Energy Efficiency and Demand Response

Energy efficiency and demand response constitute a core area of Synapse’s expertise. We assist clients with analyzing costs, energy savings, avoided costs, cost effectiveness, potential studies, rate and bill impacts, price suppression effects, economic and job impacts, and the regulatory policies used to promote and support energy efficiency resources.  Our work benefits from a deep understanding of program design and evaluation, measurement, and verification (EM&V) practices; extensive research skills and knowledge of materials useful during portfolio ramp up, including goal setting and identification of potential; and practice integrating energy efficiency into long-term resource planning. At the Regional Transmission Organization level, we represent the interests of our public-sector clients to ensure proper treatment of energy efficiency, demand response, and distributed generation in system planning.

We have developed a number of tools to help states and regulators better understand the important role energy efficiency can play in meeting Clean Power Plan targets. We can assist you with expert analysis during your compliance planning process.

Regulatory Policies Supporting Energy Efficiency

Much of our work on energy efficiency is related to the regulatory policies used to promote and support successful, cost-effective energy efficiency resources. Some of the most important policies have to do with the efficiency program cost recovery and mechanisms to help overcome utility financial disincentives regarding energy efficiency. These include:

  • EPA's Clean Power Plan and its Clean Energy Incentive Program (CEIP)
  • Efficiency program cost recovery mechanisms that allow for timely, stable, and predictable recovery of reasonable and prudent efficiency program costs
  • Mechanisms to address utilities’ natural incentive to increase sales, including the design of decoupling mechanisms that balance utility needs with customer protection
  • Mechanisms that provide utility shareholders with financial incentives to plan for and implement innovative, comprehensive, and successful efficiency programs

Efficiency Programs in Resource Planning

Synapse frequently works to ensure that energy efficiency is appropriately evaluated and included in regional, state, and utility energy plans. Our services include:

  • Analyzing the potential ratepayer costs savings and emissions benefits of using energy efficiency to replace or offset the need for new natural gas plants and new natural gas pipelines
  • Evaluating the opportunity to use cost-effective energy efficiency as a resource to meet future demand in utility integrated resource plans
  • Developing regional and statewide, cost-effective clean energy plans that comply with EPA's Clean Power Plan and address other state energy policy priorities by employing aggressive levels of energy efficiency and renewable energy
  • Promoting the inclusion of energy efficiency in wholesale electricity markets
  • Promoting the inclusion of energy efficiency in system planning studies conducted by regional Independent System Operators

Cost-Effectiveness Screening

Policymakers use a variety tests, methodologies, and assumptions to assess the cost-effectiveness of energy efficiency. Synapse has prepared many reports, conducted surveys, managed working groups of experts, and testified in many proceedings regarding the appropriate frameworks for evaluating the cost effectiveness of efficiency resources.  Synapse is currently working with stakeholders to draft the first National Standard Practice Manual.

Synapse’s expertise includes:

  • Best practices in cost-effectiveness screening
  • Strengths and weaknesses of cost-effectiveness tests
  • Properly accounting for energy policies in cost-effectiveness tests
  • Policies and practices for including non-energy benefits and other program impacts
  • Guidance for regulators on the use of cost-effectiveness in resource decision making
  • Cost-effectiveness modeling of up-and-coming energy efficiency products and services

Efficiency Program Design

Program administrators should follow best practices in efficiency program design, and offer cost-effective programs to every type of customer, market segment, and sector in a way that helps overcome efficiency market barriers. Synapse has extensive expertise reviewing, critiquing, and developing efficiency program designs, including key topics such as:

  • Assessment of measures, end-uses, market segments, and sectors addressed
  • Program marketing strategies
  • Training and technical assistance to customers
  • Energy audit designs and processes
  • Delivery mechanism (e.g., point-of-sales rebate, upstream incentive, direct install)
  • Project financing
  • Stakeholder input, including collaborative processes

Support for Low-Income Energy Efficiency

With the growing support for energy efficiency policies that emphasize the importance of equity, including the Clean Power Plan’s Clean Energy Investment Program (CEIP), the push for more comprehensive and sustainable low-income energy efficiency programs is gaining traction.

Synapse works on three fronts—the national, state, and utility program administrator levels—to make data more interconnected and transparent, promote policies that address equity issues, and support best practice low-income energy efficiency program designs. Synapse’s nationally recognized energy efficiency team has deep expertise with energy efficiency policies and programs in all 50 U.S. states, the District of Columbia, and six Canadian provinces. Our extensive research and experience with existing programs across the country reveals that targeted low-income programs are frequently missing altogether, too underfunded to reach all potential participants, or poorly designed such that they cannot capture all the cost-effective savings opportunities.

Avoided Costs

Synapse produced the 2007, 2009, 2011, and 2013 Avoided Energy Supply Costs in New England studies, key references used by New England energy efficiency program administrators in the development of energy efficiency plans and reports. We also:

  • Assess methodologies used by utilities for estimating avoided costs
  • Evaluate the types of avoided costs used in energy efficiency cost-effectiveness tests
  • Estimate the price suppression effects of energy efficiency resources
  • Develop projections of long-term avoided costs for individual U.S. states

Efficiency Potential Studies

Synapse has participated in numerous cases to investigate and critique efficiency and DSM potential studies. We also develop and forecast alternative efficiency potential estimates. Our services include:

  • Assessing the types of measures, technologies, market segments, and sectors, and identifying any overlooked savings opportunities
  • Assessing and critiquing measure cost assumptions
  • Assessing avoided costs used in screening measures for economic potential estimates
  • Assessing methodologies to forecast market and technology adoption rates used in screening measures for achievable potential estimates

Rate and Bill Impact Analyses

Although energy efficiency programs reduce costs and provide significant benefits to customers, utilities and policymakers are often concerned about the rate impacts of these programs. Synapse analyzes both the rate and bill impacts of efficiency programs to put these impacts in context, and to compare them with the other benefits of efficiency programs. In addition, Synapse has pioneered the concept of addressing rate impact and customer equity concerns comprehensively by estimating customer participation rates and developing policies to increase customer participation.

Efficiency Program Evaluation, Measurement, and Verification (EM&V)

Synapse has experience reviewing energy efficiency program evaluation studies and savings protocols, and drawing conclusions regarding program design and planning. Our services include:

  • Assessing impact and process evaluation studies, and recommending improvements in the study methods and key assumptions as well as program reporting styles
  • Critically reviewing key assumptions and algorithms in Technical Reference Manuals, and recommending improvements
  • Participating in stakeholder meetings on EM&V activities and offering recommendations on EM&V planning and schedules and the types of studies needed to improve program designs, reporting, and savings attributions

Economic and Job Impacts

Synapse estimates the economic impacts of energy efficiency investments from spending on: investments in efficient equipment, the labor required for installing the measures, the administration of efficiency programs, and the re-spending of energy savings by participants in the local economy.  Synapse can develop program-specific spending patterns and model these impacts using the IMPLAN or REMI models.

Demand Response and System Planning

Synapse helps to shape state policies and market rules for demand response, provides guidance on properly evaluating DR cost-effectiveness, reviews DR potential studies, analyzes the ability of DR to reduce costs in wholesale markets, and models the impact of DR on air emissions. Synapse has made presentations to the FERC and European regulators on issues such as DR compensation, the ability of fast-responding DR to integrate renewables, and experience with integrating DR into wholesale markets.