Four Things You Didn’t Know about Energy Efficiency in Connecticut… And One You Might Have Guessed

1. Nutmeggers have saved more than 1.5 billion kilowatt hours (kWh) in energy over the last five years¹

That’s equivalent to fully powering 169,000 houses in Connecticut for an entire year.² For reference, Bridgeport, the largest city in Connecticut, has approximately 51,000 occupied housing units³ so with the energy saved over the last five years, we would have more than enough to power three cities the same size as Bridgeport for an entire year.

This number doesn’t even include the additional lifetime savings that we know will be realized in the future thanks to these investments in energy efficiency now. If you include those savings, Connecticut residents and businesses will save more than 18.3 billion kWh.⁴ That’s equivalent to:

• 2,058,030 houses powered for one year (1.5 times all of the occupied homes in Connecticut), or
• Millstone’s annual generation (Millstone is Connecticut’s largest power plant),⁵ or
• Combined annual generation of the next 15 largest power plants in Connecticut⁶

What do these savings mean in real terms? They mean lower overall energy demand and lower overall energy costs for everybody. Lower demand also means that the power grid can better handle times of peak use, such as the heights of summer and the depths of winter.

These energy savings translate to carbon dioxide emissions reductions of 13.5 million tons over the lifetime of these investments.⁷ That’s more than the amount of carbon sequestered by planting 300,000,000 trees and letting them grow for 10 years.⁸

2. Connecticut’s residents and businesses have achieved more than $3.8 billion in lifetime savings on their energy bills

Energy efficiency investments over the last five years will save Connecticut consumers approximately $3,818,900,000⁹ over the life of those investments. This is money that consumers don’t have to spend on their energy bills.

Most money that is spent on energy goes to large, out-of-state energy corporations, such as merchant generators that rely on natural gas to fuel their power plants. Money that isn’t spent on energy can instead be spent on goods and services right here in Connecticut. This local spending grows our economy and spurs job creation. The money saved by Connecticut’s 2015 investment in energy efficiency will end up generating approximately 9,258 new jobs, for example.¹⁰

3. Connecticut’s energy efficiency programs have served 242,222 homes over the last five years¹¹

This number includes rebates for efficient HVAC systems, as well as 162,270 homes that were weatherized from 2011 to 2015. In 2015 alone, Connecticut’s Home Energy Solutions (HES) and Home Energy Solutions-Income Eligible (HES-IE) Programs served 55,166 homes.¹² That’s more than the total number of housing units in Connecticut’s second largest city — New Haven.¹³

These programs provide energy auditing services that help residents assess how best to improve the energy efficiency of their homes. These statewide programs will even install many of these important improvements on the spot. They also offer price reductions for purchasing energy efficient appliances and products for the home.

4. Connecticut has converted enough energy efficient light bulbs to fill 300 average-sized swimming pools

A recent report sponsored by Connecticut’s Energy Efficiency Board shows that LED and CFL bulbs have saturated 45% of the residential market in the state.¹⁴ This means that approximately 45% of household lighting in Connecticut uses these high-efficiency bulbs.

Using more efficient bulbs can significantly reduce energy consumption — and they’re more convenient because they last longer. LEDs in particular last 30 to 50 times longer than incandescent bulbs and use up to 85% less energy.

5. Connecticut has more work to do!

All of these impressive achievements are important, but there is more work to do.

Saturation of LEDs in Connecticut is only at 10%. LEDs out-perform CFLs in many ways: they are more energy efficient, they last longer, and people are happier with them. Connecticut’s energy efficiency programs need to continue to incentivize consumers to switch to LEDs to encourage even greater energy savings.

If the HES and HES-IE programs continue at their current pace, it will take almost 15 years to reach even half of the occupied houses in Connecticut. Expanded funding is vital in order to keep these crucial residential programs going strong.

Use of these valuable programs could also be improved. When a resident uses HES to assess and improve their home, HES usually recommends additional work to be done to improve the home’s energy efficiency. More of this additional work, such as adding attic, wall, or basement insulation, needs to be done in order to make Connecticut’s homes more efficient.

It is also worth noting that Massachusetts and Rhode Island are outperforming Connecticut in energy efficiency. The most recent energy efficiency savings rates in Massachusetts and Rhode Island are 3.04% and 2.9% per year, respectively, while Connecticut is at 1.53% — strong nationally, but regionally only half of its leading neighbors. This means that Connecticut’s energy efficiency programs could be eliminating double the energy waste that they currently do. Imagine twice the energy saved, twice the carbon pollution avoided, and twice the cash saved on energy bills!

