Delaware has made significant advances toward strengthening its energy efficiency programs in recent years. This has occurred in the context of the recession and the subsequent need for job creation. The state established the nonprofit Delaware Sustainable Energy Utility (SEU) to operate programs to deliver comprehensive end-user efficiency and customer-sited renewable energy services. The state chose Applied Energy Group as the lead contract administrator of the SEU. The board of the SEU met for the first time in January 2009.
The SEU now operates an outreach and education website called “Energize Delaware.” This site connects utility customers with incentives and other resources. The SEU receives funding from multiple sources including the Regional Greenhouse Gas Initiative, the American Recovery and Reinvestment Act (the 2009 federal economic stimulus), and tax-exempt bonds.
In 2009, Delaware approved Energy Efficiency Resource Standards (EERS) that set goals for consumption and peak demand for electricity and natural gas utilities. The goals are 15% electricity consumption and peak demand savings and 10% natural gas consumption savings by 2015. The SEU has a goal of reducing “energy waste” by 30% by 2010, but this goal is limited to program participants.
Since 2006, Delaware law has required electricity providers to engage in integrated resource planning (IRP). Utilities develop and file demand-side management and energy efficiency plans with the commission. Because efficiency programs are administered by the SEU, Delaware electric utilities do not report efficiency program savings to the Energy Information Administration, nor do they report any efficiency program budgets to the Consortium for Energy Efficiency.Reported budgets for energy efficiency programs for 2011, and electricity savings for 2010, are in the State Spending and Savings Tables.
Delaware’s utility restructuring in the 1990s ended existing energy efficiency programs in the utility sector. Since 2000, Delaware has taken steps to reverse the situation. Delaware Governor Ruth Ann Minner signed the law that created the nonprofit Sustainable Energy Utility (SEU) on June 28, 2007 — Senate Bill 18, Substitute Number 1 in the 144th General Assembly. The law created a nonprofit corporation under the direction of a State Energy Coordinator within the Delaware Energy Office, Department of Natural Resources and Environmental Control. The SEU is the product of a legislative task force created in 2006. The SEU leverages public and private funds and uses special purpose bonds to fund its activities. The state chose Applied Energy Group as the lead contract administrator of the SEU. The board of the SEU met for the first time in January 2009.
The SEU's goals are to advance energy efficiency and affordable energy and to promote and help to achieve customer-sited renewable energy generation. The SEU initiated an ENERGY STAR Appliance Rebate Program in early September 2009. In June 2010, the SEU plans to launch its Efficiency Plus Home Program and Efficiency Plus Business Program. The SEU is also developing a Low-Income Multi-family Housing Program, a Home Lighting Discount Program, and a “Green for Green” program for building construction.
Parallel with the development of the sustainable energy utility, electric utilities are now instituting changes in their planning and operations as a result of new regulations requiring integrated resource planning and demand-side management. In 2008, Delmarva Power & Light Company submitted its third comprehensive demand-side management, advanced metering, and energy efficiency plan to the Delaware Public Service Commission (Docket No. 07-20). The commission finalized these regulations in December 2009 (Docket No. 60). Delaware electric utilities did not report any 2008 efficiency program savings to the Energy Information Administration, nor did they report any efficiency program budgets to the Consortium for Energy Efficiency for 2009.
Reported budgets for energy efficiency programs for 2011, and electricity savings for 2010, are in the State Spending and Savings Tables.
The Sustainable Energy Utility (SEU) was funded initially via "special purpose" bonding by the State of Delaware. Bonds are to be sold at two or more times . Revenue sources to pay off the bond debt and help the SEU to grow will include:
Expected yearly funding for energy efficiency program spending by the SEU for the period 2008-2010 will be about $6–7 million. Atmos Energy has budgeted $565,000 for natural gas programs in 2009 and $691,000 in 2010. The company reported that this total budget exceeds state requirements by 10%. According to the Energy Information Administration, Delaware utilities spent $680,000 on energy efficiency in 2008. No program budgets for 2009 were reported to the Consortium for Energy Efficiency.
Reported budgets for energy efficiency programs for 2011 are in the State Spending and Savings Tables.
On July 29, 2009, Governor Markell signed SB 106, which established Energy Efficiency Resource Standards (EERS) and set goals for consumption and peak demand for electricity and natural gas utilities. The goals are 15% electricity consumption and peak demand savings and 10% natural gas consumption savings by 2015. SB 106 also requires utilities to first consider electricity demand response and demand-side management strategies for meeting base load and load growth needs. The SEU has higher goals for its program participants – 30% savings by 2015 – but these goals do not apply to the entire public.
The bill also sets up an eleven-member stakeholder workgroup to assist in developing key regulations, studying the impacts of the EERS, reviewing progress annually, and recommending changes to the plan as needed. The workgroup’s report underscored the numerous challenges the state must address in order to implement the EERS properly. Among the challenges, Delaware needs a sustainable and robust funding source to attain the savings set out with its EERS.
Without corresponding regulation to bind utilities to the targets, the EERS remains a voluntary target.
Senate Bill 106 (Title 26, Chapter 15 of the Delaware Code) set a deadline of December 2010 for implementing decoupled rate design for utilities (Sec. 1500(b)(8)). The state evaluates the issue of decoupling on a utility-by-utility basis when it sets utility rates through rate case proceedings. In September 2009, the PSC entered Order 7641 (Docket No. 09-276T), examining a modified fixed variable rate design for Delmarva (electric and gas). In 2011 the PSC approved a form of decoupling for Delmarva Power & Light.
In 2009, Senate Bill 106 stated that energy efficiency would be the “highest-priority resource” in the state. Cost-effectiveness was one motivation for this decision. The Electric Utility Retail Customer Supply Act of 2006 requires electricity providers to file 10-year integrated resource plans that will address long-term supply contracts, including provisions for renewable energy and demand-side resources (26 Del. C. §1001-1012.). Additional integrated resource planning rules are under consideration. In PSC Regulation Docket Number 60, the PSC entered Order Number 7318 (Dec. 4, 2007), proposing integrated resource planning regulation. This regulation was finalized in 2008.
The evaluation of ratepayer-funded energy efficiency programs in Delaware relies on legislative mandates (Energy Efficiency Resource Standards Act of 2009). Evaluations are administered by the Delaware Department of Natural Resources and Environmental Control. There are no specific legal requirements for these evaluations in Delaware. Statewide evaluations are conducted. In terms of a benefit-cost test, Delaware relies on the Utility/Programs Administrator Test (UCT), and considers it to be its primary cost-effectiveness test. No rules for benefit-cost tests are specified. Delaware does not apply the benefit-cost test to program screening since it has not had significant program evaluation in the past.