By Mary Barber

Source: WallyFromColumbia

Superstorm Sandy crippled much of New Jersey’s critical infrastructure when it swept through the state two years ago. Stuck without power at home, many of the state’s residents also couldn’t get to work because the operations center for New Jersey Transit (NJ Transit) flooded, damaging backup power systems, emergency generation, and the computer system that controls train operations.

New Jersey is doing its best to make sure that won’t happen again. After a highly competitive grant process, NJ Transit last week received $1.3 billion in federal funds to improve the resilience of the state’s transportation system in the event of devastating future storms. The funds include $410 million to develop the NJ TransitGrid into a first-of-its-kind microgrid capable of keeping the power running when the electric grid goes down.

Microgrids are different from traditional electric grids in that they generate electricity on-site or nearby where it’s consumed. They can connect to the larger grid or island themselves and operate independently.

The NJ TransitGrid will not only generate power on-site but will incorporate a range of clean energy technologies such as renewable energy, energy storage, and distributed generation. This microgrid will also allow NJ Transit and Amtrak trains running on Amtrak’s Northeast Corridor, the country’s busiest train line, to keep operating during an outage.

Environmental Defense Fund joined state and federal stakeholders, such as New Jersey Governor’s Office of Recovery and Rebuilding and the U.S. Department of Energy, in the early stages of NJ TransitGrid planning. EDF also wrote a letter in support of New Jersey’s application for the funds from the Federal Transit Administration.

The $1.3 billion in total federal funds received by NJ Transit will go toward a range of resiliency and restoration projects across the system, including flood protection, drawbridge replacement, train storage and service restoration, and making train controls more resilient. These funds will also be used to fortify critical Amtrak substations.

Serving almost 900,000 passengers daily, NJ Transit is the third largest transit system in the country connecting travelers to the tri-state area of New York, New Jersey, and Pennsylvania. An independent microgrid for NJ Transit will prepare the state for future extreme weather events, which are happening more frequently due to climate change. Furthermore, the use of clean energy resources will make this microgrid a less polluting and more efficient operation for New Jersey’s day-to-day needs.

By Marilynn Marsh-Robinson

Source: Caroline Culler

Take thousands of people, put them on a college campus – and watch the energy and water usage spike. That's what happens in the fall at universities across the country when students flood back to classrooms and dorms.

The nation's oldest public university system is keeping a keen eye on utility meters. The University of North Carolina (UNC) is on its way to reducing energy and water use by 30 percent by 2015.

Also noteworthy is UNC's goal for 2050, when the university's 17 campuses aim to be carbon neutral.

Slowing down UNC's progress are North Carolina statutory restrictions that make it difficult for campuses to finance and use their own renewable energy.

UNC President Thomas W. Ross put it this way: "The ability to generate part of our own energy through solar and other alternative methods would present the greatest opportunity to lower future energy costs and lessen our impact on the environment.”

Duke Energy recently announced a long-term contract to sell solar power it generates in North Carolina to campuses in Washington, DC. The deal will help American University, George Washington University, and George Washington University Hospital meet their renewable energy and carbon neutrality goals. UNC doesn't have the same opportunity in North Carolina, and it should.

North Carolina's academic and environmental communities continue to explore policy changes to provide sustainable options for universities. Two examples stand out. In 2007, lawmakers passed legislation to promote energy and water conservation on UNC campuses. Three years later, legislators enacted a law allowing UNC campuses to retain a portion of the money they save when they reduce energy use.

How to shift away from inefficient practices to stronger policies and regulations like these was a topic at the annual Appalachian Energy Summit, attended by energy leaders from every UNC campus and six private universities in North Carolina.

Speakers emphasized that engaging students in planning a cleaner future is critical to success. Campuses that encourage a clean energy future give students the opportunity to learn about efficiency and sustainability across disciplines. Plus, campuses are able to use energy savings to pay for energy upgrades and other fiscal needs.

UNC has made the commitment to a clean energy future. Now, the state of North Carolina should continue to update policies to make the university system as widely recognized for energy innovation as it is for academic excellence.

By Abbey Brown

Source: Kevin Case Flickr

Over the weekend, New York City Mayor de Blasio unveiled an ambitious plan to address energy use in the city’s buildings, called NYC Built to Last. Through this plan, NYC is committing to reduce its emissions by 80 percent below 2005 levels by 2050. This makes NYC the largest city in the world to commit to a goal like this. Representing three quarters of the city’s greenhouse gas emissions, New York City buildings must play a central role in any effective climate action plan, and Mayor de Blasio knows this.

A key component of this plan is the ‘retrofit accelerator,’ a program modeled on the successful NYC Clean Heat program. Retrofit accelerator aims to upgrade 20,000 private buildings, making up 15 percent of citywide built square footage. Of these buildings, 40 percent of them will be low-income housing.

EDF partnered with the City to create NYC Clean Heat, which forged a diverse coalition of financial, real estate, and non-profit communities to launch a $100 million financing program to help phase out dirty heating oils. Last week, the City announced the program met its goal of reducing soot pollution from heating oil in NYC by 50 percent. The program helped 4,000 buildings – half of them affordable housing – convert to cleaner, more efficient heating fuels.

The mayor’s retrofit accelerator program is an exciting expansion of the successful NYC Clean Heat model and could help thousands of buildings in the city invest in energy efficiency. The City is leading by example by performing energy efficiency upgrades on every single public building in the city by 2025. Overall, improved energy efficiency will reduce the burden of high energy bills on the city’s low-income residents, improve air quality while reducing emissions, and spur green collar jobs city-wide.

With New York City buildings planning to switch on heaters Oct. 1 for the colder months, energy is on the mind of every building owner and manager in the city. The mayor’s retrofit accelerator program will help private building owners and managers make choices that save them money, improve the way their buildings run, and contribute to the health of all New Yorkers. EDF looks forward to working with the mayor and the City to accomplish these important and necessary goals.

By Ronny Sandoval

Source: designmilk flickr

New York is re-examining the way energy is regulated, priced, and distributed in the state in order to emerge with a 21st century business model. This change will deliver on a broad range of objectives, including increased customer value and environmental benefits, among others. However, achieving greater system efficiency could lead to the most impactful outcomes for customers, the environment, and society as a whole. Not only does increasing system efficiency have the potential to significantly reduce costs, energy use, and carbon emissions, it also makes the customer an integral part of the solution to meeting our future energy needs.

The challenge

Electric utilities are tasked with meeting consumer demand for electricity at all times and, until now, have done so primarily by installing additional infrastructure on the electric grid whenever needed. While this has resulted in a fairly-reliable way to meet our energy needs, it has been and continues to be extremely expensive and inefficient given the evolution in how energy is used today.

This inefficiency exists because, as a society, we use a significantly larger amount of electricity during just a few hours of the year than we do on average. This ‘peak’ use, which generally occurs in the summer months, draws upon most of the power grid’s available resources to meet electricity demand. The price utilities pay to maintain this extra capacity so they can meet seasonal peak demand is extremely high, often running into the millions of dollars. If you think about it, this means a huge amount of our power infrastructure exists to meet electricity demand for a brief interval, while going unused the rest of the time. These expensive infrastructure investments also consume a large amount of other types of limited resources, such as land and water.

The solution: all of us

Rather than continue to build out more infrastructure, system planners can instead focus on reducing the large demand for electricity during the few hours we use the most energy. If this is done systematically, as part of the planning process, we can more effectively utilize the existing system, while avoiding building more costly, unnecessary infrastructure along the way. Some of these strategies include greater use of customer-generated power like rooftop solar, energy efficiency, and demand response, which allows customers to voluntarily cut back on electricity when demand is high.

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Achieving greater system efficiency is going to require making consumers a bigger part of the energy discussion. Customers need to be aware it isn’t just how much electricity they consume, but when that matters most. In order to do this, customers must be equipped with the right tools to better manage their consumption and make smarter energy choices.

One such tool is the Nest Labs learning thermostat, which provides customers the interface needed to participate in demand response and control over their electricity remotely. It also alerts them to appliances that aren’t working properly or drawing unnecessary electricity.

Utilities, too, should fulfill their part of the bargain in helping to optimize energy use. They can offer financial incentives, such as time-of-use pricing, that compensate customers for conserving energy during certain hours. Voltage optimization technologies, which reduce the amount of electricity wasted during transport, also make it possible for customers to consume less energy.

Armed with the right tools, we may find it is entirely within our collective power to flatten the electricity spike that occurs a few hours every year and, as a result, accelerate the transition to a clean energy future.

