Energy Exchange: Energy efficiency

By EDF Blogs

By Scott Henderson, Advisor to Metrus Energy

While many in the clean energy industry are familiar with the use of power purchase agreements (PPA) to finance solar energy systems at commercial and industrial facilities, many may be surprised to know that there is a similar contract for funding energy efficiency retrofit projects. Called an efficiency services agreement (ESA), this contract was designed to address the challenges, or “pain points,” that building owners commonly face when contemplating such projects.

Like a PPA, an efficiency services agreement enables third-party ownership of a project, in which a developer designs, finances, implements, and owns a package of energy and water efficiency measures at a customer facility. In return for implementing the project, the ESA provider charges the customer for any realized savings, at a rate that is less than their current cost of electricity, gas, or water. This continues until the end of the contract period, typically 10 years, upon which time the customer can renew the contract or purchase the equipment at fair market value.

Low implementation of ESAs

The ESA is a pay-for-performance contract. If the efficiency project does not produce measurable and verifiable savings, the customer owes nothing. More fundamentally, ESAs allow energy and water efficiency to be valued and sold as a resource, much like wind or solar power.

Although building owners recognize the benefits of implementing multi-measure energy and water efficiency retrofits, their implementation in the commercial and industrial (C&I) market has been historically low. Most C&I building owners grapple with a common set of “pain points” as they attempt to plan, fund, and execute capital improvement projects. However, these pain points are often most acute when it comes to energy and water efficiency retrofits, conspiring to scuttle even the most well-designed project.

Challenges cited by customers

The list below includes eight pain points that C&I owners frequently cite when evaluating energy and water efficiency retrofit projects, as well as the specific ways in which ESAs address these challenges:

1. The customer’s capital budget for facility improvements is constrained, due to competing needs for cash within the organization.

ESAs involve zero up-front capital from the customer. ESA providers fully finance the project using their own sources of capital and cover all ongoing operations and maintenance (O&M) costs.

1. The customer is unable to assume the performance and/or financial risk associated with a large, integrated energy project.

ESA providers mitigate these risks for the customer by taking ownership of the assets and charging the customer only for realized energy savings.

1. The customer must establish that energy savings have truly been realized.

ESA providers, with their contractor partners, use only the most sophisticated, transparent, and widely-accepted protocols for measurement and verification of energy savings.

1. The customer lacks the time and resources necessary to undertake an integrated energy efficiency project.

ESA providers typically handle all project development activities including overseeing engineering and construction, project financing, and providing O&M services during the contract period.

1. The building energy efficiency market is heavily fragmented with a wide array of technologies and service models to choose from, often leading to confusion and/or inaction on the customer side.

ESA providers manage project development, giving customers more time to focus on their core business. They also partner with leading contractors to ensure reliable and efficient engineering and construction of projects, including equipment selection.

1. The customer is worried about the impact of financing an energy efficiency project on their balance sheet.

ESA payments often qualify as an operating expense for accounting purposes, avoiding any negative impact on the customer’s balance sheet. Since ESA providers fund projects using their own capital, the customer can reserve their credit capacity for core business needs.

1. The customer is sensitive to rising energy prices.

ESAs provide customers with a partial hedge against rising energy prices by allowing them to lock in a known rate for a significant portion of their baseline energy consumption. Further, the rate is lower than the rate they currently pay.

1. Customers who manage multiple facilities are hesitant to invest the time and energy to undertake a “one-off” project that can’t be easily scaled or replicated.

ESAs are structured to accommodate funding of multiple projects with different scopes across a portfolio of buildings.

To date, most of the initial customers utilizing ESAs have been large industrial or institutional customers. Organizations such as these tend to own and occupy a large campus or portfolio of facilities, allowing them to replicate their first ESA project across other buildings.

By directly addressing the most commonly cited “pain points” of customers, ESA providers turn energy and water efficiency into a resource that can be produced, measured, and sold in much the same way that PPA providers generate and sell solar or wind power.

Moreover, ESAs have the added benefit of helping customers upgrade their facilities from the inside out with new equipment and other improvements that are critical to their daily operations.

By EDF Blogs

Every year, SXSW Eco – one of the most high-profile environmental conferences – selects its programming based on votes from the public. This means anyone, regardless of whether you submitted a panel, can cast a vote.

This year, seven experts from Environmental Defense Fund are featured on dynamic panels that cover everything from solar equity and new utility business models to innovative building efficiency programs and the threat of methane pollution. To make sure EDF and energy-related programming is represented at the conference in Austin, TX this October, we are asking our readers to please vote for your favorite EDF panels and presentations.

How to vote

To vote, you will need to login or create a PanelPicker account here: http://panelpicker.sxsw.com. The voting is simple, just give a session a “Thumbs Up” or “Thumbs Down,” leave some comments, and move on. This whole process will take you all of one minute.

Voting ends this Friday, May 22nd, so please help us spread the word by sharing this post with your friends via email and social media (you can also retweet us from @EDFEnergyEX)!

EDF panel and presentation submissions

The Revolution Will Be Solarized

The solar revolution is here, but will it truly empower all people? The U.S. now has enough installed solar to power more than four million homes, and has added more solar capacity in the past two years than in the previous 30 years combined. But who is really benefiting from this boom? What about renters, low-income communities, and communities of color, who disproportionately bare the pollution burden from today's electricity system? Recent misinformation campaigns from the utility and fossil fuel industries would have us believe solar energy is hurting low-income communities and communities of color. This panel will explore tough question about equity, affordability, and access to solar power – and highlight real-world examples of policy solutions and pilot programs attempting to bring solar power to the people.

 Speakers

• Jorge Madrid, Environmental Defense Fund
• Brentin Mock, The Atlantic
• Anya Schoolman, Community Power Network
• Jaqui Patterson, NAACP
• Michael Kadish, GRID Alternatives

Back to the Future: Power Grid Edition

Illinois is proving electric utilities don’t need time travel to move its power grid light-years into the future. Since 2011, Illinois’ largest utilities, Commonwealth Edison and Ameren Illinois, have started rolling out some five million smart meters and making more than $2 billion of smart grid investments. EDF and Citizen’s Utility Board are working with ComEd and Ameren to ensure customers not only get meters, but also a cheaper and cleaner grid, with ground-breaking initiatives, such as community solar farms, easy access to energy data, a suite of alternative electricity pricing plans, microgrid development, voltage optimization, and greenhouse gas reductions. Discover for yourself how Illinois’ model of using information and data from meters and other equipment creates new business models and benefits to residents, small businesses, manufacturers, and commercial real estate. Illinois is setting a standard for a smarter, cleaner, and healthier energy.

Speakers

• Dick Munson, Environmental Defense Fund
• Andrew Barbeau, Accelerate Group
• David Kolata, Citizens Utility Board

Innovating to Fight the Other Big Climate Threat

Natural gas use across the United States has jumped– but leaks of methane, a potent greenhouse gas and the main component in natural gas, can undermine gas’ potential climate benefits over coal. To help the oil and gas industry faster detect, and ultimately reduce, methane emissions, Environmental Defense Fund and a diverse set of partners drew on innovation competitions to develop the Methane Detectors Challenge, an initiative to commercialize next-generation detection sensor systems equipped with big data capabilities. Attendees will learn how the Challenge has marshaled the expertise and buying power of seven leading oil and gas companies and the talent of a diverse international set of technology development teams. The goal is to not only help find and fix leaks with the speed we expect in the digital age – improving air quality, and keeping companies’ supply in the pipeline and out of the atmosphere – but also to catalyze a new market for detection equipment.

 Speakers

• Ben Ratner, Environmental Defense Fund
• Dirk Richter, Quanta3
• Roy Hartstein, Southwestern Energy
• Jason Gu, SenSevere

Water Management 2.0 – Policy, Tech and Education

The 21st century has ushered an era where city planners in New York, Sacramento and Singapore must consider the implications of rising sea levels, extended droughts and 100-year storms in their long-term development. With California in the throes of a fierce drought and the pain of Australia’s 'Big Dry' still lingering in recent memory, Texas and the City of Austin are taking aggressive measures to prepare for extended periods of drought. This panel will explore the political, technical and educational investments Texas has and must take to prevent similar consequences. Veteran environmental columnist Todd Woody will return to SXSW as moderator and lead the conversation among panelists Mark Jordan from Austin Water, Kate Zerrener from the Environmental Defense Fund, Pete Brostrum from California’s Department of Water Resources and Joe Ball from Itron Technologies.

 Speakers

• Kate Zerrener, Environmental Defense Fund
• Mark Jordan, Austin Water
• Peter Brostrom, California Department of Water Resources
• Joe Ball, Itron

Innovative Building Operators Help Chicago

In June 2012, Mayor Rahm Emanuel announced that the City of Chicago would join the Obama Administration’s Better Buildings Challenge, and called on local business owners to help reduce energy use by 20 percent across nearly 24 million square feet of public and private building space by 2017. JLL, owner of 77 West Wacker Street, a Class A building, and Urban Innovations, operator of 11 Chicago Class B buildings, stepped up to the Mayor’s call, and together reduced their energy usage by nearly 3 million kilowatt hours. And, both saved considerable money in the process. Environmental Defense Fund helped guide those results by embedding EDF Climate Corps fellows in each organization to help identify, plan and implement those energy reduction programs. In this session, attendees will hear directly from JLL and Urban Innovations about their journeys to innovate and lead the field in energy management, and how EDF Climate Corps is scaling their solutions across the U.S.

 Speakers

• Victoria Mills, Environmental Defense Fund
• Myrna Coronado-Brookover, JLL
• Alrieda Green, Urban Innovations

The New Utility Business Model

The business model for electric utilities is rapidly changing. Historically, utilities earned revenues based on how much money they spent. The more money they spent on power plants and other infrastructure, the more money they earned for their shareholders. This business model is now changing in several states, where utilities will earn revenues by meeting performance objectives. These objectives will be tied to basic goals such as providing reliable service and customer satisfaction, but will also include clean energy objectives – such as adding more wind and solar to the grid and reducing greenhouse gas emissions. This session will review the latest developments in this area.

Speakers

• John Finnigan, Environmental Defense Fund

Solar Energy is On the Rise

Solar energy is making great strides in the U.S. There are two basic forms – large scale solar power plants covering several acres, and the solar panels you can install on your roof. This session will discuss the current state of affairs with both forms of solar – how does the cost compare with other forms of energy? What are the benefits? Why are customers turning to solar energy? What parts of the country have been most successful in adopting solar energy? What changes do we need to add more solar energy?

 Speakers

• John Finnigan, Environmental Defense Fund

Image source: Flickr, Alan Cleaver

By Marilynn Marsh-Robinson

Diverse groups are creating a healthy dialogue on climate change and clean energy. In addition to ethnicity, diversity includes geographical representation, political affiliation, socio-economic backgrounds – and religious beliefs.