¹ Calculation from adding up annual savings reported in the Energy Efficiency Fund’s Annual Legislative Reports from 2011 to 2015.
² Based on average of 8,892 kWh annually required per household.
³ Bridgeport has 51,255 occupied housing units according to the 2010 U.S. Census.
⁴ Calculation from adding up lifetime savings reported in the Energy Efficiency Fund’s Annual Legislative Reports from 2011 to 2015.
⁵ Based on Millstone’s gross generation for 2014.  Data from: https://www.eia.gov/electricity/data/eia923/.
⁶ Based on gross generation of Connecticut’s power plants in 2014. Data from: https://www.eia.gov/electricity/data/eia923/.
⁷ From Energy Efficiency Fund’s Annual Legislative Reports from 2011 to 2015.
⁸ Based on 23.2 lbs of carbon per tree. Estimate given by EPA GHG Equivalencies Calculator: https://www.epa.gov/energy/ghg-equivalencies-calculator-calculations-and-references.
⁹ From Energy Efficiency Fund’s Annual Legislative Reports from 2011 to 2015.
¹⁰ From Energy Efficiency Fund’s Annual Legislative Report for 2015.
¹¹ Data from HES/HES-IE Performance numbers reported in CT Statewide Energy Efficiency Dashboard for 2011-2015.
¹² Same as above.
¹³ According to the 2010 U.S. Census, New Haven has 54,967 housing units (48,877 occupied housing units).
¹⁴ LED Lighting Study Report (Jan 2016): http://www.energizect.com/sites/default/files/R154%20-%20CT%20LED%20Lighting%20Study_Final%20Report_1.28.16.pdf.

Interconnection Reform: Good for the Grid and the Climate

New York State is currently working to dramatically ramp up the deployment of solar and other distributed generation (DG) technologies in an effort to improve the resiliency and reliability of its electric system as well as to help combat climate change. In these efforts, interconnection reform plays a key role.

Interconnection refers to a state-established procedure that new distributed generation units must follow to connect in parallel with the utility’s distribution system. The interconnection process involves numerous steps and may take several months depending on the technical specifications of the project and the point of interconnection. Projects awaiting interconnection are put into an interconnection queue in the order of application.

In New York, the interconnection queue has been growing steadily, with 4,007 MW of projects in queue as of June 2016, a 38% increase from April 2016. Spurred primarily by a growing interest in community distributed generation (CDG), this unprecedented surge in project applications highlights the importance of proactive queue management to support the proliferation of DG throughout the state.

Interconnection procedure in New York State is governed by statewide rules known as the Standard Interconnection Requirements (SIR). SIR provide a general framework for interconnection application processing, including fees, timelines, and technical criteria.

For many years, SIR incentivized developers to file an application and reserve a place in the queue even if they had no intention of moving forward with their project; and further, SIR provided no process for removing the project from the queue without a customer’s permission. Thus, hundreds of these abandoned projects continue to clog the interconnection queue today.

On April 29, 2016, an update to SIR for systems between 50 kW to 5 MW went into effect, addressing some of the interconnection challenges raised by those involved in recent SIR proceedings. This update:

• Provided for a pre-application report that allows a developer to obtain information about a circuit, including capacity, peak load, and aggregate existing and queued DG, without having to submit a complete application and being placed in queue;
• Established project timelines to ensure that abandoned projects are removed from the queue after 30 days;
• Created a uniform set of technical screens to be used by all utilities for project review and called for uniform technical standards used by utilities to evaluate project feasibility.

However, the new rules are applicable only to project applications submitted after the effective date, and so have done little to resolve the existing queue backlog. Further updates to SIR are expected to address this backlog.

These best practices for queue management are currently being considered by the recently created Interconnection Policy Working Group (IPWG), comprised of utility company, state, and industry representatives. In its most recent straw proposal, the IPWG is seeking to require all pre-April 29th applicants to take action by certain dates to remain in the queue or face removal. For instance, the applicants would be required to provide a landowner consent form within 10 days of a Public Service Commission Order to demonstrate site control and prevent site shopping by the developer.

In addition to addressing the backlog, the IPWG is working to reform interconnection by addressing cost sharing for required substation or distribution-level upgrades. These upgrades can often amount to hundreds of thousands of dollars and make a project cost-prohibitive for a single developer. Under the current rules, the first developer to proceed with a project on a given circuit/substation bears the full cost of upgrades. Any subsequent projects take advantage of those upgrades and forgo the expense. Cost-sharing mechanisms could ensure that every developer benefiting from an upgrade pays their fair share.

Together these reforms could significantly facilitate DG interconnection in New York, resulting in a more reliable, resilient, and efficient system that advances the state’s environmental and climate goals.

Importance and Implications of Massachusetts’ Clean Energy Bill

With just a few hours to go in the legislative session, the Massachusetts legislature passed a bill that will significantly reduce carbon pollution, reshape the regional power system, and foster new technologies that will play a large role in meeting future energy needs. The main provisions of An Act to Promote Energy Diversity (H4568) center on providing long term contracts for offshore wind, hydroelectricity, and other forms of renewable energy. These contracts will enable financing to cover the construction costs of grid-scale clean energy sources and electric transmission to connect the new projects to demand centers. The final bill meshed a streamlined proposal from the House and more ambitious and comprehensive package from the Senate to include contracting and a number of complementary pieces, most notably support for energy storage.

