California’s “big three” utilities, at the behest of state regulators, are in the process of examining and improving how they price electricity, including something called time-of-use (TOU) electricity pricing. This option – which rewards people who shift some of their electricity use to times of day when clean energy is abundant and electricity is cheaper – […]

As any child of the ’80s knows, October 21, 2015 is “Back to the Future Day” – the day that the film’s protagonist, Marty McFly, travels to the future in his DeLorean. Though it would no doubt be useful to have access to flying cars (think of the traffic one could avoid), Californians are seeing […]

Electricity regulators, clean energy innovators, and rappers have all lamented poor communication. And some have pushed for cleaner, cheaper, more reliable solutions for meeting our energy needs. This is particularly so with the much anticipated emergence of a new kind of non-event based, price-responsive demand response (DR), or flexible DR. Whereas traditional DR signals customers to voluntarily […]

California’s “big three” utilities are taking important steps toward achieving a clean energy future – one in which we will better utilize renewable sources of energy, give customers more choice and control, and keep the state on course to cut pollution. One way they are doing this is through Distribution Resource Plans (DRPs). Signed into state […]

This summer the California Public Utilities Commission (CPUC) ordered big changes in how Californians will pay for electricity. Starting in 2019, residential customers of the big three investor-owned utilities (Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric) will be switching residential customers to the same pricing plan used by commercial […]

Anybody managing a household budget knows it pays to plan ahead. With advanced thinking we can buy favorite items with coupons, when they’re on sale, in bulk, or at the cheapest store in the area. Similarly, we know that buying under duress, or in the touristy spot, will likely mean higher prices. Using the same smart […]

Here at Environmental Defense Fund (EDF), we love win-win solutions. This is why we’re big fans of time-of-use (TOU) electricity pricing (a type of time variant electricity pricing). As I’ve written before, TOU pricing better reflects the true cost of electricity, which fluctuates throughout the day. What’s more, it brings with it significant benefits for […]

You may have noticed:  we’re big fans of electric vehicles (EVs) here at Environmental Defense Fund (EDF). Standard transportation fuels are one of the biggest sources of harmful greenhouse gas emissions, so vehicle electrification is a crucial part of our clean energy future. But getting more EVs on the road is about more than just […]

Last week, the California Public Utilities Commission (CPUC) issued a proposed decision on residential rate reform. Residential rate reform – how and what Californians pay for electricity – is a thorny subject, and the Commission’s proposed decision is being met with a range of reactions. We at Environmental Defense Fund (EDF) want to highlight a […]

While California never quite got a winter, we can still acknowledge that spring – with the sun shining and flowers blooming – is here. From where I sit in Sacramento, spring means allergy season, getting out and enjoying the blue skies, a last bit of cool air before a brutal summer, and oh yes, the […]

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.

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 coal-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, as this proceeding moves forward:

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.

By Jorge Madrid

Map of polluting power plants in Los Angeles County. Many are located in or near the region’s most vulnerable communities that are already over-burdened by air pollution.

My mom is a pro at shopping for good deals. She taught me the importance of timing my purchases during the off-peak season to get the most value for my dollar.

Time-of-Use (TOU) electricity pricing reminds me of the lessons my mom taught me, and it can help empower families to take control of their energy use, while saving money AND improving air quality.

Like the name implies, TOU pricing allows customers to choose when to power-up large appliances (think laundry, dishwasher, A/C) in order to avoid using high-demand, “peak” energy – which is more polluting and expensive. It is a voluntary program with a proven track-record.

Peak energy demand typically occurs late in the afternoon when everyone is coming home from school and work, running the A/C, charging phones, cooking, doing laundry, or streaming Netflix on a T.V. During this high-demand time, energy prices spike and electric utilities flip on expensive and dirty fossil fuel “peaking” power plants to meet energy demand (because nobody wants to lose power and heaven-forbid the Internet!)

We all know that something is most expensive when everyone wants it at the same time. Why not hold-off on a purchase until the rush ends to save some money? Timing your energy use during off-peak times allows you to use cheaper electricity. Even better, you can time your energy use to take advantage of peak sun, when California’s solar panels are humming; or late at night, when our wind turbines are spinning. You’ll be making smart choices, saving money, AND helping clean the air.

Mom would be proud!

Still need convincing? Want to learn more?

My colleagues at EDF put together a terrific primer on Time-of-Use electricity pricing. Here are three ways TOU can help California make smarter, healthier energy choices.

