NewEnergyNews: 05/01/2022 - 06/01/2022

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

The challenge now: To make every day Earth Day.

YESTERDAY

THINGS-TO-THINK-ABOUT WEDNESDAY,:

  • TTTA Wednesday-ORIGINAL REPORTING: California’s Rooftop Solar Supports Questioned
  • TTTA Wednesday-The Transportation Electrification Policy Fight Goes On
  • THE DAY BEFORE

  • Monday Study – The Everywhere Drive To Modernize The Grid
  • THE DAY BEFORE THE DAY BEFORE

  • Weekend Video: Carbon Offsets Go Wrong
  • Weekend Video: Russia Uses Electricity As A Weapon In Europe
  • Weekend Video: Wildfires Are Driving Firefighters Nuts (No Joke)
  • THE DAY BEFORE THAT

  • FRIDAY WORLD HEADLINE-New Records For New Energy
  • FRIDAY WORLD HEADLINE-Russian NatGas Started The War In 2021
  • THE LAST DAY UP HERE

    THINGS-TO-THINK-ABOUT WEDNESDAY, May 11:

  • TTTA Wednesday-ORIGINAL REPORTING: Automated Customer Grid Services Coming In California
  • TTTA Wednesday-The Energy Transition’s Grid Modernization Marches On
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    Founding Editor Herman K. Trabish

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

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    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

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  • FRIDAY WORLD, May 20:
  • Europe’s New Energy Transition Accelerating
  • New Energy Still The Best Buy

    Friday, May 20, 2022

    Europe’s New Energy Transition Accelerating

    Ukraine war sparks new energy pivot

    16 May 2022 (Private Equity Wire)

    “One of the key levers in the West’s response to Russia’s Ukraine invasion has involved the energy market. The US, UK and EU have all pledged to reduce their purchases of Russian oil and gas in the years ahead, improving energy security and making gas and oil prices less volatile in the long-term…[I]t appears that the new drive for energy independence and security will revolve around the energy transition to renewables…

    ...[G]lobal renewable energy capacity is expected to rise over 60 per cent from 2020 levels to over 4800GW by 2026. Renewables will account for 95 per cent of the increase in global power capacity to that date with solar PV responsible for more than 50 per cent, given its lower cost of production than wind…China will remain the global leader in terms of capacity additions with it expected to reach 1200GW of total wind and solar capacity in 2026. India, Europe and the US alongside China account for 80 per cent of renewable capacity expansion worldwide…

    …[A]nother result of the Ukraine conflict is an “acceleration of investments in renewable and associated cleantech infrastructure [such as] faster hydrogen development and interconnection of EU electric networks”, according to a recent note from Bank of America…Movements are already being seen by governments…[Private equity] involvement is set to surge…[with continued investment in renewable energy and new capital] for hydrogen projects such as storage and electrolyser plants…[PE investment sources are calling] for a mature approach to the power and renewables sectors…[with technical expertise] to better understand the risk…” click here for more

    New Energy Still The Best Buy

    Solar PV, wind costs climbing, but still way cheaper than fossil fuel – report

    Lameez Omarjee 12 May 2022 (FIN 24)

    “Increasing commodity and freight prices are driving up the costs of solar PV and wind turbines, but these renewable energy generators are still more cost-competitive than fossil fuels like coal and gas…[According to the International Energy Agency (IEA) [Renewable Energy Market Update and outlook for 2022 and 2023,] prices of raw materials and freight costs have been rising since the start of 2021. By March 2022, the steel price increased by 50%, copper increased by 70% and aluminium doubled. Freight costs were five times higher than they were in 2021.

    This means that the prices of wind turbines and solar PV modules or panels have had to increase - reversing the previous trend of declining prices…[Solar PV and wind prices are expected] to remain higher than pre-pandemic levels in 2022 and 2023…Rising freight costs are the main driver of higher wind prices, while solar PV increases are evenly split between freight and raw material costs…[But] higher prices of fossil fuels - natural gas, oil and coal - used in industrial processes and electricity supply to produce components in renewable energy technologies also drive costs…[and] renewable energy prices remain cost-competitive, as fossil fuel prices have risen at a much faster pace…

    …[Also,] residential and commercial users of solar PV have managed to reduce their electricity bills…[Renewable energy capacity is expected] to increase by 8% in 2022 and reach almost 320 GW. Solar PV is projected to be the front-running technology, accounting for 60% of global renewable capacity…The outlook for renewable energy deployment in 2023 depends heavily on the policy environment…[Russia's invasion of Ukraine] sparked a new urgency among some countries - especially the EU - to secure energy by transitioning clean generation while reducing dependence on fossil fuels from Russia…” click here for more

    Wednesday, May 18, 2022

    ORIGINAL REPORTING: California’s Rooftop Solar Supports Questioned

    Prominent Energy Experts and Terminator Blast CA’s Revised Support for Rooftop Solar

    Herman K. Trabish, January 18, 2022 (California Current)

    Editor’s note: The nation is watching what California will do about this.

    Those calling for overhauling the California Public Utilities Commission’s proposed changes in rooftop solar’s Net Energy Metering now include a former federal energy commission chair and former Gov. Arnold Schwarzenegger. The pending decision’s “discriminatory fixed fees on existing and new solar and storage customers are unprecedented,” wrote a group of 10 energy experts in a Jan. 17 letter to the CPUC, Gov. Gavin Newsom, and California Energy Commission. The commission proposal would increase the average solar plus storage customer’s charge to $116/month for utility service, they estimated.

    That charge and a reduced per kWh credit to rooftop solar owners for generation exported to the grid would extend the investment’s payback period from the current seven to nine years to over 20 years, making solar plus storage “essentially unaffordable for just about all customers,” they said. “Most people agree that NEM needs to be reformed,” but this proposed decision “does grave injustice to the state’s ambitious goals for electrification and decarbonization,” added signatory Ahmad Faruqui, retired Brattle Group Principal and an economist-at-large. It offers a rebate for batteries but makes rooftop solar essentially out of reach financially, defeating the goal of growing storage to enhance system reliability.

