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The CPUC Supports NEBs and TSB

Energy efficiency is finally getting starting to get the recognition it deserves. The California Public Utilities Commission (CPUC) supports NEBs and TSB.

Non- Energy Benefits (NEBs)

For years contractors have promoted the Non-Energy Benefits (NEBs) of energy retrofits. Comfort, health, safety, and durability are a few of the benefits commonly referred to as NEBs. These benefits and are frequently used to encourage consumers to invest in energy efficiency upgrades. The challenge has been that it is hard to assign a direct monetary value to the NEBs as they vary widely based on the project’s scope.

Several organizations, including Efficiency First California, have petitioned the CPUC to factor non-energy benefits as a value when developing rebate programs. Most energy efficiency rebate programs require a specific return on each dollar spent. After many years of advocating to include these benefits in cost-effectiveness tests, it seems the CPUC has finally got the message.

The CPUC is now working on new standards that create established values for non-energy benefits related to energy efficiency. These values will be used to evaluate the usefulness of new rebate program structures and will factor into their cost-effectiveness metrics. Finally, we are getting recognition for the non-energy benefits of energy efficiency.

Total System Benefits (TSB)

In another significant step, the CPUC recognizes another value of energy efficiency. It formally recognizes the importance of avoided costs related to energy efficiency. Many in the industry have referred to this benefit as a “Negawatt,” as it implies reduced electricity production, although this legislation intends to be fuel agnostic.  We have often argued that energy efficiency deserves credit for reduced electricity production. It looks like that moment might have finally arrived too.

In legislative speak, this is the “monetary value for the lifecycle benefits based on the avoided costs of new generation.” The industry has created yet another acronym for this benefit, the TSB, which stands for Total System Benefit. The TSB will now consider energy savings related to peak demand and greenhouse gas reductions. Anything that reduces electricity demand will reduce peak loads and GHG emissions. The TSB will allow planners to consider “high value” load reductions by concentrating on specific geographic locations. In practice, they might consider bumping up EE efforts within a particular region instead of building a new powerplant. We have already seen this logic in practice.

In less than one year, we have two significant achievements related to energy efficiency. 1. The CPUC formally recognizes non-energy benefits for their value. 2. The avoided production of energy from EE savings is recognized. All I have to say is it’s about time, and thanks to all who made this happen.

Charley Cormany
Executive Director

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