Connecticut Explores Performance-Based Regulation for the State’s Utilities

In August 2020, Tropical Storm Isaias left more than 1 million customers in Connecticut without power. For many customers, it took nearly a week to restore power.

Partly in response to the storm, state legislators passed the “Take Back Our Grid” Act (PA 20-5). The bill required the state’s investor-owned electric utilities, Eversource and United Illuminating, to provide credits back to customers for the delayed storm response. It also required the Public Utilities Regulatory Authority (PURA) to open a proceeding to explore and implement a new framework for how the state should regulate its investor-owned utilities.

While Tropical Storm Isaias may have been a catalyst, adopting a new approach to utility regulation—specifically Performance-Based Regulation (PBR)—has been a nation-wide conversation for years. Performance-Based Regulation includes a broad set of policy tools that regulators can use to tie utility revenues more directly to improved performance, helping to overcome outdated financial incentives.

PURA’s PBR proceeding is a key opportunity to help make utilities work better for customers.

What would it mean to improve utility performance through PBR? Regulators could, for example, require utilities to track the number of customers enrolled in time-varying rates, which have been shown to help reduce both costs and greenhouse gas emissions. Often, tracking data in scorecards leads to improved performance based simply on the pressure of public comparisons to peer companies. But if regulators felt that there was sufficient data and experience to set specific performance targets for the metric being tracked, here enrollment in time-varying rates, they could then impose either rewards or penalties (or both) according to how performance changed over time.

PURA’s PBR proceeding began in earnest in March 2022. The process is expected to last well into 2023, and possibly 2024. While this is a long proceeding, it is critical to make sure that regulators take the time to consider all potential solutions.

Acadia Center has been working closely with other advocacy groups in Connecticut, including Vote Solar, Conservation Law Foundation, and Save the Sound, to raise awareness about the proceeding and to ensure that the proceeding incorporates a broad set of interests and perspectives.

While PURA and stakeholders will figure out many details over the coming months, PURA’s overarching goals for any PBR framework in Connecticut are to 1) enhance electric distribution company performance; 2) advance public policy; 3) improve customer empowerment and satisfaction; and 4) ensure reasonable, affordable, and equitable rates.

So far, PURA has held three stakeholder workshops, each with an accompanying working paper from PURA staff to gather specific feedback from stakeholders. While later stages of the proceeding will explore performance metrics and potential rewards and penalties in more detail, the process so far has helped stakeholders develop a better sense of which regulatory tools in Connecticut are working and which are not.

As the proceeding continues, Acadia Center will work to ensure that a broad set of voices are heard and to make sure that any new regulatory tools support key public policy goals and prioritize customers.

For more information, including Acadia Center reports and an introductory webinar on PBR that Acadia Center co-hosted with Vote Solar, Conservation Law Foundation, Save the Sound, see: https://votesolar.org/resources-for-performance-based-regulation-of-connecticut-utilities/

 

 

Moving Beyond Gas in RI

Following the success of the Massachusetts-based Beyond Gas coalition, Acadia Center has formed a similar coalition in Rhode Island. Acadia Center and its partners in the Beyond Gas-RI advocacy coalition have submitted comprehensive comments to the Rhode Island Public Utilities Commission (PUC) outlining our recommendations for the forthcoming Future of Gas investigation. The proceeding, expected to unfold over the remainder of 2022 and well into 2023, will examine how the state’s overreliance on “fossil” gas must change for the state to meet the Act on Climate’s requirements of a 45 percent reduction in greenhouse gas (GHG) emissions by 2030, 80 percent reduction by 2040, and to net-zero by 2050.

The letter, signed by Acadia Center, Audubon Society of Rhode Island, the Environment Council of Rhode Island, Conservation Law Foundation, Green Energy Consumers Alliance, the Climate and Development Lab at Brown University, Sierra Club and concerned citizens, makes a series of recommendations for the scope of the proceedings.

