United States Baulks at the Political Cost of a Carbon Price
The Green New Deal was introduced with great fanfare on Capitol Hill by lawmakers Alexandria Ocasio-Cortez and Ed Markey and hailed as the United States’ flagship package to combat climate change in 2019. Notably, for such a package, it did not contain any carbon pricing mechanism. Then, Joe Biden’s $1.7 trillion infrastructure plan launched in May 2021—fundamentally the administration’s central climate change mitigation policy package—also did not include carbon pricing.
The US is becoming an outlier on the international stage. According to the Centre for Climate and Energy Solutions (C2ES), a US environmental non-profit organisation, about half of the nations signed up to the Paris Agreement plan to—or already do—use market-based approaches to help achieve emissions reduction. Globally, 22% of the world’s emissions are already covered by carbon pricing, notes Jessica Green at the University of Toronto and a critic of carbon pricing.
….
In the Regional Greenhouse Gas Initiative (RGGI) region—one of the US’s few state-level programmes that spans eleven northeast states—power sector emissions have fallen more quickly on average than the rest of the country while the region’s economies have thrived, notes Jordan Stutt at the Acadia Centre, a clean energy, research and advocacy group in Maine. Without RGGI, emissions would have been 24% higher from 2009 to 2015, a Duke University study found.
Read the full article in Foresight- Climate and Energy here
Is a ban on new natural gas hookups on the table for Aquidneck Island?
PROVIDENCE — If there’s a frontline in the battle over natural gas in Rhode Island, it has to be Aquidneck Island.
It’s where thousands of people in Middletown and Newport lost heat 2½ years ago when an extraordinary set of mishaps resulted in an interruption to their gas supply on some of the coldest days of winter.
It’s where National Grid is working on a long-term plan to shore up service and, in the meantime, wants to continue to operate a temporary plant that can tap into liquefied stores of natural gas when necessary.
And it’s also where a pair of leading environmental groups has formally petitioned state regulators to enact a moratorium on new gas connections to help curtail use of a fossil fuel that is a key driver of climate change.
The request from the Conservation Law Foundation and the Acadia Center is the latest twist in an ongoing debate about the future of gas on the island, which literally sits at one of the endpoints of the pipeline network that sends the fuel around New England, making it especially vulnerable to disruptions to delivery.
….
Even though the siting board didn’t immediately give his group what it wants, Hank Webster, Rhode Island director of Acadia, expressed satisfaction that a moratorium is still on the table.
“A moratorium, paired with targeted efficiency and electrification improvements, will deliver consumer benefits directly into people’s homes and businesses,” he said in an email. “Sinking tens of millions of ratepayer dollars into new long-lived gas infrastructure just doesn’t make sense, given the need for [Rhode Island] to cut greenhouse gas pollution as fast as we can.”
Read the full article in the Providence Daily Journal here
As Maine reinvents its electricity grid, it will need greater public engagement, utility oversight and data-sharing
The U.S. electricity grid is a dinosaur, a huge, unwieldy relic of the past. Built with an expected lifespan of 50 years, much of its infrastructure is now more than 60 years old. Its outmoded design reflects an era when power flowed only one way — from generators to consumers.
Now the grid must become more of a beehive with energy entering and exiting in countless directions, given distributed energy resources like wind and solar generation. Like a hive, it needs substantial storage capacity. And it must handle increased demand: The New England regional grid is expected to see a doubling or tripling of electricity use by 2050 as heating and transportation shift from fossil fuel reliance.
Maine is just starting to confront the magnitude of this power sector overhaul. Last fall and winter, a diverse group representing environmental, consumer and industry interests, utilities and state agencies — the Maine Utility/Regulatory Reform and Decarbonization Initiative (MURRDI) — met repeatedly to discuss how to navigate this grid transformation, eventually releasing consensus recommendations. A few are already taking form, thanks to laws passed in the recent legislative session.
A more flexible grid
The grid of the future must be nimble, partly due to the intermittent nature of renewable power. Another factor driving load flexibility is that electricity consumers can now be active producers (in the case of rooftop solar) and can adjust their electricity use in response to price signals (such as time-of-use rates).
