How Will Future Energy Needs Be Met, Now That Kinder Morgan Pipeline Has Gone Belly Up?
…To that end the administration has proposed a new way to fund pipelines. It would place a line on customers’ electric bills to pay for them. On May 5 the State Supreme Judicial Court will decide if that method is legal. Peter Shattuck of the environmental group the Acadia Center says if we fund projects that way, it essentially puts the risk on the public.“Risks including that projects run over their multi-billion dollar initial estimates; risk that pipelines serve export markets and actually drive our prices up, and risk that growing climate concerns and cheaper renewables will leave us with expensive fossil fuel infrastructure that we just can’t afford to keep using,” he says…
Reggie Reform: Will Connecticut lead the way?
…”Governor Malloy has made strong commitments to address the threats of climate change,” said Daniel Sosland, Acadia Center president. “Strengthening, extending, and expanding RGGI is a clear way to follow through on climate commitments.” The Malloy Administration is facing cuts to RGGI’s clean energy funding. The letter cites some of the benefits that RGGI has provided to-date: $245 million in value added to Connecticut’s economy, more than 2,200 job-years of employment, GHG reductions of 35 percent, and $13 million in avoided health impacts…
New Coalition of Nonprofit, Business and Consumer Groups Launch Alliance for Clean Energy Solutions (ACES)
Leading Regional Organizations Combine Forces to Support Long-Term Policies that Will Create Clean, Affordable and Reliable Energy
Boston, MA – April 26, 2016. Nearly 20 environmental, clean energy industry, business, consumer, and health groups announced the creation of a coalition named the Alliance for Clean Energy Solutions (ACES acesma.org). The alliance consists of a wide variety of organizations seeking to ensure that Massachusetts enacts long-term policies that will drive clean, affordable & reliable energy.
“The Alliance shows the diverse support for new clean energy policies from the environmental, clean energy and business communities,” said Acadia Center’s Massachusetts Director Peter Shattuck, one of the co-chairs of the Alliance. Northeast Clean Energy Council’s Executive Vice President Janet Gail Besser, also co-chair of the Alliance, noted, “This Alliance is a testament to the fact that Massachusetts residents and businesses see clean energy as the centerpiece of a strategy to create a stable price environment for energy customers, mitigating the volatility of electricity prices driven by fossil fuels and driving the Commonwealth’s economy for the future. ”
ACES supports policies to bring diverse clean energy resources to Massachusetts. Alliance members share the view that such policies are critical for the Commonwealth to achieve its climate commitments, and will also protect consumers and the environment. ACES supports a diversified energy policy that includes:
- Large-Scale Clean Energy Procurements – authorize procurement of Renewable Portfolio (RPS)-eligible resources (such as onshore wind) and hydroelectricity in order to facilitate cost-effective achievement of the RPS, replace retiring generation, reduce greenhouse gas emissions and diversify our electricity supply.
- Pairing of Wind and Hydroelectricity – require bundled procurements of RPS-eligible resources (such as onshore wind) and hydropower in order to drive in-region development and maximize efficient use of transmission for clean energy.
- Meaningful Offshore Wind Development – authorize phased procurement of offshore wind of sufficient scale over 15 years in order to tap Massachusetts’ world-class offshore wind resource and develop a sustainable industry in Massachusetts.
- Energy Procurement Standards and Criteria – competitively procure cost-effective and environmentally preferable clean energy resources through a procurement process that protects against self dealing, and ensures reliability, price stability, affordability for all income levels, and ensures that environmental impacts of electricity generation and transmission are appropriately avoided, minimized, and mitigated.
