Full Title: Comments on EPA’s Draft Evaluation, Measurement, and Verification (EM&V) Guidance for Demand-Side Energy Efficiency (EE)
Author(s): Karen Palmer
Publisher(s): Resources for the Future (RFF)
Publication Date: 01/2016


Description (excerpt):

End-use energy efficiency is expected to play an important role in the development of state plans to comply with the US Environmental Protection Agency’s (EPA’s) Clean Power Plan (CPP) and could be particularly important in those states that adopt an emissions rate-based approach to comply with EPA’s carbon dioxide (CO2) emissions guidelines. Under such an approach, entities including utilities, community groups, energy agencies, and others that take certain actions to increase investments in end-use energy efficiency (EE) are entitled to earn emissions reduction credits (ERCs) for every demonstrated MWh of electricity saved. In the aggregate, crediting energy savings in this way is expected to reduce demand for electricity and the need for generation from all sources, including emitting sources. ERCs can be used to augment the denominator in an affected generator’s calculated emissions rate, thereby bringing the generator closer to compliance with the emissions rate standard. By supplementing the denominator in this way, efficiency-associated ERCs lessen the need for a generator to reduce its own emissions directly.

Under such a rate-based regime, the veracity of energy savings and associated ERCs are very important to the environmental integrity of the policy; thus, EPA rightly requires in the final CPP rule that entities wishing to earn ERCs for energy savings submit an ex-post evaluation conducted by an independent third party to verify that their actions or policies have yielded the claimed amount of energy savings. The draft evaluation, measurement, and verification (EM&V) guidance document issued in conjunction with the final rule and proposed model rule/federal plan offers a very useful description and guide for the states on how efficiency evaluations are currently conducted and provides a useful basis for moving forward. EPA is to be commended for putting the guidance document together and providing the opportunity to comment.