Energy Efficiency

Overview

Synapse works at the national, state, municipal, and utility program administrator levels to improve energy efficiency policies, programs, and practices. Synapse's energy efficiency team is versed in the treatment of energy efficiency in all 50 U.S. states, Puerto Rico, the District of Columbia, and several Canadian provinces.

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
• Regulatory policies used to promote and support energy efficiency resources.

Our work benefits from a deep understanding of program design 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 within energy system planning.

We also assist clients with the integration of building decarbonization in the energy efficiency program framework. We assess and develop novel approaches to reforming the framework and designs of energy efficiency programs so that program administrators have proper incentives and goals to promote cost-effective building decarbonization in their programs.

We have developed a number of tools to help states and regulators better understand the important role energy efficiency can play in meeting state and federal emission reduction targets. For example, we recently developed the Energy Savings and Impacts Scenario Tool (ESIST) on behalf of U.S. EPA. This is a customizable and transparent Excel-based planning tool for analyzing the energy savings and costs from customer-funded energy efficiency programs and their impacts on emissions, public health, and equity.

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. These policies include:

• 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
• State and federal energy policies, including building codes and appliance standards, cost-effective energy efficiency requirements, least-cost procurement mandates, and energy efficiency resource standards
• State and municipal energy policies including building benchmarking policies and building performance standards.

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, transmission and distribution systems and new natural gas facilities and 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 and address federal and 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

Energy Efficiency as Non-Wire and Non-Pipeline Alternatives for Utility Infrastructure Planning

Synapse conducts technical and economic potential of energy efficiency and other distributed energy resources (DERs) as non-wires alternatives (NWAs) to transmission and distribution systems and as non-pipeline alternatives (NPAs) to gas pipeline and infrastructure systems. Synapse also examines screening processes for NWAs and NPAs and develops comprehensive frameworks to integrate cost-effective energy efficiency and other DERs as NWA and NPA measures in the planning for transmission and distribution systems as well as for gas pipeline systems. Synapse has assisted our clients on the assessment of NWAs and NPAs in various jurisdictions in North America including the District of Columbia, New York, Maine, and Nova Scotia.

Cost-Effectiveness Screening

Policymakers use a variety of tests, methodologies, and assumptions to assess the cost-effectiveness of energy efficiency. Synapse assists clients with the development of cost-effectiveness frameworks, facilitation of working groups, review and development of benefit-cost models, and by providing expert testimony. Synapse is the lead author of the National Standard Practice Manual for Benefit-Cost Analysis of Distributed Energy Resources and its companion guide Methods, Tools & Resources – A Handbook for Quantifying DER Impacts for Benefit-cost Analysis, published by the National Efficiency Screening Project and coordinated by E4TheFuture.

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 in 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

We also provide research on best practices across jurisdictions, leveraging our deep knowledge of policies and practices across the United States and Canada.

Support for Low-Income Energy Efficiency Programs

There’s a strong need for equity considerations in order to implement successful energy efficiency programs. Even within programs that specifically target low-income ratepayers, our extensive research reveals that they are often insufficiently funded to reach all qualified participants or are not designed to capture all cost-effective savings opportunities. Low-income programs also commonly lack specific and meaningful goals. Even when such goals are established, programs may not be designed to sufficiently document and demonstrate progress toward achieving these goals. Further, ratepayer-funded low-income efficiency programs commonly do not account for many of the benefits that accrue to participants and society as a result of their implementation. We offer solutions to resolve these issues and support our clients with robust data, research, analysis, and regulatory know-how to improve and expand low-income energy efficiency offerings.

Avoided Costs

Synapse develops projections of electricity and natural gas costs that would be avoided due to reductions in electricity and natural gas use resulting from energy efficiency and demand response measures. Synapse continues to produce the Avoided Energy Supply Costs in New England studies and updates, which provide key references used by New England energy efficiency program administrators in the development of energy efficiency plans and reports. Synapse has also conducted avoided electricity calculation costs for many other clients in various jurisdictions, including the American Council for Energy-Efficiency, GridLab, Efficiency Maine, District of Columbia Public Service Commission, and Puerto Rico Electric Power Authority. We also:

• Assess methodologies used by utilities to estimate avoided costs
• Evaluate the types of avoided costs used in energy efficiency cost-effectiveness tests
• Estimate the price suppression effects of energy efficiency resources in wholesale electricity and natural gas markets
• Estimate avoided costs of carbon emissions
• 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 demand-side management potential studies. We also develop and forecast alternative efficiency potential. 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. We help clients:

• Analyze both the rate and bill impacts of efficiency programs
• Compare rate and bill impacts with other benefits of efficiency programs
• Address rate impact and customer equity concerns comprehensively by estimating customer participation rates and developing policies to increase customer participation

Rate and bill impact assessments are a key component in determining the overall impacts of energy efficiency programs. Rate and bill impact assessments can assess potential cost-shifting between customers from energy efficiency programs that are planned or implemented. This helps utilities and stakeholders address potential equity concerns by assessing the extent to which different types of customers benefit from or are affected by energy efficiency programs and whether the expected rate increases are acceptable.

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

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

• Assessing impact and process evaluation studies, and recommending improvements in study methods and key assumptions as well as program reporting styles
• Critically reviewing key assumptions and algorithms in Technical Reference Manuals (TRM), 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

Job and Economic Impacts

Synapse estimates the macroeconomic impacts (employment, income and GDP) of energy efficiency programs using the IMPLAN and REMI models. Our macroeconomic analysis considers the impacts of spending on investments in efficient equipment, the labor required for installing the measures, and the administration of efficiency programs. Our approach also accounts for the re-spending of energy savings by participants in the local economy.  Synapse has developed in-house job impact vectors spending models for energy efficiency programs that reflect program-specific spending patterns. We periodically update these representations to ensure our analyses reflect current energy efficiency program offerings.