Author Archives: Jamie Fine

Finding Common Ground on Pricing Clean Energy Resources in California

Source: limelightpower flickr

Source: limelightpower flickr

This post was co-written by Chris Yunker, Rates and Analysis Manager at San Diego Gas & Electric.

Industrial and environmental stakeholders are usually portrayed as adversaries. But one exciting example from California proves there can be another side to that story. San Diego Gas & Electric (SDG&E) worked with Environmental Defense Fund, Sunverge, Google, and the California Public Utility Commission at Rocky Mountain Institute’s eLab Accelerator to investigate electricity tariffs that enable new technologies and practices and to reveal their costs and benefits to the grid. As distributed energy resources (DERs) continue to grow rapidly, there is increasing need to enable the marketplace to value utility-supplied grid services and customer-sited resources.

SDG&E serves 3.4 million people in and around San Diego, and is also home to roughly 10,000 electric vehicles and 40,000 rooftop solar systems. SDG&E is responsible for keeping the lights on despite growing demand (the region has one of the largest EV adoption rates in the nation) and variable electricity generation (PV panels stop producing at sunset). Read More »

Posted in California, Clean Energy, Renewable Energy, Smart Grid| 1 Response, comments now closed

Nest’s Promising Results for Reducing Peak Electricity Demand

Google's Nest

Back in January when Google announced it would spend $3.2 billion to purchase Nest, EDF knew this was a company to watch. The results of three new reports, released today, confirm that controllable thermostats like the Nest Learning Thermostat are both customer-friendly and useful for energy system planners. Moreover, the reports signal that smart devices, such as those Nest manufactures, have potential for generating marked savings for utility customers.

The reports analyze 2012-2013 energy use data gathered from four major utilities across the U.S. that offer Nest energy services programs: Austin Energy, Reliant Energy, Green Mountain Energy, and Southern California Edison.

The first report evaluates the results of Rush Hour Rewards, a demand response service that changes the temperature of the homes of Nest users during energy “rush hours”, or times when demand on the grid is highest. The second examines Seasonal Savings, a program that runs for three weeks and slowly modifies the temperature according to the customer’s behavior (which this smart thermostat is able to ‘learn’ via its built-in motion sensor and understanding of its owner’s temperature preferences). Both operate during times of heavy usage, namely winter and summer. The third report analyzes home energy data of Nest customers more broadly, comparing energy use before and after the installation of a Nest Thermostat. Read More »

Posted in Clean Energy, Demand Response, Energy Efficiency, Smart Grid, Utility Business Models| Tagged | 1 Response, comments now closed

Preliminary Results Find Demand Response-Green Building Partnership is Off to a Great Start

LEED3

The preliminary results of the Demand Response Partnership Program (DRPP), a unique partnership launched by EDF and the U.S. Green Building Council (USGBC) in 2011, are now available in the 2013 DRPP Overview. Photo source: Harvard University.

Buildings account for 40% of our nation’s electricity use. In 2012, power plants spewed about 2 gigatons of global warming pollution into our air, which was about one-third of total U.S. emissions. That’s why EDF and the U.S. Green Building Council (USGBC) teamed up to launch the Demand Response Partnership Program (DRPP) aimed at increasing the participation from commercial buildings in host utility demand response (DR) and smart grid programs. Now, 2 years into the program, the preliminary results of this collaboration are available in our 2013 DRPP Overview.

DR is used to reduce energy use by rewarding utility customers who use less electricity during times of “critical,” peak electricity demand. Through DRPP, we leveraged relationships with the building community asking LEED projects to operate in low power mode when the grid is stressed. LEED ‘Pilot Credit 8: Demand Response’ has been developed as an incentive and implementation guideline.

This study evaluated three areas to measure the program’s success in 2013: Recruitment and outreach to potential participants, research and analysis of data from participants, and education about the DRP Program. A few key highlights are outlined in the Overview: Read More »

Posted in Clean Energy, Demand Response, Energy Efficiency, Renewable Energy, Smart Grid| Tagged , | 1 Response, comments now closed

How's Your Electric Bill Treating You? Time To Give It Some Thought

This commentary originally appeared on EDF's California Dream 2.0 Blog

When was the last time you really gave a lot of thought to your electric bill?

If your answer is “not very often”, then you’re not alone. In fact, the typical household thinks about their electric bill only six minutes a year.