One notable group, Interfaith Power and Light (IPL), is mobilizing millions of people of faith to be better stewards of energy and the environment. Founded in 1998, IPL now has chapters in more than 40 states and represents 15,000 congregations. IPL works with congregations to promote energy conservation, energy efficiency, and renewable energy, with the goal of reducing carbon emissions and the impacts of climate change.

In addition to clean energy advocacy, IPL recognizes that public policies – local, state and federal – play a pivotal role in reducing reliance on fossil fuels and expanding energy choices. IPL rightly focuses attention on communities most vulnerable to the impacts of climate change, advocating for strong adaptation and mitigation actions to protect all communities – from the coast to the heartland. These communities, which are least responsible for activities and decisions that adversely impact the climate, suffer the most.

In my home state of North Carolina, the IPL chapter is part of the N.C. Council of Churches, which represents 6,200 congregations. The chapter recently held a Clean Energy Advocacy Day that drew members and clergy from around the state to the legislature to meet with elected officials. They logged an impressive 27 meetings in just one day.

Their faith-based messages to lawmakers were to expand consumer energy choice with third-party sales, keep the renewable energy tax credit, and protect the Renewable Energy Portfolio Standard (REPS). They also presented an open letter to the General Assembly with over 50 signatures from faith leaders supporting solar energy, which is a significant contributor to North Carolina’s economy.

Working together with IPL has taught me more about their work and focus on advocating through compassion, which involves sharing personal beliefs, values, and stories with elected officials. For example, some places of worship are interested in solar energy because it allows them to use a natural resource that lowers energy budgets while reducing air and water pollution associated with fossil fuels. The cost savings can help congregations pay utility bills or redirect funds to program areas that support their community mission.

Communities of faith provide a unique perspective on reducing carbon emissions, and more places of worship are including the concept of caring for Creation in their missions and sermons. These voices can speak directly to the changes they would like to see in their homes, places of worship, and their communities.

I applaud the efforts of IPL and other religious organizations committed to this charge. Let’s keep the faith that we will continue to move toward an inclusive and just clean energy future.

By Dick Munson

FirstEnergy, the giant Ohio-based company that owns power plants and transmission lines in several midwestern and northeastern states, is ready to raise electricity prices for its customers. This is in part because three of its oldest coal-fired power plants are set to close, but also because of a few bad business bets.

Though finally shuttered this week, the three plant closures were announced in January 2012 so FirstEnergy could take advantage of a power auction planned by PJM Interconnection, the power grid operator in the Mid-Atlantic region. That auction determines the most efficient power plants to serve this region for the next three years.

By taking these old and dirty units out of the auction, FirstEnergy was able to push up prices for its other power plants.

At the time, environmentalists argued FirstEnergy should account for the efficiency gains that would result from state-mandated programs. Lower demand for electricity caused by efficiency improvements would have reduced the auction price for power. Although such energy efficiency is typically “bid” into PJM auctions in the same way coal or nuclear energy is, FirstEnergy refused.

A coalition of environmental groups complained to the Public Utility Commission of Ohio (PUCO), the state agency that regulates power companies. PUCO eventually ordered the utility to include energy efficiency – .

FirstEnergy then launched a successful multi-year lobbying campaign to freeze and gut the state-mandated efficiency programs. Meanwhile, FirstEnergy was still cashing in on these old power plants because, though they were not bid into the PJM auction, they were still technically open.

Since the 2012 closure announcement, FirstEnergy was allowed to collect up to $300 million a month with the assumption these units generated power all the time. But they didn’t run continuously.

Finally, FirstEnergy spent millions of dollars to build new transmission lines along the Ohio River. Federal regulations allow utilities to recoup such costs by hiking up electricity prices. According to John Funk of the Cleveland Plain Dealer, “So far the company has budgeted $263 million on the transmission projects — just the beginning of a $4.2 billion re-building effort, which will be reflected in future rates, which will increase annually.”

Part of the underlying problem is a lack of “corporate separation.” FirstEnergy’s power plant company, FirstEnergy Solutions, operates in competitive markets. That means it should operate separately from its distribution companies (Illuminating Company, Ohio Edison, and Toledo Edison). Under state law, the companies are not supposed to share information or give each other preferential treatment. The company’s lack of separation is now the focus of a PUCO investigation.

Regulators also need to review how market manipulations – ignoring energy efficiency and timing the closure of power plants – are resulting in rate hikes for FirstEnergy’s customers. Rather than bail out the company’s bad bets, we need markets that reward innovation. And instead of allowing FirstEnergy to expand its monopoly, we need to expand competition, for the benefit of both customers and the environment.

Photo source: Flickr/Rennett Stowe

This is one in a series of posts that examine FirstEnergy’s proposed bailout for its aging coal fleet and other market manipulations. Stay up to date on FirstEnergy by visiting EDF’s website, where we’ve published helpful resources and will host a series of newsletters. If you would like to receive our FirstEnergy newsletter directly, please click here.

By Michael Panfil

If reducing climate pollution from power plants were a football game, the U.S. team would be halfway to the goal line while fans were still singing the national anthem.

That is, we have already gotten about halfway to the expected goals of the Clean Power Plan – before the rule is even final.

The Clean Power Plan is the U.S. Environmental Protection Agency’s (EPA) historic effort to place the first-ever limits on climate pollution from our country’s existing fleet of fossil fuel-fired power plants. When it’s finalized this summer, it’s expected to call for a 30 percent reduction in carbon emissions compared to 2005 levels — but U.S. power plant emissions have already fallen 15 percent compared to 2005 levels.

That’s because renewable energy, energy efficiency resources, and natural gas generation have been steadily deployed and growing for years. Even conservative estimates forecast continued growth of these resources — which makes last week’s report from the North American Electric Reliability Corporation (NERC) seem really strange.

NERC’s report about the Clean Power Plan’s impacts on electric grid reliability makes predictions that starkly contrast from the progress we’re already seeing.

How did this departure from reality happen?

It’s due in large part to severely flawed assumptions underlying NERC’s analysis, which yield unrealistic results.

Those flawed assumptions cause NERC to greatly overstate the generation mix changes required to meet the Clean Power Plan. The NERC Assessment’s assumptions regarding energy efficiency, renewable energy deployment, and retirement modeling are at odds with both recent experience and current trends.

Unrealistically low energy efficiency gains

NERC assumes demand for electricity will grow at an average of one percent per year through 2030, even after accounting for growth in energy efficiency investments. That growth rate is more than 40 percent higher than the U.S. Energy Information Administration (EIA) predicts.

It also fails to reflect likely energy efficiency growth. An analysis by McKinsey & Company found that implementing only those efficiency measures that pay for themselves would reduce the nation’s total end-use energy consumption by 23 percent by 2020.

Arbitrary and unrealistic projections on wind and solar expansion  

NERC predicts expansions of wind and solar power that are far below those observed in recent years.

U.S. solar capacity stood at 20.5 gigawatts at the end of 2014. The NERC Assessment predicts an addition of 13 to 20 gigawatts of solar energy between 2016 and 2030 — when solar capacity is expected to grow by 20 gigawatts over the next two years alone.

The U.S. wind industry is also expected to add 18 gigawatts of new capacity in the next two years.

NERC’s low-ball assumptions greatly limit renewable energy deployment in their study. This in turn greatly increases the burden on other compliance options, namely coal-to-gas generation shifting.

Failure to account for dynamic grid reliability management tools

NERC assumes the Clean Power Plan will drive coal power plant retirements over its entire life-span. However, numerous studies — including one by the Brattle Group and three by the Analysis Group, show that total output and emissions from coal units can decrease without retiring units that are needed to operate on occasion in order to maintain electric reliability.

There are also numerous tools and processes available to grid operators to ensure reliability in light of dynamic market, technological, and regulatory change, including capacity and energy markets, resource adequacy forecasting, and reliability must-run contracts.

These instruments, for example, have worked well to maintain adequate capacity during the recent wave of coal-fired power plant retirements, so much so the electric grid has added an average of roughly 30 gigawatts of total power every year since 2000. The NERC Assessment, however, finds only 11 to12 gigawatts of total power will be added every year – a significant departure from the past 15 years of evidence.

A history of inaccurate assessments

This report is not the first time that NERC has issued an inaccurate assessment of threats to reliability.

NERC has assessed previous public health and environmental safeguards, each time raising reliability concerns that were not borne out in reality.

• In 2011, NERC issued its Long-Term Reliability Assessment, which looked at the Mercury and Air Toxics Standards, the Cross State Air Pollution Rule, the Clean Water Act Cooling Water Intake Structures rule, and the Coal Combustion Residuals rule. NERC raised numerous reliability concerns about these protections, which the EPA noted at the time were flawed and exaggerated. None of NERC’s concerns have manifested during implementation of these standards.
• In a 2011 companion study, NERC issued its Potential Impacts of Future Environmental Regulationsabout the Mercury and Air Toxics Standards and a number of other regulations. NERC again raised reliability concerns, none of which have occurred in practice.
• In its 2007 Long-Term Reliability Assessment, NERC predicted several regions, including New England and New York State, would drop below target capacity margins, threatening reliability. NERC’s prediction was based on a number of factors, including proposed environmental protections. Some power generators used the report to oppose to the Regional Greenhouse Gas Initiative. NERC’s predicted reliability shortfalls did not occur, nor has the Regional Greenhouse Gas Initiative caused reliability issues – even while emissions fell almost 50 percent below the region-wide emissions cap.
• In 2000, NERC drafted a reviewof EPA’s nitrogen oxide emissions standards for eastern power plants, knows as the NOx SIP Call. Yet again, NERC predicted a number of reliability concerns that did not occur after the rule was implemented.

NERC has repeatedly produced analyses indicating that public health and environmental safeguards will come at the expense of electric reliability – and these analyses have consistently been contradicted by reality. In fact, emission standards have never caused a reliability problem in the more than four decades that EPA has been administering the Clean Air Act.

NERC’s newest report is no better. It gives no solid reasons to doubt that the Clean Power Plan will be compatible with a reliable electric grid.  

For a clearer picture of the link between reliability and environmental protections, read this post by my colleague Cheryl Roberto, a former Commissioner of the Ohio Public Utilities Commission and electric system operator.

You might also like EDF’s fact sheet about the Clean Power Plan and the latest flawed NERC report.

The progress made in the past demonstrates our nation is already approaching the goal line under the Clean Power Plan. The tremendous flexibility the Clean Power Plan provides to states and power companies alike, together with time-tested grid management tools, provides the framework we need to reach the goal line — protecting our communities and families from dangerous carbon pollution, strengthening our economy, and providing a steady flow of cost-effective electricity.

This post originally appeared on our Climate 411 blog.

By Dick Munson

Source: flickr/Vattenfall

In Dublin, Ohio, the Community Recreation Center decided to reduce its energy waste. Rather than rely on an electric utility to burn more coal or natural gas to provide electricity, as well as its own boilers to burn more fuel to provide heat, the facility decided to install a combined heat and power (CHP) unit.

The CHP or “cogeneration” project produces both electricity – allowing the Center to keep its lights on during power outages – and heat – keeping offices and swimming pools warm. The CHP unit is financed with private capital and will allow the Center to save roughly 10 percent on its energy bills.

