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Avoided Energy Supply Costs in New England 2021 study materials:
For more information about the AESC study, please visit our project page.
Synapse and a team of subcontractors developed projections of electricity and natural gas costs that would be avoided due to reductions in electricity and natural gas use resulting from improvements in energy efficiency. The 2021 report provides projections of avoided costs of electricity and natural gas by year from 2021 through 2035 with extrapolated values through the mid-2050s. In addition to projecting the costs of energy and capacity avoided directly by program participants, the report provides estimates of the Demand Reduction Induced Price Effect (DRIPE) of efficiency programs on wholesale market prices for electric energy, electric capacity, and natural gas. The report also provides a projection of avoided costs of fuel oil and other fuels, non-embedded environmental costs associated with emissions of CO2 and NOX, avoided costs of transmission and distribution, and the value of reliability. The 2021 AESC study was sponsored by a group representing all of the major electric and gas utilities in New England as well as efficiency program administrators, energy offices, regulators, and advocates. Synapse conducted prior AESC studies in 2007, 2009, 2011, 2013, and 2018.
Visit our AESC 2021 Materials page to download the AESC 2021 report appendices, user interfaces, a slide deck on the study findings, and supplemental studies.
Visit our AESC 2018 Materials page to review the 2018 report and additional materials.
Synapse has also conducted supplemental analysis on the avoided costs of compliance of the Massachusetts Global Warming Solutions Act. Visit here for more details.
Synapse assisted the Regulatory Assistance Project with developing a guide utility regulators and other policymakers can use to adapt regulatory frameworks so that their jurisdictions can capture the full benefits of beneficial electrification and associated load flexibility in buildings. Technologies such as controllable water heaters, smart thermostats, and air source heat pumps create new opportunities for buildings to flexibly manage energy use and interact with the power grid in ways that benefit the electric system, homeowners, and the environment. Yet, many existing regulations were not designed to support the transition to lower-emission, electrified, and grid-integrated buildings. The guide focuses on ways to adapt regulations so that building electrification can be equitable, flexible, and grid-integrated. The guidebook addresses the need to update to fuel-neutral energy efficiency resource standards and program design, as well as to modernize building codes and performance standards and the evaluation of gas infrastructure needs. In addition to the guide, the authors provided an interactive webinar on ways to help regulators support the evolution of regulatory frameworks.
On behalf of Eversource Electric in Connecticut, Synapse developed an active demand reduction (ADR) benefit-cost (BC) screening model. Additionally, Synapse investigated storage benefits beyond those captured in the 2018 Avoided Energy Supply Costs study to be used either as quantitative inputs to the BC screening model or as qualitative information that will support the development of storage programs. By drawing upon literature reviews and common industry assumptions, Synapse produced storage non-energy benefits that could be input into the ADR BC model.
On behalf of the City of Boston, Synapse performed an in-depth building energy data analysis to develop a draft building emissions performance standard. The analysis involved developing frameworks and cost impacts for mandatory GHG emissions targets by building type that decrease over time. As part of the project, Synapse convened and facilitated a series of technical discussions with an advisory group comprised of experts in building science, architecture, engineering, construction, building operations, energy policy, renewable energy, and affordable housing. Using input from the City and the advisory group, Synapse developed recommendations, including proposed targets by building type, example compliance strategies, and aggregate cost estimates. Advisory group meeting materials are available on the City's website. The report published below describes the proposed standard and the methodology used to develop it.
Synapse was retained to provide expert witness and consulting services to the Hawaii Division of Consumer Advocacy in a proceeding to develop and review integrated resource plans (IRPs) for three electric companies. Topics include scenario planning, resource modeling, community and stakeholder input processes, and analysis of locally produced biofuels, wind and solar energy opportunities (both distributed and large scale), battery storage, and other renewable energy options. The three major electric companies supplying 95 percent of Hawaii’s electricity are simultaneously facing the need to retrofit or replace existing generation impacted by new environmental regulations and the onset of a very stringent renewable portfolio standard (40 percent by 2030). Imported fossil fuel costs are the primary driver behind high electricity rates and subject Hawaiian residents to rapidly fluctuating prices. Currently all of the Hawaiian Islands operate their electricity systems independently; a major planning issue going forward is interconnecting several of the islands using undersea cables in order to better integrate and manage high levels of variable renewable energy. On behalf of the client, Synapse is reviewing these key issues and addressing how best to meet future constraints and policy goals while minimizing costs to consumers.
