STATE OF VERMONT
PUBLIC SERVICE BOARD
Petition of Vermont Transco, LLC, and
Vermont Electric Power Company, Inc.
(collectively, “VELCO”), and Central Vermont
Public Service Corporation (“CVPS”) for a
Certificate of Public Good, pursuant to 30
V.S.A. § 248, for the “Southern Loop Project,”
located in Vernon, Guilford, Brattleboro,
Dummerston, Newfane, Brookline, Townshend,
Grafton, Windham, Andover, Chester, Ludlow
and Cavendish, Vermont, consisting of the
following elements: (1) a new, approximately
51-mile, 345 kV transmission line between
Vernon-Cavendish, to be built parallel to and
within the same utility right-of-way as
VELCO’s existing Vernon-Cavendish 345 kV
line; (2) a new VELCO 345/115 kV Vernon
substation, to be located just north of the
Vermont Yankee Nuclear Power Station; (3) a
new 345/115/46 kV Newfane substation; (4) a
new, approximately one-mile, 345 kV
transmission line loop between the new
Newfane substation and the new VernonCavendish 345 kV line; (5) expansion of
VELCO’s Coolidge substation in Cavendish,
Vermont; and (6) the implementing of
incremental energy efficiency to defer
transmission upgrades in Southern Vermont
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Docket No. ____
PREFILED TESTIMONY OF
JONATHAN KLEINMAN
ON BEHALF OF
PETITIONERS
November 8, 2007
The purpose of Mr. Kleinman’s testimony is to present and briefly summarize the
following reports entitled: “Assessment of Energy Efficiency and Customer-Sited
Generation Investments in the Southern Loop,” and “Assessment of Achievable Potential
for Energy Efficiency in the Central and Northwest Vermont Load Zones.”
TABLE OF CONTENTS
1.
Introduction ............................................................................................................. 1
2.
Conclusion ............................................................................................................ 15
EXHIBITS
Exhibit Petitioners JK-1
Resume of Jonathan Kleinman
Exhibit Petitioners JK-2
Assessment of Energy Efficiency and CustomerSited Generation Investments in the Southern Loop
(Optimal Energy, Inc., Vermont Energy Investment
Corporation, Green Energy Economics Group,
2007)
Exhibit Petitioners JK-3
Assessment of Achievable Potential for Energy
Efficiency in the Central and Northwest Vermont
Load Zones (Optimal Energy, Inc., Vermont Energy
Investment Corporation, 2007)
STATE OF VERMONT
PUBLIC SERVICE BOARD
Petition of Vermont Transco, LLC, and
Vermont Electric Power Company, Inc.
(collectively, “VELCO”), and Central Vermont
Public Service Corporation (“CVPS”) for a
Certificate of Public Good, pursuant to 30
V.S.A. § 248, for the “Southern Loop Project,”
located in Vernon, Guilford, Brattleboro,
Dummerston, Newfane, Brookline, Townshend,
Grafton, Windham, Andover, Chester, Ludlow
and Cavendish, Vermont, consisting of the
following elements: (1) a new, approximately
51-mile, 345 kV transmission line between
Vernon-Cavendish, to be built parallel to and
within the same utility right-of-way as
VELCO’s existing Vernon-Cavendish 345 kV
line; (2) a new VELCO 345/115 kV Vernon
substation, to be located just north of the
Vermont Yankee Nuclear Power Station; (3) a
new 345/115/46 kV Newfane substation; (4) a
new, approximately one-mile, 345 kV
transmission line loop between the new
Newfane substation and the new VernonCavendish 345 kV line; (5) expansion of
VELCO’s Coolidge substation in Cavendish,
Vermont; and (6) the implementing of
incremental energy efficiency to defer
transmission upgrades in Southern Vermont
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Docket No. ____
PREFILED TESTIMONY OF
JONATHAN KLEINMAN
ON BEHALF OF
PETITIONERS
1
1.
Introduction
2
Q1.
Please state your name, occupation, and business address.
3
A1.
My name is Jonathan Kleinman. I am employed by Optimal Energy, Inc.
4
(“Optimal”) as a Senior Associate. My business address is 14 School Street,
5
Bristol, VT 05461.
