4. Benchmarking
Benchmarking was an important directive for commercial sector energy efficiency programs in D.09-09-047. Ordering Paragraph (OP) 30(a) states:
Pacific Gas and Electric Company, Southern California Edison Company, San Diego Gas & Electric Company, and Southern California Gas Company shall benchmark all facilities that enter any of the Commercial Energy Efficiency Program sub-programs for services.
D.09-09-047 at 153 specifically directs the IOUs to collaborate on benchmarking tools, stating: "We direct all utilities to collaborate on the use of automated benchmarking tools to achieve economies of scale and consistent benchmarking services statewide. We expect any cost savings to be applied to benchmarking more buildings." The decision at 172 states: "We direct the utilities to use the updated benchmarking guidelines as developed by the California Energy Commission under their activities to implement Assembly Bill (AB) 1103."2 While the decision gave guidance for benchmarking activities, it did not specify the tools to be used to benchmark. Further, the decision language also states IOUs should specifically incorporate benchmarking in the nonresidential audit, Savings by Design, retrofit, direct install, and retro-commissioning programs.
On December 14, 2009, SCE, on behalf of all the IOUs, submitted Advice Letter 2417-E requesting clarification and direction on many issues pertaining to the implementation of the energy efficiency program portfolio. Benchmarking was one of the main issues in the Advice Letter. On May 12, 2010 Energy Division rejected the Advice Letter without prejudice and suggested the IOUs file a Petition for Modification as the best avenue to address the issues raised.
4.1. IOU Benchmarking Proposal
In the Petition, Joint IOUs included a benchmarking proposal, and provided specific language in Appendix B of their Petition. The proposal details three basic principles and six utility benchmarking services and activities the Joint IOUs assert will satisfy the benchmarking mandate in D.09-09-047. These issues include: exclusive use of ESPM, targeting of larger buildings as per the AB 1103 proposed implementation schedule, identify benchmarking as a customer driven process for whole buildings, ensure customer privacy and protections, and numerical targets.
4.1.1. Benchmarking Tool
D.09-09-047 did not indicate which benchmarking tool should be utilized and directed the utilities to collaborate on the use of automated benchmarking tools. In the Petition, Joint IOUs request the exclusive use of ESPM as the main benchmarking compliance tool. They claim this tool is widely understood by the market and will not create confusion.
AB 1103 requires all commercial buildings to benchmark and submit a score via ESPM upon the leasing, financing, or purchasing of a building. Joint IOUs assert that ESPM is the benchmarking tool required for complying with AB 1103. However, the scope for AB 1103 is very specific, requiring benchmarking of buildings under certain transactions. D.09-09-047 is larger in scope, applying to all buildings that enter into IOU commercial sector energy efficiency programs, effective January 1, 2010. We view D.09-09-047 as a mechanism to expand activities now mandated by AB 1103.
AB 1103 is being implemented by the California Energy Commission (CEC). The implementation date is expected to be around July 2011; guidelines are still being drafted. D.09-09-047 anticipated the IOUs would begin benchmarking activities at the beginning of the 2010-2012 energy efficiency program cycle; we did not intend for the IOUs to wait for the implementation of AB 1103 to begin benchmarking activities. We understand that benchmarking activities have taken place during this portfolio period. However, ongoing benchmarking activities should incorporate the efforts of the CEC as AB 1103 is implemented.
At the PHC, the IOUs acknowledged if they were to exclusively use the ESPM tool, the Commission's requirement for "all" buildings to be benchmarked would not be met.3 Joint IOUs admit that this failure to comply would occur because ESPM is not a universally-applicable tool. The CEC is developing an asset rating tool, currently identified as the Building Energy Asset Rating System or BEARS. In addition to the BEARS tool, the CEC is also developing a California-specific rating tool that will work with ESPM to include more California buildings. While the IOUs agree that other benchmarking tools are available, they claim that there is not one tool available to benchmark all buildings. At the PHC, the IOUs agreed to support and pilot new benchmarking tools that differ from ESPM as long as they were not mandated and such tools provided valuable information.