Lower Electricity Bills

TOU gives people options to save by conserving and shifting energy use to cheaper times of the day. By paying more attention to the timing of energy use, Californians could have a new means of lowering energy bills and reducing the use of costly, polluting power plants. In fact, because peaker power plants run so infrequently and inefficiently, EDF estimates that if half of all Californians participate in TOU, electric utilities and customers could save nearly $500 million annually.

All Californians, including low-income families, have much to gain from TOU because it is a customer-focused program. For example, Washington D.C. initiated PowerCents DC, with nearly 900 residents, including low-income households, to test responsiveness to TOU pricing and to see how smart thermostats could help residents save money. The results showed that nearly all participants (regardless of household income) saved money and responded favorably to the program. Sacramento Municipal Utility District (SMUD) launched a similar program, and the vast majority of participants either paid the same amount as before or saved money through TOU. With the right customer education programs and built-in safeguards, proactive Californians could easily replicate this outcome.

Freedom of Choice

TOU puts people in the driver’s seat, empowering them to make energy choices – if they choose to. As California’s electric utilities expand the use of TOU rates in the coming years, customers will have the option to opt-in or opt-out, effectively choosing how they want to pay for electricity. When SMUD implemented TOU pricing, people reported greater satisfaction with this plan compared to existing electricity rates, noting that TOU provides “fairer pricing” and “more opportunities to save money.” From an economic, health, and environmental perspective, EDF encourages Californians to choose TOU, as this program will open the door for other clean energy resources like rooftop solar and smart thermostats.

Clean, Healthier Air for All

TOU could bring relief to communities located near power plants, as they bear a significant health burden from breathing in toxins from these facilities. Power plant emissions have been linked to premature death, aggravated lung and heart disease, bronchitis and asthma (especially in children), and an increased number of missed school and work days. With TOU, California has the tools at hand to protect air quality and help businesses and families save money without reducing the reliability of the electric grid.

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.

By Lauren Navarro

Source: North America Power Partners

This week the California State Assembly will consider Senate Bill 1414 (Wolk). What’s so exciting about SB 1414? This bill will accelerate the use of demand response (DR), a voluntary and cost-friendly program that relies on people and technology, not power plants, to meet California’s rising electricity needs.

DR programs compensate people and businesses who volunteer to use less electricity when supplies on the power grid are tight and/or to shift energy use when cleaner, renewable resources are available. Every time a customer participates in lowering their energy use through demand response, they are rewarded with a credit on their electricity bill.

The implementation of demand response will help catalyze a much needed upgrade to our outdated grid, whose fundamental design hasn’t been updated since Thomas Edison invented it over a century ago. Demand response can empower participants to lower their electricity bills and carbon footprints, improve air quality, allow for more renewable electricity, and enhance electric grid reliability. In a tree of options for modernizing and cleaning up our energy system, demand response is a low-hanging-fruit.

Yet in California, the law that governs Resource Adequacy (a fancy phrase meaning short-term electricity planning) only requires electric utilities to contemplate investments in costly generation, i.e. power plants – not clean technologies and innovative approaches like demand response.

SB 1414 will correct this shortcoming and, in doing so, will help bring more demand response onto the power grid. SB 1414 directs the Public Utilities Commission and utilities to consider demand response as a partner in planning how to balance the power grid. This makes sense because asking people to dial down their energy demand can help take the place of ramping up power plants, like two sides of the same coin.

Similarly, increasing the use of this innovative resource on the electric system can help bring on more renewable generation, reduce the need for “peaker” power plants (very inefficient fossil fuel-fired power plants that only run a few hours each year), and enhance electric grid reliability – more practically and at a lower cost than relying on power plants alone.

Why Else Would California Want More Demand Response?

Rewarding people who use less power during high-demand times (when electricity prices are at their highest) through demand response incents homes and businesses to voluntarily conserve electricity when it matters most. Plus, DR programs can use technologies, like the Nest thermostat, that come equipped with set-it-and-forget-it programming and the option to decline the conservation request altogether. With these options, participants can save money and always remain in control of their energy needs. And SB 1414 ensures that consumer protection rules are in place for these good actors.

Further, demand response can help California meet its goal of 33% renewable energy by 2030 by encouraging people to use non-essential devices, like swimming pool pumps and defrosters, when renewable energy is available and abundant. It is a clean, flexible, and low-cost way to help address the rising energy needs in Southern California following the closure of San Onofre Nuclear Generating Station (SONGS) and the Once-Through-Cooling (OTC) plants.