Southern Loop Project, PSB Docket No._____
Prefiled Testimony of Jonathan Kleinman
November 8, 2007
Page 2 of 15
1
Q2.
Please describe your education and employment background.
2
A2.
I have over 7 years of experience in all aspects of energy efficiency, including
3
facility energy management and project evaluation, policy development and
4
research, integrated resource planning, cost-benefit analysis, and efficiency and
5
renewable program design, implementation and evaluation. I am a Certified
6
Energy Manager and am also accredited by the U.S. Green Building Council for
7
the Leadership in Energy and Environmental Design program.
8
9
Beginning in 2001, I worked as a Project Manager and Market Coordinator for
10
Efficiency Vermont, and have maintained an active support role since joining
11
Optimal in 2004. In these capacities, I have worked with many Vermont
12
businesses, helping them to lower their overall energy costs and improve their
13
workplaces. Through these efforts, I have become familiar with the energy
14
efficiency potential at a range of business facilities in the state. I have also helped
15
to develop strategies at Efficiency Vermont to improve relationships and in the
16
state’s K-12 schools, colleges and universities, and largest commercial and
17
industrial customers, as well as to increase participation in the new construction
18
market. Outside of Vermont, I have supported implementation efforts by the
19
Long Island Power Authority, Efficiency Maine, and Efficiency New Brunswick.
20
I have also managed or participated in a number of studies to determine energy
21
efficiency and combined heat and power potential, including evaluations of the
22
potential on Long Island, the NSTAR service territory in Massachusetts, the State
Southern Loop Project, PSB Docket No._____
Prefiled Testimony of Jonathan Kleinman
November 8, 2007
Page 3 of 15
1
of New York (for natural gas), the Province of Prince Edward Island, and two
2
provinces in China. These studies have included forecasts of energy and demand
3
reduction, program designs, and estimates of implementation costs (both financial
4
incentives and labor costs).
5
6
Prior to my experience in Vermont, I was the Energy Specialist for the Center for
7
Study of Responsive Law in Washington, DC, researching and promoting the
8
procurement of energy-efficient technologies by the public sector. I also
9
conducted evaluations of the independent power production market and the
10
potential for greenhouse gas reduction in the early 1990s.
11
12
I have a B.S. in Mechanical Engineering from Cornell University, and an M.S. in
13
Technology and Policy from the Massachusetts Institute of Technology. My
14
resume is included with Petitioners’ filing in this Docket as Exhibit Petitioners
15
JK-1.
16
17
Q3.
Have you testified previously before the Public Service Board?
18
A3.
No.
20
Q4.
What is the purpose of your testimony?
21
A4.
The purpose of my testimony is to present and summarize two reports prepared
19
22
under my direction by Optimal and Vermont Energy Investment Corporation, the
Southern Loop Project, PSB Docket No._____
Prefiled Testimony of Jonathan Kleinman
November 8, 2007
Page 4 of 15
1
first of which was also prepared by Green Energy Economics Group (“GEEG”).
2
The first report, Exhibit Petitioners JK-2, was prepared for Central Vermont
3
Public Service Corporation (“CVPS”) to evaluate the achievable potential of
4
energy efficiency (“EE”) measures to control or reduce winter peak electric load
5
in CVPS’s service area in Southern Vermont. It is entitled, “Assessment of
6
Energy Efficiency and Customer-Sited Generation Investments in the Southern
7
Loop” (the “Southern Vermont EE Report”), and the second report, Exhibit
8
Petitioners JK-3, entitled “Assessment of Achievable Potential for Energy
9
Efficiency in the Central and Northwest Vermont Load Zones (the “Central and
10
Northwest Vermont EE Report”) evaluates the achievable potential for EE
11
measures to control or reduce summer peak electric load in Central and Northwest
12
Vermont.
13
14
For the Southern Vermont EE Report, the results of our EE, combined heat and
15
power (“CHP”), and solar photovoltaics (“PV”) assessment, together with an
16
evaluation of other distributed generation (“DG”) options by La Capra Associates
17
(“La Capra”), are incorporated into a report prepared by CVPS that assesses the
18
ability of non-transmission alternatives to avoid or defer the need for certain
19
transmission and distribution investments to address local reliability needs on
20
CVPS’s sub-transmission system in Southern Vermont.