Electricity consumers who shift their use to lower demand times can — in industry lingo — “shave the peak.” Load flexibility offers numerous benefits, Kay Aikin, co-founder of Dynamic Grid in Portland, said at a June E2 Tech Forum: It reduces infrastructure needs and costs (including energy storage capacity), and helps cut carbon emissions.
As part of a newly passed law to advance energy storage, the Maine Public Utilities Commission (PUC) has opened a docket to look into rate design issues at Maine’s two dominant utilities, CMP and Versant, exploring how time-of-use rates could offer sufficient incentive to shift consumer behavior.
The PUC also has opened a docket to investigate the design and operation of electricity distribution, trying to determine how the system can accommodate substantially more power. The commission has hired consultants and expects their reports by early next year, according to Susan Faloon, a PUC spokesperson, and then “the commission will conduct a full investigation.”
….
Whether these two efforts coordinate remains to be seen, but according to MURRDI participant Jeff Marks, Maine director for the nonprofit Acadia Center, “they need to get started quickly and they need to work together.”
There’s widespread acknowledgment, he added, that “if we’re going to get to the scale of decarbonization we need to, we’re going to have to do planning in a completely different way than we do now.” A growing number of people, Marks included, are convinced that means separating grid planning functions from utility ownership. Who takes over that planning role is “still an open question,” he added, but “there’s going to have to be a discussion about utility structure going forward.”
Read the full article in the PenBay Pilot here
Massachusetts should be converting 100,000 homes a year to electric heat. The actual number: 461
When Massachusetts officials look into the not-so-distant future of 2030, they see 1 million homes across the state comfortably heated and cooled by sleek, efficient heat pumps, their old oil- and gas-burning systems — and the climate-warming emissions they spewed — relegated to the scrap heap.
But they are woefully behind pace to reach that lofty goal, and the more time that passes without an urgent response, the further out of reach it gets.
According to the state’s own plan, Massachusetts should be converting 100,000 homes a year from fossil fuels to electricity for heating and cooling. The reality is much different: Just 461 homes made the switch last year, according to data reviewed by the Globe.
….
Of the 461 full-electric conversions in 2020, fewer than half were facilitated by Mass Save. The rest came from programs sponsored by the Massachusetts Clean Energy Center and the Department of Energy Resources. Both departments have offered programs that help homeowners purchase heat pumps. Though there may have been some additional electric conversions that year, experts in the field said that number is likely to be small.
Critics who have been watching the slow progress in Massachusetts are coming to the conclusion that, in its current form, the Mass Save program, which for 20 years has been effective at increasing energy efficiency, may no longer be the best vehicle now that the program’s directive is shifting to helping fight the climate crisis.
“It’s difficult to build new imperatives onto old programs,” said Matt Rusteika, who leads the buildings initiative at Acadia Center, a clean energy advocacy organization.
….
Ben Butterworth, a Melrose homeowner and the senior manager for Climate and Energy Analysis at Acadia Center, said that out the five contractors he spoke with, only one was comfortable fully converting his oil-burning heating system to heat pumps. Because he works in the field and is well versed in the technology, he knew to look around for a more amenable contractor to help him make the switch. But others might be more likely to take the first contractor’s advice and keep a fossil fuel system for backup.
Read the full article in the Boston Globe here
Efforts to pursue climate goals in Mass. clash with incentives offered that promote fossil fuels
Massachusetts has ambitious climate goals, and not a lot of time to achieve them, which has some clean energy and climate experts questioning why a state program continues to promote fossil fuels with cash incentives for oil and gas home heating systems.
The state’s climate plan demands that 1 million households be converted from fossil fuels to electric heat by the end of the decade, part of a sweeping transition meant to help stave off the worst of climate change’s consequences. And yet the state’s only incentive program, and its best tool for helping convince businesses and homeowners to make that switch, is sticking with rebates for new carbon-emitting systems likely to remain in service long past that deadline.
The program, Mass Save, is run by utility companies with oversight by the state, and hands out between $640 million and $700 million a year in rebates that are funded by a surcharge on utility customers’ bills. It is credited with successfully reducing carbon emissions from home heating across Massachusetts since its inception in 2008. But in the past, those cuts have come largely by encouraging conversions from oil to gas, a less-dirty fossil fuel that the state plans to phase out.