The California Public Utilities Commission (CPUC) now has the opportunity give people another way to control household energy bills by creating a system where changing the time you use electricity can save money. This won’t mean you’ll need to invest more time thinking about energy use, but you’d be well-served to think about the timing of it.

Last week, the CPUC held a public workshop inviting stakeholders — PG&E, SCE and, SDG&E, along with consumer, industry, and environmental groups — to present and discuss their proposals for revising the system of charges for residential electricity use. I had the pleasure of presenting EDF’s proposal for a time-of-use (TOU) pricing system: For customers looking for another option for saving money on their monthly bill, EDF sees TOU as the best pricing policy for both people and the environment; customers uncomfortable with this option would be able to “opt out” and choose another pricing structure.

Currently, the standard “tiered” rate charges customers higher prices for higher electricity usage. The approach is intended to send the message: “The more you use, the more you pay.” Read More »

Posted in California, Demand Response, Smart Grid, Utility Business Models| 1 Response, comments now closed

Cream Cheese And Time-Of-Use Electricity Pricing

This commentary was originally posted on EDF's California Dream 2.0 blog.

“The cream cheese just fell off the roof of the car,” my 7-year old daughter said as I turned into my driveway after a trip to the grocery store. Right now you might be asking yourself, “What does this have to do with time-of-use pricing?” Allow me to explain.

We live in Alameda, CA, where plastic bags are prohibited and stores must charge for a paper bag. Alas, I had forgotten to bring a reusable one. To teach my children a lesson and avoid the public scorn (not so much the $0.05 per bag), I carried our groceries and asked the kids to lend their hands. And yes, I put the cream cheese on the roof of the car to free a hand to unlock it.

Once home, I realized that, in addition to almost losing my cream cheese, I’d been making potentially risky tradeoffs. After all, exiting the supermarket with full hands prevented me from holding my children’s hands while crossing a busy – and dangerous – parking lot.

Don’t get me wrong; I’m not lamenting the ban on plastic shopping bags. I think it makes perfect sense, but it takes time to start making the adjustment and the risk tradeoffs aren’t always obvious.

This scenario– making adjustments that may seem inconvenient and a bit scary, but are well worth the effort– plays out in other areas of life as well. Particularly in rethinking how Americans use and pay for electricity.

Source: Union Atlantic Electricity

Most of us don’t think about how the time of day affects the cost of serving us power. In California, we aim to change that by moving to Time-of-Use (TOU) pricing – which will make electricity more expensive during times of peak, or high, energy demand and cheaper off-peak. In fact, just yesterday, the Sacramento Municipal Utility District (SMUD) recommended moving all residential customers to time-of-use rates by 2018 in an effort to give customers more control over energy costs.

EDF believes that TOU pricing will be best for people and the environment, just as banning plastic shopping bags effectively reduces their environmental impact. This approach can encourage conservation and reduce peak energy use while providing customers with more choices that can ultimately lower their monthly bills. Switching to TOU electricity pricing may feel to some like being thrust into a busy parking lot with an armload of groceries and two children to monitor. When should I use my dishwasher? Do I need to reset my air conditioner? Well, yes and no. You can choose to do nothing, or you can exercise a choice you don’t have with our current pricing structure: shifting energy use to times of lower electricity prices. It’s quite doable.

Read More »

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Nest Labs: Proof Life Exists In The Smart Grid Ecosystem

This commentary was originally posted on EDF's California Dream 2.0 blog.

There are many conceptions of the smart grid; what it is and what it should do for us – the “ratepayers” – who will finance the necessary upgrades to California’s electrical system. I find the concept of a “smart grid ecosystem” — with smart customers, smart utilities and smart markets — to be a helpful guidepost as we seek to evaluate what should be accomplished by the utilities trusted to deploy our smart grid.

Ecosystems achieve resiliency through diversity. We want a variety of clean energy resources on the supply side – hydropower, wind, solar photovoltaic, solar thermal – spread across a variety of locations (but never too far from customers). Similarly, on the demand – or customer – side, Californians, buildings, appliances and electric vehicles create an intricate, synergetic web that can be made more efficient and flexible with customer education and empowerment, customer-focused energy pricing policies, and demand response (which allows customers to voluntarily reduce peak electricity use and receive a payment for doing so in response to a signal from their electric utilities).

