Will the country’s first mandatory residential demand charge slow the Massachusetts solar boom?
Environmental and DER advocates strongly objected to the new rate design. Acadia Center argued it is “inconsistent” with “rate design principles of efficiency and fairness.” The New England Clean Energy Center (NECEC) argued it will cause “arbitrary” and “extraordinary and unreasonable” bill impacts. Both Massachusetts’ Attorney General (AG) and Department of Energy Resources (DOER) concurred.
[…]
Acadia Center Attorney Mark Lebel told Utility Dive the approval of the non-coincident demand charge and the separate rate for DER owners was unexpected because they were unprecedented. “Most students of rate design generally tend to find those two things not the best kind of ratemaking.”
A non-coincident demand charge applies a per-kW charge for the customer’s highest 15 minutes of usage, whether that 15 minutes coincides or does not coincide with the system peak demand. It is considered poor ratemaking because the customer’s reduced usage, in response to the price signal, does nothing to reduce the system’s peak like it would if the demand charge coincided with the system’s peak.
“Acadia Center proposed a distribution reliability charge that could be implemented more gradually with current metering,” LeBel said. “It would be a variation on a three-part rate where the third part, instead of a demand charge, would be a rolling 12-month average of kWh consumption.”
It deals with Eversource’s displaced distribution revenues by not counting months “in which exported generation exceeded imported electricity,” he added. “It addresses the cost shift as effectively as this non-coincident demand charge. A coincident demand charge should be on the table when we have the right advanced metering technology and customer education,” he said.
The argument by Eversource and the commission that DER owners will figure out how to avoid running major appliances at the same time is harder than it sounds, he added. And the DPU order on customer education highlights “how unprepared Massachusetts residential customers are for the complications of a demand charge.”
Good and bad demand charges
The Acadia Center, along with NECEC, Vote Solar and others argued in their filings that a customer’s non-coincident peak “fails to track the peak demand that drives system costs.” The result is that “customers whose demand peaks outside of system peak periods would pay too much, and customers whose individual peaks coincide with system peaks may pay too little.”
[…]
But the DPU ruling does not say the customer education program must be executed ahead of the rate implementation, LeBel noted.
DPU rulings are often appealed to the Massachusetts Supreme Judicial Court (SJC) and the attorney general, who acts as a ratepayer advocate, is already contesting parts of the November decision, he added. “You could reasonably expect an appeal of the rate design at the SJC and a judgment before the end of the year.”
Addressing the DPU ruling will also likely “rise to the shortlist of priorities for clean energy advocates at the state legislature,” LeBel said. Eversource is politically influential, but “the message that this is a threatening precedent will resonate with a lot of Massachusetts legislators.”
The legislature could enact a prohibition on demand charges for residential customers, he suggested. Lawmakers could also provide more specific guidance about the MMRC that prevents using it in this way.
“The problem is the legislature didn’t define MMRC and there is no pre-existing policy definition, which gave discretion to the DPU, which it used,” Lebel said. “This is an opportunity to clean all that up and there’s nothing like a really bad proposal to unite stakeholders around a remedy.”
Read the full article from Utility Dive here.
Advocacy groups oppose National Grid rate hike
The groups that oppose the rate settlement include the Alliance for a Green Economy, PUSH Buffalo, Acadia Center and Syracuse United Neighbors. They jointly released a statement earlier this week opposing the plan, which would gradually increase the typical monthly residential gas and electric bill for upstate National Grid customers by $16 by 2020. The coalition said the rate plan did not go far enough to make gas and electric service affordable for low-income customers or do enough to push renewable sources of energy.
Read the full article from the Times Union here.
Consumer and environmental advocates release statements opposing National Grid settlement proposal
After months of negotiations, a Joint Proposal was filed Friday, January 19, in the National Grid rate case, representing the settlement position of some parties in the case. The new proposed increases are as follows:
Under the agreement, the fixed charge for electricity would remain at $17.00 per month. The fixed customer charge is the portion of the bill that does not change, no matter how much electricity the customer uses. For more information see: www.lowerfixedcharges.org.