Last month, EDF filed comments (Track 1 and Track 2) in New York State’s historic ‘Reforming the Energy Vision’ (REV) proceeding to re-evaluate the longstanding utility business model in light of a rapidly changing energy sector. We recommend: 1) transitioning from traditional rate of return regulation to performance-based regulation; 2) fully valuing all costs and benefits associated with distributed energy resources; 3) removing barriers to non-utility entities participating in energy service markets; and 4) requiring the utility to optimize the load it serves. This blog post concludes our series on each of these recommendations but we will continue to publish blog posts relating to utility business model reform.

By: Abdul Wadood, EDF Climate Corps Fellow and graduate student at Duke University’s Pratt School of Engineering

How does one maintain a facility of 4.2 million square feet, with five acres of roofs, that is two city blocks long and has 375 tenants? And, how does a building built in 1930 (also the largest building in the world at that time) compete with current technological innovations and new energy conservation trends? The answer lies in having accurate data, which can be a challenge considering the sheer size and age of this particular building.

The building I am referring to is the Merchandise Mart. Also called ‘The Mart,’ this building centralizes Chicago’s wholesale goods businesses by consolidating home, office, casual furnishings and a large variety of luxury home kitchen & bath showrooms under one roof. At the same time, the building now forms part of Chicago’s growing tech triangle community near the famous city loop as 1871, Motorola Mobility, Braintree, All Scripts, CCC and Yelp are in the building.

Every EDF Climate Corps fellow can fathom the potential of implementing energy efficiency measures – especially since it is a current industry trend. However, this does not come without challenges. As a student at Duke, I thought putting in long study hours, deskbound in a library only to be chauffeured home by campus safety was difficult.

Everything came into perspective when I was asked to spend a night at the Mart, walking in the building, climbing stairs, reading and recording 839 meters in 250 closets spread over 25 floors! This was necessary because of system limitations at the Mart; my host supervisor and I realized that the only way to capture ‘after-hours’ load assessments of the building required manual meter reads of each tenant. Armed with only building floor plans and a clipboard, from midnight to 6:30 am, sleeping over at the Mart gave ‘challenging your limits’ a whole new meaning.

The Sleepover

Taking my usual red and brown line trains towards the famous Chicago Loop, I headed towards the downtown skyline for the second time that day, but at 11pm. As I re-entered the Mart, it felt like a ghost town; not experiencing the usual rush hour at the Mart was bizarre. There were no waves of people crashing into the lobby. I could not smell the coffee brewing, the lemony fresh iced tea bars, or hear the whirring juicers of Jamba Juice. I could not hear sales people call out orders or the bustling food court. For the first time, it was all too quiet. Something felt amiss, but we had a mission to complete.

My host supervisor and I made our way through the dimly lit building, unlocking each electrical closet, reading each meter and resetting the registers one by one until sunrise. We passed through corporate suites, through dark offices, R&D labs and tenant spaces, covering miles of ground. Every floor space presented a new obstacle. Sometimes we would come across floors devoid of any light. Other times we would find a floor lit as brightly as a Christmas tree, halogens ablaze. As we physically surveyed spaces we recorded high-energy users and audited tenant plugs and supplemental load. We even decided to track calories burned. Lo and behold, we burned a whopping one thousand calories after walking 11 miles in one night. Who knew being an EDF Climate Corps fellow would give me such a work out!

Every so often we came across security guards completing their rounds. They would stare at us for fishing around electrical closets in the wee hours of the night and questioned us for peeking into tenant spaces and around electrical panels. As the sun came up and tenants finally began to pour in, we left feeling exhausted and flushed. As I headed to my office to catch a quick revival nap, it felt like only seconds had gone by when a strong tap on my shoulder awakened me. I was slumped over in my chair. It was early morning and time for a new workday at the Mart.

While extremely exhausting, the sleepover allowed me to capture a solid baseline of data as well as a complete picture of the tenants’ energy and power usage. We found why the Mart uses a whopping two megawatts of power after-hours, but we also collected enough information to see which specific tenants can cut down on their energy use. For future tenant engagement work, this data will help target specific vendors that have the most potential to become more energy efficient.

This blog post originally appeared on the EDF Climate Corps Blog.

About EDF Climate Corps
EDF Climate Corps (edfclimatecorps.org) taps the talents of tomorrow’s leaders to save energy, money and the environment by placing specially trained EDF fellows in companies, cities and universities as dedicated energy problem solvers. Working with hundreds of leading organizations, EDF Climate Corps has uncovered nearly $1.3 billion in energy savings. For more information, visit edfclimatecorps.org. Read our blog at edfclimatecorps.org/blog. Follow us on Twitter at twitter.com/edfbiz and on Facebook at facebook.com/EDFClimateCorps.

By Dick Munson

Source: pgegreenenergy

A new utility business model – “Utility 2.0” or “reform” – is the hot topic in statehouses and regulatory commissions across the country. This is due to many factors: technological innovations in the energy sector, changing consumer expectations, increasing electricity prices, tighter regulations, and the need to decarbonize our energy sector as we grapple with climate change.

Some argue utility earnings should be based on performance rather than volumetric electricity sales. They suggest utilities’ monopoly interests should be aligned with enabling clean energy services – such as on-site renewable energy and home energy management – instead of simply delivering more electricity.

Key to this new approach is the ability to define – and then measure – performance. This will require a set of metrics by which utility investments can be judged and rewarded. Illinois was the early adaptor of performance-based metrics for its historic smart meters roll-out and is finalizing a set of metrics this week that are critical to designing a utility business model for the future.

Calculating the benefits of smart meters

Two years ago Environmental Defense Fund (EDF) and Citizens Utility Board (CUB) negotiated some 20 environmental and economic metrics to judge the progress of Illinois’ largest utilities’ (ComEd and Ameren) advanced meter infrastructure. This week, EDF and CUB will ask the Illinois Commerce Commission to embrace their final metric outlining how to calculate the greenhouse gas reductions associated with the utilities’ investments in smart meters. This proposal describes how to track emission cutbacks associated with shifting energy use to different times of day (load shifting), reductions in system-wide electricity use, and reduced use of meter-reading vehicles.

The groups and utilities held workshops over the past year to identify the best approach to achieve these measures in Illinois, including strategies for better data collection. As a result, the new proposal calculates the emissions savings due to load shifting for smart meter customers (versus non-smart meter customers) on an hourly basis.

The measurement evaluates the variable carbon value of a kilowatt-hour (kWh). A kWh saved during an hour of high-carbon intensity, when power is generated from coal, is worth more (carbon-wise) than a kWh saved when our power is mostly coming from renewables and nuclear. Similarly, a reduction in peak demand that avoids the need for dirty “peaker” plants creates a system-wide environmental benefit.

The metric also calls for evaluating operational benefits, such as the reduced use of meter-reading vehicles.  By being able to check a meter remotely, a utility avoids sending people to read the device, thus saving both money and gasoline.

Tracking greenhouse gases is key to “Utility 2.0” 

Being able to measure the environmental benefits of clean energy investments like smart meters is critical to designing a utility business model for the 21st century. It will incent utilities to make similar investments as they search for new ways to meet state and federal environmental regulations, like the Clean Power Plan. And as technologically savvy customers continue to demand greater control and oversight over their electricity use, sharing this data with customers will improve the value of utility-customer relationships.

While entrepreneurs continue to bring innovation to electricity markets in the form of smart appliances, electric vehicles, and affordable, on-site renewable energy generation, utility managers of the grid need new business models that reward performance and efficiency, at least in the short term. Such models, however, depend upon metrics that can identify and measure performance goals that matter.

By Mandy Warner

Source: Brendan Wood

Millions of Americans are watching their bills more closely as middle-class incomes continue to stagnate in the nation's uneven economic recovery.

So it's frustrating to hear opponents of climate action once again use the threat of higher electricity rates as a scare tactic to try to stop the U.S. Environmental Protection Agency's Clean Power Plan. We know it has many people concerned.

The good news is we have more evidence than ever before to prove our opponents wrong.

We pay the same rates for power now as in 1994

Electric rates in the United States have remained steady over the last 20 years, even as consumption of renewable energy increased 40 percent, statistics from the U.S. Energy Information Administration show. Over the same time, we reduced coal plant emissions of sulfur dioxide and nitrogen oxides by more than 75 percent.

The power sector has a long history of implementing clean air standards while delivering reliable power and doing so at lower-than-anticipated costs. Not surprisingly, EPA’s modeling shows that the average monthly electric bill will be $8 lower in 2030 with the Clean Power Plan than without it.

