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Michael Bushey, Director, Customer Programs and Services, Southern California Edison

Adam Procell, Chief Strategy Officer, Willdan

Putting Principles Into Practice: Q&A On Performance-Based Utility Program Models

Last month, the Alliance’s Active Efficiency Collaborative released the Guiding Principles for Next-Generation Performance-based Utility Program Models as part of its first year of work to reimagine what energy efficiency can accomplish in the digital age. We sat down with Adam Procell, Chief Strategy Officer at Willdan, and Mike Bushey, Director, Customer Programs and Services at Southern California Edison (SCE), co-chairs of the working team that produced the principles, to discuss their work.

1. Tell us what’s in the Guiding Principles and what excites you about them.

AP: The Guiding Principles contain the latest thinking from some of the best minds across the energy industry. Our industry is trying to meet a wide range of ambitious energy, economic, equity, and environmental goals. A new generation of performance-based utility programs are needed in order to meet the goals, but we are in desperate need of standard practices and common understanding – we need a roadmap for the coming decades. I’m excited because I’m acutely aware of the gap the Guiding Principles fill.

MB: SCE and utilities nationwide are experiencing transformative changes in the utility space and all stakeholders must collaborate to usher in the next generation of demand side management DSM programs. At SCE, we are excited about the Guiding Principles, as they along with our policy and strategy objectives will help shape the future of our behind-the-meter DSM opportunities as we work to exceed our customer, environmental, and energy related objectives. 

2. Who should check out the Guiding Principles, and why?

AP: Who shouldn’t? Anyone who is at all interested in the future of the built environment. Whether your interest is based on the impact that buildings will have on the future of the grid; the immense financial opportunity presented by customer-side-of-the-meter investments; the job creation opportunity of this retrofit work; or the critical role that buildings will play in meeting our decarbonization targets. The next big disruption in the U.S. economy is in the trillion-dollar business of powering buildings and transportation – efficiency, renewables, batteries, electrification. The regulatory and business model decisions made in the next couple of years will define this industry for a generation.

3. Mike, speaking to your experience with Southern California Edison, how will the final principles be useful to utilities? And as Director of Customer Programs and Services, how would the goals and ideals outlined in the principles benefit utility customers if implemented?

MB: In November 2019, SCE published “Pathway 2045,” a data-driven analysis of the steps that California must take to meet the 2045 goals to clean our electricity grid and reach carbon neutrality. From electrifying transportation and buildings to decarbonizing the grid through the use of Distributed Energy Resources, customer programs will be one of the most important components of this pathway. Now, while we realize that not every utility is in the same space or regulatory environment as SCE, I can assure you that these Guiding Principles can be applied to any variety of customer energy efficiency programs in a wide range of regulatory environments.

Performance-based programs ensure that utilities, stakeholders, regulators, participants, and ratepayers receive the benefits that are expected. Whether you are modifying an existing program or creating a new program, these principles will be useful to make your program more customer-centric, equitable, accessible, and verifiable –  thus ensuring they meet everyone’s goals.

4. And Adam, specifically speaking to your experience with Willdan, talk about how the private sector/energy service companies weighed in on the principles, and – vice versa – how they inform your work?

AP: I believe that, as usual, energy service companies and other private industry players brought the reality of the situation on the ground. We have suffered consistently from the myth that energy efficiency is low-hanging fruit, and we have been constrained by program caps, annual program changes, and the very necessary industry guiderails around cost-effectiveness. Understanding government and utility goals and constraints are critical to building the products and services of the future, so our participation in these forums is critical to our own sustainability.

5. Active Efficiency is defined as optimizing the use of energy by integrating the benefits of traditional energy efficiency measures with the opportunities presented by digital technologies. What do you see as the next big steps in furthering this concept?

MB: Active Efficiency requires immense commitment from all stakeholders including regulators, utilities, implementers, and customers to address barriers for implementation while taking advantage of the latest technological advances to ensure that benefits are not left on the table. The Collaborative has been a thought leader on these efforts and could support the transition from Guiding Principles to recommendations for implementation. SCE looks forward to being a part of the effort. 

AP: I think that the stakeholders are still getting their heads around the challenges and opportunities that are created by these evolving technologies. It’s important to recognize that they do not render obsolete the important tools that our industry has carefully honed over decades – energy efficiency, demand response, customer engagement, project financing and more. New technologies for the most part provide a communications and control overlay that is more critical now than ever before as we recognize the value of time- and location-dependent resources. Getting the policy, business, and regulatory frameworks right will be critical to the evolution that our industry is attempting to bring about.

Read the full principles on the new Active Efficiency website, where you can also find out more about the Collaborative and how to join.