Demystifying EM&V: The 4 Best Resources for Utilities on Measuring and Verifying Savings

According to research by the American Council for an Energy-Efficient Economy, energy efficiency is the least expensive and cleanest energy resource. By our estimation, it’s also the most effective way to provide utility customers with real cost savings on their energy bills.

In theory, public funding and support for these programs should never be in doubt - the benefits of these programs doing well are endless. They include but are not limited to, improved public health, lower energy prices, job creation and lower greenhouse gas emissions.

Unfortunately, providing evidence and documentation of savings is something that challenges utilities all across North America. In other words, proving ROI on an energy efficiency program isn’t so easy.

For any other type of business, ROI is a clear and measurable concept: the ratio of how much much money you earned or saved, versus the amount of money you spent to acquire those customers.

For utilities and evaluators, ROI on energy efficiency is not the easiest thing in the world to figure out. Several factors determine the amount of savings attributed to an energy efficiency program, including focus groups, meter readings, demographic surveys and more. Further complicating the matter, natural conditions such as the weather are actually a major factor in determining whether savings can actually even be attributed to energy efficiency programs.

Evaluation, Measurement and Verification (EM&V) is the lifeblood of any solid savings program. It’s how evaluators look at the cause and effects of your programs, and how they determine whether it continues to get funding or not. In other words, it’s how they determine your programs’ return on investment (ROI).  Comparing these savings to their “baseline” levels allow evaluators to ascertain the value of each program, or more commonly referred to as, “impact evaluation”.

Given all of this, it’s no surprise that 68% of utilities reported that they were unable to measure ROI for their residential customer engagement programs. In the same report, 57% of utilities say their inability to prove this ROI is the biggest challenge to securing funding for their programs.

But with so much information out there, how do you know what the latest best practices for EM&V are? In this article, we’ve documented a few of the best EM&V resources out there. Everyone in your utility’s energy efficiency teams should be reading or referencing at least some of the following materials to stay informed.

Here are the four best resources on EM&V for utilities and their energy efficiency teams.

On EM&V Policies and Performance-Based Contracts:

Prepared for the U.S. Department of Energy Federal Energy Management Program, this highly technical and accurate report is not an easy read but contains just about all of the information you need to guide your EM&V programming.

On Evaluating the Impact of Energy Efficiency Programs:

SEE Action (The State and Local Energy Efficiency Action Network) has an amazing portal for EM&V resourcing. Utilities can get tools and methodologies that can be applied nationwide and address consistency issues in utility reporting. In particular, we like the Energy Efficiency Program Impact Evaluation Guide, which is a definitive EM&V resource to make the topic easy to understand.

On Advanced Metering Infrastructures:

NEEP Advanced Metering Infrastructure: Utility Trends and Cost-Benefit Analyses in the
NEEP Region
is a great resource that highlights the cost-benefit of advanced metering infrastructure (AMI). Particularly useful in the Northeast, but packed with case studies of utilities all across the country, which includes: Baltimore Gas & Electric, Central Maine Power Company, Con Edison, Eversource MA, National Grid MA and Green Mountain Power. More and more utilities are making the investment into advanced meters, but showing the capital cost justification is still an issue. The business case for AMI deployment will depend on the utility, the program and their situation.

On Finding Cost-Effective EM&V Results:

The Public Utility Commission of Texas (PUCT) has been working with EM&V specialists and contracts every year since 2012, and each year, put out a quality report (Statewide Energy Efficiency Portfolio Report Program). It’s a long read, but details case studies of how utilities in Texas delivered cost-effective savings through a sound EM&V process.

Bruce Chen