Energy Exchange

What Does It Mean For Energy Efficiency To Be A Resource In Texas?

By Kate Zerrenner / Published: August 7, 2013

We’ve discussed the potentially grave impacts of the Texas Energy Crunch in a number of our previous blog posts. Time and time again, we repeat that the cheapest, cleanest and most reliable energy resource is the energy we save through energy efficiency. But our energy efficiency programs in Texas are still modest compared to other states. Beyond politics, there is another key issue limiting our state’s energy savings: Texas does not treat energy efficiency as a ‘resource.’

Traditionally, energy efficiency is left ‘invisible’ to utilities and grid planners—so they lose count of its many benefits. Treating energy efficiency as a resource, instead, puts it on a level playing field with other energy resources, such as power plants. This allows utilities to realize the unique benefits energy efficiency has over other energy sources.

Energy efficiency can reduce harmful greenhouse gases, save people money and create jobs – and it is extremely competitive with other energy resources. When the energy saved through efficiency is weighed against new energy resources, efficiency upgrades to buildings and homes generally weigh in at just one-third of the cost of building a new fossil-fuel power plant. On top of that, energy efficiency upgrades can eliminate the need to install or replace other expensive electric grid equipment. This cost-savings is one of the many benefits generally overlooked by utilities and electric grid planners.

Part of what prevents electric grid planners from counting efficiency as a resource in Texas is the way that the energy market is structured. When Texas deregulated its energy market in 1999, the aim was to increase options for customers and lower prices. Efficiency programs were not included in the new market structure. Instead, they were left for transmission and distribution utilities (TDUs), the “wires” companies that deliver electricity from power plants to customers, to manage. With efficiency left out of the restructured energy market, the Public Utility Commission of Texas (PUC) and other state leaders tend to view efficiency programs as subsidies that exist outside of the market. Read More »

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California’s Capital Leads the Nation in Energy Efficiency Financing

By Climate Corps Fellow / Published: July 30, 2013

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

By: Kate Daniel, EDF Climate Corps Fellow

Kate Daniel, Climate Corps Fellow

Great news for California and the future of energy efficiency in Sacramento.

Today I took part in an announcement by Sacramento Mayor Kevin Johnson unveiling the nation’s largest Property Assessed Clean Energy (PACE) project in the country — and potentially a huge boost for businesses in the state’s capital.

Launched by Clean Energy Sacramento, the property owners of Metro Center, Metzler Real Estate, will now be able to take advantage of PACE financing to fund $3.1 million in energy efficient upgrades, including high efficiency rooftop units for heating and cooling and a state-of-the-art building management system. Ultimately, these upgrades will save $140,000 in annual utility costs for the property.

This project is not just good news for Metro and Metzler, but for the entire Sacramento region. Here’s how it works: Under the PACE program Metzler will receive private funding from Ygrene Energy Fund, who covers the upfront costs of the project Metzler pays the costs back on their property tax bill while Johnson Controls will design and implement the upgrades.

Read More »

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Net Metering And Rooftop Solar For The Utility Of The Future

By John Finnigan / Published: July 24, 2013

John FinniganLike the tide washing upon the shore, new technologies are gradually eroding electric utility revenues.  These new products enable consumers to use cleaner energy and use it more efficiently.  Electric utilities worry this trend will ravage their industry just as wireless technology convulsed the telecommunications industry.  The utility industry urges its members to stem the tide by, among other things, increasing consumers’ net metering costs.

Net metering makes small-scale renewable energy, such as rooftop solar panels, more affordable by crediting the “distributed generation” owners for the excess energy they produce.  The electric meter measures how much electricity flows back to the grid from the distributed generation unit.  A corresponding credit is applied to the consumer’s monthly energy bill.  The Energy Policy Act of 2005 requires public utilities to offer net metering to all consumers upon request.

Why the new focus on net metering?  The cost for rooftop solar panels has fallen 80% since 2008, including 20% in 2012 alone.  Installed rooftop solar energy has increased by 900% between 2000 and 2011.  As consumers install more rooftop solar panels and net meter them, utility revenues will decrease. Read More »

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Texas Electric Co-op At Forefront Of Customer Engagement

By Kate Zerrenner / Published: July 23, 2013

This commentary originally appeared on EDF’s Texas Clean Air Matters blog.

