NewEnergyNews

NewEnergyNews

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

While the OFFICE of President remains in highest regard at NewEnergyNews, this administration's position on climate change makes it impossible to regard THIS president with respect. Below is the NewEnergyNews theme song until 2020.

The challenge now: To make every day Earth Day.

YESTERDAY

  • TODAY’S STUDY: Using Economics To Grow Energy Efficiency Habits
  • QUICK NEWS, February 20: Cities’ Climate Fight Sets Goals; Solar On Every Roof; Wave Power For Ocean Water Desalination
  • THE DAY BEFORE

  • TODAY’S STUDY: Rewarding Utilities For Giving Customers What Customers Want
  • QUICK NEWS, February 19: The Campaign To Get Conservatives To Fight Climate Change; A Perfect Match Of Distribute Energy And The Grid; U.S. Navy Moves On Wave Energy
  • THE DAY BEFORE THE DAY BEFORE

  • Weekend Video: Colbert Nails EPA Head Pruitt
  • Weekend Video: Ocean Life And Offshore Wind, Better Together
  • Weekend Video: Australia’s 50,000 Home Virtual Power Plant
  • THE DAY BEFORE THAT

  • FRIDAY WORLD HEADLINE-Get Ready ‘Cause Here It Comes
  • FRIDAY WORLD HEADLINE-World Power Grids Are Ready For New Energy
  • FRIDAY WORLD HEADLINE-World Wind Numbers Reach New Highs
  • FRIDAY WORLD HEADLINE-Global Data Giants Drive New Energy Growth
  • THE LAST DAY UP HERE

    THINGS-TO-THINK-ABOUT THURSDAY, February 15:

  • TTTA Thursday-Conception In A Time Of Climate Change
  • TTTA Thursday-Introducing The EV Policy Fights
  • TTTA Thursday-The Oklahoma Wind War
  • TTTA Thursday-New Things To Do With Solar
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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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  • TODAY AT NewEnergyNews, February 21:

  • ORIGINAL REPORTING: Common Ground In Texas On How To Drive Utilities To New Energy
  • ORIGINAL REPORTING: Are Electricity Customers Ready For Dynamic Pricing?

    Wednesday, February 21, 2018

    ORIGINAL REPORTING: Common Ground In Texas On How To Drive Utilities To New Energy

    Texas stakeholders find common ground in utility revenue recovery for DERs State power sector players say DER growth should not hurt utility finances, but consensus over rate design reform remains elusive

    Herman K. Trabish, Aug. 2, 2017 (Utility Dive)

    Editor’s note: This story is part of the national effort to reform the utility business model that makes the power system more New Energy-friendly.

    A broad coalition of stakeholders in the Texas grid say investor-owned utilities (IOUs) should not have to risk their revenues to meet the demands of 21st century power consumers. Regulated utilities that advance energy efficiency and distributed energy resources (DERs) should have incentives or a rate structure that keeps them financially whole, according to a new consensus statement from the South-central Partnership for Energy Efficiency as a Resource (SPEER). SPEER members include top executives with Texas transmission and distribution (T&D) utilities, competitive electricity retailers, and advocates for efficiency, distributed resources, and energy management software. Though the group broke new ground by that regulated utilities have the right to financial protection, it could not agree on a specific remedies in the ratemaking process, SPEER CEO Bob King told Utility Dive.

    DERs — including demand response (DR), energy efficiency, storage and on-site generation like rooftop solar — can help relieve system congestion and avoid traditional infrastructure costs, King said. But because of a “complex and multidimensional” set of disincentives embedded in traditional ratemaking, “utilities have no incentive to invest in them, even if they reduce overall costs.” T&D utilities are obligated to their shareholders make investments on which they earn a rate of return by the hundred-year-old regulatory construct that was created to drive investments. Today, utilities need to use new, customer-owned energy efficiency resources that reduce customer costs and strengthen the system but on which they do not earn a rate of return that benefits their shareholders. There is no financial incentive for utilities to do that...click here for more

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    ORIGINAL REPORTING: Are Electricity Customers Ready For Dynamic Pricing?

    Beyond TOU: Is more dynamic pricing the future of rate design? Analysts say sending stronger price signals to residential ratepayers could help reduce peak demand, but consumer advocates are leery

    Herman K. Trabish, July 17, 2017 (Utility Dive)

    Editor’s note: Surprisingly, the wonky topic of utility rate design is becoming cool as more people realize it could be the key to bringing New Energy into the power system.

    Innovative ratemaking is the talk of the town. Trials of time-of-use rates, demand charges and time varying pricing are playing a growing role in the transformation of the electric power sector. California will deploy default time-of-use (TOU) rates in 2019 at an unprecedented scale. Landmark regulatory debates across the country have been resolved in recent months by stakeholder agreements to explore new ways to use rates to control spiking peaks. And research is beginning to point toward what works and what doesn’t. The magnitude of a TOU rate’s impact on peak demand depends on the off-peak to on-peak price ratio, Brattle Group Principal Ahmad Faruqui told Utility Dive. He also concluded that TOU rates are just a hint of how rate design can be used to lower electricity customer costs and integrate more clean energy. The better solution is dynamic pricing, he said.

