Stuck on the “Three Prong Test”
The California Public Utility Commission uses the 3-prong test to allow fuel substitution on projects with incentives. For energy efficiency contractors this represents a barrier that is limiting the switch from natural gas appliances to electric heat pump technology.
In it’s simplest form the 3-prong test requires projects to meet the following criteria:
1. Must not increase source-Btu consumption, using CEC-established heat rates
2. Program/measure/project must have both TRC and PAC benefit-cost ratio ≥1.0
3. Must not adversely impact the environment, using most recently adopted values for avoided costs of emissions.
Most of the concern with fuel switching concerns item #2. TRC (total resource cost) is a metric to determine project cost and PAC (program administration costs) is a metric to determine program administrative costs.
In its current configuration meeting, the cost requirements of the 3-prong test are limiting the adoption of electricity in situations where natural gas is being used. Without going too deep into CPUC speak and technobabble, we need to recognize that changes need to happen with the 3-prong test to make fuel switching a reality in California.
The good news is we are making headway. The NRDC has filed a motion that would require the 3-prong test to include societal costs as part of the metric. This means the carbon reductions from using clean electricity over natural gas would be part of the cost consideration.
There are other efforts at addressing the TRC/PAC cost limits as well. In 2016 Sacramento’s Utility District (SMUD) hired EPRI (Electric Power Research Institute) to study the cost effectiveness of builders using all-electric solutions. When the cost of providing natural gas to the site is factored into the equation an all electric solution is cheaper.
This is all good news, as steps are in progress to prove to the CPUC that not only is electricity the cleaner solution it is also the most cost effective solution to providing energy to buildings.
CPUC Workshop on HVAC standards for 2019
Next Tuesday, July 18th, the CPUC is conducting a workshop on residential HVAC measures and the certification test requirements for technicians. Information from this workshop will be used to provide updates for the new 2019 Standards. This is an opportunity to provide your real-world experience that will help shape the 2019 HVAC standards. You can attend in-person, remotely, and written comments will be accepted.
For further information check out the details on the CPUC website.
Charles Cormany
Executive Director
Efficiency First California
Image from iStock.
