Category Archives: Texas

When We Save Energy In Texas, We Also Save Water

By | Bio | Published: February 13, 2013

Last week, the Texas Coalition for Water, Energy and Economic Security (TCWEES), of which EDF is a member, held a legislative briefing at the Texas Capitol titled Energy & Water, Dollars & Sense: Improving security and maximizing benefits to Texas businesses and residents. The briefing focused on the nexus of water and energy, and furthered the idea that where you save energy, you save water too. The briefing included a panel discussion and a question and answer session. 

State Representative Lyle Larson from San Antonio welcomed attendees, a speaker that is well-suited to talk about water issues. Before becoming a state legislator, he served on San Antonio’s City Council, a city with one of the best water conservation programs in the country. Representative Larson started with an interesting point: In addition to the physical issues of water scarcity, we also need to resolve the psychological issues of water resources.

People simply do not think of water as a scarce resource, despite the multi-year droughts we’ve seen in Texas. Addressing water scarcity has been done in much the same way as system-wide power shortages: in a short term, reactive way, rather than a long term, proactive way. And we will never be able to meet our energy or water needs of our growing populations by being short-sighted.

Representative Larson said that water is the number one impediment to business no matter where you are in the world. Water-rich countries will take American jobs if we can’t address our scarcity, and water-rich states will take Texan jobs. We don’t deploy best management practices in this state when it comes to water. And calling for more water infrastructure is great, but conservation is going to save significantly more water than new infrastructure will. Read More »

Also posted in Energy Efficiency, Texas Energy Crunch, Water | Tagged , , | Comments closed

New ERCOT Report Shows That Texas Wind And Solar Are Highly Competitive With Natural Gas

By | Bio | Published: January 28, 2013

An interesting fact seemed to go unnoticed in all the press around the Electric Reliability Council of Texas’s (ERCOT) Long Term System Assessment, a biennial report submitted to the Texas Legislature on "the need for increased transmission and generation capacity throughout the state of Texas." ERCOT found that if you use updated wind and solar power characteristics like cost and actual output to reflect real world conditions, rather than the previously used 2006 assumed characteristics, wind and solar are more competitive than natural gas over the next 20 years.  This might seem a bit strange since we've been told for years by renewable energy skeptics that wind and solar power can't compete with low natural gas prices. Let me back up a second and explain what's going on here, and what it means for both the energy crunch and Texas' ongoing drought.

Every two years since 2005, ERCOT has used a series of complex energy system models to model and estimate future conditions on the Texas electric grid.  This serves a critical function for legislators, utilities and regulators and others who need to prepare for changes as our electric use continues to expand and evolve.  As with any model of this kind, the assumptions are critical: everything from the price of natural gas, to the cost to build power plants and transmission lines. Facing an acute energy crunch and given that solar and wind costs have come down a great deal since the first study in 2006, ERCOT dug a little deeper into their historical assumptions and developed a version of the model that used current, real-world cost and performance data for wind and solar power.

What they found was astounding: without these real-world data points, ERCOT found that 20,000 MW of natural gas will be built over the next 20 years, along with a little bit of demand response and nothing else.  Once they updated their assumptions to reflect a real-world scenario (which they call “BAU with Updated Wind Shapes”) ERCOT found that about 17,000 MWs of wind units, along with 10,000 MW of solar power, will be built in future years.

In addition to demonstrating the economic viability of renewable energy, these results show two drastically different futures: one in which we rely overwhelmingly on natural gas for our electricity, and one in which we have a diverse portfolio of comparable amounts of renewable energy (which does not use water) and natural gas.  All of this is crucial to keep in mind as the Legislature, the Public Utility Commission and ERCOT evaluate proposals to address resource adequacy concerns and the impacts of a continuing drought on our state’s energy supply.

Finally, one ERCOT statement in particular stands out from this analysis, in direct contradiction to renewable energy opponents who say that renewable energy is too expensive: “the added renewable generation in this sensitivity results in lower market prices in many hours [of the year].”  This means that when real-world assumptions are used for our various sources of power, wind and solar are highly competitive with natural gas. In turn, that competition from renewables results in lower power prices and lower water use for Texas.