Offshore Wind
The core of the bill requires utilities to solicit long term contracts for 1600 megawatts (MW) of offshore wind. The procurement is the largest ever in the United States (or the hemisphere for that matter) for offshore wind, launching a brand new industry that the Department of Energy estimates could support 54,000 jobs and $200 billion in economic activity by 2030. Some of these jobs are already starting to materialize, with the arrival last weekend of a purpose-built construction vessel for Rhode Island’s Block Island Wind Farm.

With relatively shallow water close to major population centers, the Eastern Seaboard is prime location for offshore wind, and steady wind speeds allow offshore wind farms to operate at high frequencies (38%-52% capacity factors according to DOE). Once fully online and operating 45% of the time (midpoint of DOE range), the new offshore wind will produce about 6.31TWh of energy, or approximately the output of the soon-to-close Pilgrim Nuclear power plant.

Hydroelectricity and Other Renewables
The other main piece of the bill requires solicitations for 9.45 terawatt hours of hydroelectricity and other energy sources eligible for Massachusetts’ Renewable Portfolio Standard (RPS). The solicitation builds on an existing collaboration with Connecticut and Rhode Island that has led developers to put forward a diverse array of proposals for onshore wind, hydroelectricity, solar, energy storage, and pairing of multiple resources. Opening procurements up to diverse clean energy resources was a key priority for business, health, consumer and environmental organizations collaborating to provide input on the legislation through the Alliance for Clean Energy Solutions, an effort Acadia Center co-led with the Northeast Clean Energy Council. Broadening procurements beyond hydroelectricity alone allows for innovative approaches and forces competition that will bring costs down. Pairing of resources also helps ensure optimal use of new transmission lines needed to connect hydroelectricity from Canada, wind from Northern New England and Upstate New York, and grid-scale solar from areas where land is available.

The combined impacts of the clean energy procurements are profound. The wind farms would total more than three times the capacity of the long-stalled Cape Wind project (which was excluded from participation), and the procurement for hydro and other renewables will likely lead to an additional (~1000MW) transmission line designed for the first time to access low carbon energy, and potentially a number of smaller projects. If the new energy supplies displace natural gas, they will avoid 7.9 million tons of carbon pollution, bringing electric sector emissions down 56% from 2012 levels and helping Massachusetts make progress toward the deeper 80% reduction across the entire economy required by 2050.

Massachusetts’ legislation and joint effort with RI and CT also signify a deeper shift in planning for the region’s energy future. Significant progress has been made towards advancing energy efficiency and other customer-sited resources like rooftop solar, but over time New England will need to bring online significant additional quantities of grid-scale renewable energy resources to replace fossil fuel power plants. Additionally, there will be increased demand for clean electricity as electric vehicles replace gasoline-powered cars and heat pumps replace oil and gas for heating.

New England has previously explored steps needed to enable large quantities of grid-scale renewables (up to 12,000MW of wind and hydroelectricity in a 2010 analysis for New England’s Governors), and the Massachusetts legislation is likely to build momentum for reforms. One clear step is to plan transmission for renewables, but this planning must be paired with reforms to improve transparency and reduce high costs of the current model that encourages over-building transmission for reliability when smaller scale, clean, and less expensive alternatives exist

Energy Storage
Another promising approach for enhancing clean energy and improving the operation of the grid is to deploy energy storage. Energy storage will facilitate integration of variable resources like wind and solar, providing power when the breezes die down or clouds roll in. Storage also can avoid the need to build expensive grid infrastructure that is only needed a few hours of the year to meet peak demand. As described in another Acadia Center blog, storage provides the equivalent of warehouses for the world’s largest supply chain (the power grid), which currently works on an overpriced instantaneous delivery model. The legislation recognizes the breakthrough potential of energy storage, and directs the Department of Energy Resources to set 2020 utility procurement targets for storage, building on leadership the Baker Administration has already shown through the Energy Storage Initiative. If Massachusetts’ procurement is of similar scale to California’s successful program, utilities would need to contract for 330MW of storage, which would both help rationalize the grid and provide a boost to an industry with enormous potential and promising storage technologies being developed in the Commonwealth.

Natural Gas
The legislation includes important provisions to repair natural gas leaks but did not include language prohibiting the unprecedented proposal to require electric ratepayers to subsidize new gas pipelines. The legality of this risky and unnecessary approach will now be decided in the courts, with the fate of the controversial Access Northeast project hanging in the balance.

Additional Provisions
Additional provisions of the bill include commercial clean energy financing through tax assessments (CPACE) establishment of a nuclear decommissioning advisory council, net metering for small (under 2MW) hydroelectric facilities, expanded eligibility for fuel cells and waste-to-energy under the Alternative Energy Portfolio Standard.

In all, the legislation represents a major commitment to clean energy and reducing carbon pollution.  The procurements set in motion by the bill will decarbonize Massachusetts’ electric sector and accelerate the transformation of the regional energy system. At the same time the bill provides vital support for two new technologies — offshore wind and energy storage — that will put the Commonwealth at the forefront of industries that will power the energy future.

