Energy Efficiency & Demand Response

Demand Response is a voluntary program that compensates end-use (retail) customers for reducing their electricity use (load), when requested by a utility or RTO/ISO, during periods of high power prices or when the reliability of the grid is vulnerable. These customers receive payments from utilities in return for this service.

For Energy Efficiency in Indiana, an electric utility is required to file with the Indiana Utility Regulatory Commission (IURC) a request for approval of an energy efficiency plan not less than one time every three years. Each utility applying to the IURC for approval of its energy efficiency plan must include the following information with its petition:

1. A description of each energy efficiency program and demand response program proposed by the utility.
2. A budget for the energy efficiency plan, including budgets for each energy efficiency program and demand response program.
3. A cost-benefit analysis using at a minimum all the following:
   1. Participant cost test.
   2. Ratepayer impact measure test.
   3. Program administrator cost test.
   4. Total resource cost test.
      Additional reasonable cost-benefit tests may be proposed.
4. Projected changes in customer consumption of electricity resulting from the implementation of the energy efficiency plan.
5. A statement of whether the energy efficiency plan is consistent with the IURC analysis.
6. A description of how the energy efficiency plan is consistent with the utility’s most recent Integrated Resource Plan (IRP), including copies of relevant portions of the utility’s most recent IRP.
7. Identification of a preference to a customer class potentially resulting from the implementation of an energy efficiency program or demand response program.
8. A description of the lost revenues and financial incentives the utility seeks to recover.
9. The effect, or potential effect, in both the long term and the short term, of the energy efficiency plan on the electric rates and bills of program participants compared to the electric rates and bills of customers that do not participate in the program.
10. An Evaluation, measurement, and verification (EM&V) procedure to assess implementation and quantify the impact on energy and demand of each energy efficiency program and demand response program included in the energy efficiency plan.
11. A statement of the utility’s energy efficiency goals for producing reasonably achievable energy efficiency through the implementation of cost-effective energy efficiency programs. The energy efficiency goals must be designed to achieve an optimal balance of energy resources in an electricity supplier’s service territory. The energy efficiency goals must exclude industrial customers that have opted out of the utility’s energy efficiency plan.
12. If an electricity supplier is using forecasted costs and energy savings for cost recovery purposes, it shall propose a mechanism to reconcile forecasted costs and energy savings with actual costs and energy savings.
13. The work papers and data used for calculations performed. 170 IAC 4-8-2.

The IURC must approve the recovery of reasonable energy efficiency program costs and may approve the recovery of reasonable demand response program costs on a timely basis through a periodic rate adjustment mechanism. 170 IAC 4-8-5.

The IURC is required to approve the recovery of reasonable lost revenues for energy efficiency programs and may approve the recovery of reasonable lost revenues for demand response programs. 170 IAC 4-8-6.

Industrial Customer Opt-Out

An industrial customer, which is defined as a person that receives electric utility services at a single site constituting more than 1 MW of electric capacity, may opt-out of participating in a utility’s energy efficiency program. An electric utility may not charge an industrial customer that opts out rates that include energy efficiency program costs that accrue or are incurred after the opt-out date. However, an industrial customer remains liable for rates that include energy efficiency program costs that accrued or were incurred or related to investments made, before the opt-out date.

An industrial customer that opts-out of participating in an energy efficiency program may subsequently opt to participate in the same or a different energy efficiency program. The industrial customer must participate in the subsequent energy efficiency program for at least three years after the date the industrial customer opts back into the program. If the industrial customer terminates participation in the subsequent energy efficiency program during the three-year period, the industrial customer must continue paying energy efficiency program rates for the remainder of the three (3) year period. Indiana Code 8-1-8.5-9(e), (f), and (g).

For more information, please visit www.in.gov/urc and find the DSM and Energy Efficiency page, “DSM and Energy Efficiency” https://www.in.gov/iurc/2802.htm.

To learn more about Indiana’s Programs:

• Citizens Energy Group – “Energy Savings Tips”
• Duke Energy Indiana – “Find More Ways to Save”
• Indiana Michigan Power – “Saving energy at home and work. That’s smart.”
• IPL – “Ways to Save: Save energy. Save money.”
• NIPSCO – “Helping Save you Energy and Money”
• Vectren, A CenterPoint Energy Company – “Save Energy”