    Signatories also include former Federal Energy Regulatory Commission Chair Jon Wellinghoff and Jim Lazar, author of the handbook Electricity Regulation in the U.S. Schwarzenegger agreed with their arguments in a Jan. 17 New York Times editorial. While he was the state chief, California’s 10-year “Million Solar Roofs” initiative was launched, kicking off California’s rooftop solar boom.

    California leads the nation in distributed solar, which has reached 1.3 million rooftop solar systems and over 10,000 MW of generation, but this achievement “is now under threat,” Schwarzenegger warned. The new fixed charges are essentially a “solar tax” discouraging the progress it claims to support. But he also welcomed proposed incentives to encourage adding batteries to existing and new solar installations and proposed funding of installations for low-income and disadvantaged communities.

    A CPUC-ordered study found the existing NEM “disproportionately harms low-income customers” and a January 2021 Lookback Study showed cost shifts to all customers, wrote CPUC Administrative Law Judge Kelly Hymes in her decision. This proposed decision meets Assembly Bill 327’s mandate to protect both rooftop solar growth and avoid cost shifts to other customers, she concluded…

    The pending NEM is a “massive” shift of system costs from low income non-solar owning customers to high income solar owners, argued University of California Energy Institute at Haas Director and Professor of Business Administration and Public Policy Severin Borenstein, a member of the California Independent System Operator Board of Governors, in support of the proposed decision. Rooftop solar is a “much more costly way to provide renewable energy, creates less value for the grid than alternatives, and the current NEM “is a very bad way to subsidize it,” Borenstein added… click here for more

    The Transportation Electrification Policy Fight Goes On

    The 50 States of Electric Vehicles: Federal Infrastructure Funding and Managed Charging Programs in Focus During Q1 2022

    May 4, 2022 (North Carolina Clean Energy Technology Center [NCCETC])

    “…[The Q1 2022 edition of The 50 States of Electric Vehicles finds that all 50 states and the District of Columbia took actions related to electric vehicles and charging infrastructure during Q1 2022…[The greatest number of actions related] to rebate programs, grant programs, rate design for vehicle charging, and state procurement of electric vehicles…A total of 627 electric vehicle actions were taken…[The most active states were] Massachusetts, Illinois, California, New York, Minnesota, and Hawaii…[I]n 2022, 21 states have enacted legislation related to transportation electrification…[Three Q1 2022 trends were] (1) states planning for federal electric vehicle infrastructure funding, (2) utilities developing active managed charging pilot programs, and (3) state lawmakers addressing charging infrastructure siting issues…

    …[Five of the top policy developments of the quarter were] Washington lawmakers approving a light-duty vehicle electrification target…Utilities filing new managed charging pilots in North Carolina and Wisconsin…Missouri regulators approving new utility transportation electrification programs…The Governor of North Carolina increasing the state’s zero-emission vehicle adoption target…[and] Georgia legislators adopting a resolution to study transportation electrification…” click here for more

    Monday, May 16, 2022

    Monday Study – The Everywhere Drive To Modernize The Grid

    The 50 States of Grid Modernization: Q1 2022

    Rebekah de la Mora Brian Lips Vincent Potter Autumn Proudlove David Sarkisian, April 2022 (North Carolina Clean Energy Technology Center)

    Executive Summary

    WHAT IS GRID MODERNIZATION?

    Grid modernization is a broad term, lacking a universally accepted definition. In this report, the authors use the term grid modernization broadly to refer to actions making the electricity system more resilient, responsive, and interactive. Specifically, in this report grid modernization includes legislative and regulatory actions addressing: (1) smart grid and advanced metering infrastructure, (2) utility business model reform, (3) regulatory reform, (4) utility rate reform, (5) energy storage, (6) microgrids, and (7) demand response.

    Q1 2022 GRID MODERNIZATION ACTION

    In the first quarter of 2022, 49 states plus DC took a total of 578 policy and deployment actions related to grid modernization, utility business model and rate reform, energy storage, microgrids, and demand response. Table 1 provides a summary of state and utility actions on these topics. Of the 578 actions catalogued, the most common were related to deployment (128), policies (104), and financial incentives (103).

    TOP 5 GRID MODERNIZATION DEVELOPMENTS OF Q1 2022

    Five of the quarter’s top policy developments are highlighted below.

    Virginia Regulators Approve Dominion Energy’s Grid Transformation Plan

    In January 2022, the Virginia State Corporation Commission approved Dominion Energy’s Phase II Grid Transformation Plan. The $666.5 million plan includes investments in AMI, a customer information platform, a DER management system, intelligent grid devices, fault isolation and service restoration, voltage optimization, and cybersecurity. Dominion has also provided a timeline for system-wide implementation of time-varying rates and an opt-in systemwide peak time rebate program.

    Grid Modernization Roadmap Released in New Mexico

    The New Mexico Energy, Minerals, and Natural Resources Department released its grid modernization roadmap in January 2022, following a working group process. The roadmap includes a number of consensus recommendations, including investing in AMI, updating interconnection rules and advanced inverter standards, creating a transmission planning group, and strategically deploying energy storage.

    Hawaii PUC Approves Bring Your Own Device Tariff Framework

    The Hawaii Public Utilities Commission issued an order in January 2022, establishing an advanced DER tariff offering, which will be a Bring Your Own Device tariff. The tariff will include three enrollment options – Level 1 will involve participants making certain dispatch commitments, Level 2 will involve the utility controlling dispatch for a predetermined number of events, and Level 3 will involve compensation for system grid services. The details of these tariff options will be addressed further in Phase 2 of the proceeding.

    Maine and New Hampshire Regulators Address Statewide Energy Data Platforms

    The Maine Public Utilities Commission completed its report on the feasibility of a statewide energy data platform during Q1 2022, finding that there is no existing solution that can provide the desired functionality and that the cost and complexity for such a platform would be significant. Meanwhile, New Hampshire regulators approved a design and framework for a statewide energy data platform authorized by 2019 legislation.