DRA/TURN's position is that the Commission should not mandate only one benchmarking tool. DRA asserts that ESPM is an operational tool and that there may be other emerging tools, such as an asset rating tool, that could address the shortcomings of ESPM. DRA/TURN further commented that the inability of ESPM to benchmark portions of buildings (those which do not fit certain technical parameters) is problematic. DRA/TURN suggest the need for a more comprehensive review of ESPM, and recommend continued collaboration between the utilities and Energy Division to resolve ongoing benchmarking issues.
We will not modify D.09-09-047 to deem ESPM as the exclusive benchmarking tool. ESPM appears to be the most prevalent rating tool currently available today. Therefore, it is reasonable for the utilities to use ESPM for the majority of their benchmarking efforts. To address the shortcoming of this tool, the IOUs should pilot the best available alternative tools, including the California rating tool and the asset rating tool (BEARS) available from the CEC. We reiterate OP 24(g) in D.09-09-047: "(The utilities) should use this data collected from the calendar year 2010 to report new and existing benchmarking data to the Energy Division and the service list by July 1, 2011."
4.1.2. Numerical Targets
While OP 30(a) of D.09-09-047 dictates that all buildings participating in commercial programs or subprogram services should be benchmarked, D.09-09-047 (See section 5.3.1.2) also sets energy efficiency benchmarking targets of 50,000 commercial and institutional buildings for PG&E and SCE, with a benchmarking goal of 20,000 for SDG&E for this program cycle. The decision both encouraged PG&E and SCE to set this benchmark goal, and directed SCE to benchmark 50,000 buildings (consistent with a target set by PG&E). SDG&E was directed to benchmark 20,000 commercial buildings. D.09-09-047 also suggested the utilities start benchmarking efforts by focusing on the following programs: Retro Commissioning and retrofit programs, 4 Non-Residential Audits,5 and Savings by Design.6
Joint IOUs propose to eliminate numerical benchmarking targets adopted by D.09-09-047, by changing language regarding these targets from "encouraged" to "an aspirational stretch." Joint IOUs also propose to delete the requirement in several Ordering Paragraphs for the IOUs to benchmark "all" specified facilities, instead substituting the concept that they should "actively promote" benchmarking.7 The IOUs want to remove mandatory requirements because they do not want to deny energy efficiency incentives and services if a customer does not want to benchmark.
At the PHC, DRA suggested there could be a middle ground between "actively promote" and benchmarking "all" large buildings. DRA suggested that as a condition for getting incentives, the customer would be required to release information for benchmarking purposes. We do not agree with DRA's suggestion; while the need for the utility to benchmark is important, customers' willingness to release customer information should not preclude customer participation in all energy efficiency programs.
We disagree with the IOU proposal to eliminate the numerical targets for benchmarking; these targets were approved in D.09-09-047 based on the data available in that proceeding. The IOUs provided no further or better information in their Petition to justify a change for these targets for the IOUs. Similarly, we will not accept the IOU proposed language of "aspirational stretch" instead of "encouraged" to meet benchmarking targets; this proposed term implies a level of difficulty in meeting Commission goals which has not been proven.
The IOU proposal to simply "actively promote" benchmarking is also insufficient to meet our expectations. With this language, there is no way to determine whether many, most or few buildings will actually be benchmarked, and no way to determine if the IOUs have made their best efforts. The requirement for benchmarking "all" buildings is an objective standard to achieve. At the same time, we do agree that it may not be possible to benchmark all commercial buildings in this portfolio period.
In order to promote the benchmarking of as many commercial buildings as possible without setting what may be an impossible standard, we look to the targets established in D.09-09-047. SDG&E was required to benchmark 20,000 commercial buildings, while SCE was required to benchmark 50,000 commercial buildings. PG&E was encouraged to benchmark 50,000 commercial buildings. These required or encouraged levels are not consistent with the other requirement of D.09-09-047 to benchmark all commercial buildings. We have determined that it is not feasible to require benchmarking of all commercial buildings. Instead, we will retain the numerical targets set in D.09-09-047, as required for SCE and SDG&E. For PG&E, we will impose the same requirement to benchmark 50,000 commercial buildings. This provides consistency across utilities and will ensure a strong commitment to benchmarking statewide.8
The benchmarking requirements established here should be considered minimum requirements for this portfolio period. Every building benchmarked for energy efficiency purposes provides additional opportunities to find energy efficiency savings. We encourage the utilities to make every effort to benchmark all commercial buildings as soon as practical.
