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On-Bill Repayment in California: Two Steps Forward, One Step Back

By Brad Copithorne / Published: July 2, 2013

This commentary originally appeared on EDF’s California Dream 2.0 Blog

Last week, the California Public Utilities Commission (“CPUC”) issued a proposed decision with the final implementation rules to create the nation’s first On-Bill Repayment (“OBR”) program for commercial properties. If properly constructed, the program is expected to allow building owners to finance clean energy retrofits with third party capital and repay the obligation through their utility bills.

The good news is the CPUC’s proposed decision contains the vast majority of the program elements necessary to create a flourishing financing market for energy efficiency and renewable projects. The CPUC ordered robust disclosure to tenants and property owners of any OBR obligation in place, required a centralized program administrator to reduce expenses for market participants, required an equitable share of partial payments between the utility and the lender and agreed that nonpayment of an OBR obligation will result in the same collection procedures from the utility as nonpayment of an electricity charge.

Unfortunately, constructing a successful financing program is much like building a boat. A boat with 90% of its hull in place will not travel very far. The proposed decision appears to also have a potentially fatal flaw. The CPUC has required all subsequent owners and tenants of a property to provide consent to ‘accepting’ the OBR obligation, but does not specifically state what will happen if the consent is not given.

OBR can work for lenders when it significantly reduces risk and simplifies the underwriting decision. ‘If the lights are still on, then the lender is getting paid’ is a simple rule that will provide significant comfort to ratings agencies and credit committees. Downtown office buildings and suburban shopping malls are foreclosed on a regular basis, but in almost all cases the lights stay on. If an OBR obligation is sure to be paid — even after a foreclosure — the availability of investment and cost of financing will improve dramatically. Read More »

Also posted in Energy Efficiency, On-bill repayment, Renewable Energy, Utility Business Models / Read 2 Responses

It’s Time for Latino Leadership on Climate Change

By Jorge Madrid / Published: July 2, 2013

(This post first appeared on EDF voices)

Source: Thomas Hawk/Flickr

I love California in the summertime, and Fourth of July weekend is one of my favorite holidays. But it is getting excruciatingly HOT out here, and according to the best science, it is going to get much hotter.

This past weekend the West Coast broke nearly every temperature record on the books, well ahead of August and September, which are usually the hottest months of the year.

And last year was the hottest year on record for the continental United States. Crops were devastated, cities were hit by supercharged storms, and people, mostly the poor, suffered and died amid some of the most destructive extreme weather events in our history. All told, the United States spent more than $110 Billion on weather related disasters in 2012.

There’s more bad news ahead. Extreme heat projections for the U.S. in 2030, based on research from Stanford University, shows that the West and Southwest are going to get really, really hot! Read More »

Also posted in Clean Energy, Climate, Solar Energy, State / Tagged green jobs | Comments are closed

How’s Your Electric Bill Treating You? Time To Give It Some Thought

By Jamie Fine / Published: July 1, 2013

This commentary originally appeared on EDF’s California Dream 2.0 Blog

When was the last time you really gave a lot of thought to your electric bill?

If your answer is “not very often”, then you’re not alone. In fact, the typical household thinks about their electric bill only six minutes a year.

The California Public Utilities Commission (CPUC) now has the opportunity give people another way to control household energy bills by creating a system where changing the time you use electricity can save money. This won’t mean you’ll need to invest more time thinking about energy use, but you’d be well-served to think about the timing of it.

Last week, the CPUC held a public workshop inviting stakeholders — PG&E, SCE and, SDG&E, along with consumer, industry, and environmental groups — to present and discuss their proposals for revising the system of charges for residential electricity use. I had the pleasure of presenting EDF’s proposal for a time-of-use (TOU) pricing system: For customers looking for another option for saving money on their monthly bill, EDF sees TOU as the best pricing policy for both people and the environment; customers uncomfortable with this option would be able to “opt out” and choose another pricing structure.

Currently, the standard “tiered” rate charges customers higher prices for higher electricity usage. The approach is intended to send the message: “The more you use, the more you pay.” Read More »

Also posted in Demand Response, Grid Modernization, Time of Use, Utility Business Models / Read 1 Response

Cream Cheese And Time-Of-Use Electricity Pricing

By Jamie Fine / Published: May 7, 2013

This commentary was originally posted on EDF’s California Dream 2.0 blog.

“The cream cheese just fell off the roof of the car,” my 7-year old daughter said as I turned into my driveway after a trip to the grocery store. Right now you might be asking yourself, “What does this have to do with time-of-use pricing?” Allow me to explain.

We live in Alameda, CA, where plastic bags are prohibited and stores must charge for a paper bag. Alas, I had forgotten to bring a reusable one. To teach my children a lesson and avoid the public scorn (not so much the $0.05 per bag), I carried our groceries and asked the kids to lend their hands. And yes, I put the cream cheese on the roof of the car to free a hand to unlock it.

Once home, I realized that, in addition to almost losing my cream cheese, I’d been making potentially risky tradeoffs. After all, exiting the supermarket with full hands prevented me from holding my children’s hands while crossing a busy – and dangerous – parking lot.

Don’t get me wrong; I’m not lamenting the ban on plastic shopping bags. I think it makes perfect sense, but it takes time to start making the adjustment and the risk tradeoffs aren’t always obvious.

