Charging Ahead with Electric Buses in Rhode Island

Rhode Island and its Northeast neighbors have achieved great reductions in greenhouse gas emissions from power plants since joining the Regional Greenhouse Gas Initiative (RGGI) in 2009. Unfortunately, emissions from transportation sources are not covered by RGGI and still comprise about 40% of all greenhouse gas emissions in the state. Rhode Island needs to act urgently to reduce emissions from passenger, commercial, and public transportation fleets.

Rhode Island has taken an exciting stride towards cleaner public transportation by leasing three 100% electric buses, slated to enter service in early 2019. The Rhode Island Public Transit Authority (RIPTA) showcased the three 40’ vehicles at an October 22nd test drive featuring Governor Gina Raimondo, the state’s congressional delegation, and a contingent of state and local officials. Unlike Providence’s electric trolley-buses from the 1930s to 1950s, which were powered by fixed overhead wires, these battery-powered buses will charge overnight at RIPTA’s bus depot and can be flexibly used on a variety of routes.

RIPTA is using funds from Rhode Island’s $14.4 million share of a massive settlement between the federal government and Volkswagen after the automaker was caught circumventing emissions rules. The state has committed nearly $11 million to purchase 16 to 20 additional all-electric buses in 2021. Each electric bus that replaces an older, high polluting diesel bus could reduce carbon dioxide (CO2) tailpipe emissions by nearly 230,000 pounds annually, according to bus manufacturer Proterra.

In addition to reducing CO2 emissions, each diesel-to-electric bus replacement would also avoid over 100 pounds of nitrogen oxide (NOx) tailpipe emissions, which can cause or worsen respiratory and heart diseases in local communities. RIPTA will prioritize deploying electric buses on routes that serve low-income, environmental justice communities in neighborhoods that disproportionately bear the negative health impacts associated with fossil fuel combustion. This approach to prioritizing health benefits in overburdened communities should serve as a model for future clean transportation investments in Rhode Island and the region.

While the upfront cost of electric buses is higher than existing diesel, diesel-electric hybrid, or compressed natural gas (CNG) equipment, RIPTA expects to achieve significant life cycle savings primarily through lower fueling and maintenance costs—electric vehicles have fewer drivetrain components and feature regenerative braking, which can greatly reduce the overall frequency and cost of parts replacement. Still, as transit agencies across the country seek to incorporate cleaner vehicles, the upfront premium on electric bus purchases will likely remain a significant barrier.

One way to generate a dedicated revenue stream for clean transportation investments is through a price on carbon emissions from the transportation sector. A group of dedicated states, including Rhode Island, has been exploring policy solutions through the Transportation & Climate Initiative. Acadia Center released a policy analysis in September detailing how enacting a $15 per metric ton price on carbon emissions from the transportation sector could help Rhode Island generate over $600 million in revenues between 2019 and 2030 for a variety of clean transportation investments. This could include vehicle electrification, improved commuter rail offerings, cleaner port operations, and expanded pedestrian and bicycle paths to connect more people to employment, recreation, and basic services in their communities.

Acadia Center will continue to advocate for programs that address transportation-related emissions, helping states pursue and expand new opportunities for investment in clean transportation programs. Click here to read more about Rhode Island’s clean transportation opportunities.

As solar grows in Rhode Island, so does the need for smart siting policies

One of Rhode Island’s newest renewable energy installations is being celebrated as a model of solar siting, repurposing contaminated land that is unlikely to be developed. The solar array’s 6,700 panels spread across 12 acres in North Providence that comprise an old landfill.

The rapid expansion of renewable energy projects in Rhode Island – and across the region – is bringing new and pressing land-use challenges. Because of the urgent threat posed by climate change, it is important to accelerate the pace at which clean energy resources replace polluting fossil fuels. At the same time, we must protect Rhode Island’s diverse ecosystems.

With collaborative work on smart siting policies – and solar projects like the one in North Providence – Rhode Island is demonstrating a commitment to doing both: creating a low-carbon energy system and serving as responsible stewards of our landscapes and habitats.

Solar’s role in the clean energy future

The deep greenhouse gas emissions reductions demanded by the rapidly changing climate will require an energy system that looks a lot different than today’s. Our vehicles and home heating systems will need to transition from gasoline, propane, and natural gas to electricity, which has the flexibility to run off the sun, wind, and other clean sources. That means our electricity supply must move away from fossil fuels and become significantly cleaner itself.

Solar energy will play a key part in the clean energy future. According to the State Energy Plan, Rhode Island could develop over 1,800 MW of solar by 2035, compared to the current 105 MW. Determining how much solar is needed to meet the state’s climate goals under the Resilient Rhode Island Act is only one part of the equation. We must work together to determine how best to site it, including on what types of land and at what scale, to minimize land-use conflicts in local communities.