We do understand the concern of the IOUs that some customers, such as buildings with multiple tenants, may not consent to benchmark and release their energy usage data. By setting numerical requirements for benchmarking buildings in D.09-09-047 and eliminating the requirement to benchmark all commercial buildings, we recognize that release of customer information cannot be forced upon customers. However, while desirable, it is not always necessary to obtain the permission of customers to benchmark buildings. Instead, the IOU can use information (energy usage, square footage, building type and address) already available to develop a reasonable proxy for the energy efficiency benchmark.
4.1.3. Targeting Larger Buildings
The Petition requests alignment with the CEC's phased approach to target larger facilities first and smaller facilities over time with the ESPM tool, and as other appropriate tools and systems are phased in to address these building types. D.09-09-047 at 172 directs the IOUs' Savings by Design program to use the updated benchmarking guidelines as developed by the CEC to advise on how to benchmark. These guidelines note that larger facilities should be targeted first. DRA/TURN agree with this phased approach. We agree that this phased approach of buildings is consistent with CEC guidelines.
We will modify OP 30(a) to add the sentence: "Benchmarking may be phased in so that established benchmarking tools are used to target larger facilities first, consistent with California Energy Commission guidelines for phasing in benchmarking of buildings to apply to all existing commercial programs."
To summarize our intent: The utilities are required to benchmark at least specified numbers of commercial buildings for energy efficiency purposes in the 2010-2012 portfolio period. The utilities should focus on benchmarking larger buildings first. The utilities should use ESPM for larger buildings when feasible, along with newly developed benchmarking tools. If customer resistance or a lack of appropriate tools makes it difficult to benchmark certain buildings (especially smaller buildings), the utilities should use known factors to construct proxy benchmarking data, if possible.
4.1.4. Customer Privacy and Protection
The Petition also requests that the Commission ensure compliance and consistency with customer privacy policies and protections regarding benchmarking. We determined above that ESPM will not be the exclusive benchmarking tool. The IOUs' privacy concerns are focused on instances where benchmarking is performed using ESPM. If data privacy is a customer concern the utility can use other benchmarking tools, or use proxy data. Therefore, there is no need to adopt specific data privacy provisions at this time. To the extent that privacy issues prevent access to customer data even through proxies, such buildings will not be benchmarked. This outcome is consistent with our requirement that not all buildings must be benchmarked in this portfolio period.
With the CEC's expected regulations on AB 1103 to be released soon, we intend to work closely with the CEC to implement this statute.
2 Ch. 533, Stat. 2007. This statute required electric and gas utilities on and after January 1, 2009, to maintain records of the energy consumption data of all nonresidential buildings to which they provide service, in a format compatible for uploading to the ESPM for at least the most recent 12 months. Upon written or secured electronic authorization of a nonresidential building owner or operator, on and after January 1, 2009, an electric or gas utility would be required to upload all of the energy consumption data for a building to the ESPM in a manner that preserves the confidentiality of the customer. The statute also required, on and after January 1, 2010, that a nonresidential building owner or operator disclose ESPM benchmarking data and ratings, for the most recent 12-month period, to a prospective buyer, lessee, or lender. After the benchmarking data and ratings are disclosed, the property owner, operator, or his or her agent would not be required to provide additional information regarding the benchmarking data and ratings.
3 The requirement to benchmark all commercial buildings is addressed later in this section.
4 D.09-09-047 at 155.
5 D.09-09-047 at 152.
6 D.09-09-047, OP 24(g).
7 Specifically, OP 24(g), OP 30(a), OP 30(c), and OP 39(a).
8 D.09-09-047 did not provide benchmarking targets or requirements for SoCalGas. We strongly encourage SoCalGas to benchmark as many commercial buildings as possible. SoCalGas should coordinate its efforts with the electric utilities serving the buildings.
