The SPEER Commission on Texas Energy Efficiency Policy was established in 2014, to create a shared vision for the future of efficiency in the Lone Star State. Through consensus, the SPEER Commission developed recommendations to move efficiency forward and strengthen the state’s economy. The SPEER Commission included former regulators and legislators, and representatives of electric companies, non-profits, manufacturers, academic institutions, and more.
The SPEER Commission was reconvened in 2016 to focus in on the utility regulatory structure affecting non-wires alternatives and distributed energy resources in greater detail. It considered the possible need for and impact of modifications to either the revenue recovery or rate design elements of utility rate regulation, specifically addressing the unbundled ERCOT investor-owned utilities. The 2016 – 2017 Commission aligned on the following consensus statement:
“Investor Owned Utilities evaluate various options for delivering safe, reliable and cost effective service. When these utilities identify and stimulate alternative cost-effective, non-traditional infrastructure solutions, such as energy efficiency, that offer the same level of safe and reliable service, these utilities should be allowed cost-recovery and a rate of return for those expenditures as though they were capital investments. The Commission supports awarding financial incentives to Investor Owned Utilities that reduce revenue requirements relative to what they would have been through such investments.”
SPEER’s whitepaper, “Win-Win Utility Regulation in an Era of Energy Innovation,” was used to stimulate conversation and debate among participants in the 2016-2017 SPEER Commission. Under the current regulatory framework, utilities are allowed to earn a profit through a rate of return on their investments, driving them to focus on building capital assets. With the explosion of the “Internet of Things”, including smart thermostats, and the adoption of on-site generation by consumers, utilities are considering alternatives to current rate mechanisms, enhancing the role energy efficiency will play as a resource in the modern utility business model. The whitepaper detailed components of alternative rate-making mechanisms for consideration by the SPEER Commission.
The 2015 SPEER Commission report represents an initial consensus vision. Taken together, these recommendations suggested gradual but significant change, designed to increase not just the efficiency of building stock, but the efficiency of the economy. The Commission’s recommendations fit into seven categories, which are explained more fully in the body of the report.
- Coordinate State Activities to Support Energy Efficiency
- Ensure High Energy Performance in New Buildings
- Enable Access to Financing for Energy Efficiency Retrofits
- Align Electric Companies’ Interests with Increasing Efficiency
- Leverage the Smart Grid to Drive Efficiency Actions
- Use Energy Efficiency to Improve Air Quality and Regulatory Compliance
- Increase Public Sector Efficiency to Save Taxpayer Money