However, in a set of proposed new incentives that would take effect next year, Mass Save is again planning substantial incentives to install gas systems and, in some instances, oil. And at a time when record-breaking heatwaves are scorching the country and the amount of greenhouse gas in the atmosphere is at an all-time high, experts said incentives must now move sharply in the other direction.
….
Mass Save’s latest proposed incentives are being reviewed by the program’s advisory council, a governing body that includes representatives from clean energy groups, the attorney general’s office, housing organizations, and more, and engages in months of negotiations with the utilities over their proposed plans. The advisory council will vote on the plan. In years past it has approved incentive plans put forward by the utility companies with little or no dissent. But this year, it is hoping for major changes, said Amy Boyd, a council member.
She said the council will ask the utilities to move further away from fossil fuels and do more to incentivize the transition to heat pumps.
She said it will also push to make the new Mass Save offering more appealing to low- and middle-income consumers. In the past, Mass Save has been primarily used by those in wealthier communities, where usage can be seven times higher than in less affluent towns.
The state Department of Public Utilities will have final say on the plan in January 2022.
Read the full article in the Boston Globe here
With new climate responsibility, PUC can pick best, not just cheapest, solutions for Maine
Few state agencies have more impact on more Mainers’ daily lives than the Public Utilities Commission (PUC). The Maine PUC regulates electric, gas, and water utilities’ rates and services and provides oversight to monopolies Central Maine Power and Versant Power, which collectively serve more than 795,000 electricity customers over 22,000 square miles from Fort Kent to Kittery.
Due to outdated laws that defined the foundation on which it makes decisions, the PUC was charged with keeping rates low, ensuring reliable supply of electricity, and allowing utilities to earn a profit on their businesses. That’s it!
Those three responsibilities, while important, did not fully capture the role utility regulators can play in addressing climate change. If a clean energy investment would increase rates in the short term or cut utility profits, the PUC may be required to reject it, even if the investment benefits Maine people through lower, less volatile long-term rates, cleaner air, and better access to clean energy resources.
The Maine Legislature enacted, and the governor signed a bill to add “climate” to the PUC’s responsibilities, empowering the agency to make decisions that support greenhouse gas emission reductions as part of its primary mission. LD 1682 also opens the door for all state agencies — not just the PUC — to address equity concerns in environmental justice, frontline, and other vulnerable communities that are underserved or overburdened by current energy policies, programs and systems due to geography, race, income or other socioeconomic factors.
The Governor’s Office of Policy Innovation and the Future is charged with evaluating how to incorporate equity considerations across state government actions and report back to the Legislature in February 2022, followed by a new bill to implement its findings.
The decisions that state government makes today will create the building stock, transportation systems, and electricity infrastructure of 2030, 2050 and beyond. State agencies must prioritize climate now and create efficient buildings and electrified transportation, powered by clean, renewable energy. LD 1682 gives the PUC the tools to do so and sets Maine on a course to do it equitably for all.
The timing of this change fits well with Gov. Janet Mills’ pick of a seasoned energy attorney with the depth to fill a commissioner seat and help push the PUC into the future. The massive capital and planning necessary to transform buildings, transportation, and the electricity grid over the next three decades necessitates a deep understanding of the PUC’s capabilities and limitations to make it happen.
Commissioner Patrick Scully joins a PUC on the cusp of an energy transition, that will be called upon to expand heating and transportation electrification; increase clean energy generation, storage, and delivery of offshore wind, solar, and other renewables; and oversee innovative utility innovation and grid modernization.
Not all strategies are created equal, and the PUC will want to focus on those that deliver the biggest bang for ratepayers’ bucks. PUC commissioners, and eventually all of state government, will need to appropriately value pollution reductions, climate impacts, public health, job creation, improved reliability, and other costs and benefits while eliminating wasteful spending and stranded costs for fossil-fuel infrastructure inconsistent with climate actions.
If another bill that would replace Maine’s two investor-owned utilities with a community-owned utility is enacted, the PUC will need to help the new entity plan, accelerate, and achieve electrification of the entire state to meet our climate targets as rapidly, reliably, equitably, and affordably as possible.