There are other ways to contemplate diversity in the energy context: Unlike some other states, most Californians can’t choose their power providers, though they can choose among rate “plans” (which are payment schemes, not plans to help manage energy use and costs). EDF recognizes that a smart energy marketplace will thrive with a greater variety of competitors, products and services, and would like to see “3rd party energy service providers” able to participate (that catch-all term includes organizations that deliver energy services and products to customers at a variety of levels throughout the smart grid ecosystem).

Yesterday’s announcement by Nest Labs (Nest) is more proof that the smart grid ecosystem is alive and well. With utility partnerships in California and Texas, among other places, Nest uses their intelligent, WiFi-connected thermostat to help customers smartly and painlessly trim energy use by learning, and mimicking, their temperature preferences automatically. For example, the Nest’s Seasonal Savings services will alert your thermostat when new rates apply with a change of season and the device will begin slight adjustments to presets to adapt to predictable weather trends. Read More »

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Solar, Wind Prompting Electricity Grid Innovation In California

In a February Wall Street Journal article (“California Girds for Electricity Woes”), reporter Rebecca Smith gives an alarmist and misleading account of California energy regulators’ efforts to secure a cleaner, less expensive, more reliable electricity grid.  Right now, California has plenty of power:  44 percent more generating capacity than it typically uses, including a considerable fossil fuel energy portfolio.  Renewables – large scale, rooftop solar, wind, and, increasingly, energy storage – make up almost 15 percent of the grid, a percentage that will more than double in the next decade.  These clean, innovative energy technologies are working to improve the system by reducing the need for fossil fuels.

The reality is that the grid is changing, driven by California’s quest to secure an environmentally safe and affordable electricity system. Increasing the amount of renewable energy on the grid will mean that more generation is variable; electricity output from solar and wind depends on sunshine or windiness, respectively.    Up to this point, California has met this challenge by backing up clean resources with fossil fuels.  But California’s ratepayers can’t afford to keep doing this, so instead of “girding for woe,” the CAISO and the CPUC met to proactively address our changing future – to move California towards cleaner, less expensive electric grid planning.

This new approach can increase California’s ability to rely on clean energy generation by building greater flexibility into the system – while giving more options to consumers.  Not only can customer-based (“demand-side”) clean energy technologies reduce reliance on polluting power plants, they are quite likely to be more reliable and are potentially more cost-effective.   Demand response, or the ability of customers to choose to save money by responding to a price or electronic signal from the grid operator in times of excess system demand, will be key to integrating large amounts of intermittent solar and wind without back-up fossil or storage.   In fact, during afternoon peak demand, where supply is extremely limited in its ability to serve load, the addition of virtual generation resulting from the participation of DR into the market will actually lower energy prices.

California has already installed a robust digital metering infrastructure – and it’s time to put these meters to work by enabling customers to participate in demand response and other demand-side programs.  Coupled with technologies that now allow for fast, reliable, automated ‘set-it-and-forget-it’ adjustments to electricity use, we can seamlessly integrate variable electricity resources, such as wind and solar, without disrupting energy users.  Customers can choose to become an energy resource instead of fossil fuel plants.  Read More »

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Standing Or Elbow Room In The Energy Sector?

GridWeek 2012 convened earlier this month in Washington D.C., and as a first time attendee, I left breathless and hopeful – yet confused – by inexplicable lingering complacency.  Unbeknownst to me, by agreeing to be a panelist in two sessions, I was setting up a comparative experiment. For the first panel, I spoke on “New Utility Business Models” to a packed room of the glimmer-eyed new energy intelligentsia, which is what makes GridWeek so exciting. In the later days of the conference, about a dozen GridWeek participants interspersed amongst a room of mostly empty seats to hear my panel presentation on “Smart Grid’s Role in New Air Quality Standards.”      

