During the 2018 General Assembly session, legislation was passed requiring Appalachian Power (APCo) and Dominion Energy Virginia (DEV) to use a stakeholder process to develop energy efficiency programs. This process aims to gather input and feedback from energy efficiency stakeholders to inform petitions submitted to the State Corporation Commission (SCC) for approval, supporting state energy conservation goals. Chapter 397 of the 2019 Virginia Acts mandates that this process be facilitated by an independent monitor to ensure stakeholder representation, track progress, and report on objectives, recommendations, and petition statuses. This report covers the stakeholder process from July 2023 to June 2024, as required by Chapter 397.

Stakeholder Process

Each utility’s stakeholder group represents over 20 different types of organizations, including the utilities, SCC, Virginia Department of Energy, local governments, energy conservation organizations, energy efficiency organizations, program implementers, and low-income advocacy and assistance organizations.

Between July 1, 2023, and June 30, 2024, the stakeholder group for Appalachian Power (Phase I Utility) has met three times and the Dominion Energy Virginia (Phase II Utility) group has met twice, which is not inclusive of the numerous subgroup meetings that Dominion Energy and other stakeholders have actively participated. Large stakeholder group meetings for both utilities were used to inform stakeholders of the status of program recommendations from previous years, develop program recommendations for the utilities’ next filing, and to discuss topics of interest raised by the stakeholders, including customer awareness and outreach and program performance highlighted in EM&V reports. For DEV, the subgroup meetings included a meeting of the Agenda and Process subgroup on June 4, 2024, to discuss the DSM Recommendations.

Current Number of Stakeholder Group Members

Appalachian Power: 172

Dominion Energy: 307

Stakeholder Objectives

In the 2024 Stakeholder Feedback Process survey, the independent monitor asked stakeholders to identify what objectives they wanted to accomplish over the next five years to reach energy efficiency goals and what would constitute “success" for them for the process for the upcoming year. Collectively the stakeholder group identified the following five categories and 11 objectives(*1):

Transparency, Data-Driven Conversations, and Stakeholder Engagement

1. Increase Transparency:

• Provide clear insights on how savings are calculated.
• Explain reasons for low program participation.

2. Data-Driven Focus:

• Share key data points, such as gaps between current performance and VCEA goals, in stakeholder meetings.
• Focus discussions on specific actions to bridge identified gaps and track progress with regular updates.

3. Stakeholder Involvement:

• Solicit and incorporate input from stakeholders, providing feedback on their suggestions.
• Ensure active engagement of small working groups, possibly through in-person meetings.
• Increase representation of diverse entities, including those not currently involved in program design.

Program Design, Expansion, and Cost Management

4. Innovative Program Design:

• Build programs from the ground up with diverse input, moving beyond current design constraints.
• Learn from successful ratepayer-funded energy efficiency programs in other states (e.g., WI, VT, OH, MA).

5. Program Expansion:

• Continue and expand successful programs like IAQ Solar.
• Increase the range of measures available for reimbursement.

6. Cost Stabilization:

• Aim to stabilize energy costs, protecting consumers, especially retirees and the working class, from high-energy burdens.
• Generate energy savings with minimal impact on ratepayers/customers.

Performance, Compliance, and Reward Systems

7. Meeting Targets and Compliance:

• Achieve VCEA savings targets and EERS targets.
• Ensure thorough follow-through and reporting on SCC-mandated topics by Dominion.

8. Performance-Based Programs:

• Deploy pay-for-performance energy efficiency programs.
• Reward demand reduction with significant incentives rather than token payments.

Awareness, Participation, and Effective Processes

9. Increase Awareness:

• Enhance the visibility and understanding of energy efficiency programs among consumers.
• Promote broader participation through targeted education and outreach.

10. Effective Processes:

• Consolidate programs for better cost-effectiveness and increased savings and participation.
• Streamline planning cycles and coordinate with IRA programs to avoid overlapping and confusion.

Continuous Improvement and Feedback Loops

11.Continuous Improvement:

• Regularly evaluate and improve the stakeholder process to ensure it remains productive and inclusive.
• Set clear goals and regularly assess progress to ensure the process benefits all involved parties.