First, Rhode Island must harness the potential of rooftop solar, which gives residents and businesses more control over their energy use and production, lowers utility bills, and helps avoid the siting of projects in sensitive environmental areas. Acadia Center’s EnergyVision 2030 Rhode Island Progress Report finds that Rhode Island is lagging regional leaders on locally-sited solar resources. While rooftop solar is not the only answer, we can do more to support it.

Larger-scale solar projects are also needed. Some municipalities in Rhode Island, especially rural ones where land is more readily available, are being inundated with solar proposals – some of which have resulted in widespread tree-clearing. In response, a number of communities are halting renewables development, at least temporarily, putting at risk continued progress towards a climate-safe Rhode Island. It is imperative that we find a new path forward that balances the need to deploy renewables with forest and habitat protection.

Consensus-based solutions

A stakeholder group of diverse interests began convening in August 2017 to address the siting issue. The committee, which includes Acadia Center, developed 13 consensus principles that reflect the priorities of conservationists, clean energy advocates, farm interests, municipalities, and renewable energy developers. State officials have also been holding public workshops all across Rhode Island to gather input from communities and residents. There has been widespread agreement on the need to influence the economics of siting to encourage cost-effective development of solar projects on already developed land like brownfields, commercial and industrial zoned land, and other environmentally disturbed sites.

There are no quick solutions, but progress is being made. Rhode Island is undertaking several initiatives designed to guide solar to preferred areas. An infusion of $1 million into the Renewable Energy Fund will support brownfields projects. A proposal before the Public Utilities Commission includes a 70 percent increase in small rooftop solar in the 2019 Renewable Energy Growth Program and a new category to promote solar carports. Between six and twelve solar canopies are expected to be developed as a result.

Much work remains. The stakeholder group is discussing additional strategies for the 2019 legislative session to encourage solar siting in least-conflict locations. The work being done in Rhode Island could serve as a model for the region as states grapple with a productive path forward that both reduces harmful emissions and protects our natural resources.

New York Must Expand Solar: How Does Its New Net Metering Process Fit in?

Since 1997, New York has allowed customers with certain types of distributed generation systems, including rooftop solar (sometimes referred to as “mass market” solar) and community solar, to participate in net metering. This simple billing method allows a customer’s consumption and generation to be “netted” at the end of every month. If a customer has consumed more energy from the grid than she has generated from her solar panels, she will pay for the net consumption. However, if a customer has generated more power than she has consumed, then that net generation will be rolled over into the next month’s bill and credited toward future consumption at the retail rate—i.e. the same amount that the customer is charged for using a kWh of electricity.

This form of compensation (sometimes referred to as “retail rate net metering”) has supported solar expansion with a simple, predictable formula. However, because this form of net metering relies only on retail rates, which tend not to vary by time or location, solar systems are not always installed in areas where they are most needed or combined with other technology like energy storage to provide additional value to the grid. Some areas of the grid need more congestion relief, some hours of the day have higher electricity demand, and some distributed energy sources are cleaner than others.

New York has decided to move away from retail rate net metering and toward a smarter and fairer pricing scheme that reflects clean energy resources’ value to the grid. The state is now grappling with creating such a system while at the same time ensuring that this transition is gradual and understandable to consumers.

What’s Next?

In 2015, the Public Service Commission (PSC) initiated the Reforming the Energy Vision (REV) process, which seeks to create a new utility business model that incorporates more distributed energy while ensuring that energy remains affordable, resilient, and reliable. Recognizing the need to develop a more accurate way of valuing these clean energy resources, in March 2017 the PSC issued an order transitioning from retail rate net metering to a net metering program referred to as Value of Distributed Energy Resources (VDER) that attempts to more accurately reflect the costs and benefits of these clean resources on the grid.

The first phase of the VDER process applies to larger solar installations including remote net metering (where the electricity produced from a solar installation at one location is credited toward electricity consumption at a different location) and community solar but not to residential rooftop solar. Phase One compensates these projects using a “Value Stack,” which identifies certain components that together represent the value of that clean energy to the grid. The values in the Phase One Value Stack include certain costs that the utility no longer has to incur, which are referred to as “avoided costs” and which are assigned a monetary value. These include:

• The cost of the energy that the utility would otherwise have to generate or purchase (referred to as “wholesale” energy);
• The amount of energy-producing resources that the utility would have to procure to meet demand (referred to as “capacity”); and
• The cost of delivering that energy to customers, as well as the higher costs of delivering the energy in certain congested areas of the grid.

In addition to these avoided costs, the Value Stack also includes a credit for the environmental attributes of certain types of clean energy, primarily the fact that they do not emit greenhouse gases.

