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9.11.20 - MN Update & PAYS + Demand Response

The City of Minneapolis and Centerpoint have come to a Stipulation Agreement on their Tariffed On-Bill Program

  • The agreement between Centerpoint and the City of Minneapolis is a stipulation attached to a settlement between the utility and the state agencies that negotiated over the utility’s rate hike request.  The MPUC will next need to approve the settlement and its stipulation for the agreement to proceed, and it could approve either one alone (or neither).  

  • See the cover letter and stipulation attached which calls out some of the key consumer protection features required by PAYS such as: essential utility service subject to disconnection, the 80/20 rule, renters are required to obtain owner consent, and the notice to future participants. The stipulation agrees to a 3-year tariffed on-bill pilot reaching 3,000 homes in the City of Minneapolis.

  • The initial focus is on “natural gas conservation measures'' (attic and wall insulation, air sealing, furnace upgrades, and multifamily whole home upgrades) with the potential to expand to other measures and other communities as feasible.

  • With respect to electric savings: "The Program Operator will seek to estimate electric bill savings related to the installation of gas measures that may also result in electricity savings (e.g. insulation) and estimated electric savings will be presented to the customer before they make the decision on whether or not to enroll in TOB. As a condition of participation, Participants will consent to allow CenterPoint Energy and the TOB Program Implementer to receive information from the electric utility about their electric bill. Electric bill savings will not be initially included in determining whether the project satisfies cost-effectiveness criteria for enrollment (i.e. the 80% rule). However, the Company will endeavor to quantify annual electric bill savings to Participants enrolling in the first year after the program has been in operation for 18 months."

  • The Tariff filing will follow MPUC approval. 

New ILSR Demand Response Report - Huge Untapped Opportunity Remains 

  • Reading energy industry news one could easily get the impression that the U.S. is well on its way to tapping into the vast energy capacity and services potential of demand response.

  • However, the Institute for Local Self Reliance’s recent report on demand response notes that: “The Federal Energy Regulatory Commission finds that less than 5% of U.S. households are participating in programs to reduce demand at opportune times, despite residential customers using more energy and causing more peak energy demand than non-residential users. Commercial and Industrial customers make up more than 10.9 GW of enrolled demand response capacity, while the residential/mass market customers only make up 5.6 GW.”

  • ILSR argues that residential demand response is poised to bring greater energy savings to consumers and that “this potential for abundant, low-cost sources of peak energy supply should be hard for utilities, and their regulators, to ignore.”

  • This ILSR report reminded us of the findings from our recent analysis of Roanoke Electric Cooperative’s Upgrade to $ave program using PAYS as operated by EEtility. We found that REC’s demand response program substantially contributed to the value proposition of the program. Because the PAYS system has demonstrated success in delivering a bundle of DR+EE upgrades to the homes with the highest energy intensity, it will become an increasingly important tool for more equitably delivering and expanding residential demand response.

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