Recognition of the Influence of the Stakeholder Process

In August 2023, the American Council for an Energy-Efficient Economy (ACEEE) published the 2023 Utility Energy Efficiency Scorecard(*2), which evaluates and ranks the 53 largest U.S. utilities on policy and program efforts related to energy efficiency. As a key finding in the report, the ACEEE noted that Dominion Virginia “was the most improved utility in both absolute and relative terms, jumping from 50th place…to 27th place." The report commented that the increase was driven by expanded programs following the passage of the Virginia Clean Economy Act. Dominion Energy Virginia has stated that the stakeholder process has contributed to the growth of the number of programs.

Dominion Energy Virginia DSM Recommendations

A special focus for the Phase II Utility emerged during the 2023 filing year and continued into the 2024 filing year. In the 2022 DSM Final Order for Dominion Energy (CASE NO. PUR-2022-00210), the Commission directed four recommendations out of a total of 26 to be reviewed by the stakeholder process. The four recommendations referred to the stakeholder group were:

1. Recommendation 12: Refer the issues regarding how the cost-effectiveness of DSM Programs is currently measured, including: (i) How the Inflation Reduction Act will reduce the cost of some DSM Programs; (ii) how the inclusion of non-energy benefits (e.g., the social cost of carbon) can better quantify the benefits for all programs and bundles; and(iii)how building codes impact the measurement of cost-effectiveness of DSM Programs to the Stakeholder Group and require a report from the Company on these issues in next year’s DSM case.

2. Recommendation 24: Refer the issue of dual-fuel customers to the Stakeholder Group and require a report from the Companyon the issue in next year’s DSM case.

3. Recommendation 25: Refer the issue of the Long-Term Plan and DSM Program consolidation to the Stakeholder Group and require a report from the Company on the issue in next year’s DSM case.

4. Recommendation 26: Refer the issue of leveraging the functionalities of [Advanced Metering Infrastructure], including geo-targeting, in demand-response programs to the Stakeholder Group and require a report from the Company on the issue in next year’s DSM case.

At the October 23, 2023, Dominion Energy Virginia Energy Efficiency Stakeholder meeting, several external experts were brought in to present their thoughts on the four recommendation areas. The stakeholders held some brief discussions and then requested an opportunity to provide written feedback to Dominion Energy Virginia (DEV) regarding the four recommendations. From October 26, 2023, to November 17, 2023, the independent monitor used an online survey to gather stakeholder input. The survey contained a total of 29 questions that had been provided to the independent monitor from stakeholders, including DEV.

The stakeholders’ feedback can be summarized in several key points. They emphasized the need for better coordination and consolidation of Dominion Energy’s programs to streamline efforts and improve performance. They also highlighted the importance of including non-energy benefits in program evaluations, such as improved comfort, health benefits, and job creation. The stakeholders also discussed the potential impact of IRA funds on program participation and suggested that these funds could enhance the cost-effectiveness of the programs, accelerate participation, and increase the number of participants. They stressed the need for improved marketing and outreach efforts to increase program awareness and participation. The stakeholders also suggested aligning vendor contracts with program bundling for better efficiency. They recommended better utilization of AMI data for geotargeting and demand response programs. They also pointed out the need for clearer information on IRA funding opportunities and the importance of considering the social cost of carbon in cost-effectiveness analysis. Lastly, they emphasized the need for ongoing updates and improvements to the stakeholder process to ensure continuous alignment with best practices and regulatory impacts.

The full set of responses were included in Dominion Energy’s 2023 filing. A copy of the summary information from the survey is provided in Appendix IV of this report.

The DEV Agenda and Process subcommittee met on June 4, 2024, to continue the discussion around the four recommendations and how the Stakeholder group should address each. The group conducted a preliminary force field analysis for each recommendation, which will be shared with the entire stakeholder group for revision and prioritization. During the discussion, several items in the recommendations were determined to either have been overtaken by events, including the passage of the Savings Achieved Via Efficiency (SAVE) Act by the General Assembly, or to be waiting further information from Virginia Energy. At the time of the writing of this report, the process for further stakeholder discussions and recommendations is being designed by the Independent Monitor and will be implemented between July and December 2024.
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(*1) Please note that some objectives apply to only one of the utilities, i.e., specific to DEV or APCo, while most apply to both utilities.
(*2) https://www.aceee.org/research-report/u2304