Sharing Visions for a Clean Energy Future

It’s spring and Acadia Center staff is on the move participating in policy events, talking to community members, and providing information to diverse stakeholder groups about how to build a clean energy future that will lower energy costs and emissions and empower consumers. Many of the presentations feature Acadia Center’s EnergyVision and UtilityVision. Here are some recaps and previews:

April 30/New England Local Energy Network
Bill Dornbos (Connecticut Office Director & Senior Attorney) presented Acadia Center’s EnergyVision and focused on policy considerations for accelerating community energy work in the region. The webinar explored full electrification of transportation and buildings as a path to reaching aggressive greenhouse gas (GHG) reduction targets, ways to build a modern power grid by empowering the energy consumer as called for in UtilityVision, and the importance of local energy as a grid resource. The presentation also highlighted local energy projects around the region and Acadia Center’s recent work on the value of solar PV.

May 1/Massachusetts Transportation Summit, Worcester, MA
Staff attorney, Mark LeBel, spoke on the panel entitled “Full State Ahead: 12 Leaders Share Their Vision for Transportation” at the Massachusetts Transportation Summit hosted by Transportation for Massachusetts in Worcester. He presented on EnergyVision, which charts a pathway to 80% greenhouse gas emissions reductions by 2050. In particular, Mark described the critical role of electric vehicles powered by renewables in transforming transportation and building a clean energy system.

May 6/The Financial Benefits of Sustainability – an Evening of Humor and Insight, Sustainable Wellesley, MA
As part of a panel of financial and sustainability experts, Amy Boyd, Senior Attorney, presented to a group organized by Sustainable Wellesley on the economic benefits of energy efficiency and a clean energy system. Amy shared her knowledge of Massachusetts’ statewide energy efficiency programs, which are nationally recognized for their performance and benefits delivered to consumers and businesses. As part of this educational roundtable, Amy demonstrated the value of energy efficiency as a sustainable business practice and as a key component of the vision for a clean energy future (EnergyVision) and for the framework of a consumer-friendly energy system (UtilityVision).

And Coming Up:

May 14/ Leadership South Coast Panel Discussion on Sustainable Energy Solutions, Fall River, MA
Abigail Anthony, Director, Grid Modernization and Rhode Island Director, will talk about the potential for consumer-friendly, clean distributed energy resources to replace the need for expensive, capital-intensive energy infrastructure, and the benefits of geographically targeted energy efficiency in the South Coast region of Massachusetts. Other panelists will include State Representative Haddad (5th Bristol District) and Pauline Rodrigues from the Somerset Citizen’s Transition Committee.

May 14/ People’s Power & Light Annual Meeting, Providence, RI
Abigail Anthony will provide Acadia Center’s perspective on major energy legislation currently under consideration in Rhode Island, including the creation of the Rhode Island Infrastructure Bank and the renewal of the state’s Least Cost Procurement policy for energy efficiency. Abigail will also provide recommendations for issues that advocates and stakeholders should prepare to advance in next year’s legislative session in Rhode Island.

June 9/New England Conference of Public Utility Commissioners (NECPUC) Annual Meeting, Newport, RI
Abigail Anthony will participate in a panel on the Integrated Grid with a representative from Eversource at this year’s annual meeting of utility regulators. These two panelists will provide unique perspectives on the grid of the future, including the role and functionality of the distribution utility. Abigail will discuss the utility business model and regulatory model reforms recommended in UtilityVision. Eversource will be in the midst of developing its 10-Year Grid Modernization Plan for Massachusetts.