“It’s pretty simple,” said Patrick Smith, a co-developer of the Dublin project. “It’s a generator, and we happen to capture the heat.”

Technology of the past…

Cogeneration is not a new concept or technology. In fact, Thomas Edison’s first power plants sold both heat and electricity to nearby buildings and factories. Yet to electrify America quickly in the early 20th century, policymakers and power companies created monopoly electric utilities that were protected from competition and guaranteed profits based on how much money they spent. As a result, for many decades, utilities favored larger and larger power plants that were placed far away from the buildings and factories that could have used their wasted heat.  

From @DickMunson: A Two-in-One #Energy Solution: Capturing Waste Heat for Electricity
Click To Tweet

America, of course, has long been electrified, but the model of monopoly-owned and electric-only power plants persists. And the waste is substantial. The typical power plant burns three units of fuel to generate just one unit of electricity. That 33 percent efficiency rate has not improved by a single percentage point since the late 1950s. Can you imagine if our cars wasted two-thirds of gasoline we put in them every time we filled up?

…Innovation for the future

The typical power plant burns three units of fuel to generate just one unit of electricity. That 33 percent efficiency rate has not improved by a single percentage point since the late 1950s.

CHP units, in contrast, achieve efficiencies of 60 to 90 percent. When designed and engineered appropriately for the facility in which they're installed, they also significantly reduce on-site emissions of carbon dioxide and other pollutants, such as nitrogen oxides (NOx) and sulfur oxides (SOx).

Fortunately, lawmakers and regulators are beginning to pay attention to CHP. The U.S. Environmental Protection Agency, for instance, identified efficient cogeneration as a means to meet the proposed Clean Power Plan, the nation’s first-ever limit on carbon dioxide pollution from existing power plants. That’s why the Ohio Environmental Council and Environmental Defense Fund recently asked the Public Utility Commission of Ohio to support Ohio Power Company and Kraton Polymers’ joint application to use a new CHP project to help the utility meet its energy efficiency goals.

Currently, CHP provides 12 percent of U.S. electricity, virtually the same as solar, wind, biomass, and hydropower combined, but, according to the Oak Ridge National Laboratory, CHP could supply as much as 20 percent of U.S. electric capacity by 2030. If CHP reaches this threshold, it would:

• create nearly one million new, highly-skilled technical jobs across the country;
• save the U.S. more than 5 quadrillion Btu (Quads) of fuel annually, the equivalent of nearly half the total energy used by U.S. households; and
• reduce carbon dioxide emissions by more than 800 million metric tons per year, the equivalent of removing more than half of the passenger vehicles from the road.

The Dublin and other CHP projects demonstrate the need for a broader definition of efficiency. Rather than just focus on how residents and businesses can reduce their electricity use, perhaps by adding insulation or installing modern appliances, utilities and other power companies also need to look at new (and old) technologies, like CHP, to obtain substantial efficiency gains for their power plants.

By Dick Munson

Source: flickr/thomashawk

Imagine homeowners and businesses saving millions of dollars – and cutting pollution – without needing to do anything. Magic? No, but it does require electric utilities to take advantage of new technologies that better provide customers with just the right amount of voltage to their electrical outlets.

Many appliances, including incandescent lighting, work just as effectively, yet consume less energy, when the flow of electricity to them is reduced. Put another way, higher voltages generally make individuals and businesses needlessly use more energy, driving up electricity bills and air pollution. Therefore, if voltage was “right-sized,” residents would get enough power to run their appliances efficiently, but not so much that they use more electricity than needed.

What we’ve described above is “voltage optimization,” and a new study by Commonwealth Edison Company (ComEd) looking at this technology’s potential within Chicago and northern Illinois found it could reduce the need for almost 2,000 gigawatt-hours of electricity (enough to power 180,000 homes) each year at an amazingly low cost of less than two cents per kilowatt-hour – more than is achieved now from the utility’s other efficiency programs. This translates to $240 million per year in savings for ComEd’s customers, of which 90 percent could potentially benefit. The study also suggested full deployment of voltage optimization would only take about five years.

New Post from @DickMunson: It’s Not Magic. It’s Voltage Optimization. #energyefficiency
Click To Tweet

Costs and benefits

Like ComEd, a few utilities and regulators are beginning to realize voltage optimization is a lot less costly and risky than building new power plants and power lines. The introduction of smart meters and advanced meter infrastructure – including microprocessor-based controls, modern sensor technology, and advanced software algorithms – enables utilities to virtually measure electricity use and vastly improve the efficiency of its flow. Combining this meter technology with voltage optimization allows utilities to reduce electricity demand at peak times (like during a heatwave), improve efficiency throughout the power grid, cut harmful air pollution, improve electric reliability, and integrate more renewable generation resources, like wind and solar.

Environmentalists also support voltage optimization, but don’t want it to take away from other energy efficiency programs. ComEd, unfortunately, has proposed legislation that would allow it to profit from voltage optimization while reducing its commitment to existing programs that encourage residents and businesses to switch out inefficient light bulbs and appliances and to install insulation.

That debate will play out over the next couple of months within the Illinois General Assembly. Yet, there’s no doubt modern technologies are giving electric utilities new tools to substantially cut costs and pollution without asking anything of its customers. Maybe not magic, but voltage optimization is one attractive investment.

By Michael Panfil

Last June, the Environmental Protection Agency (EPA) proposed the first ever national carbon pollution standards for existing power plants. Fossil fuel-fired power plants account for almost 40% of U.S. carbon dioxide emissions, making them the largest source of greenhouse gas emissions in the nation and one of the single largest categories of greenhouse gas sources in the world.

Under the Clean Power Plan, these emissions will decline to 30% below 2005 levels by 2030 – accompanied by a significant decline in other harmful pollutants from the power sector, such as sulfur dioxide and oxides of nitrogen. The power sector is already halfway to this target, already 15% below 2005 levels.

The EPA has carefully designed the Clean Power Plan to provide extensive flexibility so that states and power companies can continue to deliver a steady flow of electricity while deploying cost-effective measures to reduce carbon pollution over the next fifteen years.

The Clean Power Plan:

• Allows states and power companies to determine the optimal timing of emission reductions over a ten year-long averaging period starting in 2020;

• Allows states to decide how to most cost-effectively reduce carbon pollution, including through market-based programs and clean energy policies that have been successfully used around the country; and

• Allows states to cooperate with one another in complying with the long-term reduction goals.

In addition, the Clean Power Plan preserves the ability of grid operators to deploy long-standing tools and processes that have been successfully used in the past to keep the electric grid functioning reliability during periods of significant change. EDF has released a white paper identifying these well-established tools and practices, and describing how they will continue to ensure a reliable grid under the Clean Power Plan.

Grid operators are well-equipped to ensure reliability as we transition to a cleaner and more efficient power sector, just as they have under all previous Clean Air Act regulations. EPA’s proposed Clean Power Plan is eminently achievable, reliable, and cost-effective – and integral to our climate security, human health and prosperity.

Ample tools and practices exist to ensure a clean and reliable grid

Grid operators have long-standing tools and practices available to ensure that our nation’s grid continues to provide power reliably. These include well-established planning principles that have motivated large amounts of new generation year in, year out. Since 2000, roughly 30 gigawatts of new generation have been added per year, largely consisting of low or zero-emitting resources such as wind turbines and natural gas combined cycle power plants. Over the next two years, the solar industry alone expects to add another 20 gigawatts of power. In addition, reliability is ensured through tools and practices including:

• Transmission Upgrades: Because upgraded transmission infrastructure can help move generation more easily, transmission upgrades can enhance reliability without needing to add new generation.

• Long-term forecasting: Grid planners and reliability regulators forecast the needs of the electric grid years in advance. By determining how much transmission and generation will be needed, any long-term reliability issue can be identified and resolved quickly and effectively.

• Reliability Must-Run (“RMR”) Contracts: Short term contracts that, in the case of sudden and unexpected retirements or plant losses, require a unit to be kept operational until reliability can be ensured through the use of longer term tools.

• Operating Procedures: Manuals and standard practices exist to ensure that, in the case of particular reliability scenarios, grid operators know the best way to respond.

These tools are already in use throughout the country, and have proven extremely effective in maintaining reliability over the last few decades – even as the power sector has begun a rapid transition towards cleaner sources of electricity, and has implemented important public health protections under the Clean Air Act. In the Mid-Atlantic region, for example, roughly 12,500 MW of coal-fired power plant capacity retired from 2010 to 2014 due to economic reasons. Employing these well-established tools and practices, the region saw a large quantity of new resources added, without reducing reliability.

Clean energy resources and reliability

In complying with the Clean Power Plan, states and power companies will be able to draw on reliable, low-cost clean energy resources like demand response, renewable energy, and energy efficiency. Energy efficiency is almost three times cheaper than the next cheapest alternative and primed for enormous growth. Resources like demand response help prevent blackouts, such as in the case of the 2013 polar vortex. And renewable energy continues to grow, with states such as Maine, California, and Iowa already using it to meet close to one quarter of their entire demand.

No reliability crisis has resulted from implementing clean air standards

Claims that we can’t have clean air and a reliable power grid are as old as the Clean Air Act itself — and havenever proven accurate. As far back as the 1970s, a power company issued an ad claiming the lights would go out as a result of the Clean Air Act. In recent years, some power companies that oppose public health protections under the Clean Air Act have made similar claims that the Mercury and Air Toxics Standards and Cross-State Air Pollution Rule will harm electric reliability.

These assertions have consistently been discredited: in the 45-year history of the Clean Air Act, no emission standard has ever caused the lights to go out. This is a testament both to the rigorous process and analyses EPA relies on to develop Clean Air Act standards, as well as the effective tools that grid operators and other authorities use to manage reliability on a short-term and long-term basis.

Numerous states, power companies, and reliability experts have indicated that the Clean Power Plan is achievable

A diverse collection of energy experts and power company officials have recently made comments noting the feasibility of achieving the emission reduction goals of the Clean Power Plan; describing their experience in reducing carbon emissions in a cost-effective way as well as explaining approaches to ensure reliability is maintained while making progress to reduce carbon emissions.

Written Testimony of Kathleen Barrón, Senior Vice President, Exelon Corporation, Before the Federal Energy Regulatory Commission: Technical Conference on EPA’s Clean Power Plan (Feb. 19, 2015):

Exelon strongly supports EPA’s goal of reducing carbon emissions from the electric power sector. As EPA notes in the Clean Power Plan, the current level of carbon emissions is environmentally unsustainable, and action must be taken now in order to prevent significant, irreversible environmental damage and major economic loss. By providing regulatory certainty, well-designed carbon reduction rules will be a driving force to modernize our aging electric system so that our customers will continue to have a safe and reliable electric system to support our Nation’s economic growth.”

