Has the so-called “nuclear renaissance” finally met economic reality? The nuclear industry recently experienced their “worst week” since the Fukushima disaster in Japan. Not only did Duke Energy scrap plans to build new reactors at their Shearon Harris site in North Carolina but the many events which unfolded in Florida, culminating with Governor Scott’s signing of Senate bill 1472 late last Friday, affirm that the “renaissance” is crumbling – and economic reality is prevailing.

The new law amends a 2006 anti-consumer law that was meant to promote nuclear reactor construction by shifting all the financial risk of constructing new nuclear reactors to the power company’s customers. The earlier law drew significant consumer pushback and has now been scaled back. This new law is a step in the right direction. Proposed new nuclear projects in Florida will face more procedural checks that are intended to better protect consumers and must show that a project remains feasible and that project costs are reasonable. Find a brief summary of the new law here and our statement on its signing here.

This is the first time a state in the U.S. has scaled back a so-called “construction work in progress” (CWIP) or “advance/early cost recovery” law for new nuclear reactors. CWIP laws generally mitigate the financial risk of constructing a reactor by shifting part or all the financial risk of construction to utility customers. Essentially, customers are charged in advance, but with no assurance that they will ever receive a benefit from that forced investment. These laws have the perverse incentive of encouraging power companies to pursue speculative projects, even when there is no intent to build the plant because there is no risk for utility shareholders.

The law in Florida was sold to state legislators back in 2006 as a way to help finance the expansion of nuclear power. The help was necessary because Wall Street was (wisely) reluctant to finance new reactor projects given the abysmal industry track record of abandoning dozens of nuclear projects due to soaring cost overruns and a drop in electricity demand. A 2010 Forbes article mentioned, “A 1985 article in FORBES (Feb. 11) made the case that the U.S. nuclear power program was the largest managerial disaster in business history.” That’s primarily why there hasn’t been a new nuclear plant built in the U.S. in over 30 years.

But this time around, the industry and its proponents promised things would be different. Former Vice President Cheney’s Energy Task Force issued recommendations that pointed to a possible nuclear power resurgence and the Department of Energy launched the “Nuclear Power 2010” program, with the goal of having two reactors online by 2010. And thus, the nuclear “renaissance” was born as dozens of new nuclear reactors were proposed in the U.S. But that cheerleading has not led to much and the “renaissance” has seriously faded. Today, just four reactors are actively under construction at two plants: Vogtle in Georgia and V.C. Summer in South Carolina.

One need look no further than Florida, where four reactors are proposed, to see how the so-called renaissance has gone awfully wrong.

Duke Energy Florida, formerly Progress Energy Florida, anticipating future electricity demand, “bet the farm” on a proposed, nearly $24 billion nuclear reactor project in Levy County. Original cost estimates were a meager $5 billion in 2007 with a start date of 2015-16. Most recent cost estimates have skyrocketed over 400 percent with the earliest start dates of 2024-25. Customers are already on the hook for over $1 billion in pre-construction costs, which includes $150 million dollars for Duke shareholders. And by all accounts, the reactors likely won’t get built yet customers will bear the entire financial burden, never having received a kilowatt hour of power.

Meanwhile, Duke just shuttered its Crystal River Unit 3 nuclear reactor that hadn’t produced any power since 2009 after being damaged during a bungled in-house upgrade. Here, too, customers are already on the hook for more than a billion dollars in repair-related expenses and replacement power costs not covered by the utility’s insurance company. The Florida Public Service Commission has thus far approved the recovery of costs related to the failed repair, and the company is seeking to recover an additional $68 million this year for a shuttered nuclear plant that will never produce another kilowatt hour of electricity. It’s estimated that the failed upgrade, decommissioning, and a new power plant will ultimately cost Duke customers about $3 billion.

And Duke Energy is not alone in Florida. Florida Power & Light is likewise pursuing two costly new reactors at their existing Turkey Point plant near Miami. That project has been delayed by four years to 2022-23 at the earliest and the utility also continues to recover pre-construction costs from customers without having made a firm commitment to actually build the new reactors. These utilities serve over 6 million customers who are affected by this avalanche of nuclear costs.

It’s no wonder that the Florida legislature finally felt compelled to act. The amendment bill was opposed by the state’s largest power companies, who for years have persuaded legislators not to change the 2006 law, even though estimated costs of the reactors have quadrupled and their construction plans were perpetually postponed. Utility lobbyists argued “minor changes to the statute can impose enormous risks and put nuclear projects in jeopardy.” Yet, the bill passed over powerful power company objections.

