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In comments at the Texas Public Utility Commission (TPUC) in response to questions raised about energy efficiency, parties filed a host of comments on the topic.  Excerpts from filed comments are presented below.

The REP Coalition – “both EE [energy efficiency] and DR [demand response] are first and foremost competitive energy services under Commission rule that are and should be offered in the competitive market.”

“The Commission’s rules both reinforce and caveat this distinction by acknowledging the separation of the TDU’s administration of EE programs from the prohibited competitive energy services. Therefore, to the extent EE and DR will also continue to be incentivized through TDU EE programs, it is important to consider how those incentives can be aligned and co-optimized with the organic wholesale market incentives that arise from ERCOT’s competitive retail market.”

“Any financial incentives from TDU EE programs for residential or small commercial DR initiatives should be viewed as a way to augment retail electric providers’ (‘REPs’) economic motivation to offer DR products to those customer segments, not a substitute for those offers.” 

The REP Coalition said that, in considering initiatives to expand the growth of DR in the areas of the state open to retail competition, three fundamental principles should govern:

1. “DR is a competitive energy service;
2. “REPs should be the entities that provide DR service to customers; and
3. “to the extent TDU EE programs remain involved in EE and DR, they should be focused on structural improvements and incentive payments (e.g., AC tune-ups, heat pump installations, funding for smart thermostat deployment, demand-related cost incentives through REP dispatch), which can make DR more effective, rather than through load control programs directed by TDUs.”

“REPs — and not third-party DR vendors — are best suited to facilitate load resource participation within the framework of ERCOT’s competitive wholesale and retail markets.”

“In competitive portions of ERCOT, REPs are the primary customer-facing entity for electric service and bear responsibility for customer usage in wholesale settlement. Further, a key design feature that has allowed the retail market to be so successful is the requirement for REPs to own the customer relationship for electric service. This simplifies the customer experience, allows competition on a level playing field, and ensures established customer protections will govern the customer/market entity relationship,” the REP Coalition said

“REPs are responsible for procuring power for their customers, and if the REP does not have direct access or visibility into the customers consumption/habits, that makes it increasingly difficult to forecast the appropriate amount of power to procure for each particular time interval of service. If there are large unanticipated swings in the customer’s consumption due to third party DR activity, the REP will have an even more difficult time forecasting and managing their customer load.” 

“Placing the responsibility for DR programs with REPs, rather than third-party DR providers, avoids policy concerns such as the lack of customer protection rules applicable to these third-party providers.

“Any financial incentives from TDU EE programs for residential or small commercial DR initiatives should be viewed as a way to augment retail electric providers’ (‘REPs’) economic motivation to offer DR products to those customer segments, not a substitute for those offers,” 

The REP Coalition said that, in considering initiatives to expand the growth of DR in the areas of the state open to retail competition, three fundamental principles should govern:

1. “DR is a competitive energy service;
2. “REPs should be the entities that provide DR service to customers; and
3. “to the extent TDU EE programs remain involved in EE and DR, they should be focused on structural improvements and incentive payments (e.g., AC tune-ups, heat pump installations, funding for smart thermostat deployment, demand-related cost incentives through REP dispatch), which can make DR more effective, rather than through load control programs directed by TDUs.”

“REPs — and not third-party DR vendors — are best suited to facilitate load resource participation within the framework of ERCOT’s competitive wholesale and retail markets.”

“In competitive portions of ERCOT, REPs are the primary customer-facing entity for electric service and bear responsibility for customer usage in wholesale settlement. Further, a key design feature that has allowed the retail market to be so successful is the requirement for REPs to own the customer relationship for electric service. This simplifies the customer experience, allows competition on a level playing field, and ensures established customer protections will govern the customer/market entity relationship,” the REP Coalition said

“REPs are responsible for procuring power for their customers, and if the REP does not have direct access or visibility into the customers consumption/habits, that makes it increasingly difficult to forecast the appropriate amount of power to procure for each particular time interval of service. If there are large unanticipated swings in the customer’s consumption due to third party DR activity, the REP will have an even more difficult time forecasting and managing their customer load.”

 “Placing the responsibility for DR programs with REPs, rather than third-party DR providers, avoids policy concerns such as the lack of customer protection rules applicable to these third-party providers.”

 “While the REP Coalition is not recommending specific changes to the bonus calculation for TDUs set out in the rule, to the extent that REPs will be leaned on to achieve demand reduction goals in ERCOT, a credit (funded through TDU Energy Efficiency dollars) to REPs that are able to achieve those goals may be appropriate to serve a similar ‘bonus’ purpose for REPs as the existing bonus serves for TDUs.”

Octopus Energy Comments – Octopus Energy recommended setting aside a portion of expanded EE program funding to be allocated to REPs to facilitate delivery of EE and DR products and services to retail customers.

“Octopus Energy supports aggressive expansion of the state’s commitment to DERs including EE and DR. Given their relationship to retail customers, REPs should be key players in delivering EE and DR to customers, especially residential customers. We strongly recommend that the Commission consider modifying delivery models for utility EE and DR to better utilize this relationship.” 

“For example, we recommend that the Commission consider both an increase in the funding available for EE and DR programs, as well as establishing a percentage of that increased funding for utility programs to be delivered by REPs. Under current programs, a REP must apply for funding from each individual utility, and each utility may have different program rules even for similar programs. Just as REPs can better deliver retail products and services to customers with the standardization that comes from having a pro-forma TDU tariff, creating standardized programs across ERCOT utilities and providing adequate funding opportunities that are dedicated to facilitating REP delivery of EE and DR would dramatically improve the ability of REPs to reach their customers.” 

CenterPoint Houston – said the PUC should, “[a]llow[] electric utilities to deliver energy efficiency incentives directly to customers and increase direct marketing capabilities to drive awareness and participation.”

See all filed comments at project link below.

CenterPoint Responses To TPUC Questions  (05/24/2024)
ERCOT Comments  (05/24/2024)
Joint Utilities’ Comments  (05/23/2024)
Comments Of Octopus (05/23/2024)
REP Coalition’s Comments (05/23/2024)
Texas-New Mexico Power Company’s Comments  (05/23/2024)

Project 56517   (04/17/2024)
(Questions For Comments On Energy Efficiency)