Residential Refrigerator & Freezer Decommissioning

Measure Update

May 13th, 2014

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2

Measure background• Measure Name: Residential Refrigerator &

Freezer Decommissioning.• Measure Type: UES• Measure Category: Proven• Measure Sector: Residential• Sunset Date: June, 2014• Reason for Update: Update to R2/ Brother-In-

Law Factor, Additional Evaluation Data, ProCost Template

3

Staff Highlighted Areas• Inclusion of Non Energy Benefits.• Guidance on R2 / Brother-In-Law Factor.

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Measure Update Summary• Transferred analysis into latest ProCost template.• Updated previous program data (PY '10-'11) with

latest data from JACO and ETO (PY '12-'13).• Inculcated latest evaluation data from the PNW

(ETO, PacifiCorp WA & ID)• NEB calculated and applied to TRC

Refrigerator Decommissioning Methodology: A primer.

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Total no. of units recycled

Sold/ Donated

Kept and used

If the refrigerator was not recycled… …but it was recycled, so energy savings depend on the counterfactual.

Left on grid:% of total units

recycled

Left off grid:1 - % of total units recycled

Recycled unit would have been off-grid without the

program

Induced Replacement

Refrigerator Replacement (R2)*No Refrigerator Replacement (1-R2)

Potential Recipient's Action in the Absence of Recycled Unit

Induced Replacement

No Replacement

Induced Replacement

-515

622

-515

0

4951137

1137

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Measure Update SummaryRefrigerators:Factor Previous Value New Value SavingsLeft On Grid 66% 62% -6%Kept and Used 8% 7% < 1%Induced Replacement 2% 6% -3%R2 50% 75% -17%Part use 93% 91% -2%Freezers:Factor Previous Value New Value SavingsLeft On Grid 55% 66% 17%Kept and Used 12% 13% < 1%Induced Replacement 2% 6% -3%R2 50% 75% -11%Part use 90% 91% 1%

7Non Energy Benefits (NEB)• A Southern California Edison (SCE) evaluation

conducted by Cadmus (2013) estimated that net-NEB in CA range from $19 to $79 per recycled unit.

• NEB occur due to added societal benefit from disposing refrigerators via EPA recommended methodology as opposed to baseline disposal practice.

• Baseline determined via customer survey of program participants.

• ETO administered similar survey, this data was applied to calculate numbers pertinent to the NW.

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Non Energy Benefits (NEB) – Northwest Specific Values• Surveyed customer baseline disposal practices in

the absence of the program divided into four bins.• Bin 4 is closest to EPA compliance; bin1 is farthest from

EPA compliant disposal practice. • ETO data used to develop NW specific values

Scenario Description Distribution w/o Program Distribution w Program

1Unit destroyed in an environmentally irresponsible way, disposed of in a way such that no materials would be recovered

15% 0%

2Unit destroyed in an environmentally irresponsible way, disposed of in a way such that materials with retail value would be recovered

23% 0%

3 Taken to dump 23% 0%

4 Recycled, non-RAD, non-utility 39% 0%Current program 0% 100%

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Steps to Calculate NEB per unit• Compile list of waste materials from refrigerator,

freezer disposal.• Calculate weight/ count of each raw material per appliance.• Each discard scenario represents a different combination of

material-specific disposal methods.

• Estimate the monetary benefit from EPA compliant disposal (as opposed to no compliance) for each material.

• Expressed as high, medium, low benefit per appliance.

• Gross benefits = sum of all benefits under program scenario

• Net calculated as gross benefits less baseline.

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Per Unit NEB – Mid Scenario

• Majority of benefits come from GHG emissions• GHG benefits calculated by converting GHG emission to equivalent CO2 (global warming

potential).• CO2 cost taken from council’s forecast of CO2 prices

• Cost $ 27 / ton in 2012.

Material

Gross (2006 costs) Ratio Net

GHG Emissions 51$ 74% 37.4$ Avoided Mercury Contamination 4$ 49% 2.1$ Avoided Oil Contamination 16$ 38% 6.1$ Reclaimed aluminum 5$ 11% 0.5$ Reclaimed copper 15$ 12% 1.8$ Reclaimed ferrous metal 15$ 11% 1.7$ Reclaimed foam 1$ 100% 1.3$ Reclaimed oil 1$ 38% 0.3$ Reclaimed plastic 4$ 55% 2.2$

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Decommissioning Per Unit NEB • Net NEBs are $ 53 for the mid scenario.

• Inclusion of NEBs is dependent on the following questions:• Are re-sale costs of recovered material considered in the

incremental cost of the measure?• What happens to the recovered refrigerant post recycling?

• These NEBs are currently used to offset incremental measure cost.

• Staff requests RTF guidance on how to account for these NEBs

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Brother In-Law/R2 Factor (history)• Subcommittee met in April, did not reach

consensus.• Staff proposal: R2 = 75 %

• Justification on following slide.• Motion made to update R2 to 75% in April meeting.

Result: 11 Yes, 1 No, 3 Abs. Motion needs 12 Yes to pass, did not have a quorum.

• Presentation from April meeting available as backup slides.

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Staff Recommendation• R2 = 75%

• Justification:• Would-be non-opportunistic acquisitions are likely to get

acquired anyway (i.e. R2 = 100%).• 55% could be the lower limit of R2, based on:

• Initial Cadmus analysis from 4 extra-regional surveys estimates that 55 % of non-participant recycled units would have ended up as an non- opportunistic acquisition.