“Clean energy procurements can play an important role in achieving Massachusetts‘ greenhouse gas reduction requirements,“ said Josh Craft, Program Director from Environmental League of Massachusetts. “But new hydropower resources alone are insufficient to meet our state’s energy needs. The ACES platform will allow our state to develop a truly diversified energy resource portfolio while ensuring that Massachusetts ratepayers will only pay for responsibly developed and competitively priced clean energy.“
The Alliance advocates that further action is needed to meet the State’s 2020 mandatory greenhouse gas requirements and believes that Massachusetts has an opportunity to create a diversified energy mix that will allow energy consumers to avoid being at the mercy of extremely volatile natural gas prices. Additional priorities supported by ACES include advancing energy storage and clean energy financing, establishing ambitious yet achievable targets for renewable energy and GHG reductions, and promoting distributed clean energy.
Businesses and other large energy consumers like hospitals and universities also recognize that a long term vision will help to provide a stable pricing environment that will make it easier for companies to budget and plan, turning Massachusetts’ energy markets into a positive for businesses. “It’s no secret that businesses use lots of energy. That’s why a stable pricing environment will be good news for the Massachusetts business community, making it easier for companies to budget and plan for their energy costs,” said Jesse Mermell of the Alliance for Business Leadership. “Businesses also benefit from the fact that renewable energy prices are declining, and are on their way to becoming the most affordable energy option.”
###
Media Contacts:
Kate Plourd Johnson
NECEC
Phone: 617-500-9933
Kiernan Dunlop
Acadia Center
Phone: 617.742.0054 x107
About ACES:
The Alliance for Clean Energy Solutions (ACES) is a “coalition of coalitions” comprised of business groups, clean energy companies, environmental organizations, labor, health, and consumer advocates dedicated to advancing clean energy for Massachusetts. ACES is committed to ensuring that those charged with shaping Massachusetts’ energy policies have the most rigorous, current data on the benefits and costs of clean energy. Our goal is to ensure that the Commonwealth can attain a cost-effective, reliable and diverse energy supply to power its businesses, communities and households, which will reduce our reliance on fossil fuels, create a stable and prosperous business environment and meet the Commonwealth’s greenhouse gas emissions requirements. For more information: macleanenergysolutions.org
Members Include: Acadia Center, Alliance for Business Leadership, Climate Action Business Association, Clean Water Action, E4theFuture, Energy Storage Association, Environment Massachusetts, Environmental Entrepreneurs, Environmental League of Massachusetts, Health Care Without Harm, Mass Audubon, Mass Energy Consumers Alliance, Northeast Clean Energy Council, Northeast Energy Efficiency Council, RENEW Northeast, Solar Energy Business Association of New England, Union of Concerned Scientists, US Green Building Council Massachusetts Chapter, Vote Solar.
The Promise of Energy Storage: Making the Grid Operate Like Our Food System
To understand the transformative potential of energy storage in helping achieve a clean and efficient power grid, it helps to conduct a thought experiment: imagining if our food system worked like our power grid. Instead of warehousing surpluses from our farms and keeping refrigerators and pantries stocked with what we need at home, a massively overbuilt food delivery system would be needed to provide the exact amount of food needed to serve every human being, at every single moment of every day.
Illogical as it seems, that is how our electric grid functions, requiring electricity generation to match fluctuating demand on a minute-by-minute basis, 365 days of the year. With intermittent renewable energy sources such as wind and solar making up a greater portion of energy supply – essentially serving up local, cheap food at unpredictable times – the lack of storage has become untenable.
Advances in energy storage are needed to make our outdated grid more efficient, support the growth of renewable energy, and reduce consumer costs. Storage will allow us to preserve excess energy generated during periods of low demand (for example offshore wind produced at night) and use this energy to meet peak demand hours or days later. Drawing on stored energy will avoid the need to switch on the least efficient and most expensive fossil fuel-burning power plants, saving money for all electricity consumers. Energy storage can also reduce the need for more expensive upgrades to utility infrastructure, and improve resiliency by providing electricity in emergency situations. There is even greater promise in “stacking” all of these services – reducing peak power costs, avoiding infrastructure expenditures, providing backup power – and more, as described in a recent RMI paper.
