(Washington Post Opinion)
The sweeping energy regulatory legislation in Virginia that Gov. Ralph Northam rightly stepped in to improve and recently signed deserves celebrating.
Whether you’re an environmentalist concerned about the affects of climate change, a business trying to keep operating costs low or a consumer advocate looking out for low-income customers, this is a historic win that will generate economic and environmental benefits for years to come.
Three key elements of the law make this a victory for all Virginians.
- Utilities will finally invest significantly in energy efficiency, the very best tool to lower Virginia’s rising electricity bills and reduce air pollution, rather than continue the relentless cost increases that have made Virginia’s bills the 10th-highest in the nation. The $1 billion investment utilities will make in efficiency upgrades and programs over the next decade will yield long-term dividends for Virginia ratepayers and our environment.
- Virginia will finally join the American clean energy revolution currently underway, as the law makes a truly transformational commitment to solar, wind and grid technology upgrades that will deliver as many clean electrons to our outlets as possible. The 5,000 megawatts of renewable energy declared to be “in the public interest” under this legislation is enough to power more than 1 million homes. This will be good for both the climate and customers, as solar and wind are often the cheapest energy you can find nowadays and some of the fastest-growing job creators in the country.
- This law finally turns the page on an outdated regulatory model that was putting a damper on our economy and our clean air, with an endless succession of fossil fuel plants that were good for utilities but bad for Virginians’ pocketbooks. Now, regulators are free to approve investments that make better economic sense: efficiency programs such as lighting upgrades and weatherized homes and businesses that lower energy consumption and therefore bills, low-cost renewable energy and grid technology upgrades to optimize the most efficient use of our various resources to lower total costs and carbon and other pollutants.
Even though the legislation returns an upfront $200 million to customers and passes along another $125 million of annual tax savings from the federal corporate tax cut, some remain opposed to the legislation on strict consumer-protection grounds, insisting that all customer dollars over-collected by utilities under the “refund freeze” law of 2015 should be refunded rather than reinvested.
To be sure, the initial bill was unacceptable on many grounds, and even the final version is not perfect. But the bill’s remaining detractors appear to overlook two key facts: Simply refunding every possible dollar to customers would not achieve the same economic and environmental advances this law makes possible. Not only would those refunds not make a significant impact on each customer’s pocketbook but also the investments under this law will achieve far greater results than a one-time credit on bills ever could. Significantly more energy efficiency, renewables and modern grid technology mean that instead of just one lower bill as the result of a one-time credit, Virginians can now see years and even decades of lower costs and cleaner air.
Many are rightly celebrating the recent passage of a bill that aims to move Virginia’s power grid into the 21st century. Yet one of the most progressive measures in the bill relies on some of the oldest electrical technology around – harkening back to Thomas Edison’s very first power plant. I think that’s a good thing.
The Grid Transformation and Security Act – which promises to lower utility bills, increase investments in energy efficiency and renewables, and restore oversight of electric utility rates in the Commonwealth – requires Virginia’s largest utility (Dominion Energy) to consider combined heat and power, or CHP, in its future resource plans. CHP has been around as a clean energy option since at least the 19th century, when Edison first recognized that conventional power plants produce an enormous amount of heat in generating electricity, and typically waste that heat by venting it to the air. CHP captures that heat instead, and puts it to good use in buildings and manufacturing plants, providing energy, economic, and environmental advantages over conventional power plants, and doubling the efficiency of the plant.
For years, Virginia’s utilities overlooked CHP. According to the latest scorecardfrom the American Council for an Energy-Efficient Economy (ACEEE), Virginia scored 0 out of 4 points for its CHP policies, highlighting the lack of effort to encourage this important technology.
The Trump administration must carry out the implementation of four energy efficiency regulations that it has delayed for more than a year, a federal court ruled Thursday.
The Department of Energy (DOE) wrote the rules and made them public in December 2016, under the Obama administration.
But when President Trump took office Jan. 20, 2017, his administration took advantage of a 45-day window for error corrections to review the rules and potentially scuttle them. The DOE still has not published the rules in the Federal Register, the final step to implement them.
“This failure is a violation of the department’s duties under the Energy Policy and Conservation Act,” Judge Vince Chhabria, who former President Obama nominated to the federal District Court for the Northern District of California, wrotein the Thursday ruling.
“Summary judgment is therefore granted to the plaintiffs on this claim, and the department is ordered to publish the standards within 28 days of this ruling.”
The ruling stands as a setback in the Trump administration’s ongoing efforts to delay, weaken or undo major parts of Obama’s aggressive environmental agenda.
(Electricity Markets and Policy Group, Berkeley Lab)
Nonresidential buildings are responsible for over a quarter of primary energy consumption in the United States. Efficiency improvements in these buildings could result in significant energy and utility bill savings. To unlock those potential savings, a number of market barriers to energy efficiency must be addressed.
Commercial Property Assessed Clean Energy (C-PACE) financing programs can help overcome several of these barriers with minimal investment from state and local governments. With programs established or under development in 22 states, and at least $521 million in investments so far, other state and local governments are interested in bringing the benefits of C-PACE to their jurisdictions.
