Energy Exchange

Consumers At The Heart Of Illinois Smart Grid Revitalization Project

By Raya Salter / Published: April 3, 2013

On April 1, Illinois’ largest utilities, ComEd and Ameren Illinois (Ameren), updated their plans to launch one of the nation’s largest electrical grid upgrades, a $3.2 billion project that will set the stage in Illinois for how utilities and customers interact in the future.  The ComEd and Ameren plans provide new detail on how they intend to replace the aging Illinois grid and begin to transform it into a digital smart grid capable of monitoring customer and environmental benefits.  EDF and Citizens Utility Board (CUB) teamed up with both utilities to create twenty new benchmarking metrics that will measure how the utilities deliver benefits to consumers and improve their performance annually. 

To elaborate, such metrics include reductions in peak energy demand, increased adoption of renewable energy, such as solar power, wide-spread implementation of smart energy devices and diminished greenhouse gas (GHG) emissions, among others.  In addition, ComEd and Ameren have elected to work with EDF and CUB to develop new and better ways to measure how smart grid technology can help reduce GHG emissions and electrical inefficiencies.  Using smart grid devices to precisely measure GHG and line loss is technically challenging, but key to unlocking the promise of smart grid technology.

When customers are empowered with the knowledge and tools to control their own energy usage, they are also empowered to save money on their utility bills.  As CUB Executive Director David Kolata points out, “A smart grid begins with smart policy. These new metrics will help bring the power grid into the 21st century more quickly and cost-effectively, ensuring that consumers see the benefits in the form of lower electric bills.”

To take full advantage of the $3.2 billion project, born out of the Illinois Energy Infrastructure Modernization Act of 2011, ComEd and Ameren must go above and beyond the business-as-usual utility metrics.  Utility metrics to date have commonly focused on general measures to gauge customer benefits, such as customer awareness survey completions and number of customer outreach events attended.  These new tracking mechanisms go further in that they will allow the utilities to track and report where customers are realizing the benefits of electric grid improvements, and the extent to which they are participating in these opportunities.  This includes measures like the number of customers who can directly access their own energy usage data and the time it takes to connect renewable energy resources, like solar power, to the electric grid. Read More »

Also posted in Grid Modernization, Renewable Energy / Tagged , | Comments are closed

EDF Energy Innovation Series Feature #12: Community-Owned Utility – CPS Energy

By Jim Marston / Published: September 25, 2012

Throughout 2012, EDF’s Energy Innovation Series will highlight around 20 innovations across a broad range of energy categories, including smart grid and renewable energy technologies, energy efficiency financing, and progressive utilities, to name a few. This series will demonstrate that cost-effective, clean energy solutions are available now and imperative to lowering our dependence on fossil fuels.

Find more information on this featured innovation here.

Want to build CPS Energy’s new massive solar project in San Antonio?  Pack your bags.  You may have to move to the Alamo city and hire a few hundred local employees.

With more than $2.3 billion in annual revenue and $10 billion in total assets, CPS Energy (CPS) is the largest municipally-owned electric and gas utility in the country, providing service to almost 750,000 customers in and around San Antonio, Texas.

CPS’s strategic goals and decisions are among the most progressive in the country.  It is shooting for 20 percent renewable energy generation capacity by 2020 and has plans to mothball one of its 1970s-era coal plants in 2018, 15 years earlier than expected. But beyond carbon reduction targets and renewable energy commitments, CPS is using a very old-fashioned tool to spur energy innovation deep in the heart of Texas.

The tool? LEVERAGE. With a $2 billion annual operating budget and the highest credit rating in the industry, CPS has dollars to spend on innovative technologies, and the company is leveraging its renewable energy and clean technology dollars to bolster local job growth, protect the environment and help its customers use energy more wisely. CPS calls it the “New Energy Economy.”

“We have the opportunity to leverage our buying power to benefit our community, by requiring our partners to add more value to San Antonio,” said Doyle Beneby, President & CEO of CPS Energy. “That value comes in the form of jobs for our community by establishing headquarters and adding manufacturing. It also comes in the form of investment in San Antonio’s educational institutions.” Read More »

Also posted in Energy Innovation, Texas / Read 1 Response

EDF Energy Innovation Series Feature #8: Clean Energy Options From NRG

By Jim Marston / Published: July 26, 2012
Throughout 2012, EDF’s Energy Innovation Series will highlight more than 20 innovations across a broad range of energy categories, including smart grid and renewable energy technologies, energy efficiency financing, and progressive utilities, to name a few. This series will demonstrate that cost-effective, clean energy solutions are available now and imperative to lowering our dependence on fossil fuels.
 
Find more information on this featured innovation here.

