The U.S. electric grid has not been updated since World War II when telephones, dishwashers, and air conditioning were the cutting-edge technology innovations of the century. Today, this same grid is struggling to cope with the technological advances of the last decade, a reality that hit home for New Yorkers in the wake of Superstorm Sandy when millions of people lost power for days and even weeks.
But New York is taking steps to change this, first by initiating a proceeding in April to overhaul the state’s utility business model, and now by opening the proceeding to comments. EDF filed our comments (Track 1 and Track 2) in this case last Friday, July 18th, and commends the New York Public Service Commission for the opportunity to provide our input on this exceedingly important policy that will have national implications.
New York played a leading role in establishing today’s utility business model. Thomas Edison developed the first power plant on Pearl Street in Manhattan in 1882, serving 85 lighting customers. Read More
Source: Leatherndevil, via Wikimedia Commons
According to the Electric Power Research Institute, the U.S. will need to invest $124 billion between now and 2030 to upgrade its electric distribution system, and these upgrades will require state utility commissions to thoughtfully plan for and oversee the investments. Last week, Massachusetts became one of the first states to begin this process by taking a bold step to modernize its electric grid, joining states like New York and Hawaii, which recently introduced similar measures.
On June 12, 2014, the Massachusetts Department of Public Utilities (DPU) ordered utilities to file ten-year grid modernization plans. These plans will spell out how utilities plan to incorporate modern technology to improve electric service and connect clean energy resources to the grid. This will provide customers access to cleaner and higher quality electricity service at a lower cost. Read More
By Jukka Isokoski via Wikimedia Commons
The recent Energy Strong settlement between New Jersey regulators and Public Service Electric & Gas (PSE&G), the state’s largest utility, should help reinforce vulnerable energy infrastructure ahead of future severe storms. Last month, the Board of Public Utilities (BPU) agreed that customers could fund $1.2 billion in PSE&G improvements to New Jersey’s electric grid to make it more resilient and efficient. As a participant in the case, EDF was encouraged that PSE&G agreed to necessary changes to its grid to protect against more extreme weather events.
PSE&G, which had originally asked for $2.6 billion in storm-related hardening funds, submitted its Energy Strong proposal to regulators in the wake of Superstorm Sandy, which knocked out electricity for a third of homes and businesses in the state for weeks.
The BPU denied EDF and other environmental organizations full intervener status, preventing us from mounting a full case that would have included expert witnesses on proven climate science and the increased likelihood of future superstorms, the pressing need to take aggressive action to make our existing electric and gas distribution grids more resilient, and the need to transition to a smarter, more decentralized energy system. Although our status in the case was limited by the BPU’s decision, we managed to argue for and win some positives for the environment: Read More
Source: Chris Chan Flickr
Energy efficiency is a proven value. In Ohio alone, energy efficiency programs have saved people a total of $1 billion since 2009. What’s more is that these savings far outweigh the costs to implement Ohio’s energy efficiency programs, which amount to less than half of the total savings. Yet Ohio utilities, particularly FirstEnergy, and large industrial companies want to kill it. Why? Because they lose when customers use energy efficiency programs.
One would think that the billions in customer energy savings would easily trump the utilities’ and large industrial companies’ efforts to kill energy efficiency. But we live in challenging times. The utilities and large industrial companies are spending big money on this issue, and they might win the day unless we can convince our elected leaders to save energy efficiency. Read More
Indiana State Capitol, Source: David Schwen
At the end of March, the Indiana legislature passed a bill repealing the state’s energy efficiency standard, becoming the first state in the nation to roll back its energy savings goals. Governor Mike Pence could have signed the bill into law or he could have vetoed it. He did neither; instead, the bill became law because he took no action within the prescribed time period. His statement as to why he allowed the bill to become law left us scratching our heads.
Here’s what he said:
“I could not sign this bill because it does away with a worthwhile energy efficiency program developed by the prior administration. I could not veto this bill because doing so would increase the cost of utilities for Hoosier ratepayers and make Indiana less competitive by denying relief to large electricity consumers, including our state’s manufacturing base.” Read More
Source: American Insurance Association Flickr
Cheryl Roberto, Associate Vice President and leader of EDF’s Clean Energy Program, recently testified before the Ohio Senate Public Utilities Committee against S.B. 310, which would freeze Ohio’s energy efficiency and renewable energy standards at current levels. Sen. William Seitz, the Committee Chair, described her testimony as “passionate,” “very persuasive” and “thought provoking.”