So why, then, would fossil fuel interest groups claim that electric bills are going to drastically increase whenever we talk about clean energy and reducing pollution from power plants?

It comes down to this: The proposed Clean Power Plan will place the first-ever national limits on carbon pollution emitted by power plants in the United States – a proposed rule that will shift the market toward clean energy and away from the dirtiest power producers and their shareholders.

Opponents of EPA’s plan point to utility bills – when it’s really about defeating clean air policies.

States would need to ramp up carbon-reducing measures such as energy efficiency and installation of renewable energy sources so the power sector as a whole can cut emissions by 30 percent in 2030, from 2005 levels.

Of course, nobody really opposes clean air. This is why opponents of EPA’s plan point to utility bills – when it’s really about defeating clean air policies.

Energy efficiency can save us billions

In California, the state’s efficiency standards have saved Californians $74 billion and avoided the construction of more than 30 power plants.

Now, remember that as our coal fleet continues to age it must be replaced, anyway. The industry is already facing competitive pressure from low- and zero-carbon resources – with or without new policies.

New coal-fired power plants are one of the costliest generation options even without considering the significant pollution they generate. If built in the next five years, they would cost about 19 percent more than onshore wind, 44 percent more than combined cycle natural gas, and significantly more than energy efficiency measures.

The energy sector is entering a new era, even if some players have yet to get onboard.

Clean power is already lowering bills

The cost of renewable energy has been dropping dramatically and wind is now competitive with coal in some places. The top 10 wind-producing states have average residential electricity prices that are lower than the national average.

The Clean Power Plan may just spell out what many in the industry already knew: Fossil fuels are not as cheap as they may seem. So why do opponents think they can fool consumers into thinking they’re better off with pollution?

Beats me. Today, more than ever before, we can show that clean energy is a good deal for you and me.

This post originally appeared on the EDF Voices Blog.

By Gavin Purchas

Source: gato-gato-gato

Imagine you’re trying to lose weight. If you step on the scale once a month, how can you possibly know how each of your daily decisions affects the number? Weighing yourself every day would be a step up, giving you a much clearer picture of the effects of each day’s choices. Now imagine the potential results if you could access real-time data – if you were able to see just how many calories were in each food you picked up, as well how much energy you were exerting at any given moment.

Thanks to a meta-analysis on behalf of the American Council for an Energy Efficiency Economy (ACEEE), we can now see that access to this kind of granular, real-time data on electricity use leads to significant household electricity savings.

Survey highlights importance of timeliness and granularity

The ACEEE survey aggregates multiple studies designed to evaluate the effectiveness of different types of electricity customer feedback from the past 20 years, including 61 trials from around the world: 33 from the U.S., 13 from Europe, 9 from Canada, and 3 others. Such a diverse pool allows us to draw important conclusions about consumer energy use habits while controlling for variations in culture, climate, and energy use patterns. The results are displayed in the graph below.

Source: ACEEE

The red column above represents when the energy user receives information about the overall household use once a day or week. The purple column, on the other hand, displays the savings associated with receiving appliance-specific feedback while consumption is occurring. With this level of detail, you could turn off an appliance in your house and immediately see the impact it has on demand.

From this we can gather that consumers could save 12% on their energy bills which represents a 40% increase when you go from daily household data to real-time appliance-level data. While the marked difference is partially a result of timeliness, granularity is even more important. The significant jump in savings between the orange and purple column is solely a result of including the specific details of exactly how much energy your TV or washing machine is using at any given moment.

Why is this significant?

The EPA recently announced the Clean Power Plan, which for the first time ever, proposes limits on carbon pollution from power plants. If adopted, energy efficiency will increasingly serve as an important asset for utilities to cut their carbon emissions to meet these new regulations. They will need to find new means to nudge people into using less energy. One way to do this is to provide customers with energy use data that empowers them to make more efficient choices.

Furthermore, the electricity industry is currently undergoing rapid transformation, which will require a better information flow between electricity provider and user. Utilities should adapt and adopt the system that provides consumers the greatest control and oversight over their energy bill. By being able to compare the results of different types of consumer feedback, utilities can make more informed decisions that will better serve their customers as they transform.

With this kind of real-time feedback on our electricity choices, maybe we can finally shed those undesirable (and unnecessary) energy pounds.

By John Finnigan

Source: Tendril

The New York Public Service Commission (Commission) has embarked on the landmark Reforming Energy Vision (REV) proceeding to design a new business model for electric utilities. Today’s business model allows utilities to earn revenues based on how much money they spend to supply and deliver electricity. Under the new model, utilities will earn revenues based on the value of services they deliver to customers and the environment.

Currently, utilities dominate the electricity service market, limiting customer access to the full range of products and services otherwise available in a truly open market. One focus of the proceeding is to remove the barriers preventing third parties, such as retail electric suppliers, solar energy companies, or smart meter providers, from fully participating in the energy market. Allowing full participation by third parties would lead to increased innovation and fuel the development of new products and services.

Several barriers limit third-party participation

To be sure, non-utility companies currently do play a role in today’s electricity markets, but their participation is curbed by several barriers. The first is a limit on the type of revenues they can earn. For example, smart meter providers and open standards-based cloud platforms, like Tendril Connect, earn revenues today by enabling customers to more effectively conserve energy and thus lower their utility bills. Yet these companies provide other benefits to the electricity market as well, such as reduced carbon emissions, improved system efficiency from producing and delivering power locally, or lowering stress on the power grid during times of peak demand. As a result, utilities might be able to avoid or delay costly infrastructure investment, leading to lower electricity prices. These benefits are real, but non-utility players can’t earn revenues for these services under the current regulatory environment. A new utility business model should allow energy service companies to earn revenues from all the benefits they provide.

Another barrier arises from how electricity rates are developed. Electricity rates are set based on the average annual cost of serving a customer, and customers pay the same rate regardless of the time of day they use electricity despite the fact that electricity is more costly to produce during the middle of the day when usage is at its peak. A reformed business model would give customers the option of paying different rates based on their time of usage, allowing customers greater control over their electricity bill. Once electricity pricing gravitates away from a monolithic, one-size-fits-all structure to better reflecting consumer behavior and choices, customers will have greater incentive to adopt renewable energy or energy efficiency measures offered by third parties.

Removing barriers to 3rd-party participation in electricity markets is key to greater use of clean...
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Access to customers would help third parties compete

Lack of customer data is another barrier third parties must overcome. A new business model would give customers easy access to the detailed energy data they need to control their energy use and reduce their electricity bills, which in many cases they don’t have. Once customers are granted such access, they would be able to share their energy profiles with non-utility businesses that could then customize products and services, allowing customers to maximize their value. Indeed, granting third parties access to customer data drove many innovative services offered by telecommunications providers in the nineties, such as free night and weekend minutes and free friends and family minutes.

Finally, third parties also face a barrier of high customer acquisition costs. Currently, the monopoly utilities enjoy has translated into longstanding customer relationships. The REV proceeding will examine whether third parties should be allowed to access customers directly through the utility’s website or even on electricity bills, substantially reducing customer acquisition costs and making their products and services more competitive.

EDF believes removing the barriers to third-party participation in electricity markets would lead to more widespread use of clean energy solutions as they became more cost-effective. The ultimate beneficiaries would be customers who could see lower electricity prices, innovative products and services, and more reliable service as well as cleaner air and a safer climate.

Last month, EDF filed comments (Track 1 and Track 2) in New York State’s historic ‘Reforming the Energy Vision’ (REV) proceeding to re-evaluate the longstanding utility business model in light of a rapidly changing energy sector. We recommend: 1) transitioning from traditional rate of return regulation to performance-based regulation; 2) fully valuing all costs and benefits associated with distributed energy resources; 3) removing barriers to non-utility entities participating in energy service markets; and 4) requiring the utility to optimize the load it serves.

Over the coming weeks, we will devote a blog post to examining each of these recommendations in depth. This next blog post in our Utility 2.0 series will discuss requiring the utility to optimize the load it serves.

By Rachel Neil

Source: Flickr/constellationenergy

Governor Brown has the opportunity to make energy-saving upgrades possible for families and small business owners by signing Assembly Bill 1883 (Nancy Skinner- Berkeley). This bill would significantly lower the cost of Property Assessed Clean Energy (PACE), a tool which enables property owners to take advantage of energy efficiency and rooftop solar PV for their homes or buildings with no money down, allowing them to pay off the investment over time through their property tax bill.

