Experts Weigh In: Maine Doesn’t Need New Gas Pipelines

Jul 17, 2015 by  | Bio |  Leave a Comment

This week consultants hired by the Maine Public Utilities Commission (PUC) concluded that Maine should not enter into contracts to purchase gas pipeline capacity because the costs of doing so would outweigh the benefits to Mainers.

In many ways, this was a foregone conclusion – one that CLF predicted nearly a year ago and that the PUC itself (unofficially) reached before soliciting proposals from pipeline companies and spending taxpayer dollars on a lengthy consultant’s report. It’s a cautionary tale not just for Maine but for all of New England as the region weighs its energy future – and decides whether it will overinvest in natural gas or blaze a trail based on cleaner, renewable resources.

This process all started back in March 2014. After a cold winter sparked region-wide fears of an imminent shortage of natural gas to power our homes and businesses, Maine’s PUC was tasked with determining whether the state should contract for additional gas capacity under the Maine Energy Cost Reduction Act (MECRA). The PUC approached this work in two phases: first, soliciting and examining evidence and testimony from a variety of interested parties, including CLF, as to the need and economics of gas pipeline capacity procurement. And, second, if the economics made sense, to request proposals from pipeline companies.

CLF testified before the PUC as it gathered the evidence and data it would need to make their determination. We reasoned that Maine should not enter into new contracts with pipeline companies – both because the legal basis for them was suspect (the investment in these new projects would have been paid for by ratepayers, which is unprecedented and risky) and because the costs – to our wallets and our climate – would ultimately outweigh the benefits to consumers.

PUC staff agreed with the economic argument in their own preliminary report, but the Commission nonetheless went ahead and accepted supply proposals from pipeline companies. As required by MECRA, the PUC hired an independent consultant, London Economics International (LEI), to examine these proposals. The consultant’s detailed report compared scenarios in which the state didn’t contract for additional pipeline and ones in which it did (based on the actual proposals the state had received).

LEI’s analysis reinforces both CLF’s testimony and comments and the PUC’s own staff report issued during the first phase of this proceeding: The costs of any contract for Maine to buy natural gas pipeline capacity trumps the benefits. In fact, LEI concluded that, even without Maine entering into a gas contract, gas prices should drop by 25% for Maine customers over the next few years due to already planned, market-based gas capacity expansions. The group also found that electricity prices should drop by 15% due to these lowering gas prices.

The LEI report rightly calls into question whether the PUC should have accepted proposals from gas companies in the first place – a process that has been costly to all participants, expended valuable resources of the PUC, and resulted in no different a conclusion than the PUC’s own staff analysis.

Maine law requires that, for any contracts like these proposed expansions, the benefits must outweigh the costs. The conclusions drawn by the PUC’s expert consultant in their report should prevent Maine from entering into such a contract any time soon.

Ultimately, there’s a larger lesson here – one for every state in the region considering its electricity future. Over this year-long process, the PUC spent hundreds of thousands of (tax-payer) dollars on experts and an intense, litigation-like process, only for their experts to conclude what was readily apparent at the outset – that subsidizing the gas industry on the backs of ratepayers is a bad idea, both economically and for the environment.

Those gas shortage fears that sparked this whole process in the first place ended up being completely unfounded over this past winter. Since then the economics of the energy markets have started to shift, with wholesale electric prices declining by 50% over the past year alone. Meanwhile, energy efficiency is decreasing the need for energy resources, fuel-free renewables are supplanting polluting power plants, and liquefied natural gas has become cost-competitive and available at times of peak need. With at least two new small-scale pipeline projects already set to come on-line and reduce energy costs even more over the next two years, now is the time for the New England states to invest in the stability of the cleanest energy future we can create – one that weans us off of natural gas within the next 35 years.

UPDATE: Take Action: Restore Energy Efficiency Funding in Maine

Jun 23, 2015 by  | Bio |  Leave a Comment

UPDATE: Governor LePage vetoed the revised bill on Tuesday, June 23, but the state legislature voted overwhelmingly to override his veto that same night. “With their override vote, the legislature has served the best interest of all Mainers by restoring funding for energy efficiency,” CLF’s Executive Vice President, Sean Mahoney, said in a statement.

