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)

Concentric assumed heat rate versus actual heat rate

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

Simplified Reinvestment Portfolio

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

Benefits of reinvesting TCI revenues

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 green line represents the ISO peak demand forecast, which factors in solar and energy efficiency.

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.

An EnergyVision for Puerto Rico

When Hurricane Maria hit Puerto Rico on September 20, it plunged the island into a devastating power outage. This NOAA satellite photo shows visible lights in Puerto Rico and the U.S. Virgin Islands before the storm (July 24) and after (October 13). It took two months to restore more than half of normal peak load electricity, as of early-December, almost a third of households are still in the dark.

In May, Acadia Center released EnergyVision 2030: Transitioning to a Low-Emissions Energy System, a comprehensive analysis that demonstrates how seven Northeast states can spur use of market-ready technologies that empower consumers, control energy costs, and advance economic growth while lowering carbon pollution. EnergyVision 2030 presents a practical path to a clean energy future where electricity produced by solar, wind, and other renewable technologies powers our cars and provides efficient heating; where residents and businesses anchor an integrated grid, with power flowing between consumers and among smart appliances and batteries, within energy efficient buildings; and where community energy provides equitable access to renters, low-income ratepayers, and those who cannot site clean energy at their own homes. EnergyVision 2030 is ambitious, optimistic, and achievable.

In September, Hurricanes Irma and Maria devastated Puerto Rico, leaving 3.4 million people without power, clean water, food, or cell phone service. Almost three months later, a third of the island is still in the dark. While officials warn that it will take many more months and many billions of dollars to repair the island’s electricity transmission and distribution system and restore some sort of normalcy, creative thinkers are asking what might be possible if—instead of fast-tracking huge investments in rebuilding Puerto Rico’s troubled, traditional grid— Puerto Rico builds an affordable clean energy system of the future.

This clean energy future would be a significant departure from Puerto Rico’s pre-hurricane energy system, which depended heavily on fossil fuels and resulted in the highest retail electricity prices for American citizens outside of Hawaii. Despite including both the Caribbean’s largest solar farm and its largest wind farm, renewable energy supplied only 2.4% of Puerto Rico’s electricity in 2016. That’s far short of the 2010 Renewable Portfolio Standard (“RPS”) requiring the Puerto Rico Electric Power Authority (“PREPA”) to get 12% of its electricity from renewable sources starting in 2015, scaling up to 15% by 2020 and 20% by 2035. Missing the RPS target is not PREPA’s only problem. The agency’s debt tops $9 billion, its infrastructure is old and failing, and service is often unreliable. The bottom line is that Puerto Rico was ripe for grid modernization even before Hurricane Maria wiped out the grid.

Weaving strategic grid modernization into emergency response will require sensitivity, and Acadia Center’s EnergyVision lays the foundation for ambitious, achievable reforms anchored by clean energy technologies in four core areas:

Grid Modernization: Advocates on Puerto Rico and the mainland are abuzz with the potential of a modern system of microgrids. These localized grids incorporate renewable generation and battery storage to avoid the need for expensive long-distance transmission and distribution lines, and are more resilient than traditional, centralized grids. The impact of Hurricane Maria bears this out: though the storm took out 80% of transmission lines, it damaged only 10-15% of solar panels. Functioning panels weren’t able to deliver power to the now-destroyed grid, but interconnecting those panels through local microgrids would be particularly useful, especially given Puerto Rico’s terrain of forests and mountains through which it is difficult to maintain power lines. Renewable energy companies have stepped up since the hurricanes: German energy storage manufacturer Sonnen already has six microgrids up and running, with nine more installations planned in coming weeks; Tesla deployed solar and storage to restore power at San Juan’s Children’s Hospital and has announced six new battery projects on two Puerto Rican islands. Taxpayer-funded disaster relief should encourage innovations like these to lend immediate support to traumatized Puerto Ricans and to demonstrate the potential of a smart, clean, modern grid.