It would seem that I, and the handful of attendees at the air quality panel, see the productive overlaps between air quality standards compliance, smart grid and new utility revenues.   There are several ways that smart grid provides a value proposition for utilities faced with increasingly stringent air quality regulations, most recently the Mercury and Air Toxics Standards (MATS) rule. Here’s a short, but by no means comprehensive, list of both synergies and potential tensions:

  • Renewable Portfolio Standards (RPS): Smart grid supports achieving higher and higher proportions of intermittent, non-dispatchable renewable electricity generation.   Achieving high levels of RPS will be expensive unless we can use new strategies to manage intermittency and power quality.  New pricing structures for utility services can provide incentives to invest on both sides of the meter, and open the door for historically hidden utility services (such as voltage regulation) to be priced and sold.  For incumbent utilities, there is an opportunity to identify and price network services that traditionally have been bundled into rates.
  • Electric Vehicles (EV):  EVs are an important new frontier for utilities, and like most frontiers, offer both promise and peril.  Overloaded distribution networks might keep the utility engineers up at night, while the emerging new customer class has utility shareholders thinking like venture capitalists.  Though still small in number, EVs are quickly driving utility planners and system operators toward a fork in the road. Do we provide safe reliable service to new and existing customers using expensive dirty methods of the past (i.e., more big power plants) or do we take a deep breath (of cleaner air) and trust in the power of the people by embracing distributed energy resources?  
  • Distributed Energy Resources (DER):  Rooftop solar, energy efficiency, and demand response, collectively known as distributed energy resources, unquestionably can provide the low cost, clean pathway towards both energy independence and a sustainable economy.  However, DER is harder to plan and dispatch, and it threatens the traditional utility business models of incumbent institutions.   In California, net energy metering policy has been an important ignition switch, fueled by the California Solar Roofs Initiative, but these successful policies need to evolve to achieve DER at larger scales.   Again, the key is precisely pricing the goods and services on both sides of the meter.  Utilities should be paid for power quality and storage services provided to owners of rooftop systems, while electricity from those rooftops should be priced fairly to provide incentive to invest.
  • Clean air standards:  Oxides of nitrogen, particulate matter, acidifying compounds and carcinogens, such as mercury, are the power sector’s long-time emissions concerns.  Across the nation, electricity generators must hold permits to pollute and tradable emissions allowances that must be acquired at nontrivial prices.   Starting in 2013, California electricity generation that emits global warming pollution will have an associated cost –carbon allowances in the state’s cap-and-trade program.  Already, polluters in Southern California must acquire emissions allowances for the RECLAIM program, and power plants nationwide must comply with the acid rain emissions allowance program established in the Federal Clean Air Act .  Similarly, the Regional Greenhouse Gas Initiative (RGGI) program puts a price on carbon emissions for nine northeastern states, and the Western Climate Initiative is endeavoring to do the same for West Coast states and Canadian provinces.  These programs use emissions allowances that are fungible and tradable, yet they represent real costs – and thus economic opportunity when avoided.  Pollution pricing is changing business models throughout North America.    But there is more to come.  For example, improved environmental performance enabled by smart grid technologies, such as increasing DER, presents new avenues to meet air quality requirements.  For the Environmental Protection Agency (EPA) and other oversight agencies, the ability to measure, verify and enforce DER is key to granting compliance credit, and such capabilities are increasingly cost-effective with smart grid deployment. 
  • Consumer empowerment:  The mobile phone revolution is a prelude to what may be possible once consumers and producers begin to see true pricing in the energy marketplace.  While load-serving entities can find new revenues through services, consumers and entrepreneurs will be motivated by new ways to make a buck, or avoid spending bucks through unnecessary energy waste. 

The new smart grid business frontier has, in fact, many frontiers.  The California Public Utilities Commission conceived of an electricity ecosystem comprised of smart consumers, smart markets and smart utilities.  Utilities are trying to find their new niche within the ever changing food web, and all ears are perked for new opportunities.  That’s why only standing room was available in the business model panel session at Gridweek.

Meanwhile, in the air quality session of GridWeek, there was plenty of elbow room.EPA is considering flexible strategies for meeting new emissions standards for carcinogens.  Many utilities are operating in permit constrained areas that fail to meet National Ambient Air Quality Standards.  Enlightened utilities are seeing demand-side strategies as increasingly viable with smart meter deployment, and a means to improve returns to shareholders.  Performance-based rate of return can be structured to both reduce sales of energy to customer and to improve utility earnings. 

Gridweek revealed to me that many are educating themselves about new business opportunities, but precious few have the connected the dots to air quality improvements.   If I could, I’d bet on the folks who attended both sessions.

Posted in Energy Efficiency, Renewable Energy, Smart Grid, Washington, DC| Tagged | 1 Response, comments now closed

San Diego's New "Smart Energy Community"

This commentary was originally posted on the EDF California Dream 2.0 Blog.

