Category Archives: Energy Efficiency

Comparing Climate Action Plans

Colorado used to be counted among national leaders on climate change and renewable energy, with citizens voting in favor of a 2004 initiative to establish a renewable energy standard for qualifying utilities. These standards were then increased multiple times by the Colorado Legislature to their current level, 30% renewable generation for investor-owned utilities by 2030 and 20% for large electric co-operatives.

Now, as governors from three states – California, New York and Colorado – release plans or sign legislation related to climate change and renewable energy, it is clear that Colorado no longer leads on these issues.

Jerry Brown, California

Yesterday, California Governor Jerry Brown signed SB 350, landmark legislation to reduce air pollution and increase renewable energy. This legislation requires his state to:

  • Generate 50% of its electricity from renewable sources by 2030
  • Double energy efficiency of homes, offices and factories
  • Incentivize utilities to install electric charging stations
  • Authorize the California grid operator, CAISO, to transform itself into a regional energy market, potentially spurring renewable energy development across the West

Andrew Cuomo, New York 

Today, New York Governor Andrew Cuomo announced new climate change commitments for his state. Here are his four major actions:

  • Joined California in signing the Under 2 MOU (Memorandum of Understanding), a compact between states, provinces and cities around the world committing them to limit emissions in line with a 2 degrees Celsius increase in global average temperature, vowing to reduce emissions between 80% and 95% below 1990 levels by 2050 (and/or below 2 metric tons per capita annually by 2050
  • Declared his intention to link the Regional Greenhouse Gas Initiative, a cap and trade market reducing emissions in nine Northeastern states, with other markets in California, Quebec and Ontario
  • Committed to putting solar on 150,000 homes and businesses by 2020
  • Install renewable energy systems at all 64 State University of New York campuses

John Hickenlooper, Colorado

While California and New York make new commitments and take pioneering steps to bring energy storage online and reimagine the electric grid, Colorado Governor Hickenlooper presented his 2015 Climate Action Plan in mid-September. It’s fair to say his plan is a step backward for Colorado as the plan:

  • Lacks specific emissions reductions goals. While previously Governor Ritter had set a goal of 80% emissions reductions by 2050, Hickenlooper’s plan skirts even referencing these goals specifically
  • Proposes no new initiatives to reduce greenhouse gas emissions
  • Celebrates mining, oil and gas as pillars of Colorado’s economy
  • Projects that by 2030 Colorado’s emissions will increase 77% from 1990 levels
Governor Hickenlooper's Climate Plan predicts Colorado's emissions will rise 77% by 2030.
Governor Hickenlooper’s Climate Plan predicts Colorado’s emissions will rise 77% by 2030.

 

Where to from here for Colorado?

Despite its deficiencies, Hickenlooper’s plan proudly states that “Colorado is on the right track.” So where will the Governor’s business-as-usual approach take Colorado?

Interestingly, buried in the Plan itself is the answer. Colorado, famous for its beauty in all seasons, is on track for an average temperature rise of more than 6 degrees Fahrenheit by 2050, making seasonal temperatures in Denver most “closely resemble… Albuquerque.”

Colorado has already seen the devastating effects of climate change on our state: the ravages of pine beetle infestations, more intense floods and more destructive fires. If the Governor wishes to preserve the Colorado that Coloradans know and love, he ought to listen to what leaders on climate and renewable energy in New York and California are saying.

Since Governor Hickenlooper’s Energy Office has stressed that this plan is work in progress one can only hope that future versions of the plan include goals based in science and concrete actions to achieve those goals. States that are “on the right track” – New York and California – have these goals and initiatives. Colorado ought to as well.

Got EE, PV, EV?

5:30 pm Light Refreshments
6:00 pm Event Begins
Boulder Main Public Library
Boulder Creek Room – Main Floor

 

Energy Efficiency, Photovoltaic Solar Systems, and Electric Vehicles: Join Clean Energy Action, Empower Our Future, and others to learn more about City and County of Boulder programs to help you obtain more EE, PV, and EV!
An $11,000 Nissan Leaf? Until September 30th, look into a Nissan Leaf discounted by roughly $8,300 through Solar Benefits Colorado in Boulder, Adams and Denver County. After state and federal tax incentives, that’s around $11,000.
Interested in PV? The same counties are offering a solar deal at $3.50 per watt – a 15% discount through October 31st.
Click the following links more information on Boulder CountyEnergy Efficiency and PV/EV programs
 

Climate Change: The Latest Science, Why It’s Serious, & What You Can Do About It

7 pm to 9 pm
Tuesday, September 8th, 2015
Wolf Law Building, Room 204
2450 Kittredge Loop Road, Boulder, CO

Join Clean Energy Action and the Colorado Renewable Energy Society (CRES) for an explanation of the latest science about climate change and what we can do about it, featuring:

Dr. Chuck Kutscher

Director of the Buildings and Thermal Systems Center
National Renewable Energy Laboratory

Discussion will focus on:

–  How we know our climate is changing
– Why it’s clear that we are causing climate change
– What we can do to address  climate change
– How we can respond with the needed solutions today

Join the Meetup event and share it with your friends!

This meeting is free for CRES members and $5 for non-members.

Decoupling & Demand Side Management in Colorado

Utility revenue decoupling is often seen as an enabling policy supporting “demand side management” (DSM) programs.  DSM is a catch-all term for the things you can do behind the meter that reduce the amount of energy (kWh) a utility needs to produce or the amount of capacity (kW) it needs to have available.  DSM includes investments improving the energy efficiency of buildings and their heating and cooling systems, lighting, and appliances.  It can also include “demand response” (DR) which is a dispatchable decline in energy consumption — like the ability of a utility to ask every Walmart in New England to turn down their lights or air conditioning at the same time on a moment’s notice — in order to avoid needing to build seldom used peaking power plants.