21
Southern Loop Project, PSB Docket No._____
Prefiled Testimony of Jonathan Kleinman
November 8, 2007
Page 5 of 15
1
The results of our Central and Northwest Vermont EE report, together with an
2
evaluation of other non-transmission resources performed by La Capra, such as
3
demand response and generation, are incorporated into a report prepared by La
4
Capra (Exhibit Petitioners RH-2) that assesses the ability of non-transmission
5
alternatives to avoid or defer the need for the portions of the Southern Loop
6
Project needed to address regional reliability. Dean LaForest’s prefiled testimony
7
identifies the portions of the Project that address local reliability.
8
9
Q5.
Please summarize your study results.
10
A5.
The Southern Vermont EE Report finds that approximately 32.2 MegaWatts
11
(“MW”) of winter peak reduction are available from EE in the Southern load zone
12
of Vermont within 10 years. (The analysis period for this study was 2007 through
13
2016.) This reduction is attainable by 2016 with aggressive implementation of
14
efficiency measures. Of this amount, we estimate that 8.7 MW would be captured
15
through pre-2006 adjusted efficiency programming, yielding an estimate of
16
incremental EE of 23.5 MW.1 An estimated 18.8 MW of winter peak demand
17
reduction could be available by 2010. Additionally, approximately 2.1 MW of
18
winter peak reduction could be available by 2016 from cost-effective CHP
Note that the Energy Efficiency Utility (“EEU”) budget was adjusted by Order of the Public
Service Board dated August 2, 2006. This Order increased the 2006 funding level from a capped amount
of $17.5 million to $19.5 million, and establishes funding levels of $24 million and $30.75 million for 2007
and 2008, respectively. This amounts to incremental funding for the EEU of $21.75 million over this
period (the “2006 EEU budget adjustment”). “Pre-2006 adjusted programming” refers to the continuation
of EEU funding from the 2006-2008 contract prior to the 2006 budget adjustment, and does not take into
account geo-targeted DSM to be implemented in 2007 and 2008 by Efficiency Vermont.
1
Southern Loop Project, PSB Docket No._____
Prefiled Testimony of Jonathan Kleinman
November 8, 2007
Page 6 of 15
1
applications at certain health, industrial, and sewage treatment facilities. The
2
study found that PVs do not pass the cost-effectiveness test and provide minimal
3
winter peak demand reduction. The estimated cumulative 10-year cost of the
4
incremental EE effort is $170.1 million (in 2006 dollars). The estimated cost to
5
capture the CHP winter demand reduction over a four-year period is $6.7 million
6
(in 2006 dollars).
7
8
Our Central and Northwest Vermont EE Report finds that approximately 190 MW
9
of summer peak reduction are available from EE in the Central and Northwest
10
load zones of Vermont. (The analysis period was from 2007 to 2016.) This
11
reduction is attainable by 2016 with aggressive implementation of efficiency
12
measures. Of this amount, we estimate that approximately 102 MW would be
13
captured through currently-planned energy efficiency programming, yielding an
14
estimate of incremental EE of 88 MW.2 This incremental amount represents an
15
8% reduction of the 2016 forecast peak demand.3 We estimate this reduction
16
would be attainable by 2016 with aggressive implementation of efficiency
17
measures. Approximately 28 MW of this incremental reduction is estimated to
18
be acquired by 2010 and 75 MW by 2014. The estimated cumulative 10-year cost
“Currently-planned energy efficiency programming” does take into account the 2006 EEU budget
adjustment, as well as the geo-targeted DSM to be implemented in 2007 and 2008 by Efficiency Vermont.
It assumes the continuation of funding at the 2008 level from 2009 through 2016.
2
3
The forecast demand takes into account currently-planned efficiency programming, with
comparable levels of performance from 2009 through 2016.
Southern Loop Project, PSB Docket No._____
Prefiled Testimony of Jonathan Kleinman
November 8, 2007
Page 7 of 15
1
of implementing this incremental efficiency programming is $256 million (in
2
2007 dollars).
3
4
Q6.
What do you mean by “aggressive implementation” of efficiency measures?
5
A6.