Electric Generation: Puerto Rico has ample renewable resources, yet last year, petroleum supplied nearly half of the island’s electricity, and natural gas supplied nearly one-third. Solar power is the fastest source of clean, renewable generation. As of June 2017, Puerto Rico had five utility-scale solar farms with 127 megawatts of capacity, and more than 8,500 customers with nearly 88 megawatts of distributed capacity connected with net metering. Expanding grid-scale and distributed renewable generation to achieve and surpass RPS targets will mitigate high fuel costs, advance energy independence, reduce emissions, and support a more resilient energy system.

Buildings: Energy efficiency and clean building-cooling and water-heating technologies have already provided cost savings and emissions reductions in Puerto Rico. The island utilized funds from the American Recovery and Reinvestment Act to weatherize more than 15,000 homes, cutting electricity use by an average of 15%, and to install more than 11,000 solar hot water heaters. As it rebuilds, Puerto Rico should maintain its requirement that all new single-family homes have solar hot water heaters, and also require minimum efficiency standards for homes, municipal, and commercial buildings.

Transportation: Hurricane Maria severely damaged Puerto Rico’s critical transportation infrastructure, including highways, bridges, traffic signals, and fuel stations. Immediate recovery efforts focused on clearing and repairing roads and reopening gas stations to facilitate relief efforts and restore local and regional bus service. Longer term efforts should recognize the potential of electric vehicles and innovations in mobility options to improve transportation efficiency and resiliency, and strive to build a robust network of electric vehicle charging stations.

EnergyVision 2030 calls for a resilient, low-emissions energy system that benefits communities every day, and especially in the face of extreme weather events and volatile global fuel markets. Acadia Center advocates in the Northeast for a consumer-friendly grid, clean distributed generation, and efficient buildings and transportation, but this can and should be pursued everywhere. Puerto Rico needs this critical help now.

Action Guide Identifies Barriers to Community Energy—Resilient Microgrids Could Have Helped Maine Bounce Back from Storm Damage

Of the many economic, energy, and environmental benefits of a clean, modernized community energy system, one might stand out for electric customers across the Northeast right now: resiliency.

More than 1.5 million homes lost power when hurricane-force winds and torrential rain battered New England in late October. In Maine, toppled trees blocked roads, damaged homes and cars, and pulled down power lines, contributing to outages that left nearly two-thirds of the state without power. The emergency response was hardly a picture of resilience: despite the efforts of more than 3,000 state agency and utility workers from 14 states and three Canadian provinces, it took more than a week to restore service statewide.

Neighbors rallied to keep each other warm and fed, but updating the way we plan, manage, and invest in our electric grid would give communities the freedom to do even more. Acadia Center’s Community|EnergyVision Action Guide highlights how communities can create more resilient energy systems by leveraging available technologies to generate, distribute, and use power in a cleaner, more consumer-friendly way. The Action Guide also reveals where current state rules limit—and even prohibit—community action.

New England’s recent and historic wind storm is a stark reminder that obstacles to community energy leave residents vulnerable. Power outages are inconvenient, dangerous, and expensive—and so are the workarounds many municipalities, businesses, and residents turn to during lingering blackouts.

Communities need better, more resilient energy systems, and they deserve the freedom to access and control clean, affordable, local energy. Microgrids are a key component of this clean energy future. These self-contained power systems can combine distributed renewable generation resources with demand optimization and energy storage to serve their immediate geographical area. Microgrids can operate as part of the main electrical grid or go into “island” mode to operate separately from the grid during power outages.

Microgrids improve resiliency because they provide electrical service to a concentrated area and their generation and storage sources can be distributed across that area—with multiple rooftop solar installations, for example. This compact, yet decentralized, approach makes microgrids more rugged overall, reducing their vulnerability to the service disruptions that go along with long-distance transmission and distribution lines.