    Faruqui’s conclusions are based on a Brattle study of 300 TOU pilots and trials. Unlike TOU rates, which include a modest price differential on each day, dynamic pricing involves alerting customers to steeper increases in per-kWh rates in advance of specific peak demand events. Instead of a small differential every day, the larger gap between peak and off-peak pricing is meant to drive more significant reductions during the highest demand days. Jayant Kairam, Environmental Defense Fund (EDF) California Clean Energy Director, sees TOU rates as a way the state can reliably and cost-effectively deploy DER. Research done for state regulators showed TOU rates could help save up to $700 billion annually by 2025. But Faruqui argues that advanced metering infrastructure (AMI) and dynamic pricing has the potential to better align pricing and costs with price signals that guide customer usage… click here for more

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    NO QUICK NEWS

    Tuesday, February 20, 2018

    TODAY’S STUDY: Using Economics To Grow Energy Efficiency Habits

    Forging a Path to the Modern Grid: Energy-Efficient Opportunities in Utility Rate Design

    February 2018 (Alliance to Save Energy)

    Executive Summary

    The past decade has seen a convergence of technology, policy and economic trends that have directly impacted the energy sector. New appliance standards and building codes have reduced the amount of energy we use. New communications and information technology have transformed electricity delivery and use from the analog world to the digital world. Prices for renewable generation have fallen; for example, solar PV prices have fallen by more than 60% since 2010,1 and the cost of wind projects have fallen by more than 90% since the early 1980’s. 2 As a result, electricity sales for the U.S. utility industry have been flat for years and the carbon intensity of the power grid fell by 21% between 2005 and 2015.

    Through it all, utility companies have been working to maintain safe, reliable and affordable service. But the way utilities have traditionally recovered much of their costs – through flat volumetric pricing (cent per kilowatt-hour), especially for residential and small commercial customers – is increasingly out of step with the needs of both the utility companies and the customer base they serve. As efficiency and distributed generation continue to put downward pressure on sales and in the absence of frequent rate increases, reliance on traditional, flat volumetric pricing makes it increasingly difficult for utilities to recover the fixed costs of existing assets and new investments needed for replacing aging infrastructure.

    Fortunately, the same technology and policy trends that are driving this misalignment can be called upon to help solve the problem. The Alliance believes that the transition to a grid that is reliable, resilient, decarbonized, automated, transactive, efficient and equity-driven (hereinafter referred to as a “modern grid”) can be enabled through good rate design.

    Appropriate combinations of rate designs and other ratemaking policies can support an increasingly clean energy system without detriment to reliability, exorbitant costs to consumers or degradation of utilities’ financial stability. Other benefits could emerge as well. System utilization would increase as customers manage their peak demand and provide headroom to bring on additional electrification of end uses. Price signals can more closely correspond to system costs, providing the correct incentives about what to deploy and where to deploy it. Customer rates can be managed due to an increase in energy supplies with zero fuel costs. And tying it all together will be the utility, coordinating the many pieces of technology that are plugged into its grid.

    There are a number of elements that will be important for attaining this vision, however: demand flexibility will be critical; cost-effective energy efficiency must be aggressively deployed everywhere; and zero- and low-carbon generation must play a part in both the bulk power grid and the local distribution grid. The ability to manage customer loads through demand-side management will be critical to balancing supply with load. Energy storage (both thermal and electrochemical) will play multiple roles, including maintaining power quality on the system.

    Also, products, services and markets must be developed and commercialized to coordinate everything, policies must be in place to shape the move toward a modern grid and rate design must support all these activities.

    Energy efficiency will continue to be a critical means to reduce the need for electricity generation. But we expect that to some degree in the future, the nature of achieving efficiency will change so that it focuses on not only how much electricity is used, but also when and where it is used. To ensure that this transition happens in a way that optimizes the deployment of all types of system resources, prices that recognize the possibility of bi-directional price signals, power flows and geographic and temporal costs are increasingly important.

    It is within this context that the Alliance to Save Energy (Alliance) convened the Rate Design Initiative (RDI), with input from a diverse set of rate design stakeholders, to develop principles and recommendations for rate design that can serve as a near-term guide for policymakers and regulators to help align their decisions with policy goals as they examine these complex issues in their own jurisdictions.

    All parties participating in the Alliance’s discussions fully acknowledge that a singular proposal will not apply to all markets. However, the core participants did reach consensus on a set of principles designed to drive future innovation in Demand Side Management (DSM) services and business models in response to changing customer needs and the evolution of distributed energy management, generation, storage and control technology. These are:

    • Rate designs should include the ability to collect for the use of the energy grid and to compensate customers for investments that provide verifiable local and system-wide cost savings compared to alternatives.

    • Rates should be designed, to the extent possible, to reflect the real-time, localized costs of service while assuring equity, limiting complexity and minimizing rate shock.