    New Jersey Regulators Approve AMI Deployment for Jersey Central Power & Light

    The New Jersey Board of Public Utilities issued an order in February 2022, approving Jersey Central Power & Light’s proposed deployment of AMI throughout its service territory. The utility will install 1.15 million advanced meters, totaling $390 million in capital investment. The decision also specifies that customer AMI usage data belongs to the customer, who may share it with third parties.

    MOST ACTIVE STATES AND SUBTOPICS OF Q1 2022

    The most common types of actions across the country related to energy storage deployment (80), utility business model reforms (51), smart grid deployment (43), advanced metering infrastructure deployment (35), and time-varying rates (30).

    The states taking the greatest number of actions related to grid modernization in Q1 2022 can be seen in Figure 4. New York, Massachusetts, California, Illinois, and Minnesota saw the most action during the quarter, followed by Michigan, Hawaii, Washington, Connecticut, and Missouri. Overall, 49 states, plus DC, took actions related to grid modernization in Q1 2022.

    TOP GRID MODERNIZATION TRENDS OF Q1 2022

    States Examining Decommissioning and Recycling of Energy Storage Systems

    State legislatures considered numerous bills during Q1 2022 calling for the examination of decommissioning and recycling processes for energy storage systems. South Carolina lawmakers enacted a bill directing the Department of Health and Environmental Control to develop regulations to manage the decommissioning of solar and energy storage systems in excess of 13 acres. In Virginia, state legislators enacted bills requiring that the State Corporation Commission create a task force to analyze the life cycle of energy facilities including solar, wind, and/or battery storage. The study is to address recycling and salvage opportunities, waste strategies, and decommissioning. Legislation introduced in Tennessee would require a study that addresses end-of-life management for energy storage systems, while a Louisiana bill would establish decommissioning requirements for solar facilities, including those with energy storage.

    Utilities Pursuing Resiliency-As-A-Service Programs

    A growing number of utilities are requesting approval for “resiliency-as-a-service” programs involving customer-sited, utility-owned battery storage. In California, Liberty Utilities filed an application for a customer resiliency program, including a behind-the-meter battery energy storage offering targeting medical baseline, critical infrastructure, and large commercial segments. Liberty Utilities will own and maintain the storage systems, with participants making monthly payments. Xcel Energy filed an application with Colorado regulators to implement a resiliency service program tariff, providing utility-owned battery storage or other resiliency assets to commercial customers. DTE Electric proposed a customer-sited, utility-owned residential and commercial battery storage program in Michigan, and Georgia Power is currently developing a resilience asset service tariff to provide utility-owned distributed energy resources to commercial and industrial customers.

    State Legislators Exploring Financing and Incentives for Resiliency Improvements

    Across the country, state legislators have been considering new incentives and financing opportunities for resiliency improvements, including battery storage and microgrids. Legislation introduced in Louisiana would establish a disaster resiliency and grid stability battery incentive program, while a bill that did not advance in Florida would have created an energy security and disaster resilience pilot focused on solar-plus-storage for critical disaster resilience facilities. A Colorado bill would create a grant program to support microgrids for community resilience, and a bill introduced in California would provide grants to help local governments develop community energy resilience plans. Several states considered bills that would allow resiliency improvements to qualify for property assessed clean energy financing, with bills in Alaska and Pennsylvania advancing through one chamber and bills in Virginia and Wisconsin being signed into law.

    Saturday, May 14, 2022

    Carbon Offsets Go Wrong

    Carbon offsets can be part of the solution to the climate crisis but they have to be done right, with transparency, integrity, and rigorous accounting. From thejuicemedia via YouTube

    Russia Uses Electricity As A Weapon In Europe

    Russia is cutting the natural gas supply to EU countries to try to turn them against Ukraine. It isn’t working. From WION via YouTube

    Wildfires Are Driving Firefighters Nuts (No Joke)

    Don’t forget this dreadful cost of the climate crisis in calculating the costs and benefits of the energy transition From CNBC Television via YouTube

    Friday, May 13, 2022

    New Records For New Energy

    Renewable power is set to break another global record in 2022 despite headwinds from higher costs and supply chain bottlenecks

    11 May 2022 (International Energy Agency)

    “…The world added a record 295 gigawatts of new renewable power capacity in 2021, overcoming supply chain challenges, construction delays and high raw material prices…, according to the [according to the International Energy Agency] Renewable Energy Market Update… Global capacity additions are expected to rise this year to 320 gigawatts…Solar PV is on course to account for 60% of global renewable power growth in 2022, followed by wind and hydropower…

    In the European Union, annual additions jumped by almost 30% to 36 gigawatts in 2021…The additional renewables capacity commissioned for 2022 and 2023 has the potential to significantly reduce the European Union’s dependence on Russian gas…[depending] on the success of parallel energy efficiency measures to keep the region’s energy demand in check…Renewables’ growth so far this year is much faster than initially expected, driven by strong policy support in China, the European Union and Latin America…

    The US outlook is clouded by uncertainty over new incentives for wind and solar and by trade actions against solar PV imports from China and Southeast Asia…[T]he amount of renewable power capacity added worldwide is expected to plateau in 2023, as continued progress for solar is offset by a 40% decline in hydropower expansion and little change in wind additions… The cost of installing solar PV and wind plants is expected to remain higher than pre-pandemic levels throughout 2022 and 2023…[but remain] competitive because prices for natural gas and other fossil fuel alternatives have risen much faster… click here for more

    Russian NatGas Started The War In 2021

    Gazprom set the Russian invasion of Ukraine in motion

    Alan Riley, May 3, 2022 (Atlantic Council)

    In the run-up to Russia’s invasion of Ukraine, Gazprom was already busy setting the stage…[by keeping EU natural gas] supplies low and prices high in advance of the conflict. Moscow wanted to keep the Europeans vulnerable and therefore less likely to intervene when Russia invaded Ukraine…[Gazprom] held back natural gas from the European spot markets, and as a consequence, gas prices in Europe spiraled to unheard-of levels of more than $1000 per thousand cubic meters over the winter. Gazprom also refused to fully refill European storages, leaving energy commentators across the continent obsessing daily throughout the winter at the low level of gas stocks…