Synapse partnered with subcontractor Slipstream, Inc. to produce a comprehensive assessment of the energy storage potential in Iowa for the Iowa Economic Development Authority. The study produced forecasts of energy storage deployments in Iowa. By 2035, Iowa could see between 1 GW and 2 GW of energy storage deployed within the state. The study found that the scale and pace of energy storage deployments in Iowa will depend on many factors. This includes future capital and maintenance costs for battery storage systems, wholesale market reforms, and the degree to which state regulators incentivize utilities to consider storage as an alternative to traditional utility investments.
The study included macroeconomic modeling using Implan to explore the impacts on Iowa's gross domestic product and employment. The state economic impacts of a growing battery storage industry were estimated to be limited, but positive. This includes net job impacts ranging from 298 to 595 full-time equivalent jobs and state gross domestic product impacts from $13 million to $24 million per year. The macroeconomic impacts could be larger if Iowa attracts new businesses to the state that are part of the battery storage supply chain.
The Iowa energy storage study included an assessment of the barriers and best practices to the development of sustainable market opportunities for energy storage in Iowa. This report identified three key barriers to the broader implementation of storage in Iowa. These include: (1) lack of current alignment between storage value and markets; (2) the relatively high capital cost of battery systems; and (3) uncertainty in the future (for markets, regulation, and battery technology).
Read the Iowa Economic Development Authority's Executive Summary here.
Synapse evaluated the installation of coal combustion residuals and effluent limitation guideline costs at existing coal plants in dockets before the Public Utilities Commissions in three power plants: the Amos and Mountaineer plants in West Virginia, owned by Appalachian Power Company (APC); and the Mitchell plant in West Virginia, co-owned by Kentucky Power (KPC) and Wheeling Power (WPC). Synapse updated the companies' renewable pricing and found that a scenario in which effluent limitation guideline investments were foregone and the plants were retired in 2028 was more economic than a scenario in which the plants continued operating until 2040.
On behalf of the Gulf Coast Community Foundation and the Sierra Club, Synapse conducted an in-depth evaluation of Mississippi’s EnergyWise low-income energy efficiency pilot program. The EnergyWise program is a grant-funded program in Mississippi administered by the Gulf Coast Community Foundation. EnergyWise has been operating since 2015 and has helped about 700 low-income households improve their building energy use and reduce annual energy bills.
As part of this evaluation, Synapse conducted an energy savings impact evaluation of the program and assessed costs and benefits of the program, including non-energy benefits and bill savings. Synapse also conducted a survey of program participants and program implementers and identified various non-energy benefits experienced by program participants, including improved comfort and safety, improved ability to pay for food and other necessities, and reduced illness. We documented our findings in a report to support the continuation or expansion of the EnergyWise program. Further, Synapse reviewed Mississippi Power Company (MPC)’s low-income program called SELECT and identified specific aspects of the program that could be incorporated into MPC’s SELECT program.
Synapse assisted Sierra Club with comments on Mississippi Power's 2021 Integrated Resource Plan. These comments identify areas in which Mississippi Power’s IRP failed to advance the goals of protecting ratepayers, providing transparency, and operating a well-planned and efficient electricity system. To address these flaws, Sierra Club and Synapse made the following recommendations:
• Mississippi Power should accelerate the retirement of Plant Daniel, an uneconomic coal plant that the utility currently plans to operate until 2027.
• Mississippi Power should devote more funding to energy efficiency and demand-side management programs that help customers use energy more efficiently - saving money and helping the environment in the long term. Mississippi Power’s commitment to low-income energy efficiency programs pales in comparison to other jurisdictions with comparable high energy burdens and high poverty rates.
• The Commission should revise the IRP rule to require greater transparency and opportunity for public input because utilities will not do so without a stronger mandate. Greater transparency and opportunities for public engagement would strengthen Mississippi’s IRP process and center customers in the process.