    • Rates that more accurately reflect the costs and savings resulting from time- and location-dependent demand management should be introduced as a platform for delivering innovative new energy services to customers.

    • Utility business models should be complementary with state energy goals and priorities.

    Based upon the principles developed with full consensus of the core RDI participants and consistent with its mission, the Alliance has set forth proposed elements to consider for a transitional rate design for those utility systems with advanced metering infrastructure (AMI) and for those without it.

    It is critical to note, however, that this white paper was not prepared with specific ratemaking or regulatory proceedings in mind; it should not be cited by any party in a specific ratemaking or regulatory proceeding as evidence that the Alliance endorses any specific proposal.

    Although many commercial and industrial customers today are served today by three-part tariffs, which include a customer charge, a demand (or kW) charge and a volumetric (or kWh usage) charge, the majority of residential and small commercial (collectively, mass-market) customers are served on traditional two-part tariffs comprised of customer and flat volumetric charges. The consensus of the RDI core participants is that the latter rate design will not assist us in transitioning to the modern grid that will benefit all customers in the future.

    Revenue decoupling is an important policy in many jurisdictions for many reasons, but the RDI participants stressed that it is insufficient to accomplish the needed transition and should not be viewed as a substitute for good rate design. At its core, revenue decoupling breaks the link between utility sales and revenue. By adjusting rates up or down depending on actual sales, decoupling ensures that the proper revenue will be recovered by utilities. In the short term, this can protect consumers from over-recovery if there is a hot summer and can protect utilities against under-recovery if energy efficiency programs are more effective than anticipated. The Alliance concludes on this issue that if rate design better aligns costs with prices, it will be complementary to the choice of decoupling as a policy tool.

    This report provides tools to stakeholders at the start of the journey to a modern grid; extensive analysis, pilot programming and stakeholder outreach and education will be necessary to complete it.

    Alliance to Save Energy Points for Consideration

    Utilities will begin the journey to a modern grid from different starting positions and with different factors that control the pace and character of the transition. Some states already have in place technology (such as AMI) and policies (such as revenue decoupling) that will enable this transition to occur more quickly than others. Some states may have laws or regulations that must be considered in concert with changes to rate design. In all cases, utilities must be responsive to the concerns of their stakeholders and the precedents of rate-setting bodies.

    Within this document, the Alliance provides a starting point for parties considering a new rate design, including elements of a transitional rate design that will encourage customers to manage their demand, including through both energy efficiency and demand response, while allowing utilities the opportunity to earn the revenues required for maintaining a safe, reliable, affordable, clean and sustainable grid. To do this, there must be a balance between encouraging demand-side efficiency and system energy efficiency, to the benefit of all. Key considerations include:

    1. The Alliance maintains that the development and implementation of any specific policy must be rigorously analyzed and tested against the “North Star” objective of maximizing system energy efficiency and reaping societal benefits, including minimizing greenhouse gas emissions and maintaining affordable energy access for all.

    2. The Alliance recommends that as a utility and its stakeholders consider whether and how to pursue a more advanced rate design, analyses and pilot programs should be conducted to gain real-world experience on how customers respond to rate design changes. These pilots should also test the effectiveness of different enabling technologies such as home automation systems. To the extent that this process demonstrates that the rate designs indeed prompt shifts in energy use and do not disproportionally impact subclasses of customers (such as low-income customers or urban apartment residents), the results can be used to design a rate structure that combines the most effective elements.

    3. The Alliance recommends that aggressive customer-education programs precede the deployment and roll-out of new rate designs. Such programs are a key and critical element to ensure that customers understand how best to manage their usage under a new rate structure before the new rates are implemented system-wide.

    4. For jurisdictions that do not have AMI, the Alliance proposes a rate structure that incorporates a customer charge plus a seasonal Time of Use (TOU) rate (with cent/kWh charges that vary by season of the year). In the absence of real-time metering capability, this rate structure represents a sound balance among numerous goals: encouraging demand-side energy efficiency, economic efficiency and system energy efficiency, sending price signals to customers about the cost of service and providing revenue sufficiency for utilities. For those utility systems without the technical capability to implement more granular pricing, tiered rates with seasonal variation in pricing are superior to flat volumetric rates in two ways: (1) these rates more accurately assign capacityrelated costs to the time of year when those costs are incurred; and (2) they link total energy use to peak demand, more accurately assigning peak demand costs to customers likely to be using the system during peak times.

    5. Where AMI is fully deployed, the Alliance recommends implementing three-part rate pilot programs, and if these are successful, the full consideration of a modified, three-part rate structure as a means of transitioning to the modern grid. All customers, including residential and small commercial customers, could have a customer charge, a demand charge and a volumetric charge. The customer charge would collect revenues for customer-related costs. The demand charge would be based on clear and demonstrable evidence of cost causation and designed to create incentives for customers to both use the grid as efficiently as possible and to shift usage from high-cost to low-cost periods, thus lowering overall system supply and delivery costs and improving overall system energy efficiency. The volumetric charge would be a time-of-use rate with kWh charges varying during three time periods per day.

