Wednesday, December 19, 2018

Overheard at 2018 NEEP Summit

MIDDLETOWN, R.I. — The increasing interplay between energy efficiency and electrification was a hot topic at the 2018 Northeast Energy Efficiency Partnerships summit Oct. 1 to 3. But industry leaders and experts also discussed how to measure the benefits of energy efficiency — and how to motivate consumers to do more to save energy.

Carol Grant | © RTO Insider

“The truths of how we did efficiency 10 years ago are not necessarily how we’re going to be doing it the next five years,” said Carol Grant, commissioner of the Rhode Island Office of Energy Resources. “How can we bring more people into the drive, make more people aware?”

To get people to value efficiency, policymakers need to make it more visible, said Mary Sotos, deputy commissioner for energy at the Connecticut Department of Energy and Environmental Protection.

Mary Sotos | © RTO Insider

The department realized it needed to set priorities for its limited resources following a state budget crisis this year, which saw a third of energy efficiency funding swept into the general fund, Sotos said.

“One clear priority that came out of that process is that climate needs to be at the front of all of our efficiency work,” Sotos said. “One of the biggest sectors of emissions in Connecticut is actually our home heating. So about half of Connecticut is heated with delivered fuels — fossil fuel, heavy emissions.”

DEEP has long discussed applying a carbon or fuels charge, but officials now are uneasy about “creating another pot of money” that could be commandeered to fix a budget shortfall, she said.

The 2018 Northeast Energy Efficiency Partnerships summit was Oct. 1 to 3 | © RTO Insider

“We need to look at the resources we have, including our conservational management plan, and be willing to use those resources to make this transition away from fossil fuels,” Sotos said. “That’s something new for us.”

Suzanne Shelton | © RTO Insider

Energy marketing consultant Suzanne Shelton recommended brand marketing and psychological tactics to shift public perception — and find electricity’s equivalent to the “natural” in natural gas.

“We don’t know what we’re doing, we don’t think we need it, and we don’t think it works. That’s our huge problem with energy efficiency,” Shelton said. “Americans want to be greener. Forget education, that’s boring. Think of it in terms of engaging consumers, inspiring them, motivating consumers.”

Who Pays?

Abigail Anthony | © RTO Insider

Utility and auto industry shareholders should be responsible for the costs of accelerating electrification, Rhode Island Public Utilities Commissioner Abigail Anthony said.

Additional electricity sales increase cash flow, and new load may result in infrastructure upgrades that provide earnings opportunities for the utility, or the utility could receive new incentive-based earnings to absorb increased electric load without new wires, Anthony said.

“From a regulator’s perspective, I am cautious that electric utilities aren’t promoting electrification at scale because they are holding out to see how much preferential regulatory treatment they can get first,” Anthony said. “Why take on any risk if regulators are willing to put all the risk on ratepayers? In any case, we’ll lose the public trust if we don’t have good evidence for asking ratepayers to make the first move in a new business.”

Grant gave a “shout out” to National Grid as the primary utility in Rhode Island: “I’m excited about the leadership they’re providing in continuing to push themselves … their talent and their innovation is really growing, and their focus on new approaches is exciting as well.”

In Connecticut, DEEP this year for the first time asked the utilities to say how they could help homes convert from their current fuels to air-source or ground-source heat pumps, which are good for both heating and cooling, Sotos said.

Tommy Wells | © RTO Insider

One challenge in the nation’s capital is that “our energy is too affordable,” said Tommy Wells, director of the D.C. Department of Energy & Environment.

The whole regulatory structure is geared toward keeping electric power rates low, he said, “so when advocates say we want energy to cost more so you use less, it goes directly against the whole construction of our regulatory scheme.”

“In D.C. we have the most valuable, highest renewable energy credits in the country for solar … but the uptake of solar on people’s homes … is slow because their power bills are so low,” Wells said.

Electrification Metrics

Sotos noted that by 2030 Connecticut will need to reduce greenhouse gas emissions across all sectors 40% below 2001 levels, and each year it must save 1.6 MMBtu of energy.

“It’s important to us to make sure that the metrics that we’re applying to our programs actually match what we are trying to accomplish, she said. “Depending on how much you value carbon, or other environmental impacts, the cost-effectiveness of certain programs can potentially look very different.”

