In Light of CPP, Midwest States Look to Established Carbon Markets

…”It’s encouraging to see increasing interest in regional mass-based trading. Allowing market participants the flexibility to determine how and where to reduce emissions results in environmental improvement at the least cost to ratepayers. This has proven to be the case in the [RGGI] states, where, since the program began, significant emissions reductions have coincided with lower electricity prices,” Jordan Stutt, policy analyst with think-tank Acadia Center, said… (This article is available only with a subscription to SNL Financial)

Acadia Center Welcomes Chuck Quintero as Clean Energy Community Engagement Director in Maine

Rockport, ME –Acadia Center is pleased to announce that Chuck Quintero is joining the organization as Director of Clean Energy Community Engagement (Maine), where his focus will be on raising awareness, network building and advancing Acadia Center’s clean energy program goals.

“We’re very excited that Chuck is joining our team. Chuck’s deep knowledge of Maine and extensive experience in state government and community outreach will contribute greatly to our work to advance a consumer-friendly, more local and clean energy system that will strengthen our communities and position Maine for a stronger economic future,” said Daniel L. Sosland, Acadia Center President. “Chuck’s background makes him an informed and effective leader in Maine’s energy and policy landscape.”

Chuck comes to Acadia Center with two decades of experience in government and politics. He has extensive experience in Maine public affairs, managing multiple statewide campaigns for the Maine Democratic Party and serving in both the state’s legislative and executive branches, as chief of staff to the Senate president, a former Senate majority leader, and as a legislative liaison for former Governor John Baldacci. Chuck has coordinated event planning for the Office of the President and served in a series of positions on outreach, advance team services and communications with the New Jersey Governor’s Office and on national campaigns.

Chuck holds a B.A. in Biology from Manhattanville College and resides in Richmond, Maine with his wife and two young children.

Contact:

Daniel L. Sosland, President, Acadia Center, 207-236-6470, dsosland@acadiacenter.org

Emily Avery-Miller, Director External Relations, Acadia Center, 207-576-6550, eavery-miller@acadiacenter.org

 

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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.

 

CT Mirror/AARP Google Hangout: Fixed-Rate Cap on Electric Rates

Along with sponsor AARP, The Connecticut Mirror hosted its fourth Google Hangout of the 2015 Connecticut Legislative session to discuss variable rates and the fixed-rate cap with third-party electric retailers. The panel consisted of William Dornbos, Senior Attorney and Director, Connecticut Office for Acadia Center; Elin Swanson Katz, Consumer Counsel, State of Connecticut; and John Erlingheuser, Chief Lobbyist for AARP Connecticut.  Dornbos’s commentary begins at 11:20.

 

For more information on the fixed-rate cap in Connecticut read our analysis here.

 

Source: http://ctmirror.org/2015/05/27/ct-mirroraarp-google-hangout-fixed-rate-cap-on-electric-rates/ 

 

 

Cutting Carbon Pollution While Promoting Economic Growth

According to a report by Acadia Center, a nonprofit organization dedicated to advancing clean energy policy, RGGI “provides both a proven template for state action and an example of the capacity to clean up the power sector while benefiting consumers.” Acadia’s report further argued that “RGGI’s flexible, market-based system reduces emissions at lower cost than alternative approaches” and provides states with “the flexibility to achieve distinct local objectives.” It suggested that joining RGGI would be the best way for the state of Virginia to comply with the Clean Power Plan.

New Analysis: $10 Fixed Electric Charge Cap to Lower Most CT Monthly Bills for Eversource Energy’s Residential Customers

At Connecticut’s General Assembly these days, a debate is raging about consumers’ control over their electric use and costs. On one side, the utilities defend ever higher “fixed charges” on electric bills; on the other, consumers and their advocacy allies push to lower and cap those charges at $10. A fixed charge is a monthly flat minimum charge on a customer’s electricity account that should be an accurate calculation of the minimum, short-term fixed cost of connecting a customer to the grid. High fixed charges hurt consumers by increasing the amount that must be paid regardless of energy use. These fixed charges interfere with benefits from energy efficiency measures and diminish consumer control over energy generation, consumption, and costs.