Written Testimony of Susan F. Tierney, Ph.D, Analysis Group, Before the House Comm. on Energy and Commerce: Hearing to Examine EPA’s Proposed 111(d) Rule for Existing Power Plants (Apr. 14, 2015):

The Clean Power Plan provides states a wide range of compliance options and operational discretion that can prevent reliability issues while also reducing carbon pollution and compliance costs. Experience has shown that such approaches allow for seamless, reliable implementation of emissions-reduction targets. By contrast, many stakeholders’ concerns about the Clean Power Plan presume inflexible implementation, are based on worst-case scenarios, and assume that policy makers, regulators, and market participants will stand on the sidelines until it is too late to act. There is no historical basis for these assumptions.”

Joshua Epel, Chairman, Colorado Public Utilities Commission, Before the Federal Energy Regulatory Commission: Western Regional Technical Conference on EPA’s Clean Power Plan (Feb. 25, 2015).

In Colorado we have charted our own course to decarbonize our electric system. . . . Now when the Clean Power Plan is finalized I believe that Colorado as a state will come up with an approach which will meet the revised goals . . . . I’m very pleased with some of the steps we have taken with just approved unprecedented amounts of utility scale solar . . . . We are doing a lot with wind, we are doing a lot with innovat[ive] approaches actually passed by the legislature. . . . So we think there’s a lot of innovative tools for Colorado to use."

Flexibility in the Clean Power Plan

EPA’s Clean Power Plan wholly preserves the ability of grid operators, power companies, and other institutions to deploy the well-established tools and practices that ensure the reliable operation of the power grid.

The Plan provides state-wide goals for emission reductions, while affording states ample flexibility in how those goals must be met. States are not limited to using any particular pathway to meet the Plan, and can deploy a variety of existing and new policies to meet the state-wide greenhouse gas reduction goals, including flexible market-based tools. This already existing flexibility allows grid operators the freedom to use long-standing and tested actions to ensure reliability.

Although the Clean Power Plan represents an important step forward for our country, it builds on a nation-wide trend toward a cleaner and more efficient power sector that is already under way. As noted above, carbon emissions from the power sector are already 15% lower than in 2005 – reflecting a sharp decline in coal-fired power generation, as well as a significant increase in natural gas generation and renewables and rising investment in energy efficiency.

Since 2005, many fossil fuel-fired power plants have also installed modern pollution controls in response to state and federal clean air standards adopted to protect public health from harmful particulates, ozone-forming pollution, and toxic air pollutants such as mercury and arsenic.

The robust system of reliability safeguards described above has responded deftly to these developments, ensuring a consistent and reliable supply of affordable power while helping reduce harmful air pollution. There is every reason to believe that the Clean Power Plan, with its extended implementation timeframe and numerous compliance flexibilities, will similarly achieve important reductions in air pollution without compromising electric reliability.

For more information please read our white paper: Protective Carbon Pollution Standards and Electric Reliability

This post originally appeared on our Climate 411 blog.

By Andy Darrell

Last month, I attended the Vail Global Energy Forum in Colorado. Billed as a “mini-Davos” of energy (studiously ignoring the Aspen crowd a few hours down the highway), that moniker may have felt aspirational when the conference launched three years ago. But, this year it paid off: momentum for frank dialogue and global innovation is building on the slopes of the Vail Valley.

Here’s my take on how the clean air of the mountains cuts through the hot air of energy debates to illuminate practical, actionable ideas.

Three big ideas drove the conference:

1. North American energy independence

Mexico, the United States, and Canada could, together, innovate their way to an energy marketplace that weakens dependence on overseas imports, scales up clean energy solutions, and charts a path to low-carbon prosperity. At times, the discussion was framed by the rise of unconventional oil and gas exploration (yes, “fracking”), collaboration around pipelines (yes, “Keystone”), and whether these could disrupt traditional geopolitical frames.

On gas, climate was there to drive the conversation too, rooted in Colorado’s leadership. At last year’s Vail Forum, Governor Hickenlooper, Fred Krupp (disclaimer: my EDF boss), and a handful of CEOs from energy companies took the stage to announce a first-in-the-nation set of new laws to cut methane and air pollution from oil and gas production. If fracking is to be a cornerstone of North American energy independence, industry and political leaders must lock in Colorado’s solution at a continental scale. Colorado’s air rules show that practical solutions are doable.

1. Clean electricity and its potential both in North America and globally

Consider these trends: Mexico just revolutionized its energy laws, opening doors to international collaboration and private companies to sell energy to – and add capacity to – its electricity grid. California and Quebec have launched and linked economy-wide cap-and-trade programs, and other jurisdictions, including Ontario, Canada’s largest province, are talking about joining the club. And, from Silicon Valley to Wall Street, ideas are brewing to finance energy efficiency and clean tech at larger scales.

1. New York is emerging as a “lighthouse” of market-based reforms

Richard Kauffman, once of Goldman Sachs and now the “energy czar” of New York State, quietly took the stage in rumpled corduroys and a country shirt amid the crisp suits of energy execs.

And, he laid out New York’s revolutionary plan to reinvent the rules of the energy game, clearing away thickets of regulation that stand in the way. It’s looking at new business models for utilities, giving them reason to welcome solar, efficiency, and other technology innovations. And, its new green bank will help get clean tech deployed in communities statewide with the help of public and private capital. If New York succeeds, it can be a model for the continent.

I’m thrilled to be part of at least one take-away from the Forum that builds on the relationships forged there. Environmental Defense Fund, Stanford University, and Richard Kauffman’s team in New York are going to collaborate on solving key challenges for low-carbon electricity. We’ve already had follow-up conversations to identify the problems and get to work – in time to make a difference in real-world regulatory decisions.

With this kind of momentum, I’ll be back in Vail next year – and not just for the skiing. Maybe one day we’ll be talking about Davos as the “mini Vail” of clean energy!

By Larissa Koehler

San Onofre Nuclear Generating Stations (SONGS) Photo source: Flickr/Jason Hickey

When the door to one power plant closes, a window to more clean energy solutions opens.

It may seem logical that once a power plant closes, another one needs to be built to replace it – after all, we need to make up for its potential energy generation with more natural gas or nuclear-powered energy, right? San Diego Gas & Electric (SDG&E) is certainly trying to convince Californians this is true. Trouble is, EDF and other environmental groups, along with the California Public Utilities Commission (CPUC), aren’t buying it. And you shouldn’t either.

This story begins in 2013, when the San Onofre Nuclear Generating Stations (SONGS) permanently closed, shutting down a nuclear power plant with a capacity of 2,200 megawatts (MW) and sparking a debate about how to replace this lost power source. When first determining how to proceed in the wake of the SONGS closure, the CPUC decided SDG&E could buy between 500 to 800 megawatts (MW) of new energy resources by 2022. Further, at least 200 MW of this power had to – and all of it could – be met with preferred resources like energy efficiency, renewable energy, energy storage, and demand response (an energy conservation tool that pays people to save energy when the electric grid is stressed).

SDG&E, one of the joint owners of SONGS, is seeking permission to buy a brand-new 600 MW natural gas plant in Carlsbad, California from NRG Corporation. SDG&E’s argument is that this resource is necessary to fill the gap left by SONGS and provide greater reliability in the face of intermittent renewable energy resources. EDF and like-minded organizations such as the Sierra Club and the Natural Resources Defense Council (NRDC), on the other hand, are rightfully pushing back on this proposal as likely unnecessary and unquestionably premature. For example, rather than paying above-market prices to NRG for polluting power plants, why not work with NRG to help them meet their commitment to invest more than $102 million in electric vehicle infrastructure that could help address reliability concerns?

Rightfully, in their recent proposed decision over SONGS replacement, the CPUC sent a clear signal that SDG&E must abide by the state’s Loading Order, first established in 2003 by the California Energy Commission (CEC) and adopted by both the CEC and the CPUC. The Loading Order was developed for just this type of situation: as regulatory guidance to help clean energy solutions be part of the mix when considering how to replace lost power supply. In the CPUC’s own words, when proposing to reject the Carlsbad plant: “we reaffirm our commitment to the Loading Order, and reiterate that it is incumbent on SDG&E to meet its procurement authority to the extent feasible with preferred resources and energy storage.” Though the CPUC left the door open for SDG&E to bring this proposal again if the utility cannot buy the minimum required amount of preferred resources, we believe SDG&E, with reasonable effort, should be capable of meeting the CPUC’s directive.

EDF’s stance, then and now, amounts to this: while the demand for power doesn’t go away, a plethora of clean, efficient resources exist that can help us manage energy demand more effectively without turning to fossil fuels. For example:

• California can make much greater use of demand response programs. Demand response sends a signal to customers to voluntarily and temporarily reduce their energy use at times when the grid is most burdened – thereby preventing the need to ramp up fossil fuel resources to meet demand and reducing system costs and emissions.
• Incorporate time-of-use (TOU) electricity pricing. By charging lower energy prices to encourage use during off-peak times, or when renewables are available, California can integrate more clean energy resources and relieve strain on the power grid during peak times. In fact, EDF has demonstrated that if half of Southern California Edison’s residential customers adopted a voluntary TOU electricity price, they could replace two-thirds of SONGS’ lost capacity, saving $357 million per year – and the same trend would likely follow in SDG&E’s service territory.
• Bolster energy efficiency programs. Emphasizing the use of energy-efficient technology will lower demand, offset the need for expensive and dirty fossil fuels, and reduce system costs by avoiding additional power plant, transmission, and distribution infrastructure. For example, in 2010 and 2011, CPUC energy efficiency programs produced enough energy savings to power more than 600,000 households and offset 1,069 megawatts (MW) of electric capacity.
• Utilize increasing viable storage technologies. By storing energy at times when the sun is shining or the wind is blowing, and drawing on that energy when these resources are not available, storage provides a powerful mechanism to integrate more clean energy and greatly reduces the need for fossil fuels. As demonstrated by the CPUC’s storage mandate for utilities – as well as the fact that Southern California Edison already went above and beyond this directive – storage is a reliable and growing part of the solution.

EDF applauds the CPUC for issuing a clear statement on how the SONGS capacity should be replaced – making it apparent that SDG&E should commit to more than the minimum required procurement of energy efficiency, renewable energy, energy storage, demand response, and other clean energy resources. And with SDG&E’s history of forward-thinking energy policy, they should embrace this opportunity for continued leadership. The key to California’s energy needs lies in a suite of solutions that are good for the grid, the environment, and the health of California’s citizens. The CPUC’s statement highlights an important priority for the state in the coming decades to address these needs. This should be the beginning, not the end, of Southern California’s push to adopt preferred resources. Diversifying the region’s energy mix opens the door to a clean, sustainable, and healthy future.

This post originally appeared on our California Dream 2.0 blog.

By Guest Author

By: Charlene Heydinger, Executive Director, Keeping PACE in Texas

Today marked a milestone for Texas’ clean energy economy. Travis County voted to adopt the Property Assessed Clean Energy (PACE) program, making it the first county in Texas to do so. This means Austin and the surrounding area will soon reap the economic and environmental benefits from giving energy-intensive, thirsty Texas a reprieve with water efficiency and clean energy.

