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Energy Baselines: Goalposts with Legs

By August 19, 2014December 26th, 2021Briefs

Government statistics are often harangued when they are measured against what would have happened without market intervention – especially when promises of end results are so clearly measurable and well defined at the outset.  When metrics switch from “this is what will happen” (e.g., create 70 billion new jobs in two years) to “this is what would have happened”, blow the whistle!  Dig up the goal post, move it a little closer, and put the crossbar at five feet.

But wait a minute!  The energy efficiency industry has its own referee-controlled telescoping goalpost on wheels.  Baselines!  Energy savings that result from participating-customer projects are based every bit as much on what didn’t happen as what did happen – in most cases.

In most cases, what didn’t (presumably) happen is the participant didn’t purchase the crumbiest new widget available in the marketplace.  This sounds simple, but things get messy in many situations.

What If?

What if mice chewed up a customer’s air conditioning wiring in the winter and he’s faced with paying $200 to fix it, or he could upgrade to the current standard, which is much more efficient than he has?  In his mind, since there is no incentive, why bother?  There must be no savings.

What if a customer wants full or partial redundancy for a major piece of equipment, which has been well maintained with no signs of degradation and a history of zero repairs?  Furthermore, the new piece of equipment has much better modulating control for greater efficiency over a large range of operating conditions.

What if the cost of a custom project is 80% labor and knowhow, with 20% of the cost being required system modifications to allow the operation to be permanent?

What if a customer has been told by their architect/engineering firm that the building “sold” to the customer will save $200,000 annually, but the baseline for that assumption included electric resistance heating and a system that is not code compliant?

What if a customer’s new engine block production line required a complete replacement because cast iron is out of style – and the savings were estimated with the out-of-style cast iron blocks as the baseline?


These are all good questions, and the best solutions include a reasonable split between administrative cost and equity among participants.  Certainly, it is not reasonable to calculate energy savings for every squiggly lamp sold to a homeowner.  On the other hand, savings for a variable frequency drive for a 75 hp motor can easily vary by 200,000 kWh from one application to the next.  In fact, a VFD may be installed on a redundant pump and save nothing – and still be incentivized.

Some programs use dual baselines: one for the remainder of the expected life of the old equipment and a second baseline for the remaining life of the new equipment.  Expensive!  Complicated!  Still arbitrary!

Whatever the case:

  • Document the rules
  • Prepare to add new rules as crazy new scenarios arise and as savings gamers “manufacture” savings
  • Follow the rules!
Michaels Energy

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