    …[A]s China came out of lockdown beginning in the spring of 2021, Chinese demand accelerated, creating a major global knock-on effect on natural gas prices…[T]his price spiral was exacerbated by a series of supply disruptions. However, Gazprom actions turned what would have been an expensive winter into a major European energy crisis…[T]his softening-up exercise did not ultimately deter the European Union from supporting Ukraine…[but] high natural gas prices and low storage levels still deter politicians in some EU member states, notably Germany and Austria, from voicing full-throttled support for Ukraine…

    Gazprom has so far been able to avoid scrutiny…partly because it began its softening-up operations well before the actual invasion took place on February 24 and partly because the supply decisions made by Gazprom looked at first sight like ordinary commercial decisions from outside the market. In fact they were not….Gazprom refilled storages across Europe—some of which it owned—through summer, in time for the winter heating season…Then suddenly, in the spring of 2021, it…began to reduce its supply to the European spot market…[which] increased spot prices…This pricing strategy was reinforced by discontinuing its more-than-decade-long practice of refilling European gas storages…By December 2021, European gas storages were at the lowest point at any time in the last five years. Gazprom made the situation still worse by draining its own storages to fulfill its own contracts rather than importing more gas…[which left] European gas storage dangerously low at the height of winter, increased market panic, and further inflated gas prices…

    In no way can Gazprom’s actions from the spring of 2021 and then on into the winter of 2021-22 be viewed as the decisions of a normal commercial supplier…[Gazprom’s reputation as a reliable and stable supplier of gas] was abandoned by the Russian state and Gazprom last year in the interest of winning a war against Ukraine…Europe did open itself to be able to be softened up…[States] undertook decarbonization without thinking through the implications for supply security, particularly by switching off coal and then deciding to just import more Russian natural gas…[A] focus on supply security is likely to become a key part of a redesigned European energy security policy…[by] making greater use of non-Russian gas sources (including LNG), deploying renewables at greater scale, and encouraging wider acceptance and adoption of nuclear power…The mistake the Kremlin made in using Gazprom so explicitly as a weapon in its war-making is that it left Gazprom open to being heavily regulated by the EU…” click here for more

    Wednesday, May 11, 2022

    ORIGINAL REPORTING: Automated Customer Grid Services Coming In California

    Energy Agency May Turn Automation of Grid-Connected Devices into Reality

    Herman Trabish, January 11, 2022 (California Current)

    Editor’s note: Electricity customers will soon have automated opportunities to provide services to the power system as part of the ongoing energy transition.

    The California Energy Commission took the key first step toward a customer-led power sector that would help balance the grid during times of stress with the launch of its Load Management Standards rulemaking in late December. The proposed standards begin the process of capturing demand flexibility from customers’ distributed energy resources—from electric vehicles to water heaters—through automated responses to real-time price signals, Commissioner Andrew McAllister told Current.

    These long-overdue load management standards will help build a cloud-based “platform” in which utilities upload “a publicly accessible statewide rate database” that can be used by large and small energy users, he said. With advanced meters, communications, and automation technologies, customers and third-party aggregators gain the ability to take advantage of rates to optimize electricity usage and minimize economic and environmental impacts, according to the final CEC Staff Report on the rulemakingclick here for more

    The Energy Transition’s Grid Modernization Marches On

    The 50 States of Grid Modernization Q1 2022: States Focus on Promoting Grid Resiliency During Q1 2022

    April 28, 2022 (North Carolina Clean Energy Technology Center [NCCETC])

    “…[NCCETC’s The Q1 2022 50 States of Grid Modernization] finds that 49 states, as well as the District of Columbia, took actions related to grid modernization during Q1 2022…with the greatest number of actions relating to energy storage deployment (80), utility business model reforms (51), smart grid deployment (43), advanced metering infrastructure deployment (35), time-varying rates (30), and data access policies (28)…

    A total of 578 grid modernization actions were taken during Q1 2022. New York, Massachusetts, California, Illinois, Minnesota, Michigan, and Hawaii took the greatest number of actions during the quarter, followed by Washington, Connecticut, and Missouri…[Three trends in grid modernization actions taken in Q1 2022 were] (1) states examining decommissioning and recycling of energy storage systems; (2) utilities pursuing resiliency-as-a-service programs; and (3) state legislators exploring financing and incentives for resiliency improvements…

    …[The top five policy developments of Q1 2022 were…Virginia regulators approving Dominion Energy’s grid transformation plan…The New Mexico Energy Minerals, and Natural Resources Department releasing its grid modernization roadmap…The Hawaii Public Utilities Commission approving a bring your own device tariff framework…Maine and New Hampshire regulators addressing statewide energy data platforms…[and] New Jersey regulators approving Jersey Central Power & Light’s AMI deployment…” click here for more

    Monday, May 09, 2022

    Monday Study – For The Energy Transition, Performance Matters

    Performance-based regulatory strategies to accelerate beneficial electrification

    Jesse Hitchcock, Meryl Compton, Bill LeBlanc, Steven Day, March 30, 2022 (Esource)

    Key takeaways

    States are increasingly required to advance beneficial electrification, and policy changes like performance-based regulation (PBR) can help.

    Using PBR shifts the regulatory focus toward long-term, societal benefits.

    PBR can align societal goals with the utility’s business goals. For example, beneficial electrification can achieve societal goals like reducing carbon while also meeting utility goals.

    Even if PBR isn’t feasible now, utilities can take small steps to support beneficial electrification and pursue larger regulatory reforms

    Beneficial electrification can be one of the primary ways to reach aggressive carbon-reduction goals while keeping energy costs down for utility customers.

    Utilities have a role in electrification, but their goals often don’t align with society’s best interest. Electrification initiatives that focus solely on increasing load or utility revenue are difficult to claim as beneficial because focusing only on the economic benefits of electrification could:

    Put upward pressure on rates

    Increase free-ridership

    Increase inequity in programs

    Reduce energy reliability

    Increase greenhouse gas (GHG) emissions

    If done correctly, utilities’ beneficial-electrification initiatives can reduce carbon, improve grid management and efficiency, and lower customer costs.