What is PACE?

PACE, enacted during the 2013 Texas Legislature with support from both sides of the aisle, has the potential to unlock a considerable amount of private funding for clean energy projects in the state. Specifically, it is an innovative financing program – completely free of government mandates and public funding – that enables commercial, industrial, multi-family, and agricultural property owners to obtain low-cost, long-term loans for water conservation, energy-efficiency, and renewable energy projects. Participants will then repay these loans for clean energy projects through their property tax bill.

Austin launches Texas’ inaugural PACE program, unleashes private funding for water…
Click To Tweet

A PACE loan simultaneously offers building owners cheaper financing options and lenders secure repayment terms. In exchange for funds provided by a private lender to pay for the project, the property owner voluntarily requests that the local government place an assessment secured with a senior lien on the property until the assessment is paid in full. The assessment is owed to the local government, which forwards the payments to the private lender.

State Program, County Project, Local Support

Travis County Commissioners Gerald Daugherty (R) and Brigid Shea (D) united to cosponsor the resolution with tremendous support from a large local coalition of PACE advocates in Travis County, as well as by County Tax Assessor Collector Bruce Elfant.

This means that within the next several weeks, private funding for water and energy efficiency upgrades as well as renewable energy projects in Travis County will be unleashed for local businesses.

Benefits to Businesses

PACE has great potential to directly affect the bottom lines of small and medium sized businesses. To be eligible for PACE financing, a project must show that the savings in utility costs will offset the cost of installing the project. In most instances, this will result in an immediate positive cash flow. This mechanism can be used to equip buildings with the latest in efficiency technology, including lighting, HVAC, and water conservation tools. In addition, PACE can be used for renewable energy additions, such as roof-top solar panels.

Nationally, almost 75 percent of PACE projects were less than $250,000 in size, demonstrating PACE’s popularity as a tool for small and medium-size businesses. Further, these project installations lead to increased property value and lower utility bills, making PACE projects attractive for both property owners and tenants alike.

The Future of PACE in Texas

Texas now has its first PACE program. But it shouldn’t stop here in Travis County. The state of Texas accounts for about 12 percent of the entire country’s energy use, and Texas’ unique PACE framework makes implementation across the state easy and predictable. In the next few months, we’ll be looking to help other counties follow with PACE programs of their own.

If you’d like to bring PACE to your county in Texas, please contact Keeping PACE in Texas. We look forward to making this powerful, free-market approach to clean energy available everywhere in Texas!

This post originally appeared on our Texas Clean Air Matters blog.

By EDF Blogs

By: Nicholas Bianco, Director of Regulatory Analysis and Strategic Partnerships

The U.S. Environmental Protection Agency (EPA) is hard at work right now on the Clean Power Plan – the first ever national carbon pollution standards for power plants.

Among the many important aspects of this historic plan, we believe this: It is critical that EPA finalize carbon pollution standards for the power sector that include protective, well-designed standards beginning in 2020.

Power plants account for almost 40 percent of U.S. carbon dioxide emissions, making them the largest source of greenhouse gas emissions in the nation and one of the largest sources of greenhouse gases in the world.

The Clean Power Plan will be finalized this summer. When fully implemented, it is expected to reduce greenhouse gas emissions from the power sector to 30 percent below 2005 levels. That makes these eminently achievable and cost-effective standards integral to climate security, human health, and prosperity.

The Clean Power Plan will phase in over a 15-year period, with interim standards commencing in 2020, and final standards taking effect in 2030 – and there is strong reason to believe the interim standards covering the period 2020 to 2029 should be strengthened in the final rule.

Interim standards can help the U.S. secure near-term low-cost opportunities to reduce greenhouse gas emissions, while generating the market signals necessary to achieve the deeper reductions required in the years ahead. They also can deliver important public health benefits for our families by providing healthier and longer lives for millions of Americans. And EPA has designed the interim standards in a manner that provides considerable flexibility to states and power companies to comply while deploying their own unique solutions.

Carbon Pollution Limits that Begin by 2020 are Essential for Driving Near-term Actions to Reduce Dangerous Emissions and to Advance Climate Security

As proposed, the Clean Power Plan’s interim standards could deliver cumulative emissions reductions of more than 5 billion tons of carbon dioxide. That approaches the total annual carbon dioxide emissions for the entire United States. Protective interim standards that require states and power companies to take near-term action to reduce carbon pollution are essential to secure these climate benefits.

Interim standards are essential for mobilizing the full range of near-term cost-effective opportunities to cut pollution, as they are the only way to ensure that investments in activities that reduce carbon pollution are fully recognized and properly rewarded. This is true whether the investments are new renewable generation, customer-friendly demand side energy efficiency programs, or other low-carbon solutions.

As the cost of clean energy decreases and the heavy burden of carbon pollution increases, a near-term limit on carbon emissions helps ensure these vital solutions are deployed without delay.

Interim standards can also help drive sustained investments in one especially important area – energy efficiency. Investments in energy efficiency can lead to direct financial benefits for customers – families and businesses alike – in the form of lower electric bills.

23 states are already implementing mandatory efficiency savings targets. These efforts have been overwhelmingly successful, regularly delivering two dollars of savings to customers for every one dollar invested – and in some cases up to five dollars for every one dollar invested.

Even in those states that have been implementing these programs for a while, there is little reason to believe they have come anywhere close to exhausting the available potential. For example, analysis by McKinsey & Company found implementing only those efficiency measures that pay for themselves would reduce the country’s total end-use energy consumption by 23 percent by 2020, relative to a business-as-usual scenario.

Analysis by the National Academy of Sciences found the building sector could reduce energy consumption by 25 to 30 percent between 2030 and 2035, at a cost of just 2.7 cents per kilowatt hour saved. In addition, they found cost-effective measures could reduce industrial demand 14 to 22 percent by 2020.

For all these reasons, electricity bills are actually expected to decrease as a result of efficiency investments power companies and states make to comply with the Clean Power Plan.

Near-Term Reductions are Essential to Ensure Healthier, Longer Lives for Millions of Americans

The interim emission standards are expected to drive significant near-term public health benefits across America.

In 2020 the proposed standards are expected to prevent:

• Up to 4,300 premature deaths
• Up to 100,000 asthma attacks in children
• Up to 2,100 heart attacks
• Up to 1,500 hospital admissions
• Up to 290,000 missed school and work days

Even greater benefits are anticipated in later years.

That’s because power plants are major sources of emissions for a range of pollutants that contribute to ground-level ozone, better known as smog, and dangerous particulate pollution, better known as soot. Power plants are also a major source of emissions for pollutants that have neurotoxic or carcinogenic (cancer-causing) effects.

Power plants account for about 70 percent of U.S. total sulfur dioxide emissions and 46 percent of mercury emissions, and are important sources of nitrogen oxides. Steps taken to reduce carbon pollution under the Clean Power Plan will have the co-benefit of reducing emissions of these and other harmful air pollutants.

EPA estimates these human health benefits outweigh the costs of compliance by a factor of seven to one.

Each year they are in effect, these important safeguards provide healthier and longer lives for Americans.

Protective Interim Standards are Flexible and Achievable

The goals of the Clean Power Plan are eminently achievable, as they are based on proven and cost-effective methods for reducing carbon pollution that many states and power companies are already demonstrating.

In addition, the Clean Power Plan provides an extraordinarily flexible structure in which states are able to craft their own path forward for reducing carbon pollution, so long as they meet the 10-year average interim target over the period 2020-2029 and then achieve the final reduction target in 2030. This flexibility provides states with the opportunity to harness their own unique opportunities and solutions in light of their own policy preferences.

When evaluating the feasibility of the standards, it is important to consider how quickly the nation’s grid is already decarbonizing. Emissions of carbon pollution from the power sector fell 15 percent from 2005 to 2014. As proposed, the Clean Power Plan only requires them to fall another 15 percent by 2030. Analysis by EIAsuggests that the U.S. could cost-effectively reduce greenhouse gas emissions from the power sector about four times faster.

Here’s more evidence that the grid is decarbonizing at a considerably faster rate than what is required by EPA – in the five year period from 2007 to 2012, the Northeastern states reduced their carbon dioxide emissions from large power plants by 37 percent to 42 percent below 2005 levels. The reductions were due to a wide range of factors, including the adoption of the Regional Greenhouse Gas Initiative, shifting natural gas prices, and efficiency investments. That demonstrates the dynamic flexibility and adaptability of which the grid is capable.

This is all happening in the context of a continuously evolving and decarbonizing electric system. Since 2000, the U.S. has installed roughly 30 gigawatts of new generation capacity per year, the vast majority of which was natural gas and renewables. According to EIA, more than 20 gigawatts of utility scale renewables, natural gas, and nuclear generation are already scheduled to come online in 2015, almost half of which is wind.

Meanwhile, we continue to build new infrastructure – which can help unlock even greater opportunities.

For example, according to the Department of Energy, during the last several years more than 2,300 circuit miles of new transmission additions were constructed annually. According to FERC, there are almost 10,000 miles of proposed new transmission projects in various stages of development that have a “high probability of completion” by January 2017.

Protective interim standards will align our nation’s major investments in new infrastructure with climate security – providing lasting protections and smart investments.

Interim Standards Can Help Promote Investments that Drive Even Deeper Reductions in the Years Ahead 

The cost of zero carbon generation is rapidly falling. Wind and solar are cheaper than coal – and even natural gas in a growing number of markets.

Renewable prices are expected to continue their meteoric decline. The price for photovoltaic modules has fallen 80 percent since 2007, and wind prices have fallen 64 percent since 2009.

As a result, the solar industry is expecting to build another 20 gigawatts of new generation over the next two years alone. That’s roughly equivalent to the generation of 13 mid-sized coal plants. (The average capacity factor for new utility scale solar array is around 20 percent, while the average monthly capacity factor for the coal fleet was 61 percent in 2014.)

While EPA’s building blocks assume only modest growth in renewable generation over the next 15 years, recent shifts in price dynamics suggest that the actual market opportunity could be considerable. For this opportunity to materialize, however, power companies and investors need a clear signal about the value of reducing carbon pollution from the power sector.

Providing the clear investment signal beginning in 2020 can shape the broader range of infrastructure investments expected in the coming years, and ensure that they are consistent with the low carbon future we will need if we are to stave off the worst impacts of climate change.

That broader range of infrastructure investments includes the vast miles of electric transmission and natural gas pipelines that are expected to be built in the coming years, as well as investment decisions in today’s generation fleet. More than 30 percent of coal plants are 50 years old, and approximately one in four plants do not contain controls for sulfur dioxide or nitrogen oxides.

In total, utilities appear poised to invest up to $2 trillion in new generation, transmission, and distribution infrastructure between 2010 and 2030 in order to modernize aging generating facilities and grid systems. Any delay in establishing carbon pollution standards for the power sector increases the uncertainty and increases the risk that investments could become stranded in the future.

