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Rate Design Pathways to Fair Utility Rates for Solar PV in a Distributed Energy Age

Rate Design Pathways to Fair Utility Rates for Solar PV in a Distributed Energy Age

By Jim Kennerly

Technological innovation and declining costs in solar PV have created irreversible momentum.  A timely, clear-eyed national conversation concerning how electricity providers and consumers alike may thrive in such an environment is essential.

Introduction: The state of play

A

fter experiencing significant cost declines over the past decade, 64% of the cost of rooftop solar photovoltaics (PV) is now associated not with the cost of the physical system hardware, but with non-hardware “soft” costs. Thus, high soft costs constitute the major remaining cluster of barriers to cost-effective rooftop solar PV.

As PV has experienced dramatic cost declines, however, electric utilities have concurrently experienced persistent cost pressure due to a sluggish economy, offshoring of manufacturing, new investments in their energy delivery infrastructure, the increasing commodity cost of coal and, to an increasing degree, customer-initiated actions to save energy and money.  Some industry observers have correctly noted that these factors, if they persist and spread, could undermine the basic structure and incentives built into the regulated utility business model.  This is especially true if a large amount of utility fixed costs are recovered through variable “energy” rates.[1]

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A New Energy Efficiency Manifesto: California Needs a More Integrated, Cost-Effective Approach

A New Energy Efficiency Manifesto:        California Needs a More Integrated, Cost-Effective Approach

By Cynthia Mitchell

Our energy efficiency programs are not adequate to meet grid-scale and local distribution service challenges. This requires a new urgency to find more robust approaches to financing and scaling efficiency — not just in California, but across the country.
A

 powerful verse from the Book of Ecclesiastes was turned into a moving song by Pete Seeger and popularized by The Byrds as “Turn! Turn! Turn! (To Everything There Is a Season).  It seems an appropriate anthem for the utility industry today.  The electric power industry in California is at a crucial season of change: meeting state and federal environmental initiatives; planning and implementing diverse resources to continue meeting the energy needs of its people and its economy, cleanly and at lowest cost; and answering novel operational challenges previously unseen in the industry.

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Policies to Build a Flexible Power System

Policies to Build a Flexible Power System

By Bentham Paulos

A power system with large amounts of wind and solar power requires flexibility to maintain reliability.  While the flexibility toolbox is well known to grid operators, policies and financial incentives to apply them to integrating renewables are sometimes lacking.
T

he world is heading into the next phase of a global Energiewende, the transition from fossil energy to a highly-efficient, renewable, and low carbon future.  As renewable energy technologies become more mature and cost-competitive, policies to promote their use need to adapt.

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Demand Response is Alive and Well: DR Opportunities in a Post-Order 745 World

Demand Response is Alive and Well: DR Opportunities in a Post-Order 745 World

By Greg Wikler, Stuart Schare, and Brett Feldman

Whatever the outcome of litigation to redress the effects of the D.C. Circuit panel’s decision voiding FERC Order 745, the economic and operational benefits of demand response are so great that many opportunities remain for this largely untapped resource.
W

hile the jury is still out on whether the recent D.C. Circuit panel’s decision to overturn FERC Order 745 will withstand an appeals process, many commentators have questioned whether the decision spells the end of demand response (DR) as we know it.  This paper provides a number of reasons for those in the DR industry to be hopeful.

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Three Years of Residential Electric Choice in Illinois, with Opt-Out Aggregation, Yields Results: A Status Report

Three Years of Residential Electric Choice in Illinois, with Opt-Out Aggregation, Yields Results: A Status Report

By Ann McCabe

Illinois residents are becoming accustomed to seeking the best deal for electricity service from an alternate supplier. Beginning in 2011, the ability of cities and towns to contract electric service for their residents through muni aggregation has led to two-thirds of residential customers being served by alternate suppliers. 
D

uring the last three years, residential electric switching increased dramatically in Illinois.  By the end of May 2014, more than 3 million residential customers received their electricity from a non-utility provider.  These customers represent about two-thirds of all residential customers; the actual population that switched is significantly greater than the number of meters given the average household size in Illinois.  Illinois has a population of 12.8 million.

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Electricity Daily

FERC examines coal-rail interactions

FERC examines coal-rail interactions

By Kennedy Maize

December 19, 2014 – When the Federal Energy Regulatory Commission opened its monthly public meeting yesterday; the name card usually placed in front of Chairman Cheryl LaFleur was missing. Instead, there were three small model railroad hopper cars, complete with a load of coal, from her husband’s collection, in front of her microphone. It was an intended symbol of the most importan...

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ACEEE: Increasing utility fixed costs a bad trend

ACEEE: Increasing utility fixed costs a bad trend

Facing slow growth or declines in electricity demand, along with increasing customer-owned generation, some utilities are creating a “disturbing trend” of raising customer fixed charges, says the American Council for an Energy Efficient Economy. “For residential customers,” says the Washington-based energy efficiency advocacy group , “utilities currently charge about $5-$10 per month for fixed custo...