(Source: Bluebonnet Electric Co-op)

Everywhere you turn these days, you hear someone mention the emergence of big data and how our lives will be more and more reliant on numbers.  Well the world of electric cooperatives (co-ops) is no exception.  Originally emerging out of the establishment of the Rural Electrification Administration, co-ops enabled rural farmers and ranchers to create customer-owned electric utilities in areas that are not serviced by traditional utilities.

I recently visited the Bluebonnet Electric Cooperative (Bluebonnet), one of the Texas’ largest co-ops providing energy to 14 counties, spanning the outskirts of Austin to Houston and boasting an impressive 11,000 miles of electric lines, 83,000 electric meters and 63,000 members.  Who would have thought so much big data is coming out of rural Texas?

What makes this co-op particularly unique is its smart grid, which is attracting some serious attention.

Unlike other traditional utilities, Bluebonnet does not generate any of its own electricity.  Instead, it buys electricity from the Lower Colorado River Authority and CPS Energy, both pioneers for clean, renewable energy.  Because of this, Bluebonnet is able to concentrate its energy (pun intended) on using new technologies to provide reliable power and enhance customer satisfaction. Read More »

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Combining Solar And PACE In Connecticut: A Potential Game Changer For Commercial Properties

By Brad Copithorne / Published: July 19, 2013

In my last post about Connecticut’s clean energy finance efforts, I alluded to an important innovation in their Property Assessed Clean Energy (“PACE”) financing program for commercial properties.  PACE programs have been in place for several years, and the basic concept is that property owners are able to pay back clean energy financing through their property tax bill over time.  Rates tend to be low because property taxes are almost always paid back and the PACE assessment will survive foreclosures.

To date, PACE transactions have generally been structured as a set of fixed payments to finance retrofits managed by the property owner.  Functionally, these transactions have been quite similar to loans.  In the solar industry, however, the vast majority of financings have been structured as leases or power purchase agreements (PPAs) in order to fully capture the tax benefits associated with solar investments.  This has generally resulted in fairly low use of PACE by solar installers and limited installations of solar on commercial properties.  (Most commercial properties have large mortgages and are not good candidates for additional financing unless PACE or On-Bill Repayment (OBR) can be used to improve credit quality.  The exceptions are buildings that are owned or occupied by very high quality credits, such as a large corporation or city.)

Connecticut is breaking new ground by allowing leases and PPAs to participate.  The lease or PPA payments would simply become part of the property tax bill.  If necessary, true-up mechanisms could be used to adjust payments and ensure that customers are not overbilled.  Additionally, we understand that this flexibility will likely be available for innovative energy efficiency financing for commercial properties.  EDF has long advocated for this type of flexibility (and we see this as a major benefit of OBR), but – to date – PACE programs have not incorporated this feature.

Hats off to Connecticut for once again showing us how to get things done!

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America’s Aging Energy Infrastructure Needs An Overhaul

By Jim Marston / Published: July 19, 2013

No one likes being told “I told you so.”  But since DOE released its report last week, I’ve been tempted.

The report warns that the existing American energy infrastructure is highly vulnerable to climate change.  That increasing temperatures will stress the U.S. water system and enhance the likelihood of drought. That because conventional power plants require huge volumes of water to operate, lower water availability will mean less reliable power.  And that the changing climate will prompt more extreme and frequent storms, increasing energy demand due to extreme temperature changes and threatening our aging and already stressed electric grid with potential blackouts.

In essence, the affirms the many the calls-to-action that EDF and many other groups have been leading for years and the lessons we learned from Superstorm Sandy made painfully real and salient:  Our existing energy technologies and policies were designed for a 20th century climate.  To weather the extremes of a 21st century climate, we need to a 21st century energy system – one  that promotes energy efficiency, enables widespread adoption of homegrown, renewable sources of power and allows people to control their own energy use and reduce their electricity costs.

I have been very encouraged by President Obama’s recent movement on climate change, and the DOE report provides research backing the urgency of his Climate Action Plan.  Hopefully, this recent movement will translate into real national momentum, as our national approach to energy truly needs an overhaul. Read More »

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