As state leaders look for ways to encourage new capacity in the midst of a drought, it’s important to realize that renewable energy is now competitive over the long term with conventional resources.  The fact that renewable energy resources can reduce our water dependency while hedging against higher long-term prices means that however state leaders decide to address the energy crunch, renewables need to be part of the plan.

Also posted in Demand Response, Natural Gas, Renewable Energy, Solar, Texas Energy Crunch, Wind | Tagged , , | Comments closed

Energy Crunch: Saving Energy In Texas Schools Is A Win-Win

By | Bio | Published: January 17, 2013

This commentary was originally posted on EDF's Texas Clean Air Matters blog.

The Texas Legislature is back in session, and there will be, as always, a lot of discussion about how to fund schools. The school system in our state seems to be chronically short of funds to meet the demands of our growing state and its children.

But while the state-level politicians discuss, some school districts are taking matters into their own hands where they can. In the summer 2012, the Houston Independent School District (HISD), the seventh largest school district in the U.S. and the state’s largest, hosted a student through the EDF Climate Corps program. The program trains graduate students to find energy savings in their host institutions or companies. The Climate Corps fellow at HISD found several potential projects to help save the district money. For example, HISD has approximately 1,000 temporary buildings. The fellow found that if all the trailer-type temporary buildings’ lighting and wall air conditioning units and box heaters were upgraded and had insulation installed, at an upfront cost of $453,000, the district would realize over $62,000 in annual savings, nearly 700 kilowatt hours in annual electricity savings, and an annual reduction of approximately 400 metric tons of carbon dioxide. And that’s just one project!

The student’s work built on the findings of an audit funded through the State Energy Conservation Office (SECO) in 2007, which estimated that with recommended upgrades, HISD could cut its annual energy costs by $15 million!

Since the 2007 audit was performed, Houston voters have approved two bonds to help upgrade their school district, including one in November 2012. In the last bond vote, they approved, by a margin of nearly 2:1, a $1.89 billion bond to replace and repair 40 schools in HISD. In recent years, HISD has committed to ensuring all new and future buildings meet Leadership in Energy and Environment Design (LEED) standards for green building.

In 2009, the Texas Legislature passed Senate Bill 300, which was signed by Governor Perry. It requires school districts to develop long-term energy plans. It leaves it up to the boards of trustees of the individual school districts to determine if they want to submit the plan to SECO to help finance measures for plan compliance. There is no way to determine which school districts have developed plans or are implementing them. This Legislature could require school districts to report to SECO or could establish some minimum standards for building new school facilities or renovating existing ones.

Nationwide, schools spend more than $6 billion on energy costs, and the US Department of Energy National Renewable Energy Lab estimates that most schools could save about 25 percent of that by implementing smart energy measures. Those savings could pay 40 million new textbooks, 30,000 new teachers or 1.5 million new computers every year.

Some relatively simple measures such as daylighting (using windows and skylights to bring in natural light) have a double benefit—in addition to saving the average middle school tens of thousands of dollars in energy costs, daylighting technologies are also proven to improve students’ academic performance. One study in North Carolina showed that students who attended daylight schools scored up to 14 percent better on tests than the equivalent non- daylight school students. Smarter energy technologies and conservation measures lead to lower electricity costs, but also to lower maintenance costs, better indoor air quality, and free up money that can be used on other necessities, such as hiring teachers or buying more computers.

There is often an upfront cost to installing these energy efficiency technologies (although many conservation measures, such as turning off vending machine lights require no cost and only save money), but in most cases, school districts are in a good position to take advantage of several financing options. SECO operates the LoanSTAR program, which uses a revolving loan mechanism to fund energy efficiency projects for public buildings, including those in school districts. SECO also operates the Texas Cool Schools grant program, which helps Texas schools lower their operating costs by purchasing new and more energy-efficient heating, ventilation and air conditioning (HVAC) systems.

Performance contracting is another way to finance upfront costs for schools. Under performance contracts, contractors pay the upfront costs, which are recouped through a portion of the resulting savings, and even guarantee net savings for the building owner.