This scenario– making adjustments that may seem inconvenient and a bit scary, but are well worth the effort– plays out in other areas of life as well. Particularly in rethinking how Americans use and pay for electricity.

Source: Union Atlantic Electricity

Most of us don’t think about how the time of day affects the cost of serving us power. In California, we aim to change that by moving to Time-of-Use (TOU) pricing – which will make electricity more expensive during times of peak, or high, energy demand and cheaper off-peak. In fact, just yesterday, the Sacramento Municipal Utility District (SMUD) recommended moving all residential customers to time-of-use rates by 2018 in an effort to give customers more control over energy costs.

EDF believes that TOU pricing will be best for people and the environment, just as banning plastic shopping bags effectively reduces their environmental impact. This approach can encourage conservation and reduce peak energy use while providing customers with more choices that can ultimately lower their monthly bills. Switching to TOU electricity pricing may feel to some like being thrust into a busy parking lot with an armload of groceries and two children to monitor. When should I use my dishwasher? Do I need to reset my air conditioner? Well, yes and no. You can choose to do nothing, or you can exercise a choice you don’t have with our current pricing structure: shifting energy use to times of lower electricity prices. It’s quite doable.

Also posted in General, Grid Modernization, Renewable Energy, Utility Business Models / Comments are closed

California Leading The Way To Clean Energy Innovation While A Few Lag Behind Investing In Litigation, Obstructionism

By EDF Blogs / Published: April 17, 2013

This commentary by Erica Morehouse, EDF Staff Attorney was originally posted on EDF’s California Dream 2.0 blog.

Climate pollution threatens the health of California’s families and the prosperity of our economy. Last November, California began a vitally important program that reduces climate pollution, rewards clean energy innovation, and helps ensure that the biggest emitters are responsible for their own pollution.

The program places a firm limit on overall climate pollution from the largest industrial emitters in California, allows flexible solutions to achieve that limit across sources, and requires major industrial emitters to bear a small portion of their pollution costs by requiring them to obtain carbon emissions allowances under the state’s cap-and-trade program, under which allowances may be obtained in public auctions or trades on the open market.

Fast forward five months, Californians are already realizing critical health and economic benefits from this groundbreaking environmental policy. And, the Golden State continues to lead the way in clean energy and transportation jobs due in large part to AB 32, which has opened the door for greater investment in the clean energy economy. More good news: Yesterday, the state fulfilled a requirement of 2012 AB 32 Legislation by releasing its blueprint for how to expand these benefits by investing proceeds from auctions to strengthen our economy, our health, and the environment.

California’s plan focuses on making key greenhouse gas reductions in three sectors: transportation, energy, and natural resources. The goal is to create multiplier effects that allow Californians to draw benefits from these opportunities that far outweigh the investment. And every day new research shows just how widely the benefits of clean economy investments can ripple. EPA recently released a study showing that if energy costs accounted for the health impacts of burning fossil fuels, they would increase by between $361 and $886.5 billion annually. When California invests in clean energy those hidden health benefits accrue for years to come – and they protect our families and our children.

Also posted in Energy Efficiency, Renewable Energy / Comments are closed

Solar, Wind Prompting Electricity Grid Innovation In California

By Jamie Fine / Published: March 4, 2013

In a February Wall Street Journal article (“California Girds for Electricity Woes”), reporter Rebecca Smith gives an alarmist and misleading account of California energy regulators’ efforts to secure a cleaner, less expensive, more reliable electricity grid. Right now, California has plenty of power: 44 percent more generating capacity than it typically uses, including a considerable fossil fuel energy portfolio. Renewables – large scale, rooftop solar, wind, and, increasingly, energy storage – make up almost 15 percent of the grid, a percentage that will more than double in the next decade. These clean, innovative energy technologies are working to improve the system by reducing the need for fossil fuels.

The reality is that the grid is changing, driven by California’s quest to secure an environmentally safe and affordable electricity system. Increasing the amount of renewable energy on the grid will mean that more generation is variable; electricity output from solar and wind depends on sunshine or windiness, respectively. Up to this point, California has met this challenge by backing up clean resources with fossil fuels. But California’s ratepayers can’t afford to keep doing this, so instead of “girding for woe,” the CAISO and the CPUC met to proactively address our changing future – to move California towards cleaner, less expensive electric grid planning.

This new approach can increase California’s ability to rely on clean energy generation by building greater flexibility into the system – while giving more options to consumers. Not only can customer-based (“demand-side”) clean energy technologies reduce reliance on polluting power plants, they are quite likely to be more reliable and are potentially more cost-effective. Demand response, or the ability of customers to choose to save money by responding to a price or electronic signal from the grid operator in times of excess system demand, will be key to integrating large amounts of intermittent solar and wind without back-up fossil or storage. In fact, during afternoon peak demand, where supply is extremely limited in its ability to serve load, the addition of virtual generation resulting from the participation of DR into the market will actually lower energy prices.

California has already installed a robust digital metering infrastructure – and it’s time to put these meters to work by enabling customers to participate in demand response and other demand-side programs. Coupled with technologies that now allow for fast, reliable, automated ‘set-it-and-forget-it’ adjustments to electricity use, we can seamlessly integrate variable electricity resources, such as wind and solar, without disrupting energy users. Customers can choose to become an energy resource instead of fossil fuel plants. Read More »

Also posted in Grid Modernization, Renewable Energy / Tagged CPUC, Wall Street Journal | Comments are closed