The greatest impediment to achieving the benefits of energy storage has been high up-front costs, but this barrier is falling away. Costs for established technologies like the lithium-ion batteries in phones and electric vehicles are falling rapidly, and creative approaches have shown the viability of storing energy in compressed air, high-tech spinning tops called flywheels, and myriad new chemistries being cooked up in research labs and universities across the country.
Where it has been allowed to compete with conventional resources, storage is already excelling. In California, regulators determined that it would be cost-effective for utilities to bring 1300MW of storage online (about the size of New England’s largest, and soon-shuttering coal-fired Brayton Point power plant). As covered in UtilityDive, in an initial step toward that target, Southern California Edison (SCE) signed up 264MW diverse energy storage applications in 2013, far exceeding requirements for the first procurement. In a sign of the changing times, this energy storage even beat out natural gas power plants for the portion of the procurement meant to ensure adequate generating capacity.
In Massachusetts steps are being taken to unlock the potential for energy storage. The Baker Administration’s Energy Storage Initiative is providing $10 million in funding for storage deployments, and analyzing the market and economic development potential for energy storage. Energy storage will also likely feature in omnibus energy legislation, in the form of S1762, authored by Sen. Ben Downing, or a similar mechanism to enable the Department of Energy Resources to act on the findings of their studies. Opportunities for deploying energy storage in new ways – such as repowering Brayton Point with clean energy – are also helping to build support.
With more and more renewable energy coming online, and more clarity about the consumer and commercial benefits of developing energy storage, Massachusetts appears poised to take the next step in realizing the potential for energy storage. By cultivating and supporting innovative technologies and applications for energy storage we can make the electric grid more efficient and adaptable, allowing us to have our cake and eat it – whenever we want.
Peter Shattuck is Director of Acadia Center’s Massachusetts office and Clean Energy Initiative. Peter’s work at Acadia Center focuses on cleaning up the energy supply across all sectors of the economy. Driving market-based emissions reductions is at the core of this work, using cap and trade policies such as the Regional Greenhouse Gas Initiative, which Acadia Center has tracked since the program’s early development in the 2000s.
Connecticut Leadership Needed in Regional Climate Program
In a letter sent today to Governor Malloy and the Department of Energy and Environmental Protection, environmental, business, consumer, and public health organizations call for strengthening and expansion of the Regional Greenhouse Gas Initiative (RGGI), which Connecticut is currently chairing through a Program Review. The letter notes that RGGI provides an effective and existing mechanism to meet the state’s statutory greenhouse gas (GHG) targets and follow through on the state’s recent commitments to climate leadership.
“Governor Malloy has made strong commitments to address the threats of climate change,” said Daniel Sosland, Acadia Center President. “Strengthening, extending, and expanding RGGI is a clear way to follow through on climate commitments.”
As the Malloy Administration battles raids on RGGI’s clean energy funding, the letter cites some of the benefits that RGGI has provided to-date – $245 million in value added to Connecticut’s economy, more than 2,200 job-years of employment, GHG reductions of 35%, and $13 million in avoided health impacts. “RGGI has had a tremendous impact in Connecticut through the state’s reinvestment of auction proceeds,” said Jamie Howland, Director of Acadia Center’s Energy Efficiency and Demand Side Initiative. “Continued use of RGGI revenue for clean energy investment is the surest path to realizing the thriving, low-carbon economy that Governor Malloy has envisioned for the state.”
In advance of the next Program Review meeting on April 29th, the groups call on Connecticut to lead partner states in pursuing ambitious reforms to the RGGI’s pollution reduction targets. Specifically, the letter calls for evaluation of pollution reductions of up to 5% per year from power plants covered by RGGI, an ambitious yet achievable rate that matches reductions since RGGI launched. “On a day of unprecedented international action on climate change, now is the time to be ambitious,” said Peter Shattuck, Director of Acadia Center’s Clean Energy Initiative. “Connecticut’s leadership will be vital to strengthening RGGI, and RGGI must be a vital part of Connecticut’s approach to addressing climate change.”