Microgrids became a focus of many state resiliency plans after Hurricane Sandy in 2012, and those on-line in Texas helped keep stores and hospitals open during Hurricane Harvey. Even in good weather, microgrids add value to a community. Vermont’s Stafford Hill solar and storage microgrid not only powers Rutland’s emergency shelter, it yields $380,000-$700,000 annually in energy storage benefits and land-lease fees.

Maine communities are ripe for microgrids, yet there is no clear authority for municipalities to act. Acadia Center’s Community|EnergyVision Action Guide notes that communities would have a clearer path if policymakers established specific rules enabling developers and stakeholders to collaborate on microgrids that enable local clean energy generation, use distributed energy storage, and improve control over energy consumption; add resilient capacity and stability to the larger grid; and operate independently at critical times.

When legislators return to Augusta in January, they will consider An Act to Enable Municipalities Working with Utilities to Establish Microgrids (LD 257). There was an informational meeting on the bill last month—just days before the majority of Mainers lost power—and there will be public hearings and work sessions in early 2018. Please join Acadia Center in sharing the impact of an outdated, inflexible power grid and demanding expanded community energy options to enhance resiliency.

Acadia Center Strengthens New York Office and Hires New York State Director

Cullen Howe, New York Office Director

It is an exciting time for clean energy issues in New York. New York’s ongoing Reforming the Energy Vision (REV) proceeding, its goal of 50% renewable energy by 2030, and its continued participation in the Regional Greenhouse Gas Initiative provide key elements for the future of the state’s energy system. Acadia Center’s recently completed report, EnergyVision 2030, shows that New York can reduce emissions 45% and be on a path to a clean energy system by the year 2030 if the state acts now to further strengthen its commitment to clean energy technologies. To facilitate the action necessary to achieve this vision for all New Yorkers, Acadia Center has taken the next step, strengthening its staffing capacity in New York and hiring a full-time staff director of its New York program.

Acadia Center has been active on selected issues in the state for several years, participating with colleague organizations in the Regional Greenhouse Gas Initiative and other energy and climate issues. New York’s REV process—one of the most comprehensive reassessments of energy policy occurring in the country—has offered opportunities for Acadia Center’s experience in energy policy, energy efficiency and climate mitigation to be applied in New York forums. Fully active in the many REV proceedings, Acadia Center has focused on energy efficiency, power grid modernization, and climate policy. In 2015, by invitation of the Rockefeller Brothers Fund, Acadia Center hosted a multiday meeting at the Pocantico Conference Center focusing on utility reform and grid modernization issues. Beginning in 2015, the organization helped to protect the integrity of New York’s new Clean Energy Standard by successfully arguing against counting large hydropower as a renewable resource eligible for ratepayer support. In addition, it participated in the settlement phases of Con Edison’s most recent rate case and successfully advocated for the utility to increase its investments in energy efficiency.

This past July, this work ramped up when Acadia Center hired me as Senior Attorney as its inaugural New York Director, joining Acadia Center’s New York project team of lawyers and energy policy experts. I’ve joined the team at an exciting moment for the organization and the state. I came to Acadia Center from the New York City Council, where I had been a legislative counsel and was responsible for drafting and negotiating a wide variety of legislation focused on energy efficiency, clean energy, and sustainability. Before that I was an environmental law specialist at Arnold & Porter Kaye Scholer’s New York City office, where I focused on federal and state environmental issues involving climate change, energy efficiency, and green buildings. My work at Acadia Center largely focuses on policies that I’ve been working on throughout my career—policies that move us toward a future fueled by clean energy and energy efficiency.

One of my first tasks has been representing Acadia Center in a rate case brought by National Grid. The utility is seeking to increase customer rates by $331 million beginning next year. Acadia Center has focused on National Grid’s high fixed customer charges, which are charges all customers pay regardless of the amount of electricity they use. In most states, fixed charges range between $5 and $10 a month for residential customers, but in some states, including New York, these charges are much higher.