Roberto described how the electric grid has changed. The old model, in effect for the past hundred years, relies on one-way power flows from large, centralized utility power plants, with limited customer service options and limited information available to customers on their energy usage. The new model involves two-way power flows between the utility and customers who own small, on-site solar, wind, and combined heat and power units. Customers receive detailed, real-time energy usage and price information. Read More
Source: Edison International
Two seemingly unrelated announcements drew much attention in the electric utility industry recently. First, the Edison Electric Institute (EEI) (the trade group for the U.S. electric utility industry) and the Natural Resources Defense Council (NRDC) jointly recommended changing how utilities should be regulated. Second, Duke Energy announced it will sell 13 Midwest merchant power plants. These announcements are actually related because they both result from the same dramatic changes affecting the electric utility industry. As Bob Dylan aptly noted, “the times they are a-changin’.” Regulators and other stakeholders must be prepared to address these changes.
Under the traditional business model, electricity usage grew steadily. Utilities built ever-larger plants to serve this growing load. The bigger plants were more efficient than existing plants, so the unit cost for electricity steadily declined. Utilities benefited by steadily increasing their revenues. Customers benefited from declining unit costs. For utility customers, it was like paying a lower price per gallon of gasoline every time you filled your tank.
But this traditional model is crumbling, due to several factors: Read More
Ben Franklin famously said, “If you fail to plan, you’re planning to fail.” This saying certainly holds true for smart grid deployment plans, which can cost utilities several hundred million dollars. Given these high stakes, good planning is essential.
Many utilities have installed smart grids. Currently, 25% of U.S. electricity customers have smart meters, a key component of the smart grid. Some early deployments were rocky, but utilities have learned their lessons. Utilities have incorporated these lessons learned in the planning process for more recent smart grid deployments. A well-thought-out smart grid deployment plan should address the following topics: Read More
This commentary originally appeared on EDF Voices blog.
Rooftop solar owners in Arizona will pay higher costs for utility service under a new decision by state regulators, but the increase was much lower than the amount sought by Arizona Public Service, the state’s largest utility company. Both sides claimed victory. The case is part of a growing trend of more states reviewing these charges.
What is net metering?
The case involves a practice known as “net metering” where the utility pays rooftop solar owners for the excess energy the rooftop solar panels send back to the grid. Most states allow net metering. In many states, the utility company pays rooftop solar owners the full price the utility charges for power it delivers to customers. Utility companies claim this price is higher than their actual cost to produce electricity. The rooftop solar industry claims that raising costs would crush a new industry that provides cheap, clean energy and fails to recognize the benefits provided by rooftop solar.
Regulators must find the right balance between utilities and the rooftop solar industry by allowing utilities the opportunity to recover all their costs while ensuring that rooftop solar owners receive full credit for the benefits they provide to the electric distribution system.
Ohio’s clean energy standards have helped jumpstart an industry that is spurring economic development, creating jobs, boosting energy independence and cutting the state’s carbon footprint. Recently, these standards have come under attack and EDF’s own Cheryl Roberto, Associate Vice President of Smart Power, stepped up to defend them by testifying before the Ohio Senate Public Utilities Commission on Senate Bill 58 (S.B. 58). As a former Ohio Public Utility Commissioner herself, Roberto made it clear that S.B. 58 would destroy Ohio’s clean energy standards and unjustly enrich the state’s electric utilities.
Ohio adopted clean energy standards in 2008, and is one of 29 states with a renewable energy standard and one of 25 states with an energy efficiency standard. Based on these standards, Ohio will acquire 12.5% of its power by renewable energy and will reduce its energy use by 22% by 2025. The energy efficiency standard has allowed Ohio to reduce its energy use by over 3%, and the renewable energy standard has already added 466 mw of wind energy in the state, enough to power 466,000 homes. Ohio is now ranked fourth in the nation for wind energy jobs, with over 5,000 direct and indirect jobs supported by the industry.
Credit: Julia Collins
The American Legislative Exchange Council (ALEC), a group of conservative state legislators, is leading a nationwide effort to repeal state clean energy standards, including S.B. 58 in Ohio. ALEC has previously supported controversial “stand your ground” laws as well as laws classifying environmental civil disobedience as terrorism. To date, ALEC has failed to repeal clean energy standards in any state. Read More