A second phase of this transition (referred to as Phase Two Value Stack) is in process to further refine these values. After January 1, 2020, VDER will also apply to new residential rooftop projects under a new compensation method to replace traditional retail rate net metering.

New York’s Solar Gap

Because retail rate is a more straightforward, if blunt, method of net metering, developers may initially struggle to make an easy economic case for solar while transitioning to a value-based compensation structure. However, if done well, this new structure will allow solar to expand more efficiently in New York, with better outcomes for consumers and the climate. Continued expansion of solar is important, because in contrast to other Northeast states such as Massachusetts and Vermont, New York has relatively modest amounts of installed distributed solar given its population (Figure 1). It must accelerate to meet state and regional climate goals.

New York has set a goal of procuring 50% of its energy needs from renewable energy resources by 2030.  As shown in Acadia Center’s EnergyVision 2030, with further strategic action New York can reduce greenhouse gas emissions 45% by 2030, a target that will put the state on a path to meet minimum EnergyVision 2030 recommends that, in addition to sharply increasing grid scale wind and solar generation, New York needs to add 13.7 GW of distributed solar, more than 10 times the amount that has been installed to date.

Figure 1 – Per Capita Installed PV

Paths Forward

New York’s need for more distributed solar can be addressed from multiple angles: first, by making the transition to value-based compensation as gradual and understandable as possible; and second, by supporting solar expansion through complementary programs. Acadia Center has been an active participant in the VDER proceeding since its inception. Recently, staff from the Department of Public Service approved several changes to the Phase One Value Stack to expand the types of eligible renewable energy resources and make it easier for customers to participate and receive compensation. These changes include:

• Removing certain size limits from eligible clean energy resources
• Expanding the VDER compensation structure to storage and new forms of renewable energy such as tidal energy
• Removing location-based restrictions within utility territories

Acadia Center supported these changes and submitted comments with these and other recommendations for improving various elements of the value stack to make it easier for customers to receive compensation and to ensure these resources are appropriately compensated for the value they add to the system.

Acadia Center also supports solar expansion in New York through statewide initiative and grassroots campaigns. One such state initiative is NY Sun, a program administered by NYSERDA that seeks to add 3 GW of installed solar capacity in the state by 2023. The program works by establishing cash incentives for developers that decline over time as solar installation increases in certain regions of the state. Recently, NYSERDA made improvements to the program by expanding the incentives, supporting larger projects, and encouraging solar installations in a greater variety of locations. In addition, Acadia Center is a founding member of Million Solar Strong, which seeks to double this statewide goal to 6 GW of solar capacity by installing solar on 1 million homes by 2023, including 100,000 low-income households. The campaign has been meeting with public officials and building support around the state.

New York must make the leap to close its solar gap, and both regulatory solutions and grassroots support will be necessary. Together, these efforts have the capacity to make lasting change for this key technology.

Regional Interest in Battery Storage Heats Up

With the sweltering days of summer behind us and New Englanders reluctantly turning their minds to winter storm season, it is worth asking how we can keep our electric grid running affordably and efficiently during both heat waves and cold snaps. Behind-the-meter energy storage is one solution that is showing increasing promise.  

In-Home Energy Storage

Behind-the meter energy storage refers to when customers store electric power purchased from the grid or power generated themselves (such as from rooftop solar panels) in batteries installed in their homes. The market for behind-the-meter storage is growing rapidly due to decreasing costs and growing awareness. In addition to providing backup power to homeowners during outages, like a traditional generator, this storage can provide backup power for the grid itself.

Battery storage can also be combined with innovative electric rates. For example, time-varying rates could encourage customers to purchase power from the grid during periods of low demand and use energy stored in their battery during periods of high demand. This would lower storage users’ bills directly while reducing the use of expensive and polluting backup plants typically needed during times when temperatures surge or plunge. In turn, avoiding these expensive resources will cut energy prices for all customers.

Policies and Pilots

Many states are currently experimenting with adding battery storage to the grid to help reduce prices and integrate renewable energy sources that produce power intermittently. This wide range of pilots is providing valuable lessons for putting storage to good use. For example, Vermont’s Green Mountain Power (GMP) claimed it saved customers $500K during a heat wave this summer through its pilot of in-home batteries. During the hours of highest demand, the program allows GMP to withdraw energy stored in customers’ batteries instead of paying very high prices on the wholesale market. This year, GMP also expanded its pilot program to allow customers to purchase third-party storage devices. In New Hampshire, Liberty Utilities is proposing a similar pilot that would combine storage with time-varying rates to provide customers with incentives to use electricity during times of lower demand.