RGGI Riding Clean Energy to a Low Carbon Future

The Regional Greenhouse Gas Initiative (RGGI) has now produced enough data to make certain trends abundantly clear: the electric sector is becoming cleaner while the regional economy grows. The nine participating RGGI states, which held their first allowance auction nearly eight years ago, have delivered on their promise of cutting carbon emissions from the region’s power plants. As Acadia Center’s most recent report details, these emissions reductions have been driven, in part, by the steady growth of renewable energy generation and energy efficiency programs. Not only has this transition to a clean energy system helped to curb harmful pollution, it has produced substantial benefits for the regional economy.

Slashing emissions
Emissions in 2015 continued the downward trend of recent years. Carbon emissions from the power plants covered by RGGI totaled 83.2 million tons in 2015, which was 6.3% below the 2015 emissions cap of 88.7 tons and 37% below emissions levels in 2008, the year before RGGI started. RGGI’s experience continues to show that power sector emissions can be reduced much more quickly and cost effectively than expected.

RGGI Caps and Actual Emissions

Fostering a clean energy transition
Energy efficiency programs are reducing demand for electricity across the region, while electricity is increasingly being supplied by renewable energy sources. Both of these trends help to displace electricity generation from aging, inefficient, carbon-intensive sources like coal and oil, while deferring the need to invest in costly natural gas infrastructure. All together, these factors are helping to make electricity in the region cleaner and more affordable.

Increasing Role of Energy Efficiency and Renewable Generation

Both energy efficiency and non-emitting generation are projected to continue increasing in the years ahead. In the nine RGGI states, budgets for electric efficiency programs grew from $575 million in 2008 to $1.9 billion in 2015, an increase of 230%. These efficiency programs are the primary beneficiaries of RGGI revenue, and investments in energy efficiency yield economic benefits on the order of 3 to 4 times the up-front cost. Renewable generation will continue increasing, as all nine RGGI states have Renewable Portfolio Standards that require electric utilities to procure increasing quantities of renewable electricity.

Going forward, many of the RGGI states are increasing commitments to clean energy. Connecticut, Rhode Island, and Massachusetts are procuring significant quantities of hydroelectricity and renewable energy through a joint procurement, and soon-to-be-enacted legislation in Massachusetts will require additional procurements of hydroelectricity, offshore wind, and other renewables equivalent to approximately 30%–40% of the Commonwealth’s electric consumption. New York has committed to a 50% renewable energy supply by 2030, and Rhode Island recently adopted a 40% renewable energy requirement by 2035.

As the RGGI states continue to achieve these increasingly ambitious targets for clean energy growth, the economic and environmental well-being of the region will continue to benefit. New, high-quality jobs will be created in the booming clean energy sector.  The region will pay less for the imported fossil fuels needed to power traditional generation. Cleaner air will result in healthier citizens who spend more time at school and work, rather than making costly hospital visits. And last but not least, achieving these goals will enable the RGGI states to meet their own economy-wide GHG targets for 2030 and 2050, doing their share to help avoid the worst impacts of a warming planet.

Stay tuned for Part II of our RGGI report, with the latest on the 2016 program review and the CPP.

Acadia Center’s Community Energy Forums continue with event in the SouthCoast

Last month, Acadia Center co-hosted the first event in the South Coast Community Energy Series with Leadership SouthCoast, the Marion Institute, South Coast Media Group, and Toxics Action Center. The New Bedford forum, “Building the SouthCoast’s Clean Energy Future,” explored the current energy landscape, energy challenges affecting the SouthCoast, and local clean energy alternatives for the region.

Because of new developments in the way energy is generated, delivered, and used, communities and neighborhoods have exciting opportunities to benefit from clean, efficient, and affordable energy at the local level and move away from increasing their overreliance on fossil fuels. However, reforming our existing and outdated utility model is necessary to enable these transformative community energy projects to flourish. Through forums like this one, residents can learn more about their current energy system, the reforms that are possible, and the ways they can have an influence.

Speakers at the event included: Claire Miller, Lead Community Organizer, Toxics Action Center; Roger Cabral, Organizer with South Coast Neighbors United; Peter Shattuck, Director of the Clean Energy Initiative and Massachusetts Office, Acadia Center; and Janet Milkman, Executive Director, Marion Institute.

The diverse panel examined how energy decisions affect a person’s wallet, health, and community. The speakers presented an overview of the current energy system and how it works; highlights of local efforts to combat proposed pipeline expansions; an explanation of the Attorney General’s Natural Gas Report and of Acadia Center’s EnergyVision — outlining a pathway for creating safer, cleaner, and more affordable energy systems; tips for deciphering a utility bill; and local opportunities, like the SouthCoast Energy Challenge, for reducing energy usage through energy efficiency.

SouthCoast Today, a local media outlet, covered the event with a piece here: Panel Explores SouthCoast Region’s Clean Energy Future.

The New Bedford forum was the first event in the SouthCoast Community Energy Series, which seeks to explore energy issues affecting the SouthCoast and how local residents and communities can maximize the economic, environmental, and public health benefits of clean energy. Two more events are planned for the coming months.

