NESEA’s 2024 Building Energy Boston Conference – Echoing the Importance of Resilience in Climate Solutions

The impacts of climate change have become dramatically more adverse in recent years. From extreme heat and disastrous wildfires to severe flooding and melting ice sheets – the list goes on. A recent collaborative study by Berkeley National Laboratory and the University of Michigan supports the idea that these extreme conditions will continue to worsen as time passes. Increasingly, and despite inroads being seen on decarbonization nationally and internationally, the built environment will not be spared by the harmful impacts of the changing climate.

A timely conversation to address climate impacts and prepare communities to be more resilient was recently put together by the Northeast Sustainable Energy Association (NESEA). With the theme, Climate Resilience, NESEA convened policymakers, design and construction workers, representatives from government agencies, and others from the climate and energy sector to brainstorm solutions to the dire and urgent demands of climate in the building sector.

As Acadia Center’s Environmental Justice & Outreach Manager, I attended the two-day Building Energy Conference from March 19 through March 20. I was part of the 26-member content committee that curated and supported almost 50 seminars presented during the conference. Two keynote addresses on Climate Change: What Will You Do when Your Project Floods? and The Power of Systems Thinking: Designing Equitable and Resilient Infrastructure were presented on the two consecutive days of the conference, ensuring that solutions brainstormed resonated with the theme of the conference. I supported two seminar sessions on Virtual Microgrids in Low-Income Communities and Tools for Inclusion in the Workplace, leveraging my understanding of equity and environmental justice policy and her experience in workplace diversity, equity, inclusion, and justice practice.

As recent as two years ago, Acadia Center developed a thorough report to summarize carbon emissions resulting from uninsulated low-quality housing in the Northeast. Overall, direct building sector emissions make up a significant portion of emissions in the northeast – a close second behind transportation sector emissions. Aside from the contribution to greenhouse gas emissions, buildings also contribute significantly to indoor air quality, making it a climate change concern and a public health issue. As a result, NESEA’s conference on Climate Resiliency in the building sector has brought this much-needed conversation to light.

Acadia Center is proud to work with our partners and other stakeholders in the building sector. We will ensure that our work strives for rapid emissions reductions from this sector in the coming years and decades ahead.

The Planning Process for NESEA’s 2024 Building Energy Conference in NYC is ongoing with calls for proposals. Visit https://nesea.org/conference/buildingenergy-nyc-2024 for more information to participate and support.

Restructuring for Net Zero – A More Unified Future Vision Emerges

Acadia Center’s President, Dan Sosland, was pleased to participate in the March 2024 Restructuring Roundtable event in Boston. The now decades-old convening that brings together key energy thought-leaders and stakeholders for timely discussions on the evolving market, technology, and policy landscape in New England. Borne out of the electricity industry restructuring of the late 1990s, it is fitting that the ‘restructuring’ title is still being used for these gatherings, as the ‘i-n-g’ ending connotes a process that is still actively unfolding today – nearly 30 years later. This convening focused specifically on wholesale electricity markets and the bulk power system in the region.

From all the presentations that were featured at the event, it is clear that the region is entering a new chapter in that restructuring journey – a future 2050 state coming into greater clarity, significant market changes currently in the works, and new challenges emerging that must be overcome together. Refreshingly, the conversation reflected a growing consensus about the future 2050 grid that the region must plan for and seek to achieve:

• Abundant clean energy resources like solar and wind delivering the majority of energy on an annual basis and dominating annual capacity additions onto the grid;
• Increased transmission to deliver new resources, such as offshore wind, better interconnect neighboring regions, and further unbottle/optimize contributions from resources already shaping daily and seasonal load profiles, such as distributed solar;
• Greater utilization of new solutions such as grid enhancing technologies (GETs) to help meet the imperative of consumer affordability and squeeze as much out of our existing grid as possible

Acadia Center has been examining leading economy-wide analyses for decarbonization in New England, and it has assembled the following comparison to demonstrate just how significant these changes will be to the mix of generation resources serving the New England grid – and how glaring the gap is between where the region is today and where it needs to be in less than three short decades.