The Maryland Office of People’s Counsel retained Synapse to provide expert witness testimony on the multi-year rate plan proposed by Potomac Electric Power Company (Pepco). This included an examination of capital planning processes, proposed performance incentive mechanisms, and recommendations for tracking metrics.
The Illinois Environmental Protection Agency hired Synapse to assess the financial condition of Exelon's Illinois nuclear fleet following the announcement by Exelon that it intends to shutdown the Byron and Dresden nuclear stations starting in September 2021. The information from this financial audit will help inform legislative action regarding how the state should respond to the announced closure timeline.
For this project, Synapse incorporated a Monte Carlo simulation that encompassed distribution and probabilities of revenues and costs for the Byron, Dresden, Braidwood, and LaSalle plants over the next five and 10 years.
Through this analysis, Synapse found the following:
Synapse recommends that Illinois develop a program that offers financial support for the Byron and Dresden plants only when the plants require this support. This program need not extend beyond five years and could be re-evaluated at the end of the five-year period.
The Minnesota Department of Commerce, Division of Energy Resources retained Synapse to support its exploration of privacy and security issues related to Minnesota utilities’ hosting capacity analyses (HCA) and distribution grid data. As with other jurisdictions modernizing the grid, Minnesota seeks to balance the data access needed to support distributed energy resource (DER) uptake with maintaining a secure grid that protects the privacy of customers.
Xcel Energy (Xcel), Minnesota’s largest electricity provider, has made its HCA available via an online map, but blurs the display of the data in a way that does not reveal discrete circuits, and provides less system information. Xcel claims that an unblurred map would make the distribution grid unnecessarily vulnerable to attack and would jeopardize customer security and confidentiality.
Synapse wrote a report stating that Xcel should unblur its HCA map and place it behind a verified web login portal that is open to the public. In reaching this conclusion, Synapse noted that:
For sensitive grid data, such as peak substation and feeder loads, which is currently not provided on the HCA map, Synapse recommended applying a risk/cost-benefit framework to balance grid security with the public benefits of HCA map data. The framework could help determine whether specific, sensitive grid data should be published on its HCA map, and how secure access to this data should be provided. Synapse suggested that Xcel consider a tiered-access approach that helps streamline access to non-public grid data and does not make requirements unnecessarily burdensome.
On behalf of Energy Outreach Colorado, Synapse submitted testimony regarding the impact of Public Service Company of Colorado's proposal to eliminate inclining block rates (IBR). Synapse's analysis revealed that inclining block rates are more cost-reflective than flat rates, and that eliminating IBR would have disproportionately negative impacts on low-income customers, as these customers tend to have lower usage than average. Further, Synapse's testimony supported empowering customers to better manage their electricity bills by providing customers with cost-reflective rate options.
In 2019, Sandia National Laboratories contracted Synapse Energy Economics to improve understanding and provide guidance on the challenges and opportunities facing communities and electric utilities seeking to coordinate energy-related resilience efforts. The research was funded by the U.S. Department of Energy and conducted as part of the Grid Modernization Laboratory Consortium’s Designing Resilient Communities: A Consequence-Based Approach for Grid Investment (DRC) project. Synapse was one of several government, industry, and university partners on the project team and provided expertise on electric utility regulation.
Synapse produced a series of five reports exploring several important topics related to its area of focus, including:
The Natural Resources Defense Council (NRDC) retained Synapse to analyze the macroeconomic impacts of light-duty vehicle greenhouse gas (GHG) standards and zero emission vehicle (ZEV) policies in the state of Illinois. We assessed the likely employment and GDP impacts in Illinois for three policy scenarios: (1) adoption of low emission vehicle (LEV) tailpipe standards for criteria pollutants and GHGs, and ZEV regulations; (2) the LEV standards with increased ZEV penetration that achieves Governor Pritzker’s goal of 750,000 ZEVs by 2030; and (3) the LEV standards with further ZEV penetration that achieves 100 percent ZEV sales by 2035. Our analysis found that each of the three policy scenarios is likely to result in small but positive long-term macroeconomic impacts in Illinois and that employment and GDP benefits grow as each policy scenario becomes more aggressive in its assumed number of LEVs and ZEVs in Illinois.
