Proposed Quantification Approaches for Midwestern Governors’
Association Energy Efficiency Advisory Group (MGA EEAG)
Options for Greenhouse Gas Emissions Reduction
[Draft, for review at EEAG Conference Call, 8/27/08]
For All Options:
Common assumptions/data needed:

Discount rate (5%/yr, real basis)

Calculation years (probably present through 2025)

Reporting years (probably 2012 and 2025)

Future rate of inflation (if needed—based on recent trends)

Emission factors for non-electric fuels (likely constant across jurisdictions)

Emission factors for electricity generation, which will be the same across options in a
given jurisdiction, but may vary somewhat by jurisdiction.

Avoided costs for electricity generation (by jurisdiction or from MISO)

Avoided costs for natural gas and other fuels (by jurisdiction, but likely derived from
regional fuel price forecasts applied to jurisdiction-level current/recent costs).

Transmission and distribution losses as a fraction of generation (by jurisdiction, or adopt
region-wide value if variation is small).
EE-1: Establish Quantifiable Goals for Energy Efficiency
Quantification Approach:
Not quantified. Specifies overall goal and identifies initiatives to support overall energy savings
efforts in the MGA states and provinces.
EE-2: Undertake State Assessments that Quantify the Amount of Energy Efficiency that
Would Cost Less on a Unit Cost Basis than New Generation
Quantification Approach:
Not quantified. Specifies preparation of a “White Paper” to describe the state of energy
efficiency resources assessments in the jurisdictions of the region, and provides guidelines for
new and ongoing assessments that would be in support of overall energy-efficiency improvement
efforts in the MGA states and provinces.
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EE-3: Require Retail Energy Providers to Make Energy Efficiency a Priority
Quantification Approach:
Apply annual energy efficiency goal for retail energy providers—defined to be consistent with
the goal set out in EE-1, which in turn interprets the overall MGA energy efficiency goal—to
projected retail sales for electricity and natural gas in each jurisdiction, less savings from
previous years’ programs.
Key Elements:
 Energy savings from programs/requirements currently in place, relative to energy use in
the absence of any energy efficiency programs, will be considered savings as a result of
“Recent Actions”, and will be counted toward the overall MGA goal, but counted
separately from new actions undertaken to comply with the MGA goal.
 Energy savings from programs developed to meet MGA goals are to be “ramped in”,
with timing as specified for the option, and starting from the level of savings currently
achieved or expected for programs/policies currently in place.
 Option applies to electricity and natural gas sold by utilities, including direct sales to
large-volume industrial consumers. [Question to EEAG—should this option also apply to
non-transport petroleum products use (propane/LPG and heating oil)?]
 Forecasts for electricity and gas consumption by state/province
Required Data/Parameters
 Forecasts of retail sales of electricity and natural gas (and other non-transport fuels if
applicable) for each jurisdiction. These will be compiled from one of three sources
(roughly in order of preference): 1) a sum of major utility forecasts, extrapolated as
needed to future years and to cover the entire jurisdiction, or an existing jurisdiction-wide
forecast from a government agency, 2) a forecast from a previous or ongoing climate
change mitigation process, or 3) an appropriate regional growth rate for fuel sales from
the USDOE Energy Information Administration’s Annual Energy Outlook, applied to
base-year sales in the jurisdiction (or the analog of same for provinces).
 Data on the historical/expected effectiveness of ongoing utility or non-utility energy
efficiency programs in the jurisdiction, ideally expressed in energy units or as a fraction
of total sales.
 Average total resource costs of saved energy from electric ($/MWh) and gas ($/million
Btu) energy efficiency programs. These could conceivably be jurisdiction-specific, if
studies exist that are specific to particular areas, otherwise would likely be based on
national studies or an average of jurisdiction-specific studies. We would probably
propose to start with a value of about $30/MWh for electricity, which is roughly
consistent with a number of state, regional, and national studies.
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EE-4: Remove Financial Disincentives and Enable Investment Recovery for Energy
Efficiency Program Costs
Quantification Approach:
Not quantified. This option supports and enables utility energy efficiency programs carried out
under EE-3, but will not be separately analyzed.
EE-5. Strengthen Building Codes and Appliance Standards and Requisite Training,
Quality Assurance and Enforcement
Quantification Approach:
Estimate the difference between recommended building energy efficiency codes in this option
for the residential and commercial sectors with codes already in place (if any) in the MGA
jurisdictions. Estimate the potential savings for appliances/equipment standards for devices that
are more efficient than US/Canadian standards.
Key Elements:

Energy savings from new building energy efficiency codes recently put in place, if any,
relative to codes previously in place, will be considered savings from “recent actions”

Energy savings from building energy efficiency codes at the EE-5 level relative to
building codes now in place in each jurisdiction will be considered as savings due to the
option.

We will likely adapt an approach used for a number of US states by the Building Code
Assistance Project to estimate savings.