For reasons that will be obvious if you’ve read our previous posts on revenue decoupling, getting utilities to invest in these kinds of measures can be challenging, so long as their revenues are directly tied to the amount of electricity they sell.  Revenue decoupling can fix that problem.  However, reducing customer demand for energy on a larger scale, especially during times of peak demand, can seriously detract from the utility’s ability to deploy capital (on which they earn a return) for the construction of additional generating capacity.  That conflict of interests is harder to address.

But it’s worth working on, because as we’ll see below, DSM is cheap and very low risk — it’s great for rate payers, and it’s great for the economy as a whole.  It can reduce our economic sensitivity to volatile fuel prices, and often shifts investment away from low-value environmentally damaging commodities like natural gas and coal, toward skilled labor and high performance building systems and industrial components.

The rest of this post is based on the testimony that Clean Energy Action prepared for Xcel Energy’s 14AL-0660E rate case proceeding, before revenue decoupling was split off.  Much of it applies specifically to Xcel in Colorado.  However, the overall issues addressed are applicable in many traditional regulated, vertically integrated monopoly utility settings.

Why can’t we scale up DSM?

There are several barriers to Xcel profitably and cost-effectively scaling up their current DSM programs.  Removing these impediments is necessary if DSM is to realize its full potential for reducing GHG emissions from Colorado’s electricity sector.  Revenue decoupling can address some, but not all of them.

  1. There are the lost revenues from energy saved, which impacts the utility’s fixed cost recovery.  If the incentive payment that they earn by meeting DSM targets is too small to compensate for those lost revenues, then the net financial impact of investing in DSM is still negative — i.e. the utility will see investing in DSM as a losing proposition.  Xcel currently gets a “disincentive offset” to make up for lost revenues, but they say that this doesn’t entirely offset their lost revenues.
  2. Even if the performance incentive is big enough to make DSM an attractive investment, the PUC currently caps the incentive at $30M per year (including the $5M “disincentive offset”), meaning that even if there’s a larger pool of cost-effective energy efficiency measures to invest in, the utility has no reason to go above and beyond and save more energy once they’ve maxed out the incentive.
  3. If this cap were removed, the utility would still have a finite approved DSM budget.  With an unlimited performance incentive and a finite DSM budget, the utility would have an incentive to buy as much efficiency as possible, within their approved budget, which would encourage cost-effectiveness, but wouldn’t necessarily mean all the available cost-effective DSM was being acquired.
  4. Given that the utility has an annual obligation under the current DSM legislation to save a particular amount of energy (400 GWh), they have an incentive to “bank” some opportunities, and save them for later, lest they make it more difficult for themselves to satisfy their regulatory mandate in later years by buying all the easy stuff up front.
  5. It is of course the possible that beyond a certain point there simply aren’t any more scalable, cost-effective efficiency investments to be made.
  6. Finally and most seriously, declining electricity demand would pose a threat to the “used and useful” status of existing generation assets and to the utility’s future capital investment program, which is how they make basically all of their money right now.

Revenue decoupling can play an important role in overcoming some, but not all, of these limitations.  With decoupling in place, we’d expect that the utility would be willing and able to earn the entire $30M performance incentive (which they have yet to do in any year) so long as it didn’t make regulatory compliance in future years more challenging by prematurely exhausting some of the easy DSM opportunities.

Continue reading Decoupling & Demand Side Management in Colorado

Worth watching at the CO PUC – upcoming hearing on DSM Docket 13A-0686EG

This case was originally filed June 17, 2013 and is a strategic demand side management issues matter. Demand Side Management (“DSM”) refers generally to policies that aim to reduce energy consumption overall (through energy efficiency and other programs) and moving certain loads from peak to off peak periods.

Value of Demand Side Management

Although taking the same consumption and moving it to a different time might not seem like it will make a huge difference in energy use and consumption, it’s a very important resource. Certain generating units called “peaking plants” (or “peakers” burning methane) operate only when there is a larger than usual demand for energy, such as a really hot day when everybody is running their air conditioners at the same time. In those instances, the peaking plant kicks on and saves the day. Peaking plants are more expensive to operate and are typically much less efficient than fossil baseload resources (if those resources are operating properly, but that’s another chapter). If there’s a large manufacturing plant that can temporarily suspend their operations or reduce their consumption in other ways to a large enough degree, Xcel won’t have to turn that peaker on at all. Peaking plants generally operate about 100 hours or less per year. By moving a large load from the middle of the day to the middle of the night when loads are lighter, we’re still using the same amount of energy, but it won’t come from that inefficient peaking plant. Energy efficiency and demand response are great programs that change the picture of energy consumption and can make a huge difference in reducing emissions stemming from fossil generation.

DSM Mandate

Xcel’s DSM program is in response to legislation passed in 2007. The Legislature declared in HB 07-1037 that “cost-effective natural gas and electricity demand-side management programs will save money for consumers and utilities and protect Colorado’s environment.” Through this legislation the PUC was “encouraged” to “reduce emissions or air pollutants and to increase energy efficiency.” The goal is for electric utilities to reduce peak generation by 5% from the 2006 levels by 2018. The bill allowed for utilities to recoup their investments in DSM programs at a higher rate of return than other generation investments. Continue reading Worth watching at the CO PUC – upcoming hearing on DSM Docket 13A-0686EG