With the highest residential fixed charges in New England for any major electric utility, Connecticut’s Eversource Energy and United Illuminating continue to increase already high fixed charges and to oppose legislative attempts to lower or cap these charges. In response to inaccurate information distributed by Eversource lobbyists at the Capitol, Acadia Center completed an analysis which shows that significantly more than half of Eversource residential customer monthly bills would decrease if the General Assembly enacts a $10 fixed charge cap, as proposed in a pending Senate bill.

In a May 12th email, an Eversource lobbyist claimed that, “more than half of our customers would see an increase in their overall bill if the fixed charge is lowered,” and that, “a $10 fixed charge is actually more regressive than a $19.25 fixed charge.” However, using information provided by Eversource in its 2014 rate case before the Public Utility Regulatory Authority (PURA), Acadia Center found that:

  • All residential customers using less electricity than the average in a given month would pay less if the fixed charge decreases from $19.25, the existing amount, to $10, the maximum allowed under the proposed cap;
  • 61% of monthly bills in Eversource’s primary residential rate class fall below the actual average of 730 kilowatt hours per month; and,
  • Increasing the residential fixed charge to $25.50 per month—the amount sought by Eversource in its rate case—would increase monthly bills for all customers that use less electricity than the average.

 

The analysis showed that an overwhelming majority of Eversource’s approximately 1 million residential customers would pay higher bills and would see a decreased incentive to use energy efficiently under the utility’s high fixed charge approach. This analysis rebutted claims by Eversource lobbyists that consumers do not stand to benefit from lower fixed monthly charges.

Fixed Charge CT Graph

Acadia Center released its analysis of Eversource’s claims against the fixed charge cap on May 18th. The issue continues to be debated in Connecticut’s General Assembly with a vote hopefully soon to be scheduled in the Senate on Senate Bill 570.

 

Learn more about fixed charge caps from Acadia Center’s Senior Attorney and Connecticut Office Director Bill Dornbos by watching this panel discussion video: CT Mirror/AARP Google Hangout: Fixed-Rate Cap on Electric Rates

 

Principles to Strengthen the RGGI Program

The Regional Greenhouse Gas Initiative (RGGI)—a market-based program developed to reduce CO2 emissions from the power sector—has been a success through its first six years of operation. Since the program began in 2009, the nine participating states have seen electricity prices fall while harmful emissions from the power sector have been reduced. Revenue from emission allowance auctions has been reinvested in programs that help consumers make energy efficiency improvements in their homes and save on energy costs. RGGI’s success shows the ability of market-based approaches to deliver cost-effective emissions reductions, and demonstrates how states can work together to develop sound energy policies.

Ahead of the upcoming 2016 RGGI Program Review process, Acadia Center and 31 other environmental groups and clean energy businesses have produced a set of joint principles to strengthen the program and enable the RGGI states to comply with U.S. EPA’s Clean Power Plan which requires reductions in power plant carbon emissions nation-wide (30 percent below 2005 levels by 2030). The following reforms to RGGI are needed to meet these requirements and improve the program going forward.

1) Extend the RGGI Cap

The RGGI cap currently extends to 2020, while EPA’s Clean Power Plan requires that states demonstrate how they will meet emissions targets in 2030. By extending the RGGI cap to 2030, the RGGI states will be consistent with EPA’s targets and will provide market certainty to encourage clean energy investments.

2) Correct the Emissions Cap Decline Trajectory

The way the RGGI cap declines must be corrected to ensure achievement of deeper long-term emissions reductions. The current cap declines by 2.5% annually based on a percentage of the prior year’s cap. Instead, the cap should decline by 2.5% of the 2014 base year, and continue to decrease by that same fixed quantity of allowances each year. By 2050, the percentage-based reduction would allow four times more emissions than the fixed quantity approach and could prevent states from meeting their 2050 GHG reduction targets.

Graph 1 RGGI Program Updates

3) Revise or Remove the Cost Containment Reserve

In order to reduce price volatility, the RGGI states established a Cost Containment Reserve (CCR) that creates additional allowances when price thresholds are reached. The release of additional allowances could push RGGI emissions above EPA’s proposed 2030 emissions targets and prevent the RGGI states from achieving compliance with the Clean Power Plan. The CCR should be modified to ensure achievement of emissions reductions by drawing allowances from under the cap, rather than minting new allowances.

