Cara Miale

Guest Blog by Cara Miale
April 20, 2011

Looking at the list of the most EV-ready cities just released by Ford, it’s no surprise many of them are coastal. On the east and west coasts energy is pricey, so the pressure is on to achieve innovation that will control costs and reduce dependence on fossil fuels.

But what’s up with Denver out there in the middle of the map, all by its lonesome?

Government leaders in Colorado, and Denver specifically, have long been committed to sustainability and energy efficiency. Denver has worked hard over the years not only to position itself as a national leader in sustainability, but also to lead by example.

Denver was home to the first “Green Fleet” of city-use vehicles in the early 1990’s, which now includes 138 hybrid electric vehicles. The city hosted the greenest Democratic National Convention to date, and shows continued focus through clean-energy legislation. Its concentration of clean-energy workers and companies is on the rise, and Colorado continues to attract more venture capital financing for clean-tech start-ups than nearly any other state.

And, we’re not so alone after all. Denver is also participating in a U.S.-China “Eco Partnership” sponsored by U.S. Department of the Treasury, which is focused on the implementation of electric and plug-in hybrid vehicles.

On the forefront of the EV-push is the Colorado Plug-In Working Group, which engages communities (like Denver and Boulder), government and private businesses to facilitate EV market growth. Current members are no strangers to the scene: Xcel Energy, the National Renewable Energy Laboratory, the Rocky Mountain Institute, Denver Metro Clean Cities Coalition and the Governor’s Energy Office.

In putting together its list of EV-ready cities, Ford looked at several criteria including complementary state and regional activities. Of these, Denver has no shortage:

  • Intellectual resources abound. Colorado’s universities are actively researching how to increase efficiency of electricity generation and transmission and testing smart grids, and collaborating with Colorado-based national labs.
  • Greenprint Denver was established by then-Mayor Hickenlooper to position Denver as a national leader in sustainability and integrate environmental impact considerations into the city’s programs and policies.
  • The Utilities & Transmission Program at the Governor’s Energy Office (GEO) has its sights set on working with utilities to increase the proportion of demand-side management within their resource portfolios.
  • Denver P2 Partners, a pollution prevention program, works with small businesses to increase participation and adoption of sustainable practices that go beyond compliance. It’s developed industry-specific criteria to target environmental issues and concerns specific to auto repair shops. Reducing transportation pollution is one of five criteria that auto repair shop must address to maintain certification through the program. While “educational training on hybrid and alternative fuel vehicle maintenance” is listed as an elective criterion, a partnership with Denver P2 Partners could be easily expanded and used to enlist auto repair shops to support EV implementation. 
  • Voluntary Ozone Reduction program. The City & County of Denver’s Environmental Transportation Coordinators hit the streets during critical summer months to educate employees about ozone pollution and  ways to reduce ozone levels.
  • Recharge Colorado Rebate Program has pumped more than $90 million into the Colorado economy since late April 2010.
  • A year ago, Colorado company UQM Technologies received a $45 million grant from the American Recovery and Reinvestment Act to expand operations of its electric motor factory, accelerating electric vehicle projects across Colorado.
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By Elisa Wood

December 3, 2009

A candy shop owner on Cape Cod offers a new approach to build a retirement portfolio: put solar panels on your roof.

“We looked at the stock market last year and it didn’t look too good so we decided to invest in electricity,” said Ray Hebert, owner of Stage Stop Candy in Dennisport, in an article on wickedlocal.com by Nicole Muller. http://www.wickedlocal.com/dennis/news/business/x1792920283/PHOTO-GALLERY-Solar-energy-to-power-chocolate-production-at-Dennisport-shop

Thanks to today’s generous state and federal subsidies, Hebert expects to recover costs in five years and then begin collecting a return on investment of 13.8%. “What investment can guarantee that?” he asks. “And since electricity costs are expected to climb, my profit will go up, up, up over time.” He plans to channel the savings into his retirement account.

I’m not a financial planner, so won’t pretend to know if Hebert’s numbers are correct. But his reasoning points out a new and growing way consumers and businesses have begun to think about electricity. Efficiency allows them to not only save money, but also to earn it.

In Hebert’s case, he is saving money by using a generation source that has no fuel costs – sunshine is free – and by taking advantage of Massachusetts net metering laws, which allow consumers to sell back to the local utility any excess power generated by their solar panels.

But there are other ways, as well, that consumers can earn a return on electricity savings. Neighboring Connecticut, for example, has become the king of monetizing energy savings through its innovative energy efficiency certificates. The certificates represent energy savings (negawatts) businesses achieve when they install efficient technologies. Each megawatt-hour of savings equates to one certificate. The businesses then sell the certificates to utilities or retail electricity suppliers who use them to prove to regulators that they’ve achieved state-mandated levels of energy savings.