As we start this new Legislative Session in Texas, and parallel debates happen about our impending energy crunch and how to fund schools, doesn't it make sense to merge these two issues? Help our school districts reduce energy costs (and in the process improve indoor air quality, student performance, and water efficiency) and enable them to spend their money on improving education, and reduce stress on the grid. Don’t the schoolchildren of Texas deserve that?

Also posted in Energy Efficiency, Texas Energy Crunch | Tagged | Comments closed

Dallas Fort-Worth Breathes Easier Following EPA’s Decision On Wise County Ozone Petitions

By | Published: January 16, 2013

This commentary was originally posted on EDF's Texas Clean Air Matters blog.

Just in time for the holidays, the U.S. Environmental Protection Agency (EPA) delivered a valuable gift to residents of the Dallas-Fort Worth area: the promise of stronger protections against the harmful public health and environmental impacts of ground-level ozone (the main component of smog). Specifically, EPA announced on January 7 that it has decided to deny 19 petitions filed by the state of Texas and other parties last summer — all demanding that the agency reverse its determination that Wise County, Texas contributes to high ozone levels in nearby Dallas-Fort Worth (EPA’s responses were signed December 14, 2012). EPA’s action means that polluters in Wise County will have to do their fair share to reduce ozone levels in Dallas-Fort Worth, which have been among the worst in the country for many years. Because of the importance of this issue to the public health of Texans, EDF has already taken steps to defend EPA’s action in Federal court.

Background

Ozone pollution has long been regulated under the Clean Air Act because of the tremendous hazards that ozone poses to public health and the environment. High ozone levels lead to respiratory distress and disorders; decreased lung function; increases in emergency room visits and sick days; and more. To address the serious problem of ozone, the Clean Air Act provides a multi-step process for ensuring that all areas of the country achieve acceptable ozone levels. First, EPA must establish nationwide air quality standards for ozone (called National Ambient Air Quality Standards), which are required to be strong enough to protect public health with an adequate margin of safety. Second, EPA must designate which areas of the country meet those standards, and which do not. Lastly, states are required to submit plans for achieving and maintaining compliance with EPA’s ozone standards — with especially strict requirements for areas that currently do not meet the standards.

EPA last updated its ozone air quality standards in March 2008. The revised standard requires that average ozone concentrations over an 8-hour period remain at or below 75 parts per billion (ppb) — a level that is more protective than the previous standard set in 1997, but still significantly higher than the range of 60 to 70 ppb recommended by EPA’s own Scientific Advisory Committee. EDF has consistently advocated for a stronger ozone standard, and has even taken EPA to court over this issue together with other public health and environmental organizations. At the same time, EDF has also fought hard against attempts to weaken the 2008 ozone standards or stop their implementation.

Designation of Wise County

On May 21, 2012, EPA issued a regulation designating 45 areas of the country as out of compliance with the 2008 ozone standards – including a group of ten counties in the Dallas-Fort Worth area, which had long failed to meet the earlier and less stringent ozone standards. For the first time, however, the Dallas-Fort Worth designation also included Wise County, Texas, due in large part to emissions of nitrogen oxides and volatile organic compounds from a recent boom in oil and gas production in the area.

As EPA explained in a detailed technical analysis, Wise County was included in the Dallas-Fort Worth ozone designation because of the county’s contribution to unhealthy levels of ozone. Among other things, EPA found that ozone monitors less than half a mile from the county line were recording unhealthy levels of ozone; that Wise County emits some of the highest levels of ozone-forming pollution in the 19-county area surrounding Dallas-Fort Worth; and that the prevailing winds on high-ozone days are responsible for bringing that pollution from Wise County to the nearby city.

Ensuing Litigation and Requests for Reconsideration

EPA’s determination was reached after a lengthy process during which the state of Texas and other stakeholders had ample opportunity to submit comments and data on Wise County’s contribution to ozone in Dallas-Fort Worth. However, this didn’t stop the state, some local governments, and various oil and gas producers and trade associations from trying to stop the designation of Wise County by filing a total of 19 petitions asking EPA to reverse its decision. The state of Texas, Wise County, and four industry parties also filed legal challenges to EPA’s determination in the D.C. Circuit Court of Appeals — and EDF responded by moving to intervene in defense of EPA’s action.

