Yet Another Look at Demand-Side Bidding: Long Island Power Authority’s 75-Megawatt Efficiency RFP

Eric Belliveau, Optimal Energy, Inc.
Gary Krieger and Dan Zaweski, Long Island Power Authority
Craig McDonald, Navigant Consulting, Inc.

Keywords

Abstract

Long Island Power Authority (LIPA) continues to experience significant growth in demand for electricity. While this is not news, LIPA’s solution for procuring new supply is. LIPA is committed to cost-effective energy efficiency to minimize the need for additional generation and transmission resources. Though the supply needs ruled out energy efficiency as the only solution, LIPA was determined to make efficiency contribute to the solutions. In spring 2003, LIPA issued a Request for Proposals (RFP) seeking additional supply (SRFP) (Long Island Power Authority 2003). Soon after, a second RFP was issued seeking 75 megawatts from energy efficiency (Long Island Power Authority 2004).

This paper explores the design and implementation of the Energy Efficiency RFP (EE RFP). The RFP required efficiency measures with both megawatt (MW) and megawatt-hour (MWh) savings. MW savings had to be realized from energy efficiency only, not load management or distributed generation. Respondents were asked to include a detailed discussion of how customers would be solicited, what measures would be installed and how savings would be verified. Extra consideration was given to proposals addressing load pockets, publicly-owned buildings, small commercial and industrial (C&I) customers and multifamily buildings.

The paper addresses how bids submitted in response to the RFP scored on the requirements and issues. The paper also compares the costs, kW/kWh ratio, lifetimes of the energy efficiency RFP with the supply RFP, and prior experiences of demand-side bidding (DSM). Particular attention was paid to past efforts at demand-side bidding. LIPA strived to identify, and as often as possible, rectify the deficiencies of those efforts.