    Utilities can encourage regulatory changes that support beneficial electrification by quantifying holistic benefits for the environment, grid, and their customers.

    With PBR, utilities can be rewarded for quantifying and advancing these societally beneficial outcomes. Moving toward PBR comes with a range of options, and utilities can apply the approach broadly or selectively in areas like beneficial electrification.

    Societal goals for regulation may include:

    Increasing electric system reliability

    Reducing carbon

    Putting downward pressure on rates through grid optimization

    Deferring infrastructure investments through efficiency and demand-side management programs

    Providing equitable access to the benefits of energy programs and electricity

    None of these goals directly require utilities to increase or decrease demand. The question becomes, How can regulation motivate regulated utilities in a way that also benefits society?

    Regulatory reform isn’t a one-size-fits-all solution, and the answer to this question will vary by jurisdiction. Regulators, utilities, environmental organizations, low-income advocacy groups, solution providers, consumers, and businesses will have to determine the best goals for each region.

    To help these parties set goals and make plans, this report details PBR approaches in the US, but the principles apply to Canada too. It also gives a roadmap for how utilities can create increasingly strong business cases, incorporate more-appropriate cost-effectiveness tools, and drive a more supportive regulatory environment for beneficial electrification.

    State mandates to advance beneficial electrification

    Most states and provinces don’t mandate beneficial electrification in the same way they mandate energy efficiency. And while many investor-owned utilities have shareholder incentives or earnings adjustments for their efficiency portfolios, they haven’t yet applied those mechanisms to beneficial-electrification initiatives.

    But states are starting to write beneficial electrification into policies. Using ACEEE’s 2020 report State Policies and Rules to Enable Beneficial Electrification in Buildings through Fuel Switching (PDF) and our own research, we identified nine states with policies that directly encourage electrification (figure 1).

    Figure 1: States with beneficial-electrification mandates

    In 2021, state legislatures in Illinois, Minnesota, Colorado, and Washington implemented new laws that support beneficial electrification. To read more about the 2021 mandates, see Colorado Senate Bill 21-246, Illinois’s Energy Transition Act (PDF), Minnesota’s Energy Conservation and Optimization (ECO) Act, and the Washington Climate Commitment Act (PDF).

    How to rethink the utility incentive structure with PBR

    Utilities and regulators are increasingly juggling economic, environmental, and societal priorities. There are three strategic questions a utility can ask itself to decide whether it should pursue new regulatory frameworks:

    What outcomes are regulators trying to achieve?

    Are utility incentives aligned with these goals?

    Do current regulations impede progress toward the goals?

    In some cases, cost-based regulation can conflict with achieving the shared benefits from electrification. If utilities aren’t incentivized to achieve these shared goals, they’ll continue to prioritize investing in infrastructure over modern solutions such as distributed energy resources (DERs) or transportation electrification. PBR can help utilities meet these complex societal goals while delivering value to shareholders.

    An explanation of PBR

    Capital-intensive investments aren’t always the most beneficial for customers, society, or the grid. Instead of rewarding utilities for electricity sales and capital investments, PBR ties utilities’ profit to their performance toward meeting societal, high-level goals.

    It does this by rewarding the utility for meeting or exceeding specific and measurable goals, such as:

    Reducing carbon

    Keeping rates below a threshold

    Increasing financial benefits to customers, relevant workforces, and the economy

    PBR systems can have several different elements that work in tandem to change utility motivations (figure 2). Some of the core components are performance incentive mechanisms (PIMs), multiyear rate plans (MRPs), and revenue or profit adjustments.

    A utility may choose to adopt many of these elements and focus on high-level, societal outcomes (full PBR) or mix and match the elements that work best for its unique circumstance (partial PBR). For example, the Lawrence Berkeley National Laboratory report Performance-Based Regulation in a High Distributed Energy Resources Future (PDF) outlines six possible PBR scenarios to increase adoption of DERs.

    Figure 2: How PBR components contribute to shifting utility goals

    This diagram shows how different elements of PBR compare to each other based on the desired outcomes and the departure from cost-based regulation. Some components such as activity-focused PIMs or MRPs can shift the utility’s focus slightly.

    Full PBR incorporates several of these components and PIMs. PIMs set the targets, metrics, and financial incentives for progress toward clearly defined goals. They can apply to traditional goals such as reliability and safety or incentivize performance on emerging policy goals like electrification of buildings and vehicles, avoided carbon emissions, and peak demand reductions.

    Although PBR is a broad tool, the PIMs define specific, quantifiable goals and make sure that utilities get rewarded for achieving these goals. PIMs can set goals for high-level, societal benefit or they can focus on program- or activity-oriented goals like enrolling a certain number of customers in a program.

    The PIMs need to be specific enough for the utility to attribute its efforts without unintentionally stifling progress or innovation. If a metric is too high-level, it might not be clear how to measure impact and determine whether the utility deserves to be rewarded for the progress. Examples of outcomes that PIMs could incentivize include:

    Peak demand reduction

    Accelerated interconnection processes for new energy resources

    Optimized EV charging

    EV charging infrastructure deployment and operation

    Improved customer service and energy-equity outcomes

    MRPs. MRPs extend the time between rate cases to multiple years, giving the utility more opportunity to improve performance. This reduces the regulatory burden and gives the utility more flexibility to achieve innovative targets.

    Learn more about revenue decoupling

    Revenue and profit adjustments. These adjustments make sure utilities can get financially compensated for meeting goals.

    Decoupling is an example adjustment that breaks the tie between revenue and sales.

    Decoupled utilities receive stable revenue at an amount set by the regulator, allowing them to pursue efficiencies and encourage energy conservation without losing revenue.

    Many utilities that pursue PBR use decoupling, but alternative revenue and profit adjustment mechanisms can also give positive incentives for achieving goals outside of energy efficiency. Alternative mechanisms include rate-of-return adders or shared-savings mechanisms, which let the utility share savings with customers.

