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 NO_X, 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.

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 Sierra Club, Synapse developed and modeled a Clean Energy Portfolio for Tampa Electric Company (TECO) that met the City of Tampa’s goal of 100 percent renewable energy by 2050. For our analysis, we modeled a Business as Usual (BAU) Scenario where TECO continues to rely on its current fossil resources, and a clean energy scenarios where TECO retires its remaining coal unit and reduces its dependence on energy from its existing gas plants by building out solar PV and battery storage and increasing investment in demand-side management. The clean energy scenario achieves a 50 percent renewable portfolio standard (RPS) for TECO by 2035. We also tested a more aggressive sensitivity that achieves an 80 percent RPS by 2035.

We found that transitioning to 50 percent renewables is the lowest-cost resource option for Tampa ratepayers relative to continued reliance on fossil resources. The 50% Clean Energy Scenario saved ratepayers between $400 million and $1.6 billion in net present value terms relative to TECO's current fossil plan, depending on the gas and carbon pricing forecasts. This Clean Energy Scenario will also reduce CO2 emissions by 60 percent by 2040 (compared to 2021 levels) and prevents approximately 50 million tons of CO2 from being emitted compared to the TECO BAU scenario. We also found that the Clean Energy Scenario generated more and higher quality local jobs than the BAU scenario.

Synapse provided 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 included 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). Synapse reviewed these key issues and addressed how best to meet future constraints and policy goals while minimizing costs to consumers. Synapse also provided the Division with production cost modeling analysis to identify avoided costs, including avoided ancillary service costs. We also provided technical support for developing time-of-use rates for distributed energy resources.

Synapse Energy Economics, Climable, GreenRoots, and Clean Energy Solutions provided technical assistance to the City of Chelsea, Massachusetts to develop a community-centric microgrid at two of its critical facilities: City Hall and Police Station 911 Call Center. The team of experts provided technical design, economic analysis, community engagement activities, and policy support to the City. Funding from the Massachusetts Department of Energy Resources Municipal Energy Technical Assistance Grant helped complete the following project activities:

• An energy assessment of City Hall and police station, including recommendations for electrification, resilience, and energy savings.
• Calculation of the public benefits from improved resilience, electrification, and energy efficiency of the 911 Call Center and City Hall.
• Preparation of public-facing materials to describe the upgrades and their benefits to the community.
• Development of design concepts and selection criteria for contractors to perform building improvements.
• Identification of a strategy for City Hall and the Police Station to integrate into a broader distributed microgrid in Chelsea.

The resulting the proposed projects create a variety of opportunities for the City of Chelsea and its residents to “prosper-in-place,” produce decentralized clean energy, develop local career pathways, lower energy costs, improve climate resilience, and engage actively with the community.

Community Flyers on the Benefits of Microgrids

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.

On behalf of the Sierra Club, Synapse prepared a written technical report addressing the consistency of NRG Energy's proposed Astoria Gas Turbine Replacement Project with New York’s Climate Leadership and Community Protection Act (CLCPA) and a technical evaluation of NRG’s identified justifications for the project. The report addressed whether adding new fossil fuel generation is consistent with the CLCPA’s mandate that New York achieve 100 percent zero-emission generation by 2040. In addition, the report evaluated NRG’s proffered justifications regarding:

• reliability (in light of recently approved local and bulk transmission upgrades);
• cost implications;
• localized air emissions;
• facilitating renewable integration over relevant time scales; and
• provision of black start capability.

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 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:

• Location information on distribution facilities is likely already in the public domain
• Various tools exist to help map distribution lines
• Providing distribution line information provides significant value to DER developers
• Focusing on strengthening the grid’s physical and cybersecurity defenses, and increasing grid resiliency, is more effective at deterring attackers than concealing information.

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.

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:

• Current landscape: structured interviews with six community and utility pairs to better characterize the existing state of resilience planning within and across jurisdictions and identify opportunities for improvement;
• Benefit-cost analysis for grid investments in resilience: the first application of the framework developed in the 2020 National Standard Practice Manual for Benefit-Cost Analysis of Distributed Energy Resources to grid resilience investments;
• Resilience performance metrics: guidance for jurisdictions to take the important step of defining and establishing performance metrics for resilience;
• Resilient public purpose microgrids: definition of the term and characterization of five project types that may be more likely to receive ratepayer funding; and
• Regulatory mechanisms to support resilience: mechanisms that electric utility regulators can use to align grid resilience investments with resilience interests and priorities.

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 has been engaged with the Puerto Rico Energy Commission, now named the Puerto Rico Energy Bureau, since 2015. Our role includes providing technical support and expert review of materials submitted by the Puerto Rico Electric Power Authority (PREPA, the island's sole electric utility). In early 2015, Synapse was engaged by the Regulatory Assistance Program (RAP) to help develop Puerto Rico's first Integrated Resource Planning (IRP) rules. The rule was successfully promulgated in May 2015. Subsequently, Synapse collaborated with RAP to assess PREPA's first IRP, and lead a commission investigation into the development and finalization of the IRP. Over the course of 2015 and into early 2016, Synapse led an increasingly intensive review of the IRP process and findings, as well as the Commission’s first public hearing. The IRP Final Order, largely a result of Synapse's work, was published September 2016.

We have also assisted the Bureau in crafting rules for microgrids and developing performance metrics and incentives. In the wake of Hurricanes Irma and Maria, we have also supported the Bureau as it guides the utility through its second IRP in the context of expected privatization or concessionaire structures for both generation and electric grid operations. Our engagement in Puerto Rico has been conducted in close partnership with the Regulatory Assistance Project (RAP). Together, we act as a resource for support and an expansion of the technical and regulatory expertise available to the recently formed regulator.

In 2020, Synapse supported the Puerto Rico Energy Bureau in:

1. Completion of the 2019 Integrated Resource Plan process and associated follow-up;
2. development and execution of the Optimization proceeding to develop decision-making approaches for resilience investments;
3. development of revised demand response and energy efficiency regulations, as well as beginning development of the required cost-effectiveness screening framework and avoided costs; and
4. evaluation and development of performance metrics and structures for PREPA and LUMA.

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.