The Joint Proposal will now be open for public comment and consideration by the Public Service Commission. In response to the filing, some parties to the case who do not support the settlement released the following statements:
Cullen Howe, Acadia Center’s New York Director, said: “Acadia Center is disappointed that the Joint Proposal filed today does not address National Grid’s high fixed charges of $17 per month for residential customers. In contrast to its high fixed charges in New York, National Grid has a residential fixed charge of only $5 in Rhode Island and $5.50 in Massachusetts. These high fixed charges reduce customers’ ability to lower their electricity bills by using less energy, and they are ultimately incompatible with the energy future envisioned by New York’s Reforming the Energy Vision, which anticipates wide deployment of distributed energy resources and increased energy efficiency. By not addressing these charges, these goals are much more difficult to achieve.”
Jessica Azulay, Program Director of Alliance for a Green Economy, said: “We are disappointed that we were unable to reach an agreement with the parties in this case that would prevent a rate hike and support the State’s environmental goals. While there are some improvements made in the filed agreement as compared to National Grid’s original proposal, it does not go far enough to protect low-income households and the environment. In particular, we oppose any rate increase at a time when there is already an untenable affordability and economic crisis in Upstate New York, and we further call on the Public Service Commission to reduce the fixed charges on our bills. These fixed charges, which customers must pay regardless of how much energy they use — disproportionately hurt low-income customers by impeding their ability to control their bills through conservation, efficiency, and renewable energy participation. Finally, we oppose the provisions in the proposal that support ratepayer investments and incentives for gas expansion. The climate crisis demands that we stop investing our public money into gas infrastructure and that we support renewable-based heating options instead.”
Clarke Gocker, Director of Policy and Strategy at PUSH Buffalo, said, “Low income National Grid customers in Buffalo and Western NY struggle to afford the high cost of utility bills and want nothing more than to take control over their energy consumption, whether it’s through conserving energy, participating in no cost or cost-effective energy efficiency programs, or accessing rooftop and community solar opportunities that afford them real decision making power and actual savings. The Joint Proposal filed today with the Public Service Commission in the National Grid rate case fails to deliver the kind of direct benefits that can permanently reduce household energy burdens and create the conditions for energy democracy in marginalized communities. While settlement negotiations in the case, together with fallout from the recent federal tax cut plan, have appeared to reduce the potential rate impact for customers, any increase in utility rates is extractive and unaffordable for low income customers in our community, and for that reason PUSH Buffalo opposes the terms reached in the Joint Proposal.”
Rich Puchalski, Executive Director of Syracuse United Neighbors, said: “The Joint Proposal fails to once again look at the historic policies that have forced high electric and gas rates on low income families in Syracuse for all too long. Those living in 1, 2 and 3 family poorly insulated wood frame homes are shelling out hundreds of dollars especially in the last couple of months of below freezing temperatures. Shutoffs will escalate. Credit will be ruined, and the poor can’t manage their way out of the bills they get from National Grid. And this is a 3-year plan! HELP.”
The public can submit comments to the Public Service Commission on the Joint Proposal at this web address: http://documents.dps.ny.gov/public/Comments/PublicComments.aspx?MatterCaseNo=17-E-0238
Comments can also be submitted through the following websites, which have samples and talking points available to aid in comment writing:
www.allianceforagreeneconomy.org/new-year
www.lowerfixedcharges.org
All documents related to the case can be found here:
http://documents.dps.ny.gov/public/MatterManagement/CaseMaster.aspx?MatterCaseNo=17-E-0238&submit=Search
Media Contacts:
Cullen Howe, Senior Attorney & New York Director
chowe@acadiacenter.org, 212-256-1535 x501
Krysia Wazny, Communications Director
kwazny@acadiacenter.org, 617-742-0054 x107
Is cap and trade the climate solution? The jury’s still out
Acadia Center Policy Analyst Jordan Stutt said the most impressive thing about RGGI is that it has proved “ambitious emissions reductions” and “economic growth” can be achieved together. “A major part of that is the benefits from the reinvestment of auction proceeds,” he told Utility Dive.