$1.5 Billion in Energy Costs Avoided by Energy Efficiency/New Study of Winter 2014

With several tough New England winters behind us, the cost of energy remains a top concern for consumers. A recent study by Acadia Center shows that energy efficiency may be one of the best solutions for keeping those costs under control. Without electric efficiency programs, energy costs would have been $1.5 billion higher in winter 2014 alone. *

The analysis shows the value of electric efficiency–especially during the winter periods when we need the greatest relief from high prices. Lower demand as a result of energy efficiency measures reduces the prices that consumers pay for power, and provides significant relief during peak demand periods when prices are highest. In the report, Acadia Center estimated what electricity demand, wholesale prices, and consumer costs would have been in the winter of 2014 and found that, without electric efficiency programs:

• Demand would have been 14% higher
• The price of wholesale electricity would have been 24% higher
• Overall costs for electricity would have been $1.5 billion higher

This winter 2014 energy cost relief complements savings that electric efficiency programs deliver over the entire year. It reinforces the logic of investing in electric efficiency as the “first fuel” in order to meet the region’s energy needs and reduce the risk of fuel price volatility. Saving electricity though efficiency measures such as LED lighting, building weatherization and incentives for efficient appliances costs about four cents per kilowatt hour (kWh), which is about a quarter of the regional average wholesale price of 16 cents per kWh during the winter of 2014. Indeed, since 2000, electric efficiency programs have reduced electricity demand in New England by almost 2.2 gigawatts, equivalent to the combined capacity of the coal-fired Brayton Point and nuclear-powered Pilgrim power plants.

New England states are now considering long-term investments in gas pipelines and electric transmission lines to add to the region’s energy supply. The report data—showing that energy efficiency is a prime method to cost-effectively reduce energy demand—can influence how states shape their energy plans. Given the findings of the report, the policy of implementing all cost-effective efficiency should be a prerequisite to any proposals that could result in ratepayers bearing the risk of new infrastructure investments.

As states work to meet the region’s energy needs while controlling costs, policy makers should prioritize energy efficiency investments. In particular, Massachusetts, Rhode Island, and Vermont should continue to push the envelope in their efforts to procure all cost-effective efficiency, and other New England states should ramp up their efficiency program savings levels to invest in all energy savings that are cost-effective.

The report is available here.

*In this analysis, “winter 2014” is defined as January-March 2014 and the effects of electric efficiency are estimated by comparing actual demand and prices during that period.

What Is the Value of Solar Power in Massachusetts? A New Report

A new study released this week by Acadia Center quantifies the grid and societal benefits of solar photovoltaic systems (solar PV) in Massachusetts. Establishing the value of distributed resources like rooftop solar is increasingly important as states explore ways to meet energy needs and deploy clean energy resources.

Acadia Center assessed the value of six hypothetical solar PV system configurations to better understand the overall value that solar PV provides to the grid. The assessment determined that the value of solar to the grid—and ratepayers connected to the grid—ranges from 22-28 cents/kWh, with additional societal values of 6.7 cents/kWh. This value derives from solar PV’s unique ability to produce clean energy and, among other benefits, avoid generation and related emissions from conventional power plants.  The overall grid value of solar is the sum total of these different benefits.

Acadia Center also evaluated the impact of orientation (i.e. west- or south-facing arrays with different tilts from the horizontal) on the value of solar PV, which is why six different system configurations were examined.  One key finding is that under traditional net metering, west-facing arrays—which maximize output during periods of peak demand like late afternoon—would receive approximately 20% less credit than a comparable south-facing system, despite the fact that they produce approximately the same overall value to the grid. The study finds that solar PV provides broader societal advantages (such as environmental benefits from avoided greenhouse gas emissions and other pollutants) which should be considered when assessing costs and benefits and determining additional incentives for solar producers.

The implications and policy recommendations of the report include the following key points:

• Solar generation is a valuable local energy resource that provides significant benefits to all ratepayers, with a per-kWh value in excess of retail rates. Further, in the aggregate, net metering is a fair policy.
• Once sufficiently high levels of solar PV are installed, a “value of solar” tariff could correct discrepancies between the individual elements– for example, avoided energy or transmission and distribution costs – of the value of solar and of retail rates. In such a tariff, solar PV generation is credited at an administratively determined rate and the individual value components can be accounted for properly (e.g. distribution portion of benefits paid by distribution companies).
• Current policies can discourage the installation of west-facing systems.  For customers who cannot install south-facing solar, new policies that recognize the value of west-facing solar (maximizing output during peak demand periods) could be beneficial for both ratepayers and society.
• Societal benefits should be calculated when assessing the costs and benefits of solar PV and determining additional solar producer incentives.
• Locational values (the added value from solar that reduces grid congestion and avoids expensive upgrades to the distribution system) have not been considered in this study, but are important to maximize the savings in distribution costs that solar can bring to ratepayers. Appropriate incentives can ensure that solar PV, energy efficiency, and other customer-side resources are targeted to defer or avoid the need for new infrastructure spending.