The analyses specifically sought to ensure that the estimates of potential peak
6
demand savings are realistic, considering how difficult it may be to convince most
7
consumers and businesses to replace inefficient existing equipment or choose high
8
efficiency options in new construction. This aggressive campaign would pursue
9
comparatively high levels of peak load and energy reductions, considering the
10
history of energy efficiency programs in Vermont and other places in the nation.
11
In other words, it includes a comprehensive set of measures with strategies to
12
obtain all cost-effective efficiency opportunities among each participant. The
13
analysis recognized this by lowering projected penetration rates to levels below
14
that achieved by selected “best practice” programs where full funding has been
15
available, ensuring a more conservative analysis. This is because, while best
16
practice programs have in some cases achieved higher penetration rates, this has
17
generally been restricted to individual technologies rather than fully
18
comprehensive treatment of subject premises and activities.
19
20
All the technologies and market intervention strategies contemplated in the
21
analysis have proved effective in Vermont, throughout New England and the
22
Northeast, and in states such as California, where DSM and distributed supply
Southern Loop Project, PSB Docket No._____
Prefiled Testimony of Jonathan Kleinman
November 8, 2007
Page 8 of 15
1
have figured prominently in that state’s efforts to meet its pressing resource
2
needs. The long and successful history of procuring large quantities of cost-
3
effective energy-efficiency in Vermont provides a strong basis for confidence in
4
the estimates developed here. An important source of uncertainty, however, is the
5
fact that no utility has ever sustained such large distributed resource commitments
6
for so long in so many markets simultaneously and actually achieved the relative
7
magnitudes of peak demand savings projected over the next decade as indicated in
8
our Report.4
9
10
Q7.
11
12
Please describe the process that you undertook to develop and evaluate the EE
potential to defer or avoid the need for components of the Southern Loop Project.
A7.
We started our analyses by considering the four geographic Vermont load zones –
13
Northern, Northwest, Central and Southern. Figure 1.1 of our Central and
14
Northwest Vermont EE Report shows the approximate boundaries of the four load
15
zones. For the Southern Vermont EE Report, CVPS determined that
16
nontransmission alternatives (“NTAs”) outside of the Southern load zone would
17
have minimal effect on the specific local issues that the Southern Loop
18
components were intended to address. Therefore, the CVPS analysis, and our
19
Southern Vermont EE Report, focuses on measures that cost-effectively provide
It should be noted, however, that Efficiency Vermont’s contract goals with the 2006 budget adjustment
call for capturing 10 MW of winter peak reduction and 10 MW of summer peak demand reduction in
selected geographic areas within a 1.5 year time frame. It remains to be seen whether Efficiency Vermont
will succeed; our estimate assumes a 60 percent success rate in the geographic targeting, but attaining the
statewide 2007-2008 goals.
4
Southern Loop Project, PSB Docket No._____
Prefiled Testimony of Jonathan Kleinman
November 8, 2007
Page 9 of 15
1
winter peak reduction and can be implemented in the Southern zone. Separately,
2
VELCO has determined that NTAs in the Southern and Northern load zones
3
would have minimal effect on the regional reliability issues that the Southern
4
Loop is designed to address. Therefore, La Capra’s analysis, and our Central and
5
Northwest Vermont EE Report, focuses on measures that can be implemented in
6
the Central and Northwest load zones.
7
8
The Southern Vermont EE Report estimates the reductions in winter peak load
9
reduction, and annual energy requirements that could be cost-effectively achieved
10
by highly aggressive initiatives targeting key residential, commercial and
11
industrial markets in Southern Vermont. The Central and Northwest Vermont EE
12
Report estimates reductions in summer peak load in Central and Northwest
13
Vermont load zones of Vermont. These initiatives would extend and expand on
14
programs Efficiency Vermont is now implementing statewide, and programs that
15
the Burlington Electric Department (“BED”) is implementing in the City of
16
Burlington. To achieve these aggressive load reduction goals, both Reports
17
contemplate large, ambitious investment campaigns over a decade, using the most
18
aggressive proven market implementation strategies to acquire widespread
19
participation by all market sectors: Such strategies would necessarily include:
20
21
22

Sustained marketing to consumers, retailers, builders, contractors,
and equipment suppliers;
Southern Loop Project, PSB Docket No._____
Prefiled Testimony of Jonathan Kleinman
November 8, 2007
Page 10 of 15
1

Extremely attractive financial incentives to customers, offering
2
them extraordinarily favorable financial returns on their investment
3
in efficiency retrofits and distributed generation investments, and
4
covering the majority of the incremental costs for new
5
construction/renovation measures and planned investments in new
6
equipment and systems;
7

8
9
Comprehensive technical and information services for market
participants; and

For some market segments, complete customer service delivery
10
from initial contact through project completion (including measure
11
installation).