    The Alliance believes that such a rate design could be constructed to:

    • continue to provide consumers with the incentives and ability to control their energy costs;

    • increase economic efficiency and system energy efficiency;

    • send appropriate price signals to the market for demand-side management investments;

    • help customers participate in improving the efficiency of the system as a whole, delaying or avoiding altogether the need for costly incremental infrastructure investments; and

    • enable utilities the opportunity to earn a reasonable rate of return on their assets.

    In this white paper, the Alliance to Save Energy offers suggestions on how states, utilities and other stakeholders could move forward to modify and transition rate designs for mass-market customers to make progress toward a modern grid. We believe that the sooner we begin down this road, the smoother the transition will be.

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    QUICK NEWS, February 20: Cities’ Climate Fight Sets Goals; Solar On Every Roof; Wave Power For Ocean Water Desalination

    Cities’ Climate Fight Sets Goals As the Trump administration retreats on climate change, US cities are moving forward

    Katherine Levine Einstein, David Glick, Maxwell Palmer, February 20, 2018 (The Conversation)

    “…[The White House infrastructure plan] contradicts the priorities of many local leaders who view climate change as a growing concern…Mayors overwhelmingly believe that climate change is a result of human activities… Perhaps even more strikingly, [a summer 2017 poll showed] two-thirds of mayors agreed that cities should play a role in reducing the effects of climate change – even if it means making fiscal sacrifices. Cleaner, smarter cities. [Almost two-thirds of the U.S. population lives in cities or incorporated places. While mayors and local governments cannot comprehensively tackle climate change alone, their sizeable political and economic clout may make them an important force.]

    …[The] mayors highlighted a number of environmental initiatives that they were interested in pursuing…Over one-third prioritized reducing the number of vehicles on the road and making city assets, such as buildings and vehicles, more energy-efficient…Other popular programs included shifting toward green and alternative energy sources; promoting energy efficiency in private buildings; reducing risks of damage from flooding; and installing smart traffic lights that can change their own timing in response to traffic conditions. Many mayors are already implementing these initiatives in their communities…[M]ayors largely did not think that such initiatives would require imposing costly new regulations on the private sector…” click here for more

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    Solar On Every Roof A solar panel on every roof in the US? Here are the numbers; Estimate shows rooftop solar could produce almost 40 percent of our electricity.

    Scott K. Johnson, February 16, 2018 (Ars Technica)

    “…[Detailed new research estimates] that there are a little over 8 billion square meters of suitable roofs in the US. Cover that in solar panels, and you would produce about 1,400 terawatt hours of electricity each year—about two-thirds of which would come from small residential buildings. The total production is equal to nearly 40 percent of the total electricity currently sold by utilities in the US…[That is almost twice the less detailed 2008 estimate] of 22 percent of electricity…[The new estimate is higher] partly because solar panel efficiency has improved but also because new sources of data made a more accurate estimate possible…States with strong sunlight and plenty of roofs obviously have the most potential…But that’s partly because of different electricity use. New England doesn’t have the sunniest skies, but the limited need for air conditioning in the summer helps keep electricity use down. As a result, that region could produce about half its total electricity from rooftop solar…[The output of the all-in scenario would not be enough to replace all power plants, but it is significant]…” click here for more

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    Wave Power For Ocean Water Desalination Fresh drinking water from the ocean: Delmarva company harnesses waves to make it happen

    Maddy Lauria, February 9, 2018 (Delaware Online/New Journal via USA Today)

    “…[In places like the hurricane-devastated Caribbean islands, a way to remove the salt from ocean water and provide clean drinking water without using electricity could be a vital lifeline and a prototype device is being tested] off the coast of Delaware. It would use wave energy to desalinate ocean water. Initially, it would be for use in emergencies but could eventually be scaled] to augment or replace traditional municipal water services in coastal communities…[A barge is designed to absorb the energy of ocean waves and use it] to operate a filtration system capable of removing the salt from seawater to produce up more than 100,000 gallons per day of fresh water…[The Murtech, Inc., device]is the first of its kind to be individually permitted in the United States…” click here for more

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    Monday, February 19, 2018

    TODAY’S STUDY: Rewarding Utilities For Giving Customers What Customers Want

    Utility Earnings In A Service-Oriented World; Optimizing Incentives for Capital- and Service-Based Solutions

    Danny Waggoner, Thomas D’Ambrosia, Kent Bond, et. al., January 30, 2018 (Advanced Energy Economy)

    Summary

    Throughout the economy, companies are finding efficiencies and operational benefits by meeting their needs through services provided by third parties rather than investing in physical assets that they own and manage.1 Utilities are no different. However, the trend toward services has faced some unique barriers in the investor-owned utility industry, as utilities have an issue in their underlying business model, imposed by regulation, that most other businesses do not.

    In the current cost-of-service regulatory model, which has served the sector and customers well for many years, capital investments are a large driver of returns to utility shareholders. Utility investors are allowed to earn a rate of return on net invested capital (gross capital minus accumulated depreciation). In contrast, operating costs (such as fuel, labor, maintenance, and service expenses)2 are generally passed through to customers in electric rates without the utility making any direct profits on them, although utilities remain incented to manage operating costs to reduce overall cost to customers, and also to manage profits between regulatory rate reviews.