To support a future electric grid where consumers are empowered to produce, store, and use their own electricity, state policies should enable residents to own and operate batteries to the largest extent possible. Utility ownership of residential batteries can stifle the development of competitive markets and reduce customers’ flexibility in deciding how and when to deploy their power. Acadia Center will continue to advocate for programs that prioritize a customer-centered model, helping states pursue and expand programs like those detailed above.

Mistaken Assumptions: Analysis from Pipeline Proponents Significantly Overestimates Oil and Coal Consumption and GHG Emissions

Making smart policy decisions on any issue requires sound objective analysis. To contribute to the public debate on a range of regional energy and environmental decisions, including evaluation of proposals for electric ratepayers to finance new regional natural gas pipelines, Acadia Center recently released a fact sheet that takes a comprehensive look at several different regional trends for greenhouse gas (GHG) emissions, electricity generation, and fuel consumption across all sectors.

Recently, Concentric Energy Advisors (Concentric) produced a report that includes an emissions analysis of this past winter’s electricity generation on behalf of a coalition of advocates for ratepayer-funded expansions in natural gas pipelines. Acadia Center’s Climate and Energy Analysis Center (CLEAN Center) reviewed this analysis, and it seems clear that the Concentric analysis significantly overestimated winter greenhouse gas (GHG) emissions from oil and coal generators in New England this past winter, likely between 15–20% higher than actual emissions from these sources.

This is because the Concentric report, like most analyses, makes assumptions as a part of its calculations. Assumptions are often used when data is incomplete or to avoid additional analysis that will only provide small improvements in accuracy. A frequently used assumption in electricity generation calculations is called a “heat rate,” which measures how efficiently a power plant turns fuel into electricity. A lower heat rate means a plant uses less fuel to generate the same amount of electricity. This information can be used to estimate the amount of fuel that a power plant consumes based on the amount of electricity it has generated. The estimated level of fuel consumption can then be used to estimate greenhouse gas emissions. However, fuel consumption data is often reported directly and can be used to more accurately estimate greenhouse gas emissions. Acadia Center’s recent analysis used fuel consumption data from the U.S. Energy Information Administration (EIA) to estimate GHG emissions for recent months where emissions data isn’t directly available.

The Concentric analysis begins with electricity generation data from ISO New England and then uses assumed heat rates to calculate fuel consumption. The calculated fuel consumption is then combined with an assumed emissions rate to estimate GHG emissions. In this case, Concentric used assumed heat rates based on S&P Global Market Intelligence data to represent the heat rates of power plants in New England. The Concentric analysis does not state if this assumed heat rate data is based on regional or national figures, nor does it compare it to other published data for regional heat rates as a check on its accuracy.

The Acadia CLEAN Center examined recently reported EIA data on fuel consumption and generation for individual power plants in New England from December 2017 through February 2018. This data can be used to directly calculate actual heat rates. Based on Acadia Center’s analysis of this EIA data, it appears that the assumed heat rates in the Concentric analysis for oil and coal generation in New England are significant overestimates. In other words, the Concentric analysis assumed those types of power plants used more fuel to generate electricity than they actually did.

Table 1 – Concentric Assumed Heat Rates and Actual Heat Rates (MMBTU/MWh)

As shown in Table 1, the assumed heat rate in the Concentric analysis for oil generation is 25% higher than the actual heat rate for oil generation in New England this past winter. Similarly, the assumed heat rate in the Concentric analysis for coal generation is 9% higher than the actual heat rate for coal generation in New England this past winter.

There can be many reasons that assumptions do not accurately represent reality. Assumptions based on historical data or national data do not necessarily reflect recent local conditions in New England. The assumptions in the Concentric analysis about the relative inefficiency of oil generation could also be reflecting a more general misconception about oil generation in New England. The older oil generating units in New England are more inefficient. However, newer units, including combined cycle and combustion turbines that can run on both natural gas and oil, are much more efficient.

Table 2 – Oil Heat Rates for Electric Generation Sites with Significant Oil Combustion from Dec. 2017-Feb. 2018 (MMBTU/MWh)

As this data shows, many of the electric generation sites in New England that used a significant amount of oil this past winter were much more efficient than assumed in the Concentric analysis and only one site, New Haven Harbor, was less efficient than the overall average assumed in the Concentric analysis.

The impact of this inaccurate assumption by Concentric flows through to subsequent calculations. This means that the estimates in the Concentric analysis for combined GHG emissions from coal and oil generation would be much higher than actual GHG emissions from coal and oil generation, likely between 15–20% higher. As a result, calculations of incremental GHG emissions during the winter cold snap are likely significant overestimates, as well as the other calculations in the Concentric analysis based on the estimate of incremental GHG emissions.