All of this suggests well-designed interim standards are both achievable and essential. If anything, the standards should be strengthened given the urgency of the climate challenge, the scale of change we have seen in the power sector to date, and the significant public health and economic benefits the standards can provide.

We have an opportunity as a nation to take advantage of the fact the economics of power generation are rapidly changing. The best way for both companies and states to position themselves for a competitive advantage in the future is to think long-term and to get on the leading edge of these emerging trends. Otherwise, there is a risk of reinvesting in assets that will be left behind by a changing market, leaving shareholders and ratepayers on the hook.

The Clean Power Plan presents a real opportunity. Let’s all work together to strengthen the program, and work to deliver a vibrant low-carbon economy for the United States.

By Elizabeth B. Stein

Despite its enormous relevance to the struggle to build a cleaner, greener electric system, New York’s ‘Reforming the Energy Vision’ (REV) proceeding is not fundamentally an environmental one. It is concerned with building a new electric marketplace for a broad range of energy resources, some zero-carbon and some not, which are expected to reduce total costs paid by tomorrow’s customers over the long term compared to what would be expected under a ’business as usual’ scenario.

My last blog post described the new electric industry market structure envisioned by New York regulators in the recent Track 1 order of the REV proceeding. As promised, this week I’m providing a closer look at the environmental implications of the new order.

While reducing carbon emissions is one of the six stated goals of the proceeding, it is not the sole thrust. Interestingly, the order begins a deep dive on what decarbonization means for the electric system and discusses various environmental issues at length, potentially raising their profile in the proceeding. Highlighting the importance of environmental issues is a welcome change, but, to accomplish the goal of emissions reductions, the devil is in the details.

Most of these details are to be resolved in ’Track 2’ of the proceeding or in other processes that are shaped in part, but not determined, by the Track 1 order. Track 2, which is just getting started, is concerned with innovations in regulation, electric service pricing, and utility earnings needed to make the Track 1 vision a reality. Further complicating matters, the New York Public Service Commission (Commission), the state entity behind the REV proceeding, is not the only decision maker that will drive environmental outcomes.

Hopeful signs

• In our previous blog post on the Track 1 order, we discussed the general separation of the Distributed System Platform Provider (which would provide a technology platform and marketplace for distributed energy resources)from ownership of distributed energy resources. This move makes room for new energy service providers, opening the door to the most innovative technologies – including the best new ideas in clean energy.
• For the very near future, the Commission has made clear that existing funding for renewables and energy efficiency, as well as utilities’ energy efficiency programs, will remain in place, mitigating the risk of a collapse in the market for those resources before the new marketplace envisioned by the REV proceeding is fully up and running.
• The order (see page 124) seems to endorse not only full consideration of environmental externalities – typically the environmental costs (like air pollution) associated with making, moving, and using electricity that are unaccounted for – in a benefit cost analysis, but also internalizing externalities, or in other words, making those responsible for the environmental effects of their actions actually bear those costs.
• The order acknowledges concerns raised by many parties, including Environmental Defense Fund (EDF), about the risk of emissions from fossil fuel-based distributed generation (for example, diesel generators) that would raise local public health concerns. The order also directs the Department of Public Service Staff to help New York’s Department of Environmental Conservation (DEC) develop rules to curb local emissions. Additionally, it acknowledges there may be a need for further measures, including eligibility criteria for distributed energy resources to participate in the new marketplace, restrictions on emissions in certain areas based on environmental justice criteria, and electric pricing that reflects emissions values.
• The order takes important steps in the direction of ensuring the Distributed System Platform Provider (DSP) really will enable an active marketplace for third-party distributed energy resources, clean and otherwise. For example, the order not only requires the utility-owned DSPs to release information about system needs to the marketplace, but makes connecting distributed energy resources to the system a clear priority. Indeed, the order states that utilities’ earnings will be linked to the timeliness and frequency of these successful interconnections.

The jury is out

• In its straw proposal on Track 1, the Department of Public Service Staff suggested the benefit cost analysis should value carbon emissions by taking into account the full costs of damages – citing as an example the findings of the federal Interagency Working Group on the Social Cost of Carbon, which estimated the cost of carbon at around $40 per ton (even that may be a lowball figure). While the Staff’s proposal was encouraging, the Commission’s order is noncommittal about how externalities should be valued, leaving that to be addressed in a later staff white paper. It also suggests that decisions won’t necessarily be made based on the findings of a benefit cost analysis.
• The need to manage emissions from on-site distributed generation will be critical from the start if the REV marketplace is to be a powerful driver of the environmental transformation needed in New York – and if the DSP marketplace is to offer a model for other states to follow. However, any DEC action on localized emissions is outside of the Commission’s control. The DEC has been working on rules for public health-related emissions from distributed generation for more than a decade. Getting rules in place before REV itself becomes a driver of these types of emissions is now a matter of real urgency. In addition, we don’t yet know whether or how New York regulators plan to address carbon emissions from distributed generation.
• Unless the utility-owned DSP is successfully incentivized to seek out clean energy resources, the overall separation of the platform from the ownership of distributed energy resources could block one clear path to deploying clean energy resources (i.e., the utility itself) without fully opening the pathway for non-utility parties to do so at a large scale.
• Despite the assurances that existing programs for energy efficiency and renewables will continue to operate in the near term, the future outlook is heavily dependent on decisions that remain to be made by the Commission, the New York State Energy Research and Development Authority (NYSERDA), and the utility companies. Although the Commission envisions energy efficiency playing a larger role in a new electric marketplace – indeed, REV is designed to make utilities, customers, and third-party energy service providers rely more heavily on energy efficiency than they do today, and spend more of their own resources on it – some energy efficiency advocates worry that this approach could backfire. They are concerned that the Commission’s approach to shifting energy efficiency responsibility from NYSERDA, which currently operates energy efficiency programs, to the new marketplace poses a risk of far lower levels of energy efficiency.

REV represents a serious push to transform a crisis facing the electric industry into an opportunity – an attempt to bring the genius of the marketplace to the table to squeeze inefficiencies out of the system, reduce future costs, and achieve carbon emissions reductions on an unprecedented scale. However, the risk that REV won’t drive environmental benefits – or that it will actually cause environmental harm – will persist at least until the new marketplace actually shows that it is able to drive widespread adoption of clean energy resources. As described above, key drivers of tomorrow’s outcomes are still up in the air, and they will remain there for some time. So fasten your seatbelts because we’re still just getting started.

By Kate Zerrenner

We’ve almost made it to the midway point of the 84th Session of the Texas Legislature. As many already know, the Texas Legislature only meets from January to May every other year, so a lot has to get done in these few months.

This midway point is critical because it marks the deadline for Representatives and Senators to file bills, and it signals the rush to the finish line. Once we pass this point, the speed picks up substantially, as do the working hours and pressure.

Most bills that are filed will not make it to the Governor’s desk – for any number of reasons. But it is a good time to check in to see which climate, clean energy, and energy-water nexus bills have been filed this Session. Here’s a look at a few that are likely to rise to the top, and ones we hope will cross the finish line by June 1st.

A Roundup of #Energy, Water, and Climate Bills in the 84th #TXlege Session from @KateZerrenner
Click To Tweet

Climate Bills

As highlighted in another post, two climate bills, House Bill (HB) 2078 and HB 2080, filed by Rafael Anchia (D-Dallas), have the backing of our military advisors because they are related to the implications of climate change on our national security .

Senate Bill (SB) 77 by Rodney Ellis (D-Houston) would require state agencies to create an adaptation plan for climate change impacts. Senator Ellis has filed this bill in the past, and it is important that he continues leading the charge. State agencies that are not developing future resiliency plans to mitigate climate impacts, such as prolonged drought and intensified hurricanes, could face a real struggle when those effects start piling up.

In a similar vein, HB 2571 by Eric Johnson (D-Dallas) would require state agencies to include projections about weather, water availability, and climate variability in their strategic plans, and Rep. Johnson’s HB 2570 would require the state water plan to include the potential effects of climate change and rainfall changes in its analysis. This is a rational approach to protecting the state’s scarce water supply in the face of climate change and prolonged drought.

Clean Energy Bills

A few bad bills have cropped up in this space, including HB 857 by Scott Sanford (R-McKinney), and SB 931 by Troy Fraser (R-Horseshoe Bay) which would repeal Texas’ successful renewable portfolio standard for wind, and SB 635 by Donna Campbell (R-New Braunfels), which would cripple the state’s wind policy. Also, HB 1736 by Jason Villalba (R-Dallas) and its companion bill, SB 929 by Troy Fraser (R-Horseshoe Bay), would hamper energy efficiency in Texas by prohibiting cities from adopting stronger building codes. Considering that all major Texas cities have adopted stronger codes than the state, these bills do far more harm than good. Texas is home to four energy efficiency powerhouse cities which have initiated green building programs, installed new transportation infrastructure, and created jobs, all thanks to their energy efficiency goals.

But there are some good bills, too.

HB 2392 by Rep. Anchia would set up an energy efficiency loan program for existing homes through the State Energy Conservation Office (SECO), which currently only offers low-interest loans for public buildings and non-profit organizations. This program, called Warehouse for Energy Efficiency Loans (WHEEL), is a national program that, at the state level, would enable homeowners to tap into low-cost, large-scale funding for upgrades. Further, this program would allow energy and pollution savings to be counted toward any state implementation plan for a federal emissions reduction program, such as EPA’s proposed Clean Power Plan (CPP), which will limit – for the first time ever – carbon pollution from existing coal power plants. Similarly, HB 3363 by Jim Keffer (R-Eastland) would enable local governments to adopt residential Property-Assessed Clean Energy (PACE) districts, basically low-interest loans for energy and water upgrades to homes that are paid back on an assessment attached to the property itself. PACE and WHEEL are complementary programs that aim to address the large, untapped market for residential energy and water efficiency upgrades.

Speaking of EPA’s CPP, the agency is expected to propose its final requirements this summer, so this session is the only chance for the Texas Legislature to move before it becomes law (absent a special session). To that end, HB 3069 by Eddie Rodriguez (D-Austin) and its companion SB 1954 by Senator Juan Hinojosa (D-McAllen) would direct the Texas Public Utility Commission (PUC) and Texas Commission on Environmental Quality to take advantage of the rule’s expected flexibility and draft a compliance plan for Texas by Texas. On the flip side, HB 3590 by Matt Krause (R-Fort Worth) would prohibit the state from complying with the CPP—an unwise move, considering EPA allows states to craft their own plans in order to maximize flexibility, rather than have the Federal Government do it for them.

SB 1284 by Kirk Watson (D-Austin) and its companion HB 3343 by Sylvester Turner (D-Houston) would direct the PUC to promote the development of demand response, an innovative energy management program that rewards individuals and businesses for energy conservation. Further, this bill would task the Electric Reliability Council of Texas (ERCOT), which manages roughly 90 percent of the Texas power grid, to study the impact of this people-centric program and report on its growth. EDF supports this bill because the benefits of demand response are abundant: it gives Texans greater control of their electricity use, provides a pollution-free means to increase reliability on the power grid during times of high electricity demand, reduces the need to use inefficient, polluting power plants, and increases competition in the Texas electric sector.

