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The Coming Train Wreck in California: Why Interval Meter Based M&V is Bound to Fail


The California PUC is shepherding an ambitious program to quantify building energy savings using actual utility data instead of energy calculations.  In many ways, this method is a substantial improvement over the method used to date, in California and throughout the nation.  Under existing rules, utilities, energy efficiency companies, and consumers (the players) are financially compensated per energy unit saved only for reductions beyond the already ambitious energy codes.  As a result, because actual savings from replacing inefficient equipment is not incentivized, and there is no motivation for utilities or energy efficiency companies to retrofit many types of inefficient equipment, such as distribution transformers, incandescent lights, broken VFDs, and constant volume AHUs, because most of the actual savings brings the equipment to the level of the energy code, and the players are not paid for this portion of savings.

Another drawback of the existing system is that energy savings are based on engineering calculations, which include some measurement and many assumptions.  This method may or may not reflect actual savings.  Finally, the system requires review of the calculations once by an independent third party, and again, a portion of the calculations are reviewed by the California PUC.  Three sets of high paid engineers working on one set of calculations.

Using utility data only makes sense, at least in theory.  It quantifies actual energy savings, rather than savings beyond code.  It is based on actual performance data, rather than engineering calculations and assumptions.  It does not require three sets of engineers to evaluate the accuracy of the savings numbers.  The bills don’t lie, but they can mislead.

The response of the energy efficiency companies appears to be to use interval data models to establish a baseline and track energy savings.  Tens of thousands if not hundreds of thousands of meters will be tracked in this manner.  This method, deemed M&V 2.0, will be automatic, and once it is set up, can be carried out efficiently with little high-cost engineering labor—an improvement over the existing system.

There are many drawbacks with using utility bills and interval data to estimate savings.  Many of these drawbacks have been learned through decades of practice by the performance contracting industry, only to be ignored by the proponents of M&V 2.0, many of whom are new to Option C-type M&V.  These drawbacks are explored in this paper.  These drawbacks include: (1) the fact that fewer meters will have an acceptable regression with interval data than would using daily, weekly or monthly data.  What then is to be done with those buildings whose data does not make an acceptable model?  (2) There are unique uncertainty problems associated with many interval data fits.  (3) By far, the largest problem is associated with non-routine baseline adjustments, a problem that has plagued the performance contracting industry, to the extent that they have largely moved away from Option C M&V techniques.  Inevitably, the building occupant will override control settings, purchase additional energy-consuming equipment, change operating schedules, or in some way interfere with the buildings’ energy usage patterns, and offset the energy savings that should have occurred. These changes need to be identified, quantified and then represented in the savings calculations.  Interval data software may be able to identify instances of changing usage patterns, and in some degree characterize the type of change, but the change in usage pattern cannot be modeled until the root cause has been identified, as opposed to guessed by an algorithm.  Identifying changes in usage patterns often require site visits, interviews, and investigation of control settings.  How, then, are the changes in usage patterns to be handled by M&V 2.0?  How will non-routine adjustment calculations be conducted for events such as changes in chiller and AHU temperature settings, broken VFDs or chillers, or increased occupancy and AHU schedules?  How much time will this take?   How much uncertainty will be associated with the calculations of non-routine adjustments?  It is our contention that these unresolved issues will render M&V 2.0 unworkable and will result in chaos and uncertainty for the players in 2020

Presented By

John Avina
Abraxas Energy Consulting

John Avina, President of Abraxas Energy Consulting, has worked in energy analysis and utility bill tracking since 1994. During his tenure at Thermal Energy Applications Research Center, Johnson Controls, SRC Systems, Silicon Energy and Abraxas Energy Consulting, he has managed the M&V for a large performance contractor, managed software development for energy analysis applications, created energy analysis software that is used by several hundred energy professionals, taught over 250 energy management classes, created hundreds of building models and utility bill tracking databases, modeled hundreds of utility rates, and has personally performed energy audits and retro-commissioning on over 25 million square feet of building stock. John chairs the Association of Energy Engineer’s Certified Energy Audit Test Committee.  John has a MS in Mechanical Engineering from the University of Wisconsin-Madison.