Even a PSC commissioner who had presided over all of the annual nuclear cost recovery proceedings since this debacle started was only confirmed by the Florida Senate after a spirited debate about her role in approving nuclear recovery costs for FPL and the former Progress Energy Florida (now Duke).

If the events in Florida are any indication of where the so-called nuclear renaissance is headed, it’s clear it has met economic reality – and economic reality is prevailing. Lawmakers should now pivot to reforming the state’s resource planning process that led to the encouragement of these costly and speculative reactor projects. A focus on meeting electricity demand with lower cost and lower risk resources, such as greater energy efficiency implementation and renewable resource development, is a good step in restoring customer confidence in the state’s energy policy.

Many of the attendees have been long-time supporters of our biodiesel operations and are a big part of our success this past year, but we also met many new faces that we hope will help share what they learned about the station and biodiesel with their friends and colleagues.

Over the past year we have had the pleasure of providing fuel to a wide range of drivers, from local residents to landscape companies to cross country travelers – Woody Harrelson and New Belgium Brewing Company’s Tour de Fat, just to name a few. Everyone who provides grease or purchases our fuel has been key to our success this year. By using the fuel from our retail station, you are helping prevent carbon dioxide from being emitted into the air, making a real difference in the environment.

Our biodiesel is the only biodiesel in the country produced using 100% solar energy. It is also completely locally sourced, meaning that every cent is pumped right back into the Georgia economy. Our biodiesel also meets the American Society for Testing and Materials (ASTM) International Standard, which ensures quality and consistency that rivals conventional diesel.

By converting what would be an otherwise burden on our landfills and sewers into the greenest transportation fuel available, we are ensuring that our customers will have a safer and more enjoyable experience behind the wheel knowing that they are having as minimal environmental impact as possible. If you would like to know more about our biodiesel, click here.

We would especially like to thank our summer interns from Emory University and Georgia Conservancy/Atlanta Green Drinks for their help with promotion and set up, and the many vendors providing supplies, raffle prizes or food/beverage for the event. These fantastic supporters include:

Monday Night Brewing, David Lloyd and Technical Specialties, LLC, Pengelly’s Landscape and Garden, Fuller Hot Rods, Fireball Whisky,  The Mobile Marlay Food Truck, Bad Dog Taqueria, King + Duke, Brickstore, Skips Chicago Dogs, Chai Pani Decatur, Chickens and Pigs, and more.

Photos from the event can be viewed via Flickr or Clean Energy Biofuels’ Facebook page here.

Thank you Atlanta, for helping us make this endeavor possible. Sales of the fuel also help support our advocacy work to advance clean energy in the Southeast. Please continue to help us build on our success by telling your friends, contractors, gardeners, farmers and local restaurants about using biodiesel. Please share our video, “Like” us on Facebook, follow us on Twitter, or check us out on the web.

Wind energy supporter at the 2012 "Wind Works: For Jobs, for Georgian's" Rally on Tybee Island.

This Saturday, June 15th, marks the fourth annual Global Wind Day. Global Wind Day provides the opportunity for people around the world to celebrate wind energy resources. Last year, more than 250 events were organized in 40 countries around the globe.

While thousands of individuals are involved in the wind industry, many in the general public still find wind energy to be a bit of a mystery. Global Wind Day provides those individuals with an opportunity to gather more information about wind energy by participating in various wind events, such as tours to wind farms, public forums with wind experts and rallies in support of wind energy.

Here in the United States, we have much to celebrate for this year’s Global Wind Day. For every megawatt of wind energy capacity installed, about 300 homes can be powered for a year. Just last year, the US installed over 13,000 megawatts – a record breaking year. Today, over 60,000 megawatts of wind energy exist in the country providing enough energy to power about 14.7 million homes!

Wind Manufacturing Jobs in Job-Years (2030), U.S. Department of Energy's 20% Wind Energy by 2030 report, 2008.

There are approximately 75,000 individuals in the U.S. working in the wind energy industry.  With jobs in manufacturing, construction, engineering, project development, business, and education.

Here in the Southeast there are already several wind energy-related companies that help service the domestic and international wind industry markets. However, as the map to the right indicates, we have the capacity to expand and create more high quality wind energy jobs, specifically in manufacturing.

