Energy Efficiency Resource Standards

Summary

Note: In August of 2013, Delaware enacted SB 150, legislation requiring Delaware’s Sustainable Energy Utility to develop, measure, evaluate and promote cost-effective programs. The law now requires the Delaware Public Service Commission (PSC) to establish rules to oversee the SEU’s programs. However, the law was written to say that this requirement to pursue cost-effective programs is “notwithstanding the energy savings targets” that could be construed as an energy efficiency resource standard. In addition, the Delaware Public Service Commission has not yet established rules to implement the new law.

In July 2009 the Delaware legislature enacted legislation creating energy savings targets for Delaware’s investor-owned, municipal, and cooperative electric utilities, as well the state’s natural gas distribution companies. These targets are hereafter referred to collectively as the Delaware Energy Efficiency Resource Standard or EERS. The law requires affected electric utilities to establish programs which save the equivalent of 15% of 2007 electricity consumption and peak electric demand by 2015. The standard also includes an interim reduction target of 2% of electricity consumption and peak demand by 2011. Affected natural gas utilities are required to save the equivalent of 10% of 2007 natural gas consumption by 2015, with an interim target of 1% by 2011.

Energy efficiency is defined to include energy savings resulting from measures or programs that target customer behavior; replace or improve the efficiency of equipment, processes, or devices; or result in reductions in transmission and distribution losses associated with the design and operation of the electric system. Combined heat and power systems and the use of “recycled energy” may also count as sources of energy savings.

The legislation required the Delaware Department of Natural Resources and Environmental Control (DNREC) to develop regulations implementing the standard by July 29, 2010 (one year after the enactment); however, as of this writing final regulations have not been promulgated. The EERS Workgroup created by the law has completed a report examining the feasibility and impact of the standard and providing implementation recommendations in June of 2011.

Utilities are permitted to determine the best way to achieve the energy savings targets and to develop and fund programs towards this end. Based on the recommendations of the EERS Workgroup, the DNREC may establish an energy efficiency charge to fund these programs on customer bills. Any charge must be levied on a per kilowatt-hour (kWh) or per therm basis and may not vary by customer class. In addition, the chosen rate may not result in an average charge greater than $0.58 per month per residential electric customer, or $0.41 per month per residential natural gas customer. Utilities collect and remit any energy efficiency charges to the Delaware Energy Office for deposit into the Sustainable Energy Trust Fund (SETF), with a separate account for each utility. The funds will be used to support activities in the following areas and proportions.

• 75% to further the goal and activities of the Sustainable Energy Utility (SEU), including energy conservation, energy efficiency, renewable energy and energy financing.
• 20% to fund the Weatherization Assistance Program
• 5% to the Delaware Energy Office to cover EERS program costs

Please see the EERS Workgroup web site (listed as the program web site at the top of this page) for further information on how the standard will be implemented.