On the left above, you see the 2023 generation mix for ISO-NE in the inner circle, compared to how this generation mix must evolve by 2050, according to the MA CECP. (Neither of these includes imports). The takeaway? The region must move from 55% natural gas today to 85% solar and wind by 2050, in terms of annual MWh. On the right, Acadia Center compared findings on 2050 installed capacity (MW) from five prominent studies of deep decarbonization in the New England region, from Princeton, Brattle, and Energy Futures Initiative (EFI) to two studies from state processes – the MA Clean Energy and Climate Plan, and the DPU 20-80 modeling. Across these, Acadia Center has taken a look at their high electrification scenarios for an apples-to-apples comparison, although you see nonetheless some notable differences in projections for in-region build-out. Regardless of these differences, all these studies find a need for a substantial growth in installed capacity, growing from roughly 30 GW today to at least 120 GW by 2050, possibly up to 160 GW or higher. This is the glaring gap the region faces. As a region, we must build more than 30 GW of solar and more than 20 GW of offshore wind across all studies, likely more. The studies do foresee notable amounts of fuel combustion capacity remaining online, despite very low production from those resources.

To realize this future state, the region’s wholesale electricity markets must be reformed to accommodate such major influxes of new clean resources at the scale and timeframe needed. ISO-NE presented on the proposed shifts to a prompt and seasonal capacity market from the current Forward Capacity Market construct, and other presenters focused on the parallel resource capacity accreditation (RCA) process underway. Both are major capacity market design reforms, and we argued that these processes must fully value clean energy resources for the benefits they provide (including, e.g., fuel saving during peak periods) and allow for swift and reliable market entry – which also ties into interconnection reform. We highlighted the recently finalized Gulf of Maine wind energy area (WEA) from the Bureau of Ocean Energy Management (BOEM) to underscore that these volumes of new clean resources – 30 GW in this case – are eminently feasible from a technical potential standpoint, so the region’s markets must adapt and evolve as a result.

The discussion turned next from the electrons to the poles and wires – the state of the future grid the region will need to match growing influxes of clean supply with growing electric demand from buildings and transportation. Dan went on to emphasize the importance of GETs, underscoring that consumers are currently missing out on big benefits and cost saving opportunities by failing to adopt GETs at scale. The figure below from an Idaho National Lab study on GETs in ISO-NE shows the costs and benefits associated with each of the technology strategies, with the GETs toward the bottom and the traditional upgrades in the longer red bars. Each of the GETs options has a payback period in months (not years) regardless of the metric used to assess. The study found that Power Flow Controls (PFC) and Dynamic Line Ratings (DLR) together can be better than each individually. The bottom line: GETs are a cheaper, quicker, and higher value option to traditional upgrades.

Dan also highlighted transmission asset condition projects (ACPs) as another major low-hanging fruit, with a need for tariff reform. Acadia Center strongly agrees with the spirit of the NESCOE letter to transmission owners on these ill-governed projects:

“…the process by which Asset Condition Projects are developed by NETOs, reviewed by ISO-NE, states and the public, approved for rate recovery, and considered in overall transmission system needs and planning is antiquated and ultimately, inadequate. It is the right time to implement planning process improvements to protect consumers from excessive costs and to maximize the use of all transmission assets by moving Asset Condition Projects from the current siloed, notice-based method into meaningful and holistic transmission system planning.”

Finally, Dan touched on a big missing piece of the puzzle, long overdue for incorporation: improved interregional grid planning and coordination. This requires broadening the discussion beyond the six New England states to reach into New York and into Eastern Canada, the other jurisdictions that compose the Northeast Power Coordinating Council (NPCC) region. Specifically, we took the opportunity to highlight our Northeast Grid Planning Forum (NGPF) project, which is seeking to bring not only these states and provinces together but also the community stakeholders and clean energy market participants who must necessarily have prominent voices in this collaboration. To us, the benefits of this interregional opportunity make it a highly logical priority:

If you missed the Roundtable discussion, slides and recordings from the presentations are available online here. Acadia Center thanks both Raab Associates and our fellow presenters at NPCC, ISO-NE, Connecticut DEEP, the Massachusetts AGO, LS Power, and Vineyard Offshore for an engaging and lively discussion. It’s time to get to work to make this future vision a reality for New England the northeast.