    An example of PBR

    In Hawaii, market conditions, legislative ambition, and regulatory vision all led to the state adopting PBR. As Dan Cross-Call, a former principal at Rocky Mountain Institute (RMI), explains:

    The PUC needed to deliver on strong direction from legislators, but there was also a strong sense of responsibility and purpose around changing the industry.

    Even in jurisdictions where regulators don’t have a similar vision, PBR can give utilities an opportunity to align with overarching regulatory goals. Cross-Call says:

    PIMs can … address emergent outcomes that need attention, including incentivizing outcomes that wouldn’t necessarily be addressed under traditional operations.

    DERs increase. Hawaii has historically had the highest electricity rates in the US. A high reliance on imported petroleum for electricity generation has led to prices three times the national average. As a result, the utilities and customers moved toward rooftop solar and grid-scale renewable electricity.

    The press release Solar Energy Hits New Milestone in Hawaii details Hawaii’s major clean energy accomplishment: more than 1,000 megawatts (MW) of solar energy integrated into the grid.

    This progress hasn’t been driven by market conditions alone. The Hawaii Clean Energy Initiative set an ambitious legislative mandate to achieve 100% renewable electricity by 2045. Legislators, regulators, and stakeholders in Hawaii recognized that meeting these goals would require a reform of the utility business model, starting with approving decoupling in 2010.

    Learn more about Hawaii’s clean energy transition

    Decoupling and audits were first steps. “Decoupling was a big first step” says commissioner James Griffin, chair of the Hawaii PUC, “but the final result came from a long progression of legislation, commission decisions, and industry events. It was a 10-year evolution of the regulatory construct.”

    According to former public utility commissioner Karl R. Rábago, auditing programs and operations is a valuable tool for utilities getting started with PBR:

    Hawaii’s audit identified operational headroom that created immediate savings opportunities and allowed them to feel safe going into PBR. This gave them more comfort while trying to earn the initial performance incentives.

    PIMs helped the utility expand goals. In June 2021, the Hawaii PUC approved new PIMs for utilities. The PUC worked with stakeholders to choose the PIMs that reward utilities for exemplary performance toward goals involving DERs, low-income customers, and renewable energy. Check out the Hawaii PUC press release Hawaii PUC Approves Portfolio of Performance Mechanisms for Hawaiian Electric (PDF) for details on the new PIMs.

    Thoughtful regulatory reform is critical. For Griffin, an important takeaway from Hawaii is that “[f]ull-blown reform might not be the right place to start. You need lots of time to lay the groundwork and thoroughly understand all the options and their impact.”

    Despite this, Griffin doesn’t want other utilities and regulators to be afraid to try something new: “There can be a lot of trepidation and uncertainty about overhauling the regulatory framework, but it’s still something to explore and be bold with.”

    How PBR can advance beneficial electrification

    Despite the societal benefits of beneficial electrification, traditional regulatory policies don’t incentivize utilities to work toward that goal. PBR redefines what determines a utility’s performance, making it possible to reward utilities for advancing beneficial electrification.

    Minnesota… North Carolina…Illinois…New York…

    How to design a roadmap for a new regulatory framework

    While a utility can’t change its regulatory model unilaterally or overnight and fully adopt PBR, taking small steps can pave the path for larger reforms down the road.

    Start small

    Utilities can use PBR tools on a small scale to support beneficial-electrification initiatives. For example, Minnesota’s e21 Initiative Phase II Report (PDF) explains how the state considered everything from adding performance incentives onto its cost-of-service model to comprehensive reform.

    Several of our interviewees said that applying bite-sized pieces of PBR can be an effective approach and could work well with beneficial-electrification initiatives.

    “Full utility reform isn’t always essential to achieve a utility’s beneficial-electrification goals,” says Cross-Call. He suggests stepping back and identifying the barriers to implementation in your area:

    Ask yourself the question, What are the roadblocks to getting there? Identify the top two or three, and then consider what reforms might address those.

    Scott suggests that utilities experiment with using transportation or building efficiency as test options. He also stresses that regulatory reform doesn’t have to be holistic right away:

    It’s okay to not think about PBR as holistically as places like New York or Hawaii. It’s not a one-size-fits-all solution, and allowing states to see what pieces fit them best makes a lot of sense.

    As utilities explore their options with PBR, they could consider using elements of PBR and using PBR in one portfolio.

    Using elements of PBR. Several states are starting by implementing elements of PBR in a traditional cost-of-service framework:

    North Carolina started with a shared savings mechanism that incentivized performance in energy efficiency and demand-side management, according to the state’s Performance Based Regulation Study Group Work Products (PDF). It explores more PBR elements in House Bill 951 (PDF).

    Illinois had a performance-based rate and PIMs before taking on more elements of PBR in the 2021 Senate Bill 2408.

    Michigan operates under a traditional utility regulation model with elements of PBR. Public Act 295 let the commission set financial incentives for utilities that exceeded energy savings targets, as explained in Performance-Based Regulation Options: White Paper for the Michigan Public Service Commission (PDF).

    Pepco’s Multi-Year Plan page outlines why the utility proposed an MRP as an exploration of PBR. The plan also includes PIMs.

    Using PBR in one portfolio. PBR can also be used to target a specific policy or portfolio component like beneficial electrification, even without extra incentives or goals. The Michigan Public Service Commission white paper highlights several ways utilities and regulators can use PBR and PIMs in specific, emerging areas like electrification. Some examples of this bite-sized approach include:

    The New York State Department of Public Service has an earnings adjustment mechanism specifically for DERs, which encourages utilities to pursue beneficial electrification.

    National Grid Massachusetts proposed a transportation electrification performance goal. Colorado’s Senate Bill 21-246 (PDF) is exploring how performance incentives can help advance beneficial electrification.

    These changes help utilities recover their costs and earn performance-based incentives for exceeding beneficial electrification or emissions-reduction targets.

    Build a business and regulatory case for electrification

    Pursuing regulatory reform can take several years, so it’s important that utilities find a way to start electrification initiatives in the meantime. This will require utilities to work with regulators to redesign cost-effectiveness tools that better reflect the value of electrification.