Looking beyond the power sector, the letter also commends Connecticut for partnering with other states to explore market-based approaches to reduce transportation sector emissions, which comprise an increasing share of regional climate pollution
RGGI Overview:
The Regional Greenhouse Gas Initiative (RGGI) is the first mandatory, market-based effort in the United States to reduce greenhouse gas emissions. Nine Northeastern and Mid-Atlantic states reduce CO2 emissions by setting an overall limit on emissions “allowances” which permit power plants to dispose of CO2 in the atmosphere. States sell allowances through auctions and invest proceeds in consumer benefit programs: energy efficiency, renewable energy, and other programs.
The official RGGI web site is: www.rggi.org
Contact:
Peter Shattuck, Director, Clean Energy Initiative
pshattuck@acadiacenter.org, (617) 742-0054 x103
Kiernan Dunlop, Communications Associate
kdunlop@acadiacenter.org, (617) 742- 0054 x107
###
Acadia Center is a non-profit, research and advocacy organization committed to advancing the clean energy future. Acadia Center is at the forefront of efforts to build clean, low-carbon and consumer-friendly economies. Acadia Center provides accurate and reliable information, and offers a real-world and comprehensive approach to problem solving through innovation and collaboration.
New York Grid Modernization Reforms Present Utilities with New Earnings Opportunities
New York State is in the midst of radically reforming its utility regulatory landscape— and eventually markets—to accelerate the integration of distributed energy resources (DERs) into the grid. DERs, like solar photovoltaics (PV) and energy efficiency, create opportunities for customers to manage their energy usage, improve power quality and resiliency, and help meet state clean energy and environmental goals. The radical reform all started in 2014 with the Reforming the Energy Vision (REV) initiative, which “aims to reorient both the electric industry and the ratemaking paradigm toward a consumer-centered approach that harnesses technology and markets.”
The Public Service Commission tasked with REV implementation has been considering a number of regulatory options to advance REV goals over the past two years. Earlier this year, the Commission held a technical conference focused on performance incentive tools – Earnings Impact Mechanisms (EIMs) and Market-Based Earnings (MBEs.)
Earnings Impact Mechanisms
Earnings Impact Mechanisms reward or penalize utilities for their performance with regard to certain targets, such as energy efficiency and peak demand reduction. The speakers noted that the mechanisms are one of the most effective and low risk regulatory tools and are crucial to achieving New York’s climate goals, but numerous questions remain about the exact EIM structure.
Clear guidelines and an adequate level of utility incentives are necessary for the EIMs to be effective, but at the same time, the mechanisms are meant only as a transition device to a future utility business model envisioned in REV and must not foster continued dependence.
The regulators should ultimately consider how EIMs fit into an overall utility revenue framework. If a utility hits an EIM performance target, it could earn a lump sum cash award or receive an adjustment to return on equity (ROE) basis points.¹ The former scheme is preferable according to the panel as an EIM tied to ROE is in direct conflict with the state’s strive to eliminate utilities’ incentive to favor capital expenditures. The EIMs must ultimately encourage utilities to utilize customer and third party capital to advance REV goals rather than grow their rate base. To further this objective, the Commission has also proposed a modified claw back mechanism that allows utilities to keep earnings on unspent capital as long as the reduction in capital spending is attributed to a distributed energy resource (DER) solution. In the absence of this provision, any reduction in capital spending would cut into utilities’ profits.
Besides the EIM design, the list of policy goals suitable for EIMs hardly gathered unanimous support from the panel. Joint Utilities argued that only metrics within utility control should have symmetrical as opposed to positive-only earnings impact – for instance, peak demand is subject to factors independent of utility actions, such as weather and economic activity in the service area. Joint Utilities also emphasized the need for revenue certainty and continued access to capital markets that may be jeopardized if utility earnings are at risk.