The Value of Solar report has been released in time to provide information for the work of the Net Metering and Solar Task Force in Massachusetts, which will conclude its work at the end of April.

For more information:
Value of Solar  for MA and CT

Maine ‘s Public Utilities Commission Value of Solar analysis

Additional rate design recommendations in Acadia Center’s UtilityVision

Join us for Earth Day Webinar

What do you know about our energy system? Some don’t know much more beyond sending a check every month to keep their lights on. Others are working to engineer new technologies to generate energy or researching and advancing policies to promote a clean energy future.

There’s new info for all of these audiences at Acadia Center’s Earth Day Webinar, Utility Vision: Making the Energy System Work for Consumers and the Environment, which will discuss how the consumer can become an integral part of the energy system.

As it stands now the energy system is largely one-directional, with the power flowing to us from large fossil-fueled generators and our money flowing back. For decades that money has gone towards maintaining the infrastructure of those plants and the power lines that bring us that energy.

But, as consumers become more aware of how our energy use affects the environment, the supply of fossil fuels runs low, and worries about energy costs increase, consumers and leaders are increasingly looking to ways to re-envision the energy system. And now that cleaner technologies for demand-reducing efficiency and generating and distributing a renewable supply are becoming more accessible and affordable, a new energy system isn’t only necessary, it’s possible.

Acadia Center’s Utility Vision is a strategic plan to achieve a new system that meets our energy needs and supports a fair, healthy economy and environment. The webinar will outline the recommendations for policy changes that will create an energy system that will benefit and empower us all.

The webinar will take place at 1:00 pm on April 22nd , led by the director of Acadia Center’s Grid Modernization Initiative, Abigail Anthony. You can Register Here. Tuning in would be a great way to celebrate Earth Day!

Update

Thank you to everyone who attended the webinar! Abigail Anthony, Director of the Grid Modernization Initiative, took us through the development of Acadia Center’s vision for a clean energy future, from ClimateVision 2020 to EnergyVision to UtilityVision, which was published in February of this year. If you want to learn more about anything you heard or may have missed today there is more information on our website or you can email us, Happy Earth Day!

Envisioning Our Energy Future: Making It Work for Consumers and the Environment –A Strategy Retreat

On the heels of its release of UtilityVision, a framework for advancing a modern clean energy grid, Acadia Center took the next step to work through various challenges to implementation. On March 23 and 24, Acadia Center hosted Envisioning Our Energy Future: Making it Work for Consumers and the Environment—a strategy retreat at The Pocantico Center of the Rockefeller Brothers Fund* in Tarrytown, New York.  The objective was to move closer to resolving key questions regarding how the utility business model must change to achieve a clean energy future that is friendly to both consumer and the environment. The agenda was structured around two key questions:

1. What reforms are needed to maximize the utility transition to a clean, affordable distributed energy future?

2. Broad-based consumer support will be critical to achieving the reforms needed. What is needed to ensure that all consumers tangibly benefit from the future energy system?

The retreat brought together a small group of individuals who are leaders in thinking about the future of the electric power system. Attendees included representatives from utilities, clean energy businesses, academia and consulting, state energy officials, and consumer and sustainable energy voices from California, New England, and New York.
The discussions covered these three categories: a) the roles of planning and competitive markets to achieve a sustainable power grid; b) how to align utility financial incentives with public policy objectives; and c) ways to design revenue recovery to both empower consumers and provide utilities with the appropriate level of certainty. Some of the key questions discussed included the following:

• What is the utilities’ experience with using geographically-targeted energy efficiency and demand response to avoid transmission and distribution upgrades?
• What is the experience with performance incentive mechanisms, from the U.S. and United Kingdom?
• Can competitive markets deliver greater innovation and respond to consumer needs more quickly and with greater nimbleness than utilities?
• What are different ways utilities can earn the revenue required to support the advanced technological investments needed to create a market platform?
• Can the utility’s obligation-to-serve and net metering co-exist?
• Can we shift to widespread time-of-use distribution rates or demand charges while ensuring that consumers have the knowledge and tools to manage their electricity bills?