New Jersey homeowners could do more to reduce pollution. They must embrace heat pumps

Last summer, many of us in New Jersey found ourselves retreating indoors as the skies filled with smoke from the Canadian wildfires. This smoke carried particulate matter (PM 2.5), nitrogen oxides (NOx) and a whole host of other pollutants that are harmful to our health. Even though the smoke dissipated, millions of New Jersey residents continue to breathe in unhealthy outdoor air.

A new piece of legislation introduced by state Sens. Bob Smith and Andrew Zwicker would finally make a dent in this health-harming pollution by helping our most vulnerable community members receive a relatively new yet proven home upgrade: heat pumps.

The fossil fuel HVAC systems we use to heat our homes are also driving up energy bills across New Jersey. According to a recent report by the Acadia Center, year after year, New Jerseyans who switch from gas to highly efficient heat pumps can save money in every utility territory. If households couple this investment with weatherization and improved energy efficiency, customers save as much as 69% on their annual energy bills. The National Renewable Energy Laboratory released similar findings earlier this year, concluding that between 62% and 95% of households nationwide would see a drop in their energy bills by using a heat pump.

To read the full article on NorthJersey.com, click here.

Everett LNG Contracts Face Skepticism in DPU Proceedings

Proposed gas supply agreements between Constellation Energy and Massachusetts gas utilities that would keep the Everett Marine Terminal operating through 2030 are facing significant pushback from environmental organizations and the state Attorney General’s Office in time-constrained proceedings at the Department of Public Utilities. 

Everett is an LNG import facility located just outside of Boston and is the only facility in the region that can directly import and inject LNG into the gas system. The main customer of Everett, the Mystic Generating Station, is set to retire at the end of May at the conclusion of a two-year cost-of-service agreement with ISO-NE, threatening the future of the import facility. 

A CLF appeal had the potential to threaten the contracts only if the state Supreme Judicial Court (SJC) thought the issues stated in the appeal merited a hearing by the full court, said Joe LaRusso, senior advocate at the Acadia Center.

“What the DPU denial of CLF’s intervenor status prevents, then, is CLF filing a meritorious appeal to the SJC and a potential direct challenge to DPU approval of the contracts.”

To read the full article from RTO Insider, click here.

Amid progress on electric vehicles, political setbacks frustrate advocates in Maine, Connecticut

After setbacks to adopting electric vehicle sales targets in Maine and Connecticut, New England clean transportation advocates are regrouping with a focus on charging infrastructure and consumer education.

Maine’s Board of Environmental Protection voted 4-2 on March 20 against adopting California’s Advanced Clean Cars II rules, which would have required electric or plug-in hybrids to make up 82% of new vehicle sales in the state by model year 2032.

Peter LaFond, the Maine program director for the Acadia Center, a regional nonprofit, said the delay in adopting California’s rules provides time for combating misconceptions and for utilizing increasing state and federal funds for charging infrastructure.

“Every month that goes by, I think there’ll be more and more chargers, and once there are, I think people will see the clear advantages,” LaFond said. “(EVs and plug-in hybrids) lower the carbon footprint and they’re less expensive to operate, and the cold doesn’t present as much of a challenge as the misinformation would have you believe. I think education is going to be a big part of this.”

Jayson Velazquez, the Acadia Center’s Hartford-based climate and energy justice policy associate, used the term “through-emissions” to describe pollution from diesel trucks and other vehicles that traverse low-income neighborhoods and communities of color in Connecticut’s cities en route to nearby highways.

Unlike those vehicles and their non-local drivers, Velazquez said, “the lasting health effects that come from that pollution don’t just get up and go.”

To read the full article from Energy News Network, click here.