AB 1883 would streamline the PACE process and drive down the fixed transactional costs associated with commercial projects. Lowering these transaction costs is especially important for small businesses because high transaction costs can reduce the economic viability of the smaller energy upgrades that small business typically need. AB 1883 also incorporates new options for financing rooftop solar PV through PACE, which will enable a greater number of homeowners and small businesses to qualify for cost-saving solar PV contracts.

An obstacle for small businesses

To execute a PACE transaction, a property owner will agree to make financing payments through their property tax bills over the next 5 to 20 years. Typically a government agency, such as the California Statewide Communities Development Authority (CSCDA), will use these expected tax payments to issue a bond to an investor who will provide funding for the project. Currently, the bond is tied only to the tax payments on the specific property. CSCDA, the county, or the municipality wouldn’t take any risk for the repayment of the bond.

However, every time the CSCDA issues a bond they incur fixed overhead costs for lawyers and a trustee bank. These costs are usually passed on to the borrower and, on a percentage basis, can make the financing look expensive for smaller transactions (less than $250,000).

How AB 1883 can help

AB 1883 allows the relevant government agency, such as the CSCDA, to issue bonds for bundles of PACE deals, rather than being forced to issue a bond for each individual project. Under this provision, up to three years’ worth of PACE deals could be bundled into a single bond. These fixed fees will be spread across multiple transactions, and this change is expected to meaningfully reduce financing costs for smaller projects and make the investment more attractive for small businesses.

A new solar option for PACE

In addition to reducing the cost of commercial PACE projects, AB 1883 would give property owners – both homeowners and small businesses alike – even more opportunity to access rooftop solar PV. By allowing tools like solar leases to be assessed through PACE, AB 1883 opens up a new way for residential and small business customers to qualify for these money-saving rooftop solar contracts.

Enabling more energy efficiency and clean energy deployment is a win for the customer who saves money, a win for the electric grid relieved of energy demand, and a win for the environment benefitting from cleaner and reduced energy consumption.

Governor Jerry Brown has been dedicated to seeing PACE programs succeed in California, and we are very grateful for that commitment. AB 1883 offers significant enhancements to the current design that EDF expects to dramatically improve access to PACE. For these reasons, EDF strongly urges Governor Brown to sign AB 1883 and propel PACE to a new level of success for homeowners and small business owners.

This post originally appeared on our California Dream 2.0 blog.

By Jim Marston

Source: Aurora Lights

Chronicle readers would be forgiven if they opened their papers last weekend and thought it was 2005. That’s because the Koch brothers-funded Texas Public Policy Foundation published an editorial that echoed the pro-coal rhetoric we heard nearly 10 years ago when then-TXU wanted to build new power plants across Texas that would burn Wyoming coal.

Sure, this weekend’s piece had a different news hook – the new Clean Power Plan that will require Texas to reduce carbon emissions from power plants like every other state. But TPPF’s conclusion was the same: better, cleaner technology is bad and coal is king. As Yogi Berra would have said, “It’s like déjà vu all over again.”

Texas is the number one carbon emitter in the U.S. and power plants, together, are the largest emitters. Our state represents close to 10 percent of the entire nation’s carbon emissions. The Clean Power Plan will simply require Texas to adhere to the rules all other states have to follow. I love Texas more than the average person, but I don’t think we should get special treatment simply because some of our energy companies doubled-down on fossil fuels. And I certainly don’t think we should rely on Wyoming coal when Texas is the nation’s energy powerhouse.

The truth is the coal industry’s doomsday rhetoric and heel dragging has hurt Texas a lot more than the Clean Power Plan will. While states across the country have been preparing for the inevitable shift to cleaner energy resources for years (New Jersey gets more energy from residential solar than Texas. New Jersey!), companies like Luminant have been spreading fear about pending blackouts if their beloved coal plants were cleaned up (Luminant, for the record, is among TPPF’s largest funders).

Despite the well-funded lobby efforts of the fossil fuel industry, Texas has made some significant clean energy investments over the years. Carbon-free investments like West Texas wind, solar, and energy efficiency, as well as lower-carbon options like natural gas, will not only cut harmful pollution, but will also provide more homegrown energy, more jobs, and lower electricity bills, and help secure water and energy resources for Texas families and businesses. If Texas continues to amplify current trends (which it was doing well before the Environmental Protection Agency proposed the Clean Power Plan), the state can easily meet the proposed carbon limits.

Texas is the number one wind producer in the nation, and proud of it. Earlier this year, wind provided 39.7 percent of all electricity in the state. And in February and August 2011, Texas wind performed well above expectations while other energy sources, namely coal plants, failed in extreme cold and heat – performance that came in handy during the Polar Vortex this past winter. Thanks in large part to the new Competitive Renewable Energy Zone (CREZ) transmission lines, Texas is now doubling its use of wind energy, bringing clean, low-cost electricity to the state’s major population centers and helping attract close to $15 billion in added investment to the state.

With the right policies in place, other states will look to Texas to meet the national demand for cheap wind energy and natural gas. In fact, top gas-producing states, including Texas, are expected to see upwards of $16 billion in additional annual sales revenue between 2020 and 2030. This doesn’t sound like the energy apocalypse TPPF was predicting to me.

As in many cases, TPPF is simply the boy who cries wolf. Texas is moving forward, and its voters don’t want to go back. We understand TFFP’s fear of the future. We agree that the future does not look bright for dirty coal companies. But that’s not Texas’ problem, it’s Wyoming’s.

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

By Kate Zerrenner

This post was co-written by Catherine Ittner, Communications Intern, and Catherine Nisson, Clean Energy Research Intern.

Source: energyhog.org

The American Council for an Energy-Efficient Economy (ACEEE) recently released the second edition of its International Energy Efficiency Scorecard, ranking the energy efficiency efforts of the world’s 16 largest economies. The report assigns each country a score based on three primary sectors responsible for energy use: buildings, transportation, and industry. So where did the land of the free fall on the index? Disappointingly, the U.S. ranks number 13, ahead of only Russia, Brazil, and Mexico. The international champion for the second time this summer: Germany.

ACEEE concedes the demand for energy has been declining in the U.S. since 2007, and progress is most likely due to increasingly energy-efficient appliances and buildings, as well as the local and state policies that encourage their use. But, clearly, there is significant room for improvement and much of that may lie in behavioral changes and everyday tweaks people can make to conserve energy.

With recent energy efficiency initiatives going nowhere on Capitol Hill, another means of encouraging the efficient use of energy without legislation is to take the message straight to the people. Cue creative communications campaigns that can play a role in bumping the U.S. closer to the top of the International Energy Efficiency Scorecard.

Savvy communications can encourage energy conservation

Michigan Saves, a nonprofit dedicated to making energy improvements easy and affordable, created the campaign, Avoid Energy Drama, complete with public service announcements. For anyone that has engaged in a thermostat battle with a loved one or roommate, you know just how personal our energy choices can be. The clip below cleverly plays on the unnecessary drama inherent in energy use by portraying a couple as fighters in a boxing match. The campaign website also features helpful information about local energy efficiency resources based on zip code.

Similarly, the Department of Energy (DOE) and the U.S. Ad Council have joined together to create a number of campaigns directed at tweens with demonstrable success. Their most recent, EnergySaver.gov, has useful videos highlighting tips for saving money through common-sense energy conservation. After running several ads promoting unplugging electronics and switching to energy-saving light bulbs, survey results showed the tweens who had seen the ads were more likely to engage in these energy saving actions.

The Alliance to Save Energy also believes in educating young energy users as a way to instill long-term habits. Their most recent DOE-sponsored campaign is geared toward kids and features a somewhat grotesque villain named Boss Hogg, who loves to enter homes with his henchmen to waste energy. In person, the mascot visits schools to inform students about how “energy hogs” ultimately cost the rest of us hundreds of dollars. Targeting children could lead to greater overall household efficiency by indirectly educating parents as well.

Even utilities are starting to get in on the action. Home energy management start-up CEIVA Energy has partnered with various utilities to encourage energy-efficient behavior with digital photo frames. The frames display personal photos interspersed with energy data and conservation tips. Dean Schiller, CEO of CEIVA and former executive for Walt Disney, has led the organization to use humor and sentimentality to deliver Glendale Water & Power’s message.

