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State Energy Efficiency Policy Database

Delaware

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Advances the efficient use of energy in homes, buildings and industry in the northeastern United States.
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Summary

Delaware has made significant advances toward strengthening its energy efficiency programs, establishing the nonprofit Delaware Sustainable Energy Utility (SEU) to operate programs to deliver comprehensive end-user efficiency and customer-sited renewable energy services. SEU operates as “Energize Delaware.” In 2009, Delaware approved an Energy Efficiency Resource Standard (EERS) that set goals for consumption and peak demand for electricity and natural gas utilities. The goals are 15% electricity consumption and peak demand savings and 10% natural gas consumption savings by 2015.Since 2006, Delaware law has required electricity providers to engage in integrated resource planning (IRP). Utilities develop and file demand-side management and energy efficiency plans with the commission.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

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November 8, 2013


Customer Energy Efficiency Programs

In 2007, Senate Bill 18, Substitute Number 1 was passed, creating the nonprofit corporation Sustainable Energy Utility under the direction of an Oversight Board and the State Energy Coordinator within the Department of Natural Resources and Environmental Control. The SEU was designed to operate programs to deliver comprehensive end-user energy efficiency and customer sited renewable energy services.  In January 2013, the SEU re-launched a residential new construction program and has additional programs under development.

Parallel with the development of the sustainable energy utility, electric utilities are required to prepare integrated resource planning demand-side management plans. Delmarva Power & Light filed its second Integrated Resource Plan (“IRP”) on December 7, 2012 opened under Order No. 8259. On July 29, 2011 Delmarva Power & Light filed an application with the Commission seeking approval of the Company's proposed Residential Direct Load Control Program (PSC Docket No. 11-330). Delmarva Power & Light's New Residential Air Conditioning Cycling Program was approved on October 17, 2012.

The Sustainable Energy Utility (SEU) programs are funded by Regional Greenhouse Gas Initiative proceeds, the American Recovery and Reinvestment Act (the 2009 federal economic stimulus), and via "special purpose" bonding by the State of Delaware. Revenue sources to pay off the bond debt and help the SEU to grow will include:

  1. Shared savings agreements with program participants,
  2. Partial proceeds from the sale of renewable energy credits in local and regional markets, and
  3. Green energy fund monies (from a fund, established by an earlier statute that collects revenue from electricity sales).

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

Links:

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November 8, 2013


Energy Efficiency Resource Standards

Summary: Not a mandatory EERS. Considered voluntary until final implementation rules are established.

 Delaware established energy savings targets in 2009 with the passage of SB 106, the Energy Efficiency Resource Standards Act of 2009, but final implementation rules have yet to be established. 

The Act set cumulative targets for the reduction of energy consumption and peak demand through electricity and natural gas energy efficiency programs: a 15% reduction in electricity consumption, a 15% reduction in peak electricity demand, and a 10% reduction in natural gas consumption by 2015, based on 2007 retail sales.  The targets apply to all electric and natural gas utilities in the state.  The Act also requires utilities to first consider cost-effective electricity demand response and demand-side management strategies for meeting base load and load growth needs before any increase in energy supply.

The Act set up an eleven-member stakeholder workgroup to assist in developing key regulations, assessing the feasibility and impact of pursuing the established targets, reviewing progress annually, and recommending changes to the plan as needed.  In its June 2011 report, the workgroup identified several issues that undercut the effectiveness of the policy. First, the level of proposed funding (gathered through an energy efficiency charge on customer bills) make it unlikely that the state would meet the targets established in the Energy Efficiency Resource Standards Act. Second, the workgroup found that conflicting state statutes muddied the institutional structure around efficiency program implementation and accountability, making it impossible to determine which entity (utilities, the Sustainable Energy Utility, or the Public Service Commission) has accountability for EERS performance results and the development of enforcement mechanisms.  

Given the lack of final implementation rules, and the funding and institutional challenges outlined above, Delaware's energy savings targets are considered voluntary.


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August 9, 2013


Alternative Business Models

The state evaluates the issue of decoupling on a utility-by-utility basis when it sets utility rates through rate case proceedings. In September 2009, the PSC entered Order 7641 (Docket No. 09-276T), examining a modified fixed variable rate design for Delmarva (electric and gas). In 2011 the PSC approved a form of decoupling for Delmarva Power & Light.


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August 12, 2013


Reward Structures for Successful Energy Efficiency Programs
There is currently no policy in place that rewards successful energy efficiency programs. 

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August 9, 2013


Energy Efficiency as a Resource

In 2009, Senate Bill 106 stated that energy efficiency would be the “highest-priority resource” in the state. Cost-effectiveness was one motivation for this decision. The Electric Utility Retail Customer Supply Act of 2006 requires electricity providers to file 10-year integrated resource plans that will address long-term supply contracts, including provisions for renewable energy and demand-side resources (26 Del. C. §1001-1012.). Additional integrated resource planning rules are under consideration. In PSC Regulation Docket Number 60, the PSC entered Order Number 7318 (2007), proposing integrated resource planning regulation. This regulation was finalized in 2008.


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August 12, 2013


Evaluation, Measurement & Verification

The evaluation of ratepayer-funded energy efficiency programs in Delaware relies on legislative mandates (Energy Efficiency Resource Standards Act of 2009). Evaluations are administered by the Delaware Department of Natural Resources and Environmental Control. Statewide evaluations are conducted. In terms of a benefit-cost test, Delaware relies on the Total Resource Cost Test (TRC), and considers it to be its primary cost-effectiveness test. Rules for benefit-cost tests and evaluation requirements are outlined in the Delaware Evaluation Framework and will be specified in upcoming regulations.

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August 9, 2013