Synapse provided the Maryland Office of People’s Counsel (OPC) with technical assistance in evaluating the likely impacts on Maryland ratepayers from pursuing the fixed resource requirement (FRR) alternative to continued participation in PJM's capacity market. The FRR alternative is the main avenue for states to avoid the negative impacts of the Federal Energy Regulatory Commission's (FERC's) controversial minimum offer price rule (MOPR) order on the development of renewable resources and the cost to achieve state clean energy goals.
As part of this work, Synapse developed a three-step framework for assessing the potential impacts of the FRR alternative. The framework was proposed to evaluate the economic and financial trade-offs between the FRR alternative and continued participation in PJM's capacity market and the state regulatory and legislative actions that may be necessary to support pursuit of the FRR alternative. This included evaluating the potential benefits and costs to Maryland ratepayers from pursuit of the FRR alternative and an assessment of the legislative and regulatory actions necessary to pursue the FRR option if the benefits are determined to exceed the costs. As part of this effort, Synapse conducted in-depth analysis on the benefits and costs associated with FRR, including changes in cost to meet clean energy goals, changes in capacity procurement quantities, and market power impacts.
Synapse provided expert testimony and analysis to support the Sierra Club in reviewing Indiana Michigan Power Company (I&M)’s Power Supply Cost Recovery (PSCR) Plan for the calendar year 2021 in Michigan Public Service Commission Docket U-2804. Synapse testimony focused on evaluating the prudence of I&M’s PSCR plan for 2021. Specifically, we evaluated I&M’s justifications for charging Michigan customers for the purchase of energy from its affiliate, Ohio Valley Electric Corporation (“OVEC”) under the Inter-Company Power Agreement (“ICPA”), at above-market prices and review I&M’s oversight of OVEC’s operational and planning decisions. We also evaluated the Company’s operation of the Rockport units and reviewed the fuel and power purchase costs it plans to pass on to customers during the PSCR plan and five-year forecast period.
We found that I&M has been purchasing power from OVEC, an affiliate company, under the ICPA at above market value and passing those costs on to ratepayers since 2017. In 2020 alone, I&M customers incurred $2.5 million in losses relative to the energy market on a variable cost basis, and in total, the ICPA cost I&M customers $26.5 million more than the cost of equivalent energy and capacity in the market. We also found that I&M incurred $25.1 million in net losses relative to the market energy prices in 2020 at the Rockport units on variable cost basis, which could have been mitigated with more prudent unit commitment practices. Finally, we found that I&M's latest fuel cost plan and five-year forecast show that the company will continue to incur net losses in energy market revenue and capacity value by purchasing energy from OVEC under the ICPA and that I&M will continue to uneconomically operate Rockport, and the Company will pass millions in excess costs on to its ratepayers as a result of these actions.
We recommended that the Commission amend the PSCR plan and remove costs incurred under the OVECICPA above the cost of market purchases for energy and capacity. The Company should cap the recovery of costs incurred under the ICPA at the equivalent market value in the future. We also recommend that the commission not allow I&M to develop a PSCR plan that assumes uneconomic commitment of the Rockport units. Finally, we recommend that the Commission indicate that it will disallow recovery of the fuel portion of all net revenue losses incurred as a result of imprudent unit commitment decisions in future reconciliation dockets.
On behalf of the Sierra Club, Synapse is providing expert comments and analysis in the Minnesota Public Utilities Commission’s investigation into the Self Scheduling and Self-Commitment practices of the state’s Coal-fired power plants.
In 2020, Synapse evaluated the unit commitment and dispatch practices of two Minnesota Utility companies: Minnesota Power’s two Boswell units and Otter Tail Power’s Big Stone and Coyote units.