From here, it’s up to the Public Utilities Commission to draft a new rule that will properly fund energy efficiency. Thank you to everyone who contacted their legislators and asked them to stand strong on efficiency in Maine. Your voice made a difference.

My original blog post follows:

Do you like wasting energy? How about paying more for electricity? What about leaving nearly $200 million in energy savings on the table every year because a single “and” was accidentally left out of a law?

Who would say “yes” to any of those questions? Governor Paul LePage.

If Governor LePage gets his way, then Maine will leave more than $200 million in energy savings

If Governor LePage gets his way, then Maine will leave more than $200 million in energy savings on the table.

With one stroke of his veto pen, Governor LePage plans to wipe out $38 million in funding for energy efficiency in Maine by vetoing a bill that simply restores the missing “and” into the law.

Contact your state legislators today. Tell them to stand behind their decision to restore energy efficiency funding. Tell them to override LePage’s veto.

Less energy efficiency funding means losing hundreds of jobs. It means fewer residential homes and commercial businesses in Maine will be able to install energy efficient light bulbs and HVAC equipment. It means fewer energy assessments to help Mainers reduce their electricity bills. It means fewer rebates for solar panel installation. And the list goes on. Energy efficiency fuels our economy. It’s the foundation of a strong energy future. The stakes could not be higher.

Here’s the back story on how energy efficiency funding has come under threat and why it’s so important that you act now:

Efficiency Maine Trust lost $38 million in funding due to an accidental omission of the word “and” when the Maine legislature passed the Omnibus Energy Act in 2013. The legislature has now wisely acted to correct that error and passed LD 1215, an act that restores the missing “and.” The bill to restore energy efficiency funding received nearly unanimous support from the Maine legislature! But Gov. LePage is threatening to veto it.

LePage’s threat to veto is nonsensical. Energy efficiency measures not only benefit the environment and help address climate change, but they also save the state — and all of us — money!

Luckily, the Maine legislature has the power to override Governor LePage’s veto. Tell your legislators to do what’s best for Maine and vote to override LePage’s veto. The veto could come anytime today. The legislature could vote to override it in the next 48 hours. So please act now!

Please contact your Maine legislators immediatelyThis is an opportunity to thank your senator and representative for their initial vote (the lone vote against the bill came from Rep. Ricky Long) and let them know how important it is that they override a veto.

Take action to restore energy efficiency today! 

 

The Alternatives to New Natural Gas Pipelines

May 15, 2015 by  | Bio |  Leave a Comment

Now that we’ve made it through the winter, policymakers in Massachusetts are taking a look at the state of energy in the Commonwealth and trying to sort out what to do about the big energy policy questions currently on the table. First among these questions is what, if any, public policy support and funding should be invested in natural gas pipeline infrastructure.

How policymakers answer this question is important because now, more than ever, we must look beyond fossil fuels and ensure that our energy system is one built on the cleanest energy sources. Overinvestment in natural gas is simply a bad bargain for our climate, for consumers, and for our economy.

For several years now CLF has been calling for caution in the pipeline debate by debunking myths presented by pipeline proponents, exploring the environmental and economic ramifications of overbuilding natural gas infrastructure, and highlighting alternatives to pipeline investments. I had the opportunity this week to present CLF’s broad vision for the future of energy in New England to the Massachusetts legislature’s Joint Committee on Telecommunications, Utilities, and Energy. The plan I presented to the legislators:

1. Strategic public investment in the resource with the best rate of return for ratepayers: Energy Efficiency.

2. Strategic public investment in clean electric generation that is not tied to fossil fuel prices: Renewables.

3. Encourage the electric and gas markets to utilize existing gas storage and pipeline to meet peak gas demand.

4. Overall, the need for new gas pipeline has not yet been demonstrated, but if it occurs, we should begin with small pipeline upgrades and peak storage projects first.

5. If we still need more pipeline capacity after doing all of the above, go incremental first (by increasing the capacity of existing pipelines), and let the markets support the capital costs rather than putting them further on the ratepayers.

