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New ACEEE Recommends That Texas Distribution Utilities Be In Charge of Sought New Demand Response, Efficiency Programs Serving 5 Million Customers (Includes Smart Thermostat Programs, Managed EV Charging)

May 11, 2023

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Copyright 2010-23
Reporting by Paul Ring •

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A new report from the American Council for an Energy-Efficient Economy (ACEEE) concerning proposed programs for demand response, energy efficiency, and similar measures in Texas "recommend[s]" that distribution utilities be in charge of the programs

Most notably, the suite of programs sought by ACEEE includes several programs focused on customer interaction, monitoring, and behavior, including a program for central air conditioners with smart thermostat control and electric vehicle managed charging (as opposed to more typical incentive funding)

The ACEEE report's recommended suite of program includes:

Demand response measures

• Central air conditioner with smart thermostat control demand response

• Water heater demand response

• Electric vehicle managed charging

With regards to certain of the demand response programs, the report also states, "In an important distinction from current Texas demand response programs, these programs would require the electric utilities to recruit additional new participants every year, not merely maintain current customers."

The report envisions 2.6 million homes in the central AC demand response program and 2.2 million in the water heater demand response program

Efficiency measures

• Program to replace electric furnaces with ENERGY STAR® heat pumps

• Attic insulation and sealing incentive program

• Heat pump water heaters incentive program

• Smart thermostat incentive program (both an efficiency and demand response program)

• Set of energy efficiency programs serving low-income homeowners and renters, including low-cost kits distributed by community groups and more comprehensive whole-home retrofit programs for single-family homes and multifamily apartments

• Small commercial and industrial retrofit program

• Monitoring-based commissioning program for large commercial buildings

The report states, "We recommend that distribution utilities be in charge of these programs since they serve all the customers in a specific geographic area and can use economies of scale and geographic targeting to help reduce costs."

The report does continue in stating that, "Retail energy providers could be allowed to offer these services to their customers, preferably offering comprehensive services that serve all customers under the same program rules and cost allotments as the utilities."

"Short of this, retail providers could offer a much more limited program focused only on smart thermostats," the report states

"Even where distribution utilities oversee the programs, most of the costs will be for private-market program support contractors and installation contractors such as insulation and air-conditioning contractors," the report states

ACEEE states, "The study finds that implementing these programs from 2024 through 2030 could reduce summer peak loads statewide by about 14,800 MW and reduce winter peaks loads by about 23,500 MW[.]"

"In summer, programs rewarding charging electric vehicles at off-peak times would deliver the biggest impact, followed by automated cooling management to reduce peak-period cooling use. Incentivizing customers to improve attic insulation and seal air ducts would also have large impacts. In winter months, the biggest peak reductions would come from incentives for replacing electric furnaces with heat pumps, managing electric vehicle charging, and using smart thermostats in homes," ACEEE states

Link to report


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