Even if there is not a Global Wind Day event taking place in your community, I would encourage you to take some time this Saturday to learn more about wind energy and your state’s wind potential and keep an eye out for upcoming wind events hosted by SACE. You can also send a message to world leaders by participating in the “G8 Wake-Up Call.” A global call-to-action to leaders that encourages them to shift to renewable energy resources.

Roundtable participants dig in to energy issues

In organizing circles it’s often said that if you’re not at the decision-making table, watch out — you may be on the menu. At June 10th’s Equity Matters Forum on Energy Equity, the many tables were full of folks from all over the city, who brought their diverse perspectives on economic, racial, gender, and other aspects of equity to form a vision for equitable inclusion in energy decisions.

“Energy Equity” was defined by the convening partnership as the fair distribution of the benefits and burdens of the ways we produce and consume energy. The partners include SACE, Partnership for Southern Equity, GreenLaw, Georgia Watch, the Center for Sustainable Communities, the Fulton Atlanta Community Action Authority, and the Concerned Black Clergy of Metro Atlanta.

Community advocate Bobby Green asks a question for the panel (with Dwayne Patterson of Partnership for Southern Equity).

Too many people don’t know how energy decisions are made until it’s too late — they’re already paying for an expensive nuclear plant on their utility bills, they can’t find financing help with solar panels or home efficiency upgrades, and the 50-year-old coal fired plant next door continues to spew air and water pollution. Some communities, particularly low income, elderly, and communities of color, are more likely to bear the brunt of these burdens — and they’re also more vulnerable to the extreme weather events predicted to increase due to climate change. For too long, these communities haven’t been at the table often enough when it comes to energy decisions.

Keynote speaker Barbara Hale with panel facilitator MaKara Rumley, Environmental Justice Attorney at Greenlaw

The Forum served as an introduction to both the ways energy effects us, through our bills, air and water pollution, and local economic development, as well as the ways the public can engage in the decision-making process. In Georgia, decisions affecting Georgia Power, the largest utility in the state, are made at the Public Service Commission, an elected body most people at the Forum acknowledged they weren’t familiar with.

Utility expert Barbara Hale traveled across the country to kick the Forum off by sharing a positive vision for energy equity. She works for San Francisco’s city utility and spoke about how committed citizen coalitions successfully shut down the city’s two fossil-fueled power plants, developed a clean energy alternative utility, and instituted a community benefits program at the utility.

Four panelists, including myself, responded to Barbara’s keynote, and brought in our own perspective. I was honored to sit alongside (from left to right in photo on right):

• Ron Shipman, Georgia Power’s VP of Environmental Affairs
• Dr. Joyce Dorsey, CEO of the Fulton Atlanta Community Action Authority
• Dr. Marilyn Brown, Professor of Public Policy at Georgia Tech and Nobel Peace Prize Laureate

Rev. Dr. Gerald Durley delivers the closing charge to take action

After the panel, the real work began: tables of participants addressed the three discussion questions below. Their responses were reported back at the event and collected to inform future conversations and action. What do you think? Please use the comments section below to share!

• What are areas that you think could be strengthened (both private and public) to help increase equity in energy through power generation, transmission and distribution, including workforce development?
• How could energy equity be used to sustain a healthy and competitive Atlanta now and for future generations?
• Describe the ideal model for enhancing authentic community engagement at the Public Service Commission?

The Forum was just the beginning conversation and dialogue of a larger movement to re-engage the public in energy decisions. The new collaborative is forming a vision recognizing that energy affects all of us, and all of us have an opportunity and a responsibility to affect our society’s energy choices.

Finally, remember that there’s a great opportunity for all Georgia citizens to speak their minds at the PSC next Tuesday at the final hearing to review Georgia Power’s long-term plan (Integrated Resource Plan or IRP). Planning to come? Please let me know!

All photos by Erik Voss. To see a gallery of his fantastic photos from the event click here. 

“North Carolina is home to one of the fastest growing solar industries in our nation,” said Governor McCrory. “It is important that we recognize the impact the solar industry is making in our state, not only in terms of being another valuable piece to an ‘all-of-the-above’ energy plan, but also the high-quality jobs the industry creates for hardworking North Carolinians.”

According to the Solar Energy Industries Association, North Carolina ranked 5th in the U.S. for annual installed solar photovoltaic (PV) capacity in 2012. This is even more impressive considering the state ranked 8th in 2011. North Carolina currently has more than 500 companies working in the solar industry, which they employ about 2,000 workers.

And it only gets brighter from here. SEIA expects North Carolina to rank 4^th in the country for annual capacity to be added in 2013.

