Map of polluting power plants in Los Angeles County. Many are located in or near the region’s most vulnerable communities that are already over-burdened by air pollution.
My mom is a pro at shopping for good deals. She taught me the importance of timing my purchases during the off-peak season to get the most value for my dollar.
Time-of-Use (TOU) electricity pricing reminds me of the lessons my mom taught me, and it can help empower families to take control of their energy use, while saving money AND improving air quality.
Like the name implies, TOU pricing allows customers to choose when to power-up large appliances (think laundry, dishwasher, A/C) in order to avoid using high-demand, “peak” energy – which is more polluting and expensive. It is a voluntary program with a proven track record.
Peak energy demand typically occurs late in the afternoon when everyone is coming home from school and work, running the A/C, charging phones, cooking, doing laundry, or streaming Netflix on a T.V. During this high-demand time, energy prices spike and electric utilities flip on expensive and dirty fossil fuel “peaking” power plants to meet energy demand (because nobody wants to lose power and heaven-forbid the Internet!). Read More
A new utility business model – “Utility 2.0” or “reform” – is the hot topic in statehouses and regulatory commissions across the country. This is due to many factors: technological innovations in the energy sector, changing consumer expectations, increasing electricity prices, tighter regulations, and the need to decarbonize our energy sector as we grapple with climate change.
Some argue utility earnings should be based on performance rather than volumetric electricity sales. They suggest utilities’ monopoly interests should be aligned with enabling clean energy services – such as on-site renewable energy and home energy management – instead of simply delivering more electricity.
Key to this new approach is the ability to define – and then measure – performance. This will require a set of metrics by which utility investments can be judged and rewarded. Illinois was the early adaptor of performance-based metrics for its historic smart meters roll-out and is finalizing a set of metrics this week that are critical to designing a utility business model for the future. Read More
Imagine you’re trying to lose weight. If you step on the scale once a month, how can you possibly know how each of your daily decisions affects the number? Weighing yourself every day would be a step up, giving you a much clearer picture of the effects of each day’s choices. Now imagine the potential results if you could access real-time data – if you were able to see just how many calories were in each food you picked up, as well how much energy you were exerting at any given moment.
Thanks to a meta-analysis on behalf of the American Council for an Energy Efficiency Economy (ACEEE), we can now see that access to this kind of granular, real-time data on electricity use leads to significant household electricity savings.
Survey highlights importance of timeliness and granularity
The ACEEE survey aggregates multiple studies designed to evaluate the effectiveness of different types of electricity customer feedback from the past 20 years, including 61 trials from around the world: 33 from the U.S., 13 from Europe, 9 from Canada, and 3 others. Such a diverse pool allows us to draw important conclusions about consumer energy use habits while controlling for variations in culture, climate, and energy use patterns. The results are displayed in the graph below. Read More
The New York Public Service Commission (Commission) has embarked on the landmark Reforming Energy Vision (REV) proceeding to design a new business model for electric utilities. Today’s business model allows utilities to earn revenues based on how much money they spend to supply and deliver electricity. Under the new model, utilities will earn revenues based on the value of services they deliver to customers and the environment.
Currently, utilities dominate the electricity service market, limiting customer access to the full range of products and services otherwise available in a truly open market. One focus of the proceeding is to remove the barriers preventing third parties, such as retail electric suppliers, solar energy companies, or smart meter providers, from fully participating in the energy market. Allowing full participation by third parties would lead to increased innovation and fuel the development of new products and services. Read More
By: Karan Gupta, EDF Climate Corps Fellow at Jones Lang Lasalle
EDF Climate Corps fellow, Karan Gupta, in front of the Building Automation System at 77 West Wacker, Chicago, IL.
Demand response – an energy saving tool that encourages customers to shift their electricity use to times of day when there is less demand on the power grid or when more renewable energy is abundant – has been at the core of my work this summer as an Environmental Defense Fund Climate Corps fellow. My host company, Jones Lang Lasalle, is the property manager for 77 West Wacker Drive, a 50-story office building in downtown Chicago. Here, I am focusing on maximizing the benefits of demand response, which have already been implemented through multiple technologies.
Currently, 77 West Wacker is enrolled in the PJM demand response capacity market through a demand response service provider. As discussed in my previous post, there are standby payments for demand response commitments, meaning that the building is paid for simply making itself available to reduce energy demand when called upon to do so. Read More
Source: Johannes Rössel, wikimedia commons
It would be logical to assume that we make decisions based on our needs, desires, and values regardless of how the choice is presented. For instance, we wouldn’t expect the choice to become an organ donor to depend on whether you must check a box to accept or decline donation. But we would be wrong: our decisions depend a great deal on how the choice is presented.
Choice architecture gets to the heart of the debate on whether it’s preferable to offer people the opportunity to opt-in or to opt-out, and this question has become crucial to the discussion about time-variant electricity pricing throughout the country.
Opt-out vs opt-in time-variant pricing
Currently, most electricity customers pay for electricity at a single flat rate (i.e., one price per kWh consumed). Such pricing is simple but doesn’t reflect actual system costs, which are higher during times of the day when overall energy demand peaks. Time-variant pricing instead allows utilities to charge more for electricity during periods of peak demand, and less during periods of lower demand. Read More
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: Daniel Schwen
By: David Kolata, executive director of the Citizens Utility Board
Over the next five to seven years, smart grid infrastructure, including advanced metering infrastructure (AMI), will be deployed for customers of the two largest utilities in Illinois: Commonwealth Edison and Ameren Illinois. Over five million new meters will be installed and over $2 billion of smart grid investments will be made. The challenge confronting consumer and environmental advocates in Illinois is how to make sure that infrastructure is rolled out in a way that maximizes other policy objectives—namely, saving customers money on their energy bills and promoting opportunities for innovative technologies like microgrids and energy storage.
Years of discussion in Illinois culminated in the Energy Infrastructure Modernization Act, a new law that supports smart grid deployment and funds programs to support electricity system innovation through: Read More
Library of Congress, Prints and Photographs Collections.
As innovative energy products and services come to market, so do new mechanisms to fund them. And existing funding options become more popular. This has resulted in a boom of finance jargon, especially regarding energy efficiency and renewable generation. Though many of the finance terms used in clean energy finance are similar to those used in traditional finance, it’s easy to get lost. We hope this glossary will help those in clean energy navigate the new and growing world of clean energy finance.
Asset Class: A grouping of similar types of investments that behave similarly in the marketplace and are subject to the same laws and regulations. Broad examples of asset classes include:
- Equities (also known as stocks) – assets that represent ownership of part of a company.
- Bonds – assets that guarantee a fixed payment stream.
Bonds are often further categorized based on structure or source of the payments. Examples of these subclasses include municipal, corporate and mortgage bonds. Read More
Source: NASA Earth Observatory
Last month, I had the pleasure of moderating a panel called “Utilities 2.0: The Role of Distributed Generation and Demand Response in Evolving Utility Business Models.” The topic may sound esoteric, but to the more than sixty people in attendance, and at least fifty more watching online, the event, which was sponsored by clean energy networking group Agrion, offered insight into how these options will in a not-too-distant future revolutionize the way all of us consume electricity.
The energy industry is abuzz with talk of how distributed generation, which enables consumers to draw power from on-site sources, such as rooftop solar, and demand response, which rewards customers who use less electricity during times of peak demand, are transforming the electric utility industry. A once-in-a-generation paradigm shift is already in motion, and exactly how it will play out is anyone’s guess. Read More