    Non-energy benefits are an important part of the equation, but it’s imperative for utilities, regulators, and stakeholders to develop tools that can assign a value to these benefits and compare them fairly to the costs.

    Moving away from kilowatt-hour. Measuring kWh savings isn’t the most effective strategy for measuring the impact of beneficial electrification. Luckily, there are other ways to measure the impacts. And the right strategy will vary by utility.

    Measuring kWh savings isn’t the most effective strategy for measuring the impact of beneficial electrification.

    A few utilities have switched from kWh to million Btu (MMBtu) as the primary reporting metric. According to a 2020 Evaluation of PSEG Long Island Energy Efficiency Programs (PDF), the switch lets them pursue beneficial-electrification measures that increase electricity consumption but lower overall energy use and emissions. And a 2020 North Carolina Energy Regulatory Process packet (PDF) also mentions that using Btu as the core metric would “give credit for electrification.”

    But switching to MMBtu can have drawbacks. It doesn’t differentiate the impacts based on the generation mix of the grid, which may determine whether an electrification project is beneficial. Using MMBtu might also create challenges if natural gas prices are high or if the grid is significantly less carbon intensive.

    Figure 4: Policy changes that use PBR tools to advance beneficial electrification

    Energy Efficiency Resource Standards (EERSs) can be another way to support beneficial electrification.

    EERSs are policies that require utilities to achieve specified energy savings. In the US, 27 states have implemented some form of EERS as of 2019. According to ACEEE’s Next-Generation Energy Efficiency Resource Standards (PDF) report, states are beginning to reexamine their EERSs in response to four key policy drivers: decarbonization, cost, equity, and grid value. States exploring how EERSs can evolve have taken three main approaches. They can set:

    Resource-specific goals for energy savings (typically MWh, therms, or peak MW). An overarching fuel-neutral goal for a portfolio, measured in Btu savings, or avoided GHG and CO2-equivalent emissions.

    Multiple goals that may combine resource-specific and fuel-neutral goals. This approach could include non-energy goals like customer service and equity.

    States that include beneficial electrification in their EERSs

    According to ACEEE’s report, EERSs with multiple goals can enable both energy efficiency and beneficial electrification, particularly if they include a fuel-neutral goal and allow fuel-switching. Goals that allow fuel-switching can help beneficial electrification by letting utilities prioritize the highest-potential GHG savings opportunities regardless of fuel type.

    Examples of states that are reworking their EERSs in ways that could support beneficial electrification are:

    New York has an overarching fuel-neutral savings goal, resource-specific goals for electric and gas, and a goal for heat-pump savings.

    Massachusetts has overarching goals for lifetime MMBtu savings, CO2-equivalent reductions, and net economic benefits. There are resource-specific goals for electric, natural gas, and peak demand savings.

    Hawaii has resource-specific goals and is considering goals for fossil-fuel reductions, CO2-equivalent reductions, and cumulative persisting electricity and peak demand savings.

    Using cost-benefit analyses that reflect goals and priorities. Utilities without societal or resource cost-effectiveness tests can use GHG adders to support carbon reduction. Adders are multipliers that let you estimate net benefits without doing substantial analysis to monetize the value of a benefit.

    Another way to create a stronger incentive for electrification is by incorporating societal metrics like the social cost of carbon (SCC), which accounts for the damage resulting from emitted carbon, into cost-effectiveness tools.

    Using the SCC rewards utilities for delivering electrification programs that displace carbon-intensive fuels. Chris Porter, a director at National Grid, discussed this change at the E Source Forum 2021. He shared that accounting for SCC is shifting the focus to beneficial electrification. He added that using SCC let the utility focus on “displacing fuels for heating” instead of only focusing on MWh demand reductions. This allows the utility to attribute the societal benefit of electrification to its programs.

    Learn more about designing cost-effectiveness tests

    Massachusetts and Colorado have legislation that directs program administrators to include the SCC in cost-effectiveness testing. To learn more about how these states apply the SCC, see Massachusetts’s press release Governor Baker Signs Climate Legislation to Reduce Greenhouse Gas Emissions, Protect Environmental Justice Communities and Colorado’s SB 21-246: Electric Utility to Promote Beneficial Electrification.

    Ideally, cost-effectiveness should account for all substantive impacts that are relevant to policy goals, even the impacts that are difficult to quantify and monetize.

    Chapter 10 of the National Standard Practice Manual for Benefit-Cost Analysis of Distributed Energy Resources (PDF) describes the benefits and costs that are most relevant for electrification (such as grid resilience, program costs, and emissions reductions). The manual also explains how to address the challenges with traditional cost-effectiveness testing. Coordinate regional efforts

    In any regulatory environment, advancing electrification initiatives inevitably involves multiple stakeholders from government, industry, and other organizations. Colorado’s Senate Bill 21-246 explicitly encourages municipally owned cooperative electric associations and wholesale electric cooperatives to “participate in statewide or regional initiatives” to advance efficient electric technologies.

    This partnership allows the utilities to give customers and heat-pump solution providers a consistent experience while working toward electrification policy goals.

    Having multiple stakeholders may complicate the initiatives, but New York has shown that partnering with other organizations can be beneficial.

    In 2018, the New York Public Service Commission set a goal to save at least 5 trillion Btu through heat pumps and directed utilities to work with the New York State Energy Research & Development Authority (NYSERDA) to prepare filings. NYSERDA had an existing goal to reduce emissions from the heating and cooling sector outlined in its Renewable Heating and Cooling Policy Framework (PDF). The framework allows NYSERDA to work with utilities and energy service companies to pilot third-party ownership and other innovative models under Reforming the Energy Vision (REV). To reduce participation barriers, the New York Electric Utilities partnered with NYSERDA to codeliver the state-funded NYS Clean Heat Statewide Heat Pump Program. This partnership allows the utilities to give customers and heat-pump solution providers a consistent experience while working toward electrification policy goals outlined by the state. See the program’s manual (PDF) for details.

