Ariz. Admin. Code § R14-2-2504 - Energy Efficiency Standards

A. Except as provided in R14-2-2518 and R14-2-2519, in order to ensure reliable gas service at reasonable ratepayer rates and costs, by December 31, 2020, an affected utility shall, through DSM and RET programs, achieve cumulative annual energy savings, expressed as therms or therm equivalents, equal to at least 6% of the affected utility's retail gas energy sales for calendar year 2019.

B. An affected utility shall, by the end of each calendar year, meet at least the cumulative annual energy efficiency standard listed in Table 1 for that calendar year. An illustrative example of how the required energy savings would be calculated is shown in Table 2. An illustrative example of how the standard can be met in 2020 is shown in Table 4.

Table 1. Energy Efficiency Standard

CALENDAR YEAR	ENERGY EFFICIENCY STANDARD (Cumulative Annual Energy Savings by the End of Each Calendar Year as a Percentage of the Retail Energy Sales in the Prior Calendar Year)
2011	0.50%
2012	1.20%
2013	1.80%
2014	2.40%
2015	3.00%
2016	3.60%
2017	4.20%
2018	4.80%
2019	5.40%
2020	6.00%

Table 2. Illustrative Example of Calculating Required Energy Savings

CALENDAR YEAR	A RETAIL SALES (therms)	B ENERGY EFFICIENCY STANDARD	C REQUIRED CUMULATIVE ENERGY SAVINGS (therms or therm equivalents) (B of current year × A of prior year)
2010	100,000,000		0
2011	97,500,000	0.50%	500,000
2012	94,870,000	1.20%	1,170,000
2013	92,411,540	1.80%	1,707,660
2014	90,018,939	2.40%	2,217,877
2015	87,691,512	3.00%	2,700,568
2016	85,427,344	3.60%	3,156,894
2017	83,224,605	4.20%	3,587,948
2018	81,081,521	4.80%	3,994,781
2019	78,996,374	5.40%	4,378,402
2020	76,967,498	6.00%	4,739,782

C. An affected utility may count energy savings resulting from DSM and RET programs to meet the energy efficiency standard. At least 75% of the energy efficiency standard for each year listed in Table 1 shall be achieved through DSM energy efficiency programs.

D. An affected utility's energy savings resulting from DSM energy efficiency programs implemented before the effective date of this Article, but after 2004, may be credited toward meeting the energy efficiency standard set forth in subsection (B). The total energy savings credit for these pre-rules DSM programs shall not exceed 1% of the affected utility's retail energy sales in calendar year 2005. A portion of the total energy savings credit for these pre-rules programs may be applied each year, from 2016 through 2020, as listed in Table 3, Column A.

Table 3. Credit for Pre-rules Energy Savings

CALENDAR YEAR	A CREDIT FOR THE PRE-RULES ENERGY SAVINGS APPLIED IN EACH YEAR (Percentage of the Total Eligible Pre-rules Cumulative Annual Energy Savings That Shall Be Applied in the Year)	B CUMULATIVE APPLICATION OF THE CREDIT FOR THE PRE-RULES ENERGY SAVINGS IN 2016-2020 (Percentage of the Total Eligible Pre-rules Cumulative Annual Energy Savings That Are Credited by the End of Each Year)
2016	7.5%	7.5%
2017	15.0%	22.5%
2018	20.0%	42.5%
2019	25.0%	67.5%
2020	32.5%	100.0%

E. An affected utility may count toward meeting the energy efficiency standard up to one-third of the energy savings resulting from energy efficiency building codes and up to one-third of the energy savings resulting from energy efficiency appliance standards, if the energy savings are quantified and reported through a measurement and evaluation study undertaken by the affected utility, and the affected utility demonstrates and documents its efforts in support of the adoption or implementation of the energy efficiency building codes and appliance standards.

F. An affected utility may count a customer's energy savings resulting from self-direction toward meeting the energy efficiency standard.

G. An affected utility may count toward meeting the energy efficiency standard all energy savings resulting from the affected utility's sponsorship of RET projects that displace gas. An affected utility may also count toward meeting the energy efficiency standard all energy savings resulting from other RET projects that are not sponsored by the affected utility, if the affected utility can demonstrate that its efforts facilitated the placement and completion of the RET project.

H. An affected utility's energy savings resulting from efficiency improvements to its delivery system may not be counted toward meeting the energy efficiency standard.

I. An affected utility's energy savings used to meet the energy efficiency standard will be assumed to continue through the year 2020 or, if expiring before the year 2020, to be replaced with a DSM measure or RET having at least the same level of efficiency.

Table 4. Illustrative Example of How the Energy Standard Could be Met in 2020

	2020 Energy Efficiency Standard	2019 Retail Sales (therms)	Required Cumulative Annual Energy Savings (therms or therm equivalents)
Total	6.00%	78,996,374	4,739,782
Breakdown of Savings and Credits Used To Meet 2020 Standard:
			Cumulative Annual Energy Savings Or Credit (therms)
Pre-rules Savings Credit R14-2-2504(D)			359,545*
Building Codes and Appliance Standards R14-2-2504(E)			425,000
Self-direction R14-2-2504(F)			27,000
RET R14-2-2504(G)			25,000
CHP R14-2-2501(10) and R14-2-2504(C)			135,000
Energy Efficiency R14-2-2504(C)	At least 75%		3,768,237
Total			4,739,782

* The total pre-rules savings credit shall be capped at 1% of 2005 retail energy sales, and the total credit is allocated over five years from 2016 to 2020. The credit shown above represents an estimate of the portion of the total credit that can be taken in 2020, or 32.5% of the total credit allowed.

Notes

Ariz. Admin. Code § R14-2-2504

New Section R14-2-2504 and Tables 1 through 4 made by final rulemaking at 17 A.A.R. 72, effective March 4, 2011 (Supp. 11-1).