REPORT TO COUNCIL
SUBJECT
Title
Note and File the Ten-Year Goals for Silicon Valley Power’s Energy Efficiency Program
Report
BACKGROUND
AB 2021, signed on September 29, 2006, requires every local publicly owned electric utility (POU) to identify all potentially achievable cost-effective electricity efficiency savings and to set annual targets for energy efficiency savings and demand reduction over 10 years. The first report was due on June 1, 2007. The bill also requires POUs to report those targets to the California Energy Commission (CEC) within 60 days of adoption. Current law requires updates every four (4) years.
On behalf of its members, the California Municipal Utility Association (CMUA) issued a Request for Proposals and, as a result, contracted with GDS Associates to develop the goals for energy efficiency for each CMUA member utility. These goals are based on a state-wide proprietary model developed for the public power utilities using utility-specific data. For each utility, GDS Associates reviewed historical and proposed sales by customer class, avoided cost data, a summary of past and current utility energy efficiency programs, and past program participation. Upcoming codes and standards changes are also incorporated to determine feasible goals for the utility for the next 10 years. Climate zone and the type of customers in a POU’s utility service territory also have an impact on the model output for each utility.
The model provides technical, economic, and market potential for energy efficiency within the City of Santa Clara. Technical potential includes all potential remaining energy savings opportunities where technology exists to save energy. Economic potential looks at what measures will pay for themselves within the life of the measure. Market potential takes into account market saturation and customer decision-making, such as required payback periods or return on investment to install energy efficiency measures. The goals GDS provided in the model output tables are the market potential of energy efficiency measures in the City of Santa Clara.
DISCUSSION
SVP’s cumulative energy efficiency program target for the next 10 years is set at 372,614 MWh. This results in an average annual target of 0.60 percent of total projected energy sales. Targets are unique to each utility based on the types of customers it serves, the climate zone, and how much previous energy efficiency has been implemented within the utility’s service territory. The largest contributor to the goals is the energy efficiency potential attributed to data centers, including new construction data centers, as they make up the largest portion of Silicon Valley Power’s electric load. With the projected load increase from new data centers over the next several years, and expansion of existing data centers, these goals represent a significant increase over the goals presented in 2021.
Residential customers make up approximately 6% of the utility’s electric load, while in comparison, 35% of energy sales is residential statewide. Statewide, the average energy use of a residential customer is higher than that of Santa Clara residents due to more extreme temperatures driving the use of air conditioning and/or electric heat. As such, the largest statewide contributor to energy efficiency potential in residential units comes from air conditioning. With Santa Clara’s mild climate, there is little energy efficiency potential attributable to more efficient air conditioning. On average, Santa Clara residents use less than 500 kilowatt hours (kWh) per month. With this low overall residential energy use and the low percentage of utility load, residential energy efficiency potential is limited in Santa Clara, which drives lower residential goals. Over the ten-year goals, residential energy efficiency potential increases as new multifamily housing units are constructed.
Achievement of these energy efficiency goals support the City’s Climate Action plan for greenhouse gas (GHG) emissions reductions through energy efficiency measures. These goals do not include the net energy and GHG emissions impacts of building electrification efforts, which further reduce GHG emissions from residents and businesses in Santa Clara. The energy efficiency potential study only considers energy savings from existing electric equipment replaced with more efficient electric options. While there is little opportunity for additional energy savings in the residential market segment in Santa Clara, Silicon Valley Power offers many building electrification programs to assist residents in switching from natural gas to efficient electric appliances to support GHG reduction goals.
Establishing these ten-year energy efficiency goals meets regulatory compliance obligations under AB 2021, as amended. The information gained from the potential study helps SVP to understand the energy efficiency market potential and design programs that are tailored to meet the needs of the Santa Clara community. These energy efficiency goals will be achieved through programs funded by the existing state-mandated Public Benefit Charges collected from customers on monthly electric utility bills.
A summary of the gross and net market potential goals by customer class is attached. Gross energy efficiency goals include all energy savings regardless of whether the utility’s programs influenced the customer’s decision to install the energy efficiency measure. Net energy efficiency goals adjust for free ridership and spillover effects. A customer is considered a free rider if they would have installed the energy efficiency measure without the utility program. Spillover effects are where customers are influenced to make decisions based on factors not directly tied to the utility’s energy efficiency program offerings. To account for these factors, net-to-gross values have been determined for each energy efficiency measure. This is done through statewide net-to-gross studies of energy efficiency measures and are applied to each measure when reporting the results of energy efficiency programs to the California Energy Commission.
The incremental market potential goals are provided to the CEC for each utility and represent the annual feasible energy efficiency savings that can be achieved. Historically, net energy savings goals were used. Some utilities moved toward tracking program results against gross energy goals, so Silicon Valley Power began providing both gross and net goals to City Council for informational purposes in 2021. This allows comparison of current goals to the historic adopted net goals. Net energy savings from utility programs are reported to agencies such as the Western Area Power Administration, the California Energy Commission and the Energy Information Administration and these program results can be compared to the net goals.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to section 15378(b)(2) of Title 14 of the California Code of Regulations as a continuing administrative activity (general policy and procedure making).
FISCAL IMPACT
There is no fiscal impact as this is an information item to note and file only.
COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Note and file the Ten-Year Goals for Silicon Valley Power’s Energy Efficiency Program.
Staff
Reviewed by: Nico Procos, Director of Silicon Valley Power
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. 10 Year Energy Goals (Incremental Gross MWh)
2. 10 Year Energy Goals (Incremental Net MWh)