Based on data and information submitted as part of the Companies’ 2020 Annual Compliance Filings, we found that both Otter Tail Power and Minnesota Power uneconomically self-committed and often appeared to have uneconomically self-scheduled their coal units throughout the 2020 reporting periods. Both utilities incurred significant losses (relative to the market price of energy) based on their unit commitment and dispatch decision-making processes. Otter Tail Power’s losses resulting from its commitment and dispatch practices were driven in large part by two factors:
(1) the Company’s decision to enter into a long-term fuel contract for Coyote at the mine that serves the plant (co-located with the mine) that designates a significant portion of its fuel costs as fixed costs; and
(2) the joint ownership structure and dual market operation of both the Big Stone and Coyote plants.
In 2021, Synapse evaluated Otter Tail Power’s units, focusing on the long-term coal contract and joint ownership structure issues outlined above. We evaluated the contract buy-out cost for Otter Tail Power to exit the coal contract at Coyote, and whether ratepayers would be better served by exiting the contract or continuing to operate the unit at a loss. We also reviewed actions the Company has taken to enable economic commitment at Big Stone, its plans to do the same at Coyote, and the challenges posed to attempting to implement fully economic operations based on the joint market and joint ownership at both plants.
Working with the Cadmus Group, Synapse assisted the Rhode Island Office of Energy Resources in conducting an analysis of carbon pricing policies focused on the transportation and building sectors. Synapse led quantitative modeling of policy options, including both the impact of carbon prices on consumer adoption of electric vehicles and heat pumps and the impact of incentives or other programs funded by revenue from the carbon price. Synapse used our EV-REDI and Building Decarbonization Calculator tools to model stock turnover and the resulting emissions and energy use impacts. We also evaluated the economic impact of each carbon pricing policy option using IMPLAN, and health impacts using EPA's COBRA model.
Synapse is providing expert assistance to the Conservation Law Foundation in regard to Massachusetts Department of Public Utilities (DPU) docket 20-80. The Massachusetts DPU opened docket 20‐80 to examine the role of Massachusetts gas local distribution companies in helping the Commonwealth to achieve its 2050 climate goals. The DPU’s order requires the state’s gas utilities to complete studies over the next year that will inform this examination and allow the DPU and other state agencies to develop the specific roadmap to required emission reductions.
Synapse produced the white paper below which presents a set of criteria for the required “future of gas” studies and has been submitted to docket 20-80. These criteria are designed to ensure that the studies will present sufficient, detailed, and justified data, analysis, and recommendations to inform the DPU and relevant stakeholders.
The Natural Resources Defense Council retained Synapse to provide technical and policy support for public comments on fossil gas forecasting methodologies in Nevada. With assistance from subcontractor John Rosenkranz, Synapse assessed the filings of NV Energy and Southwest Gas with the Public Utilities Commission of Nevada, and developed recommendations for better accounting of uncertainties, such as the impacts of electrification.
On behalf of the Natural Resources Defense Council, Synapse is providing technical and policy support in a number of New York Public Service Commission (NY PSC) and Pennsylvania Public Utility Commission (PUC) proceedings.
In the ongoing Niagara Mohawk rate case before the NY PSC, Synapse filed testimony on earnings adjustment mechanisms to align utility incentives with New York's energy and climate goals. Synapse also developed a white paper on the planning practices necessary to guide and support the transition from today’s fossil gas utility industry to one that complies with the emission requirements of New York’s Climate Leadership and Community Protection Act (CLCPA), supports the equitable distribution of energy-related benefits and burdens, maintains essential energy services, manages costs, and protects all customers. In a joint filing with other stakeholders, NRDC filed the Synapse white paper in the NY PSC’s ongoing proceeding to consider changes to gas utility planning and procedures in light of the policy changes facing the industry.
In Pennsylvania, Synapse submitted testimony on the Act 129 Energy Efficiency and Conservation plans of PPL Electric Utilities Corporation and PECO Energy Company. Separately, Synapse assisted NRDC with developing comments for the PUC's proceeding on Utilization of Storage Resources as Electric Distribution Assets.