San Diego Gas & Electric Co. (SDG&E) and Sudberry Properties have announced plans to incorporate breakthrough smart grid technology in the construction of Civita, the new master-planned development in Mission Valley, California. With a focus on sustainability and energy-efficiency, the “smart energy community“ will be home to vehicle charging stations, solar and fuel cell electricity, battery storage and energy management tools for residents.

"The Civita project is consistent with what we are trying to achieve here in San Diego," said Mayor Jerry Sanders. "By integrating solar power, clean transportation and energy efficiency into the very foundations of our homes and businesses, we can help preserve the environment while strengthening our community overall."

With plans to build nearly 5,000 homes and around a million square feet of office properties, apartment living, public parks, and a civic center over a once 230 acre gravel quarry, Civita could become one of the first communities in the nation to be “fully upgraded with smart grid technology and stand at the forefront of the broader transformation of the electric grid the community.” Civita aims to surpass current California energy efficiency standards by at least 15 percent by using energy star appliances, highly efficient residential lighting and onsite power sources, and by allowing some buildings and areas within community to operate independently of the grid.

Posted in California, Smart Grid| Tagged , , | 2 Responses, comments now closed

A Dynamic Approach To California Energy Use

This commentary was originally posted on the EDF California Dream 2.0 Blog.

Californians are poised for a more functional, data-driven model for setting the prices people pay for electricity.  The new model will make the massive differences in costs of providing electricity during the course of a typical day more evident to us as energy users, thereby inspiring more efficient use of electricity resources.

The California Public Utilities Commission (CPUC) started a rulemaking to examine if the current rate structure for residential energy users is fair and equitable across customer classes and if it:

  • supports statewide-energy goals;
  • facilitating technologies that enable customers to better manage their usage and bills;
  • enables conservation and efficiency on the customer side of the meter; and
  • increases the reliance on non-fossil based generation to reduce overall greenhouse gas emissions.

We know already that the short answer is “no”, so CPUC is eyeing a transition to time variant (“dynamic”) rates.  According to Pacific Gas & Electric (PG&E), with time variant, or what is often referred to as “time-of-use”, pricing – rates “will be higher during summer weekday afternoons when electric demand is higher, typically noon to 6 p.m., May through October. In return you’ll pay lower rates at all other times. This means that when you use energy is just as important as how much you use.” 

EDF’s Energy team has been, and will continue to be, closely involved in the CPUC’s rulemaking, which will examine several facets of the current system.  EDF has also been involved in the related smart grid proceedings, such as the deployment of smart grid infrastructure – which provides the ability to both measure energy use in real time and inform customers about the costs (and environmental impacts) of their choices to use electricity at different times of the day.  This Advanced Metering Infrastructure (AMI) enables a smoother transition to dynamic rates for residential consumers.

EDF is very encouraged that the CPUC is considering  time variant pricing because it will help consumers to be more thoughtful about their energy usage, particularly at times when demand is peaking and pushing electricity supply sources to their limits.  This type of rate structure can encourage conservation and reduce peak demand while providing customers with more choices that can ultimately lower their monthly bills.  For example, allowing consumers to see how much they can save on their electric bills by reducing their energy use during peak hours will encourage a shift of energy-intensive activities, such as washing and drying clothing and dishes, to off-peak (and less expensive) times of the day. 

Because a dynamic pricing system will alleviate pressure on the electric grid during peak demand, it will also lead to a more stable, less expensive energy system that is increasingly resilient to extreme weather events.  The economic motivation should also help to create an easy way for consumers to make decisions more efficiently, thereby lowering their electric bills and shrinking their environmental footprints.   

Futhermore, dynamic pricing can help integrate renewables and electric vehicles into the electric grid by allowing utilities to respond to price signals more effectively.  For example, time-of-use rates support electric vehicle charging at times when grid resources aren’t strained, such as late at night or early in the morning when most people are sleeping. 

This new approach will facilitate conservation and energy efficiency, as well as an increase in the use of clean energy sources that avoid harmful greenhouse gas and urban air pollution.   If adopted, the dynamic pricing model can be a common sense approach to saving energy and money, while promoting energy efficiency and a smarter, “greener,” electric grid country-wide.

Posted in California, Energy Efficiency, Smart Grid| 3 Responses, comments now closed