12
13
The study estimates savings both from an aggressive campaign in the target
14
zones, as well as those expected to materialize due to statewide programs already
15
underway by Efficiency Vermont and BED. The net impact of the achievable
16
contributions projected here is the difference between this targeted campaign and
17
the projected savings from existing Efficiency Vermont efforts under its 2006-8
18
contract (and projected to continue at the 2008 statewide level of savings: for the
19
Southern Vermont Zone, originally planned in 2005 prior to the 2006 budget
20
adjustment; and for the Central and Northwest zones, inclusive of the 2006 budget
21
adjustment and decision to implement geo-targeted programs).
22
23
In estimating the EE potential, both reports include only those energy efficiency
24
technologies, services, and design strategies that pass Vermont’s societal cost-
Southern Loop Project, PSB Docket No._____
Prefiled Testimony of Jonathan Kleinman
November 8, 2007
Page 11 of 15
1
effectiveness test, using statewide energy and transmission and distribution
2
avoided costs.
3
4
Q8.
5
6
Please describe the process that you undertook to develop and evaluate the CHP
and PV potential in the Southern Vermont zone.
A8.
For CHP applications, Optimal worked with La Capra to estimate project costs,
7
fuel requirements, and CHP capacity and electric energy production for a set of
8
hypothetical CHP projects. These project profiles were based upon data collected
9
during interviews conducted by CVPS staff. Optimal estimated the winter system
10
peak reduction benefits provided by these projects, and evaluated each project
11
using the societal cost-effectiveness test. Those profiles that passed the test were
12
then applied to those facilities in the Southern load zone that met each profile.
13
Optimal then developed a program approach to aggressively pursue those
14
opportunities in the Southern load zone, combining outreach, technical assistance,
15
and a package of financial incentives and financing assistance.
16
17
For PV applications, Optimal evaluated the cost-effectiveness of PV applications
18
using current Vermont-specific information about PV system costs, DC and AC
19
electric capacity and electric energy production, and winter peak reduction.
20
Optimal found that PVs do not pass the cost-effectiveness test.
21
Southern Loop Project, PSB Docket No._____
Prefiled Testimony of Jonathan Kleinman
November 8, 2007
Page 12 of 15
1
Q9.
2
3
Were there any differences in the approaches taken by Optimal to evaluate EE
potential under the two Reports?
A9.
The approaches to the Reports differ in four ways: (1) the line loss factors
4
approved at the time that each Report was conducted; (2) the impact that winter
5
and summer peaking systems have on which measures pass the societal cost-
6
effectiveness test; (3) the site visits conducted for the Southern Vermont EE
7
Report (because of the limited geography of the study area size); and (4) the
8
estimate of currently-planned DSM programs for the Energy Efficiency Utility.
9
These four differences are more fully explained as follows:
10
11
1.) On April 6, 2007, the Vermont Department of Public Service (“VTDPS”)
12
distributed a letter from Riley Allen entitled “Line Loss Calculations for use with
13
avoided costs.” This letter provided a new set of line loss factors to be used with
14
statewide energy and transmission and distribution avoided costs; the new energy
15
loss factors do not include VELCO losses, and set of factors are significantly
16
lower than the old set. Because of the timing of each study, the Southern
17
Vermont EE Report uses the old line loss factors, and the Central and Northwest
18
Vermont EE Report uses the new line loss factors. Optimal estimates that the use
19
of the new line loss factors for the Southern Vermont EE Report would lower the
20
amount of total winter peak reduction available from EE by about 8 percent.