Cheers to North Carolina’s Solar Energy Month and to the industry that made it possible! We hope that this pronouncement is a sign that Governor McCrory recognizes the importance of protecting the state’s RPS, and that the North Carolina legislature will continue to invest in good tax policies that support the growth of this “sunny” and successful industry.

Retro-Commissioning, Measurement & Verification, and Ongoing Performance Management

It’s open season with no bag limit all year ‘round in Florida for hunting feral hogs—and no hunting license is required!  The same could be said in buildings here—killing your building energy hogs should be an ongoing effort—and there’s no limit.

At a workshop organized by the U.S. Green Building Council North Florida chapter, David Miller, an experienced Energy Performance Consultant with TLC Engineering for Architecture, recently told us about the fast cash paybacks available from making sure your building is running properly and you’re using the latest cost-effective equipment.

Click image to enlarge / see details

Commissioning (or retro-commissioning or re-commissioning) is a methodical process for getting the most from the energy budget for your building  and use of it—and for saving money by avoiding unnecessary expense for energy use.  This applies for commercial and residential buildings.  During commissioning, a building’s design and equipment is tested, settings are tuned, problems are solved, and the superintendents/residents are trained in operations of the building. It’s a very cost-effective quality assurance process.

Building Energy Fundamentals

Buildings use about 41% of our nation’s energy; about 74% of our electricity. Ranking next in energy use are transportation, and then industry.

The biggest use of energy by buildings is for Heating, Ventilating and Air Conditioning (HVAC)—and one of the biggest opportunities for energy savings.  The percentages vary a bit by local climate and by type of building use, but HVAC and water heating combined account for 55%-59% of building energy consumption.  The shares of this use shift widely in Florida from north to south, among heating, cooling and water heating; and energy use for ventilation is an important factor in commercial buildings.  Next on the building energy savings opportunity list are lighting and refrigeration.  See details about energy use in residential buildings on the Florida Solar Energy Center website.

Business use varies widely by activity, and home energy use differs from commercial use in general.  BUT in the end, our use of energy in buildings is substantial.  A building’s energy footprint is bigger than one might imagine. It’s hard to bag feral hogs—they’re wily and most-often out of sight—yet they are very active and impactful across the landscape.  Consider the whole lifecycle of energy (and its climate impacts), including:  mineral fuel extraction, pollution emissions (refrigerants, CO2), building energy use intensity (EUI), and the efficiency of the structure’s components and equipment.  And we pay for this in our electricity and other fuel bills—and other ways externally.

Commissioning is not hard to do and not expensive—payback from the basics is usually in 1-2 years.  It takes some training, tools, interest and continuing attention to adjustments to realize the benefits—cash and other benefits that accrue in time.  The approach outlined by Mr. Miller is simple:

3-steps approach to efficiency via commissioning

1. Make sure it’s Off when it’s supposed to be Off.
   Among the most beneficial areas of opportunity are Lighting, Building Automation, Variable Air Volume (VAV) Retrofit, and Replace Roof-top HVAC units
2. Make sure it’s working right when it’s On.
   Needs vary by type of business and activity.  Especially in Florida, humidity control: limit outside air ventilation when occupancy is low, to allow the building to dry out overnight.
3. Is there a better way?
   There are several typical areas of improvement cost-effectively available to building owners:  Replace old-fashioned lighting; Replace old HVAC; Improve the building envelope (seal cracks, replace old windows, insulate roofs/ceilings, replace old doors); Improve control systems; use high-efficiency motors & variable-speed drives; change to low-flow water fixtures.

Opportunity for savings from commissioning was evaluated by a Lawrence Berkeley National Laboratory study of 643 buildings over 10 years. With building commissioning, median energy savings of 16% were obtained from existing buildings, 13% from new buildings; typically payback of costs was in only 1.1–4.2 years. Click here for an overview of the business case.

The federal Better Buildings Challenge asks leading organizations to commit to reducing the energy use of their buildings by at least 20 percent over 10 years.

Commissioning is a process, not an event — and it depends on measurement (data, evaluation, action; data, . . .)

With today’s data technologies, one should be able to know how a building was operating in the last hour.  BUT, there’s need for a person who’s curious to use the data collected.  Commissioning should be a multiple-stage process, with feedback loops and follow-ups.  Don’t just fill out forms and collect data—think about the information, do something to change the building and its operation; track more data and review.  Iterative, small changes will add up to big savings.  Sub-metering is now cost effective:  data logger devices now cost just $80-100; big ole’ installed meters $1000-$1500. Use some building energy tracking software (now modest cost, too) and really control your building (on a PC or one’s smartphone).