New England Electricity Restructuring Roundtable Meeting Summary: Wholesale Markets and the Clean-Energy Transition

On March 22, 2024, Foley Hoag hosted the latest gathering of the New England Electricity Restructuring Roundtable. The Roundtable, which has been meeting regularly since 1995, was originally organized to contemplate the changes wrought by the restructuring of the electric power industry. Nearly three decades later, the Roundtable continues to feature leading industry thinkers, regulators, policymakers, and businesspeople from across the Northeast and across the country. The March 22, 2024 meeting of the Roundtable, entitled “Preparing the Electricity System and Wholesale Markets for a Reliable, Affordable, and Decarbonized Future,” addressed one of the most pressing issues facing the industry during the clean-energy transition: the proper role and design of wholesale markets.

Further, improvements to existing transmission infrastructure, and to regulatory incentives around transmission management and development, can draw value out of the grid assets we already have, pointed out Liz Anderson, Chief of the Energy & Ratepayer Advocacy Division of the Massachusetts Attorney General’s Office, and Dan Sosland, President of the Acadia Center. 

The challenge of creating markets capable of maintaining system reliability while decarbonizing and growing the electric power sector is great, but the revolution now underway also offers tremendous opportunities. As Mr. Sosland noted near the end of the Roundtable:

“Look at what we’re trying to accomplish together—it’s historic.”

To read the full article from Foley Hoag, click here.

CEO outlines ISO-NE initiatives at power system forum

New England must balance multiple objectives as it navigates the clean energy transition. Collaboration and innovation will be required to maintain robust wholesale markets that ensure reliability while the states promote rapid development of renewable resources.

That was the message ISO-NE President and CEO Gordon van Welie brought to the New England Electricity Restructuring Roundtable on March 22. Hosted by Raab Associates and Foley Hoag in Boston, the quarterly forum on energy issues brings together industry leaders, state officials, and advocates.

A “Stakeholder Perspectives” panel followed, with insights from Alicia Barton, CEO, Vineyard Offshore; Nathan Hanson, president, LS Power; Liz Anderson, chief, Energy & Ratepayer Advocacy Division, Massachusetts Attorney General’s Office; and Dan Sosland, president, Acadia Center.

To read the full article from ISO Newswire, click here.

RGGI 63rd Auction: An Additional $388 Million Raised for Clean Energy

FOR IMMEDIATE RELEASE
RGGI 63rd Auction: An Additional $388 Million Raised for Clean Energy
For Release: March 20, 2024

BOSTON, MA – On Wednesday, March 6, 2023, the ten states participating in the Regional Greenhouse Gas Initiative (RGGI) released the results of the 63nd auction for 2024. Emissions allowances were sold for $16.00 each, generating $388 million for clean energy investments in participating states.  

“The strong success of this auction speaks volumes—$388 million raised brings RGGI’s cumulative total to a staggering $7.5 billion,” stated Paola Tamayo, Policy Analyst at Acadia Center and co-author of the organization’s RGGI Third Program Review Report.  

The allowance price of $16.00 is the highest level observed historically since the RGGI program’s inception. RGGI auctions stand as a crucial mechanism for curbing carbon emissions and charging power plants for their climate pollution. Among the various instruments within RGGI auctions, the Cost Containment Reserve (“CCR”) – a market mechanism that releases extra allowances beyond the cap which are sold if prices exceed predetermined levels – was triggered again in this auction. The Trigger Price of $15.92 per ton of CO2 was met, and 8,416,278 CCR allowances were sold in the auction. The CCR was initially conceived to be a safeguard, only to be triggered in times of extraordinary circumstances. However, recent trends have shown a worrisome pattern: in the latest auction, the CCR was triggered for the second consecutive time. This auction highlights the importance of reassessing the CRR trigger price in this Program Review. By raising the CCR cost, more breathing room is created for auction prices to rise, ensuring the effectiveness of the RGGI cap in reducing emissions.  