• First, the coalition notes the General Assembly granted broad powers to state agencies to promulgate rules and regulations to achieve the GHG emissions reductions required by the Act on Climate, so the PUC has the power to make significant changes in this sector, if it finds them appropriate.
• Extensive studies have repeatedly concluded that the most favorable and realistic pathway for a decarbonized future relies primarily upon heating electrification, including thermal energy networks, rather than so-called decarbonized gases such as renewable natural gas or hydrogen.
• Beyond Gas RI urged the PUC to explore the assumptions and methodologies concerning methane leaks as a primary area of focus in light of recent utility filings that confirm repeated studies that the gas distribution system might be leaking nearly 4 percent of total “sent out” gas. Gas leaks are particularly dangerous public safety concerns and doubly problematic for the climate because methane released directly into the atmosphere has a 20-year global warming potential (GWP) that is 86 greater than carbon dioxide over the same period.
• Finally, the coalition urged the PUC to expand its usual regulatory purview to also look at health and safety implications related to gas use. Studies have repeatedly shown that gas combustion inside of buildings is linked to higher rates of respiratory illness and cardiovascular disease. Recent studies have also shown that, in addition to the pipeline leaks documented above, gas stoves routinely leak methane even while they are off — accounting for between 0.8 percent and 1.3 percent of all gas they use.

“Ultimately, the PUC’s primary focus should be to identify the most aggressive and feasible gas system decarbonization pathway that both rapidly and equitably reduces current GHG fossil gas emissions in the near-term while eliminating the potential risk of new long-lived fossil fuel connections to the network and protecting ratepayers from stranded costs.”

The PUC proceeding follows several years of Acadia Center engagement with the Public Utilities Commission, Energy Facility Siting Board (EFSB), Division of Public Utilities and Carriers, Rhode Island Attorney General, and other stakeholders across a series of dockets that highlight the imprudence of continuous gas system expansion. In 2021, Acadia Center urged the EFSB to impose a moratorium on new gas connections on infrastructure constrained Aquidneck Island while awaiting a determination on utility proposals to build new gas facilities to enable future growth. While that moratorium was not granted, the case is still pending and the EFSB did order a first ever comparative analysis of the GHG impacts of the utility’s preferred solution and all rejected alternatives. Acadia Center’s work on the Massachusetts Future of Gas proceeding, as well as Infrastructure, Safety, and Reliability (ISR) dockets, energy efficiency plans, non-pipes alternative frameworks, and intervention in the sale of the utility to PPL have all led to this critical Future of Gas investigation in Rhode Island.

For more information:
Hank Webster, Senior Advocate and Rhode Island Program Director, hwebster@acadiacenter.org, 401.276.0600 ext.402

The state races that may reshape U.S. energy

Control of Congress is up for grabs in the midterm elections — but for climate policy, state races may be the ones to watch.

That’s because much of the money in the new climate law will be distributed through the states. State leaders can apply for the Inflation Reduction Act’s numerous grant programs, for example, including ones that fund new large transmission lines and energy-efficient buildings.

With gubernatorial races on the ballot in 36 states, the scope and pace of the country’s energy transition may partly depend on who takes office.

“There’s a lot of decisions that state agencies need to make about what policies they’re going to prioritize and how to distribute the money,” said Amy Boyd, vice president of climate and clean energy policy at Acadia Center, an environmental group in New England.

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Read the full article in Politico here.

As offshore wind plans grow, so does the need for transmission

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Melissa Birchard, director of Clean Energy & Grid Reform at the Acadia Center, says that less onshore work also means less impact on people and communities.

“Will it still have impacts? Absolutely,” she says. “And I can imagine that there might be environmental justice communities or indigenous communities that we will need to listen to as the process moves forward. But by reducing the on-land impacts, we reduce impacts on those communities as well.”

And unlike onshore transmission development, which needs approval from many regulatory bodies and individual landowners, the only “land owner,” so to speak, in the offshore wind areas is the federal government.