Graph 2 RGGI Program UpdateWith the changes above, the RGGI states will demonstrate a commitment to driving emissions reductions while creating a model of compliance with the federal Clean Power Plan for other states to emulate.

Consumer Advocates, Eversource Energy Spar Over Cap on Fixed Charges

… A report released Monday by the Acadia Center says more than half of Eversource Energy’s customers would see their electric bills decrease if the legislation, which would cap fixed-rate charges at $10, is approved by both the state Senate and House of Representatives and signed into law by Gov. Dannel P. Malloy. But the legislation has not yet been voted on by the Senate, said William Dornbos, a senior attorney the Acadia Center and director of the organization’s Connecticut office…

Report: RGGI Changes Will be Needed under Clean Power Plan

Clean-energy supporters at Acadia Center have completed a report finding certain changes will be necessary to the Regional Greenhouse Gas Initiative in order for it to align with new carbon mandates, including extending the RGGI cap to at least 2030.Thus far the Northeast regional effort aimed at reducing emissions has seen a 45% reduction in greenhouse gas emissions, $630 million in energy efficiency funding, and $2.3 billion in consumer savings.

New Analysis Shows that Capping the Fixed Electric Charge at $10 Will Lower the Majority of Monthly Bills for Eversource Energy’s Residential Customers

Hartford, CT – Rebutting inaccurate information publicly provided by Eversource Energy in response to efforts to place a ceiling on fixed minimum customer charges, new analysis released today by Acadia Center shows that significantly more than half of residential customers’ monthly bills would decrease if the General Assembly enacts a $10 fixed charge cap, as proposed in pending Senate Bill 570.
Using information provided by Eversource in its 2014 rate case before the Public Utility Regulatory Authority (PURA), Acadia Center found that:

  • All residential customers that use less electricity than the average in a given month would pay less if the fixed charge  decreases from $19.25, the existing amount, to $10, the maximum allowed under S.B. 570’s proposed cap;
  • 61% of monthly bills in Eversource’s primary residential rate class fall below the average of 730 kilowatt hours per month; and,
  • Increasing the residential fixed charge to $25.50 per month—the amount sought by Eversource in its rate case—would increase monthly bills for all customers that use less electricity than the average.

 

“Policymakers deserve to have sound facts and transparent analysis put before them on the critical issue of high fixed charges,” said Daniel L. Sosland, Acadia Center President.  “An overwhelming majority of Eversource’s approximately 1 million residential customers will pay higher bills and have their incentive to use energy efficiently thwarted under Eversource’s high fixed charge rate approach.  Claims by Eversource that consumers do not stand to benefit from lower fixed monthly charges conflict with reality.”

In an email sent to state legislators on May 12, 2015, an Eversource lobbyist claimed that, “more than half of our customers would see an increase in their overall bill if the fixed charge is lowered,” and that, “a $10 fixed charge is actually more regressive than a $19.25 fixed charge.”  Eversource did not disclose the data or analysis supporting these billing impact claims, instead only releasing selective information on four residential customers with monthly energy consumption ranging from slightly above average to extremely high.
The residential billing information that Eversource submitted in its 2014 rate case does not support these claims.  Acadia Center analyzed billing frequency data submitted as an exhibit by an Eversource rate design expert and determined that a majority of residential monthly bills in the Rate 001 class—the primary residential customer class—fall below the average level of consumption.
AcadiaCenter_Chart_DistofEversource2013ResRate001MonthlyBills
The results are similar for the other two Eversource residential rate classes: 58% of monthly bills in Rate 005, a closed electric heating class, fall below the 1103 kWh average and 64% of monthly bills in Rate 007, a very small time-of-use class, fall below the 1060 kWh average.

Acadia Center then analyzed three fixed charge scenarios to reveal the monthly billing impact on Eversource’s residential customers.  The three scenarios were:  (1) leaving the fixed charge at its current amount of $19.25 per month; (2) reducing it to $10 per month, which would be the maximum allowed under S.B. 570; and (3) increasing it to $25.50 per month, the amount sought by Eversource in its 2014 rate case.  The results prove that high fixed charges are more regressive than low fixed charges, as the billing impact on low-use customers increases as the fixed charge increases.
AcadiaCenter_Chart_CTResFixedChargeScenarios
“The math is undeniable,” said William E. Dornbos, Acadia Center CT Director and Senior Attorney. “More residential bills will go down if the General Assembly acts to cap these excessive and ever-increasing fixed charges.  We need to end our overreliance on this regressive way to price electricity, and so we urge the General Assembly to pass Senate Bill 570 this session.”