Read the full article from Utility Dive here.
New Hampshire, Northeast states mull building Quebec-to-D.C., EV charging network
That infrastructure is “certainly a region-wide priority,” said Mark Lebel, staff attorney at the Acadia Center, a clean energy nonprofit with offices across the Northeast. “Many of the plans are still in development, and they’ll have to solicit public comment, but there’s great interest in maximizing use of the 15 percent,” said Kathy Kinsey, a senior policy adviser at NESCAUM, a nonprofit association of air quality agencies in the Northeast.
Read the full article from the New Hampshire Business Review here.
Energy study draws divergent reactions
Mark LeBel, a staff attorney at the Acadia Center, an environmental advocacy group, cited what he called three major deficiencies in the report. He said it treats demand for natural gas for heating as a constant over the next decade, assumes no growth in onshore wind power in its renewables forecast, and downplays the beneficial impact electricity storage could have on the power grid.
Read the full article from CommonWealth Magazine here.
Mass DPU OKs new ‘demand charge’ on residential solar customers in Eversource territory
The non-profit Acadia Center said the DPU “rubberstamped” a ruling for Eversource that is “harmful to consumers” and counterproductive to the growth of energy efficiency, storage, electric vehicles, and rooftop solar. The groups said that Eversource does not provide “smart metering” that lets customers understand and manage their peak usage, leaving consumers with little control over the demand charge.
Read the full article from MassLive here.
Massachusetts approves new demand charge for Eversource’s net metering customers
Demand charges are very controversial among renewables and clean energy advocates, and Massachusetts’ decision has set the stage for intense debate over rate design. “Massachusetts needs to step up its game and embrace smarter electricity rates and more customer control,” Daniel Sosland, president of Acadia Center, said in a statement. He said eliminating optional residential time-of-use rates and approving demand charges shows the state “is moving backwards instead of forward.”
Read the full article from Utility Dive here.
MA Department of Public Utilities Order Damages Clean Energy and Consumer Control
BOSTON—On Friday, January 5, 2018, the Massachusetts Department of Public Utilities (MA DPU) issued an order on a major rate case involving Eversource, the Commonwealth’s largest utility, which provides service from Boston to the Berkshires. In Docket 17-05, the DPU rubberstamped a range of proposals by Eversource including demand charges for new residential solar projects starting on December 31, 2018 and the elimination of optional time-of-use rates for residential customers. Acadia Center is an intervenor in the rate case and opposed these proposed changes, along with numerous other parties, as harmful to consumers and counterproductive to incentives for consumer-friendly, clean energy technologies that should be the cornerstone of a modern energy system: energy efficiency, storage, electric vehicles, and rooftop solar.
“In order to achieve a cleaner, modern, more efficient and consumer-friendly energy system, Massachusetts needs to step up its game and embrace smarter electricity rates and more customer control. Rate reform should provide customers with the right tools, including understandable incentives to reduce energy use and invest in clean energy technologies,” said Daniel Sosland, president of Acadia Center. “By eliminating optional residential time-of-use rates and approving complicated demand charges, the Department is moving backwards instead of forward.”
“Demand charges” are charges based on the highest peak hourly usage by a customer over the course of a month, regardless of when that electricity is used. Given the lack of sophisticated metering in Massachusetts, there is no way for consumers to know what time this peak occurred and what actions could be taken to manage these charges. As a result, consumers will be paying the highest possible rate for this charge without being provided the information needed to understand the cause of these costs. Importantly, because an individual customer’s peak usage does not necessarily correspond to peak demand across the utility’s electricity system, consumers are not being provided incentives to reduce energy usage in a way that could benefit the whole electricity system. The result is that opportunities to reduce peak demand—which drives costs for the system at large—will be lost. Acadia Center co-authored a paper on issues with demand charges in 2016.