Market Based Earnings
Market Based Revenues represent an innovative revenue source for the utilities that offer services beyond their basic electric or gas service obligations. The discussion around MBEs focused on the composition and pricing of the utility value-added services. The Commission expects the utilities to earn platform service revenues (PSR) by virtue of serving as a distributed system platform (DSP) provider, an intermediary between consumers and third party DER sellers, as well as additional service-based revenues, such as advertising fees or engineering fees, for services that are available from either the utilities or third parties. The exact make up and structure of MBEs remain uncertain however and are largely explored through ongoing utility demonstration projects.
Panel participants proposed separate pricing approaches for PSRs and competitive MBEs. Considering utility’s monopoly position as a platform provider, using cost-based ratemaking for platform service fees to ensure nondiscriminatory and transparent rates is most appropriate. Conversely, competitive products and services that may be offered either by the utility or a third party should be market value priced upon comprehensive stakeholder input. In addition, consumers who choose to engage and take full advantage of the platform value-added services should bear the extra cost to prevent cost shifting to ratepayers who choose to limit their engagement with the platform.
Going forward Acadia Center will continue to closely monitor these discussions.
¹ The adjustment to basis points represents a change in the regulator-approved rate of return or profit a utility is allowed to earn on its rate base comprised primarily of its capital investments in long-term assets, such as transmission lines or power generation facilities.
Irina Rodina works as Staff Counsel for Acadia Center focusing on grid modernization and utility reform in New 
York State. Irina has extensive experience in environmental and energy policy, including renewable project development and market issues, community energy development, sustainable agriculture, and climate change.
Officials: Raiding carbon funds will increase power costs
… In a statement, the Acadia Center called the proposed raid shortsighted. “The raid would disadvantage consumers, increase pollution, undermine the state’s leadership on climate, and further erode confidence in the predictability of policy making,” said Jamie Howland, director of Acadia’s Climate and Energy Analysis Center.”It puts at risk Connecticut’s hard-earned credibility as a founding participant in the nation’s first carbon emissions trading program…”
What If We All Drove Electric Vehicles?
Electric Vehicles (EVs) are frequently discussed as an exciting new technology that will be able to dramatically lower transportation emissions in the region, while lowering costs to consumers. As battery costs continue to decline and technology improves, this promise looks closer than ever. The widespread adoption of EVs has another potential game-changing benefit – it could radically change the way we operate our electric system for the better.
The electric grid is built to ensure that the lights stay on during the times when electric usage is at its highest – generally summer afternoons during heat waves in this region. The rest of the time much of the infrastructure is being lightly used. Distributed Energy Resources (DER), sources of energy or energy conservation that are widely dispersed, offer the potential to change the way the grid is used and optimize the current physical infrastructure without needing to build more. Electric vehicles with 2-way connections to the grid could become a significant new DER. They could store energy when the grid is lightly taxed and feed it back onto the grid when it is most needed and could play a key role in offsetting the need to build large centralized power plants and transmission lines.
Acadia Center conducted an analysis to examine the potential impacts that EVs could have on the grid. We looked at the aggregate capabilities of switching every car in the New York / New England region to a Nissan Leaf. The Leaf is an all-electric vehicle, but its battery is relatively small compared to larger cars with greater range, which means this analysis did not look at the upper limits of potential. The Tesla Model S, for example, has a battery that has approximately three times more storage capacity than a Leaf. Switching all 10.5 million passenger cars in the New York and New England to 10.5 million Leafs would result in electric storage capacity of over 250 GWh. This is the equivalent of more than 30% of all electricity consumed in the region on an average day. The Leaf batteries would also have 850 GW of peak capacity, about 12 times more than all of the power plants in the region and 14 times more than the peak demand in the region during the highest-use hour on the hottest summer day of the year. Just tapping into a small portion of this battery capacity could dramatically reduce the need for new infrastructure in the region and could help smooth out the more variable production of renewable sources.