EPA’s Denial of Reconsideration and Next Steps

In detailed responses to the petitions, EPA reaffirmed its analysis of Wise County’s contribution to the local ozone crisis and offered rebuttals to each of the major arguments advanced by the petitioners. EPA’s responses confirm that the designation of Wise County rests on the best available science. EPA’s action is also an important advance for public health — ensuring that polluters in Wise County will do their fair share to address ozone pollution in the Dallas-Fort Worth area, and that the important protections of the Clean Air Act extend to ozone-contributing areas and sources that have been overlooked in the past.

We hope that the parties challenging the Wise County designation will ultimately decide to demonstrate leadership by becoming part of the solution to the air quality challenges facing Dallas-Fort Worth. In the meantime, vital work remains to be done to defend EPA’s actions in court: the ongoing D.C. Circuit challenges to the original designation of Wise County, which were suspended while EPA processed the reconsideration petitions, are likely to resume in a matter of weeks. In addition, EPA’s decisions on the petitions may provide fresh fodder for additional legal challenges in the D.C. Circuit. EDF’s legal team stands ready to vigorously defend EPA’s decision in the months ahead.

Also posted in EPA, Natural Gas | Comments closed

NERC Demands Action From ERCOT To Keep The Lights On In Texas

By | Bio | Published: January 14, 2013

This commentary was originally posted on EDF's Texas Clean Air Matters blog.

Last week was a busy one in Texas, with the beginning of the 83rd Legislative session attention was focused on incoming lawmakers, both seasoned and freshmen, and the opportunity that only happens every two years to address serious issues in Texas including water scarcity, education, tax issues, and of course energy issues.

So it's understandable that no one seems to have noticed a strongly worded letter to the Electric Reliability Council of Texas (ERCOT) from the North American Electric Reliability Corporation (NERC) last Monday demanding more action to ensure electric reliability in Texas, and asking ERCOT to report back to NERC by April 30 on additional actions taken. NERC isn't some federal boogey man either; it's a corporation founded by the electric industry to create commonly accepted standards for electric reliability across North America, usually through voluntary compliance. President Bush's Energy Policy Act of 2005 gave the corporation "the authority to create and enforce compliance with Reliability Standards," which is where this letter comes into play.

In their 2012 report, NERC highlighted ERCOT as the only region in North America that was not maintaining adequate electric reserves to meet demand, and with this letter they made it very clear that the actions taken to date have not done enough to mitigate that risk. In the letter, NERC President Gerry Cauley notes that the PUC and ERCOT are continuing to address energy reliability issues, but finds that "solutions have not yet sufficiently materialized to address NERC’s reserve margin concern."

Cauley goes on to say that "it is still unclear to us how ERCOT intends to mitigate issues that may arise on the current trajectory and when new resources may be available to meet growing demand." So according to the corporation whose membership consists mostly of utilities, grid operators, large and small customers, and electric regulators, the actions that the PUC and ERCOT have taken at this point are not enough to ensure we'll have reliable electric supply, risking blackouts as soon as this summer.

As lawmakers settle into Austin for the next few months they'll certainly be paying close attention to this issue, though many have indicated they would prefer that ERCOT and the PUC develop the solutions to this problem. Cauley's letter serves as notice that the PUC and ERCOT need to be more aggressive if they want to ensure a reliable supply of power in Texas. Certainly both agencies are putting serious time and effort into keeping the lights on in Texas, including effort so expand existing demand response programs, but NERC clearly thinks they need to be doing more.

All of this reminds me of the Texas drought: a year ago it was a huge looming crises, but a break in the weather took everyone’s mind off of the drying rivers and lakes, even though they never really recovered. Lately the drought has been back in the news as Texans realize that we're basically in the same place that we were in 2011.

No one could accuse ERCOT or the PUC of sitting idly by or pretending this risk isn't real. However, they have yet to send a strong enough signal to the market to spur investors in demand response or any other resources to develop new projects. About the only thing that has been done is the extension of the federal production tax credit for wind energy, which has wind developers racing to build new projects in Texas. The concern is that the solutions they've begun work on to date may not get us to where we need to be by this summer.