Depending on whom you ask, utilities and independent power generators like NRG Energy (NRG) could be the savior or the victim of the country’s future energy system. The smart grid — an upgraded electrical system that connects generators, distribution systems, homes, offices and the millions of devices that use energy — could be real trouble for traditional utilities. If they don’t evolve, well, we know what happened to the dinosaurs.

And New Jersey-based NRG is making some impressive moves in an industry not known for rapid change.

Utilities have a lot to lose if they stand still and watch this wave of innovation pass them by.  But they also have a tremendous amount to contribute, and leveraging their expertise and capital could accelerate the innovation cycle and establish the generators and transmission and distribution companies as a critical piece of the electric grid of the future.

Source: Green Mountain Energy Company

In 2010, NRG acquired Green Mountain Energy Company (GME), a Texas-based business that has been providing clean energy to consumers and businesses since 1997, making it the longest serving retailer of its kind. It is still the only retail energy provider (REP) in Texas solely focused on cleaner energy. In many ways, GME can be considered a “founding father” for the renewable energy sector, owning many “firsts” in the REP market:

  • GME was Texas’ first REP to offer pollution-free products when electricity competition began in 2002.
  • GME developed Texas’ first pollution-free electricity product specifically for electric vehicle owners.
  • GME customer demand helped develop over 50 wind and solar renewable facilities in U.S., including the first utility-scale wind farm east of the Mississippi – a wind farm built in Pennsylvania in 1999.
  • GME created a program, the Green Mountain Energy Sun Club, that to date has built solar arrays to power 35 non-profit organizations including schools, museums, zoos and Habitat for Humanity homes. Each installation includes an educational component explaining the benefits of solar energy to the non-profits’ stakeholders.

GME also provides clean energy to some iconic American brands, further proving the viability of the renewable market while also leveraging visibility to encourage others to go green. Examples include the Super Bowl XLVI, Empire State Building (powered by 100 % wind energy) and Atlantic Cup (first carbon-neutral sailing race in the U.S.).

“With significant growth, customer commitment and a passion for clean energy, Green Mountain continues to accelerate a clean energy future,” said Helen Brauner, senior vice president of Marketing & Strategic Planning, Green Mountain. “Thanks to our customers who share in our mission to change the way power is made through customer choice, we’re celebrating 15 years of dedication to renewable energy this year.”

NRG is also the largest solar power developer in the country and is a leading owner and operator of photovoltaic (PV) systems at residential and commercial locations. Through the NRG Solar subsidiary, the Company is developing two complementary technologies — photovoltaics and solar thermal — at two of the world’s largest solar projects of each type: the 290 megawatt PV Agua Caliente Project in Arizona and the 392 megawatt Ivanpah Solar Electric Generating System in California. Upon completion in 2014, Agua Caliente will be the largest solar PV project in the world and will generate enough electricity to power more than 225,000 homes.

Additionally, the Company is building the nation’s first privately-funded, comprehensive electric vehicle (EV) charging infrastructure. The eVgoSM system integrates home EV charging docks with a network of fast-charging stations that can charge a vehicle with a 100 mile range in a half hour or less. eVgo gives EV owners range confidence as they leave home every day with a full charge and know they can charge their vehicles quickly and conveniently if they need additional range. Additionally, the eVgo set-rate charging plans reduce the upfront cost of EV ownership while giving price certainty to EV drivers for the cost of fueling their vehicles.

“Electric vehicles are beginning to make a meaningful entry into the transportation market,” said Arun Banskota, President of NRG EV Services, the operator of the eVgo network. “As the EV market grows, we need to ensure that customers have the needed charging infrastructure. Residential and workplace charging, backed up by public charging stations, are critical to encouraging greater EV adoption, and we want to provide this key piece of the new energy infrastructure to ensure car buyers can buy an EV with confidence.”

NRG’s clean energy investments cover a wide range of initiatives; it owns 450 megawatts of Texas wind power, supplying clean windpower to thousands of homes. Through its retail subsidiaries and NRG SunLease, the Company leases rooftop solar panels to commercial and residential customers to reduce their electricity costs. NRG has a partnership with the University of Delaware to develop eV2g, or electric vehicle to grid technology, that might someday pay EV drivers for plugging in their cars. NRG is also developing carbon capture technology at its Petra Nova subsidiary that could reduce carbon emissions from older coal plants in the future.