If Maine follows its climate action plan and electrifies its economy — homes, businesses, and vehicles — with a clean, renewable, decarbonized electricity grid, the PUC and whatever utilities are left standing must consider climate and equity in all planning and regulatory decisions. Instead of choosing the cheapest solution in the moment, the PUC can choose the best solution for today and tomorrow’s ratepayers and require utilities to provide more innovative services to address one of the greatest crises of our time.
Jeff Marks is Maine director and senior policy advocate for the Acadia Center, a research and advocacy organization based in Rockport, ME.
Read the article in the Bangor Daily News here
Opinion: Stop sweetheart deals with state utilities
Electrifying buildings and appliances that now run on gas, oil, and other fossil fuels will be a key piece of meeting Massachusetts’ climate targets. The region’s investor-owned utilities will be vital partners in making this possible. However, it has recently come to light that Eversource has been quietly funding a campaign to fight against electrification and in support of propping up the gas system, despite the fact that the region must transition away from gas as quickly as possible.
One of the primary reasons utilities like Eversource continue to fight so hard for fossil fuels is because the current utility business model, which has helped deliver reliable energy for almost a century, is no longer compatible with the transformations within the power sector that are necessary to address climate change.
Today, utilities earn income based not on how well they serve residents, but on how expensive it is to run their companies. As expenses for maintaining the grid go up, utilities regularly ask the Massachusetts Department of Public Utilities (DPU) for approval to increase customer rates to help cover costs. Regulators usually approve these requests – and as legislators we hear frequently from constituents when they notice these new or increased charges on their electric bills and want to know what they are paying for and why.
Automatically increasing customer rates without requiring real change is not the answer. Massachusetts needs a better deal from its utilities – a real commitment to consumer interests, environmental justice, fighting climate change, and creating a reliable grid powered by clean energy resources.
Since 2018, Eversource has received an additional $95 million in revenue from cost increases to Massachusetts residents – without any requirement that the utility give them any additional benefits in return. This windfall is the result of a decision that the DPU made in 2017 that allowed Eversource to automatically increase customer rates each year using a tool called the “Performance Based Ratemaking Mechanism,” a misnomer that does not actually tie Eversource’s compensation to its performance or to benefits for customers.
The DPU then approved a similar deal for National Grid in 2019. The only thing Massachusetts ratepayers have received from these decisions is a bigger bill in their mailbox each month.
Under existing state utility regulation, Eversource’s incentives do not serve the interests of the Commonwealth’s residents. Eversource’s own securities filings identify that clean energy alternatives are a risk to its revenues. In other words, the path the Commonwealth is seeking to shift away from fossil fuels is bad for Eversource and its shareholders. This is incongruous with meeting Massachusetts’ ambitious climate goals.
We cannot continue to put the financial health of utility companies on the backs of ratepayers by providing annual revenue increases with little in return for residents or the environment. That’s why we introduced “An Act to Protect Ratepayers” (Bill H.3259/S.2143) and “An Act Promoting Local Energy Investment and Infrastructure Modernization” (Bill H.3261/S.2144). These bills will stop sweetheart deals and ensure broader stakeholder participation in decisions related to modernizing our energy system.
For years, Eversource and National Grid have faced growing expenses as a result of delays to the maintenance of the aging grid infrastructure, the cost of increasingly damaging storms, as well as the need to invest more to improve the reliability and resiliency of the grid. As these expenses have added up, Eversource and National Grid have argued that they are becoming less productive every year and, therefore, should receive an automatic revenue increase to make up for their expected financial shortfall.
For any normal business, if expenses exceed revenues, the company would attempt to lower costs, find new sources of income, or both – or go out of business. But because investor-owned utilities are granted an exclusive right to operate as a monopoly (in exchange for government oversight), residents can be unknowingly on the hook for bailing a utility out, without requiring the utility to solve its own financial problems. Under the utility’s monopoly, residents are stuck with little or no option except to pay.
The result in Eversource’s case has been a roughly 3 percent revenue increase every year without requiring any improvements in performance. This provides no incentive for the utility to solve its productivity problem. At the same time, the DPU has allowed a proceeding to consider actual performance metrics for Eversource languish since 2018. Not to mention the fact that Eversource and National Grid already earn a guaranteed return on equity that is much higher than the average in New England. All of this has raised costs for residents without providing anything in return.