An ocean grid could also reduce how much cable needs to be buried beneath the ocean floor. In the current project-by-project approach, most wind developers are planning to use cables that can each carry about 400 megawatts of electricity — an 800 megawatt wind project requires two cables, for instance.

Read the full article in WBUR News here.

Rhode Island starts to wrestle with what its net-zero goal means for natural gas

Rhode Island utility regulators are beginning to consider what the state’s mandate to zero out greenhouse gas emissions by 2050 means for its natural gas system.

The state Public Utilities Commission, or PUC, has opened a docket to investigate the future of the gas distribution business, a response to the passage last year of the Act on Climate.

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Hank Webster, Rhode Island director for the Acadia Center, a clean energy advocacy organization, said it’s crucial for the state to start this discussion now.

“The gas distribution system is one of the major sources of greenhouse gasses,” he said. “Every time a new gas connection is made, adding to ratepayer costs, it locks in long-term fossil fuel use.”

Read the full article at Energy News Network here. 

National Grid customers could see 64% increase in electric bills

BOSTON (WHDH) – National Grid customers could be in for quite the shock when they open their utility bills this winter.

The company has announced its winter rates, which go into effect on Nov. 1, stating that residential customers that use electricity can expect a price increase of 64%.

That means if you paid the typical $179 a month last winter, be ready for a monthly bill of at least $293. And it is not just an electric shock, either: customers who use gas will also feel a 22-24% price hike.

“At National Grid, this is the highest we’ve experienced,” said National Grid Chief Customer Officer Helen Burt. “Our customers pay what we pay. We’ve kept our electric distribution and transportation piece of the bill flat, year-over-year, and so this is entirely due to the cost of energy in the marketplace now.

Eversource is also predicting its gas customers will see their bills rise anywhere from 25% to 38%.

The massive price increases are reportedly due to natural gas production dropping during the COVID-19 pandemic, as well as the war in Ukraine, both straining production.

“Really, (customers) need to reach out to legislators to push for A, more renewables, more clean energy, and B, in the very short term, bill relief,” said Senior Policy Advocate Kyle Murray of the Acadia Center.

Read the full article here.

Trouble brewing in the power grid as officials warn of possible electricity shortages in N.E. this winter

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“Investing in more fossil fuel infrastructure is not going to solve the problem,” said Melissa Birchard, the director of clean energy and grid transition for the Acadia Center, a clean energy advocacy group. “It just continues our cycle of not investing in clean resources, and can exacerbate climate change.”

 

Read the full article in The Boston Globe here. 

Local researchers are aiming to create the perfect battery. The stakes couldn’t be higher.

Researchers and companies around the world are racing to solve the problem of storing clean energy when the sun isn’t shining on solar farms or the wind isn’t turning turbines. Of course, good batteries are already in common use in electric vehicles and Tesla Power walls, but those batteries rely primarily on lithium, cobalt, manganese, nickel, and other rare materials. They’re expensive, flammable, and their materials available in limited supplies and from just a few locations, including in China, Congo, and some of the deepest parts of the ocean.

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Environmental advocates in Massachusetts said they’re hopeful that technological breakthroughs would accelerate the adoption of large battery storage systems, especially as thousands of megawatts of new offshore wind are built in the region’s waters.

Kyle Murray, a senior policy advocate at the Massachusetts Acadia Center, called the region’s current rate of adoption “woefully slow.”

“We need to speed up the process so we can meet our state decarbonization goals and tackle the climate emergency,” he said. “We currently have batteries that can already do some marvelous things for society, and we need to be deploying more of them. That needs to be paired with developing and deploying new, amazing technologies.”

Read the full article in The Boston Globe here. 

Park City Wind Asks Connecticut to Adjust Energy Bid ‘to Reflect Current Economic Realities’

Avangrid Senior Vice President for Offshore Projects, Sy Oytan, said that the company will ask Connecticut for a “modest adjustment” to the state’s contract to buy power from the company’s planned 804 megawatt Park City Wind project south of Martha’s Vineyard, to “reflect the current economic realities.”