There are professionals that can help—first, talk with your local electric utility.  A typical Energy Audit may cost 10¢ to 20¢ per sq. ft. (for homeowners in Florida it’s free). Undertaking a more thorough retro-commissioning process may cost a bit more, but it should be the first Energy Conservation Measure undertaken:  commonly you’ll get a 1.1-2 year payback. It’ll be most cost effective at institutions with larger electric bills (e.g. $10,000 or so per month).

Major areas of opportunity

Mr. Miller identified a few energy conservation measures that are typical big areas ripe for improvement. HVAC is the typically biggest end-use, yet there are many other measures that are easier to commission, including:

• Lighting – 2-4 year payback; 35%-50% reduction in Watts. Typically installed are modern fluorescent bulbs or now more and more, LEDs.
• Demand Control Ventilation – schedule HVAC use in coordination with building use. Use programmable thermostats on up to whole-building computer-controlled systems.
• Static Pressure Reset (manage air pressure and flows to keep conditioned air where it is needed).

The commercial building energy efficiency standards now or being adopted in most states, ASHRAE 90.1 2012, adds plug loads (end-user equipment: TVs, copiers, toasters, etc.).  Now we’re getting into guiding the behavior of building users; we’re seeing more technology available for controls.  Building codes are needed to help keep us moving forward together: users, owners, builders and manufacturers.

Your building (where you work or where you sleep) is probably thundering with wild energy hogs, and it’s open season for the hunt.  It takes getting out there with tools and being involved to hunt down and kill the energy hogs. Call together a hunting party today and bring home the bacon.

Aerial view of USEC plant with TVA's Shawnee coal plant in the background

After 61 years, the USEC gaseous diffusion plant in Paducah, KY , which produces enriched uranium, is shutting its doors and ending its longstanding power purchase contract with the Tennessee Valley Authority.  As plans for new nuclear plants were scrapped, demand for enriched uranium dropped.  This changing landscape resulted in a global surplus of enriched uranium, making continued operation of the USEC plant unnecessary.  TVA’s Shawnee coal plant, whose first units came online in 1953, sits next door to the USEC plant and has provided power to the plant for the past 60 years.  Now that USEC is ceasing operations, the future of the Shawnee plant is in question.

As of May 31, 2013, USEC will no longer buy power from TVA and TVA will lose almost $600 million in revenue as a result.  Historically, the USEC plant accounted for about 5% of TVA power sales.  TVA was considering retiring some of the units at Shawnee, even before the USEC plant’s closure announcement.  Under a 2011 consent decree, TVA agreed to either retire two of the ten units at Shawnee or retrofit them with modern pollution controls by December 31 2017.  Regardless of the consent decree, the remaining eight units must install new air pollution controls to comply with EPA’s MATS regulations if these units are to remain operational after the 2015 MATS compliance date.

Now that the Shawnee plant has lost its primary customer, TVA will need to reassess whether or not they actually need the generation capacity provided by the 60-year-old plant.  Any pollution control upgrades made at Shawnee will cost a significant amount of money and TVA is already under pressure from the Obama Administration to shore up its financial situation.  A recent presidential budget proposal points to TVA’s “increased capital expenditures” as a possible cause of some of the federal governments current fiscal conditions (expenditures such as the $1 billion scrubber installment planned for TVA’s 60-year-old Gallatin plant).

Making a substantial investment in this ancient coal plant is clearly not the best business decision for TVA, especially in light of the decrease in electricity demand caused by USEC’s closure.  Furthermore, the Shawnee plant currently has over 8 billion tons of coal ash stored on site.  Continuing operations at Shawnee would only increase the amount of toxic ash stored on site, right next to the Ohio River.  Depending on the type of pollution controls installed, any new coal ash created may pose increased danger due to an increase in the ash’s ability to leach into the surrounding environment.  We hope TVA will take a hard look at all of its choices regarding the future of the Shawnee plant and come to the realization that the best decision, both financially and environmentally, is to retire Shawnee and replace any lost generation capacity with implementation of robust energy efficiency measures or renewable generation sources.