So far, the Connecticut program is largely confined to businesses, although homeowners are eligible. Private companies have been trying to come up with ways the householder can easily participate, but are having trouble convincing state regulators that their programs can work. One company proposed a green stamps approach, where customers could buy lights, appliances and other efficiency equipment through certificate savings. (See the CPower case before the Connecticut Department of Public Utility Control: http://www.dpuc.state.ct.us/DOCKCURR.NSF/4ad307989ca5ed2a85257523004e0191/d122623c2e5eab5c8525767400500afc?OpenDocument&scrollTop=545)

Programs that monetize electricity savings are likely to grow as more utilities install smart meters in homes and businesses. Smart meters let consumers see when and how they use electricity, so that they can better control costs. Connecticut Light & Power found that consumers who participated in a smart meter pilot program liked using the devices, although those who did so for environmental reasons were more satisfied than those who participated to save money. This isn’t surprising since residential customers only saved $24.69 on average from June 1 to August 31, 2009. http://nuwnotes1.nu.com/apps/mediarelease/clp-pr.nsf/0/0E66EBF11810786085257673004EA13B?OpenDocument

Would the savings be more meaningful if packaged into an investment that increases the value of the money — the Cape Cod candy shop owner’s approach? The possibilities are many: Pairing energy efficiency companies with financial firms to offer energy savings retirement accounts or college funds, or perhaps channeling the money into tax deductible donations. Whatever the case, translating kilowatt-hour savings into concrete financial products for consumers offers intriguing market possibilities for the electricity industry.

http://www.wickedlocal.com/dennis/news/business/x1792920283/PHOTO-GALLERY-Solar-energy-to-power-chocolate-production-at-Dennisport-shop

Visit Elisa Wood at http://www.realenergywriters.com/ and pick up her free Energy Efficiency Markets podcast and newsletter.

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By Elisa Wood

June 4, 2009

Electric industry restructuring often gets criticized for failing to deliver the goods. It was supposed to not only drive down rates, but also spark innovative new technologies.  After all, deregulation of the telecommunications industry gave us the cell phone. Where is energy’s nifty gadget?

Initiated more than a decade ago, electric deregulation has produced no such consumer hit. But it has led to innovation, albeit more complex and less tangible than the cell phone. For an example, listen to Lisa Cohn’s podcast: “How states can best use energy efficiency stimulus money” with Mark Sinclair of the Clean Energy States Alliance (CESA) http://www.realwriters.net/rew/rtlnkmr.htm.

Sinclair describes how a dozen or more states have served as laboratories over the last decade, laying the groundwork for today’s federal push to advance clean energy as a jobs builder. What got these states started? It turns out it was restructuring. CESA’s founder, Lew Milford, was an early advocate of restructuring and instrumental in the creation of rules in key states. He saw restructuring as an opportunity to open the door for development of clean energy, then largely a fringe resource. Milford pushed for a special utility rate structure, a systems benefit charge, that would channel funds into laboratory-like exploration at the state level.

Much of clean energy’s progress in the marketplace is due to these state programs:  “People tend to think somehow that these projects have appeared magically and that’s not the case… states have spent a significant amount of money putting dollars on the ground and then leveraging private capital to make those projects,” Milford says in an interview with E&E TV http://www.cleanenergystates.org/press/Milford_OnPoint-1.14.09_text.pdf.

Those states now offer specific templates for building clean energy economies that others can follow as they receive federal stimulus dollars. The clean energy states have tested rebates, grants and loans to stimulate markets. They’ve seen where poor regulation slows installations. They know what attracts clean energy companies and what drives them away.

By studying the work of experienced states, those new to clean energy can bypass years of experimentation.  So there lies an example of innovation from electric industry restructuring. Restructuring provided a mechanism for states to experiment with clean energy. Now, these pioneering efforts will save a lot of time and money for the states that are new to clean energy and find themselves with little time to ramp up the industry and attract jobs. True, electric restructuring did not produce a gadget that you can hold in your hand; instead it produced a clean energy roadmap, one that by many accounts could help create a lot of economic activity at time when it is most needed.

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.

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By Elisa Wood and Reid Smith

April 16, 2009

Once a “token gesture,” energy efficiency is now increasingly becoming a “first fuel” — the resource utilities seek before any other, even before renewable energy or other in-favor generation sources.

So says the report, “Meeting Aggressive New State Goals for Utility-Sector Energy Efficiency: Examining Key Factors Associated with High Savings,” issued today by the American Council for an Energy-Efficient Economy.