    Be creative

    Proposing budget flexibility or requesting funding support are creative ways utilities can advance electrification initiatives while working toward larger regulatory reform. Budget flexibility in Colorado. In its 2021–23 Transportation Electrification Plan (PDF), Xcel Energy Colorado requested the flexibility to move funds within and between portfolios and increase or decrease funding where needed. This flexibility would enable it “to optimize its strategy in real time as it learns about customer preferences and the evolving EV landscape.” The commission approved this request and allowed the utility to move up to 50% of the funds budgeted for each year between portfolios…

    Saturday, May 07, 2022

    Stop Russia NatGas Without Kick-Starting U.S. LNG?

    The challenge is delivering the natgas Europe needs without building domestic infrastructure and further entrenching the U.S. fossil fuel industry. From CNBC Television via YouTube

    Places To Live Through The Climate Crisis

    The climate crisis might revitalize the Rust Belt. From CNBC via YouTube

    Water Use Cutbacks In California

    Californians can water only one day a week. From KCRA via YouTube

    Friday, May 06, 2022

    The Climate Crisis-Pandemic Link

    The unsettling reason that climate change could lead to more pandemics; As the climate changes, wild animals and humans are apt to cross paths more often — opening the door for disease

    Matthew Rosza, May 2, 2022 (Salon)

    “…[As humanity careens toward a climate crisis, it is entirely possible] that a man-made event will lead to a pandemic, rather than a pandemic changing the course of man-made events…[A new paper argues] that as climate change worsens, animals will be forced to move out of their now-unlivable habitats. As they do this, mammals with foreign viromes (or the ecosystem of viruses that exist within their bodies) will have more opportunities to interact with both humans and other unfamiliar animals. This will give viruses more chances to either directly infect people or to do so by using another animal…

    …[This shows an] urgent need to pair viral surveillance and discovery efforts with biodiversity surveys tracking species' range shifts, especially in tropical regions that harbor the most zoonoses and are experiencing rapid warming…[A] similar process may have triggered the COVID-19 pandemic…[I]t is clear from DNA evidence that the SARS-CoV-2 virus that causes COVID-19 previously evolved to live in bats and pangolins before spreading to humans…[Dr. Michael E. Mann, a distinguished professor of atmospheric science at Penn State University, and Dr. Ken Caldeira, an atmospheric scientist at the Carnegie Institution for Science's Department of Global Ecology, said] habitat destruction and deforestation as two among many variables…” click here for more

    Europe’s Energy Transition Price Tag

    How much will it cost Europe to switch to clean energy by 2050?

    Victoria Masterson, 27 April 2022 (Workd Economic Forum)

    “…[The cost for Europe to switch] to clean energy by 2050 will be $5.3 trillion…[BloombergNEF (BNEF) European Energy Transition Outlook 2022 modeled] an “Economic Transition Scenario” in which] Europe’s use of fossil fuels drops by 28% by 2050. A collapse in coal use is the biggest contributor, while the rise of electric vehicles helps to cut oil demand by 30% by 2050…[N]atural gas demand falls by only 5%...because of “limited economic alternatives” to gas for heating buildings…[F]alls in gas demand will start to flatten out after 2030…

    Fossil fuels will continue to make up 60% of Europe’s energy mix by 2050 in this scenario – a relatively small reduction from 69% in 2022…[In a more ambitious “Net Zero Scenario” fossil fuels are] completely driven out by 2050. This is enabled by a switch to electrification and green hydrogen…Wind and solar become Europe’s main source of energy…They replace fossil fuels and remove energy-related carbon emissions…[through] a cut of more than 50% in oil demand…Europe would need to promote take-up of electric vehicles, heat pumps and electrified industrial processes…

    …Wind and solar made up 18% of Europe’s energy mix in 2021, but combined with battery storage this could reach 70% by 2035, BNEF’s Net Zero Scenario suggests…To be on track for this, Europe needs to double its solar and onshore wind power capacity by 2025, compared with 2016-20. And it will need to add another 60-80% on top of that between 2026 and 2030…In total, Europe needs $3.8 trillion of investment in new power generation projects – especially wind and solar – between 2021 and 2050…It also needs to spend $1.5 trillion over the same period on facilities to produce clean hydrogen…” click here for more

    Wednesday, May 04, 2022

    ORIGINAL REPORTING: Big Changes, Backlash To California Rooftop Solar Support

    CPUC Proposes Big Changes to Rooftop Solar Payments and Charges

    Herman K. Trabish, December 14, 2021 (California Current)

    Editor’s note: California regulators continue to ponder how to balance the need to protect low-income solar customers and its rooftop solar industry.

    A firestorm of controversy followed the just-released proposed decision from the California Public Utilities Commission that would make big revisions to the compensation paid to rooftop solar owners under Net Energy Metering.

    The “enormous” charges and reduced payment are “a big hatchet job to rooftop solar,” said Brattle Group Principal and nationally recognized rate design expert Ahmad Faruqui. NRDC Climate and Clean Energy Program Senior Scientist Mohit Chhabra countered that the proposed revisions released Dec. 13 balance solar growth with non-solar owners’ costs. He said it gives customers incentives to pair solar and batteries and increases access for lower-income customers.

    NEM is the payment credited to rooftop solar owners for generation their systems export to the grid. The proposed “successor tariff” makes seven changes to balance mandates in Assembly Bill 327, rooftop solar compensation’s enabling law.

    The PD revises an existing plan that “negatively impacts non-participant ratepayers,” is “not cost-effective” for most customer classes, and “disproportionately harms low-income customers,” Administrative Law Judge Kelly Hymes concluded. A CPUC-ordered study showed a shift of costs to low-income customers and a January 2021’s Lookback Study showed cost shifts in all customer classes, Hymes said.

    But those studies were flawed, solar defenders responded. Standard regulatory metrics show retail rate NEM shifts costs unjustly, but better approaches that recognize solar’s reliability value may alter those conclusions. That means the PD may not meet AB 327’s requirement to allow distributed solar “to grow sustainably,” they added.

    Among its seven key changes, the PD’s net billing plan separates import and export charges, phases out the existing NEM plan while protecting the ongoing emergence of a solar-storage market, and provides a 10-year payback to protect the solar industry… click here for more