Tyler Soleau is Acadia Center’s Energy and Climate Outreach Director working from the Boston office. He focuses on raising awareness, network building and advancing Acadia Center’s clean energy program goals in Massachusetts and the Northeast. Tyler came to Acadia Center from the Massachusetts House of Representatives where he served most immediately as Staff Director and Counsel for the House Committee on Climate Change.

New Legislation Advances Rhode Island’s Commitment to Renewable Energy

On July 7, 2016, Rhode Island Governor Gina Raimondo signed into law several bills that will help advance the deployment of renewable energy resources. These bills are welcome developments that signal the state’s commitment to the growth of renewable energy and a clean energy economy, and lay the groundwork for expanding community energy projects and advancing solar and other distributed energy resources through incentive programs and good rate design. Key provisions in each of the bills are summarized in this post.

• H-7413A/S-2185A — This bill extends the Renewable Energy Standard (RES) from 2019 to 2035 and ramps up National Grid’s renewable energy obligation from 14.5% to 38.5% over that period. Significantly, by extending the RES, Rhode Island policymakers place the state in a leadership position and reaffirm its long-term commitment to advancing the deployment of renewable resources. The new law also requires the Public Utilities Commission (PUC) to review the adequacy of renewable resources every 5 years beginning in 2019 and allows the PUC to delay all or part of the implementation requirement until it determines that resources are available to meet the legislative requirement.

• H-8354A/S-2450B — This bill makes a number of changes that affect distributed energy resource development in Rhode Island. Distributed energy resources, like rooftop solar photovoltaics, are a new and growing part of our energy system. These local, clean energy resources will help diversify the energy portfolio, create in-state economic opportunities, and reduce pollution and associated health risks.
  • The bill extends the Renewable Energy Fund from 2017 to 2022, providing grants to reduce the up-front cost of renewable energy projects for residents and businesses in Rhode Island.
  • It also expands virtual net metering, which allows multiple customers to share power from a single renewable energy system that is not physically connected to their meter(s). Previously, only public, multi-municipal, and farm projects were allowed to virtual net meter. Under the new law, residential customers and qualified low and moderate income housing developments are eligible for “Community Remote Net Metering.” Output from these community projects are credited at the full retail rate (net of the RES charge) up to the sum of average usage, and excess credits are valued at the standard offer service charge. The Community Remote Net Metering program is currently capped at 30 MW as of December 31, 2018, but the PUC has the authority to extend the program.
  • The bill creates an opportunity to promote small- and medium-scale shared solar facilities and larger (>250 kW) community remote distributed generation systems through the Renewable Energy Growth (REG) program — a performance-based incentive program. The bill allows the Distributed Generation Board to propose to the PUC to allocate annual MW goals under the REG program to community remote distributed generation systems. These projects may also receive a higher incentive rate of up to 15% more than the ceiling price for a comparable non-community project. The bill also allows the utility to propose rules and tariffs for shared solar facilities.
  • It clarifies that third party ownership and third party financing arrangements for eligible net metering systems and community remote net metering projects as well as projects enrolled in the REG program are allowed. This is significant because it allows companies that lease solar systems to operate in the state. In response to the passage of the law, SolarCity said that it anticipated expanding from 20 employees in Rhode Island to somewhere between 75 and 200.
  • Furthermore, renewable energy resources used in residential systems or employed by a manufacturer are exempt from property tax. This means that, for example, a homeowner would not be penalized for installing a solar PV array through higher property taxes resulting from their property’s increased value.

• H-8180/S-2174 — This bill amends the “Rhode Island Regulatory Reform Act” to establish a state-wide solar permitting process. A consistent and streamlined permitting process can help improve the cost effectiveness and timeliness of the interconnection process for renewable resources. In this case, the Office of Regulatory Reform will be advised by a task force comprised of the Commissioner of the Office of Energy Resources, at least five municipal representatives, and a representative from a clean energy regional business association. No later than December 31, 2016, the Office of Regulatory Reform will submit a report with recommendations for a permitting process for small residential and small commercial roof-top solar projects. The Office of Energy Resources is then required to propose legislation to establish the state-wide solar permitting process no later than January 31, 2017.

• H-7890/S-2328 — This bill expands the role of the Governor’s workforce board to include in the state career pathways system, a workforce training program(s) that would fill skill gaps and create employment opportunities in the clean energy sector.

RGGI Experience Suggests CPP Concerns Are Overblown

The EPA’s Clean Power Plan (CPP)¹ is a groundbreaking regulation to combat climate change. Despite popular support for the rule, this first federal action to reduce carbon emissions from existing power plants has been met with considerable pushback in some quarters. The rule’s opponents most frequently cite three talking points, saying the CPP could 1) cause electricity prices to rise, 2) be a job killer, and 3) lead to economic stagnation.

