Distributed energy resources

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New technologies and lower costs mean growing opportunities for distributed energy resources (DERs), such as energy efficiency, distributed generation, demand response, and energy storage. E3 helps utilities, regulators, technology developers, and large energy users find beneficial applications for these technologies. We are also examining the impact of transportation electrification on the grid and assessing the potential for electric vehicles to provide grid services.

E3 has been at the forefront of DER assessment since our founding in 1989. We developed the methods and models that utilities and state regulators throughout North America use to evaluate the cost effectiveness of utility investments in DERs. E3 has also developed tools that help utilities quantify DER location benefits and optimize siting. As our international client base grows, our consultants are disseminating these tools and best practices in India, Africa, and China.

Our distributed energy resources evaluation services include:

  • Avoided cost assessment
  • Cost-effectiveness evaluation
  • Best practice assessment
  • Program design and evaluation
  • DER potential estimation
  • Retail rate design to maximize DER cost effectiveness
  • Evaluation of electric vehicle smart charging
  • Evaluation of DER impacts on utility rates and financial health
  • Zero net energy building evaluation and cost-effectiveness analysis
  • Building energy code evaluation
  • Net energy metering cost-effectiveness analysis
  • Assessing the participation of energy storage and non-generation resources in energy and AS markets
  • Non-wires alternatives and local integrated resource plans
  • Regulatory support and expert testimony


Distributed energy resources projects

Cost-effective pathways to Hawai‘i’s 100 percent RPS goal

n 2015, Hawai‘i passed unprecedented legislation, Act 97, which requires its investor-owned utility, Hawaiian Electric Company (HECO), to meet a 100 percent renewable portfolio standard (RPS) by the end of 2045. Strengthening the state’s economy depends on moving away from imported fossil fuels for both electricity and transportation and increasing reliance on its abundant renewable […]

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  • Transportation electrification assessment | CalETC, 2014–16

    E3 analyzed the grid impacts of charging light-, medium-, and heavy-duty electric vehicles (EVs) for the California Electric Transportation Coalition (CalETC), a consortium of automakers and utilities. To quantify the distribution system upgrades needed to accommodate residential charging of light-duty EVs, we mapped vehicle registration data with utility distribution system and load data for more than 81,000 circuits and feeders and 2,200 substations; we then modeled costs under different rate and charging scenarios.

    Even with clustered EV adoption, distribution impacts were modest, and we found that managed charging reduced distribution upgrade costs by 60 percent. For most technologies studied, we showed that EV adoption can actually reduce rates for utility customers while providing net economic, environmental, and societal benefits for California. CalETC’s member utilities used our study to educate regulators and stakeholders about the benefits of EV adoption prior to seeking authorization to invest ratepayer funds in charging infrastructure and customer outreach.


    Net energy metering tariff evaluation tool | CPUC, 2015

    E3 created a public tool for the California Public Utilities Commission (CPUC) to inform the development of a successor to existing net energy metering (NEM) tariffs for eligible customer-sited renewable generators. This tool helped the CPUC and stakeholders balance legislative directives to design tariffs that maintain sustainable growth of such generation and ensure that total benefits to customers are approximately equal to total costs.

    The tool lets users evaluate different rate designs, simulating their impact on adoption of customer-sited PV and on bills for all ratepayers, while accounting for feedback effects on future rates and life-cycle cost-effectiveness. Providing a common model to all parties allowed the CPUC and stakeholders to focus on fundamental differences in proposals and scenarios, rather than on disagreements and confusion over model differences.

    Time-dependent valuation for building codes | CEC, 1999–present

    E3 supports the California Energy Commission (CEC) in implementing the state building energy code by maintaining the economic framework for energy standard requirements and allowed trade-offs for new construction. We have worked with the CEC and its stakeholders since 1999 to continually refine a time-dependent valuation (TDV) methodology, and we are now supporting the life-cycle cost analysis for measures proposed in the 2019 cycle. The TDV methodology uses a 30-year forecast of the social cost of energy that varies hourly and by location to account for shifts in system peaks over time, and regional variations in climate and grid utilization. In the 2019 code cycle, E3 is evaluating the cost-effectiveness of California’s goal to require that all new residential buildings be zero net energy by 2020 and that nonresidential buildings be zero net energy by 2030. We are also assessing the economic and GHG emission impacts of switching to all-electric housing and the value of integrating controllable thermostats and appliances into new buildings.


    Distributed resources planning tool development | Con Edison, 2014

    E3 built on a collaboration with Con Edison going back to 2000 to develop an integrated demand-side management (IDSM) model that expands the utility’s distribution planning capabilities. Using detailed data on customer populations, the tool assesses market potential for dispatchable distributed energy resources (DERs) within local electric networks, enabling Con Edison to identify lower-cost ways to alleviate local distribution constraints.

    Con Edison has integrated the IDSM tool into its distribution planning practices and is using it to help realize the New York State Public Service Commission’s Reforming the Energy Vision initiative. The E3 team continues to refine and enhance the tool, which won the 2014 Utility Analytics Institute Innovation Award.

    Avoided Cost Model for evaluating DER programs | CPUC, 2004–present

    Since 2004, the California Public Utilities Commission (CPUC) has used E3’s Avoided Cost Model (ACM) to estimate the benefits of energy efficiency, distributed generation, energy storage, and other distributed energy resources (DERs). The ACM has evolved along with energy markets and policy in the West, and it currently projects avoided costs for energy, losses, generation capacity, ancillary services, subtransmission and distribution capacity, renewable portfolio standard purchases, carbon allowances, and other air permit costs. The 30-year hourly forecast is differentiated across California’s 16 climate zones.

    The CPUC approves over $1 billion in annual funding for DERs using these avoided costs for its cost-effectiveness tests. The ACM is suitable for stakeholder processes and contentious regulatory proceedings because it uses robust methods and publicly available input data. E3 also allows the download of the ACM so that all stakeholders can audit any of the calculations.