    Over the long term, however, services that can improve the utilization of, defer, or replace capital investments may have the effect of reducing opportunities for utilities to generate earnings. Because many new technologies are offered only as a service, utilities may be discouraged from using them. Realizing that both customers and utilities stand to benefit from equalizing the earnings opportunities between traditional capital solutions and service solutions that reduce capital investment needs, several state commissions have explored or implemented mechanisms to compensate for the bias toward capital investments that is inherent in cost-of-service regulation.

    Regulated utilities spend billions of dollars each year on infrastructure to meet their obligation to deliver safe, reliable, affordable service to customers in an environmentally acceptable manner. The majority of capital investments in the power grid today are related to reliability, replacement of aging equipment, accessing renewable energy, and the installation of environmental controls. A smaller portion, primarily capital investments related to capacity expansion and IT systems, presents an opportunity for deferral or replacement by a service solution.

    We identified several different regulatory treatments that states are using or piloting for services that replace capital investments. Some of these mechanisms, such as capitalization of a service contract or the use of regulatory assets,4 are available today without the need for changes in regulation. These mechanisms allow utilities to place “service assets” in their rate base and amortize them like capital investments. Other regulatory mechanisms require changes in regulations and are designed to provide financial incentives to utilities that better align their earnings with their ability to generate cost savings.

    This paper utilizes financial models to explore the impacts of several different regulatory mechanisms for encouraging utilities to pursue service-based solutions. Based on this exploration, the paper makes some general recommendations for implementation.

    The specific service-based solutions assessed in this paper are very different in type: cloud computing services, which take the place of utility investments in on-site computers, servers, and software; and distributed energy resources5 (DER), which defer or avoid utility investments in distribution equipment and infrastructure by contracting for the services provided by customer- or third party-owned assets such as solar installations, battery torage, or demand response. Additional use cases exist that this paper does not model, such as energy efficiency programs or Power Purchase Agreements that replace utilityowned generation, but the same regulatory concepts generally apply.

    For these two service-based solutions, we looked at five alternative regulatory mechanisms in comparison to two status quo mechanisms that represent common regulatory practice. The first mechanism, which we refer to as the Reference Case, reflects standard practice for recovering the cost of a capital investment by depreciating the asset in a utility rate base over a period of years (often 20 to 40). The second status quo mechanism, Service as O&M, reflects common practice for accounting for a service solution (in lieu of a capital investment) in which there is minimal opportunity for earning a return on the service expenditure. The other five alternative mechanisms are new options that aim to provide better outcomes through providing earnings opportunities on services. The five alternative mechanisms considered are as follows:

    DER Incentive Adder (“DER Adder”) – This option functions similarly to the Service as O&M option, except that the utility receives 4% of the total cost of the periodic payments for the service solution as an incentive to compensate for the utility’s avoided earnings.

    Capitalization of a prepaid contract (“Prepaid Option” or “Prepaid Contract”) – This option employs a prepaid asset, a commonly used form of cost recovery for utilities, which treats an expense similar to a physical asset by placing it into the rate base, amortizing it, and recovering it over time. In this case, a service payment would be pre-paid for a number of years and would be amortized over the length of the contract. The utility would collect its yearly carrying costs, including return for the investors’ equity, based on any unamortized balances.

    Non-Wires Alternative Shared Savings (“NWA Option”) – The NWA Option functions similarly to the Prepaid Contract because it is based on a prepaid service that the utility recovers as a regulatory asset. However, an additional earnings incentive is provided on top of earnings from capitalizing the prepaid contract to compensate for lower earnings when the service costs less than the Reference Case. The utility shares in 30% of the present value of the total savings when compared to the Reference Case. The shared savings are applied in equivalent increments on a yearly basis for the length of the service prepayment.

    Modified Clawback Mechanism (“Modified Clawback”) – This option is an adjustment to the net capital plant reconciliation, or “clawback,” mechanism, which is used in some states to reclaim the unspent portion of a capital budget, plus the associated earnings, in the event that a utility does not spend its full capital budget. The Modified Clawback Mechanism leaves intact any portion of the capital budget that goes unspent because the associated investment was replaced with a service expenditure. Any positive difference between the original amount in the capital budget and the service cost paid through O&M is retained as profit. In the next rate case, the capital costs associated with the avoided project are removed from the capital budget and the O&M budget is increased to provide rate recovery for the service expenditure.

    Pay-as-you-Go (“PayGo”) – This option combines a number of features from the mechanisms outlined above. Under PayGo, the utility prepays a service expenditure for one year at a time and places the prepayment into the rate base as a regulatory asset. With authorization from the state utility commission, the utility would amortize these regulatory assets over a period greater than one year. In our model, the amortization rate, based on one-third the life of the service contract, is applied to the prepayments as a group. Thus, the regulatory asset would build year-on-year while simultaneously being amortized. In addition to these earnings from rate base, the utility receives a variable shared savings incentive proportional to the cost savings provided by the service option. For example, if the all-in costs of the service solution are 25% less than the Reference Case, the utility would take 25% of the total savings.