Chances are you are experiencing the benefits of efficiency – or are about to do so – if you live in one of 14 states the report identifies as leaders: California, Massachusetts, Connecticut, Vermont, Wisconsin, New York, Oregon, Minnesota, New Jersey, Washington, Texas, Iowa, Rhode Island, and Nevada.

These states show the biggest gains from efficiency. They also spend the most on programs and have the greatest legislative support.

What else makes the states stand out?

*Almost all offer direct financial incentives for delivering utility energy efficiency programs well.

*Eight of the top 14 states have an energy efficiency resource standard (EERS), which requires they meet a certain percentage of energy demand through efficiency. Typically, the requirement ramps up gradually over several years. Such standards do not deliver a lot of savings yet, but will in later years as requirements increase.

The report also looked at which efficiency measures generate the most savings. Lighting retrofits top the list, accounting for 63% to 92% of all residential energy savings and 55% to 69% of commercial and industrial savings.

The winning states still have a long way to go. Few report energy efficiency savings of 1.5% to 2.0% per year or more – the amount targeted by many state policies. Vermont is an exception with energy savings close to 2.0% of total electricity sales. What can speed delivery of results? There is no magic bullet, but the report recommends shareholder incentives, decoupling and support from top utility management.

The report is available for free download at http://www.aceee.org/

Visit Elisa Wood at www.realenergywriters.com and pick up her free Energy Efficiency Markets podcast and newsletter.

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By Patrick Costello, guest contributor

March 19, 2009

The American Recovery and Reinvestment Act promises to advance the U.S. energy efficiency movement with an unprecedented $26 billion infusion of funds. Of that, $3.1 billion goes to state energy efficiency programs through the Department of Energy’s State Energy Program.

Great news, right? Maybe not, says the Electricity Consumers Resource Council (ELCON) and the National Association of Regulatory Utility Commissioners (NARUC).

To receive the federal stimulus money, states must agree to set up financial incentives that encourage utilities to pursue energy efficiency programs. ELCON and NARUC fear that this promotes a “one-size-fits-all” approach to the administration of energy efficiency programs. In particular, they are concerned that these stimulus funds will sway states to implement revenue decoupling at the expense of developing a more unbiased energy efficiency program plan.

Revenue decoupling is a ratemaking mechanism that breaks the link between a utility’s revenues and energy sales. Since utilities normally profit from selling energy, it’s not in their best interest to push efficiency. Doing so reduces demand for their product. Revenue decoupling counters this problem by allowing utilities to earn a fair rate of return, and sometimes additional financial incentives, on energy efficiency programs. Decoupling has become a common way to align utility financial interests with state efforts to achieve greater energy efficiency.

The debate over revenue decoupling is central to discussion over what makes an energy efficiency program effective. Ratepayers measure success based on how much money they save. And how much money they save may depend on who runs the program.

Utilities, state agencies, third party non-profit organizations, or some combination of the three typically administer efficiency initiatives. Each state shapes its own approach. No one program design seems to be the most effective. Many highly regarded programs differ greatly from one another. But the best programs share one commonality: They are tailored to the unique policies and economic profile of the state and are based on input from a variety of stakeholders.

Critics of the stimulus bill argue that ‘the catch’ – the condition placed upon states before they can receive stimulus money – may stifle such tailoring, hinder development of a state’s full energy efficiency potential, and diminish cost savings. Decoupling creates the foundation for utilities to serve as the primary administrators of efficiency programs. By pushing for revenue decoupling, a state is arguably saying it wants utilities, not a third party non-profit or state agency, to take the lead in developing and administering energy efficiency programs. Therefore, the stimulus bill walks a fine line between encouraging states to implement only utility-administered programs and encouraging them to reform their ratemaking policy so that utilities can, on some level, contribute to the development of a sound energy efficiency program.

Decoupling is somewhat arcane, but ratepayers should be aware of how it may influence their rates as energy efficiency programs evolve.

This is the House Energy and Commerce Committee’s report where the controversial provision can be found on page 26:

http://www.rules.house.gov/111/CommJurRpt/111_hr1_encrpt.pdf

To see a breakdown of the stimulus package’s energy efficiency measures, visit:

http://ase.org/content/article/detail/5388

To learn about and obtain forms for stimulus package energy efficiency tax incentives, visit:

http://www.energytaxincentives.org/

To see how your state’s energy efficiency efforts rank nationally, visit:

http://www.aceee.org/pubs/e086.htm

Visit us at www.realenergywriters.com and pick up our free Energy Efficiency Markets podcast and newsletter.

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