In a call with investors on Thursday, Oytan said the company would be delaying by a year both its Park City project and the 1,200 MW Commonwealth Wind project, and would ask both Connecticut and Massachusetts to adjust contracts to buy power from those projects.

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Melissa Birchard, director of clean energy for the nonprofit renewable advocate Acadia Center, said that the “short delay” of the two projects is understandable given the global challenges in energy.

Birchard said it’s good news that the delay still keeps the projects in line to be completed within the timeframes laid out in their contracts with the states. She said the push for offshore wind needs to continue on multiple fronts, to make sure that progress is still being made even if individual projects are delayed.

“We need to do everything we can to bring offshore wind to customers as soon as possible, along with other renewables,” Birchard said. “The spiking costs of fossil fuels are hurting families and businesses and the impacts of climate change are getting worse every year.”

Read the full article in The CT Examiner here.

Will the Inflation Reduction Act Meet Environmental Justice Goals?

On August 16, 2022, President Biden signed the Inflation Reduction Act (IRA) into law. This act makes provisions for healthcare, job opportunities, and climate and energy security. The law contains clean energy infrastructure for transportation, housing, solar, and wind facilities, prioritizing low-income and environmental justice communities. Through the IRA, around $60 billion will be allocated toward environmental justice communities and low-income communities with investments made towards infrastructure and improved funding. 

The Biden administration has been forward in its response to meeting demands of climate and clean energy transition. Early on, the administration demonstrated its commitment to mitigating climate impacts and consideration to environmental justice by issuing Executive Order 14008 titled Tackling the Climate Crisis at Home and Abroad. While that order quickly set the pace in putting climate and environmental justice discourse forefront, the recent Inflation Reduction Act builds on previous efforts including climate bills, Build Back Better Act (BBBA) and Bipartisan Infrastructure Law (Infrastructure Investment and Jobs Act) (IIJA), placing the nation at an advantageous position to reduce greenhouse gas emissions and reach climate targets in the near decade.  

The IRA provides an opportunity to establish clean energy infrastructure in low-income and environmental justice communities. Such infrastructure can provide energy credit for solar and wind facilities situated in the communities, thus ensuring increased clean energy deployment and economic benefit to those overburdened and disadvantaged communities. The dividends for environmental and climate justice were expanded to include grants and financial incentives provided through the Environmental Protection Agency (EPA), the Department of Energy (DOE), Department of Transport (DOT), Department of Housing and Urban Development, and a few other federal agencies. This will provide federal intervention that reaches environmental justice communities, low-income communities, and tribal communities to reduce pollution and environmental injustice across the country.  

The Inflation Reduction Act provides funding for pollution monitoring equipment and cleanups needed to address environmental injustice—a key provision for which Acadia Center advocated as a companion policy to the Transportation and Climate Initiative (TCI).  While the law is particularly aimed to provide infrastructure on clean technologies that get situated in already disadvantaged communities, it is essential that implementation of these programs, grants, and financial incentives are administered with clarity through a transparent approach that is led by the voices and participation of communities across the country. 

Though the Inflation Reduction Act may be the biggest and most ambitious climate legislation enacted to provide climate solutions and support low-income communities, environmental justice communities, and tribal communities, continued climate leadership and stewardship is needed for climate solutions and environmental justice. The White House Interagency on Environmental Justice and White House Environmental Justice Advisory Council, both created through Executive Order 14008, and the White House Council on Environmental Quality (CEQ), are examples of equity and environmental justice stewardship at the federal level. With more state and municipality-level engagement from communities of color, tribal communities, and low-income communities, equity and environmental justice in climate action becomes foreseeable. 

For more information: 

Joy Yakie, Manager, Environmental Justice and Outreach, jyakie@acadiacenter.org, 617-742-0054 x110