Category Archives: Utility Business Models

Utility 2.0: NY’s New Business Model Should Properly Value the Costs and Benefits of Distributed Energy Resources

Source: AtisSun

Source: AtisSun

As we’ve mentioned before, New York is changing how it evaluates and compensates electric utilities. One goal of this change is increased consumer engagement, which makes customers allies in the development of a more reliable, resilient, and ‘smart’ electric grid.

Many customers have begun taking advantage of new energy technologies and their falling prices by turning to community microgrids, installing on-site distributed generation, like rooftop solar, or investing in more efficient appliances, among other actions. Advances in telecommunications and information systems have also created new opportunities for energy services we could not have imagined just a few years ago. For example, innovative tools like demand response allow third parties or utilities to turn off pre-approved appliances – like swimming pool pumps and air conditioners – remotely when the power grid is stressed and needs a quick reduction in energy demand. Read More »

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Utility 2.0: NY Utility Regulators Should Consider Change to “Formula for Success”

Source: Daniel Schwen, Wikimedia Commons

Source: Daniel Schwen, Wikimedia Commons

Acquire more customers, sell more electricity. This primary formula has fueled the runaway success of utility companies in America, as well as the rest of the world, for well over a hundred years.

But today, in an era when customers are technologically savvy, price conscious, and environmentally aware, more families are pursuing opportunities that will cut electricity bills and carbon emissions. Options once considered fringe, like installing rooftop solar panels and driving electric cars, are now becoming so mainstream that utilities everywhere are seeing their bottom lines crunched and even fear for their survival. The electricity sector needs a new formula that can account for these changes, while still providing reliable, safe, and affordable electricity for all.

As a result of increased energy efficiency and heavier reliance on local, distributed energy resources, it’s clear our country is moving toward a reality in which less electricity will come from centralized, fossil fuel power plants. At the same time, customers want utilities to continue providing basic electricity services while allowing them to benefit from new energy-efficient solutions and clean technologies in order to waste less electricity and generate our own power.

How will this be possible? A key first step is moving away from the existing regulatory paradigm, which rewards utilities for investing in more power stations and equipment, to a model that rewards utilities for the performance we seek today. Read More »

Also posted in Clean Energy, Energy Efficiency, Renewable Energy, Smart Grid| Tagged | 9 Responses, comments now closed

Corporate Buyers Demonstrate Demand for Renewables. Now it’s Time for the Market to Catch Up.

EDF Climate Corps fellow

Colin Krenitsky, 2014 EDF Climate Corps fellow for the Denver Housing Authority.

Last month, twelve major corporations announced a combined goal of buying 8.4 million megawatt hours of renewable energy each year, and called for market changes to make these large-scale purchases possible. Their commitment shows that demand for renewables has reached the big time.

We’re proud that eight of the twelve are EDF Climate Corps host organizations: Bloomberg, Facebook, General Motors, Hewlett Packard, Proctor & Gamble, REI, Sprint and Walmart. The coalition, brought together by the World Wildlife Fund and World Resources Institute, is demanding enough renewable energy to power 800,000 homes a year. And while it's great to see these big names in the headlines, they're not alone in calling for clean energy: 60 percent of the largest U.S. businesses have set public goals to increase their use of renewables, cut carbon pollution or both. Read More »

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Moving On, but Continuing the Work

Source: Chuck Abbe

Source: Chuck Abbe

Four years ago, I joined Environmental Defense Fund to work on climate policy as I believe that the issue is one of the most critical challenges of our era. I felt that my background working on Wall Street could be put to good use in crafting finance policies that help fight climate change. I chose EDF because they are the environmental organization that best understands how to use market mechanisms to deliver environmental solutions.

Tomorrow will be my last day at EDF, but I am not leaving because of any disappointment with the organization or any decline in my commitment on climate issues. At this point in time, new market mechanisms to finance clean energy are in place. The biggest contribution I can make is to switch to the private sector and demonstrate how well these mechanisms can deliver job-creating private investment.