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MISO approves $2.5B transmission expansion plan

MISO approves $2.5B transmission expansion plan

The Midcontinent Independent System Operator has approved a $2.5 billion transmission expansion plan after a process that took 18 months and involved “more than 60 meetings with member companies, regulators and neighboring systems,” according to a MISO press release. The MISO plan is the first in the ISO’s planning cycle that includes the MISO South Region, which is targeted for $359 million in new ...

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Congress approves two-week wind tax credit extension

Congress approves two-week wind tax credit extension

The tax extender legislation Congress passed earlier this week includes an extension of the wind production tax credit – for two weeks. The wind energy industry had been pushing for extension through 2017 and Senate Majority Leader Harry Reid (D-Nev.) came close to a deal with House Republicans for a long-term PTC extension, but that cratered when President Obama threatened to veto it for containi...

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Swiss Re: Another mild North Atlantic hurricane season ends

Swiss Re: Another mild North Atlantic hurricane season ends

“The North Atlantic hurricane season was relatively mild again in 2014,” according to the reinsurance giant Swiss Re, based in Zurich. “No major hurricane made landfall in the US, the ninth year running that this has happened. However, Mexico was impacted by Hurricane Odile from the East Pacific in September. Strong winds and heavy rains resulted in insured losses of USD 1.6 billion, as Odile hit th...

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Transactive Energy Conference draws international crowd. Is it a fever dream?

Transactive Energy Conference draws international crowd. Is it a fever dream?

By Bill Henry

December 18, 2014—Last week, the 2 nd Transactive Energy Conference (TEC), with an international cast of 200, that included utilities, national laboratories, ERCOT, EPRI, companies active in the smart grid space, consultants, state agencies, state legislators, academics, and more, assembled in Portland, Ore. Agencies and firms involved in interactive system implementation from the Nethe...

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Editorials

Wholesale demand response: The D.C. Circuit panel majority got it wrong

Wholesale demand response: The D.C. Circuit panel majority got it wrong

There is more than one problem hanging over wholesale power markets, in spite of the attention that’s understandably focused on FERC Order No. 745, now trapped in legal purgatory, neither dead—as generators would prefer—nor alive—as demand-side advocates and consumers desire.

There's a second market problem, a twofold one. Conventional generating plants in organized markets face potentially devasta...

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What was Google thinking?

What was Google thinking?

When Google engineers Ross Koningstein and David Fork worked on the company’s ambitious, unfocused, and now shuttered RE<C effort to assess the potential of renewable energy, they later decided to document the experience in an article for IEEE Spectrum. The resulting media frenzy was predictable. For some, the takeaway was simple: renewables can’t match coal. Which happens to be wrong.

But what em...

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A modest proposal to reduce US atmospheric carbon, efficiently and economically

A modest proposal to reduce US atmospheric carbon, efficiently and economically

In 1729 the brilliant Irish satirist Jonathan Swift, seeing a country-wide famine and vast differences in wealth and class, published “A Modest Proposal for Preventing the Children of Poor People From Being a Burthen to Their Parents or Country, and for Making Them Beneficial to the Publick,” suggesting tongue-in-cheek, that the Irish poor ease their woes by selling their young as food for the rich.

W...

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Guest editorial: Californians know it is electricity bills, not rates, that matter

Guest editorial: Californians know it is electricity bills, not rates, that matter

 

NRDC’s Sierra Martinez has a bone to pick with those, like a recent Forbes blogger, who misunderstand and misrepresent California’s electricity policies.

Despite the facts, the myth that Californians pay a lot of money for their electricity continues to be perpetuated, with proponents of that idea using their misguided interpretation of the data to justify their claim that California shouldn’...

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The deeper meaning of efficiency—and why it matters

The deeper meaning of efficiency—and why it matters

Energy efficiency is like a looming, benign shadow. It’s there but not quite real.

Five years ago we were given the impressive McKinsey & Co. study, “ Unlocking Energy Efficiency in the U.S. Economy .” It concluded that the US could reduce annual non-transportation energy consumption by 23 percent by 2020, eliminating more than $1.2 trillion in wasted electricity costs and 1.1 gigatons of greenho...

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In defense of organized wholesale electric markets

In defense of organized wholesale electric markets

By Kennedy Maize

Let me offer some disagreements with Robert Marritz’s recent editorial on organized wholesale markets. My friend and colleague makes a case that RTOs and ISOs are not capable of assuring adequate capacity to prevent serious reliability problems. Then he argues implicitly, although not overtly, for a return to state-based, cost-of-service regulation. I don’t find his arguments persuas...

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