CLF is skeptical about new gas pipeline infrastructure buildout and efforts to put additional public money toward such projects. This skepticism is based in 1) the climate implications of entrenching gas further in our energy system, 2) the short-term economic effects of building new infrastructure when we’re not maximizing the infrastructure we already have, and 3) the medium- to long-term economic effects of fossil fuel prices dictating our energy prices.

Strategic investments in renewable energy sources will reduce our reliance on climate-changing fossil fuels. Photo credit: CLF

Strategic investments in renewable energy sources will reduce our reliance on climate-changing fossil fuels. Photo credit: CLF

Rather than more investments in fossil fuel-based energy, then, let’s instead invest wisely in energy efficiency and long-term contracts for renewable energy. And where the use of natural gas is currently necessary, let’s use LNG to supplement natural gas supply during periods of peak usage. Expanding our natural gas pipelines and our reliance on this carbon intensive and price volatile fuel should be New England’s last resort.

Effective, clean and economic alternatives are available now and they’re certainly a better deal for our climate and for ratepayers in Massachusetts and across New England.

My full slides and written testimony are available here and here. And, speaking of this winter, check out this paper collecting my colleague Christophe’s blog series on the energy lessons to be drawn from the performance of New England’s energy markets this winter.

A Single Word Could Restore Maine Energy Efficiency Funding

Apr 8, 2015 by  | Bio |  Leave a Comment

A recent decision by the Maine Public Utilities Commission (PUC) severely limits energy efficiency funding in the state. If the decision stands, Efficiency Maine Trust – the public entity that runs energy efficiency programs – would see its near-term budget cut from about $60 million to $22 million. This drastic cut in energy efficiency funding would essentially eliminate the cornerstone of sound energy policy in Maine. Fixing this mistake is vital to the state’s energy future.

The fix is easy (the entire fiasco boils down to the single word “and”), but the backstory is more complicated.

The Backstory

Energy efficiency works 

shutterstock_129267746 lightbulbThe more energy consumers use, the more energy must be generated. Whether that energy comes from coal, natural gas, or renewable sources, the cost to generate that energy goes beyond the dollar figure on your utility bills. Part of that cost is sunk into the generation facilities themselves, and part is in the poles and wires needed to bring that energy into our homes and businesses.

Energy efficiency has the power to reduce the overall demand for electricity by encouraging technological advancements that produce the same service while using less energy. Less overall energy use means less transmission and distribution build out, less energy generation, and, ultimately, a lower energy bill for consumers.

Energy efficiency saves ratepayers money, improves the environment, stimulates commerce, and creates jobs. Since 2011, Efficiency Maine has saved ratepayers almost $1 billion in lifetime energy savings while creating thousands of jobs. Over their lifetime, the projects Efficiency Maine helped install in 2014 alone will save more than 1 billion kilowatt hours of energy consumption – the equivalent of more than 22 million gallons of oil. This translates to nearly $200 million in ratepayer savings. Every dollar Efficiency Maine invests provides at least three dollars in return.

All this raises a pressing question: Why would the PUC slash funding for energy efficiency?

How we got here

In 2013, the Maine Legislature passed the bipartisan Omnibus Energy Act. One piece of this legislation mandates that Maine, through Efficiency Maine, fund and pursue all maximum achievable cost-effective energy efficiency.

Let’s be clear – that is the law.

A single phrase of this voluminous statute determines how much annual funding Efficiency Maine receives to meet (or not) the law’s mandate. This funding, which is included in electricity rates, is capped at “4% of total retail electricity transmission and distribution sales in the State.”

The current fiasco all boils down to what “total retail electricity transmission and distribution sales” actually means. If you find that phrase confusing, you’re not alone. For those working in the electric industry, “retail electricity” sales mean sales of electricity generation. And “transmission and distribution” sales mean sales of the transmission and distribution of electricity. But mashing them together creates a phrase not used anywhere in Maine law, or in any other law in the country.

The problem stems from a missing “and.” The phrase as originally drafted by the legislature was: “total retail electricity and transmission and distribution sales.” That phrase means something. So what happened to the “and”? No one knows. But somewhere along the line, without any discussion, debate, or request, it disappeared from the final version of the bill – after a legislative committee approved a version containing this critical conjunction.

A matter of interpretation?