21
Southern Loop Project, PSB Docket No._____
Prefiled Testimony of Jonathan Kleinman
November 8, 2007
Page 13 of 15
1
2.) The application of statewide transmission and distribution (“T&D”) avoided
2
costs, and the calculation of their benefits, depends upon whether the system in
3
question is winter- or summer-peaking. In the Southern Vermont EE Report,
4
Optimal applied T&D avoided costs, and calculated T&D benefits, for winter
5
peak reduction, because the local reliability problem and need are tied primarily
6
to winter peak demand. Conversely, in the Central and Northwest Vermont EE
7
Report, Optimal applied T&D avoided costs, and calculated T&D benefits, for
8
summer peak reduction, since VELCO has determined that the regional reliability
9
problem is driven largely by summer peak demand. This difference affected
10
which efficiency measures were included or removed following each cost-
11
effectiveness screening. For example, many fuel-switch opportunities (e.g.,
12
converting electric hot water to oil or electric clothes dryers to propane) were
13
included in the Southern Vermont EE Report potential estimate, but not in the
14
estimate of EE potential the Central and Northwest Vermont EE Report.
15
Alternatively, certain air conditioning efficiency measures were included in the
16
Central and Northwest Vermont EE Report potential estimate, but not in the
17
Southern Vermont EE Report.
18
19
3.) At the beginning of its analysis of non-transmission alternatives to the local
20
reliability problem, CVPS used the Distributed Utility Planning (“DUP”) Scoping
21
Tool to develop an estimate of energy efficiency potential in the Southern load
22
zone. The DUP Scoping Tool indicated that energy efficiency had the possibility
Southern Loop Project, PSB Docket No._____
Prefiled Testimony of Jonathan Kleinman
November 8, 2007
Page 14 of 15
1
of serving as an NTA. However, the DUP Scoping Tool was developed using
2
statewide estimates of energy efficiency opportunities in homes and specific
3
commercial and industrial (“C&I”) facilities. Differences in the energy efficiency
4
potential at Southern load zone-specific homes and C&I facilities (particularly
5
larger facilities) could result in mis-application of the DUP Scoping Tool results,
6
and the DUP Scoping Tool also uses slightly outdated estimates of certain
7
efficiency opportunities (e.g., it does not account for the availability of new high-
8
performance fluorescent lighting systems). To address these potential sources of
9
error, Optimal interviewed Efficiency Vermont staff about their project
10
experiences in the Southern load zone and also conducted a series of site visits at
11
large and medium-sized C&I establishments to refine the DUP Scoping Tool’s
12
estimate. For the Central and Northwest Vermont EE Report, Optimal used
13
certain macro-level data from the Northwest Vermont Reliability Project, and also
14
used some of the results of our site visits in the Southern load zone to refine
15
characterizations of certain efficiency opportunities (e.g., costs and savings of
16
relevant technologies). Site visits were not conducted for the Central and
17
Northwest Vermont EE Report.
18
19
4.) At the time of the Southern Vermont EE Report, the 2006 EEU budget
20
adjustment had been quantified and the concept of geo-targeting had been
21
introduced, but neither the new savings goals nor the geo-targeted areas
22
themselves had been announced. As a consequence, the Southern Vermont EE
Southern Loop Project, PSB Docket No._____
Prefiled Testimony of Jonathan Kleinman
November 8, 2007
Page 15 of 15
1
Report assumes that the 2006-2008 Efficiency Vermont contract prior to the 2006
2
budget adjustment represented the baseline of demand-side management
3
activities. We projected the estimated Southern zone 2008 spending and
4
performance (in terms of energy and demand savings) from 2009 through 2016.
5
By the time of the Central and Northwest Vermont EE Report, however,
6
Efficiency Vermont has issued its 2007-2008 Annual Plan which included
7
spending and savings targets associated with the 2006 budget adjustment.
8
Consequently, we estimated performance in the Central and Northwest load zones
9
using the Efficiency Vermont 2007-2008 Annual Plan and stated goals from
10
Burlington Electric Department, and projected EEU performance from the
11
statewide 2008 goals to 2009 through 2016. These two approaches yield different
12
estimates of winter demand savings in the Southern zone; the first approach yields
13
a ten-year estimate of 8.7 MW; the second approach yields a ten-year estimate of
14
19.4 MW (but with no change to the estimate of achievable potential).
15
16
2.
Conclusion
17
Q10.
Does this conclude your testimony at this time?
18
A10.
Yes, it does.