Water and Energy-Water Bills

Texas is in the midst of a multi-year drought, in some areas the most severe on record, so it’s no surprise that dozens of water bills have been filed. The bills run the gamut—looking at water related to oil and gas production, groundwater conservation districts, drought response, agriculture, and more. The related issues are varied and complex, so I’ll highlight a couple that are directly relevant to clean energy.

SB 78 by Sen. Ellis would involve the state water plan, which is on a five-year planning cycle, including the best science on trends affecting future water availability and use. While it doesn’t say so explicitly, the intent is to ensure that the state water plan includes climate models of water availability, something that has been too political to do in the past, but is critical to truly understanding our future water supply as the climate changes.

HB 3298 by Lyle Larson (R-San Antonio) and its companion SB 1907 by Charles Perry (R-Lubbock) would task the Texas Water Development Board (TWDB) to conduct a study on how to establish a more intelligent, statewide water grid, much like an electric grid, to more effectively manage Texas’ tight water supply.

HB 1088 by Marisa Marquez (D-El Paso) would establishe a joint technical center at the University of Texas at El Paso and the University of Texas at San Antonio for studying energy-efficient and technologically-sound desalination, a water-producing technology. Developers in Texas are already pursuing desalination of brackish groundwater at about 100 sites across the state, and seawater desalination is also a state-approved technology, although no plants are up and running yet. This center would be an innovation hub for cutting-edge technologies to produce more potable water.

However, traditional desalination is highly energy-intensive, and, since 90 percent of our energy in Texas comes from fossil-fueled power plants which consume vast amounts of water, desalination is, in turn, highly water-intensive. But, SB 991 by Jose Rodriguez (D-El Paso) aims to address that by requiring the General Land Office and the TWDB to study the economic and geophysical potential of using wind and solar PV energy to desalinate brackish groundwater, with a plan to add additional renewable technologies for seawater desalination in the study. This is the first step to understanding how low-water-use renewable energy can help alleviate some of the state’s water pressure.

And, another ‘big bang for our buck’ energy-water bill is SB 992 by Sen. Rodriguez, which would authorize electric transmission-and-distribution utilities to partner with a water provider to study the embedded energy in water projects. Nationally, about 4 percent of energy is used for treating and moving water. This study would fill in the lack of data on the true value of the energy-intensity of water and enable these two interconnected sectors to see – in real numbers – how much energy is used by the water sector. The intent is for electric and water utilities to begin planning together and be more efficient with both resources.

We’re Halfway There

As with every legislative session, there is a mix of good and bad, and most bills don’t cross the finish line. The bills highlighted here reflect the biggest opportunities for good and bad policy in the clean energy and climate space in Texas. EDF will be keeping a close eye on all of these bills.

Photo source: flickr/Paul Woolrich

This post originally appeared on our Texas Clean Air Matters blog.

By Dick Munson

Ohio shot itself in the foot last year and we’re only now learning just how bad the damage is.

In May of 2014, the Ohio Legislature froze the state’s energy efficiency and renewable energy standards as a result of political pressure from Ohio’s largest power company, FirstEnergy, and other groups. This freeze came after efficiency measures led to more than $1 billion in savings for Ohioans, clean energy companies invested more than $660 million in 2012 alone, Ohio boasted the nation’s largest number of wind-component manufacturing facilities, and the state created 43,000 in-state jobs within the clean energy sector.

Needless to say, from 2008, when Ohio enacted its clean energy standards, to 2014, when it froze them, the Buckeye State was a clean energy powerhouse. But, as the Center for American Progress reports, when Ohio put a freeze on its clean energy economy, it hit the pause button on its entire economy.

According to the report, the freeze cost Ohio millions of dollars in energy investment. That equates to job losses, cancelled projects that would have brought sustained tax revenue to Ohio, and shifting operations to other, business-friendly states.

New Blog Post from @DickMunson: #Ohio Pressed Pause on Economic Growth When It Froze Its…
Click To Tweet

As an example, 75 wind turbines were planned for installation in the state before the Legislature’s action, now only two are planned. Specifically, the Legislature increased the property setback requirements for wind projects, meaning wind turbines must be a certain distance from property lines, effectively making it harder to develop renewable energy. It also permanently eliminated the in-state requirement for renewable energy all together. Given these energy resources lower the demand for utility-generated electricity, it should come as no surprise that FirstEnergy, the giant utility, led these anti-clean-energy efforts in order to block competition and bolster its uneconomic coal-fired power plants.

Plain and simple, investment and jobs are now leaving Ohio because of the Legislature’s actions (and FirstEnergy politicizing).

The Center for American Progress isn’t the only one shedding light on the economic impact of this freeze. Many clean energy investors and developers have aired their opinions on the unfriendly business environment in Ohio. Here are a few examples:

• “At a certain point, it becomes irrational to continue hitting your head against a wall in Ohio.” – Executive from Iberdrola, a large wind-energy developer, on shifting its focus from Ohio to other states.
• “Our confidence in Ohio has changed and we are developing projects elsewhere in the country.” – Developer with EverPower, a wind power company.
• “We are spending less time on developing projects in Ohio and more in other states that are more serious about growing investment and jobs.” – Representative from Melink Corporation, a solar energy developer.
• “As opposed to hiring, we’re pulling resources out of Ohio and looking at focusing elsewhere.” – Developer with Energy Management Solutions, an energy efficiency specialist.

Ohio can regain its clean-energy powerhouse status, including the investment and jobs that come with it. What the state needs are forward-looking policies that ensure the market places a fair value on the benefits of efficiency and renewable energy, while not subsidizing the status quo.

By Dick Munson

Source: flickr/justinwkern

Energy efficiency may be the Rodney Dangerfield of electricity policy. Compared to bulky power plants, it gets little respect.

Part of the problem is efficiency is hard to visualize. A new refrigerator, even if it uses 50 percent less power, still looks like a refrigerator. And, insulation is buried within walls, whereas it’s hard to miss a nuclear reactor or even a wind turbine.

Another issue is power companies see efficiency as competition and want to limit its development. FirstEnergy, for instance, lobbied to freeze Ohio’s energy efficiency standards, abandoned its own conservation programs, and led efforts to do away with demand response, an innovative energy management program that rewards people and businesses for conservation.

So, the Illinois Power Agency’s (IPA’s) recent decision to put efficiency and generation on the same level provides some much needed respect.

Illinois Steps Up and Gives #EnergyEfficiency the Respect It Deserves from @DickMunson
Click To Tweet

The IPA is a rather unique government agency, tasked with procuring electricity on behalf of customers for Illinois’ two main utilities, ComEd and Ameren Illinois. Beginning in 2014, EDF and the Citizens Utility Board (CUB) began advocating for IPA to include energy efficiency in its proposed procurement plan. If such negawatts (a wonky term for the avoided electricity achieved through efficiency) were treated on par with generation resources, i.e. power plants, we argued that the costs of supplying electricity would fall, as would greenhouse-gas emissions.

The IPA recently adopted our plan, calling it “Energy Efficiency as a Supply Resource,” and proposed conducting a separate auction to capture peak energy efficiency. Specifically, these are the negawatts that reduce the need for “peaker” generation plants, which only run during the most high-demand (and expensive) times of the day and are typically the dirtiest to operate. Not surprisingly, the utilities and power companies objected. Thankfully, the Illinois Commerce Commission, the agency charged with regulating electricity in the state, upheld the IPA’s approach. The agency is requiring the state’s major utilities to include the specific price of electricity at all hours of the day, in order to calculate the true value of energy efficiency programs.

Third-party energy efficiency programs, as part of their cost-benefit tests, will now be able to calculate how much efficiency trims energy use, when that shedding occurs, and the value of that avoided electricity. This change will be particularly beneficial to homes with smart thermostats, which can be programmed to temporarily reduce air conditioning during the hottest part of the day, and small businesses with energy-efficiency equipment that runs during high-cost, ‘peak’ hours.

By giving energy efficiency the respect it deserves, Illinois will be able to take advantage of its ongoing deployment of smart meters in order to advance more energy-saving innovations. Such procurement will help alleviate stress on the power grid, especially during ‘peak’ times, in order to reduce overall energy demand, cut pollution, and trim the price of electricity for Illinoisans.

By Larissa Koehler

Ask most people what the Beatles and California have in common and they might very well be at a loss. However, the answer is pretty simple: they are both unabashed trendsetters in the face of resistance – the former in their musical style and the latter in its clean energy policies.

Not content with setting a Renewable Portfolio Standard that ends at 2020, Governor Jerry Brown and state legislators are pushing for the Golden State to get 50 percent of its energy from renewable resources by 2030.

To meet this ambitious target, California must build a system that is largely based on renewable electricity, like wind and solar. This is not an easy task. The primary reason? Sunshine and wind are only available at certain times of the day and can be variable during those times.

Traditionally, managers of the electricity grid have relied upon dirty “peaker” power plants – usually fossil fuel-fired and only needed a couple of days a year – to balance the grid during periods of variability or when electricity demand exceeds supply. But, in a world where 50 percent of our energy comes from renewable sources as a means to achieving a clean energy economy, we can’t rely on these dirty peaker plants to balance the variability of wind and solar.

Luckily, technology is available today that can help fill the gap of these peaker plants – and the California Public Utilities Commission (CPUC) is starting to embrace it.

This technology, also known as demand-side resources, is defined by the CPUC as:

• Energy efficiency
• Demand response, an energy conservation tool that pays customers to save energy when the grid is stressed
• Distributed generation, like rooftop solar PV
• Energy storage, including electric vehicle batteries
• Smart grid, which utilizes technologies like two way programmable thermostats, to gather energy use information to improve efficiency and enable other resources like demand response
• Water-energy measures, which address the inextricable effect of water use on energy use, and vice-versa
• Strategic electricity rate design, such as time-of-use pricing, a voluntary program that enables people to choose when they power up appliances based on electricity prices and make decisions that can both save them money and reduce harmful pollution

By encouraging customers to use energy more wisely through demand-side resources like these, utility companies can avoid the need to produce more energy as the state’s population increases. This will also cut down on infrastructure costs, as fewer power plants and transmission lines will need to be built, and those savings can be passed on to customers. Further, by leveraging the ability of electric vehicles to charge at times when there is an abundance of clean power available, as well as distributed generation, California will be able to use increasing amounts of renewable energy.

Currently, there are a number of these innovative, demand-side solutions available in California. In order to bring them together, the CPUC, under the direction of Commissioner Michel Florio, initiated a new proceeding to, “create a consistent regulatory framework for the guidance, planning, and evaluation of integrated demand side resource programs.”