The group at The Pocantico Center of the Rockefeller Brothers Fund* came much closer to agreement than expected on key questions concerning the utility business model, the role of markets and regulation, strategic grid planning, and utility rate design and compensation for distributed generation. The next steps discussed include drafting and refining a straw proposal for grid reforms, providing lessons learned from utility pilot experiments, and possibly reconvening in the future. Acadia Center will be developing a proposal for facilitating these next steps.

*Please Note: As is the case with all materials resulting from meetings held at The Pocantico Center, the views expressed in this report are not necessarily those of the Rockefeller Brothers Fund, its trustees, or its staff.

A Resolution to Keep Massachusetts a National Leader in Energy Savings

Massachusetts has an impressive record of investing in energy efficiency and saving home-owners and businesses money on energy bills.  Electricity and natural gas programs produced an estimated $3.14 billion in benefits in 2014 alone, and $11.4 in benefits since the programs began in 2010 (Press Release: MA Energy Efficiency Benefits Top National Bests for Savings ;  MA Energy Efficiency Benefits Factsheet). Now, work is underway on the state plans that can ensure that this leadership continues to provide even more benefits to ratepayers.

Under the Massachusetts Green Communities Act (GCA), the state gas and electric utilities (Program Administrators) are charged with creating plans to acquire all available energy efficiency and demand reduction resources that are cost-effective, or less expensive than supply.  These plans are prepared in coordination with the state’s Energy Efficiency Advisory Council (Council) which is made up of fifteen representatives of stakeholder groups and includes residential customers, low-income customers, large commercial and industrial users, manufacturers, and non-profits, as well as state agencies. Acadia Center is the representative of the environmental community.

The Council recently issued a Resolution setting out its priorities and recommendations for the 2016-2018 state plans. It also reiterated that the emission reduction targets established by the Global Warming Solutions Act and the state’s Clean Energy and Climate Plan–which implements the Act—require a key role for energy efficiency and demand reduction programs. The Council has high expectations for the development of a third well balanced, cost-effective, robust, and innovative statewide electric and natural gas plan. The Council expects the forthcoming energy efficiency programs to accomplish the following:

• Achieve all cost effective energy efficiency and demand reduction in accordance with the GCA;
• Align with the greenhouse gas reduction targets of the Global Warming Solutions Act and Clean Energy and Climate Plan;
• Deliver consistent and equitable service to all segments of businesses and residents statewide;
• Prioritize lifetime savings and benefits;
• Produce electric demand savings in order to significantly mitigate peak demand costs to the electric sector;
• Achieve data transparency and enable robust planning and analysis through a comprehensive statewide database;
• Effectively communicate to ratepayers information about program and initiative effectiveness, and progress;
• Continue to improve the cost efficiency of program delivery.

Acadia Center—as a member of the Council—will be reviewing the draft Three-Year Plans when the Program Administrators submit them on April 30th.  After June stakeholder workshops, the Council and Program Administrators will coordinate on plan revisions. Plans will be filed with the Department of Public Utilities by October 31st and be finalized and under implementation starting January 2016.

The Massachusetts EEAC Resolution is available in final form here: http://ma-eeac.org/wordpress/wp-content/uploads/EEAC-Resolution-Priorities-for-2016-2018-Three-Year-Efficiency-Plans.pdf

What is the Place of Fuel Cell Vehicles in a Clean Energy Future?