It’s Time for California to Get in the Running on Demand Response

California has recognized the importance of this technology in its Loading Order for Electricity Resources, wherein the state prioritizes the use of demand response before conventional power plants (and even before renewables), as well as in the state Energy Action Plan.

Yet most other states and regions have far more demand response available. New England’s programs, for example, enable more than double the demand response participating than those of California. Only Texas and other states in the Southwest lag behind the Golden State.

With the closure of SONGS and the OTC plants, it’s time for California to get serious, get in the running, and ultimately lead on demand response. EDF urges the California Assembly to vote “yes” on SB 1414 to harness the power of this versatile technology to build a cleaner, more resilient, low-carbon electricity system.

By Jamie Fine

This post was co-written by Chris Yunker, Rates and Analysis Manager at San Diego Gas & Electric.

Source: limelightpower flickr

Industrial and environmental stakeholders are usually portrayed as adversaries. But one exciting example from California proves there can be another side to that story. San Diego Gas & Electric (SDG&E) worked with Environmental Defense Fund, Sunverge, Google, and the California Public Utility Commission at Rocky Mountain Institute’s eLab Accelerator to investigate electricity tariffs that enable new technologies and practices and to reveal their costs and benefits to the grid. As distributed energy resources (DERs) continue to grow rapidly, there is increasing need to enable the marketplace to value utility-supplied grid services and customer-sited resources.

SDG&E serves 3.4 million people in and around San Diego, and is also home to roughly 10,000 electric vehicles and 40,000 rooftop solar systems. SDG&E is responsible for keeping the lights on despite growing demand (the region has one of the largest EV adoption rates in the nation) and variable electricity generation (PV panels stop producing at sunset).

Rather than resisting these changes, SDG&E has been working collaboratively to explore a vision of a future with even greater quantities of distributed energy resources. That vision looks at several features:

• Tariff options available for customers to buy or sell services to or from the electricity grid.
• Customer rate options that are unbundled sufficiently to align with current or future technology capabilities, and broken out by attributes of interest, such as capacity, energy, and ancillary services.
• Pricing by time, location, cleanliness, and power quality.
• Valuing electricity generation and demand-side resources consistently based on the energy attributes they provide.
• A menu of tariff options that
  —keep it simple for customers who want simplicity;
  —provide clear ways for customers to save money, including controllable set-it-forget-it technologies;
  —enable meeting state and federal environmental and other policy goals;
  —address the special needs of customers; and
  —provide a seamless gateway for DERs to realize their benefits.

Embarking with this vision in mind, the group defined a structure to be available optionally to customers interested in using technologies and/or practices to provide products and services to the grid. The key is to accurately reflect the costs and benefits, while allowing for the great diversity of customer interests and capabilities.

Toward a shared goal of enabling high penetration of DERs through a menu of gradually-introduced rate options and credit mechanisms, the team conceptualized one rate option. Dubbed the "Smart Home Rate", the tariff would be geared toward adopters of any number of distributed resources (for example: distributed generation, energy efficiency, demand response, storage, smart thermostats, and electric vehicles) including those that enable automated responses to grid signals and market prices.

The structure seeks to fairly compensate customers, the utility, and third-party participants for the full range of services they provide. Essential components include:

1. A monthly service fee ($/meter) to cover customer costs such as the meter and a customer contact center
2. A grid charge that allows customers to benefit by managing their load profile
3. A day-ahead hourly price signal ($/kWh) that allows customers to utilize technologies to both avoid periods of high costs/high demand and benefit from utilizing energy during negative pricing events that occur during periods of low loads and high renewable supply

There is still a lot of work to do to refine these tariff components and to make an option like the Smart Home Rate available to SDG&E customers. Yet we all can see the benefit of offering customers the choice to adopt new technologies in a way that will reduce their bill and utility costs. While such collaboration might not grab headlines, it can certainly be an important reason to have great optimism for the future of clean energy.

James Fine is an Economist with Environmental Defense Fund.

Chris Yunker is the Rates and Analysis Manager at San Diego Gas & Electric.

The eLab Accelerator team included the two authors; Kurt Adelberger, a principal with Google; Jon Fortune, Director for Regulatory and Energy Services at Sunverge Energy; and Gabe Petlin, Senior Analyst for the California Public Utilities Commission.