These concerns will sound quite familiar to the states participating in the Regional Greenhouse Gas Initiative (RGGI), which launched in 2009. As the nation’s first market-based program to reduce carbon emissions, RGGI had plenty of detractors who used the same arguments as those currently being directed at the CPP. Now, with seven and a half years of RGGI experience to analyze, we can assess how the program has actually performed. As discussed in more detail in Acadia Center’s upcoming RGGI report, the early fears about RGGI’s impacts on electricity prices, jobs, and the economy should be put to rest. The figures below illustrate some of the key findings from RGGI’s operation to-date.

Electricity prices
By choosing to hold power plant owners responsible for the carbon they emit (rather than allowing them to pollute for free), the RGGI states accepted that it would become more expensive for fossil-fueled power plants to generate electricity. That, in turn, could result in higher electricity prices. But as shown in the table below, average retail electricity prices in the RGGI states actually declined by 3.4% from 2008 (the year before RGGI began) to 2015.² The emergence of low-cost natural gas undoubtedly played a role in this trend, but so too have RGGI-funded investments in energy efficiency and renewable energy, both of which reduce demand for carbon-intensive electricity generation and reduce prices.

RGGI State Electricity Prices, 2008 and 2015 (Cents/kWh)

Employment
Despite claims that RGGI would cost the region jobs by driving businesses away, the program has actually made a significant contribution to employment in the RGGI states. Independent analysis determined that RGGI was responsible for creating 28,500 job-years through 2014. Some of these jobs are the direct result of clean energy projects funded with RGGI auction revenue, and investments in energy efficiency and renewable energy have enabled clean companies to scale up their operations, creating new, high quality jobs for the local workforce. Additional jobs are created as consumers spend energy bill savings in local economies.

Economic stagnation?
Far from stagnating in comparison to the rest of the country, the economies of the RGGI states have outpaced growth in other states’ economies since the program launched in 2008. Over the same time period, RGGI emissions declined by 37%. The combination of economic growth with declining emissions witnessed in the RGGI states is both groundbreaking and a trend that is likely to spread as additional states adopt market-based climate programs like RGGI. Historically, electricity demand has been linked to economic growth, and electric sector emissions have increased during periods of economic expansion. However, this correlation has been broken in the RGGI region. As shown in the table below, economic growth in the RGGI states has exceeded growth in the rest of the country even as the RGGI states have surpassed their ambitious climate goals. Additionally, macroeconomic analysis of RGGI’s impact through 2014 shows that the program added nearly three billion dollars in net economic benefits for the region.

GDP Growth Rates in RGGI States versus Other States

RGGI’s experience has demonstrated that a well-designed, market-based program can achieve environmental goals and drive economic growth. Emissions reductions under RGGI have come at far lower than expected costs, and the clean energy sector and economy as a whole have been boosted by the reinvestment of allowance revenue into energy efficiency and renewable energy programs. RGGI’s experience shows the actual impact of smart climate policy in practice. Before heeding dire predictions of potential impacts of the CPP, it is worth keeping this real-world experience in mind.

Stay tuned for our upcoming RGGI report with the latest on market trends, the RGGI program review, and the CPP.

¹ The Supreme Court issued a stay on the Clean Power Plan in February, 2016, but as discussed in an earlier blog post, we expect the stay to be lifted and the Clean Power Plan to be enforced.

² Energy Information Administration (EIA) 826 Dataset, http://www.eia.gov/electricity/data/eia826/

Connecticut Passes Legislation to Promote Electric Vehicles! Will Massachusetts Be Next?

Over the past five years, plug-in electric vehicles (EVs) have gone from a cool concept to a real option for vehicle buyers, with almost 440,000 sold nationally through April 2016. Consumer rebate programs have been a big part of this success, beginning in Massachusetts in June 2014, in Connecticut in May 2015, and in Rhode Island in January 2016. Recently, New York included a provision in their 2016 budget to create a consumer rebate program as well.

However, advances in a number of policy areas are needed to allow electric vehicles to make significant inroads with mainstream consumers and take full advantage of the new advanced EV models that will go on sale in the next year. In October 2015, Acadia Center issued a joint report with Conservation Law Foundation and Sierra Club that laid out “Nine Vital Steps for Success” for governments, auto companies and dealers, and utilities.

Connecticut enacts “An Act Concerning Electric and Fuel Cell Electric Vehicles”
In May 2016, the Connecticut General Assembly passed H.B. No. 5510, “An Act Concerning Electric and Fuel Cell Electric Vehicles.” On June 7th, the bill was signed by Governor Malloy and became Public Act 16-135. This law contains a number of great provisions that will help promote electric vehicles:

• Reporting of electric vehicle sales from the Department of Motor Vehicles in order to track progress towards goals;
• Exemption of EV charging stations from burdensome public utility regulations;
• Electric vehicle time of day rates for residential and commercial customers to promote electric vehicle sales and encourage efficient charging;
• Integration of EV sales into utility distribution planning and analysis of EV batteries as energy storage in the Connecticut Integrated Resources Plan; and
• Requirements for public charging stations to allow fair access to all EV drivers.

Notwithstanding one negative provision—a new fee on certain EV charging stations—the Act contains a range of smart provisions that promote electric vehicles and creates a broader framework for widespread electric vehicle adoption.