Source: Glendale Water & Power

These are only a few examples of existing, creative efforts to encourage more efficient energy use. Considering electricity powers nearly everything in our daily lives, it is important to encourage innovation in the way we discuss energy efficiency. Also, given our love of sharing funny clips and images (cue the hundreds of cat memes and Funny or Die videos), it’s worth noting humor may be key to capturing people’s attention and making energy efficiency go viral. By appealing to individuals’ funny bones, targeting energy consumers when they are young, and emphasizing people’s everyday ability to make smarter choices, communications campaigns could fill a critical gap to boost our nation’s International Energy Efficiency Scorecard ranking.

A little creativity could take the U.S. a long way, perhaps even to the top of the list.

By Marita Mirzatuny

Source: North Texas Renewable Energy Group

August has been an eventful month here in Texas. And, no, I’m not referring to news about Governor Rick Perry, rather some of his appointees. The Texas Public Utility Commission (PUC), Texas Commission on Environmental Quality (TCEQ), Railroad Commissioners (RRC) Barry Smitherman and Christy Craddick, and State Representative Jason Isaac held a joint session to discuss the Environmental Protection Agency’s (EPA) new Clean Power Plan (CPP).

The CPP will limit – for the first time ever – carbon emissions for existing power plants. Texas, the number one polluter in the country, needs to cut 195 billion pounds of carbon in the next 18 years, according to a Texas Tribune analysis. However, EPA suggests Texas could easily meet its goal through a combination of actions: making coal plants more efficient, using more natural gas plants, increasing the use of renewable resources, and expanding energy efficiency.

Texas has a choice: either roll up some sleeves and double down on the state’s clean energy leadership, creating jobs and wealth, or continue to play petty politics to buy the fossil fuel industry more time.

Innovate, don’t procrastinate

The Brattle Group and Texas Clean Energy Coalition created a roadmap to cut pollution and grow the state’s economy, which can be used as a model to meet the CPP. The report states: “the scenario with the most aggressive assumptions for efficiency, demand response, and combined heat and power was also found to deliver the lowest power prices in 2032,” and “the more demand-side resources deployed, the more money Texas would save.”

Was that report mentioned in Friday’s hearing? No.

Among the 25 or so stakeholders invited to testify, only a handful represented the renewable energy sector and the environment – and there were plenty of claims that these rules would be a “death knell to the Texas Miracle” and “the junking of the competitive market.” You might’ve thought the world was ending with EPA leading the cavalry of Bluecoats in to oversee the entire electric grid of Texas and beyond!

EPA Administrator Gina McCarthy has already debunked this rhetoric though: “In the 1990’s critics cried wolf and said fighting acid rain would make electricity go up and our lights go out, they said the industry would and I quote, die a quiet death. Well, they were wrong again, industry is alive and well. Our lights are still on and we have dramatically reduced acid rain.” Even though the last amendment to the Clean Air Act was made in 1991, the 1990’s were one of the most prosperous economic times in our country’s history.

EDF’s general counsel and Clean Air Act expert, Vickie Patton, testified that EPA is agnostic as to how Texas complies, so long as the reductions occur. There is flexibility inherent in the rule, as has been the case with other air pollutants despite Texas’ myriad failed attempts to sue EPA. PUC Commissioner Ken Anderson seemed thoughtful as he tried to understand the rule’s flexibility and how EPA’s role would ultimately be limited if Texas took a proactive stance on the CPP.

On the defiant side, RRC Commissioner Smitherman brought up the idea of developing a state compensation fund to support companies that choose not to comply, opting for a fine from EPA instead. Luminant CEO Mac McFarland, however, reminded him that there are also criminal violations to opposing EPA rules, stating: "I don't think anybody's going to go to jail for you."

Amplify current trends

To date, the Texas wind industry has invested $26 billion in this clean energy resource for the state, providing an economic stimulus to “long-neglected rural areas.” On an apples-to-apples basis, wind power employs 26,000 Texans, which provides 66 percent more jobs than nuclear and 30 percent more jobs than coal. According to the Wind Coalition, Texas’ “land-based wind potential is the best resource in the United States and the equivalent of 18 times the state’s current electricity needs."

And, even as wind has become a major player with almost ten percent of the energy sales in the state, solar is finally becoming competitive with conventional resources, like natural gas. Solar installations are rising from 200 megawatts in 2013 to more than 1,100 megawatts by the end of 2017, ranking Texas highest in the nation for solar growth potential. First Solar is even trailblazing the merchant market (selling directly into the competitive wholesale market) with its 22 megawatt Barilla project in West Texas.

But regulators are trying to slow or even stop the growth.

In a memo sent this past May, PUC Chairman Donna Nelson claimed wind energy tax credits give the resource an unfair advantage against fossil fuels that potentially alters market outcomes, despite ample evidence to the contrary. This memo was just the beginning, as it appears new, unprecedented costs imposed on renewable energy will now tilt the playing field against renewables in Texas. Historically, all participants – from power plants to residents and businesses – have shared the cost to maintain a reliable power grid, because everyone relies on a dependable system to keep the Texas economy humming.

Now, Chairman Nelson is looking to shift some of those costs solely to renewable energy, stifling growth and innovation, particularly in rural West Texas (where wind energy has led to the biggest economic revival since the Great Depression and solar energy is just starting to take root).

Officials should instead focus their attention on a Texas way to reduce pollution and meet the Clean Power Plan standards by relying on more customer-facing, demand-side resources and clean technologies (like wind, solar, and energy efficiency), lest we find ourselves in the midst of a debacle similar to the greenhouse gas permits. One policy question that remains is whether Texas will receive credit for the actions it has taken since 2005 that already have reduced carbon emissions. These actions have avoided 25 million tons of carbon-dioxide emissions per year with wind energy alone – equivalent to taking 4,075,000 cars off the road.

States have two years to determine how to comply with the Clean Power Plan. In the meantime, EPA will review comments for revising the proposed rule. This allows for compromise, and Texas leaders should take this time to craft the best framework for the state.

There are opportunities to deliberate Texas’ clean, low-carbon future in good faith, and it would be a mistake not to do so.

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

By Beia Spiller

Source: AtisSun

As we’ve mentioned before, New York is changing how it evaluates and compensates electric utilities. One goal of this change is increased consumer engagement, which makes customers allies in the development of a more reliable, resilient, and ‘smart’ electric grid.

Many customers have begun taking advantage of new energy technologies and their falling prices by turning to community microgrids, installing on-site distributed generation, like rooftop solar, or investing in more efficient appliances, among other actions. Advances in telecommunications and information systems have also created new opportunities for energy services we could not have imagined just a few years ago. For example, innovative tools like demand response allow third parties or utilities to turn off pre-approved appliances – like swimming pool pumps and air conditioners – remotely when the power grid is stressed and needs a quick reduction in energy demand.

To this end, more customers are adopting local, distributed energy resources (distributed energy). These are customer-focused energy resources that either reduce energy demand – through energy efficiency measures or demand response programs – or generate electricity on-site. In order to support its goals of reforming the state’s utility business model, New York will have to take into account the increased role of distributed energy and properly value its costs and benefits.

Distributed Energy can offset investments in infrastructure

Understanding the benefits from making such investments can help avoid large costs ultimately shouldered by all customers. Take, for example, a large building that consumes a massive amount of electricity and places stress on the grid. Installing proven energy efficiency measures such as better lighting and insulation and even purchasing a new air conditioning system would substantially reduce energy use and operating expenses. It could also have a positive impact on the system at large and compare favorably with the cost of adding another substation – which could run into the millions – to meet increased energy load demand in the neighborhood.

Timing matters

While energy efficiency helps utilities avoid extra costs by reducing total demand, many of the benefits coming from energy efficiency and other types of distributed energy vary over the course of the day. Reductions in energy demand through on-site power generation, energy storage, or demand response programs have a much larger benefit during peak times when utility infrastructure is pushed to the limit. Incentivizing households and businesses to either produce electricity during peak times or shift their energy use to times of day when there is less demand on the power grid can help utilities avoid investments such as installing new wires or other equipment or upgrading a substation. Furthermore, because these activities are more valuable to the system during peak times, they should be priced accordingly. Demand response at 4pm is a heck of a lot more valuable than it is at 4am when energy-intensive appliances aren’t generally being used.

Location, location, location

Also, benefits vary depending on how much distributed energy is deployed in the area. For example, the utility’s ability to avoid costly infrastructure upgrades is made possible only by reaching a critical mass of distributed energy resources; thus, the impact of an extra kilowatt (kW) of solar energy is much greater in an area with little distributed energy. Finally, the benefits can also vary depending on the energy demands in a particular location. Some areas may be ripe for rapidly-growing energy needs, which may require infrastructure upgrades. Incentivizing distributed energy in such an area would yield a larger benefit than in areas where there are no foreseen upgrade needs.