This letter is a reminder that the energy crunch hasn't gone away, things are not likely to change in the near term if serious action isn't taken soon. That is a risk we can't afford to take given a looming drought, a growing economy and a stagnant electric market. NERC has asked ERCOT to report to them on their progress by April 30, near the end of our biennial legislative session, and one in which the critical PUC/ERCOT sunset legislation is expected to pass, maybe legislators should consider a similar request.

Also posted in clean energy, Demand Response, Energy Efficiency, Texas Energy Crunch | Tagged , | Comments closed

Wind Update: The PTC And A Christmas Day Record

By | Published: January 9, 2013

This commentary was originally posted on EDF's Texas Clean Air Matters blog.

Source: Houston Chronicle

Good news came out of the fiscal cliff ordeal last week when Congress voted to extend the Production Tax Credit (PTC) for renewables, which had expired on January 1. While the 2.2 cent-per-kilowatt-hour credit has only been extended through 2013, it provides some certainty to an industry that was holding its breath. As we’ve discussed previously, while the tax breaks for the oil and gas industry are written into the permanent tax code, the credits for wind and other renewables are not. Created under the Energy Policy Act of 1992, the PTC income tax credit is allowed for the production of electricity from utility-scale wind turbines, geothermal, solar, hydropower, biomass and marine and hydrokinetic renewable energy plants.

While this extension through the year does not appear to provide a great deal of long-term certainty, my colleague Colin Meehan points out that “an important distinction with this extension is that prior to 2013, the tax credits were awarded to facilities operational by the end of 2012. The extension now applies to facilities for which construction begins by the end of 2013. As a result, this is more like a two-year extension.” Cameron Fredkin, director of project development at Cross Texas, further emphasizes the point by highlighting that “the key provision in the extension is the requirement to begin construction in 2013 versus previous one-year extensions that required wind developers to complete construction and begin operations in 2013. Wind developers in the Panhandle region in the interconnection study process would have had difficulty achieving commercial operations in 2013.”

According to the American Wind Energy Association, “America's 75,000 workers in wind energy are celebrating over the continuation of policies expected to save up to 37,000 jobs and create far more over time, and to revive business at nearly 500 manufacturing facilities across the country. Half the American jobs in wind energy – 37,000 out of 75,000 – and hundreds of U.S. factories in the supply chain would have been at stake had the PTC been allowed to expire, according to a study by Navigant Consulting.”

As I wrote back in November, many of those projects and jobs that were on the line while Congress delayed are here in Texas. In Amarillo, Walt Hornaday, president of Ceilo Wind Energy, said the tax credit helped “dust off projects [they] had put on the shelf.” Hornaday says he is “impressed wind was in the bill with big-ticket items like Medicaid and the Farm Bill. It used to be wind wouldn’t have a chance to be included. I thought we’d be left out in the cold.” According to The Hill, “The wind industry has floated a phase-out plan for the credit as a way to cement some stability and avoid annual battles to extend the credit. Securing the extension now sets the table for those discussions.”

Andy Geissbuehler, head of Alstom’s North American wind business, a manufacturer of wind turbine equipment, believes that “the extension of the Production Tax Credit for wind power is a positive development for our company, our customers, and the many workers across the country employed directly and indirectly by the wind power industry. As an equipment supplier, we stand ready to provide the equipment that can be manufactured in our Amarillo facility to project developers across North America. We remain optimistic about the long-term market for wind power market in North America, especially now that the U.S. Production Tax Credit has been extended another year.”

One possible casualty of Congress’ stalling is the $5 million, 80,000-square-foot facility left behind by Zarges Aluminum Systems. The German company planned to produce wind tower components, such as ladders and platforms. A spokesman at the time blamed the recession and uncertainty regarding the tax credits as well as low natural gas prices for putting pressure on its customers and the company itself.

This extension comes at a time when wind set a new record in 2012 by installing 44 percent of all new electrical generating capacity in America, according to the Energy Information Administration, leading the electric sector compared with 30 percent for natural gas, and lesser amounts for coal and other sources. Here in Texas, wind set another record, providing 8,638 megawatts (MW) of power on Christmas Day, with 6,600 MW coming from West Texas wind farms and 1,600 MW coming from the Texas coast. This adds up to nearly 26 percent of the system load, which is 117 MW higher than the previous record set in November 2012.

