Case Study

Introduction

In December 2021, the California Public Utilities Commission (CPUC) passed Decision 21-12-011 (D. 21-12-011) to address a shortage of electricity throughout California in response to Governor Newsom’s July 31, 2021, Emergency Proclamation. Among the initiatives approved by the decision was the creation of new Market Access programs “to deliver peak and/or net peak demand savings using normalized meter energy consumption [NEMC] method of measuring energy and peak demand savings.” Marin Clean Energy responded by creating the Commercial Energy Market (CEM) program.

The CPUC engaged Opinion Dynamics to conduct an early evaluation of the CEM program as it was ramping up participation. This early evaluation of MCE’s CEM program provides some of the first insights into the design and implementation of an NMEC-based Market Access program in California. While the evaluation is not yet released, with summer 2023 fast approaching, we’re excited to share a bit about the CEM program and the overall objectives of our research.

What is the Commercial Efficiency Marketplace?

Launched in May 2021, CEM is a path for commercial aggregators to maximize and optimize energy savings for projects with performance-based incentives by enrolling energy efficiency (EE) projects from customers. The projects do not have fixed measures or incentives and all incentive payments are tied to the delivery of savings at the meter-level within 12 months of projects.

MCE designed this program to help reduce barriers to EE program participation by allowing aggregators to enroll EE projects without being confined to the installation of measures from a list. Instead, qualified aggregators participate in the program by enrolling customer projects based on their energy needs, technology fit, and cost. MCE’s original intent was to pay aggregators 12 months after a project enrollment, based on energy savings shown at the meter. The 2022 MCE CEM Implementation Plan states, however, that, “aggregators are able to receive payments quarterly for value delivered at the portfolio level.”

Research Objectives and Approach

Opinion Dynamics evaluated the CEM as one component of the MCE 2021 EE Program Portfolio. Although this program began in 2021, because claimed savings rely on NMEC methods, final savings for this program could not be claimed in 2021. Instead of evaluating final savings, our evaluation focused on the program design, the first phases of program implementation, NMEC-based Measurement and Verification (M&V) plans, and the influence the CEM program has had on aggregators and their customers who enrolled in the program. Specifically, we completed the following as part of our evaluation of the MCE CEM program:

• Documented program design
• Compared the CEM M&V Plans to the NMEC Rulebook to ensure MCE and its implementer were adhering to Rulebook requirements
• Analyzed pipeline data to explore projects in progress
• Explored what MCE has to date for ex ante savings and project documentation for 2021 and identified any potential issues in the forecast analysis for each measure and project
• Performed an evaluability assessment to determine whether MCE has collected adequate information to conduct an impact evaluation in the future after MCE claims savings
• Explored program influence and whether the CEM program helped motivate aggregators, and in turn their customers, to install EE equipment

Given the recent action in California to help ensure continued electricity reliability for Summer 2023, there is statewide interest in understanding the program design, pipeline of projects enrolled, lessons learned from implementation so far, and the reasonableness of forecasted savings. The learnings and considerations gleaned from this effort offer insight into the opportunities of NMEC-based Market Access programs, as well as suggestions and considerations for best practices in design, implementation, and evaluation. We will be sharing the full report, with complete findings and recommendations, later this year.