So, what does the PUC have to do with this? The 2013 Omnibus Energy Act directs the PUC to make a rule that interprets this phrase and thus the amount of energy efficiency funding. In making this rule, the PUC must follow what the legislature intended when it wrote the law. If what the law says is clear, the PUC need look no further than the text. But if the law is not clear, the PUC looks to the bill’s legislative history to determine what the legislature intended the law to mean.

As it turns out, the only people who have found that confusing phrase absolutely clear are two out of three PUC Commissioners. They read the language to include sales from only transmitting and distributing electricity, not sales from generating the electricity. That reading translates to a huge difference in how much money goes toward Maine’s energy efficiency initiatives – a $38 million difference.

Even as written – in other words without the “and” – the PUC got this wrong. The only thing that’s clear about the phrase is how unclear it is. That means the PUC must look to the legislative history to see what the legislature intended. And no one – not even the legislators who drafted the bill – disputes that the legislature intended much greater funding for energy efficiency by including sales from both electricity generation and electricity transmission and distribution.

The Future

Frustrated yet? There’s more.

The Maine Legislature now has the opportunity to fix the PUC’s decision. Doing so would save Maine ratepayer dollars. Unfortunately, as the Portland Press Herald reported recently, prospects for an easy legislative fix look dim.

Remember, the 2013 Omnibus Energy Act, which mandates energy efficiency measures, passed with bipartisan support. Legislators have introduced an amendment to the Energy Act that simply reinserts the word “and” – as the legislature originally intended.

But other lawmakers are trying to block this version. In an op-ed in the Portland Press Herald, House Minority Leader Kenneth Fredette (R-Newport) admitted that the Energy Act was intended to increase the funding cap to “roughly $60 million” instead of the roughly $22 million under the PUC’s interpretation. Nonetheless, he claims that the PUC correctly interpreted the law it was given, mistake and all.

What Representative Fredette and other lawmakers are now arguing is this:

  1. Yes, the Energy Act meant to increase energy efficiency funding.
  2. Yes, the PUC interpreted it to severely limit this funding.
  3. Yes, we the legislature should fix this.
  4. But NO, we are not going to simply insert a single word in order to do what a bipartisan legislature intended in the first place when it passed the law.

 

Why not? Governor Paul LePage. He is almost guaranteed to veto a fix of the bill because he does not want to invest more in energy efficiency. The legislature might not garner the two-thirds vote needed to override that veto, let alone pass the amended version in the first place.

What’s the alternative? A bill that compromises further on sound energy policy in Maine. To be clear, the original Omnibus Energy Act was itself the result of bipartisan compromise – which was meant to vastly increase energy efficiency funding. Now, because of one word, the governor and Republican legislators want another bite at the apple.

Tell your legislators to pass the clean fix of the bill and restore Maine energy efficiency funding! You can find your legislator’s contact information here. Help restore adequate funding for energy efficiency in Maine!

Quiet and Hardworking: Energy Efficiency

Apr 8, 2015 by  | Bio |  Leave a Comment

We all know them. Every family and office has at least one. That quiet and hardworking member of the team that day in and day out gets the job done.

No fanfare needed. Just consistently delivering results.

In the world of energy, that quiet and hardworking team member is energy efficiency. Every day, it cuts costs and cuts pollution, both for electricity and for heating. In doing so, it makes us better prepared for the future when climate change demands that we move away from fossil fuels and rely on cleaner and lower cost electricity.

At about half the cost of generating electricity, energy efficiency remains the lowest cost electric power resource. If we didn’t cut electric energy use with energy efficiency we would pay twice as much to buy that power from a power plant.

For more than a decade, Vermont has been a leader in relying on cleaner and low cost energy efficiency. In practical terms, our efficiency investments have avoided building new, expensive and polluting power plants, and has reduced the fossil fuels needed to heat our homes. Our reliance on efficiency also frees up energy for new uses such as heat pumps and transportation.

Energy efficiency is simply part of any sensible long-term energy strategy.

Here are some numbers:

In the past 13 years, electric efficiency in Vermont has produced savings of over 12.7 million megawatt hours. That is equal to the power needed to supply every home in Vermont for five years.

For 2014, energy efficiency met 13.3 percent of Vermont’s electric supply needs, an increase over 2013.