In the coming year, vehicles powered by fuel cells are expected to come to market in the United States, first in California and subsequently in other regions. Fuel cells are a technology that uses hydrogen to generate electricity. A fuel cell vehicle (FCV) uses this electricity to run the motor. FCVs have environmental benefits because they emit no local pollutants and the only direct by-product is water. However, the production of hydrogen can result in greenhouse gas (GHG) emissions. These emissions must be evaluated to understand how compatible they are with New England’s short-term and long-term GHG reduction targets (80% by 2050).

Hydrogen from Fossil Fuels or Renewables?

The most economical method for producing hydrogen today is steam reforming of methane. In this process, a byproduct of the hydrogen production is carbon dioxide–a greenhouse gas. In addition, there can be GHG emissions associated with the energy source used to create the steam, such as the combustion of fossil fuels. Chart 1 (below) shows the GHG emissions from a FCV using hydrogen derived from a steam reforming process that combusts natural gas as the energy source. These emissions are compared with a battery electric vehicle and a plug-in hybrid using the electricity grid mix in New England along with a traditional gasoline vehicle. This shows that a FCV can have 39% fewer GHG emissions than a gasoline vehicle, while a battery electric vehicle typically has 60% fewer GHG emissions than a gasoline vehicle. Cleaner methods of hydrogen production do exist. One common method—electrolysis–uses electricity to split a water molecule and produces only hydrogen and oxygen as a byproduct. This method has zero process emissions and, just like electric vehicles, the electricity used can be renewable, with zero GHG emissions.

Ensuring FCVs Integrate into a Clean Energy Future.

The key question is how to ensure that hydrogen production uses cleaner methods in a manner consistent with our GHG targets. In New England, our pre-dominant transportation fuels are not covered by a greenhouse gas policy. Policy solutions do exist across the country: California is now covering all sectors of the economy with a cap-and-trade program, including transportation. That state has specific requirements for hydrogen from renewable sources and encourages cleaner hydrogen with the Low Carbon Fuel Standard. New England states should adopt an appropriate combination of these policies to integrate FCVs into our clean energy future and ensure that our short-term and long-term GHG goals are met.

For more info see: Fuel Cell Vehicles GHG from Hydrogen Production

New Hampshire Needs RGGI for Economic & Energy Efficiency Benefits

Proven Benefits of RGGI in NH. The Regional Greenhouse Gas Initiative (RGGI) is a proven success for New Hampshire (NH), both as an engine of economic growth and a tool for reducing harmful emissions from the power sector.  Since the program began in 2009, electricity prices have decreased while RGGI has delivered significant economic benefits, clean energy investments and health improvements in NH and the RGGI region as a whole.  These benefits are due in large part to the reinvestment of RGGI auction revenue in energy efficiency and clean energy projects.

• Since 2009, RGGI states cut per-capita GHG pollution 2.7 times faster and their economy grew 2.5 times faster than the rest of the country.
• To date RGGI allowance auctions have generated $76.3 million in revenue for NH and projections for 2015-2020 are for an additional $198.7 million brought into the state.
• Effective investment of RGGI auction revenue has brought economic benefits to NH; the first two and a half years of RGGI participation resulted in $17 million in value added to the economy, and 458 job-years of employment.
• Electricity prices in the state have declined by 2% from 2008 (pre-RGGI) to 2013, and by 8% across the broader region.

Energy Efficiency Investments Under Threat in NH. A bill introduced by the NH House—HB 208—originally sought to withdraw the state from RGGI.  Fortunately, testimony from the general public and experts was overwhelmingly in support of retaining the program.  However, in a misguided attempt to help ratepayers in the state, legislators amended the bill to end the state’s use of RGGI revenue for investment in energy efficiency and to use it instead for rebates to consumers. This version passed the House. Unfortunately, the amended bill would only return an average of 16 cents per month to ratepayers, and yet would eliminate the proven economic benefits of efficiency investments. In the long-term, investments in efficiency help all ratepayers–by reducing demand for electricity–not just those who individually benefit from projects funded through efficiency programs.