At present, jurisdiction-level appliance standards are mentioned as an element of EE-5 in
the option text, but not specifically described. As an initial approach, we would suggest
using the list of appliances/equipment suggested by the Appliance Standards Assistance
Project (ASAP), and adapt their savings estimates as appropriate for the MGA
jurisdictions. This process would include adjusting the ASAP list/analysis for the
impacts of the recently enacted Federal (US) appliance/equipment standards.
Required Data/Parameters
 Estimates of annual number of new residential units and annual new commercial floor
area, both multiplied by a factor to include major renovation along with new buildings. If
existing estimates are available by jurisdiction, we will use them, otherwise estimates can
be prepared by jurisdiction based on population and/or energy use forecasts.
 Estimates of the savings from code upgrades, ideally (for easy modeling) directly or
indirectly related to average current energy use per home/per unit commercial floorspace.
 Estimate of building energy use, as opposed to process energy use, in industrial buildings.
We will include this as a ratio relative to commercial energy use, likely derived from
regional figures from the US survey of Manufacturing Energy Consumption (MECS).
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 Estimates of rates of compliance with codes (probably ramping up over time as
enforcement improves).
 Estimates of the fraction of existing homes and commercial buildings sold annually, and
estimates of the fraction of existing homes and commercial buildings that are improved to
new code levels as a result of EE-5 provisions.
 Estimates of the fraction of homes/businesses participating in the “beyond code” element
of EE-5.
 Estimates of the savings, relative to code energy efficiency levels, from the “beyond
code” element of EE-5. Note that this element may include some renewable energy
inputs as well, which will require additional assumptions about the fraction of renewable
energy provided by different types (biomass, solar PV, solar thermal) and the costs of
those systems..
EE-6. Have the Public Sector Lead by Example
Quantification Approach:
Estimate the improvement in energy efficiency in public buildings and in devices purchased by
public entities as a result of this option, relative to current practice in each jurisdiction.
Key Elements:

Energy savings from public building and public housing energy efficiency upgrades
(existing buildings) as a result of EE-6, relative to what would have happened to those
buildings (presumably either no upgrade or an upgrade to less than code level) that would
have occurred in the absence of EE-6.

Energy savings from “beyond code” public building and public housing energy efficiency
upgrades (new buildings) as a result of EE-6, relative to how the buildings would have
been constructed and operated if designed just to meet EE-5-level building energy
efficiency codes.

Information on existing programs in each jurisdiction to upgrade existing public building
and public housing energy efficiency, including expected fraction of new and existing
buildings participating in future years.

Energy savings from purchasing and using Energy Star-certified devices (appliances and
equipment) by public entities instead of devices just meeting standards, adjusted for
current practice by public agencies in the jurisdictions now. To estimate these savings,
we will need to identify a set of end-uses (for example, office machines, other electronics,
lighting, HVAC, motors) likely to be affected by this element of EE-6.
Required Data/Parameters
 Estimates of floorspace of new residential units in public housing, and annual new floor
area in public buildings, both multiplied by a factor to include major renovation along
with new buildings. If existing estimates are available by jurisdiction, we will use them,
otherwise estimates can be prepared by jurisdiction based on population and/or energy
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use forecasts, coupled with data from the US Commercial Building Energy Consumption
Survey (CBECS) that can be used to (approximately) estimate floorspace in government
buildings.
 Estimates of the per-unit (residential housing unit or building floorspace) savings from
upgrades of existing buildings to meet code levels.
 Estimates of the per-unit (residential housing unit or building floorspace) savings from
upgrades of new buildings to meet “beyond-code” levels, and a definition of the target
average improvement (fixed or changing over time) for “beyond code” buildings relative
to EE-5-level building codes.
 Estimates of the annual purchases of devices that fall under the EE-6 Energy Star
purchase mandate, possibly calculated based on annual device sales and/or the lifetime of
the devices and the total stock of the devices. Ultimately, it will be necessary to express
the energy usage of these devices as an average fraction of total building energy use
(probably mostly electricity, but possibly in some cases gas). This can be done by
estimating annual usage of the devices, or by obtaining an estimate in aggregate of the
devices covered.
 Estimate of the average fractional energy savings from purchasing and using Energy Star
devices that fall under the EE-6 purchase mandate, relative to the devices that would have
been purchased otherwise.
EE-7. Accelerate Adoption of Energy Efficiency Technologies and Best Practices by
Residential, Commercial, and Industrial Customers
Quantification Approach
Work on this option is still in process, so this assessment may change, but with the exception
noted below (market transformation programs), most of the current major elements of this
option—which is currently focused on education/training, information sharing, and incentives
and financing—appear to be likely to serve as important enabling or supporting activities for
energy efficiency activities quantified in other EEAG options.
The possible exception here is market transformation programs, and related provision of the
general public with incentives (rebates, financing, bulk-purchase programs) to purchase higherthan-standard-efficiency appliances and equipment. If desired, this element of EE-7 could be
quantified based on the experience with similar programs in the US Pacific Northwest (about 0.2
percent savings in electricity use annually), scaled to the size of the MGA markets.
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