All benefits and costs need to be properly valued

As customers begin to use more distributed energy, utilities must fully value all of its benefits in order to make more optimal planning decisions. This includes benefits that may not yet have a known market price, such as carbon pollution. For instance, producing solar – in lieu of fossil fuel – electricity has important health and environmental (or “social”) benefits in the form of reduced carbon emissions. The federal government has priced the social cost of carbon at approximately $40 per ton and has other methods for valuing all the benefits of reduced pollution that utilities could adopt. If pollution emissions are not properly valued by the utility, the full benefits of switching to clean electricity sources or customers reducing their demand will be left unaccounted for in the utility’s decision-making process.

On the other hand, adding distributed energy to a utility’s mix may incur some costs that should also be included in the valuation process. Increased reliance on distributed energy requires investment in new equipment, such as modernized electricity meters that could help incentivize demand response among customers in areas and at times that need it most. Properly valuing costs, along with the array of benefits, can help utilities better understand whether or not these new investments in distributed energy resources pass the cost-benefit test.

This is an exciting and important time to be working in the electricity sector. After a 100-year reign, the “make more, sell more, profit more” utility business model is being reconsidered, and there is real potential for smarter, cleaner solutions. But we need to make sure that utilities are considering (and valuing) all of the features that will transform our outmoded energy system into a truly intelligent, efficient, connected network.

Last month, EDF filed comments (Track 1 and Track 2) in New York State’s historic ‘Reforming the Energy Vision’ (REV) proceeding to re-evaluate the longstanding utility business model in light of a rapidly changing energy sector. We recommend: 1) transitioning from traditional rate of return regulation to performance-based regulation; 2) fully valuing all costs and benefits associated with distributed energy resources; 3) removing barriers to non-utility entities participating in energy service markets; and 4) requiring the utility to optimize the load it serves.

Over the coming weeks, we will devote a blog post to examining each of these recommendations in depth. This next blog post in our Utility 2.0 series will discuss removing barriers to non-utility entities participating in energy service markets.

By EDF Blogs

By: Karan Gupta, student at Duke University's Nicholas School of the Environment

As Lord Kelvin famously said, "If you cannot measure it, you cannot improve it." Here at 77 West Wacker, despite extensive metering relative to comparable buildings, we have found a lack of visibility into energy consumption data is one of the greatest barriers to implementing energy conservation measures (ECMs).

The need for detailed energy consumption data

Ideally, building equipment and tenants should be sub-metered. It might be overkill to meter every individual piece of equipment, but if all supply fans, or all water pumps, or all chillers were grouped on a single meter, understanding building behavior would be greatly simplified. Tenants, on the other hand, are sub-metered. The issue is that building management and operations do not always have access to that data because tenant consent is required to view tenant usage data. Unfortunately, a consent form does not exist in our service area to allow that. The way tenants are currently billed assumes equal energy use on a square footage basis, and therefore, does nothing to promote energy efficiency. Knowing exactly how many kilowatt-hours are used by each tenant each month would allow building management to accurately bill those tenants, thereby incentivizing conservation on their part to reduce operating costs. As building managers around the country are charged with making their buildings more efficient, they will need the tools to do so.

Since the opening of 77 West Wacker in 1992, numerous equipment upgrades and operational adjustments have resulted in huge energy savings. Certainly, these savings can be (and have been) evaluated at the aggregate level, but it is impossible to quantify the savings of individual measures without before and after data to compare. Tenant turnover further complicates this as changing use of space adds another variable. There are plenty of large portfolio owners today that prioritize buildings for energy efficiency improvements based on total energy use. The logical next step would be to prioritize spaces and equipment based on their energy use. With access to capital increasingly restricted by tight operating budgets, it is especially important to be able to assess the cost-effectiveness of ECMs. Knowing where the greatest opportunities for reductions lie and the exact size of those opportunities is critical to perform such analysis.

Once measures are implemented, they must then be tracked to verify performance, and again, that visibility is dependent on clear data. Performance tracking would further add value for certification programs such as LEED and voluntary municipal initiatives like Retrofit Chicago.

Clearly there is a market for building energy data, and anyone who has their finger on the pulse of the industry knows that there are a slew of new hardware and software companies seeking to capitalize on the opportunity. Yet, it feels like these companies are creating solutions without truly understanding the problem. New construction is one matter, where things are simplified by being able to start with a clean slate. Existing buildings have proven a greater challenge, however, and I am still looking for an accurate data collection regime that is affordable and easy to use. Interoperability between building automation systems (BAS), meters/data loggers and communications from utilities and grid operators has, surprisingly, been one of the easier hurdles to clear. But there may (fingers crossed) be a silver bullet, and it’s called monitor-based commissioning (MBCx).

A potential silver bullet: Monitor-based commissioning

MBCx is a combination of monitoring software that integrates with the BAS and engineering services to upgrade building equipment and fine-tune operations. The software monitors equipment to ensure that it is running according to specifications and is providing services (heating, cooling, ventilation, hot water, etc.) according to comfort set points. When the software detects discrepancies, it uses a complex set of algorithms to pinpoint the problem and generate a work order so that the engineering services provider can further investigate and address the issue. The appeal of such a system is that, to be effective, it would likely require monitoring at the same points where data collection is necessary for all the reasons cited earlier. This would eliminate the need for costly and redundant sub-metering and hardware/software solutions from third-party providers. Furthermore, at least in the ComEd service territory, the incentives for the implementation of MBCx are quite attractive. If it can live up to the promise, future best practice may dictate MBCx as a first step toward reducing energy use in buildings just starting down that path. MBCx has the potential to allow for the accurate a priori analysis of financial and energy savings, prioritization of projects and maximized savings from retrofits/upgrades (plus incentives), ultimately leading to faster paybacks and reinvestment into further ECMs.

We would love to hear how others have overcome data barriers. What strategies, products or services have you used at your organizations to gain the level of visibility that allows for targeted action? Has your company had a positive experience with MBCx? Let us know in the comments below.

This commentary originally appeared on our EDF Climate Corps blog.

By Michael Panfil

Source: BranderGuard Flickr

Late last week, the D.C. Circuit Court of Appeals affirmed an important Federal Energy Regulatory Commission (FERC) Order, giving the agency a big win and aiding in the promise of a cleaner, smarter, and more efficient power grid.

By upholding FERC’s Order 1000, the court confirmed what many think is common sense: Because the power grid crosses state and utility boundaries, a coordinated planning approach to electricity transmission (that is, moving electricity from one place to another) is more efficient and cost effective than multiple entities planning in isolation.

Order 1000 opens the door for two big electrical grid improvements. First, the order helps spur a more efficient planning process, meaning less waste and better coordination in our energy system. Second, the order allows greater opportunity for clean energy resources like demand response, energy efficiency, and renewables. It does this, in large part, by ensuring that state policies like renewable portfolio standards are taken into account. Relying on more clean energy resources will improve air quality and the health of millions of Americans now harmed by dangerous air pollution while advancing our country’s energy independence and economic growth.

Unlocking efficiency through better planning

The power grid does not end neatly at state borders or within utility service areas. Rather, electricity is transported regionally, and the country’s grid is interconnected via long-distance transmission. This interconnected grid deserves an interconnected planning process. FERC Order 1000 does exactly this by requiring grid operators to coordinate and cooperate in determining whether, how, and what type of transmission is needed to deliver safe, affordable, and reliable electricity.

This regional approach to planning is especially important in areas that don’t have an Independent System Operator (ISO) or Regional Transmission Organization (RTO), like the Southeast and much of the West. Ensuring that grid planning is done at a regional level, rather than state or utility level, could result in a more cost-effective and efficient design.

Spurring clean energy solutions

The order also has big implications for clean energy resources, because it gives them a fair opportunity to be used when they’re able to provide power. By requiring regional transmission planning that incorporates state policies, clean energy resources that might not have been considered or planned for will have the opportunity to provide cost-effective electricity to power the grid. The court’s decision makes this clear:

The Commission expects that many States will require construction of new transmission infrastructure to integrate sources of renewable energy, such as wind farms, into the grid and that new federal environmental regulations will shape utilities’ decisions about when to retire old coal-based generators. Plans that fail to account for such laws and regulations, the Commission reasoned, would not adequately reflect future needs.”

Because FERC Order 1000 requires state policies like renewable portfolio standards be considered in planning, it helps ensure the transmission for clean energy resources will exist. Likewise, by including clean energy resources like demand response and energy efficiency in planning decisions, costly transmission won’t be built unless it’s actually needed.