The response and clean-up efforts at Kingston are overseen by not only TVA and EPA but also the Tennessee Department of Environment and Conservation.  Cleaning up the spill has an estimated price tag of $1.178 billion.  Previously, the TVA Board approved a budget decision resulting in TVA ratepayers being charged an additional 69 cents on their monthly power bills starting in October 2009.  A TVA spokesman also stated that additional costs could be passed on to ratepayers if TVA has to pay damages as a result of outstanding civil suits related to the spill – a likely result in light of a recent court ruling that found TVA liable for damages arising from the spill.

At the public meeting, TVA executive Bob Deacy said the cleanup would ultimately end in November 2014.  (Click here for a Dec. 2012 video of Mr. Deacy outlining the progress of the cleanup).  When all is said and done, a total of 3.8 million cubic yards of ash will be stored in an on-site 230-acre holding cell, then covered with thick plastic liner and 2 feet of clay. EPA project manager for the site, Craig Zeller, referred to this ash holding cell as “the most monitored coal ash cell in the United States.”

EPA has an entire website devoted to its role in the cleanup where they provide a series of aerial photographs that show the impacted area around the plant before, after and in its “cleaned” condition as of January 2013.  TDEC also has a webpage dedicated to the cleanup, which includes links to air monitoring results, fish tissue data as well as soil, ash and surface water results.  Rounding out the trifecta of agency websites dedicated to documenting the response to the Kingston disaster, TVA’s website provides detailed information about the long term monitoring plan for the remaining coal ash.

Although all the agencies involved have spent a lot of time and money to restore the area impacted by the disaster, there is little hope of the water and land around the spill site ever getting back to its condition before the spill.  Not only has this disaster affected the community around the Kingston plant, it has affected all TVA ratepayers who will have to shoulder some of the financial burden associated with cleanup efforts and anyone who enjoys recreational activities on the Clinch and Emory Rivers.  The Kingston spill and the lingering devastation to the surrounding environment underscores just how badly we need proper regulation of coal ash waste from the federal government. We all need to push Congress and regulators to enact strict regulations for coal ash that will help prevent disasters like this from happening in the future.

In a move reminiscent of “Who Killed the Electric Car,” we’re hearing grumblings from the investor-owned utility (IOU) industry that advances in distributed energy technologies are threatening revenues. The IOU’s trade association, Edison Electric Institute (EEI), issued a red flag in January with a report titled: Disruptive Challenges: Financial Implications and Strategic Responses to a Changing Retail Electric Business. The “disruptions” boil down to distributed generation technologies like photovoltaics (PV), as well as energy efficiency and demand-side management programs, all of which are stealing demand and  revenue from utilities. EEI’s “strategic response” is to fight, rather than to adapt to, this evolving energy economy. While EEI is correct in raising a flag on these developing issues, the solutions they recommend are disconcerting from a public-interest standpoint, and naive from the perspective of maintaining competitiveness in an evolving market place. A more sophisticated response to the emerging market dynamics could create real economic value that can be shared by consumers, distributed energy providers and utilities.

The “Game-Changing” Factors
EEI lists a confluence of “game-changing” factors, but the greatest “threat to the centralized utility service model is likely to come from new technologies or customer behavioral changes that reduce load.” More specifically, the rapid cost reductions and advancements in distributed generation (DG) technologies, such as photovoltaics (PV) and battery storage, as well as an increase in energy efficiency (EE) and demand-side management (DSM) programs, are all directly threatening the centralized utility model. Although DG currently represents less than 1 percent of lost load nationwide, EEI is clearly paying attention to market trends in the US, where the installed cost of PV dropped 27% in 2012 alone and the installed capacity for that year increased by over 75% compared to 2011. Similar trends, and associated utility concerns, are occurring in other parts of the world. Indeed, as a recent Rocky Mountain Institute (RMI) blog stated, solar has “officially arrived.”

*For convenience, the remainder of this post lumps DG, EE and DSM into the category of distributed energy resources (DER), even though EEI only uses this term to describe DG technologies.

Utility Business Model Upended
While the majority of the American population views the deployment of distributed generation and increase in energy efficiency as positives for society, IOU’s are less excited. The IOU business model is driven by a financial interest to generate (or buy) and deliver as much power as possible. Higher energy demand means higher investments and higher utility shareholder profits. Minus a few interruptions, this model has worked exceptionally well over the past century. EEI states that the “utility sector has not previously experienced a viable disruptive threat” and has instead had “unfettered access to relatively low-cost capital” due to the confidence that investors place in the regulatory model.