In contrast, regulators in Hawaii recently rejected similar arguments from utilities around the need for automatic rate increases because of declining productivity, emphasizing the unprecedented nature of the Massachusetts decision.
Our bills will make sure the decisions that have cost residents in Massachusetts millions of dollars do not happen again. We deserve a better deal. It’s time to align utility financial incentives with climate, environmental justice, and clean energy goals.
Natalie Blais is the state representative from Sunderland, Joanne Comerford is the state senator from Northampton, and Daniel Sosland is the president of the Acadia Center, an environmental advocacy organization.
Read the full article in CommonWealth Magazine here
Environmental Advocates React to Connecticut’s Failure to Pass Regional Climate Agreement
Listen to the full segment here
Maine utility regulators can’t consider climate in their decisions. A bill headed to the governor can change that
Maine utility regulators will be able to consider the state’s long-term climate goals in their decision-making under a proposal headed to the governor’s desk.
The legislation represents a major expansion in the Maine Public Utilities Commission’s mission, which until now has focused primarily on ensuring energy reliability and affordability.
The bill also requires state officials to define “environmental justice populations,” “frontline communities,” and related terms so they might also be added as decision-making criteria later.
The wider scope is expected to improve the case for investing in newer technologies, such as heat pumps or electric vehicles, which the state is counting on to meet its climate goals — but which also come with significant upfront costs. Gov. Janet Mills signed legislation in 2019 calling on the state to decrease emissions by 45% by 2030 and 80% by 2050.
Originally, the bill would have required utility regulators to consider equity and environmental justice in their decisions. The measure was dropped in recent weeks after testimony revealed a lack of clarity over definitions that some worried could make the commission’s decisions more vulnerable to lawsuits.
“The equity piece is still in there; it’s just in a different form,” bill sponsor Rep. Victoria Doudera said. The original equity component is a “noble goal,” she said. “But what we realized in the public hearing was that the definitions … really require a lot of study and careful thought.”
While the idea of broadening regulators’ decision-making criteria is still new in many states, “we think as we move more toward electrification and decarbonization, any PUC in any state will need to consider climate and equity in whatever decisions that they make,” said Jeff Marks, who directs policy in Maine for Acadia Center. Massachusetts’ recent climate law expands utility commissioners’ scope there to include both climate and equity considerations.
Read the full article in Energy News Network here
How environmental bills fared during Connecticut’s 2021 legislative session
The recently completed legislative session notched a number of wins — but also some losses — for environmentalists. Advocates hailed improvements to Connecticut’s “bottle bill” but expressed disappointment with lawmakers’ failure to sign on to a multistate program aimed at reducing vehicle emissions.
The Transportation and Climate Initiative was one of Gov. Ned Lamont’s signature environmental policies going into this legislative session.
The multistate program was designed to place a declining cap on emissions from gas and on-road diesel fuel, while requiring wholesalers to purchase “allowances” to cover those emissions. Money raised would be reinvested into Connecticut communities and transportation projects.
Advocates said TCI would reduce on-road carbon dioxide emissions by about one-quarter while raising $1 billion by 2032.
But opponents framed the idea as a “gas tax,” clinging to language from TCI supporters that said the measure would likely raise gas prices by at least 5 cents per gallon beginning in 2023.
“It is not a tax. It is a cap on climate emissions. And that is the whole goal of this program,” said Lori Brown, executive director of the Connecticut League of Conservation Voters, which advocated for TCI’s passage. “It generates revenue from the industries that are benefiting from the sale of fossil fuels.”
“Fifty percent of that would be reinvested into communities that were either overburdened by pollution,” Brown said, “or to communities that are the most underserved by our current transportation system.”
But the “tax” idea seemed to stick. And the bill was ultimately nixed in the late days of the session from Lamont’s proposed budget.
“Not passing TCI in the regular session was a big mistake,” said Amy McLean, state director for the Acadia Center, which advocated for TCI. “That is the priority that we need to address in the special session.”
Read the full article in the CT Mirror here
Follow us