• Assuming all would-be opportunistic acquisitions do not acquire a unit. • 100 % is the theoretical upper limit of R2.

• Assuming all would-be opportunistic acquisitions do acquire a unit.• 75 % is in the middle.

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Early Retirement Treatment• New federal standard will be effective in 2015.

• New refrigerators in 2015 may be more efficient than those available now.

• Recycling refrigerators induces some early replacement.

• In cases where a recycled refrigerator gets replaced with a new refrigerator, the program could lead to a less efficient replacement.

• Should the analysis take this effect into consideration?• This issue applies to all early retirement measures.

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Risk Mitigation Credit• Risk mitigation credit is the credit for system risk

reduction due to conservation.

• Should the risk mitigation credit be applied to a short lived measure?

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Decommissioning Energy Savings (kWh)

0

100

200

300

400

500

600

Refrigerator Decommissioning andRecycling

Freezer Decommissioning andRecycling

Current

Proposed

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Decommissioning Incremental Cost

$-

$20

$40

$60

$80

$100

$120

Refrigerator Decommissioningand Recycling

Freezer Decommissioning andRecycling

Current

Proposed w/o NEB

Proposed NEB

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Decommissioning TRC

0

0.5

1

1.5

2

2.5

3

3.5

Refrigerator Decommissioning andRecycling

Freezer Decommissioning andRecycling

Current

Proposed

Proposed NEB

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Proposed Decision• “I _________ move that the RTF approve the

refrigerator and freezer decommissioning UES measures as proposed with a sunset date of June 2015.”

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Backup Slides• Brother In Law Factor Presentation, RTF April

Meeting.

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Subcommittee Meeting Attendees• Jaco: Bob Nicholas, Phil Sisson (Consultant)• PSE: Bobbi Wilhelm• KEMA: Ken Agnew• Cadmus: Josh Keeling, Doug Bruchs• CleaResult: Mark Jerome.• RTF: Adam Hadley, Mohit Singh-Chhabra• CADMUS: Doug Bruchs, Josh Keeling• Avista: David Thompson.

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Savings AlgorithmPercentage of Total Recylced Units

58% Refrigerator Replacement (R2)* Old_UEC- Replaced_UECUnits No Refrigerator Replacement (1-R2) Old_UEC

66%Savings Algorithm

Induced Replacement (R1d) 0 - UEC_Induced_R1d

Savings Algorithm

Percentage of Total Recycled Units 8% Induced Replacement (R1k) Old_UEC- Replace_UECUnits No Replacement (1-R1k) Old_UEC

*D+K=Total Left on Grid

Savings Algorithm

034%

Savings AlgorithmInduced Replacement (R1n) 0 - UEC_Induced_R1d

Program Participant's Action After Recycling

Program Participant's Action After Recycling Refrigerator

Savings* Recycled unit would have been off-grid without the

program, savings = 0

Percentage of Total Recylced Units

1- % of Total Recycled Unit

Left On-Grid (Used)

Left Off-Grid (Not Used)

Sold/Donated (D)

Kept (K)

Scenarios if Program Did not Exist

Program Participant's Action After Recycling Refrigerator

Potential Recipient's Action in the Absence of Recycled Unit

Recycling Program Made Recycled Unit Unavailable

Total Number of Units Recycled

Brother In Law Factor/ R2

As Per UMP: Percentage of the would-be acquirers of avoided transfers that found an alternate unit are referred to as “R2”.Note, Percentage of the would-be acquirers of avoided transfers that did not find an alternate unit are “(1-R2)”.

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R2 Option- 1 (UMP/ Status Quo)• R2 = 50%• Justification:

• Midpoint between extreme values (0% and 100%)• We don’t know and can’t measure this factor accurately.

• Votes: • Bob Nicholas (JACO)

• Concerned that this factor needs to be studied more before we decide to modify it.

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R2 Option-2. (PSE Study)• R2 = 97 %• Justification:

• Based on survey data.

• Vote:• Bobbi Wilhelm (PSE)

• “Concerned that because energy savings estimates feed into the adjusted load forecast for DSM that we would over adjust if not taking 97%. Need to be absolutely certain that savings exist because they impact how we plan for supply side and demand side resources.

• “Worried that voting on savings vs. using best available data limits our ability to optimize our portfolio.”

• David Thompson (Avista)• Agrees with Bobbi’s concern that we need to be certain about savings for

load forecasting.

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R2 Option 3: Meet in the Middle• R2 = 75%• Justification:

• Would-be non-opportunistic acquisitions are likely to get acquired anyway (i.e. R2 = 100%).

• 55% could be the lower limit of R2, based on:• Initial Cadmus analysis from 4 extra-regional surveys estimates that

55 % of non-participant recycled units would have ended up as an non- opportunistic acquisition.

• Assuming all would-be opportunistic acquisitions do not acquire a unit.

• 100 % is the theoretical upper limit of R2. • Assuming all would-be opportunistic acquisitions do acquire a unit.

• 75 % is in the middle.

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R2 Option 3: Meet in the Middle

• Votes: • Adam Hadley (RTF)

• This is a very difficult thing to study; we’re close enough.• Mark Jerome (CleaResult)

• Agree with above logic• Doug Bruchs & Josh Keeling (Cadmus)

• Agree with above logic• Phil Sisson (JACO Consultant)

• Provisionally agree with above logic – but want to review nonparticipant surveys and instruments.