Over the past several years, On-Bill Repayment (“OBR”) and Property Assessed Clean Energy (“PACE”) programs have been developed that are expected to allow for significantly increased investment in energy efficiency and solar generation projects.  State of the art PACE programs are up and running in California for commercial and residential properties, and in Connecticut and Ohio for commercial properties. Texas and New Jersey are expected to also launch programs in coming months. Later this year, Hawaii is expected to start the country’s first open-source OBR program that EDF helped design. Read More »

Also posted in California, Clean Energy, Climate, Energy Financing, Investor Confidence Project, On-bill repayment, Renewable Energy| Tagged , | 1 Response, comments now closed

NARUC Summer Meeting Highlights Clean Power Plan, Changing Utilities

The Official CTBTO Flickr

The Official CTBTO Flickr

The annual summer meeting of the National Association of Regulatory Utility Commissioners (NARUC) is a meeting of the minds like no other. Utility companies, regulators, staff, advocates, and trade press from around the country gather to discuss emerging trends and challenges, and it’s a great opportunity to understand what is on the collective mind of those empowered to oversee our country’s electricity system.

This month, over a thousand utility professionals attended the 2014 NARUC summer meeting in Dallas, which was dominated by two topics: the Environmental Protection Agency’s (EPA) proposed Clean Power Plan and the evolving utility business model.

This resulted in some very interesting conversations about changing the regulatory paradigm to incent the use of new technologies, optimize grid operations, and achieve reductions in greenhouse gas emissions. Read More »

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EDF Weighs In on New York’s Bold Effort to Build a New Electric Utility Business Model

New York Skyline

Source: iStock

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.

Humble beginnings

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 »

Also posted in Clean Energy, Electricity Pricing, Energy Efficiency, New York, Renewable Energy, Smart Grid| Comments closed

Dear Utilities, Change or Get Dumped

Source: Paul Cross, https://flic.kr/p/7AU7PK

Source: Paul Cross, https://flic.kr/p/7AU7PK

Like many relationships, the one between utilities and their customers can be complicated. Sure, they’ve been together for decades, but no longer are customers satisfied with a distant, disengaged power company selling them more and more megawatts.

As the utility business model evolves into one based on diverse energy services, utilities must find ways to prioritize and improve their customer relationships if they hope to thrive in the new energy economy.

What do customers really want?

It doesn’t take years of market research to discover that utility customers enjoy saving money. But just as important as a low price for power – if not more so – is a genuine feeling of power.  Just ask Dr. Philip Lewis of global energy think-tank VassaETT, who has researched the subject for years. His findings show that customers want to be in control of their energy behavior. They want market transparency and predictable rewards for their choices. The bottom line, says Lewis, is that customers want to feel like equals with their electricity suppliers, not captives. Read More »

Also posted in Clean Energy, Demand Response, Energy Efficiency, Renewable Energy, Smart Grid| 3 Responses, comments now closed

New York Energy Week Gives Clear Vision of Modern, Clean Energy Future

nyew1

By: Max Wycisk, Communications Intern

The second annual New York Energy Week, held last week, brought together more than 4,000 industry leaders and innovators – double the number last year – to discuss the dynamic changes the state’s energy sector has seen in the last twelve months, including the state’s historic move to re-examine its utility business model. In a series of panel discussions held throughout New York City, state, national, and international energy leaders reviewed key topics such as energy storage, building efficiency, and the rapidly evolving utility industry itself. While the topic of discussion varied, a number of consistent themes emerged, giving attendees a clear vision of the steps industry is taking toward adopting a modern, decentralized, clean energy future.

Communication drives innovation

One of the main themes of the conference, which was organized by research firm Enerknol, was the shift in how the energy industry will interact with consumers as well as the way in which it interacts with itself. Speakers frequently described the current energy industry as ‘fragmented’ or ‘acting within silos’ and questions arose at nearly every panel about how to stimulate conversation between different energy sectors that will lead to collaboration, investment, and innovation. Read More »

Also posted in Clean Energy, Demand Response, Energy Efficiency, Energy Financing, Energy Storage, New York, Renewable Energy, Smart Grid| 2 Responses, comments now closed

Massachusetts Moves to Modernize its Electric Grid – What this Means for Customers, Utilities

massbay

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 »

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Power Plant Rule a Tipping Point for Clean Energy Economy

powerplantruleFor those of us (and all of you) who’ve been urging the government to implement meaningful climate policy, the release yesterday of a plan to cut carbon emissions from power plants has been a long time coming. But it finally came.

The U.S. Environmental Protection Agency’s proposed carbon pollution rule for existing fossil-fueled power plants – also known as the Clean Power Plan – are a huge win for our climate.

We also think it could go down in history as the tipping point in our nation’s transition to a clean energy economy. Here’s why:

Old, dirty power plants will be retired

The nation’s fleet of coal-fired power plants is the single largest source of carbon pollution in the U.S. and one of the largest in the world. Placing carbon regulations on this source of electricity for the first time in history will transform our energy system. Read More »

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