As Kent Saathoff, vice president of grid operations and system planning at the Electric Reliability Grid of Texas (ERCOT), points out, "Unlike traditional power plants, wind power output can vary dramatically over the course of a single day, and even more so over time. With new tools and experience, our operators have learned how to harness every megawatt of power they can when the wind is blowing at high levels like this."

Those new tools and experience are exactly why the PTC is an important component of this emerging energy sector’s ability to grow and innovate, especially as ERCOT reviews an additional 20,000 MW of wind power capacity. This is in addition to the more than 10,000 MW it already has installed, which is the highest amount in the nation.

Also posted in Renewable Energy, Wind | Tagged | Comments closed

A Red Flag On Disclosure Of Hydraulic Fracturing Chemicals

By | Bio | Published: December 12, 2012

It’s not often that a new regulatory idea becomes so popular that one or more states per month climb on the bandwagon. But that is precisely what has happened with the push to disclose which chemicals are pumped into the ground to stimulate oil and natural gas production during the process known as hydraulic fracturing, or "fracking."

A year ago, only three states (Arkansas, Montana and Wyoming) required oil and gas producers to tell the public what chemicals they were using. Two other states (Colorado and Texas) were actively developing such rules. Today, just twelve months later, statutes or regulations mandating “frack” chemical disclosure are on the books in no fewer than 18 states, and proposals are pending or under consideration in several others.

FracFocus, an online registry that compiles information on hydraulic fracturing chemicals both for states where disclosure is voluntary and required, has been up and running for just 20 months, but already it houses approximately 800,000 records that include ingredients data. As of December 5, 2012, this data represented 33,606 wells. The amount of information on the site continues to grow rapidly.

It is impressive that so much information has been made available in such a short time. Still, people have begun to wonder whether the disclosure rules are accomplishing what was intended. The question is important because rules that aren’t working need to be changed. A good regulatory system is based on a process of continual improvement, not a naive idea that the rulebook can be written in a way that will never need changing.

Unfortunately, judging from early press reports, there are quite a few bugs in the system. To be fair, the reporting requirements are quite new and still being implemented — and analysis of the data has barely begun. But  problems are emerging. The issue receiving the most media attention is the sheer number of trade secret claims. Read More »

Also posted in Chemical disclosure, EPA, General, Natural Gas, Water | Tagged , | Comments closed

Pecan Street Inc. Researchers’ Report Receives Outstanding Paper Award

By | Bio | Published: December 11, 2012

Source: Pecan Street Inc.

With 1.8 gigawatts (GW) of solar power installed in 2011 and an expected 2.8 GW in 2012, it is safe to say that solar energy has solidified its role as an important part of our nation’s energy portfolio. Affordability, competitive financing and reduced greenhouse gases are just a few of the reasons why the number of solar installations has skyrocketed in the past several years.

Now, new research from Dr. Alexis Kwasinski, Dr. Fabian Uriarte, and Amir Toliyat, engineers from the University of Texas at Austin, sheds some light on how rapidly growing solar installations can work with the current electric grid. For their groundbreaking findings in "Effects of high penetration levels of residential photovoltaic generation," they were recently awarded an Outstanding Paper Award at the International Conference on Renewable Energy Research and Applications (ICRERA) in November for their in-depth research and innovative solutions.

Jump started by a $10.4 million grant from the Department of Energy, Pecan Street Inc. is a “community-wide collaboration to fully reinvent the energy delivery system”  based in Austin, Texas.  This living ‘smart grid laboratory’ provided a perfect data collection site for the researchers. Pecan Street’s leadership focuses on developing new technologies that reinvent the way we create and use energy, so that residents drive electric vehicles, invest in cutting-edge technology and, of course, use solar panels.

The massive amount of data gathered from Pecan Street’s efforts provided researchers the opportunity to analyze solar energy’s effect on the three key characteristics of “power quality” (voltage level, voltage unbalance and power factor).  The researchers found that energy inflections (voltage levels and voltage unbalance) did not create any major concerns with the power grid, despite unfounded claims to the contrary by some solar critics.