The Time is Now to Support Energy Efficiency. NH’s best path forward at this point is to maximize the state’s economic benefits by revising the RGGI revenue spending plan to invest more heavily in energy efficiency–the most cost-effective energy resource. Research shows that the states that have invested most heavily in energy efficiency also experience the greatest economic impacts. If NH curtails its investments in energy efficiency (as the bill passed by the House proposes) and chooses to use all auction revenues as direct rebates for energy bills, the state’s vast potential economic benefits will be minimized. In the interest of the state’s economy, environment and employment, NH should seek to increase RGGI revenue investments in energy efficiency.

Why We Need to Cap Fixed Charges in Connecticut: To Protect Consumers and Support Energy Efficiency & Local Clean Power

Vision

To advance a clean energy future, we need a modern power grid with full consumer control over energy generation, consumption, and costs. This modern power grid should enable consumers to make beneficial energy decisions. This can mean many things:  installing rooftop solar; participating in demand response; weatherizing and investing in high-efficiency appliances; comparing apartments based on energy cost data; or, choosing to make no changes at all. Yet, Connecticut utilities continue to increase already high fixed charges, which hurt consumers by increasing the amount that must be paid regardless of energy use and, in so doing, interfering with the objectives of a modern power grid.

Problem

A fixed charge is an automatic monthly fee that applies regardless of how much electricity the consumer actually uses. Consumers must pay it to obtain access to electricity.  High fixed charges discourage consumers from investing in energy efficiency and local clean power, such as residential solar. These charges also fall hardest on those consumers who use the least amount of electricity – typically, those on low incomes, seniors, efficient users, or households with solar PV arrays.
Historically, a reasonable fixed charge for residential customers has been in the $5 to $10 range. Yet, the residential fixed charges of Eversource Energy (in Connecticut) and United Illuminating are, respectively, the highest and the second highest in New England for any major electric utility. Eversource’s is now $19.25 per month, a twenty percent increase over the previous amount. UI’s is now $17.25 per month. Further, both utilities can be expected to seek additional increases in their next rate cases (2016 or 2017). In its most recent rate case, Eversource proposed a residential fixed charge of $25.50, while asserting that its analysis showed it was actually entitled to a $34.96 charge.

Solution

Connecticut’s General Assembly can solve the problem of ever-increasing and excessive fixed charges by placing a reasonable cap on fixed charge amounts for residential and small business customers. California successfully capped residential fixed charges at $10 in 2013. By lowering and capping fixed charges right now, we can give all consumers, including the most vulnerable, a real chance to benefit economically from the rapid advances in technology that are already modernizing the power grid. Connecticut needs a permanent solution to both protect consumers and to steer regulators towards electricity rate designs better aligned with key public policy goals.

Highlights: Envisioning Our Energy Future Forum

Acadia Center held a forum on Envisioning Our Energy Future in Boston on February 24th. The event was intended to help foster thought-leadership in the energy space, bringing together stakeholders and experts for a discussion of timely topics, with three panels and a lunch speaker.

A highlight of the day was the keynote presentation by Klaus Vesløv, developer of a smart grid pilot program on the Danish island of Bornholm, the first pilot in the EU to focus on how customer behavior impacts grid modernization efforts. The ECOGRID pilot is one of the foundations for fulfilling the Bornholm strategy of being 100% fossil free by 2025, and becoming a Bright Green Island. With Denmark as a whole setting the goal to be fossil free by 2050, reforms are underway to use wind turbines as the foundation of the grid and electrify heating and transportation.  Mr. Vesløv shared inspiring ideas and lessons from his work on this project.

The three panels of the day featured presentations from stakeholders with a wide range of expertise in the energy fields, and discussions of:

• visions of the future and identify key steps to achieving it
• recent examples of competition and reduce transmission and distribution costs
• current efforts to utilize targeted efficiency investments and consider challenges to efficiency program design and implementation

Full agenda and presentations available here.

The event was also a public debut for Acadia Center’s UtilityVision, which provides comprehensive recommendations for decision-makers to advance a modern, consumer-friendly and environmentally-friendly electric grid. These recommendations contributed to the conversation at the event.

Acadia Center is grateful to the panelists and attendees who made this day a success and looks forward to more events in the future.