DER directly counters the 100-year trend. As these technologies and behavior changes capture increasing “market share,” utility revenues drop and the cost of service is spread over fewer units. EEI contends that this, in turn, will drive up rates and lead to more customers pursuing DER. As EEI warns, “this set of dynamics can become a vicious cycle.” EEI goes on to say that under the worst scenario – i.e., “the ultimate risk to grid viability” – customers would leave the system entirely, by opting to use their own storage combined with a distributed generation resource such as PV. Worse still, utility credit quality will erode due to investors viewing utilities as an increasingly risky venture. EEI compares this “cycle of decline” to that witnessed in other sectors, such as telecommunications and the airline industry.

EEI Proposed “Actions”
In addition to pushing for a roll back of progressive state and federal policies, EEI offers several “actions” for utilities to essentially make DER prohibitively expensive. The short-term solutions revolve around eliminating cross-subsidy biases by adding fees to cover the costs of DER, and to adjust (i.e., reduce) the value provided to DER customers for the energy they offset and/or send back to the grid. Long-term actions would include additional fees and customer advances to recover a utility’s upfront investments, as well as identifying new business models and services that can be provided by utilities.

What EEI Is Missing
The projected advancements in DER technologies and consumer interests do warrant a re-evaluation of the electricity infrastructure and utility business models. However, the actions offered by EEI to address these challenges are shortsighted and merely prolong the inevitable transition to a modern energy economy rather than figuring out ways to work within it. A deeper analysis would shed light on solutions that meet the interests of not just the utilities and their investors, but those of the public and our economy as a whole. Specifically, EEI is failing to acknowledge how DER technologies are in the public’s best interest; how they can bring value, not just cost, to the grid; and, how they create opportunities, not just threats, for utilities.

It’s in the Public’s Interest
The prospect of a more distributed electricity network offers promise on many levels: economic, environmental, technological and sociological. DER can be beneficial for ratepayers seeking to reduce their electricity bills, and it also creates jobs and economic development benefits that will support both local and national interests. In addition, an increase in DER reduces the water consumption and harmful emissions heavily attributed to the electricity sector. Conventional central power plants account for over 40% of all freshwater withdrawals in the U.S. and over a third of all greenhouse gas emissions. Finally, just as we saw with the advent of the internet and cell phones, the emergence of new classes of energy production and efficiency technology and business processes will provide individuals and businesses with access to new options and more control over their energy use. The term “energy democracy” is becoming an increasingly achievable goal and one that resonates across political spectrums.

Distributed Resource Value
There is growing recognition that DER provides benefits to not only the public, but also to the power system itself. EEI appears unaware that there are more sophisticated approaches to valuing the benefits of DER on the grid compared to their decades-old methodologies. Accurately assessing the short and long-term costs and benefits of DER is more fair to customers and utilities, and will ultimately support better program design and integrated resource planning (IRP).

One of EEI’s biggest grinds with distributed energy is net metering. Sometimes referred to as “rough justice,” utilities view net metering as the perfect example of how distributed energy is reducing revenues for the utility and increasing rates – through cross-subsidization – on non-DER customers. However, several recent analyses by Crossborder Energy in California and Arizona demonstrated that the benefits of net metering will actually exceed the costs and create net benefits to all ratepayers.

Crossborder’s analyses build off a methodology pioneered by Clean Power Research, which was one of the first groups to take a deeper look at the benefits of distributed resources such as PV. Clean Power worked with Austin Energy in developing a Value of Solar Tariff (VOST), which takes into account the following values that DG solar brings to the grid:

• Avoided fuel costs
• Avoided capital cost of installing new power generation
• Avoided transmission and distribution expenses
• Line loss savings
• Fuel price hedge value
• Environmental benefits

The Austin VOST is currently 12.8 cents/kWh for residential solar systems, which, although high enough to incentivize ratepayers to consider going solar, is actually pretty conservative. In a recent Georgia IRP hearing, Karl Rabago – former VP of Distributed Energy at Austin Energy – testified that a meta-analysis he’s conducting on distributed solar valuation methodologies demonstrated that on average, distributed solar would be worth about 25 cents/kWh. Rabago noted even this is conservative because it doesn’t account for environmental, land, water, jobs, and tax benefit factors, which alone could add another 21.9 cents/kWh. And yet some utilities are only willing to pay their avoided costs for solar generation – typically well below 5 cents/kWh!

And, in case you were wondering, this sort of valuation is legal and within the utility’s valuation tool box, as Interstate Renewable Energy Council (IREC) recently made clear in their report, “Unlocking DG Value: A PURPA-based approach to promoting DG growth.” Utilities can and should be creating values-based tariffs and/or avoided costs that are equal to the value they’re receiving from having DER on the grid. 