Also posted in Energy Innovation / Read 2 Responses

Electric Utilities – An Industry In Transition

By Greg Andeck / Published: July 11, 2012

The recent merger of Duke Energy and Progress Energy represents yet another turning point for the electric utility sector, with significant implications for public health and the environment.  Duke’s six-state footprint – Florida, Indiana, Kentucky, Ohio, North Carolina and South Carolina – offers it an opportunity to lead the way on clean energy deployment.  The question is: Will the new Duke Energy – now the largest utility in the country – harness its size and scale to accelerate investments in energy efficiency and renewable energy, or stay anchored to the past?  EDF’s partnerships with Wal-Mart, FedEx and McDonalds have shown that when large companies are motivated, they are a powerful force for change.  But change doesn’t come easily.  It requires vision, leadership and a constant willingness to innovate.

This is true not just for Duke Energy, but for electric utilities around the country.  Over the past two years, four of the five largest investor-owned utilities have experienced a merger or change in the CEO role – AEP, Duke, Exelon and Southern Co.  The steps taken by these companies and their leadership will have a profound impact on our antiquated electric utility grid, human health and the environment.  The most visionary utility companies will do three things exceedingly well: 

1.       Get out ahead of environmental regulation

In 2002, Duke Energy supported efforts to tackle power plant pollution in North Carolina by supporting the “Clean Smokestacks Act.”  Xcel Energy followed a similar model in Colorado and endorsed the “Clean Air Clean Jobs Act.”  These landmark laws significantly accelerated clean-up of the dirtiest power plants in those two states and made it possible for the utilities to recover the costs of their investments.  It also enabled Duke and Excel to take early steps to modernize their fleets and prepare for future federal clean air requirements.  As a result of early actions, both companies are well-positioned for EPA’s recent Clean Air Rules – unlike the utility giant AEP, which continues to delay critical human health protections.  The world’s most successful companies skate to where the puck is headed, not to where it is, and are more competitive as a result.

2.       Treat efficiency and smart grid investments as new revenue centers, not side projects

The fact is that most electric utilities still see energy efficiency investments as side projects separate from their core business – generating power.  Without state building codes or energy efficiency standards in place, utility investment in energy efficiency remains low.  The reason is simple.  Even in states with decoupled rate structures in place, building nuclear plants is more profitable than energy efficiency projects.  Large generating plants require a large investment with a guaranteed rate of return over a long project lifetime.  In comparison, energy efficiency projects are generally small, often have an uncertain return and a short project life.  EDF is working with leading energy companies and regulators to craft new incentive models that make efficiency investments attractive, but utility companies must be willing to fundamentally alter their business models.      

3.       See competition as opportunity

Even in highly regulated markets, new market entrants and competitors are beginning to change the face of utilities with strong monopoly power.  The costs of solar panels have dropped by over a third in the past few years, making solar energy cost competitive with retail electricity prices in many parts of the country.  Companies like SolarCity are even financing and then leasing solar systems to home owners, enabling cash-strapped customers to reduce their dependence on the grid.  Hundreds of companies now exist to help all kinds of customers reduce their energy bills and dependence on electric utilities.  (I should know – I just insulated my attic and crawl space – and am already benefitting from lower electric bills.) 

Utility companies that help bring energy efficiency and renewable energy to market can retain ownership of environmental attributes (like renewable energy credits) and earn new revenue streams.  Otherwise, those benefits are likely to go to third parties or customers.  Smart utilities recognize the threat that this small, yet growing base of companies provides to their business model, and aim to bring technologies and services to market faster than new competitors.  Rather than trying to delay the inevitable, savvy utility leaders make their companies part of the solution – and profit from doing so.  Companies like San Antonio’s CPS Energy are making this idea a reality through partnerships with a wide range of service providers.

The next generation of electric utilities and their leaders must run their businesses differently than their predecessors or risk being left behind.  Just like the once monopoly-oriented telecom industry, those companies that are willing to adapt and transition to this new energy paradigm will prosper and be well rewarded.

Also posted in Climate, Energy Efficiency, Grid Modernization, North Carolina / Read 1 Response

New ERCOT Report On The Texas Energy Crunch: PUC Tweaks Are A Move In The Right Direction, But Not Enough To Keep The Lights On

By / Published: June 5, 2012

Last week The Brattle Group released their Electric Reliability Council of Texas (ERCOT)-commissioned report on what Texas can do to make sure we keep the lights on this summer, the next and for many future summers after.  As Jim Marston discussed in the Houston Chronicle last Friday, the Brattle Group is no stranger to resource issues in Texas: in 2009 they reported on demand response opportunities in Texas and other states in a report commission by the Federal Energy Regulatory Commission. 

Using that work and more recent analyses, the report shows the role that demand response can play in meeting Texas’ future energy needs.  Demand response is any change a customer makes in normal electric usage patterns in response to market signals; Brattle recommends developing programs that pay customers a market-based price for their actions, rather than simply asking them to reduce energy during peak hours. 