No one who is concerned with climate change wants fossil fuel plants to continue releasing greenhouse gases. But using emissions data to justify any policy case requires accuracy. To better inform the broader energy and environmental debate in New England, Concentric should update its analysis based on actual heat rates in New England this past winter. More broadly, all of the tools available to meet our energy needs—market reforms, energy efficiency, energy storage, solar, wind, and fixing gas leaks among them—need to be fairly evaluated in order for the right conclusions to be drawn.

Connecticut’s Emissions Reduction Opportunity

Connecticut’s transportation system – the network of highways, trains, public transit, and walking and biking corridors – is vital to the state’s economy as it facilitates movement of goods and connects people to jobs and opportunities.  However, the system needs critical updates to continue to support the state.  

At the same time, the transportation system is the largest source (41%) of Connecticut’s greenhouse gas emissions (“GHGs”), which must be reduced for the state to meet its climate commitments.   

These two challenges of improving the transportation system and reducing GHGs can be addressed by applying a policy model that has been successfully used to clean up electricity generation and raise funds through emissions reductions.  

The Cap and Invest Model

The Regional Greenhouse Gas Initiative (“RGGI”) established in 2009 put a price on carbon emissions from electricity generation and used the proceeds to invest in renewable energy and energy efficiency. Since the program began: 

• CO2 emissions in the region have dropped by 50%
• $4 billion of economic activity has been generated
• Tens of thousands of jobs have been created.¹

Connecticut was a founding member of this regional cap-and-invest program, and as of 2017 had spent about $201 million of RGGI proceeds on clean energy projects. As of 2014, the latest figures available, RGGI expenditures added about $245 million to Connecticut’s economy, created 2,200 job-years, and helped avoid $13 million in health impacts.²

A similar regional cap-and-invest program could be applied to transportation to raise revenues, reduce emissions, and stimulate the economy.  To better understand this opportunity, Acadia Center looked at a scenario that reduced Connecticut’s transportation GHGs 4%, or nearly 4 million metric tons of CO2, by 2030 compared to the baseline scenario from EnergyVision 2030.³ This level of emissions reductions is aligned with Georgetown Climate Center’s estimate for market-based policy compared to existing Federal policies.⁴

Revenue and Reinvestment Strategies

Based on a $15/ton carbon price,⁵ the state could generate about $2.5 billion in revenue between 2019-2030 by capping emissions. Connecticut could allocate these funds in many ways to improve transportation and reduce GHGs. For example:

• Maximizing transportation GHG reductions by designating 100% of the program proceeds to emissions reduction measures, such as transit expansion, consumer electric vehicle and charging infrastructure rebates, and electrification of medium and heavy-duty vehicles like transit or school buses.
• Designating funding for infrastructure maintenance and transit operations, which could also reduce GHGs (by reducing traffic congestion, for example) as an ancillary benefit.

To provide an example of the revenue that could be generated by a cap-and-invest program, Acadia Center examined a 50/50 portfolio, with half of the program proceeds going to maintenance of infrastructure and half going to specific GHG reduction measures (Table 1). This portfolio is only provided as a point of reference, not a recommendation, and it does not include the full suite of activities that could be funded with proceeds.

Table 1: Simplified Reinvestment Portfolio for Connecticut’s Proceeds from Transportation Climate Policy

Benefits from Reinvestment

By examining the benefits of similar transportation expenditures in Connecticut and the U.S., Acadia Center has estimated some of the economic activity and other monetary benefits a 50/50 portfolio could generate (Figure 1). The total benefits from both tracks of spending are estimated at:

• $10.3 billion in economic output.
• $4.3 billion in added personal income.
• $11.6 billion in other benefits including fewer hours spent in traffic (not including the value of reduced GHG emissions).
• Over 3,000 long-term jobs created (i.e. not temporary construction jobs).
• $86 million in savings from avoided GHG emissions⁷ avoided costs.

Figure 1: Increased Economic Activity and Other Benefits from Reinvesting Transportation Climate Policy Revenues⁸

For more information:

Emily Lewis, Policy Analyst
elewis@acadiacenter.org, 860-246-7121 x207

¹See: Analysis Group’s “The Economic Impacts of the Regional Greenhouse Gas Initiative on Nine Northeast and Mid-Atlantic States: Review of RGGI’s Third Three-Year Compliance Period (2015-2017)

²See: Acadia Center’s Clean Energy Investments at Stake in Connecticut

³See Acadia Center’s EnergyVision 2030 Technical Appendix for modeling details. The Baseline scenario includes existing EPA/DOT fuel efficiency standards for medium and heavy-duty vehicles, as well as the existing Corporate Average Fuel Economy standards through 2025.

⁴See: Georgetown Climate Center’s  Technical Appendix Emission Reduction Strategy Analysis from “Reducing Greenhouse Gas Emissions from Transportation: Opportunities in the Northeast and Mid-Atlantic”

⁵Georgetown Climate Center’s analysis estimates a carbon price for market-based transportation climate policy between $5-$30/ton CO2.