EDF would like to make sure the CPUC advances the following outcomes, as stated in our formal comments:

1. Ensure Californians are an integral part of the solution. Resources on the customer side of the meter should be given due consideration and incentivized by properly structured rates and ensuring these customer-side resources are properly valued.
2. Target demand-side resources geographically. The CPUC should focus on the placement of demand-side resources where they will have the most benefit – i.e., in those areas hit hardest by air pollution. This will ensure communities historically and disproportionately burdened by dirty air benefit from these improvements.
3. Consider how to link utility revenues to the outcomes California wants. Rather than allowing cost recovery as a matter of course, the CPUC should develop principles for a utility business model that rewards utilities and Californians for integrating cost-saving, well-targeted demand-side measures on both sides of the meter. Successful resources will be those that contribute to the reliable operation of the grid and advance state environmental goals, such as AB 32 (California’s Global Warming Solutions Act of 2006, a landmark piece of legislation that set an absolute, state-wide limit on greenhouse gas emissions) and the Renewable Portfolio Standard.
4. Link closely with distribution and reliability planning. By requiring the consideration of demand-side resources in utility planning, the CPUC can help to defer or avoid the need for more costly or environmentally damaging investments.

This new effort by the CPUC is a terrific opportunity for more coordinated, cost-effective deployment of demand-side resources that can better address California’s energy needs, improve customer choice, and reduce carbon pollution from our energy system. It’s a chance to make real, lasting change in California. Similar to the transformative effect “Beatlemania” had on music and popular culture, California’s clean energy policies can transform how we make, move, and use electricity.

This post originally appeared on EDF's California Dream 2.0 blog.

Photo credit: Activ Solar

By EDF Blogs

By: John Hall, Director, Texas Clean Energy

I have been involved in Texas’ energy sector for a long time, particularly from an environmental perspective.

I was there when the state’s metropolitan centers and their robust industrial sectors were challenged to reduce ozone-forming pollution. I was there when Texas deregulated its energy market to increase competition, improve choices for residents and businesses, and lower electricity prices. And now, I’m here to witness the state’s transition to a clean energy economy – one that harnesses more West Texas wind energy, rooftop solar, and natural gas (with the right controls in place) than any other time in history.

The one thing that ties all of these events together is efficiency – something Texas has led in the past.

Energy efficiency is Texas’ most cost-effective way to reduce energy use and carbon pollution from power plants. It also creates other benefits to the power grid, like improving reliability and lowering costs for infrastructure maintenance. Plus, saving energy saves water, which is critical in a state like Texas under the pressure of a multi-year drought.

#Energyefficiency is what Texas can (and should) do best #TXlege http://ow.ly/JEbbR 
Click To Tweet - Powered By CoSchedule

Texas was actually the first state to set an energy efficiency resource standard, when the electricity market was restructured in 1999. Since then, 25 other states have followed Texas' lead by creating an energy efficiency goal.

Unfortunately, Texas’ targets and national rankings have been on a downward slope ever since. But, I’ve seen Texas put its top minds to work before and innovate to lead the nation. And, last week, our energy efficiency experts laid out a blueprint to do exactly that.

The South-central Partnership for Energy Efficiency as a Resource (SPEER), of which our own Jim Marston is a board member, recently released a series of recommendations developed by more than 23 individuals, including former regulators and legislators, representatives of electric companies, non-profits, manufacturers, academic institutions, and more.

This report explicitly asks our elected officials “to designate and empower an existing state agency and hold it accountable for proposing, developing, and publicizing coordinated policies that advance energy and water efficiency.” Further, it lists seven commonsense, achievable policy recommendations that will put Texas on a path toward lower electricity bills, job creation, national competitiveness, and improved public health. These recommendations include:

• Coordinate state activities to support energy efficiency
• Ensure high energy performance in new buildings
• Enable access to financing for energy efficiency upgrades
• Align electric companies’ interests with increasing efficiency programs
• Leverage the smart grid to drive efficiency actions
• Use energy efficiency to improve air quality and regulatory compliance
• Increase public sector efficiency to save taxpayer money

I’m encouraged to see a well laid out plan for Texas, especially given McKinsey & Co. estimates that by 2020, the U.S. could reduce electricity use by 23 percent, save more than $1 trillion dollars, and cut more than a gigaton greenhouse gas emissions – the equivalent of taking the entire U.S. fleet of passenger vehicles and light trucks off the road – with efficiency measures alone.

As our state leaders convene in Austin to create the policies that will dictate Texas’ future, I impress upon them to lead on energy efficiency. It is, after all, part of Texas’ history.

If you are interested in discovering the benefits of energy efficiency, it’s time to join the conversation. In April, SPEER will hold its 3rd Annual Summit in Dallas to feature members of its Commission on Texas Energy Efficiency Policy, as well as host a series of workshops highlighting efficiency financing, energy codes, local government initiatives, smart energy, efficiency and air quality, and utility efficiency programs. I, for one, will be attending and I hope to see you there.

This post originally appeared on our Texas Clean Air Matters blog.

By Dick Munson

Illinois is two-for-two on clean energy wins. Today, Illinois legislators introduced a bill to spur significant new growth in the clean energy industry, creating an estimated 32,000 jobs annually across Illinois once proposed clean energy standards are fully implemented. Already a leader in America’s clean energy economy, Illinois, with this bill, would help boost the 100,000 clean energy jobs that already exist in the state, protect our children and future generations from the impacts of climate change, as well as maintain a reliable and affordable electricity system.

Illinois Bill Pledges More Clean Energy Jobs, Boost to Economy, and Cleaner Air #CleanJobsIL
Click To Tweet - Powered By CoSchedule

The bill, endorsed by the recently-formed Illinois Clean Jobs Coalition, of which EDF is a member, contains three main components:

• Strengthening Illinois’ energy efficiency policies

The bill would increase standards to reduce electricity use in Illinois by 20 percent by 2025, a 50 percent increase in savings compared to what would otherwise occur based on current trends. The bill also improves on-bill financing and real-time pricing programs to help more Illinoisans save money.

• Updating and extending the state’s Renewable Portfolio Standard (RPS) to enable solar and wind energy projects to flourish.

The bill would revise the current RPS to increase the share of power coming from renewable sources to 35 percent by 2030, up from the state’s current standard of 25 percent by 2025. The bill also makes technical fixes to the RPS that energy experts say have become necessary since more customers and municipalities have started purchasing energy from alternative suppliers rather than from utilities.

• A market-based strategy to meet new federal carbon rules

The bill directs the Illinois Environmental Protection Agency to develop a market-based approach to meet the proposed Clean Power Plan, which would set the first-ever national limits on carbon pollution from existing power plants. The bill contemplates a cap on emissions coupled with an auction of carbon dioxide emission allowances. The revenues generated by the auction would then be invested in areas such as workforce development, low-income bill assistance, and research and development of new clean energy technology.

Broad Consensus

With job-creating numbers like these, it’s no wonder representatives from both sides of the aisle are lining up to pledge their support for this bill. Here are a few comments from those who have already signed on:

“This bill benefits people in every part of Illinois, in our biggest cities, in suburbs, in farming communities– anywhere where people would gain from new jobs, better health and a cleaner environment,” said Sen. Don Harmon (D-Oak Park), who added that it was urgent that lawmakers act quickly to pass the bill. “As strong as the clean energy economy is today, with 100,000 clean energy jobs throughout the state, Illinois is at a tipping point. There is no time to waste,” he said.

Rep. Elaine Nekritz (D-Buffalo Grove) agreed. “We urge our colleagues to act now and join us in passing this bill,” she said. “In the race to build a long-term, sustainable and profitable clean jobs economy, too many states are beginning to outpace us.” In recent weeks, for example, it was reported that Oklahoma had surpassed Illinois as a generator of new wind energy. More than 600 megawatts of new wind energy had come on line in Oklahoma during 2014; Illinois registered zero.

Sen. Dave Koehler (D-Peoria) explained that the bill offers sizable benefits to the labor community. “The chance to create tens of thousands of new jobs—and add to the ranks of organized labor—is one that we shouldn’t pass up, and that is why I support this bill,” said Sen. Koehler. “It is union members who have built the big solar arrays and wind farms we see across central Illinois, and who carry out retrofits in downtown high-rises and homes across the state every day. Supporting these fields means more jobs for building trades and other union workers, now and into the future.”

Rep. Marcus Evans (D-Chicago) said the bill “will mean more jobs in every neighborhood, a healthier environment across Illinois, and diverse investments– from job training to low-income energy assistance– through a market-based approach to carbon. This bill works for virtually every district and every community that we serve, and I urge members of both parties to join us.”

EDF is proud to join the Illinois Clean Jobs Coalition, which comprises Illinois companies and organizations representing the state’s environmental, business, labor, and faith communities. Currently, more than 33 businesses and 26 organizations have formally joined the coalition to improve the Illinois environment, help consumers, improve public health, and create tens of thousands of new jobs across the state. As the Illinois legislative session continues on, EDF urges the Illinois Legislature to vote “yes” on the Clean Energy Bill to solidify Illinois’ lead in the race to the clean energy economy.

By Abbey Brown

We already know the innovative program NYC Clean Heat is yielding tremendous results: soot pollution in New York City has fallen by more than 50 percent since 2011, preventing an estimated 800 deaths and 2,000 hospital visits due to lung and cardiovascular diseases annually. That hard work by Environmental Defense Fund (EDF), the City of New York, and our partners has now been recognized –again.

The Association of Energy Service Professionals has given NYC Clean Heat an award for Outstanding Achievement in Non-Residential Program Design & Implementation. We are honored to receive this award from such a distinguished organization and believe it shows that a program like NYC Clean Heat is both necessary and replicable.

EDF partnered with the City to create NYC Clean Heat in 2007, which forged a diverse coalition of the financial, real estate, and non-profit communities, to launch a $100 million financing program to help phase out dirty heating oils. The program helped 4,000 buildings – half of them affordable housing – convert to cleaner, more efficient heating oils.

This latest award follows recognition in 2013 from the Citizens Budget Commission for Outstanding Public Service Innovation. EDF has always believed in the NYC Clean Heat program design – which marries technical assistance with access to financing – and is gratified to see others believe in it as well.

Nickel emission (an indicator of soot pollution) in 2008 and 2012.

Indeed, New York City Mayor de Blasio is using NYC Clean Heat as a blueprint for the ‘retrofit accelerator,’ which will address building-wide energy efficiency as part of his aggressive plan to reduce carbon emissions in the city 80 percent by 2050.

The retrofit accelerator program will use the successful NYC Clean Heat model to upgrade 20,000 private buildings, 40 percent of them low-income housing. By connecting building managers with technical experts to help them with the retrofits, as well as financing opportunities to fund the energy efficiency upgrades, the retrofit accelerator stands to be just as effective as NYC Clean Heat.

Luckily, the Mayor’s Office of Sustainability, which oversees the retrofit accelerator program, is in good hands with its new director, Nilda Mesa. Mesa has a proven track record when it comes to environmental work in New York City and even has history with NYC Clean Heat. Previously, she worked at Columbia University where she helped wean many of its buildings off of dirty heating oil.

We look forward to working with Mesa and her office to ensure the successful NYC Clean Heat model is both expanded to include energy efficiency and replicable to reach other cities around the globe.