This post first appeared on Rocky Mountain Institute Blog

By Gavin Purchas

If there is one thing that works in the world of advocacy, it is a ratings table that shows how one state, metropolitan area, or utility compares to its peers. The latest report, U.S. Clean Tech Leadership Index, from Clean Edge does just that.

The fifth annual U.S. Clean Tech Leadership Index finds that California, Massachusetts, Oregon, Colorado, and New York lead the way among states in solar and electric vehicle adoption, with smart climate policies and clean energy financing driving the clean tech leadership index growth.

Clean energy is becoming a popular choice for mainstream America with 11 states now generating more than ten percent of their electricity from non-hydro renewable sources, according to the Clean Edge report. As seen in the graph below, Iowa leads the way in utility-scale wind, solar, and geothermal electricity generation.

Meanwhile, California is leading the way on the uptake of electric vehicles.

Taking these factors into account, combined with metrics around green financing, Clean Edge has developed the chart below which shows that for the fifth year now, California has ranked number one out of all 50 states in the deployment of clean tech, with San Francisco taking the top spot by metropolitan area.

Ranking the states and cities in this way should prove a useful tool for advocates across the states. EDF’s work on designing a new regulatory model for New York will be assisted by the desire to move up the clean energy index, just as the work EDF is undertaking to shift the energy use of major cities such as Los Angeles, Austin, and Boston will be helped by looking at what San Francisco is doing to achieve such a high score of 94.4 on the metro index.

So a big thank you goes out to Clean Edge for producing this material with the hope that this work continues.

This post originally appeared on EDF's Energy Exchange blog.

By Lauren Navarro

This blog post was co-authored by Kate Zerrenner, an EDF project manager and expert on energy efficiency and climate change.

On June 2, the U.S. Environmental Protection Agency made a historic announcement that will change how we make, move and use electricity for generations to come.

For the first time in history, the government proposed limits on the amount of carbon pollution American fossil-fueled power plants are allowed to spew into the atmosphere.

There are two clear winners to comply with the plan while maintaining commitment to electric reliability and affordability: energy efficiency and demand response.

We’re already seeing pushback from some of our nation’s big polluter states, such as West Virginia and Texas. But the truth is that while the proposed limits on carbon are strong, they’re also flexible.

In fact, the EPA has laid out a whole menu of options in its Clean Power Plan – from power plant upgrades, to switching from coal to natural gas and adopting more renewable energy resources. States can choose from these and other strategies as they develop their own plans to meet the new standards.

That said, there are two clear winners on the EPA’s menu that offer low-cost options for states that seek to comply with the plan while maintaining their commitment to electric reliability and affordability: energy efficiency and demand response.

Energy efficiency our lowest-hanging fruit

Simply saving energy is the most cost-effective way to reduce demand and carbon pollution from power plants. The cheapest, cleanest and most reliable electricity, after all, is the electricity we don’t use.

The benefits of energy efficiency are vast. It helps people and businesses save money, it boosts job creation (as many as 274,000, one source estimates), and it reduces harmful power plant pollution.

From a utility perspective, energy efficiency improves the reliability of our electric grid and lowers costs for infrastructure maintenance.

Plus, in states such as Texas and California, which face extreme drought, energy efficiency can save scarce water sources. Remember that coal-fired power plants are thirstyand less water is consumed when these plants are used less (or not at all).

Half of the states already have mandatory energy-efficiency targets, so we have the knowledge and experience across the country to advance this undeniably beneficial resource.

Same as taking all cars off road

McKinsey & Co. estimates that by 2020, the United States could reduce its annual energy consumption by 23 percent by adopting energy-efficiency measures. This could save us more than $1 trillion dollars and cut greenhouse gas emissions by more than a gigaton—the equivalent of taking the entire U.S. fleet of passenger vehicles and light trucks off the road.

That’s why Environmental Defense Fund is working with policymakers, investors and utilities throughout the country to understand the full benefits of energy efficiency, and to explore paths for implementation, for when they’re crafting state plans under EPA’s new Clean Power Plan.

Demand response: everyone wins

Demand response is another way to introduce greater efficiency into the nation's electricity system and help reduce carbon emissions. It’s an invaluable tool that can help conserve electricity when supplies run thin, and to bring more clean energy onto the grid.

On a hot summer day, for example, when electricity demand is high, utilities can ask permission of select customers to lower their thermostats a couple of degrees. In exchange, these customers receive credit on their next electricity bill.