On behalf of Counsel to the Nova Scotia Utility and Review Board, Synapse analyzed and developed evidence regarding Nova Scotia Power’s (NS Power) proposed time-varying rate application. Synapse witness Melissa Whited recommended that the Board approve NS Power's proposed time-of-use and critical peak price tariffs and recommended that other aspects of the proposal be modified or rejected. In particular, Ms. Whited's evidence critiqued NS Power's proposed "Soft Launch" approach as failing to include adequate details regarding customer engagement strategy, as well as providing insufficient planning for evaluation, measurement, and verification. In addition, Ms. Whited found the company's lost revenue adjustment mechanism to be flawed and unnecessary, and certain tariff requirements to be overly restrictive. Finally, Ms. Whited's evidence pointed to the need to better incorporate long-run marginal costs into future tariff modifications.
Synapse presented two papers at the 2020 ACEEE Summer Study on Energy Efficiency in Buildings conference:
Synapse was retained by the Maryland Office of the People's Counsel (OPC) to provide technical support for alternative ratemaking proceedings, with a focus on multi-year rate plans (MRPs). Per Maryland Public Service Commission Order No. 89226, a Working Group was established to develop an implementation report for MRPs. Synapse assisted OPC by helping develop positions, drafting comments and rebuttal comments, and attending workshops. Our focus was on the overarching design of MRPs to ensure that they operate in the public interest, provide proper incentives to utilities, and mitigate information asymmetries. Our work included methods for setting allowed annual revenue requirements, the design of earnings sharing mechanisms, operation of any reconciliation mechanisms, specifying utility reporting requirements, and proposing accompanying planning processes.
On behalf of the National Parks Conservation Association (NPCA), Synapse prepared a report and briefed stakeholders and relevant parties on its its findings regarding Dominion's need for the Surry-Skiffes Creek 500 kV Transmission Line that was constructed across the Jamestown River.
In this report, we review Dominion and the U.S. Army Corps of Engineers’ justification for the Surry-Skiffes Creek-Whealton project, evaluate the actual level of need in the NHRLA, and develop a set of alternative portfolios that can meet area need and comply with North American Electric Reliability Corporation (NERC) requirements without the Surry-Skiffes Creek project. We recommend that in the upcoming Environmental Impact Statement, the U.S. Army Corp of Engineers should require that Dominion evaluate modular battery storage as a new supply option, and update its load forecast.
On behalf of the District of Columbia Department of Energy and Environment (DOEE), Synapse provided expert witness testimony regarding Pepco’s proposed multi-year rate plan and performance incentive mechanisms. Synapse also drafted comments in response to the Commission's Notice of Inquiry regarding implementation of the CleanEnergy DC Omnibus Amendment Act of 2018, which requires the Commission to consider the “effects on global climate change and the District’s public climate commitments.”
On behalf of the Eastern Environmental Law Center (EELC), Synapse and subcontractor John Rosenkranz conducted a comprehensive assessment of National Grid’s Capacity Report released February 24, 2020. National Grid's Capacity Report detailed gas peak demand forecasts through the winter of 2034/35, modeling both High Demand and Low Demand scenarios. The report then assessed various long-term gas solutions to fill these gaps. These potential solutions included various large-scale gas infrastructure projects such as the NESE pipeline and LNG facilities, as well as a “No Infrastructure” option which solely relies on additional demand-side resources.
Our analysis found various errors in National Grid’s assessments of the rate of customer conversion from oil to natural gas for the load forecasts, expected levels and costs of energy efficiency and heat pumps under existing or expanded policies and programs, and gas supply resources. The report concludes that corrections to these errors and appropriate treatment of demand-side measures, with or without small changes in National Grid’s supply planning assumptions, eliminates the need for any of the large-scale infrastructure investments examined in the Capacity Report.
On behalf of Earthjustice, Synapse reviewed the U.S. EPA's benefit-cost analysis of changes to the proposed power plant effluent limitations guidelines (ELG). Synapse created an expert report that Earthjustice submitted as part of its official comments on the proposed rule modification.
The purpose of this report is to (1) evaluate the proposed changes to the 2015 ELG rule; (2) review the four options the EPA lays out for compliance (focusing on Options 2 and 4); (3) review the EPA’s benefit cost analysis (BCA); (4) critique the EPA’s analysis and results; and (5) provide recommendations on how the EPA should structure its BCA and which compliance option it should recommend.
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