Digging further into the data, the researchers unexpectedly found that power factor could become a real issue if solar installers don’t use modern equipment that provides for power factor support.  While the issue could become very real at higher levels of solar penetration, the solution is simple, cheap and currently available; it simply means installers should begin using newer models of solar panel “inverters,” which convert solar power into electricity that can be fed into your grid and home.

Inverters simply convert raw DC power to AC power (i.e. the type of electricity we need to use everyday household items). Maximizing the amount of electricity that is converted into usable power makes solar energy more competitive, ensuring that it will remain an important and growing part of our nation’s energy mix.

It’s exciting to see that these researchers are receiving accolades for their groundbreaking work, and international acclaim is always an excellent motivator for this kind of work, but it’s nice to be appreciated where you hang your hat too.  Fortunately that doesn’t seem to be a problem, since earlier this year Austinites voted in the Best of Austin 2012 award by the Austin Chronicle for Best Way to Turn Some Green Even Greener.  Their choice: Pecan Street Inc.

Also posted in Smart Grid | Tagged | Comments closed

On-Bill Repayment: A Way To Eliminate The Upfront Costs For Energy Efficiency Projects

By | Bio | Published: December 3, 2012

When a state is facing electric resource shortages, like Texas is, it’s just common sense to explore all the ways to make our electric use more efficient. We know efficiency makes sense – in terms of grid reliability, lower emissions, and reduced costs to ratepayers. But there is a barrier to some ratepayers in implementing more energy efficiency: upfront costs. Several options currently exist to finance efficiency, such as home equity loans and incentive programs through utilities. But what about creating a market to allow private investors to invest in the market by offering lower rates for utility customers by ensuring some security through repayment on the utility bill? That’s what on-bill repayment aims to do.

On-bill repayment (OBR) offers an opportunity for home and building owners to finance energy efficiency and renewable electricity generation projects through cost-saving loans from third-party investors. The loans are repaid through customer’s utility bills.  The money comes from private sector lenders at no cost to ratepayers or taxpayers.  OBR also allows for longer term loans with lower interest rates.

The general concept of OBR is not new. Several utilities around the country have instituted on-bill finance programs. However, there is a key difference. On-bill finance programs use utility money to finance the program, thus creating an additional cost for the ratepayers. On-bill repayment would use new money from third parties, such as banks, to create a new market that is secure, cost effective, and enables more bang for the buck in terms of what the ratepayer receives.

OBR is a flexible program that works for a wide variety of properties and vendor business models.  In some programs, contractors are told what solutions can be offered to each customer.  OBR, on the other hand, allows each contractor or vendor significant latitude to design solutions that meet the needs for their customers.  This could include everything from insulation upgrades for residential customers or lighting upgrades for restaurants all the way to deep retrofits of commercial or industrial properties.  All of these would be delivered by the private sector and would be completely voluntary to each property owner.

Benefits of OBR include:

  • Job growth: We estimate that it could generate 100,000 new jobs to install energy efficiency and renewable electricity.
  • New market creation: We estimate that OBR could generate $13.5 billion over a decade in private sector investments in energy efficiency, renewable generation, and demand response projects.
  • Ratepayer and state savings: OBR would promote energy efficiency and distributed energy resources that avoid the cost of expensive new power plants and other high-cost generation—saving ratepayers $4.8 billion in energy bills.
  • Flexibility for contractors and vendors: Program participants would have considerable discretion to design product offerings and go-to-market strategies to meet their customers’ needs.

In a state like Texas that prides itself on making its economy attractive to investors and creating markets, especially in the energy sector, OBR could be an effective tool to opening up the state to a private sector solution that can ameliorate our Texas energy crunch. Efficiency is an investment that makes sense for Texas. As utilities face increasing demands on their energy resources, and fewer dollars to spend on efficiency for their customers, giving them another tool, energized by funds from the private market, will benefit the entire state.