At the same time, electric energy efficiency in Vermont cut polluting greenhouse gas emissions by 8.7million metric tons since 2000. That is equivalent to reducing pollution by taking 1.8 million cars off the road each year.

But that is only part of the story. The regional New England grid operator recognizes the clear value of energy efficiency and holds it to high standards. Vermont is paid about $4 million dollars every year for its electric energy efficiency contribution to meeting the region’s power needs. Not only is that money reinvested in Vermont, and reduces fossil fuel use for heating, it lowers electric power costs for everyone in the region.

And in terms of electric transmission, Vermont’s investments in energy efficiency have deferred building over $279 million dollars of new electric transmission lines over the next decade.

From ski areas to grocery stores to homes and manufacturing, our energy efficiency efforts produce real results. Vermont’s employers are not only cleaner businesses, but also more competitive. For example, seventy five percent of Vermont ski areas have switched to more efficient snowmaking equipment, installing 2700 new snow guns that use up to 85% less energy to operate. That is a savings for all of us.

For such a quiet and hardworking resource, it is troubling that it has been caught in a political buzz saw this year. Energy efficiency was taken political hostage and cut as part of a new energy bill. We all know politics is not pretty. But it is sad when such shenanigans trump common sense, good policy and sound economics.

Rather than reward this quiet and hardworking team member, its ability to perform and deliver savings is being cut. Going forward, this means we will all pay more and pollute more.

It is time to make sure we rely on the cleanest and lowest cost resources. We should not leave real savings on the table and should not let politics elbow out the common sense solutions that benefit all Vermonters.

Time to Act: Guest Post by Olivia Gieger

Mar 6, 2015 by  | Bio |  Leave a Comment

Last fall, CLF, Mass Energy Consumers Alliance, and four youth plaintiffs filed suit against the Massachusetts Department of Environmental Protection for failing to fully comply with the Global Warming Solutions Act. In this guest post, one of the teen plaintiffs, Olivia Gieger, explains why she’s joined the court fight to defend her climate future.

As a sophomore in high school, I am all too familiar with procrastination. That group project assigned a month ago and now due tomorrow? We had a month; why start early? It’s a group project; won’t someone else do it? In my experience, I can tell you, those all-nighter–inducing group projects never turn out well.

Don’t be the sophomore in high school.

This 2015, we have the technology to know that atmospheric carbon dioxide levels are rising at an alarmingly fast rate. We’ve had this technology since 1960 when carbon dioxide levels were at 315 parts per million (ppm). Now they’re at 395 ppm(1). We know that this carbon dioxide is a greenhouse gas, which captures heat energy and slows its release from air. While greenhouse gases are necessary in our atmosphere and are needed to keep us warm, an unnatural amount is strikingly dangerous. More greenhouse gases mean more heat held in the atmosphere, which means a hotter Earth.

Side effects of global warming are countless, and they are happening today. Sea levels are rising. Ice caps are melting. Forest fires are raging. Downpours are constant in the Northeast, yet droughts are ever more present in the West(2).

But, really, why should I care? Melting ice caps and a couple less polar bears don’t really affect me, right? I don’t live in California, so those wildfires don’t affect me, either. But other people are being impacted by the wildfires, the melting ice caps, the rising temperatures. The scary reality is that we all are. I may not know anyone who lives in California, but that’s where my food is grown. If there are droughts and wildfires, how is my family supposed to get some of our favorite fruits and vegetables that don’t grow here in Boston during the winter? And those melting ice caps affect a whole lot more than polar bears. When they melt, sea levels rise – not just at the North Pole, but globally. This means my favorite beaches on Martha’s Vineyard will be washed away. It means my favorite restaurants and museums – even my neighborhood – here in Boston will be underwater in my lifetime.

In order to do something about these concerns, I have filed a lawsuit, along with three other youth plaintiffs, against the Massachusetts Department of Environmental Protection (DEP), because DEP has been procrastinating in fully complying with the Global Warming Solutions Act (GWSA). The GWSA requires DEP to pass regulations establishing declining greenhouse gas emissions limits for Massachusetts. But DEP has not done so. The purpose of the lawsuit is to force DEP to comply with the law, because it appears unwilling to do so on its own. Thanks to the support from my lawyers at Sugarman, Rogers, Barshak, & Cohen and Our Children’s Trust, we will ensure that DEP complies with the law.

