4.10.20 - 4.5% rate decrease + PAYS Conference Abstracts
Updated: Aug 31, 2020
Hi PAYS® Pals, here's your weekly newsletter!
The “mic-drop moment” of 2019: PAYS Deep Energy Efficiency + Solar = 4.5% rate decrease!
Ouachita Electric Cooperative Corporation's CEO Mark Cayce filed for a 4.5% rate decrease and attributed this move to his coop's HELP PAYS deep energy efficiency and solar program. The Institute for Energy Economics and Financial Analysis (IEEFA) covered Mark's announcement in this article noting that he received a standing ovation from the efficiency and solar stakeholders who convened at the Heifer International HQ.
The Cooperative Finance Corporation (CFC) also highlighted OECC's innovative way of combining their residential PAYS EE program (which has reached 10% meters so far) and their industrial, community, and rooftop solar programs to decrease rates as seen in this article. CFC quoted Mark as saying "The solar installations have lowered our peak demand by approximately 8 MW and our energy efficiency efforts have contributed an additional 2 MW. That, together with some growth on our system, has made this rate decrease possible." CFC even went on to say that OECC's rate decrease is evidence that the cooperative model is alive and well!
Mark Cayce's announcement on OECC's website reads: " The Ouachita Electric Cooperative Board has approved filing with the Arkansas Public Service Commission a request to lower member rates by 4.5%. The average residential bill will decrease by 4.25% Over the past several years the cooperative has worked to lower peak demand expenses. These efforts have included adding solar to the large industrial, commercial, and residential consumers. Wholesale power expense is the single largest expense paid by the cooperative. Lowering this expense benefits every member of the coop."
At the 2020 NRECA Annual Conference, Mark commented that he has continued to expand his HELP PAYS energy efficiency program and solar program into 2020 and beyond which will allow him to file for another rate decrease in the future!
DOE Shows interest in an LBNL PAYS Evaluation Study:
As public utility commission interest in the PAYS system accelerates, it's becoming increasingly important to have empirical performance data documented by a recognizable and trusted source. Our current options for citing performance data from utility programs that used the PAYS system for EE building upgrades include:
The California—On Water Bill Pilot; Process Evaluation Report; Cadmus Group. October 2013
The Hawaii—Year 2 Process Evaluation Report for SolarSaver Program; Johnson Consulting Group. October 15, 2009
The New Hampshire—*Process Evaluation of the Pilot “Pay As You Save” (PAYS) Energy Efficiency Program*; GDS Associates, Inc. December 2003
The Ouachita HELP PAYS® Residential Energy Efficiency Program Evaluation (Prepared by OptiMiser using industry-standard methodologies. N.B. OptiMiser's energy audit software was used by EEtility for estimating energy savings in this report as well)
In acknowledgment of their unique role to address the need for more energy efficiency-focused independent evaluations, DOE's LBNL has begun to construct an outline for a PAYS® Evaluation Study report in the event that funding is available. DOE started their due diligence earlier this year by asking a few program operators if they would contribute the necessary data to complete this study. After considering this data request, it is becoming more and more clear just how much of a herculean effort the data cleaning and organizing will be. For example, just pulling, cleaning, and analyzing the necessary data to confirm kWh savings for only 100 Roanoke Electric Coop Upgrade to $ave participants took 4 FTEs 2 full weeks dedicated to just these tasks.
These facts have lead us to the realization that while this potential DOE study is a great opportunity for every program operator to have their results validated, the realities of data management may make it prohibitively expensive to participate. Perhaps the study will sub-contract the program operators?
If there were to be such an evaluation what questions would you as leaders in the PAYS community want to have the study address?
Our first thoughts are the following:
What are overall economic impacts for participants (bill reduction & added home value) and how are these distributed across the population?
What are the actual kW and kWh savings and what are these worth to the utility?
Are participants seeing the expected net positive cashflow? If so, do any pre-upgrade house characteristics or performance factors correlate?
What is the utility charge-off rate for the program participants compared to its regular members/customers and compared to a matched sample with the same type of payment status and history?
Does getting a PAYS upgrade impact customer frequency of late payments, the relative size of partial payments, size/growth rate of arrearage balances, and/or the likelihood of disconnection?
Plus the usual: percent of customer locations upgraded, offer acceptance rate, and member/customer satisfaction
So What's the Status on Conferences Where We've Submitted PAYS Related Papers/Panels?
ACEEE Finance Forum, NY June 2-3: We had a confirmed PAYS Panel (one moderator slot and two speaker slots) but this conference may either become virtual or be postponed. Tammy may still be able to present if it's virtual but we will fill out the rest of the panel once the date is known.
ACEEE Summer Study, CA August 16-21: We have a confirmed paper for the proceedings but again they are still deicing whether to postpone the date
FYI the PAYS related content featured in the 2018 proceedings for this conference was this paper written by Holmes and Harlan which summarized PAYS program performance! LibertyHomes's 2020 paper (which was mentioned in the second newsletter) will report peak demand (kW) and consumption (kWh) savings from REC's Upgrade to $ave program and to quantify their value and ROI to REC!
ACEEE BECC, DC Dec 6-9: Still scheduled for the original date but the abstract submissions have been extended till May 8th! LibertyHomes was considering submitting an abstract for a paper that either 1) analyzes where the most potential participants are lost along the acquisition pipeline, 2) how to frame the upgrade offer as an opt-out while still retaining customer/member choice, or 3) methods for increasing participation in the post-upgrade satisfaction survey. We haven't yet decided what is both the most useful but also practical given the timeline.
FYI, Holmes and Max published this paper for ACEEE's BECC in 2019. We found the following excerpts and their associated citations to be important for reuse in other papers (after looking for the most up-to-date numbers of course):
"Renters and those with little access to credit or capital account for two-thirds of the population in the U.S. Renters account for 36% of US residents, and 51% of US residents have insufficient credit scores to be considered for consumer debt-based financial products."
- U.S. Census Bureau, 2013-2017 American Community Survey 5-Year Estimates. Retrieved from Fact Finder. - Experian State of Credit. Retrieved from: [https://www.experian.com/blogs/ask-experian/state-of-credit/7State](https://www.experian.com/blogs/ask-experian/state-of-credit/7State) and Local Energy Efficiency Action Network. (2014)
"Options are even more limited for those who either do not meet the income eligibility requirements of the Weatherization Assistance Program (WAP) or who would not choose to participate. Eligibility for the program requires annual income to be less than 200% of the federal poverty level, which implies that the household must undergo a test of its means, also called a means test. It is well-established that means-tested programs are undersubscribed: "Depending on the program, between one and two-thirds of eligible Americans forego participation in means-tested government programs for which they are eligible (Blank & Ruggles, 1996; Moffitt, 1987)". WAP does provide relief to hundreds of thousands of people annually, reducing energy burden for low-income eligible members fortunate enough to receive upgrades. From 1977 to present, WAP operators have upgraded millions of homes. Nonetheless, 38.6 million homes were eligible for WAP upgrades in 2015. Despite the Recovery Act’s expansion of the number of homes upgraded --from 95,678 per year in 2008 to 340,156 homes per year in 2010 --it would take more than 110 years to upgrade the majority of these buildings." [Emphasis LibertyHomes]
Citations: Stuber, J., & Schlesinger, M. (2006). Sources of stigma for means-tested government programs. Social Science & Medicine, 63 (2006), pp. 933–945,10Oak Ridge National Laboratory. 2015, July.
Weatherization Works II –Summary of Findings From the ARRA Period Evaluation of the U.S. Department of Energy’s Weatherization Assistance Program.