By: Marita Mirzatuny and Kate Zerrenner
National Guard responding to flood emergencies.
When the U.S. military calls climate change a “threat multiplier” and “a serious threat to national security,” it makes anyone stand up and pay attention. From direct land impacts and food and water shortages, to the displacement of millions of people, climate change is not taken lightly by our armed forces.
Earlier this week, two military experts, Lt. Gen. Ken Eickmann (USAF, Ret.) and British Rear Admiral Neil Morisetti (Royal Navy, Ret.), testified at a Texas House International Trade & Intergovernmental Affairs Committee Hearing and later at an event hosted by the Robert S. Strauss Center for International Security and Law and the British Consulate-General University at University of Texas' LBJ School. As a senior research fellow at the University of Texas at Austin's Energy Institute and Former UK Foreign Secretary Special Representative for Climate Change, Eickmann and Morisetti, respectively, bring a level of trust and confidence to this issue, disarming the politics, if just for a moment, and replacing it with pragmatic duty.
Eickmann and Morisetti’s message was loud and clear: We need to diversify our energy options and shift more toward a clean energy economy. The potential for Texas is boundless. Read More
With time-variant pricing, people can choose to run their dishwashers at times of day when electricity is less expensive.
Today, most residential electricity customers are charged the same price regardless of when the electricity is actually being used. Charging customers a uniform price for electric service looks a bit like buying groceries by the cart instead of by the items purchased (e.g., apples versus filet mignon) – simple, to be sure, but so riddled with inefficiencies that no one would actually propose operating a supermarket that way. A cartful of filet mignon may weigh the same as a cartful of apples, but the value of these items and the cost of bringing them to market is drastically different. Similarly, electricity costs differ depending on the time of day power is produced and delivered.
Time-variant electric pricing addresses this issue by charging customers different prices depending on when electricity is used, reflecting the true costs of producing and delivering electricity. This gives customers greater control over their electricity bills by allowing them to reduce their energy use at higher-cost times. A recent blog post by my colleague, economist Beia Spiller, explained how time-variant electricity pricing can benefit customers, utilities, and the environment, and described several different types of time-variant pricing.
Given its compelling economics, one would think time-variant pricing would be widespread. Part of the reason it’s not is sheer inertia, but there’s more to it than that. Read More
Earlier this week, Environmental Defense Fund (EDF), along with 11 other environmental and consumer groups, joined forces in asking the Supreme Court to hear an important case involving an energy resource that saves families and businesses money, improves electric grid reliability, and reduces carbon emissions: demand response. We’ve written a lot about demand response and the federal case that could determine its future (also known as EPSA v. FERC or the FERC Order 745 case), and for good reason – the legal and policy frameworks governing demand response are critical to our clean energy future.
Simply put, demand response relies on people and technology, not just power plants, to meet electricity demand. It balances stress on the electric grid by reducing demand for electricity, rather than increasing supply. This makes our grid more efficient, reduces harmful air emissions from fossil fuel plants, and keeps electricity prices lower.
And these aren’t small savings – demand response cumulatively saves customers billions of dollars that would otherwise go toward more costly polluting resources. In 2013 alone, for example, demand response saved customers in the mid-Atlantic region $11.8 billion. Read More
This week I submitted testimony in support of a petition by the Citizens Utility Board and, my shop, EDF, to urge the Illinois Commerce Commission to require Commonwealth Edison (ComEd) and Ameren, two of Illinois’ biggest utilities, to provide families and individuals with new ways to reduce their energy bills: electricity pricing based on the hour of the day. This “Time-of-Use” (TOU) option provides times of the day when electricity will be much cheaper than the all-day, “flat” electricity pricing currently used today. Such electricity rates would reward energy-efficient customers and those who shift electricity use away from “peak” hours—when demand is high, prices skyrocket, and power plants produce the most pollution.
Our petition to the Illinois Commerce Commission, which is in charge of regulating electric utilities in the state, asks for ComEd and Ameren to offer optional rate plans beginning 2016. With voluntary TOU electricity pricing, families with digital meters can enjoy lower electric bills by running certain appliances, like the dishwasher, when electricity is cheapest, such as early in the morning or late in the evenings. However, the benefits go far beyond households that participate. Cutting energy use at high-demand times, like the afternoon, lowers electricity prices for everyone, reduces stress on the power grid, and offsets the need for expensive, polluting power plants. Read More
In the U.S., the electricity sector accounts for over a third of the country’s yearly greenhouse gas emissions, contributing more to climate change than any other sector, including transportation.
Furthermore, electricity costs have increased dramatically over the years, and are projected to continue their upward trend. Utilities and regulators have made great strides in promoting renewable energy, increasing the efficiency of the power grid, and reducing harmful pollution. However, customers, too, can be part of the solution by better managing their use of electricity – especially during those times when it is most expensive and dirty to produce.
Electricity is more expensive during ‘critical peaks’
The cost of producing electricity – and the carbon emissions associated with it – varies significantly throughout the day, depending on electricity demand at any point in time. For example, when a heat wave occurs and many customers begin cooling their homes after work, demand skyrockets and creates what is known as a ‘critical peak.’ Read More
Over the past several months, we’ve been providing updates on the ongoing litigation surrounding Order 745 – a vital, federal rule on demand response. As a low-cost, environmentally beneficial resource, demand response relies on people and technology, not power plants, to manage stress on the electric grid during periods of peak energy demand. Simply put, demand response pays people to conserve energy when it matters most – a win-win for people and the environment.
But this critical energy management tool has also been subject to an amazing amount of scrutiny (which we’ve covered here, here, and yes, here, as well). In short, the thorny issue boils down to this: a recent court decision found that the federal agency responsible for regulating demand response didn’t have the authority to do so.
When the decision came down, many were shocked. The general assumption had been that this agency (known as the Federal Energy Regulatory Commission or “FERC”) certainly was within its rights to issue Order 745, a set of rules for how demand response would function in our nation’s energy markets.
And last week, the United States Solicitor General sided with the “general consensus” on Order 745. Read More