Paul Hibbard | © RTO Insider

Paul Hibbard of the Analysis Group said there are two basic components to measuring the value of energy efficiency and electrification: forecasting and assigning a value to carbon.

“Forecasting avoided costs is incredibly complicated … [it] is really comparing the world with efficiency investments to a world without those investments, and calculating the difference,” Hibbard said.

Assigning a value to carbon is more of a political decision, but it will grow increasingly important for directing investments and determining the right way to use public funding to focus investments, Hibbard said.

Bruce Biewald | © RTO Insider

Solid metrics benefit the decarbonization effort by providing consistent approaches to evaluating cost-effectiveness in outcomes, said Bruce Biewald of Synapse Energy Economics. He also got “abstract and philosophical” about public policy.

“I have raised six kids … and you have some influence, a little bit of control, but you don’t really control them,” Biewald said. “And that’s also in this nexus of companies and government regulations, and laws and individual consumer choice. So when you see something failing, like the pricing or not pricing of carbon, there’s room for everybody in the solution. The idea that there’s one actor or one policy approach that’s going to solve this is not reasonable.”

Rich Sedano | © RTO Insider

Is electrification the new energy efficiency, or is it a new species altogether? asked Rich Sedano of the Regulatory Assistance Project.

Pasi Miettinen | © RTO Insider

Pasi Miettinen, CEO of energy analytics firm Sagewell, said his company gave up energy efficiency to focus on electrification for non-regulated utilities because the latter gives better results for a dollar spent. Nonetheless, “we look at it as one category, maximum yield for dollars,” he said.

Energy Security

Steve Cowell | © RTO Insider

Reducing carbon emissions is neither easy nor simple, said clean energy advocate Steve Cowell of E4TheFuture, an organization that promotes residential clean energy.

“Government funding versus regulatory versus market-driven investment, legislative mandates versus rate design, all these are pieces that we have to fit together,” Cowell said.

New England has enormous potential to bring offshore wind and other non-carbon imports into the region, and is also facing the recent or prospective retirements of some really important assets on the grid, said Deborah Donovan of the Acadia Center, a regional, nonprofit advocacy and research organization.

Deborah Donovan | © RTO Insider

Regarding the wholesale energy market, the region is “in the precarious position of ISO-NE procuring gas capacity through the capacity markets and then saying ‘oh my gosh, we’re over-dependent on gas,’ and really putting their thumb on the scale when we’re confronted with issues like a request for retirement from the Mystic station up north of Boston,” Donovan said.

The region needs natural gas to generate power and to heat its buildings, but the fuel security issue is really just about winter peak hours, she said.

The grid operator sees a natural gas problem and says it must have a natural gas solution, but “we and a lot of other advocates are pushing to stop that. … [It’s] costly to the environment solution,” Donovan said.

Mark Kresowik | © RTO Insider

Mark Kresowik of Sierra Club’s Beyond Coal Campaign said the Northeast states lead the country in energy efficiency, but he decried the “insanity of [CEO] Gordon van Welie in ISO New England proposing to spend hundreds of millions of dollars to bail out the Mystic plant and push billions of dollars in investment into gas pipelines for fuels that are mandated to decline by state policies.”

NEEP Executive Director Sue Coakley turned the discussion back to scaling up energy efficiency in buildings.

Cowell said New York has decided to eliminate any ongoing residential or energy efficiency work in buildings and homes.

“We had a very difficult stakeholder session a couple weeks ago where the Public Service Commission basically said it’s not worth it, we shouldn’t be helping people insulate and air-seal their homes,” Cowell said. “That makes it tough.”

Sue Coakley | © RTO Insider

Coakley suggested basing the argument for efficiency on the costs of storm damage: “You could insulate and air-seal your house for $5,000 to $20,000 and do a really good job, and instead we’re paying to repair houses from damage from bad weather.”

Leah Bamberger | © RTO Insider

Leah Bamberger, director of sustainability for the city of Providence, said that following natural gas pipeline explosions near Boston in September, residents in homes knocked off the gas system were reluctant to accept space heaters for fears that their outdated wiring couldn’t handle the extra load.

Sotos said that DEEP is expanding its thinking on what constitutes barriers to adoption of energy efficiency measures, and it now realizes that structural issues in a house, such as a difficult to reach boiler, should qualify for state-funded remediation.

Michael Kuser

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