⁶See: Economic Analysis Reports for the 1-84 Viaduct, the I-84/Route 8 Mixmaster in Waterbury, and the New Haven Rail Line, available in the November 2015 Briefing for the Transportation Finance Panel, and NREL’s National Economic Value Assessment of Plug-In Electric Vehicles.

⁷See: EPA’s Social Cost of Carbon methodology

⁸Other benefits calculated as present value. Output and income are cumulative totals over the project lifespans.

Clearing the Air: Long-Term Trends and Context for New England’s Electricity Grid

Some entities and stakeholders have raised concerns about the environmental performance of New England’s electricity system during a particularly cold multi-week period in December 2017 and January 2018. Specifically, they have called attention to emissions due to the amount of oil and coal used for electricity generation during that time. Acadia Center takes these concerns very seriously and advocates strongly for reducing pollution that hurts public health and the climate in order to meet the region’s science-based requirements.

In addition, some of these stakeholders are advancing a specific proposal that they argue would solve the region’s emissions issues, a multi-billion-dollar electric ratepayer-funded investment in new natural gas pipeline capacity. Public investments in natural gas pipelines would have significant consequences for the region and the claimed benefits of such an investment should be scrutinized closely.

To provide perspective on the grid’s environmental performance this past winter and the impacts of a proposed major expansion of natural gas pipeline capacity, Acadia Center has developed a fact sheet which takes a comprehensive look at several different regional trends for greenhouse gas (GHG) emissions, electricity generation, and fuel consumption across all sectors. The results demonstrate that the selective statistics used by pipeline advocates are incomplete at best and significantly misleading at worst.

Policymakers in the region should not be misled by pipeline advocates and must consider a full set of options to ensure that New England continues to progress toward a clean, reliable, and affordable electricity system in the coming years. Eight charts on relevant issues are presented in the fact sheet, but the most important points are included here.

New England is making significant progress reducing GHG emissions from the electric sector over the long-term. New England GHG emissions from electricity generation from March 2017 through February 2018 were 53% lower than in 2001-02, 26% lower than in 2012-13, and 8% lower than in 2016-17. Progress reducing GHG emissions in the electric sector is undeniable, even accounting for emissions related to the cold snap in December 2017 and January 2018.

Figure 1 – Annual GHG Emissions (Mar. to Feb.) from Electricity
Generation in New England

The region has historically seen significant monthly variation in GHG emissions from electricity generation. While GHG emissions from electricity generation in New England were higher in December 2017 and January 2018 than some other months, seasonal and monthly variation in GHG emissions is normal. Monthly GHG emissions from electricity generation in New England are typically higher in hot summers and cold winters. January 2018 was the 10th highest month of GHG emissions dating back to the beginning of 2014, while February 2018 was the lowest in the 21st century.

Figure 2 – Monthly GHG Emissions from Electricity Generation
in New England

GHG emissions from electricity generation are falling in New England because of several drivers, including energy efficiency, increased renewables investment, and a major decrease in the amount of electricity generation from coal and oil. Annual electricity generated by coal and oil from March 2017 through February 2018 was 91% lower than the levels in 2001-02 and 49% lower than just five years ago in 2012-13.

Figure 3 – Annual Electricity Generation from Coal and Oil (Mar. to Feb.)
in New England

New England is rapidly approaching the limit of the GHG reduction strategy of replacing electricity generation from coal and oil with natural gas. As might be expected, coal and oil generation has been reduced in part through increases in natural gas generation. However, as a long-term strategy, shifting from one fossil fuel to another will not allow for the GHG emissions reductions the region needs to meet its science-based commitments.

GHG emissions from natural gas combustion across all sectors, including those from gas delivered through two recent regional pipeline expansions, will be an increasingly significant percentage of overall regional GHG emission limits over time. Looking at combustion emissions in isolation also understates the overall impact of emissions from natural gas because it ignores the significant GHG emissions during extraction and delivery. Adding a major new regional pipeline would only exacerbate this issue, potentially increasing combustion emissions from natural gas to 49% of the overall regional GHG emissions target in 2030, and that would rise to 72% in 2040, and 135% in 2050.

Figure 4 – Natural Gas Combustion Emissions in New England from All Sectors Versus Overall Regional GHG Emissions Requirements

Of course, emissions are not the only important policy consideration for the successful operation of New England’s grid. Other serious considerations are reliability and consumer costs. Some stakeholders have argued that there is a medium-term reliability risk, which could lead to rolling blackouts or other harms. However, a recent report from Synapse Energy Economics demonstrates that, with reasonable expectations for growth in demand for electricity and natural gas and accounting for planned investments in renewables and transmission for clean energy, the risk of major reliability issues is close to zero. Keeping on this path will take some effort but should be achievable.