So now my question is why? Why are we as a society being sophomores in high school about this? Why are we just waiting for someone else to solve this massive problem? We know the problems, and, better yet, we know the solutions. Using clean, renewable energy is one solution. Enough energy from the sun enters the Earth in one hour to power it for an entire year(3). This energy is unlimited, harmless to the environment, and virtually free. Sounds to me like it tops fossil fuels any day. It’s not just solar energy, however – wind power and hydropower are also unlimited and harmless to the environment. So why then are we oblivious to this? Why are we so incapable of making a change? We need to stop procrastinating. It is long past the time to include, encourage, and execute programs with wind and solar power as the energy of America. We cannot afford to be sophomores anymore; it’s time to graduate.

Works Cited:

  1. Pieter Tans, NOAA/ESRL (www.esrl.noaa.gov/gmd/ccgg/trends/) and Dr. Ralph Keeling, Scripps Institution of Oceanography (scrippsco2.ucsd.edu/).
  2. “The Current and Future Consequences of Global Change.”Global Climate Change: Vital Signs of the Planet. National Air and Space Association, n.d. Web. 14 Nov. 2014.
  3. “Solar Power Energy Information, Solar Power Energy Facts.”National Geographic. N.p., n.d. Web. 16 Nov. 2014.

CLEC Is Looking For (Not After) Your Wallet

Oct 28, 2014 by  | Bio |  1 Comment »

The recently announced formation of the Coalition to Lower Energy Costs (CLEC) represents the latest tactic employed by Kinder Morgan and its Tennessee Gas Pipeline (TGP) subsidiary in their effort to build a gas pipeline on the backs of electric customers. The acronym’s distinct resemblance to the Koch brothers’ ALEC front group is just a coincidence, but this move is straight out of the same playbook. The group’s press release suggests that it represents the interests of “citizens” and “consumers” to lower energy costs, but this thin veil cloaks a group of lawyers and gas executives set on doing quite the opposite.

The fact is, CLEC is led by a former natural gas company executive and an attorney with the law firm that represents TGP. The entirety of CLEC’s officers and directors are employees of that same TGP law firm and its political strategy subsidiary. Needless to say, the focus of this group will have a lot less to do with the interests of our electric consumers and more to do with the 2 bcf/day pipeline that TGP is struggling to fund and build in western Massachusetts.

A quick read of CLEC’s website exposes its self-serving intentions as it unabashedly proposes that the solution to anticipated high energy costs is the development of a new 2 bcf/day pipeline to be paid for by consumers – a pipeline that would just happen to follow the same route from New York to Dracut, MA, that TGP has proposed. CLEC cites two “studies” that support this approach, but neglects to mention that they were written by experts hired by TGP and that their “flood the market with gas” approach was widely discredited by a variety of experts as being bad for consumers and likely to undermine the energy markets in a recent proceeding before the Maine Public Utilities Commission.

The CLEC/TGP proposal is not a solution. First, it was already rejected by the first regulatory body to consider it, the Maine PUC staff, which has recommended to its Commissioners that the cost to consumers of investing their money in a gas pipeline outweighs any benefits. Second, CLEC fails to advise us that this “money saving pipeline” that we should pay for is highly controversial and unlikely to obtain the necessary permits, and that even if it does obtain permits, it would not be in-service for at least another 4–5 years. Finally, by that time, already planned incremental pipelines will be in-service and, in combination with ramped up energy efficiency, expanded management of gas and electric demand, and increased renewable energy resources, will have already helped provide relief to consumers without burdening them with the $3–6 billion cost of a new pipeline – and the climate implications that come with it.

What’s more, at least one of the companies proposing those incremental pipeline projects would undertake them with or without the public subsidy that TGP is asking for. So, thanks anyway TGP, we can’t afford your brand of consumer assistance.