Furthermore, the Emissions Containment Reserve (ECR) retains allowances for additional emissions reductions if prices fall below the trigger price of $7.35 in 2024. Notably, the ECR remains well below the auction price and has historically not been triggered. That means that the auction price was over two times higher than the trigger price, signaling a significant deviation from the original intent of this program mechanism. For the ECR to maintain its effectiveness as a market stabilizer, it should show a more dynamic response to fluctuations in auction prices. While the ECR serves as a vital safety net, its rigid structure makes the effect of this mechanism negligible in the face of rising auction prices. As stakeholders engage in discussions surrounding the third program review, there’s a pressing need to reevaluate the mechanisms governing the ECR. By introducing greater flexibility and adaptability into its design, the ECR can better fulfill its role in ensuring the stability and integrity of the RGGI market, ultimately driving progress towards a more sustainable future. 

Higher RGGI allowance price is good for climate, clean energy investment  

The clearing price of $16 for the first auction of 2024 marks a continuation of the upward trend observed in recent years. This clearing price represents a 28% increase from the clearing price in March 2022 and an 8% increase from the last auction. The positive trajectory witnessed in the 2023 auctions and this first auction of 2024 holds promising implications for the RGGI program. Higher observed allowance prices in 2022, 2023 and now 2024 means that the RGGI program is sending a stronger incentive to reduce fossil fuel emissions and produce electricity from carbon-free sources, like wind and solar.   

Since the program launched, the vast majority of RGGI proceeds have been invested in energy efficiency and clean energy projects, as detailed in the most recent report on RGGI investments in 2021, released in June of  last year. We are also hoping for a more timely and transparent reporting system on proceeds investments. As the auctions generate significant revenue, it’s crucial to ensure that these funds are allocated efficiently and effectively towards clean energy and energy efficiency initiatives. 

The $388 million in proceeds generated in this auction brings the cumulative to-date total to $7.5 billion. The 2023 and 2024 auction results underscore RGGI’s significance as more than a regulatory framework, emphasizing its influence on the shift towards sustainable energy. RGGI states show the practicality of a collaborative, market-driven strategy for reducing greenhouse gas emissions.   

RGGI Third Program Review Offers an Opportunity to Direct Proceeds Towards Clean Energy Investments that Directly Benefit Environmental Justice Communities  

Since its establishment, RGGI’s priorities have centered around reducing pollution from fossil fuel power plants and achieving climate solutions for RGGI states. Every five years or so, RGGI undergoes a program review, giving the participating states the opportunity to consider the program’s performance and make various changes, including the equitable disbursement of the program’s proceeds. RGGI’s Third Program Review is happening now and is expected to conclude relatively soon this year. In 2023, RGGI held two public meetings and two public comment periods to discuss and seek feedback on various aspects of the program. Acadia Center, other stakeholders, and the public at large await any responses from the states to public input on setting the cap and improving overall program design and operation. 

As discussed in more detail in Acadia Center’s most recent RGGI Report, there are many different ways in which RGGI can ensure that environmental justice communities are heard and are actively involved in the development of strategies for an equitable transition to a carbon-free economy. Regardless of how strongly the Third Program Review does or does not prioritize environmental justice, it should remain a priority for individual states to consider the recent auctions, the history of investments across the states, the need to benefit environmental justice communities directly, and other mechanisms associated with the cap-and-invest program.  

Acadia Center remains closely involved in RGGI policy conversations across the RGGI states and will continue to advocate for program reforms that drive equitable investment and climate action.    

Media Contacts: 

Ben Butterworth, Director: Climate, Energy, and Equity Analysis
bbutterworth@acadiacenter.org, 617-742-0054 x111 

Paola Moncada Tamayo, Policy Analyst
ptamayo@acadiacenter.org, 860-246-7121 x204 

Massachusetts Clean Heat Standard Reignites Debate over Biogas

The role of renewable natural gas (RNG) and hydrogen in decarbonizing Massachusetts’ heating sector has been a major topic of debate for several years, with major implications for the state’s gas network and electrical grid. 

“The ineligibility of gaseous biofuels and hydrogen under the CHS is absolutely essential for keeping the commonwealth on the most cost-effective trajectory towards building decarbonization,” wrote Acadia Center.  

Environmental organizations in the state have long expressed concerns that electrification is the most efficient pathway to decarbonizing the building sector and that blending alternative fuels into the gas network would deliver minimal climate and public health benefits at a high cost to gas ratepayers. 