    We also examined these regulatory mechanisms under three different scenarios: short-term replacement of a capital investment expected to last for five years; short-term deferral of a capital investment for five years; and long-term replacement of a capital investment expected to last for 40 years. We further evaluated the regulatory mechanisms in two different cost scenarios, or cost cases. The first, the Equivalent Cost Case, assumes that the service solution costs are approximately the same7 as the Reference Case capital investment in order to test how efficiently the mechanisms render costs to customers and provide earnings for the utility. The second, Lower-Cost Case assumes that the service solution costs 25% less than the Reference Case capital investment to measure the impact of the shared savings functions in some of the mechanisms. 7 Utility capital investments and third-party service solutions have different underlying costs, taxes, and other factors that make a direct comparison of total solution costs complicated. We explain this in more detail on page 40 in the section titled “Making an Accurate Comparison.”

    The findings are encouraging. As the figures below show, when a service solution is available at equal or lower cost to customers than in the Reference Case (in net present value terms), the five alternative mechanisms in many cases also provide equivalent or greater earnings8 to the utility – a win-win for consumers and utility shareholders. In the figures below, a “win-win” is when an option is both above and to the left of the Reference Case.

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    QUICK NEWS, February 19: The Campaign To Get Conservatives To Fight Climate Change; A Perfect Match Of Distribute Energy And The Grid; U.S. Navy Moves On Wave Energy

    The Campaign To Get Conservatives To Fight Climate Change Seeking conservative converts to climate change cause; Former congressman Bob Inglis tries to steer his party away from denialism

    Brian Nearing, February 18, 2018 (Albany Times Union)

    “Bob Inglis is putting a lot of faith in young people…Inglis is a former U.S. Congressman from South Carolina who in 2010 was turned out of office by Republican voters after he bucked the party line concerning the role fossil fuels play in climate change…Since then, this avowed conservative has been crisscrossing America on a mission to persuade Republicans that climate change science is neither a hoax nor a fraud, and that solutions capable of heading off further damage to the environment can abide by conservative principles such as free enterprise and energy abundance…Inglis has [done over 400 talks to young people] since 2013 targeting conservative audiences…[Recent polls show] that compared to a decade ago, significantly fewer Republicans believe climate change is happening or that human activities cause it…But Inglis, 58, said he remains encouraged by the attitudes of the youngest generation of Republicans…” click here for more

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    A Perfect Match Of Distribute Energy And The Grid Pushing the Limit: How Demand Flexibility Can Grow the Market for Renewable Energy Cara Goldenberg and Mark Dyson, February 14, 2018 (Rocky Mountain Institute)

    “…Demand Flexibility: The Key to Enabling a Low-Cost, Low-Carbon Grid…shows how demand flexibility can be a lower-cost, less-polluting alternative to natural gas-fired power plants for balancing renewable energy on the grid…[The use of demand flexibility across a large geographic area can] shift electricity consumption from times of the day with high demand but low renewable supply to times with high renewable supply…[It] can significantly reduce customer costs, curtailment of renewable energy, peak demand, and carbon emissions compared to relying on natural gas-fired generation…Due to its low operating costs, new renewable capacity often displaces more expensive generators on the grid, lowering wholesale clearing prices. Higher amounts of variable renewable energy on the system also creates a mismatch between energy demand and supply, increasing the risk of renewable curtailment…[The combination, coupled with inflexible thermal generation, can significantly lower the revenues of renewable projects…[RMI]shows how this] can be addressed by the deployment of control and communication technologies used to manage energy consumption…” click here for more

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    U.S. Navy Moves On Wave Energy US Navy picks Irish wave energy system; The US Navy is to carry out grid-scale testing of a wave energy convertor developed by an Irish company.

    5 February 2018 (The Construction Index)

    “…[Irish-designed OE Buoy will be built in the US]and deployed at the US Navy’s wave energy test site on the Hawaiian Island of O’ahu in autumn 2018. The contract value of is €5.25m out of a total project value of almost €10m for testing…The 750t OE Buoy measures 38m by 18m with a draught of 9m and has a potential rated capacity of up to 1.25MW in electrical power production…It is estimated that a 100MW wave farm could power up to 47,000 Irish homes…[The pilot project is part of the Navy’s effort to test the reliability of near-full-scale wave energy converters and obtain data to validate performance predictions and levelized cost of energy estimates]…” click here for more

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    Saturday, February 17, 2018

    Colbert Nails EPA Head Pruitt

    This is a short, sadly hilarious description of EPA Head Pruitt’s effort to silence climate scientists at the Agency. From The Late Show with Stephen Colbertvia YouTube

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    Ocean Life And Offshore Wind, Better Together