On the consumer costs side, using hard-earned ratepayer dollars for major new natural gas pipelines would not have any impact on electricity prices until construction is finished, which could be in 2022 or even later. Furthermore, there are good reasons to think that purported consumer benefits would not outweigh the guaranteed costs that ratepayers would have to pay. Major investments are currently being planned for offshore wind and new transmission lines for clean energy that would come online in the same timeframe as a pipeline, and these investments undercut many of the alleged benefits of a pipeline. Additional pipeline capacity would also increase the chances of exporting natural gas out of New England, which would drive up natural gas prices.

In the shorter term, many other available policy options can help improve the reliability of New England’s grid and reduce costs, while simultaneously lowering emissions. This year, ISO-NE is implementing “pay-for-performance” market reforms, which provide additional incentives to generators to respond during times of high demand and high prices. Additional investments in energy efficiency for natural gas and electricity, fixing leaks in the natural gas distribution system, advanced energy storage, local renewables, and grid modernization will start to help right away with energy prices and reliability, while simultaneously advancing the region’s long-term emissions requirements.

The usefulness of using natural gas as a “bridge” over the last two decades is at an end and the region needs to avoid further long-term public investments in fossil fuels. New England’s economic and environmental future depends upon building a clean, reliable, and affordable modern energy system. Acadia Center’s EnergyVision 2030 shows a path to meet economy-wide GHG emissions reductions of 45% from 1990 levels by 2030 using market-ready technologies, with no additional natural gas pipeline capacity needed.  It’s time to move forward with a smart portfolio of investments to benefit consumers, create well-paying local jobs, improve public health, and lower the risks of climate change.

CT Businesses Have a Message to Legislators: Restore the Energy Efficiency Fund

Connecticut’s high-quality energy efficiency programs help many businesses save money, improve their bottom line, create new jobs that pay well, and compete locally and nationally. Last year alone, over 6,000 in-state businesses benefited from these crucial programs.

Helping businesses cut costly energy waste also helps grow Connecticut’s economy, as each $1 spent by these energy efficiency programs produces $7 in economic growth. That’s an unparalleled return on investment for the Nutmeg State.

Unfortunately, Connecticut took a major step backwards on efficiency near the end of last year. Under extreme fiscal pressure, the General Assembly diverted $127 million in ratepayer funding for efficiency, possibly sacrificing a long-term economic boost of approximately $889 million.

Connecticut now risks falling behind nearly all other states in New England, as most states in the region have achieved more ambitious energy savings targets or are on track to do so by 2019. Connecticut also risks leaving its businesses without good efficiency solutions, making its economic recovery even harder.

Businesses respond

The decision to raid energy efficiency funds leaves many businesses in Connecticut concerned.

One such business is Watson Inc, a food manufacturer based in West Haven that employs 300 Connecticut residents. Three years ago, a group of Watson employees volunteered to be on an energy efficiency and sustainability team. With help from the energy efficiency programs, the team developed and executed a plan that led to a 20% reduction in electricity and gas usage.

They also replaced all lighting with LEDs, installed a new properly-sized air compressor, removed many inefficient dust collection systems, and replaced 20 out of 30 air conditioning units with more efficient models. After completing a steam trap survey, they replaced or repaired many components in the high-pressure steam and boiler system. These improvements helped save the company money while reducing its demand on the energy grid.

Another business, Trifecta Ecosystems, Inc., a start-up aquaponic technology and indoor farming company based in Meriden, recently weighed in with the legislature as well. The company described how Connecticut’s efficiency programs helped it immediately capture significant energy savings in a new facility, gain a competitive edge in their new and growing industry, and even hire another full-time employee.

Examples of business support for efficiency abound. Last year, for instance, a number of Connecticut-based companies signed a letter asking the legislature not to divert funds from energy efficiency, as did a national coalition with numerous Connecticut members. More recently Unilever, which has a large facility in Trumbull, shared the following quote to weigh in on the value of investing fully in energy efficiency:

“Unilever believes that energy efficiency is key to keeping businesses like ours thriving. Connecticut will benefit from funding the state’s energy efficiency programs,” said Mark Bescher, Manager of Federal Government Relations and External Affairs at Unilever.

Ball in the legislative court

Legislators and policymakers should consider the repercussions of energy efficiency losses on Connecticut’s business community, as well as its consumers, economy, and environment. These self-inflicted harms include lost jobs, lower economic growth, higher utility bills for ratepayers of all kinds, increased local air pollution, and reduced access to energy efficiency for low-income households.