So what makes such a nerdy idea so important?  The Public Utility Commission (PUC) is considering raising offer caps in the wholesale market to better reflect the true cost of peak energy usage in an effort to create a more efficient market.  According to Brattle, this move will help, and may even be needed, but “reliance on scarcity prices is unlikely to achieve ERCOT’s current reliability objectives,” largely due to extreme weather events which are expected to become more frequent as a result of global warming.

Raising the offer caps isn’t just a purely abstract concept; it means real rate increases for Texans.  At the same time, Brattle found that Texas could meet 15% of our peak energy needs through demand response alone, but only if ERCOT gets serious about allowing residents and small businesses to participate in demand response programs that have historically been aimed at big industrial customers.  Demand response programs mean more money in ratepayers pockets, all while helping to stabilize the grid. 

Improvements in small programs with a limited scope like the “ERS” program are certainly helpful, but as Brattle points out repeatedly, those improvements won’t be enough to keep the lights on in the next few years.  Hopefully the PUC will direct as much effort into programs like demand response, which puts money back in customer’s pockets, as they have on increasing wholesale offer caps. 

Demand response is a big piece of the picture but it’s not the whole painting: energy efficiency programs and an expansion of peaking renewable resources like solar and coastal wind power will also play a large role, particularly as we consider a hotter, drier future in Texas with less water to cool power plants.   The Brattle report lays out some excellent recommendations, demand response among them, and – as the summer continues – we’ll be looking into Brattle’s work as well as other initiatives that Texas can take to find its way out of this energy crunch.

Also posted in Demand Response, Energy Efficiency, Renewable Energy, Texas / Read 1 Response

Austin Energy’s Electric Rates Are Lower Than The Texas Public Policy Foundation Would Have You Believe

By / Published: February 22, 2012

Austin Energy’s Residential Rates: 12% Below the Average Rate in ERCOT’s Competitive Markets – After Accounting for the Proposed 14.4% Rate Increase

Austin Energy has been in the news a lot lately, and most often for some controversy around the ongoing rate review process.  What often gets lost in these heated discussions is that fact that Austin’s heritage of clean energy and innovative approaches to economic development are firmly rooted in our city’s electric utility, and that the utility allows city leaders to keep taxes low.  At the same time, Austin Energy’s leadership often puts it in the crosshairs of groups that are ideologically opposed to clean energy and city owned utilities, and whether supported by facts or not, the opportunity to criticize Austin Energy has proven too difficult to resist.

(Source: www.inhabitat.com)

The Texas Public Policy Foundation (TPPF) is often one of the ringleaders in the crusade against clean energy as well as city owned utilities, and they’re not going to let facts get in the way of scoring an ideological point.  In knocking Austin Energy and promoting their agenda, TPPF cherry picks data and uses coded language like the idea that customers “can choose” rates lower than Austin Energy’s if they are in the competitive regions of the Electric Reliability Council of Texas (ERCOT).  The truth is, for a customer in the competitive areas of ERCOT to maintain lower rates than Austin Energy they would have to change electric providers each month, and they’d have to be pretty lucky on top of it.

The problem is that the rates TPPF reference when they say customers can choose lower rates are usually introductory, variable or otherwise subject to increases not included in the rates that customers do choose.  What this means is that customers actually pay more than TPPF’s selective math would suggest, but TPPF seems more concerned with scoring political points than what customers actually pay for their electricity.

Look at the data from a more logical point of view and you will see that competitive regions in ERCOT average higher residential rates than ERCOT’s average rates.  In fact, ERCOT rates are kept low largely by municipal and co-operative utilities like Austin Energy, the customer owned utility model that TPPF criticizes in their latest missive.  The most recent data available for a real analysis of the rates Texans pay was released by the Energy Information Administration just a few months ago, including data through 2010.  As the chart below shows, Austin Energy’s rates are well below the ERCOT average, and even farther below the average competitive market rate, despite TPPF’s claims to the contrary.  

Source: Energy Information Adminstration (EIA)

Even if you account for Austin’s proposed 14.4% residential rate increase through 2015, the the new rates are 12% below current competitive rates in ERCOT. This calculation doesn’t even take into account the fact that nominal retail energy prices in ERCOT are projected to go up by 11% by 2015 according to the Energy Information Administration.  Taking this projected rate increase into account  it’s clear that Austin Energy’s rates – even after the rate review is completed – will be below the competitive average.

As we talk about rates in our community and across Texas, it’s important to remain focused on factual analysis and avoid misleading assumptions driven more by ideology than a desire for real debate. Unfortunately, arguments like those put forward by TPPF don’t contribute to an honest discourse; they mislead the public, distort reality, and threaten Austinite’s low tax lifestyle.

Also posted in Texas / Read 6 Responses