It also helps utility companies better manage stress on the electric grid and it can help them integrate wind, solar and other renewables to replace aging coal-fired power plants.

Demand response relies on people, not power plants, to meet energy demand and reduce carbon pollution from our electricity sector.

Proven strategies

In Southern California, for example, they’re about to replace a large chunk of electric capacity – at least 550 megawatts – from the recently closed San Onofre Nuclear Generation Station with renewable energy, energy storage – and demand response. This will help minimize a need for gas-fired plants and other polluting facilities that might replace the nuclear plant.

Best of all, demand response is more affordable than building new power plants. In fact, if just 50 percent of Southern California Edison’s customers participated in time-of-use rates – a type of demand response program – energy demand would plummet so much that 66 percent of San Onofre’s former generating capacity would no longer be needed.

As a bonus, customers across the territory would also collectively see cost savings of $357 million, a 15-percent decrease.

As a result of smart decisions such as the one involving the San Onofre plant, California’s utility sector’s greenhouse gas emissions have and will continue to decline. This proves that demand response can and should be a core tenet in the nation’s push to diversify its energy mix and cut pollution in order to usher in a clean, sustainable and healthy future.

As EPA Administrator Gina McCarthy noted last week, these clean energy solutions are not new ideas. They’re based on proven technologies and approaches that "are already part of the ongoing story of energy progress in America."

"We're not doing cutting-edge work here, folks," she said. "We are just opening the door to cutting-edge.”

This post first appeared on EDF Voices

By Jamie Fine

Back in January when Google announced it would spend $3.2 billion to purchase Nest, EDF knew this was a company to watch. The results of three new reports, released today, confirm that controllable thermostats like the Nest Learning Thermostat are both customer-friendly and useful for energy system planners. Moreover, the reports signal that smart devices, such as those Nest manufactures, have potential for generating marked savings for utility customers.

The reports analyze 2012-2013 energy use data gathered from four major utilities across the U.S. that offer Nest energy services programs: Austin Energy, Reliant Energy, Green Mountain Energy, and Southern California Edison.

The first report evaluates the results of Rush Hour Rewards, a demand response service that changes the temperature of the homes of Nest users during energy “rush hours”, or times when demand on the grid is highest. The second examines Seasonal Savings, a program that runs for three weeks and slowly modifies the temperature according to the customer’s behavior (which this smart thermostat is able to ‘learn’ via its built-in motion sensor and understanding of its owner’s temperature preferences). Both operate during times of heavy usage, namely winter and summer. The third report analyzes home energy data of Nest customers more broadly, comparing energy use before and after the installation of a Nest Thermostat.

A graph from the Rush Hour Rewards (RHR) report that shows AC usage during the hottest part of the day (a.k.a., the ‘rush hour’)and how the RHR program is able to significantly reduce home energy consumption using its automated energy management system.

While each report details unique findings, EDF found three notable common threads.

• Nest Thermostats successfully reduced peak demand on the electricity grid. One of the main aims of any smart thermostat is to better understand customers’ energy usage so that energy providers and managers can utilize this information to create less of a strain on the grid. Curbing peak energy use during the hottest and coldest months (and times of the day) offsets the need for expensive, dirty ‘peaker’ plants that are used only to generate power several dozen hours per year and typically run on fossil fuels like coal. Through tools such as “rush hour” temperature adjustments and scheduled temperature shifts (based on the natural, observed routine of customers), Nest Thermostats successfully lessened the air conditioning demand on the electricity system, often greater than 50% during peak times.

• Customers saved money.It probably goes without saying that lower demand equals lower costs.  After installing a Nest Thermostat, people in Southern California saved an average of 1.16 kWh per day, or 11.3% of AC-related energy usage, equating to roughly $28 in energy savings over the course of one summer (assuming a price of 16 cents / kWh).Unfortunately, for its report comparing energy use before and after the installation of a Nest, they only looked at energy savings in Southern California, where summer temperatures are mild compared to a place like Austin, Texas. For example, last summer, temperatures in Austin soared to a blazing 103°F, but Austin Energy was able to lower AC runtimes during the hottest part of the day by 56%, on average through their Rush Hour Rewards program. So a similar cost-savings analysis for Austin Energy customers with Nest Thermostats might actually reveal more impressive numbers compared to those uncovered in the study of Southern California Edison customers.