Since I started in the role of director, Acadia Center has released a paper explaining the problems with high utility fixed charges, which detrimentally impact consumer incentives to invest in energy efficiency and solar power, and the organization has filed testimony in the rate case stating that a reasonable range for customer charges would be between $5.57 and $8.30. We have also focused outreach efforts on educating consumers about the issue of high fixed charges and about opportunities to make their voices heard. This work will continue as Acadia Center expands its reach in New York, advocating for sustainable solutions across the energy system.

No. 1 on Our List of Back to School Supplies: Electric School Buses

The beginning of September signifies the beginning of the school year for many students. Across the country, 26 million, or over half of school-aged children are transported by 480,000 school buses.1 In an average school year, each bus travels about 12,000 miles, using 1,714 gallons of diesel fuel2 and producing about 17 MMT of CO2 emissions,3 as well as other harmful emissions such as nitrogen oxides and particulate matter. Electric school buses offer a viable alternative to diesel buses, and offer a solution to the health and environmental impacts of burning diesel fuel.

A relatively new option, electric school buses are being tested in early-stage pilot programs in both California and Massachusetts. The growing interest in electric school bus deployment is evident in the increase of funding opportunities for ZEV school buses: Blue Bird, a major school bus manufacturer, is the recipient of a grant to manufacture new electric bus models;4  three school districts in Sacramento, California, received a grant for an electric school bus pilot with funds from their cap-and-trade program;5 and the Massachusetts Department of Energy Resources awarded grants to four districts participating in an electric school bus Vehicle-to-Grid (V2G) pilot program.6

Photo: Kipp Jones, flickr

The Massachusetts pilot is of particular interest, as it seeks to demonstrate the feasibility of incorporating V2G technology, through which the electric school buses connect to the grid while not in use, allowing for two-way charging and battery storage. Because most school buses are in use for about 5 hours each weekday on predictable schedules, they are good candidates for V2G for battery storage and improved management of grid-level supply and demand.7

Current acquisition costs for electric school buses are between $250,000 to $300,000—roughly $100,000 to$120,000 more than a diesel school bus. However, the use of electricity to power the buses would displace significant fuel costs over the vehicle’s lifetime. For example, an electric school bus pilot in California is expected to save the host school district $10,000 annually in fuel and maintenance costs.8 There are also a number of potential funding sources to assist with the upfront purchase cost, including funding from the Diesel Emissions Reduction Act, Volkswagen Settlement Funds, and state programs such as California’s vouchers through the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Program. Prices for batteries are expected to decline significantly in the future, too, especially as demand increases. A study through the California Air Resources Board (CARB) indicated a possible 41% reduction in battery price based on an increase from 300 to 10,000 battery systems produced per year.9

Electric school buses are an interesting alternative to diesel and are on a path to become an increasingly beneficial clean energy technology. As the electric school bus market develops, the financial feasibility of electric buses will continue to grow, and more information about the successes and limitations of electric school buses will become available as pilot programs mature.

1 http://www.americanschoolbuscouncil.org/issues/environmental-benefits

2 http://www.americanschoolbuscouncil.org/issues/environmental-benefits

3 https://nnsa.energy.gov/sites/default/files/nnsa/08-14-multiplefiles/DOE%202012.pdf

4 https://www.blue-bird.com/blue-bird/Press-Releases/Blue-Bird-Awarded-44-Million-to-Develop-Electric-S-95.aspx

5 http://stnonline.com/news/latest-news/item/8613-largest-us-electric-school-bus-pilot-comes-to-california

6 http://www.mass.gov/eea/pr-2016/electric-school-bus-grants-to-four-schools.html

7 http://www.schoolbusfleet.com/article/713421/can-electric-school-buses-go-the-distance

8 https://motivps.com/americas-only-all-electric-school-bus-transports-students-saving-california-school-district-over-10000-a-year-in-fuel-and-maintenance-march-3-2014/

9 https://www.arb.ca.gov/msprog/bus/battery_cost.pdf