Jamie Howland leads Acadia’s 
Climate & Energy Analysis Center (CLEAN), and Energy Efficiency and Demand Side Initiative. His work as a policy analyst focuses on data management on energy markets and emissions trends, buildings and land use issues.
Budget Raid Would Squander $60 Million in Energy Benefits & Undermine Climate Leadership
Budget proposals from the Connecticut legislature would slash $20m in funding from Connecticut’s clean energy programs, costing the state and consumers approximately $60 million in benefits from energy savings programs. Raiding clean energy and climate programs would threaten Connecticut’s progress to date addressing climate pollution, and undermine the state’s standing with partners in multi-state Regional Greenhouse Gas Initiative (RGGI).
“We are deeply troubled by this shortsighted proposal,” said Jamie Howland, Direct of Acadia Center’s Climate and Energy Analysis Center. “The raid would disadvantage consumers, increase pollution, undermine the state’s leadership on climate, and further erode confidence in the predictability of policy making. It puts at risk Connecticut’s hard-earned credibility as a founding participant in the nation’s first carbon emissions trading program.”
Through Connecticut’s award-winning energy efficiency programs, revenue from RGGI – which Connecticut currently chairs – supports programs that reduce ratepayer energy bills while creating jobs and spurring the economy. In 2015, Energize Connecticut achieved $3.98 in lifetime energy savings for each dollar invested. The General Assembly’s budget proposal would deprive energy efficiency programs of $15 million in 2017, which is what would cost consumers the approximately $60 million mentioned above.
The remaining $5 million of the proposed $20 million raid would be drawn from the Connecticut Green Bank, which provides an important source of funding for Connecticut’s renewable energy industry. Green Bank-funded clean energy programs reduce expenditures for fossil fuels imported to generate power and heat homes, thus making Connecticut more competitive while reducing carbon emissions.
Examples of the types of projects supported by RGGI funding include efficiency upgrades to the Connecticut Children’s Medical Center in Hartford, solar for the John Lyman Elementary School in Middlefield and Bishop’s Corner Library and Senior Center in West Hartford, and incentives for thousands of homeowners and businesses to reduce energy waste.
Acadia Center’s fact sheet on the proposed raid is available here.
RGGI Overview:
The Regional Greenhouse Gas Initiative (RGGI) is the first mandatory, market-based effort in the United States to reduce greenhouse gas emissions. Nine Northeastern and Mid-Atlantic states reduce CO2 emissions by setting an overall limit on emissions “allowances” which permit power plants to dispose of CO2 in the atmosphere. States sell allowances through auctions and invest proceeds in consumer benefit programs: energy efficiency, renewable energy, and other programs.
The official RGGI web site is: www.rggi.org
Contact:
Jamie Howland, Director, Energy Efficiency and Demand Side Initiative
jhowland@acadiacenter.org , (860) 246-7121 x201
Kiernan Dunlop, Communications Associate
kdunlop@acadiacenter.org, (617) 742- 0054 x107
###
Acadia Center is a non-profit, research and advocacy organization committed to advancing the clean energy future. Acadia Center is at the forefront of efforts to build clean, low-carbon and consumer-friendly economies. Acadia Center provides accurate and reliable information, and offers a real-world and comprehensive approach to problem solving through innovation and collaboration.
What Massachusetts can learn from New York’s solar experience*
Over the past several years, Massachusetts has been able to deploy more than 1000 megawatts of solar capacity. This remarkable success is due to an interrelated set of policies that made solar an attractive investment for customers and a viable business opportunity for developers to invest and hire in the Commonwealth. These policies are now under the microscope on Beacon Hill as lawmakers seek to develop a balanced approach that promotes continuing solar development while accounting for declining technology costs and reduced need for bonus incentives…
*Written by Acadia Center’s Peter Shattuck and Mark LeBel