3 Things No One is Telling You About Rising Energy Costs

Oct 3, 2014 by  | Bio |  5 Comment »

Rahm Emanuel, President Obama’s first White House chief of staff, was once quoted as saying “You never want to let a serious crisis go to waste,” referring to the opportunities to pass sweeping bills in the wake of the 2008 financial meltdown. Over the past weeks, we’ve seen that sentiment put into practice by some of New England’s major energy industry players. They’ve been fanning the flames of fear over expected winter price spikes to support their continued push for building massive new gas pipelines, even though new pipelines have no chance of helping to address the risk of price spikes for this winter.

Here are 3 things you’re not being told about what’s really responsible for the increased rates and how to deal with rising energy costs now:

  1. New pipelines can’t and won’t address the rising rates for this winter (or the next three winters).
    • Even under the most optimistic scenarios, new natural gas pipelines of the scale that were being considered as part of the now-stalled New England Governors’ initiative could not be permitted and built earlier than November 2018. Even if they lived up to the Governors’ promises after that, they would do nothing for consumers this winter and the next three winters.
    • New England isn’t the only region of the country that experienced price spikes this past winter. New York, an area that had just expanded its pipeline capacity still experienced higher prices last winter, and the regional electric grid known as PJM (because it covers, in part, Pennsylvania, New Jersey and Maryland) also experienced price spikes even though it is located in the epicenter of abundant Marcellus shale gas supplies.
  2. The real problem isn’t a major deficit of pipeline capacity, but a failure to deal adequately with the increased use of natural gas for power generation.
    • We now use a lot of natural gas for power generation in New England, which helped modernize the system by moving us away from old, polluting, and inefficient sources like coal and oil. Because of this, and the way the regional grid’s electric market works, natural gas prices now generally set the price for electricity in New England.
    • Unlike natural gas utilities that supply homes and businesses with gas for heating, which buy gas on long-term “firm” contracts that guarantee access to gas, the companies that own natural gas power plants typically buy cheaper “interruptible” contracts because there isn’t currently a mechanism that allows them to pass-through the additional costs of buying firm supply.
    • In the winter time, people are often turning on the heat at the same time that they are turning on the lights, so the system experiences high demands on gas for both uses in the mornings and afternoons. These “coincident” demands led to price spikes between 10-42 days in each of the last winters, and retail electric prices are now catching up as the market is expecting a repeat of last winter’s high prices.
    • Now that natural gas makes up so much of the electricity we use, the volatility of gas prices has a bigger impact on electric prices and leads to higher rates. We have been far too slow in deploying demand-reducing energy efficiency measures in homes and businesses and in increasing the amounts of local renewable energy on the system, both of which would help reduce market prices for electricity and protect us from volatile gas prices.
    • The increased use of liquefied natural gas (LNG) imports should help to moderate the price spikes to some extent this year, but more can be done through market reforms without risking overbuilding gas capacity.
  3. Energy efficiency is the best way to reduce your bills and stay warm this winter.
    • Even though rates are going up, you can still lower your total bill by lowering your demand. Massachusetts has some of the best energy efficiency programs in the country which means that you can apply for rebates, incentives, and assistance to help you install efficient measures. Other New England states have programs as well.
    • If you don’t own your home or apartment, there are still some inexpensive steps you can take to cut your bills. There are many ways to conserve energy for a very small investment of time or money. Check back in for a look at how Senior Attorney Shanna Cleveland is getting her apartment ready for the winter.

Working with the ISO to Integrate Renewable Energy in New England

Sep 15, 2014 by  | Bio |  3 Comment »

The ISO is the organization that operates the New England-wide electricity grid and runs New England’s wholesale electricity markets.

You can read more about what the ISO is, and why CLF works on ISO committees and working groups.

I have written before about CLF’s work with the ISO. You can read those prior blog posts here, here, and here.

As I have said before, CLF is one of the very few environmental organizations to work with the ISO, and no other environmental organization is as heavily engaged in the ISO as CLF is.

A few days ago, I wrote about one of the major criticisms of renewable energy – that it is too expensive – and how changes that CLF is seeing at the ISO are, even now, making that argument a thing of the past. Today I want to describe another frequently heard criticism of renewable energy, that it is not always available and so it cannot be relied upon like fossil-fuel generation can.