The good news is that this damage can still be averted if the efficiency fund raid is undone during the current legislative session, which ends on May 9th. Acadia Center will make every effort to restore these vital funds and give our state—and its business community—a chance to achieve a clean and prosperous future.

Energy Efficiency Is Working in New England

Over the past few years, electric consumption has been declining in New England even as the population and economy have grown. This is due in large part to energy efficiency (EE) gains, which have dramatically reduced the amount of electricity consumed in the region and are projected to do so even more in the future.

Declines in peak demand

The hour of highest electricity demand in New England determines the region’s infrastructure needs. The system is built to ensure it can reliably supply electricity during that hour, which usually occurs on a hot summer weekday.

For the first time ever, ISO New England (the region’s electric grid operator) is predicting a decline in peak demand over the next ten years, mostly due to projected gains in EE and on-site solar generation. Known as the 90/10 peak summer demand forecast, this projection models electric needs during a once-in-ten-years hot weather event and serves as the basis for regional system reliability planning.

The 2018 forecast also includes improvements that help it more accurately reflect recent history. Predicted winter peaks (the highest hour of use in the winter) have shifted downward, and projected needs in 2024 are nearly 700 megawatts lower than in last year’s forecast. This is equivalent to the power produced by the retiring Pilgrim Nuclear Power Station in Massachusetts.

Acadia Center looks forward to seeing these revised winter figures incorporated into the updated modeling of ISO’s fuel security study. The initial fuel security study asserted shortages could occur under severely stressed system conditions and sparked calls for new pipelines to carry additional natural gas into the region to fuel power plants. The new forecast should result in significant changes to those predictions.

Beneficial to ratepayers

Since the electric grid is designed and built to meet needs on the peak hour, increases in energy efficiency reduce the need for expensive new construction, which would be paid for by utility customers if built.

Crucial for the future

ISO projects that by 2020, energy efficiency will reduce demand on peak days by more than all of the region’s nuclear power plants combined can supply. By 2027, energy efficiency is projected to reduce the amount of electricity we need to generate by more than 22%.

These figures not only highlight the benefits of the region’s past and planned efficiency, but also give insight into what could be accomplished with more efficiency. Lagging states can continue to expand their efforts, and efficiency improvements could be better targeted at summer and winter peaks if avoided infrastructure costs are more accurately calculated.

For Fairer Electric Bills, Lower Fixed Charges

Residential electricity rates are typically comprised of two basic parts — a volumetric charge based on energy used and a monthly fixed charge, which is typically referred to as a customer charge. Customer charges are flat fees that every customer pays, regardless of the amount of electricity or gas used. Because utilities have a fixed revenue requirement, higher customer charges lead to lower volumetric charges, and vice versa.

Over the past several years, utilities across the country have pushed for higher customer charges, in part because they provide a guaranteed revenue stream. Acadia Center has developed materials showing that fixed charges for residential electric customers in most states typically range from $5 to $10 a month, but are much higher in New York, averaging close to $18. Central Hudson Gas and Electric’s current customer charge of $24 is the highest in New York and among the highest in the nation.

Why lower customer charges?

• High customer charges disproportionately impact low-income customers, who typically use lower than average amounts of electricity and who are often forced to spend significant amounts of their income on utility bills. While high customer charges might represent only a small fraction of a bill for higher-income consumers, these charges can represent a large portion of a low-income consumer’s bill, making energy costs proportionately greater for those on whom the burden is already greatest.
• High customer charges conflict with New York’s goals for a clean, modern, consumer-friendly electric system by decreasing incentives for customers to lower their electricity bills by investing in energy efficiency or distributed energy resources like solar power.

High customer charges don’t align with state goals

Importantly, high customer charges reduce the incentive for investment in energy efficiency. This is problematic as New York seeks to ramp up its efforts to improve statewide energy efficiency by announcing a plan to set a 2025 energy efficiency target by Earth Day. As Acadia Center has pointed out in its recently released EnergyVision 2030 Progress Report for New York, New York’s electric energy efficiency annual savings level is only 0.5%, compared to savings levels of 3.24% in leading states such as Massachusetts. As New York seeks to establish ambitious energy efficiency targets, it needs to set the right incentives to invest in these resources by ensuring that utilities reduce these charges.

Working toward rate relief

Things may be starting to change. On April 18, thanks in part to Acadia Center’s advocacy, Central Hudson Gas and Electric agreed to reduce its current electric and gas residential customer charge to $19.50 over three years in its ongoing rate proceeding, becoming the first New York utility to reduce its customer charge in more than a decade.

Acadia Center has set up a website with several other organizations at www.lowerfixedcharges.org to continue advocating for lowering customer charges to levels that provide rate relief to New York energy consumers and set New York on a path to meet its clean energy and energy efficiency goals.