The court’s decision was a big win for FERC, for a common-sense, efficient approach to grid planning, and for cleaner air and safer climate.

By Rory Christian

Source: Daniel Schwen, Wikimedia Commons

Acquire more customers, sell more electricity. This primary formula has fueled the runaway success of utility companies in America, as well as the rest of the world, for well over a hundred years.

But today, in an era when customers are technologically savvy, price conscious, and environmentally aware, more families are pursuing opportunities that will cut electricity bills and carbon emissions. Options once considered fringe, like installing rooftop solar panels and driving electric cars, are now becoming so mainstream that utilities everywhere are seeing their bottom lines crunched and even fear for their survival. The electricity sector needs a new formula that can account for these changes, while still providing reliable, safe, and affordable electricity for all.

As a result of increased energy efficiency and heavier reliance on local, distributed energy resources, it’s clear our country is moving toward a reality in which less electricity will come from centralized, fossil fuel power plants. At the same time, customers want utilities to continue providing basic electricity services while allowing them to benefit from new energy-efficient solutions and clean technologies in order to waste less electricity and generate our own power.

How will this be possible? A key first step is moving away from the existing regulatory paradigm, which rewards utilities for investing in more power stations and equipment, to a model that rewards utilities for the performance we seek today.

The New York Public Service Commission (Commission) recognizes that the traditional utility business model – which rewards utilities with investment returns – leaves little opportunity for utilities to innovate, stating in its “Reforming the Energy Vision” (REV) Staff Report: “Current ratemaking provides few incentives for utilities to innovate or to support third-party innovation, to address the current challenges in ways that promote a more efficient system and benefit consumers.”

Utilities will be evaluated on clean energy, customer engagement

In EDF’s recommendations to the Commission, we propose an enhanced version of performance-based regulation, or what we refer to as PBR+, that removes the link between utility earnings and their investments in infrastructure. With PBR+, a utility will be evaluated not just on how well it provides standard electricity service, but also on whether it delivers benefits to the customer and to the environment. Today, the Commission uses metrics such as reliability, safety, and quality of service to regulate utilities, all of which provide a strong foundation for evaluating performance and will still be used. But the Commission plans to establish new metrics that will also take into account the availability of clean energy solutions as well as how much flexibility a customer has to adopt them. It will be necessary for the Commission to establish these new performance metrics and also devise a standard method for evaluating a utility’s performance against them linked to the utility’s compensation.

In establishing these new metrics, the Commission must answer a number of questions, most notably: What outcomes does New York’s REV proceeding seek to achieve? From the start of the landmark proceeding, the state identified four categories of potential outcomes to come from the effort to reform the utility business model:

1. Advanced clean energy,
2. Customer engagement,
3. Reliable and resilient system, and
4. Operational efficiency.

Metrics might be applied differently

While the same metrics will apply to all utilities within New York State, they might be applied differently to utilities based on individual circumstances. Factors such as the number of homeowners versus renters, population density, and types of customers (e.g. industrial, commercial, residential) could influence the solutions utilities are able to pursue, allowing some utilities to perform better under certain metrics than others.

In defining these metrics, it will be important to understand what value customers will place on the outcomes, and some metrics may by their very nature be exceedingly difficult to accurately value. Three metrics that align with the state’s policy direction, as well as customers’ needs, are greenhouse gas emissions reductions, better resiliency, and improvements to customer service. Such metrics would help put New York on a pathway to achieve its goal of an 80% reduction in total carbon emissions by 2050.

Executed properly, a utility’s earnings would no longer be considered an entitlement, but would be based entirely on its performance according to the Commission’s new metrics. It is our belief that PBR+ is the best way to motivate utilities to achieve the outcomes New Yorkers desire, while still meeting today’s challenges.

Last month, EDF filed comments (Track 1 and Track 2) in New York State’s historic ‘Reforming the Energy Vision’ (REV) proceeding to re-evaluate the longstanding utility business model in light of a rapidly changing energy sector. We recommend: 1) transitioning from traditional rate of return regulation to performance-based regulation; 2) fully valuing all costs and benefits associated with distributed energy resources; 3) removing barriers to non-utility entities participating in energy service markets; and 4) requiring the utility to optimize the load it serves.

Over the coming weeks, we will devote a blog post to examining each of these recommendations in depth. This blog post, the first in the Utility 2.0 series, discusses the merits of performance-based regulation. 

By Kate Zerrenner

In June, U.S. Environmental Protection Agency (EPA) announced – for the first time ever – standards to limit carbon emissions from U.S. power plants, known as the Clean Power Plan (CPP). Currently power plants emit 40 percent of U.S. carbon emissions, but under the proposed Clean Power Plan, the U.S. power sector will cut carbon pollution by 30 percent below 2005 levels.

Since this announcement, the usual suspects have attacked the CPP, calling its proposed state-by-state reduction standards arbitrary. Their claims couldn’t be further from reality. When EPA asked states for feedback on how to best craft this standard, states asked for two things: individual standards and flexibility. And that’s what they got. Anyone familiar with the proposed standards will know they are based on a consistent and objective methodology that takes into account each state’s unique energy portfolio and emissions, as well as built with maximum flexibility in mind.

At first glance, the climate-change-denying crowd dismissed the standards as arbitrary, because the limits vary from state to state. For example, Washington needs to reduce its emissions rate by 72 percent by 2030, while Kentucky only needs to cut its emissions rate by 18 percent over the same period. Texas lies somewhere in the middle with a 39 percent reduction required. So what gives?

How did EPA get those numbers?

Let’s unpack the methods that went into EPA’s carbon pollution limits. EPA’s vision for the plan was to give the states complete ownership and flexibility in reducing overall carbon emissions. EPA decided on a simple greenhouse gas performance metric for each state:

Total power plant emissions in one year ÷ Total electricity generation in one year
= Emissions reduction rate

The states have complete control and flexibility over how to meet the emissions reduction rate.

To figure out each state’s potential to reduce emissions, EPA analyzed the practical and affordable strategies that states and utilities are already using to reduce greenhouse gas emissions from the power sector, such as energy efficiency, improving power plant operations, and using more renewable energy. By analyzing state-specific data, EPA calculated practical targets for each state. Their analysis formally considers four “building blocks” for cleaner power:

1. Improving the efficiency of existing power plants,
2. Increasing use of the most efficient natural gas plants,
3. Using more renewable energy, and
4. Expanding demand-side energy efficiency—the same low-hanging fruit for which experts have been advocating for years.

States are already on their way

If we look at each state’s proposed reductions individually, it’s clear that EPA’s limits will not crash the economy or tear down the power sector. In fact, in many states it will not be difficult to meet EPA’s limits ahead of schedule.

Washington, with its seemingly onerous 72 percent reduction mandate, had already ordered its largest coal plant to shut down by 2025. Closing that coal plant alone will reduce the state’s emissions by 70 percent, because much of Washington’s electricity comes from hydro power. And Kentucky leaders have already devised a strategy to meet the state’s 18 percent reduction goal.

In Texas – my home state – we’re well on our way to meeting the 39 percent reduction standard set by EPA by simply amplifying current trends, namely relying on more West Texas wind, widening the use of efficient natural gas electricity, and taking advantage of the state’s solar potential. Now Texas leaders should craft the best framework for the state – one that has the potential to bring in billions of dollars directly to our state economy, create more homegrown jobs, and lower Texans’ electricity bills. If state leaders make another “principled stance” against the EPA, like they did with the greenhouse gas permits, we can only expect for Texas to fall behind other states as they race toward the trillion dollar clean energy economy. Come January, EDF urges the Legislature to take the bull by the horns and show the nation how Texas will continue to be a leader in energy.

It’s clear that EPA’s limits were developed with a specific and pragmatic methodology. Variation in reduction goals from one state to another reflects variation in the circumstances of individual states, which EPA wisely took into account. Those who condemn the rules as arbitrary are ignoring the actual basis for the rule.

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

By EDF Blogs

By: Farris Galyon, Climate Corps Fellow

I do not want to brag, but the U.S. Army engagement at Fort Bragg is the best in EDF Climate Corps. I apologize for the bombastic tone of this statement; however, when I consider the opportunities afforded to me during my time here, it is hard for me to imagine a comparable experience anywhere else. I base my assertion on three particular characteristics of this engagement: 1) the unlimited learning opportunity, 2) the opportunity to add value in multiple areas and 3) the opportunity to meet high profile and multi-talented individuals.