    New England fishermen give personal accounts of how offshore wind, marine life, and the local Block Island economy fit together. “Already, in an empty piece of ocean, there’s more fish than there were two years ago.” From American Wind Energy Association via YouTube

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    Australia’s 50,000 Home Virtual Power Plant

    Tesla is partnering with the state of South Australia on this groundbreaking project that will link solar-plus-battery storage systems in 50,000 homes to the power grid to strengthen and stabilize power delivery and lower homeowner electricity costs. From TomoNews USvia YouTube

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    Friday, February 16, 2018

    Get Ready ‘Cause Here It Comes

    Scientists Just Issued a Grim New Warning on Climate Change: 'We Are Not Prepared'

    Justin Worland, February 15, 2018 (Time Magazine)

    “New research shows that countries around the world are falling short of greenhouse gas goals in the Paris climate deal, and the consequences will likely be unprecedented extreme weather…[Unprecedented climate events: Historical changes, aspirational targets, and national commitments] found that the likelihood of extreme heat, dryness and precipitation will increase across as much of 90% of North America, Europe and East Asia if countries do not accelerate their efforts to reduce greenhouse gas emissions…[Its authors say the world is] not prepared for today’s climate, let alone for another degree of global warming…[The study shows the difference between the Paris Agreement’s target to keep the global average temperature increase to below 3.6°Fahrenheit by 2100 and the] ideal target of 2.7° Fahrenheit…would lead to dramatic increases in the likelihood of record warm or wet days…” click here for more

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    World Power Grids Are Ready For New Energy

    Study: Solar and Wind Won’t Break the Grid

    Zsofia Vegh, February 14, 2018 (Energy Collective)

    “…[Major power systems around the world] are able to cope quite well with increasing shares of intermittent renewables, if the right measures are taken…[I]ncreased generation of these renewables does not make the grid less reliable or compromise security of supply, [according to Power-Industry Transition, Here and Now, a new study from the Institute for Energy Economics and Financial Analysis (IEEFA).] Critics of renewable energy have often warned that there are strict limits to the amount of intermittent power that the grid can handle…Yet so far, despite strong growth of solar and wind, no limits appear to be on the horizon. The expansion of renewables does present challenges and require measures, but with the right measures, systems are able to cope quite well…The IEEFA researchers looked at nine countries and regions which last year had shares of renewables ranging from 14.3% to 52.8%, while the global average was 5.2%...[They were Denmark (52.8%)…South Australia (48.4%)…Uruguay (32.2%)…Germany (26%)…Ireland (24.6%)…Spain (23.2%)…Texas (18%)…California (15%)…[and] the state of Tamil Nadu, India (14.3%)…The study outlines various methods for countries to integrate a higher share of wind and solar power into their systems. There is no general rule as to which of the options to follow; countries should adopt and adjust these measures according to their specific needs. The report did not look into the cost of these measures…” click here for more

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    World Wind Numbers Reach New Highs

    Wind Power Capacity Reaches 539 GW, 52,6 GW Added In 2017

    February 12, 2018 (World Wind Energy Association)

    Global installed wind capacity at the end of 2017 was 539,291 MW and 52,552 MW were added during the year, according to preliminary World Wind Energy Association (WWEA) data. The 2017 total is more than the 51,402 MW added in 2016 and the third biggest growth ever. The year on year growth of 10.8 % was, however, the lowest growth in this century. Wind’s total installed capacity is equal to over 5% of world electricity demand. Denmark set a new world record by getting 43% of its electricity from wind in 2017. China remained the biggest market, building 19,000 MW. The U.S. added 6,800 MW and reached a cumulative 89,000 MW. Germany added 6,100 MW to reach 56,000 MW overall. click here for more

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    Global Data Giants Drive New Energy Growth

    Hyperscalers drive renewable energy generation, says study

    Tanwen Dawn-Hiscox, 16 February 2018 (Data Center Dynamics)

    The data centers of hyperscale companies like Google, Facebook, Apple, and Microsoft use 2% to 3% of developed countries’ electricity and are transitioning to New Energy to cut operational expenses, take advantage of incentives, and respond to criticisms about the impacts their excessive electricity consumption may have on local grids, according to a new market report. Apple reached 100% New Energy five years ago and Google reached it in 2017. Facebook, Microsoft, and Amazon data centers remain around 50%, though Microsoft data centers have been carbon neutral since 2014. Amazon and Facebook have 100% New Energy goals. The two most popular New Energy resources are solar and wind power. All the companies also have ongoing energy efficiency and energy storage efforts. click here for more

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    Thursday, February 15, 2018

    Conception In A Time Of Climate Change

    No Children Because of Climate Change? Some People Are Considering It

    Maggie Astor, February 5, 2018 (NY Times)

    “…It is not an easy time for people to feel hopeful, with the effects of global warming no longer theoretical, projections becoming more dire and governmental action lagging…[There is little data on the role climate change plays in people’s childbearing decisions but interviews show young women have] a sense of being saddled with painful ethical questions that previous generations did not have to confront. Some worry about the quality of life children born today will have as shorelines flood, wildfires rage and extreme weather becomes more common. Others are acutely aware that having a child is one of the costliest actions they can take environmentally. The birthrate in the United States, which has been falling for a decade, reached a new low in 2016. Economic insecurity has been a major factor, but even as the economy recovers, the decline in births continues. And the discussions about the role of climate change are only intensifying…[Most of those interviewed] lamented having to factor climate change into their decisions at all…” click here for more