Electric Vehicle Bill Set for Action in Massachusetts
Massachusetts has its own electric vehicle bill moving through the legislative process, “An Act Promoting Electric Vehicle Adoption,” now numbered S.2266. This bill, which has already been reported favorably by the Joint Committee on Transportation and is now at the Senate Committee on Ways and Means, would promote electric vehicles and other zero emission vehicles (ZEVs) by:

• Allowing EV and ZEV owners to use high-occupancy vehicle (“HOV”) lanes;
• Providing for municipal enforcement of dedicated “ZEV-only” parking spaces;
• Amending the building code to incorporate measures to install EV charging at a lower cost in the future;
• Requiring fair access to public EV charging stations; and
• Adding EV-specific requirements to the state fleet fuel economy standards and studying the opportunities for electrification of the state fleet and vehicles used by the Regional Transit Authorities.

The original bills containing these proposals (numbered H.3085/S.1824) were supported by 16 businesses and organizations, including the Massachusetts Association of Regional Transit Authorities, in joint testimony to the Transportation Committee. Since then, a provision for a study of transportation revenue issues and options for ZEVs were added to the bill.

What Comes Next in Massachusetts?
The Massachusetts Legislature is in the middle of a big debate on our energy future. The House recently passed an “omnibus” bill to promote hydro, onshore and offshore wind, and the associated transmission and diversify the Commonwealth’s energy portfolio. The Senate and outside advocates are debating how to expand this House bill to truly promote a clean energy future. The Senate should either adopt an amendment to incorporate these electric vehicle provisions in their own bill or take up the electric vehicle bill separately as a complement to this work. This legislation could be passed within the next month, and advocates remain hopeful that Massachusetts will embrace this opportunity to make electric vehicles more accessible and practical for consumers.

Skyrocketing Transmission Costs and the Need for Reform

Concern that electricity prices in New England are too high is constant. Yet, a key cause of increasing prices is usually ignored: the high cost of transmission lines built to meet infrequent periods of peak electric demand. Over the last 15 years, charges for this reliability-focused transmission have skyrocketed and continue to climb. Since 2002, consumers have footed the bill for $12 billion in projects in New England, where transmission spending is relatively higher than in the rest of the country and steadily growing. Costs are passed directly on to ratepayers, causing electric prices to increase and raising consumer bills. Acadia Center’s new report, “The Hidden Costs of Energy: Overpaying for an Outdated System,” highlights four basic problems that contribute to increasing transmission costs and offers recommendations for reforming the way we plan and pay for the grid.

Ensuring that the grid is reliable is critical to the region’s economic, energy, and environmental future, but the way electric transmission is planned and financed gives utilities incentives to maximize spending on transmission instead of working in the interest of consumers. The current selection, planning, and financing processes are stacked in favor of transmission lines that can earn utilities upward of 11% guaranteed annual returns. Viable alternatives for meeting reliability – some of which are both cleaner and cheaper – do not offer such high returns, and are not adequately considered. Without significant changes, transmission lines will remain the inevitable outcome of all reliability planning practices, and it will be impossible for New England consumers to have confidence that the billions of dollars we are all paying for new transmission lines are the best choices to clean our air and contribute to a healthier environment.

Some new transmission investments are needed to meet regional policy goals of opening opportunities to access renewable power supplies. Others may be needed for reliability. But it is hard to distinguish the transmission investments that are truly necessary for reliability from the transmission investments that could have been avoided.

Experience has shown that New England can mitigate the high cost of transmission construction by using local energy resources. These local alternatives include geographically targeted energy efficiency and demand response that reduces demand for electricity, as well as roof-top solar, battery storage, and efficient combined heat and power. These technologies have proven themselves capable of reducing grid stress and deferring transmission construction. In Boothbay Harbor, Maine, the Boothbay Smart Grid Pilot spent $2.6 million on energy efficiency, demand response, battery storage, and solar resources instead of building an $18.7 million transmission line. Consolidated Edison is deploying energy efficiency and demand response in its Brooklyn/Queens territory to avoid costly grid upgrades and deliver benefits of greater than $500 million to consumers. Energy efficiency investments were credited with deferring the need to construct $416 million in transmission upgrades in Vermont and New Hampshire. These local energy resources are smaller and quicker to deploy than building a new transmission line and can be customized to the particular reliability need being addressed. Local energy resources represent smart and economic solutions to grid reliability needs.

But even with proven successes of local energy resources, the region keeps building more transmission lines. To understand why, you need only look to the economics and politics of transmission construction that have contributed to the increase in transmission line investment. These drivers are described in greater detail in Acadia Center’s “The Hidden Costs of Energy: Overpaying for an Outdated System.”