Also posted in Energy Efficiency, On-bill repayment, Texas Energy Crunch | Comments closed

Wind Makes Up 26% Of ERCOT Load In November, New Record

By | Published: November 26, 2012

Source: Environmental Law Institute

Despite having escaped this summer without rolling blackouts and the kind of heat we experienced last year, Texas is still dealing with the energy crunch issue. Luckily, our state is home to the nation’s largest wind power industry and it contains about a fifth of the country’s wind turbines.  The Electric Reliability Grid of Texas (ERCOT), the Texas grid operator, announced that earlier this month wind throughout the state contributed 26 percent of the load on the grid, setting a new record.  On November 10, a total of 8, 521 MW was produced, beating the previous July 19 record.  For the first eight months of this year, wind accounted for 8.7 percent of the grid’s energy.

This is in addition to wind helping Texas avoid blackouts in February of last year, when a cold front proved too much for many traditional power plants. On February 2, 2011, wind energy played a critical role in limiting the severity of the blackouts, providing enough electricity to keep the power on for about three million typical households. ERCOT confirmed that wind provided between 3,500 and 4,000 MW of electricity (about seven percent of ERCOT demand at that time), roughly what it was forecasted and scheduled to provide. Texas wind provided this electricity during the critical 5 to 7 a.m. window when the grid needed power the most.

As an E&E ClimateWire article points out, wind farms in west Texas contributed about 7,000 MW to the system on Nov. 10 when the record was hit. Coastal towers and turbines, which were key to avoiding power shortages last year, contributed about 1,100 MW of supply. Texas holds more than 10,000 MW of wind power capacity overall.

This is all welcomed news for an industry holding its breath as Congress debates the renewal of the expiring Production Tax Credit (PTC) for renewables, which provides a 2.2 cent per kilowatt-hour tax credit for the first ten years of electricity production from utility-scale turbines.

With Texas being a major manufacturer of wind equipment in addition to relying on it for power, many jobs hang in the balance.  According to a Sierra Club report,  “a typical new 250 megawatt wind farm will create 1,079 jobs – manufacturing jobs, construction jobs, engineering jobs and management jobs.” Another report by NRDC estimates that from a 250 MW project, “non-construction businesses would account for 557 jobs — 432 in manufacturing, 80 in planning and development, 18 in sales and distribution and 27 in operations and maintenance. Construction would check in with another 522 jobs, doing things like buildings roads and foundations, installing turbines and wiring and connecting the power plant to the grid.”

In Texas, the expiration of the PTC could not only mean stunting job growth but would also likely create layoffs. According to Walt Hornaday, president of Cielo Wind Power, an Austin-based wind farm developer, “We haven’t had the industry come to a stop like this before in a long, long time.” His company is pursuing work in other countries, but otherwise, he said, “we would definitely be looking at very large layoffs.”  Even Governors Perry’s own report cites a Mitchell Foundation analysis that the expanding wind and solar energy industries are projected to add 6,000 jobs in Texas per year through 2020 and, as of last year, over 1,300 Texas companies employ nearly 100,000 workers in industries directly and indirectly related to renewable energy.

And for those that now claim energy subsidies must end, despite being proponents for fossil fuel dollars, let us not forget what it has taken and continues to take to support the fossil fuel industry. First, the largest subsidies to fossil fuels were written into the U.S. Tax Code as permanent provisions.  Furthermore, the largest break, the Foreign Tax Credit, provides around $2.2 billion annually and applies to the overseas production of oil through an obscure provision of the Tax Code, which allows energy companies to claim a tax credit for payments that would normally receive less-beneficial tax treatment. In an analysis conducted from 2002 to 2008, by the Environmental Law Institute, fossil fuel subsidies accounted for $72 billion over that span of seven years. On the renewable side, over half of the $29 billion subsidy amount supports corn ethanol. For traditional renewables like wind and solar, the total amount received was $12.2 billion, amounting to $1.74 billion annually.

Given Texas’ resource adequacy problems, it makes no sense to divest from a clean resource that provides up to 26 percent of our power while growing the economy.

As we mentioned in August, please contact your elected officials and ask them to renew the PTC before the end of the year. It’s good for Texas, the nation, and the environment.

Also posted in Texas Energy Crunch, Wind | Comments closed