In a handout distributed to legislators earlier this month, Eversource also claimed that low-income hardship customers had average electricity usage between 750 and 1100 kilowatt hours per month, implying that any decrease in the fixed charge would burden them disproportionately.

“In reviewing the transcripts from Eversource’s rate case, we noticed that their testimony on this point is in direct conflict with the handout’s claim,” said Jamie Howland, Acadia Center’s Director of Climate and Energy Analysis.  “An Eversource rate design witness testified that average hardship customers actually used less than the overall average for each residential class.”
AcadiaCenter_Chart_AvgMonthlyElectricUsageEversourceHardshipandAllCustomers
Acadia Center also researched publicly-available data on the relationship between income level and electricity use and found that there is a strong correlation between the two factors, as shown in the following chart.
AcadiaCenter_Chart_NEResidentialElectricConsumption
“What this correlation means is that low-income households in Connecticut will, on the whole, benefit from any reduction in the fixed charge,” said Howland.  “It’s always possible to pick outlier examples when analyzing rate design scenarios, but the best way to evaluate billing impacts is by customer class, not through selective customer anecdotes.”
“We believe that the facts demonstrate that capping the fixed charge in Connecticut at $10 will benefit a majority of customers and support public policy goals,” said Sosland. “It is important that policy decisions be made based on accurate information.  Our goal with this analysis is to contribute to an open and honest debate about this issue.”

[Above referenced Eversource 2014 rate case testimony can be found here]
Background on the Fixed Charge in Connecticut
A fixed charge is a monthly flat minimum charge on a customer’s electricity account, sometimes called a customer service charge. The fixed charge should be an accurate calculation of the minimum, short-term fixed cost of connecting a customer to the grid. These costs should be limited to the cost of the customer’s meter, service drop, and metering and billing.
Most major utilities in New England (outside of Connecticut) have residential fixed charges in the $5-10 range.  Notably, the three Massachusetts operating units of NSTAR Electric (now part of Eversource) have residential fixed charges of $6.43, $6.87, and $3.73 per month.  Western Massachusetts Electric Co., also part of Eversource, charges $6 per month.  The region’s other major multi-state utility, National Grid, has residential fixed charges of $4 and $5 in Massachusetts and Rhode Island, respectively.
The residential fixed charges of Eversource Energy (formerly Northeast Utilities and its local subsidiary, Connecticut Light & Power) and United Illuminating are, respectively, the highest and the second highest in New England for any major electric utility.  Eversource’s is now $19.25 per month, a twenty percent increase over the previous amount.  UI’s is now $17.25 per month. Eversource’s residential fixed charge was last in the reasonable range in 2007, when it was $9.99 per month.   Since 2004, both utilities have increased their residential fixed charges at a pace more than four times faster than the cumulative rate of inflation for that same time period.
Both utilities can be expected to seek additional increases in their next rate cases (possibly 2016 or 2017).  In its 2014 rate case, Eversource proposed a residential fixed charge of $25.50, while asserting that its analysis showed it was actually entitled to a $34.96 charge.

Contact

William Dornbos, Senior Attorney and Director, Connecticut Office, 860-246-7121 x202, wdornbos@acadiacenter.org

Emily Avery-Miller, Director External Relations, Acadia Center, 617-742-0054 x100, eavery-miller@acadiacenter.org

 

Download here:

052015_AcadiaCenter_PressRelease_CTFixedChargeScenarios_Final

Your View: Fee-and-Refund Carbon Pricing Model Works for People and Business

If you could pass legislation that would reduce greenhouse gas emissions, return money to Massachusetts residents and businesses, increase the number of jobs in the state, and accelerate the growth of the commonwealth’s clean energy sector, why wouldn’t you? Massachusetts has the opportunity to be a national leader on one of the most urgent issues of our time — climate change — just as we were with universal health care and marriage equality. We can do that by becoming the first state in the nation to pass carbon fee and refund legislation, a market-driven system that will benefit both the environment and the economy.