Another key insight from this report related to customer savings highlight that incentive structures for compensation of demand response programs may matter. In the AE pilot, customers were given an $85 thermostat up front, which seemed to encourage more adoption. "There was a meaningful difference in enrollment rates based on the method of customer payments,” says the report. “In AE, where the first two years of incentives were paid up front upon enrollment, 39% of Nest’s customers enrolled in Rush Hour Rewards. In contrast, only 19% of Southern California Edison’s Nest customers enrolled in RHR. Incentives for SCE’s program were paid in bill credits on a monthly basis.

• Customers remained comfortable and in control (and more want in on the action).Nest clearly makes great efforts to ensure customers reduce energy use without significantly affecting their comfort levels. Participants in the Rush Hour Rewards program receive a notification the night before that tells them what time the rush hour will start and end, during which time the temperature will change no more than two degrees. People are ultimately in control and individuals can always easily opt-out of any Nest program by simply changing the mode on their thermostat.  In fact, following the Season Savings trials, 95% of customers still felt they had complete control over their comfort.Furthermore, there is evidence that Americans support devices and programs such as these. For example, only a few weeks after the Rush Hour Rewards programs went live, Nest succeeded in enrolling the first 1,000 Austin Energy and 1,000 Southern California Edison customers, with subsequent enrollments continuing at a rapid pace. At least 20% of Nest customers in each utility area signed up for Rush Hour Rewards by the end of the summer.

These reports demonstrate Nest can achieve its goal of reducing peak energy demand, while saving customers money and meeting their energy needs without being disruptive to people’s normal habits. Encouraging people to reduce their energy demand is not new, but the availability of smart devices like the Nest allows for an ease-of-use and automation that completes the chain of action for these demand response events to work smoothly and reliably.

More profoundly, this new evidence from Nest is a harbinger for a grid-connected world.  Currently Nest is showing how smart thermostats help to keep the lights on across the grid and lower energy bills without compromising on comfort.  Soon, other appliances, vehicles and, for some of us, self-generating electricity systems will be a part of an interconnected electricity mesh that performs useful services for people and the electricity grid.

This post first appeared on EDF's Energy Exchange blog

By Brad Copithorne

Up to now, the most popular and cost effective forms of financing solar projects have been leases and Power Purchase Agreements (‘PPAs’), which allow homeowners to install solar photovoltaic (PV) systems on their property and purchase power from the system’s output via a financial arrangement with a third-party developer who owns, operates, and maintains the solar panels.

Unfortunately, these creative financing mechanisms have not generally been available for commercial property owners. The only exceptions were buildings owned (or leased for a very long time) by investment-grade entities such as Google, Walmart, or a state or local government. Most small or medium businesses, office buildings, shopping centers, and apartment buildings could not access financing for money-saving solar projects as investors have been wary of extending 20-year solar financings for most commercial properties.

Fortunately, our good friends at Connecticut’s Green Bank (CEFIA) have created the first solar leasing investment fund that uses Property Assessed Clean Energy (PACE) to provide investors assurance that they will be repaid. The ‘CEFIA structure’ allows commercial property owners to sign a lease or PPA in the same manner and terms as their investment-grade brethren. The only difference is that payments are linked to the property tax bill and survive foreclosures. Since the taxman almost always gets paid, this structure allows investors to consider a much wider range of commercial credits.

According to Bert Hunter, CIO of CEFIA, “Our tax equity partner has provided us with underwriting guidelines that permit PPAs and solar leases secured through PACE, allowing solar developers to propose projects that would not generally be considered for financing. We have seen tremendous interest from developers, have created a $10 million pipeline, and expect to close our first transaction in May.”

Unfortunately, California’s PACE rules do not currently allow for the CEFIA structure to be implemented, but EDF is working on two potential solutions to this problem. First, we are in discussions with Demeter Power Group, Clean Fund and a couple of leading solar developers on an innovative solution that is expected to be effective under current PACE program rules.

“Our PACE solution is available in California today,” according to Michael Wallander, President of Demeter, “and we are in advanced talks with investors and project developers about executing our first transactions in the state.”

Second, Renewable Funding and EDF are working with Assemblymember Nancy Skinner on her PACE bill (AB 1883). This bill should be able to clear the way for the somewhat simpler CEFIA structure and further increase solar investment at no cost to taxpayers.

As soon as we have a workable solution in California, EDF plans to replicate it across the country. We look forward to helping provide all commercial properties the opportunity to join the low-cost solar revolution.