An Opportunity Rather than Threat
EEI calls out the fact that “all industries must prepare for and develop plans to address disruptive threats, including plans to replace their own technology with more innovative, more valuable customer services.” Though hardly any emphasis is given to this concept in the report, it is in fact exactly what utilities should be doing.

Just as utilities are quickly retooling their asset portfolio to align with greater use of natural gas, they need to retool their resource planning to better align with DER. Although EEI highlights a concern with customers eventually opting out of the grid altogether (“the ultimate risk to grid viability”), there’s little debate that some form of central and/or micro-grid will always be needed. Revamping the grid infrastructure to be “smart” enough to handle the inevitable advancements of DER is a challenging but potentially rewarding business opportunity for utilities. Further, rather than watch and complain about the encroaching deployment of PV, storage technology, and electric vehicles stealing utility revenues, why not try to compete in these sectors and provide services and/or resources that meet consumer demands?

From the financial community to advocates, everybody knows the energy times are changing. Some of the smartest people in the country are figuring out ways to reinvent the US infrastructure. RMI released a report following collaborative efforts with PG&E – California’s largest utility – and is now engaged in a multi-year effort to identify issues and solutions involved with increased DER on the U.S. electricity system. In parallel, Princeton hosted a roundtable last month with utility executives, government officials, academics, industry representatives, and various advocacy and consulting groups to discuss the paradigm shift DER is creating. A key theme at the meeting was the need to change the way various aspects of generating and transmitting electricity are valued and priced. The fact that several utilities were engaged in the discussion is promising and gives hope that maybe utilities are coming around to the fact that the best response to this type of “disruptive challenge” is to embrace it, rather than fight it.

In all of our lives there are moments that occur which are unimaginable. On Tuesday, May 22, I experienced such as moment and my perception of a group of people was drastically altered.

I volunteered to speak, as a concerned citizen, to the Georgia Public Service Commission (GA PSC).  I had been informed that the Georgia Power 2013 long-term energy supply plan (also know as an Integrated Resource Plan or IRP) was being reviewed. As a pastor, and not an expert on energy or environmental issues, I was, needless to say, somewhat intimidated to share my thoughts with such a powerful Commission.

What deeply impressed and surprised me was what I personally witnessed and felt when one Commissioner expressed his feelings about the horrible weather-related disaster, which just occurred in Moore, Oklahoma.  There was genuine interest and concern expressed about what can happen when powerful storms and events like that one impact our communities, regardless of race, creed, or political affiliation. The passion shared about what had transpired and Commissioner Wise’s prayer for the people of that city put me at ease, thus allowing me to share my brief remarks.I approached the podium to address the Commissioners and thanked them for making me, a person of faith, feel welcome. I shared that people of color, children, the elderly and those from low-income communities are disproportionately and negatively impacted by polluted air, water, and soil due to fossil fuel powered generation. I noted in my remarks:

“People ask me why I’m working on these environmental issues when there’s so much to be done for civil and human rights. I ask them, how can I do my work if I’m dead?”

I was pleased to learn that Georgia Power has proposed to retire or partially retire three coal-fired power plants in our state. This is an excellent step in the right direction. I remarked that Georgia Power should not miss the opportunity to include more clean solar and wind power in its energy resource mix.  I learned that it has just added an Advanced Solar Initiative. I asked the GA PSC to approve the retirement of the coal plants and expand energy efficiency and solar energy in Georgia Power’s 2013 IRP.

I understand that Southern Alliance for Clean Energy has been encouraging Georgia Power to increase its energy efficiency programs and develop its solar portfolio. Georgia Power plans to buy 210 MW of solar over the next two or three years, which is definitely a good step, but needs to be more vigorously pursued for communities to realize the benefits of cleaner air and water.  I also proposed that the IRP should emphasize an increase in energy efficiency programs. There must be a conscious, systematic strategy to develop a program that achieves higher energy and cost savings for residential, commercial, and industrial customers.
As a faith leader, I sensed a willingness from the Commissioners to review the IRP while considering how it can improve the quality of life and our environment while enhancing the health of all people.  It is imperative for business, science, politics, and faith to become actively involved as a “force and voice of one” to sustain a perfectly balanced world that was given to us to oversee, not destroy.

Thank you to the Public Service Commissioners for respecting the inclusive, necessary role of the faith community and providing me a special Moment in Time.