Selected category: Electricity Pricing

What is Good Rate Design, and How Will We Get There?

Good process blog post imageAs a former state utility regulator, I know the difficulty of balancing competing interests in making decisions and communicating those decisions to constituents. Solutions deemed “fair” by some parties may have harsh or unintended consequences for others.

This challenge of balancing competing interests is playing out with the current debate on electricity rate design as the system struggles to deal with the impact of new, distributed forms of energy like rooftop solar. From Nevada and Arizona, to Kansas and New Hampshire, we’ve seen these debates leave the hearing rooms of public service commissions and enter the public arena. Increases to fixed charges, changes to net metering, demand charges, time-of-use rates, minimum bills, or a combination of these options, are just some of the policies that states have either implemented in response to this debate, or are currently considering.

But many questions remain about the best path forward: What design will adequately compensate utilities for their investments, support the need to upgrade the electric grid, and encourage new technologies and innovation, while being perceived and accepted as fair? To answer these and related questions, a “good” rate design process needs to be put in place – one built on transparency, fairness, accessibility, and accountability. Read More »

Also posted in Utility Business Models| Leave a comment

New York’s Standby Tariff: Standing in the Way of Distributed Energy?

AeonSolarcityviewLate last month, New York took a major step toward rethinking utility economics when it issued the “Order Adopting a Ratemaking and Utility Revenue Model Policy Framework” (also known as Track 2 Order). This action aims to better align New York’s electricity system with Reforming the Energy Vision (REV), the state’s initiative to transform the electric grid into a cleaner, more efficient, and affordable system.

But buried in this 180-plus page document is another important development for New York’s clean energy future: Nearly 10 pages are dedicated to re-examining the state’s controversial standby tariff.

Frequently cited as a major obstacle to distributed power generation (e.g. combined heat and power (CHP) systems, rooftop solar panels, energy efficiency, and storage), the standby tariff is a special electricity rate charged to large commercial and industrial customers who produce some of their own electricity but remain connected to the grid. While utilities say they need standby tariffs to recover the costs of maintaining a reliable electric grid, many potential and existing large electricity customers producing their own power see standby tariffs as perversely designed to undermine the business case for distributed generation.

Unless the standby tariff is fixed in a manner that clears the way for investment in customer-owned and sited distributed generation, it will be hard to make REV’s revolutionary vision for a decentralized, competitive electricity market a reality. Read More »

Also posted in Energy Storage, New York, Solar Energy, Utility Business Models| Leave a comment

As SoCal Braces for Aliso Canyon-Related Blackouts, These Energy Programs Can Help


blackout2By Jayant Kairam and Timothy O’Connor

Adding insult to injury, Californians learned this spring that the disastrous four-month methane leak at the sprawling Aliso Canyon natural gas storage facility could result in a new problem: outages.

The failure at Southern California Gas Company’s massive storage site exposed a critical weakness in the state’s energy system. Densely populated Southern California is over-dependent on natural gas from a single provider.

As a result, a vast area stretching from San Diego in the south to Los Angeles and San Bernardino County in the east may face power and gas shortages during the hot summer and cold winter months, a recent report by a group of state regulatory agencies warned. Read More »

Also posted in California, Demand Response, Energy Efficiency, Energy Storage, Grid Modernization, Methane, Natural Gas| Comments are closed

3 Key Energy Policies that Can Help Us Turn the Corner on Climate

We know we need massive decreases in greenhouse gas emissions by 2050 if 177 countries are to meet the goals of the Paris climate agreement.

But before emissions go on a steep decline, we need to turn the corner. At Environmental Defense Fund, we have analyzed what it would take to turn the corner by 2020, and zeroed in on a few key actions that will halt the rise in global emissions and make them start to go down. For good.

Christiana Figueres, the United Nations official who led the Paris climate talks, rightly talks about technology, finance and policy – technologies to store and distribute energy, financing to scale the technology we have, and policies to reward innovators who deliver results. Read More »

Also posted in Clean Power Plan, Climate, Grid Modernization, Methane| Read 1 Response

New Hampshire Just Doubled Its Solar Net Metering Cap – And It Already Needs More

new hampshire solar roofBy: Roger Stephenson, EDF’s Senior Advisor for New Hampshire Affairs

New Hampshire’s solar industry has an opportunity to stand as an example of the economic gains and consumer savings that are possible when lawmakers reach across the aisle.

But the state’s public utilities commission must act quickly and responsibly.

Earlier this year, Republican and Democrat state lawmakers reached across the aisle to move forward on clean energy “net metering” legislation allowing the solar industry to continue growing in the state. (As many readers of this blog know, net metering is a policy that allows solar-equipped businesses and homes to sell their unused solar energy back to the grid.)

As it has in many other states, the solar industry in New Hampshire has seen tremendous growth in recent years. There are more than 73 solar related companies in New Hampshire, employing about 770 people. Last year, more than $45 million was invested in solar installation in the Granite State. But also, like other states, New Hampshire remained handcuffed by policies that stacked the deck in favor of legacy utilities and kept solar energy from truly taking off. Read More »

Also posted in Solar Energy| Read 3 Responses

3 Policies Driving Innovation in the Electricity Sector

solar photoAs rapid changes in energy technology – both in renewable and fossil fuel sources – transforms the way we power our lives, we have a chance to leave our children a prosperous world and reduce the effects of climate change. But, to scale fast enough, we need smart policies – at all levels of government.

National policies are essential to raise our level of ambition, put a price on carbon, limit emissions from key sectors, and spur innovation. For example, the Clean Power Plan would accelerate the adoption of clean energy technologies. But, many states are taking strides to promote innovative technologies and paving the way for national policy. Read More »

Also posted in Clean Power Plan, Climate, Energy Efficiency, Grid Modernization, Utility Business Models| Read 4 Responses
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