Tag Archives: Energy Institute at Haas

Reaction to Is “Community Choice” Electric Supply a Solution or a Problem?

Severin Borenstein at the Energy Institute @ Haas wrote a good summary of the issues around community choice aggregation.

Source: Is “Community Choice” Electric Supply a Solution or a Problem?

I am on the City of Davis’ Community Choice Energy Advisory Committee and have been looking at these issues closely for a year. I had my own reactions to this post:

First, in California the existing and proposed CCEs (there are probably a dozen in process at the moment to add to the 3 existing ones) universally offer a higher “green” % product than the incumbent IOU, most often a 50% RPS product. And although MCE and SCP started out relying on RECs of various types to start out, they all are phasing out most of those by 2017. I think most will offer a 100% product as well.

The reason that these CCE’s are able to offer lower rates than the IOUs at a lower RPS is that the IOUs prematurely contracted long for renewables in anticipation of the 2020 goal. In fact, the penalty for failing to meet the RPS in any given year is so low, that the prudent strategy by an IOU would have been to risk being short in each year and contract for the year ahead instead of locking in too many 20+ year PPAs. At least one reason why this happened is that the IOUs require confidentiality by any reviewers and no connections to any competing procurement decisions. As a result the outside reviewers couldn’t be up to speed on the rapidly falling PPA prices. The CPUC has made a huge mistake on this point (and the CEC has rightfully harassed the CPUC over this policy.)

CCE’s also offer the ability to craft a broader range of rate offerings to customers–even flat 20 year rates that can compete with solar roofs on the main issue that customers really care about: price guarantees. In addition, CCE’s are more likely to be to nimbly adjust a rapidly changing utility landscape. CCE’s are much less likely to care about falling loads because their earnings aren’t dependent on continued service.

It’s also to recognize the difference between local government general services (e.g., safety and public protection, social services, regulation, etc.) and enterprise services (e.g., utilities of all sorts). In general, the latter are as efficient as IOUs (except LADWP which illustrates the INefficiency created by overlarge organizations). So one can’t make a broad generalization about local government problems and how they might apply in this situation. The fact is that almost all of the existing and new CCEs are or will be JPAs, which are often even leaner. (Lancaster is the exception.)

Finally, Severin made this statement:

“Whatever regulatory mandates, managerial mistakes, or incompetence occurred in the past, customers switching to a CCA should not be allowed to shift their share of costs from past decisions onto other ratepayers.”

I have to disagree to a certain exent with this statement. Am I forced to pay for the past incompetencies of GM or GE or any other corporation? Yes, utilities have a higher assurance of return on their investments, but no where is it written that it is “ironclad.” Those utilities had an assurance first as the sole legal provider and then as the provider of last resort, but that’s eroding. In California, the CTC was a political deal to get the IOUs out of the way. The fact is in California that the CPUC abrogated its responsibility to oversee these decisions on behalf of ratepayers with the encouragement of the IOUs. If the IOUs want to retain their customers, then they should be forced to compete with the CCEs (and DA LSEs.) It’s time to reopen this matter.

And to add a bit more:

The logic of this statement is that ANY customer who leaves the system, including moving to another area, state or nation, should have to continue to pay these stranded costs. Why should we draw the line arbitrarily at whether they happen to still get distribution services even though the generation services have been completely severed? Particularly if someone moves from say, San Francisco to Palo Alto, that customer still relies on PG&E’s transmission system and its hydro system for ancillary services. Why not charge that Palo Alto customer a non-by-passable charge? And why shouldn’t it be reciprocal? Relying on “political practicality” is not an answer. Either ALL customers are tethered forever, or no customers are required to meet this obligation.

 

A brief reply to “Real” Electricity Still Comes from the Grid

Source: “Real” Electricity Still Comes from the Grid

Catherine Wolfram at UC Berkeley posted about their paper looking at costs of distributed energy systems in Kenya and concluding that these were too expensive for households compared to connecting to the grid. However, the paper came under immediate criticism.

Here’s my thoughts based on her representation of the paper’s findings, some of which are mirrored by other commentators:

First, the paper talks about costs on one side, but doesn’t put them in perspective to the alternatives. The post lists the cost of the individual systems, but not the expected connection costs to the grid.

Further the paper takes a static look at current costs and doesn’t account for the differential trends in the sets of costs for an home-based system versus connecting to the grid. The latter costs can be expected to be steady or even rising, while it’s well known that both solar and storage costs have fallen rapidly.

Different scales of “grid” also are important. For example, solar projects show scale economies up to about 3 MW but then modular construction flattens the per kW cost. A village microgrid separate from a national central grid may be quite cost competitive.

Finally, the paper appears to lump large hydro in with other utility-scale renewables. The environmental (and economic development) record for large-scale hydro projects in the developing world is dubious at best. There is evidence of significant methane emissions from tropical reservoirs. Habitat is destroyed and poorly designed projects don’t deliver expected benefits. Hydro is by far the largest energy supplier on these grids, and they may be little better than coal from an overall environmental perspective.

Reblog: If you like your time-invariant electricity price, you can keep it

Severin Borenstein at the Energy Institute at Haas makes the case for giving customers the choice of TOU or fixed price rates. I’ve commented several times on the Energy Institute blog about this approach, and blogged myself about the need for this option.

Source: If you like your time-invariant electricity price, you can keep it

Reblog: Leaking Coal to Asia

Maximillian Auffhammer at UC’s Energy Institute @ Haas focuses on the issue of exporting coal from the Port of Oakland, but he turns to the issue I highlighted recently–the path to accomplishing environmental objectives should travel through compensating those who are worse off from such policies.

Source: Leaking Coal to Asia

Energy Institute @ Haas takes on DOE weatherization study

Are the Benefits to the Weatherization Assistance Program’s Energy Efficiency Investments Four Times the Costs?

The authors of a study questioning the net benefits of the Weatherization Assistance Program critique the use of non-energy benefits to swing the program assessment to a net positive results. (The authors have responded to some critiques here.) Given the recent revelation that asthma is more likely to be caused by early childhood care decisions, that particular benefit may be quite vulnerable. The biased representation of other benefits undermines the DOE study as well.

I’ve posted some of my own comments on the Energy Institute blog.

Energy at Haas: One university’s attempt to reduce energy waste at work

A look at how commercial and institutional building energy use can be reduced by providing price signals.

Energy Institute Blog

If you work outside your home, chances are you don’t pay (directly) for the energy you use at work. At my place of work, the UC Berkeley campus, most employees never see – let alone pay – their energy bills.

Of course, there are plenty of pro-social reasons to be conscientious about my energy consumption at work (climate change and tight university budgets, to name a few). But these “split incentives” (i.e., the fact that I bear none of the costs when I increase campus energy use) beg the question: How much less energy would we use at work if we were all responsible for paying our own energy bills?

windows Source: http://www.theatlantic.com/business/archive/2014/04/our-cubicles-ourselves-how-the-modern-office-shapes-american-life/360613/

This seems like an important question when you consider the quantity of energy consumed each year by commercial buildings (which include office buildings, retail space, restaurants, hotels, hospitals, schools, and universities). The commercial sector now accounts for over…

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