We renewable energy advocates hear that argument a lot. For example, the nationally prominent, anti-renewable-energy Heritage Foundation wrote on May 5, 2010:

Wind, like solar energy, is not a dispatchable power source; that is, it cannot be turned on at will. As a result, increasing dependence on wind adds variability and uncertainty to the power grid that must be offset by quick-ramping power sources like natural gas turbines to maintain a relatively constant flow of electricity.

When the Heritage Foundation discusses an electricity source being “dispatchable,” it means both being turned on and off at will, and being able to increase or decrease its electricity output at will. Here in New England, the ISO, which runs our electricity grid, “dispatches” every electricity generator in the region. The ISO tells those generators when to run and when not to run; and it tells them exactly how much electricity to churn out. This is essential to maintaining the reliability of the electricity grid, because the aggregate supply produced by all the generators in the region has to be exactly equal to the aggregate demand of tens of millions of customers every minute of every hour of every day of the year.

What the Heritage Foundation means to say here is that the wind does not always blow and the sun does not always shine. For these reasons, up until now, renewable energy has not been a dispatchable power source.

But here is the really cool news from the ISO: the ISO is now on an irreversible track to make intermittent renewable energy sources like wind fully dispatchable in the New England power grid. In fact, the ISO expects to have wind fully dispatchable in New England by late 2015 or early 2016!

According to the ISO, there are three requirements, or prerequisites, for making wind (and, eventually, other intermittent renewable energy sources) fully dispatchable.

The first requirement is that the wind farms, wherever they are located, be in constant electronic communication with the ISO’s control room in Holyoke, Massachusetts. The ISO refers to this requirement as “telemetry.” The telemetry between wind farms and the ISO control room is already in place; it exists today.

The second requirement for making renewable energy fully dispatchable is that the ISO needs to have reliable, accurate five-minute-ahead weather forecasts for things like wind speed and sunshine intensity. The ISO has been running trials for months now of five-minute-ahead forecasts; and at a meeting I attended this month, the ISO reported that the five-minute-ahead weather forecasts it has been receiving have been completely reliable and accurate and fully satisfy the requirements of the ISO control room.

The third, and final, requirement for making renewable energy fully dispatchable in New England is the creation of the actual computer algorithms that the ISO control room will use to dispatch renewable generators when the time comes. The ISO plans to issue a so-called “DNE Order” to every dispatchable renewable generator for every five-minute interval of every day. This DNE Order will set an upper limit (i.e., “Do Not Exceed,” hence, DNE) for that generator for that five-minute interval. As long as the generator does not go above its DNE limit, the generator will be considered (by the ISO) to be operating “within dispatch,” and will get paid for its electricity output.

It is this third, and final, part that is still needed to make renewable energy fully dispatchable. And at the ISO meeting I attended this month, the ISO decided to start the actual work on those computer algorithms. These algorithms will take some time to complete; but when they are done, the ISO will treat wind as fully dispatchable in New England.

Many owners of fossil-fuel-fired power plants are very unhappy that the ISO is moving so inexorably toward making renewable energy fully dispatchable. Those fossil generators know, correctly, that having renewable energy fully dispatchable by the ISO will tend to undermine the economic viability of their dirty, old power plants. This is especially true now because the ISO-New England, like other ISOs in other parts of the country, is also rolling out “negative price offers” that will make renewable energy resources even more economically competitive compared to fossil-fuel plants. (I discussed that development in my blog post a few days ago, which you can see, here.)

This is a very exciting time for CLF to be participating in ISO matters, because the ISO is moving on multiple fronts to integrate new renewable energy resources in to New England’s electricity grid.

For years, opponents of renewable energy have claimed that renewable energy, while clean and non-polluting, is too expensive for average ratepayers. But on December 3, 2014, ISO is introducing negative price offers, that will make renewable energy cheaper than ever before and drive down the cost of electricity for all New England ratepayers.

And for years, opponents (like the Heritage Foundation) have argued that renewable energy is not dispatchable. But even now the ISO is taking the final steps to make intermittent renewable energy resources fully dispatchable – and is writing the computer algorithms that the ISO control room will soon use to dispatch wind farms.

These are exciting times in the world of renewable energy development, and CLF is playing an active role in those developments.

July 2015 Campaign Popup - A - with credit

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