Unlimited Learning Opportunity

Upon my arrival to the energy office at Fort Bragg, I met a team of nine individuals comprised of several engineers with 25-40 years of experience, a former employee of a private utilities company and a dual master’s degree holder currently pursuing her M.S. in global energy management. Suffice it to say, I was the least experienced person in the room. It did not take long for me to realize that my ability to identify efficiency/conservation opportunities they had not already considered was limited. My first response to this reality was to be disconcerted; how would I fulfill my obligation to EDF and the Army without possessing any experiential or academic advantage over this exceptional team? Fortunately for me, this fact would prove beneficial to me rather than detrimental. While the overview offered during EDF Climate Corps training was informative, my full immersion into this work environment proved to be downright educational. Thanks to the energy team’s expertise, I was presented with superb demonstrations on evaluating energy project viability. It was this team’s willingness and ability to teach that presented me with my chance to add value.

Ability to Add Value

A huge benefit of assisting such an accomplished team was their awareness of projects that desperately needed attention, but had slipped lower on their priorities list due to a significant work load. This became the unorthodox path to my summer project, and the means by which I ultimately added value to the Army. For the last two years, the five megawatt cogeneration (combined heat and power) plant on base had been down, and there was debate about how the equipment was utilized prior to its degradation. With renewed plans to bring the cogen plant back online, the energy team tasked me with analyzing the best use of the plant to maximize savings. By presenting me with a longstanding challenge they’ve faced with their cogen plant, I was able to provide the necessary deep dive, which was outside of their bandwidth, to identify lost savings based on historical use and make recommendations on how to realize those savings moving forward. I’m proud to say I was successful in creating a tool that enables the energy team to identify cogen savings, based on fluctuating gas and energy prices, without having to perform another in-depth analysis.

In addition to helping reduce their work load, I leveraged my prior military experience to encourage energy conservation among soldiers. In their estimation, neglectful behavior contributes roughly 10-20 percent of their substantial annual energy bill, which prompted the energy team to build up a robust outreach program; a program that I was happy to help promote in the form of face-to-face engagement and education.

Ultimately, both of these projects proved to be the type of summer engagement that simultaneously fell within and outside my realm of knowledge. To complete them, it forced an expansion of my skill-set, which has not only bolstered my knowledge, but my professional confidence as well.

Meeting the Top Brass

Finally, while I recognize that many other fellows can likely cite a robust learning opportunity and multiple areas to add value as well, I had the distinct opportunity to meet an array of high profile and multi-talented individuals that I believe sets the Army engagement apart from the rest. Perhaps the most exciting encounter I had came in the form of a convening of the Defense Science Studies Group (DSSG). DSSG is a special program facilitated by the Department of Defense (DoD), wherein a select team of scientists from DoD’s research and development wing, DARPA (Defense Advanced Research Projects Agency), consult with military personnel to identify research opportunities, in the realms of weaponry, energy and robotics. This collection of individuals, from both the Army and DARPA, represent some of the brightest and most talented from each organization. The nature of this engagement afforded me the opportunity to meet, mingle, and converse with this cohort, on topics ranging from energy efficiency technology to advanced robotics (of particular interest to me).

It is fair to say that an opportunity to meet these accomplished and brilliant individuals would likely never avail itself to me were I not positioned as an EDF Climate Corps fellow at Fort Bragg. Aside from my propensity for “geeking out” at meeting some of the advanced robotics scientists from DARPA, it was a great honor to meet such decorated military personnel. To be sure, these encounters represent some of the most memorable of the summer.

While I believe my assertion to be true, that no other fellow had it better than I did, it was also an attempt at facetiousness. After a summer of striving to embody the EDF ethos, among a diverse array of professional organizations, it is my hope that every EDF fellow is able to make the same proclamation about their summer engagement. That they too feel that theirs was the best fellowship opportunity of the summer. I look forward to hearing about the various experiences of this year’s climate corps fellows, and to sharing more of my own at the Annual EDF Climate Corps Network Event this fall.

This commentary originally appeared on our EDF Climate Corps blog.

By EDF Blogs

Source: Johannes Rössel, wikimedia commons

By: Beia Spiller, Economist

It would be logical to assume that we make decisions based on our needs, desires, and values regardless of how the choice is presented. For instance, we wouldn’t expect the choice to become an organ donor to depend on whether you must check a box to accept or decline donation. But we would be wrong: our decisions depend a great deal on how the choice is presented.

Choice architecture gets to the heart of the debate on whether it’s preferable to offer people the opportunity to opt-in or to opt-out, and this question has become crucial to the discussion about time-variant electricity pricing throughout the country.

Opt-out vs opt-in time-variant pricing

Currently, most electricity customers pay for electricity at a single flat rate (i.e., one price per kWh consumed). Such pricing is simple but doesn’t reflect actual system costs, which are higher during times of the day when overall energy demand peaks. Time-variant pricing instead allows utilities to charge more for electricity during periods of peak demand, and less during periods of lower demand.

Since the benefits of time-variant electricity pricing – including lower electricity bills, reduced greenhouse gases, and a more efficient, resilient electric grid – increase with greater adoption, the question has been raised whether everyone should automatically be subject to these types of rates. In particular, utilities are trying to decide whether to use an opt-in structure, in which the default is a flat rate and people can choose to have varying rates, or opt-out, in which case consumers who are unhappy with time variant pricing have the choice to go back to their original, flat-rate tariff.

An opt-in, time-variant rate may likely result in fewer tangible system benefits because fewer users will choose to participate. Research finds people tend to stick with the default option by systematically avoiding box-checking, or un-checking in the case of opting out. For example, countries that allow people to opt-out of organ donation (such as France and Sweden) have over 80 percent participation in the program, while countries that require opt-in (such as Germany and the U.K.) have less than 30 percent participation. Not surprisingly, the pattern of low recruitment for opt-in holds true for time-variant pricing as well, with average adoption rates hovering around 80 percent when customers are given the choice to opt-out compared with 15 percent for opting in.

Although some states, such as Minnesota, are considering using an opt-out structure and making time-variant pricing the default option, opt-in has become the norm across the U.S. For example, both California and New York offer voluntary time-variant rates.

So why might a utility choose not to have default time-variant pricing when research shows adoption is much higher?

The main constraint is the lack of advanced meter infrastructure for electricity, which allows the utility to measure consumption every hour of the day, rather than just total consumption at a monthly level. The upfront costs of deploying advanced meter infrastructure can be substantial and the utility’s investment in advanced meters for customers who ultimately choose to opt-out of the program is unlikely to be recovered. Hence, most utilities have chosen to avoid widespread installations by going the opt-in route.

Measures that can improve opt-in time-variant pricing

As a result, utilities lose out on the benefits of time-variant pricing due to low opt-in adoption, but there are measures a utility can take to ensure higher levels of adoption using opt-in. For example, EDF is working with Consolidated Edison (ConEd) on a forthcoming opt-in time-variant pricing pilot. As ConEd and other utilities consider the most effective scheme, they might think about using the measures listed below. They need only to look to Arizona Public Service, which used some of these measures and enjoyed a relatively high 30-40 percent adoption using opt-in time-variant pricing over the past two decades.

• A variety of rate offerings: Having only one peak rate will be unlikely to attract potential customers and does not lead to maximum benefits. For example: there are certain times of the year, such as during a heat wave, when electricity prices are extremely high for just a few hours. Let’s call this the ‘critical peak.’ Of course, there are also daily peak and off-peak hours. Providing a ‘critical peak price’ option along with traditional daily time-variant rates would not only help accommodate different types of customers (expanding the customer base), but would provide a tangible system benefit, as both of these rates would result in decreased consumption at peak times.

• Extensive outreach and marketing: The utility must engage, empower, and educate customers so they are aware of the new rate system as well as understand its potential benefits. If more people see the benefits of time-variant pricing, they are more likely to participate and take advantage of its offerings.

• Bill protection: Protecting the customer from sharp bill increases, particularly during the transition period, will reduce concerns about increasing bills from rate changes. Utilities can provide shadow billing for the first three to five months of the program – whereby they provide the customer with a bill showing how much she owes under the new and old tariffs – and then ask the customer to pay whichever is lower. This allows the customer to benefit from changing her behavior and better understand which actions lead to lower or higher bills.

Although opt-out time-variant pricing is likely to result in much higher levels of adoption, these measures can help utilities increase participation levels beyond what could be achieved through opt-in time-variant pricing, thus maximizing the benefits that come along with it.