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    Introducing The EV Policy Fights

    NCCETC Launches The 50 States of Electric Vehicles Report; Finds 43 States Took Action on Electric Vehicles in 2017

    February 7, 2018 (The N.C. Clean Energy Technology Center)

    “…[The 50 States of Electric Vehicles, with a special 2017 Review, previews a new quarterly that will provide] insights on state regulatory and legislative discussions and actions on electric vehicles and charging infrastructure…[The report finds that 43 states and the District of Columbia took some type of action related to electric vehicles during 2017…34 states considered or adopted changes to the regulation of electric vehicles, including registration fees, electricity resale rules, and siting of charging infrastructure…20 states plus D.C. took action to study or investigate some aspect of electric vehicles…19 states and D.C. considered or approved new financial incentive programs, or changes to existing incentive programs for electric vehicles or electric vehicle supply equipment…Utilities or legislatures in 17 states plus D.C. took action related to the deployment of electric vehicles and charging infrastructure…17 states considered policy changes to encourage electric vehicle market development…[and] Utilities or state legislatures in 13 states plus D.C. considered new utility rate tariffs for electric vehicle charging, or changes to existing tariffs…” click here for more

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    The Oklahoma Wind War

    In Oklahoma, a war over wind power

    Ryan Maye Handy, February 14, 2018 (Houston Chronicle)

    “…[In Oklahoma, where officials are contending with a massive budget deficit, long-simmering tensions between the oil and gas industry and renewables advocates] have broken out into a war over wind power that has already eliminated the state's renewable energy tax credit program and threatens to further undermine financial supports for the burgeoning wind industry. In the latest development, a plan backed by oil and gas interests to impose new taxes on wind energy production failed in the Oklahoma House…[It] was a rare victory for wind power in a year-long battle that has pitted it against Oklahoma's political establishment and the state's powerful oil and gas industry…[Wind advocates] expect the Legislature to try again to impose new taxes on wind power and move to cut incentives already awarded to projects in years past…[The driving force behind the campaign against wind is billionaire] Harold Hamm, chief executive of one of the nation's biggest independent oil companies and an energy advisor to President Donald Trump…His company's political action committee has contributed nearly $180,000 to Oklahoma state legislators from both sides of the aisle since 2015…” click here for more

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    New Things To Do With Solar

    6 Innovations That Are Shaping the Future of Solar Energy

    Earl Resser, February 12, 2018 (Blue & Green Tomorrow)

    “…[Solar energy] offers ten-thousand times the energy required by people worldwide…[Six intriguing solar innovations may help put it into service. Solar windows can help] building owners achieve partial independence from the power grid…[The solar-powered airplane Solar Impulse 2 used 17,000 solar panels to make] a historic trip around the globe…[Researchers are] embedding flexible solar panels into fabric and] solar-powered sunglasses, jewelry, watches, and backpacks…[Prototype solar power harvesting trees are charging] mobile phones, laptops, LED street lights, and electric vehicles…[A] solar desalination system uses a combination of membrane distillation technology and sunlight-harvesting nanophotonic cells to convert salty or brackish water into fresh drinking water…[and the BioSolar Cells project is working on] a sustainable production of energy, biomass, and food using photosynthesis…” click here for more

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    Wednesday, February 14, 2018

    ORIGINAL REPORTING: Stop, collaborate and listen: California works the details of bringing on distributed energy

    Stop, collaborate and listen: California stakeholders want to open electric system communications; IOUs, DER providers and CAISO collaborate on streamlining communications for higher DER penetration

    Herman K. Trabish, June 22, 2017 (Utility Dive)

    Editor’s note: This work is proceeding slowly but seriously as the urgency of integrating distributed energy resources to deal with California’s peak demand grows.

    An unprecedented collaboration between California’s grid operator, its investor-owned utilities, and third-party distributed resource providers could streamline electric system communications in preparation for higher distributed energy resource penetration. The groundbreaking work maps out plans to interconnect the bulk transmission system to distributed energy resources (DERs) through utility-operated distribution systems, achieving a new level of communication between the transmission system operator, the distribution system operator, and the DER provider.

    Technology advances and customer demand are transforming the electric power, according to a newly-released report from the California Independent System Operator (CAISO), Pacific Gas and Electric (PG&E), Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E). DERs are beginning to reach significant penetration levels on the emerging “decentralized system,” and are on their way to becoming key resources, the paper noted. A working group led by think tank More Than Smart (MTS), which included the IOUs, CAISO, and DER providers, released the paper at the end of the first year of a multi-year effort. The group’s objective is to resolve operational challenges preventing transmission operators and distribution operators from working with private sector developers to meet consumer demand for DER… click here for more

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