Lessons in Commercial PACE Leadership: The Path from Legislation to Launch, aims to fast track the set-up of C-PACE programs for state and local governments by capturing the lessons learned from leaders. The report examines the list of potential program design options and important decision points in setting up a C-PACE program, tradeoffs for available options, and experiences of stakeholders that have gone through (or are going through) the process.
C-PACE uses a voluntary special property assessment to facilitate energy and other improvements in commercial buildings. For example:
- Long financing terms under C-PACE can produce cash flow-positive projects to help overcome a focus on short paybacks.
- Payment obligations can transfer to subsequent owners, mitigating concern about investing in improvements for a building that may be sold before the return on the investment is fully realized.
- 100% of both hard and soft costs can be financed.
Read the full report.
(New York Times)
A federal judge in San Francisco on Thursday ordered the Trump administration to implement energy-use limits for portable air conditioners and other products that were adopted during the last days of the Obama presidency.
The U.S. Department of Energy was required to put the energy efficiency standards into effect after a 45-day period to identify any errors and did not have the authority to continue to assess them, U.S. District Judge Vince Chhabria said.
The ruling came in two lawsuits — one filed by New York, California and other states and the other by environmental groups.
The U.S. Department of Justice did not immediately comment. The lawsuits over the energy standards are among a spate of legal actions challenging decisions by the Trump administration to roll back environmental protections.
The states argued that the new standards would reduce greenhouse gas emissions, save businesses and consumers billions of dollars, and conserve enough energy to power more than 19 million households for a year.
Former White House climate adviser George David Banks said President Trump could be poised to reverse his decision to exit the Paris climate change accord.
“There’s nothing in it for the president this year,” Banks told E&E News in an interview after he stepped down last week. “There’s nothing in it for the president next year.” But in 2020, Trump is “going to want victories” to win re-election, he said.
The U.S. cannot formally exit from the Paris agreement until the 2020 presidential election year under the United Nations’ rules for withdrawal. Trump often has said that there might be a way to renegotiate the U.S.’s terms of the agreement. But others such as French President Emmanuel Macron have said that would impossible to do unless the U.S. was intent on increasing its commitments under the agreement.
Banks pointed out that the U.S. will be hosting the Group of Seven industrialized nations, or G7, in 2020, which the president could use as a foil to renegotiate the Paris deal.
(Daily Energy Insider)
The Alliance to Save Energy (ASE) published a white paper this week that concludes modernizing the electric grid will require changes in the pricing structures electric utilities use, including moving beyond a traditional two-part rate.
The paper, Forging a Path to the Modern Grid: Energy-Efficient Opportunities in Utility Rate Design, is the product of the Rate Design Initiative, a two-year effort led by ASE and involving representatives from utilities, technology companies, regulatory experts, environmental groups, consumer advocates and other industry leaders.
The initiative sought to identify themes and opportunities related to rate designs that incentivize energy efficiency and other environmental and social objectives, while also enabling adequate cost recovery for utilities.
“Developing utility rates that are fair to all stakeholders is a perennial challenge, but the dramatic shifts happening in our power systems are forcing us to think more creatively,” Natasha Vidangos, director for research at ASE, said. “The old-fashioned cost recovery and rate design models we’ve traditionally used simply don’t match tomorrow’s needs. As an organization that works closely with the wide spectrum of utility sector stakeholders, we took this on to try to identify areas of agreement, opportunity and lessons learned. In rate design, there are rarely simple solutions, but the potential benefits are extraordinary if we get it right.”
Americas are spending the least of their paychecks on electricity in at least 58 years as gains in energy efficiency leave more for food, vacations and gadgets.
Consumer spending on electricity fell to 1.3 percent of personal consumption in 2017, the lowest in records dating to 1959, according to a report Thursday from Bloomberg New Energy Finance and the Business Council for Sustainable Energy. That’s down from a peak of 2.3 percent in 1982.
The savings come amid a modest increase in retail power prices last year and higher spending on gasoline and other motor fuels. Spending on natural gas rose slightly last year to 0.4 percent of personal consumption, down from 1.3 percent in 1983.
The entire U.S. economy is becoming more energy efficient as a long-term shift away from manufacturing means the same amount of energy is now delivering more to GDP.
(Yale Center for Business and the Environment)
Before the federal government discontinued the United States Department of Energy’s (DOE) Qualified Energy Conservation Bond (QECB) program in 2017 as part of its tax reform package, states like Virginia leveraged this program to accomplish energy efficiency goals.
When evaluating how to use Virginia’s QECB allocation, decision makers considered the increased flexibility of Green Community Programs (GCPs) relative to traditional QECBs and “qualified” projects.
GCPs can issue bonds for any mix of public and/or private projects. In contrast, under the traditional QECB structure, a maximum of 30% of allocations can be issued for private projects.
In addition, GCPs are not subject to the 20% energy-reduction requirement. This broad scope and relaxed requirements allow them to be structured and operated on a case-by-case basis, leaving significant room for creativity and adaptability to different states, locations, and projects.
Read the case study here.