Acadia Center made the case that making hydrogen and RNG blending eligible to generate credits would be in “direct conflict” with the DPU’s 20-80 Order on gas system decarbonization.  

To read the full article from RTO Insider, click here.

Unaddressed Energy Burdens Are Threatening the Clean Energy Transition

In addition to being an incredible burden upon residents, heavy energy burdens, defined as the percentage of a household’s income spent on home energy bills, also threaten the clean energy transition. Generally speaking, the operational costs of an air-source heat pump end up being less than many existing alternatives, such as fuel oil, propane, or electric resistance heating. However, in cases where electricity prices are high and fossil gas prices are low, and without supplemental relief, it can be difficult to ask an already energy burdened household to switch to a heat pump, even if the swap were to happen at no cost. Therefore, in order to meet our climate goals, it is absolutely crucial to equitably address energy burden as well.

Thankfully, we are starting to see a number of jurisdictions take steps to combat this issue. For example, several states, such as New York, California, and Ohio, have implemented forms of Percentage of Income Payment Plans (PIPP) for certain residents or established policy goals around what constitutes an acceptable/unacceptable energy burden. A PIPP can directly alleviate energy burden by limiting a monthly payment to a certain percentage of income, often between 4-6%. Other states, such as Massachusetts, are looking at things even more comprehensively.

On January 4, 2024, the Massachusetts Department of Public Utilities (DPU) opened an inquiry into energy burden with a focus on energy affordability for residential ratepayers, DPU 24-15. In this docket, the DPU is soliciting input from stakeholders, including members of the public, advocates, and DPU-regulated entities to allow the DPU to “consider improvements to the programs currently offered to address energy affordability, to ensure maximum participation in each of these programs, and to determine whether additional programs may further benefit residential ratepayers of the Commonwealth’s electric and gas distribution companies.”¹ As part of this effort, the DPU released a broad list of questions and sought comment by March 1, 2024.

Acadia Center’s comments focused primarily on utilizing a PIPP approach versus potentially using a tiered discount approach. As outlined above, utilizing a PIPP focuses directly on limiting utility bill payments to a specific percentage of household income (with additional provisions). A tiered approach, which some jurisdictions utilize, essentially creates income brackets for which a ratepayer can qualify. At each different bracket, there are different levels of benefits/rate relief. Unfortunately, this approach to benefits has a potential drawback known as the “cliff effect.” Put simply, if a household in a particular bracket but close to the limit rises even a single dollar over the limit, they potentially could lose out on significant benefits. As such, Acadia Center also advised the DPU to avoid the “cliff effect” in any of its policies. Additionally, as part of its recommendations regarding PIPP, Acadia Center also specifically recommended utilizing a 6% income cap, a benchmark that is emerging as a commonly accepted standard for energy burden. In addition, we underscored PIPP program design elements – such as caps in consumption – that can preserve the incentive to conserve energy and the benefits of energy efficiency. Beyond PIPP, Acadia Center also advocated for auto-enrollment in the discount rate, energy affordability programs reflecting seasonal fluctuations in energy use, and placing the costs of the discounted rates upon high energy-use and higher-income households.

Acadia Center also worked with a broad array of stakeholders, including housing advocates, environmental organizations, and environmental justice advocates, to produce a set of coalition comments as well. These comments did not specifically address the questions raised by the DPU and instead focused on broad issues surrounding energy affordability. For example, it notes that existing structural inequities aggravate energy burden amongst certain customers. It also highlights that race is a major factor in determining the likelihood that a household will experience energy insecurity. The coalition letter further emphasizes that this cannot be the end of this process, and additional in-depth analysis will be required.

The steps after this point in DPU 24-15 are not currently clear. However, Acadia Center is confident that the DPU will ensure a robust and transparent process that incorporates a broad swath of stakeholder input and prioritizes environmental justice and equity. We look forward to bringing further analytical review to this important proceeding as it progresses.

1 DPU 24-15, at 1.

For more information:

Contact: Kyle Murray, Director, State Program Implementation, kmurray@acadiacenter.org