“Acadia Center and other intervenors in the Eversource rate case made a detailed case that demand charges are not understandable by small customers and are inefficient because they are not tied to the peak times that drive costs,” said Amy Boyd, Senior Attorney and lead counsel for Acadia Center in the rate case. “The Department has chosen to move forward despite these issues. In addition, elimination of residential time-of-use rates harms efforts to reduce the costs associated with peak usage across the system through energy efficiency and other investments made by customers.”
Mark LeBel, Staff Attorney and expert witness in the rate case, said: “Imposition of demand charges on new residential solar customers starting in 2018 is a mistake. The Department has taken an unreasonable approach to addressing any issues with net metering and ignored Acadia Center’s proposals for more gradual reforms over time, including a distribution reliability charge that could be implemented with current metering.”
Media Contacts:
Amy Boyd, Senior Attorney
aboyd@acadiacenter.org, 617-742-0054 x102
Mark LeBel, Staff Attorney
mlebel@acadiacenter.org, 617-742-0054 x104
Krysia Wazny, Communications Director
kwazny@acadiacenter.org, 617-742-0054 x107
Following Bonn Announcement, Leaders and Stakeholders Gather at The Fletcher School of Law and Diplomacy to Discuss the Future of Transportation
MEDFORD, MA—On January 11, 2018 stakeholders from across the northeast region will gather at The Fletcher School of Law and Diplomacy at Tufts University for “The Future of Transportation Symposium: Innovation, Technology & Policy,” a one-day conference co-hosted by Acadia Center and The Fletcher School’s Climate Policy Lab in their Center for International Environment and Resource Policy, and in partnership with Transportation for Massachusetts (T4MA) and other allies.
The symposium will serve as a forum for conversations about how the region can address transportation pollution, access, and innovation from academic, policy, and business perspectives.
The conference follows the November announcement at COP23 in Bonn, Germany by seven states—Massachusetts, Connecticut, Rhode Island, Delaware, New York, Maryland, Vermont, and Washington, D.C.—that they will explore regional climate policies for the transportation sector by holding listening sessions in the coming months. Massachusetts Governor Charlie Baker’s administration recently held several well-attended listening sessions, generating input from many members of the public and groups that want to see progress in this area. “The Future of Transportation Symposium” is an opportunity for stakeholders and policy makers to gather and discuss the best approaches and practices to shape state and regional transportation policy.
The symposium will also highlight the leadership of Massachusetts in working to promote modern, forward-looking transportation policies. Matthew Beaton, Secretary of Energy and Environmental Affairs, will open the day’s activities with an address about the future of transportation in Massachusetts and across the region.
In addition to T4MA, symposium partners include the Environmental League of Massachusetts and the Metropolitan Area Planning Council.
WHAT: The Future of Transportation Symposium: Innovation, Technology & Policy – convened by The Fletcher School’s Climate Policy Lab and Acadia Center
WHO: Matthew Beaton, Secretary of Massachusetts Executive Office of Energy and Environmental Affairs; Barbara Kates-Garnick, Professor of Practice at The Fletcher School and former Undersecretary of Energy for the Commonwealth of Massachusetts; Daniel L. Sosland, President, Acadia Center
WHERE: Alumnae Hall, Tufts University, 40 Talbot Ave, Medford, MA 02155
WHEN: January 11, 2018 10 a.m.- 4 p.m.
A complete agenda and list of speakers is available here.
Media Contacts:
Lindsay Hammes, Communications and PR Specialist, The Fletcher School
Lindsay.hammes@tufts.edu, 617-627-2447
Krysia Wazny, Communications Director, Acadia Center
kwazny@acadiacenter.org, 617-742-0054