Reliability-focused transmission lines being built now represent a 30-plus year wager on the region’s energy needs. And these investments are being made before the region has made the important determination of what transmission enhancements may be needed to integrate the renewable generators that will help meet clean energy policy goals, or what gains can be realized through greater reliance on small distributed generation like rooftop solar. Instead, utilities and grid regulators continue down the path of building expensive transmission lines to meet the region’s current resource mix and reliability needs, with little regard for how those needs might change. Any missed opportunity to meet projected reliability needs while promoting renewable resources is a costly mistake. Overestimates are wasteful and cost the region; they divert capital that could be used to make the grid more resilient with local resources and help promote a diverse and cleaner set of energy resources.

In “The Hidden Costs of Energy: Overpaying for an Outdated System,” Acadia Center offers recommendations to reform the system and thereby prevent the region from facing continued increases in transmission cost, while also furthering regional policy goals like promoting cleaner energy and stronger communities. Check out the full report to read more about the problems with our present transmission policies and Acadia Center’s recommendations for reform.

RGGI modeling should be more expansive – environmental groups and power companies agree

Later this year, Northeast and Mid-Atlantic states will determine the future of the successful, first-in-the-nation climate program for the power sector, the Regional Greenhouse Gas Initiative (RGGI). The most important decision centers on the cap level, the primary indicator of the program’s environmental ambition. Before the RGGI states ultimately decide on a post-2020 cap level, however, they will model the impacts of a range of possible cap scenarios. It is with that range in mind that the Collaborative for RGGI Progress (“the Collaborative”) urged the RGGI states to broaden their proposed scope of modeling when they submitted comments last week.

The Collaborative is a unique coalition that includes two of the region’s largest power generators (Calpine and Exelon), one of the largest utilities (National Grid), and environmental organizations (Acadia Center and Natural Resources Defense Council). By finding common ground among diverse interests, the Collaborative seeks to propel balanced policy that advances RGGI states’ climate leadership.

At a February meeting in Delaware, the RGGI states proposed to model just two scenarios: one that reflects doing the bare minimum to comply with the requirements of the Clean Power Plan (see “Model Run #1” in the figure below), and a second that essentially continues the current RGGI cap trajectory of 2.5% per year through 2030 (see “Model Run #2” in the figure)¹. The Collaborative commends the RGGI states for modeling these two scenarios, but also requests the modeling of two more ambitious scenarios:

• A 5% annual reduction per year from the 2020 cap level from the electric sector from 2021 to 2030 (the green line in the figure); and
• A scenario that aligns electric industry emissions reductions with RGGI states’ shared commitment to 80% economy-wide GHG reduction targets by 2050.

The 5% annual reduction scenario would provide the states with more information on options for achieving deep, economy-wide emissions reduction commitments, and there is ample quantitative justification to model this specific scenario. As discussed in more detail in more detailed comments to RGGI, Inc. by NRDC, an annual 5% reduction from 2020-2030 would be on par with the actual emissions reductions that have occurred since RGGI began in 2009. RGGI has also generated billions of dollars in economic benefits since 2009, and modeling of a similar emissions reduction trajectory going forward will enable states to assess the impacts of continuing along a comparable glide path. RGGI modeling should also be used to evaluate the contribution that the program can make to achieve the RGGI states’ ambitious, long-term, economy-wide GHG reduction targets. A recent analysis from Synapse Energy Economics indicates that the most cost-effective pathway to achieving those targets translates to annual RGGI cap reductions of approximately 5% from 2020-2030. While the RGGI modeling will not encompass the building and transportation sectors – as Synapse’s analysis did – it affords an opportunity to evaluate how far the electric sector can go toward achieving multi-sector requirements.

This is not the first time that stakeholders have asked the RGGI states to model this 5% cap scenario; in previously submitted comments, environmental advocates, public health groups, clean energy companies and a representative of Fortune 500 businesses have all made compelling cases for the inclusion of this modeling run. However, these comments from the Collaborative represent the first time that RGGI compliance entities and electric utilities have weighed in to support this modeling.

The request is simple, the justification is clear, and the support is abundant. If the RGGI states intend to achieve their long term goals, they need to begin considering the pathways that will actually get them there. Modeling the impacts of a cap that declines by 5% of the 2020 level each year through 2030 is a key step in that process.

¹ From 2014 -2020, the cap declines annually by 2.5% of the preceding year’s cap level, while the proposed trajectory from 2020-2030 would be an annual decline of 2.5% from the 2020 level. The proposed 2.5% cap through 2030 would also eliminate the cost containment reserve and prohibit the use of offsets.

Jordan Stutt is a Policy Analyst in Acadia Center’s Boston office. He works on energy, transportation and climate change issues, with an emphasis on research and policy analysis for energy systems and carbon markets. He was an Energy Policy Analyst at Pace Energy and Climate Center, Pace University Law School in White Plains, NY, where he focused on energy efficiency and RGGI.

Peter Shattuck is Director of Acadia Center’s Massachusetts office and Clean Energy Initiative. Peter’s work at Acadia Center focuses on cleaning up the energy supply across all sectors of the economy. Driving market-based emissions reductions is at the core of this work, using cap and trade policies such as the Regional Greenhouse Gas Initiative, which Acadia Center has tracked since the program’s early development in the 2000s.