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Wednesday, February 25, 2015

The work on efficiency you (probably) won't hear about

Sometimes government actions, like President Obama’s recent veto of the Keystone XL pipeline legislation, will dominate the news cycle for a day or more. Most actions, however, happen with little fanfare and never register a blip on the evening news.

This isn’t surprising. The Pennsylvania Bulletin, our state’s journal of record for government actions, filled 8,078 pages last year. Reading that would be like reading Tolstoy’s War and Peace more than six and a half times. That is just for the state—the Federal Register hasn’t had that few pages per year since 1949 and now tends to be around 80,000 pages every year. Luckily, these documents are fairly well organized so those of us that need to read them can skip the parts in which we're not interested. And, it's a good thing for everyone else that our news media filters the rest to a manageable level.

With all that filtering, however, it’s inevitable that important things happen that people never hear about. This may happen again in a couple of weeks when the Pennsylvania Public Utility Commission (PUC) is scheduled to release its Tentative Phase III Implementation Order for the Act 129 Energy Efficiency and Conservation program. With a title like that, it won’t be surprising if it stays well under the radar for much of the media.

Even if the fourth estate doesn't notice it, the Act 129 energy efficiency programs benefit thousands of Pennsylvanians every year. If you bought a new high efficiency appliance, purchased LED lighting, had a home energy audit, improved your insulation and weatherstripping, or completed many other energy-related activities, you may have received a discount or rebate thanks to actions your electric company is taking to comply with Act 129. Suffice to say that this has been a very successful program: data from Phase I shows that the program returned nearly $3 to consumers for every dollar spent.

We here at PennFuture have been working with other organizations to make sure these programs continue to deliver on their promise. We’ve also submitted recommendations to the PUC on how they can improve the program in Phase III. These comments included asking them to consider rules that encourage more comprehensive programs that will provide improved efficiency for years to come. We have also asked them to consider cost savings due to heath and environmental impacts, not just the savings on our electric bills, when evaluating programs.

Once the Tentative Order is released, we'll once again work to develop comments and help organize a push for the best possible program. Even if no one notices, we'll be here working for you.

Rob Altenburg is director of the PennFuture Energy Center and is based in Harrisburg. He tweets @RobAltenburg.

Solar jobs, Florida insults


Florida Gov. Rick Scott spent Monday in Philadelphia, meeting with Pennsylvania business leaders to try and convince them to move their companies to Florida.

Solar boosters and industry representatives from our state, and those from Florida, should both be insulted

His administration has done nothing to support the incredible job-creating potential that the Sunshine state possesses with respect to building a healthy and thriving solar industry. The state ranks third in the nation for most solar radiation but only ninth in the nation for overall number of solar jobs. Considering that it's the third most populous state in the union, this performance is even more dismal. 

There are any number of proactive changes that Gov. Scott could champion to stimulate solar industry growth. The current landscape is rocky, at best, for solar in Florida. The state has a prohibition on third party ownership, which makes solar leasing impossible. It has low caps (less than 2 MW) for interconnection, discouraging utility-scale projects, and has no portfolio standard to speak of. In 2014, Florida's Public Utility Commission (Florida Public Service) removed a once offered, but at the time unfunded, statewide solar rebate (and energy efficiency) program from the books altogether. Any number of these issues, if addressed, could promote solar industry growth in that state. 

Meanwhile, Florida utilities continue to write their own rules on solar. To their credit,  utilities such as Duke Energy are stepping out with some modest solar programs but they continue to resist statewide comprehensive approaches to modernize Florida's policy and market landscape. 

This parable doesn't stop at Florida, however. Despite the fact that Pennsylvania is less sunny than Florida, we still get plenty of sunshine and due to smart policies and incentives, we outranked Florida in solar jobs and solar deployment for many years. Now, because of the unwillingness of elected officials to improve our own state's solar market and provide competitive market signals, we continue to see declines in the number of solar jobs and rate of solar deployment in Pennsylvania year after year. Meanwhile our neighbors New York and New Jersey continue to see it as the job boom it is, both ranking in the top five among states for solar jobs. 

It's clear that Governor Scott should stop trying to convince Pennsylvania companies to join the ranks of the snow birds and, instead, focus on the sun birds that need his help in Florida. Meanwhile, Pennsylvania leaders should set their sights on capturing more solar jobs here at home.

Evan Endres is program manager for the PennFuture Energy Center and is based in Pittsburgh. He tweets @ER_Endres.

Wednesday, February 11, 2015

Street lighting Part 3: Following Rhode Island's lead

In the first two blogs of this series, we established that both significant energy and significant cost savings are achievable by making the switch to Light Emitting Diode (LED) street lighting technology. But for many municipalities, there is simply no path to acquiring ownership of the streetlights to upgrade to LED lighting or to enjoy the cost savings associated with municipal ownership. 

See part two to see the profound savings that can be achieved by your average municipality over what utilities charge.

To see the root of the problem, you need to go back in time. For many small towns, street lighting started as a service that natural gas suppliers provided at a time when the only streetlights available were gas streetlights. This evolved into the the electric companies providing that service when gas lights were replaced with electric lights. Since utilities managed utility poles, it made sense that they install and maintain the streetlight fixtures as a fee for service for the municipalities. The task of maintaining streetlights was costly and labor intensive, requiring frequent maintenance and regular bulb replacement. Electric utilities had the equipment and experience to deal with this need. Most cities and towns did not.

Fast forward to 2015 and to the modern technology we have now and you will realize that municipalities are beholden to the system of utility street lighting maintenance and ownership for reasons that no longer make sense. It is no longer beyond the ability of a municipality to cost-effectively own and maintain lighting units.

For the sake of energy savings and municipal budgets, it is time for Pennsylvania to explore its options and put systems in place that enable municipalities to cost-effectively gain control over the decisions related to the lighting of their streets. 

Other states are moving forward
Rhode Island passed a measure in 2013 that enables municipalities in that state to cost-effectively acquire the street lighting equipment and control from the utility. Under the Municipal Streetlight Investment Act, cities and towns are able to buy their streetlights from the utility under a purchase price that reflects the depreciated value of the lighting units that is approved by the Public Utilities Commission (PUC). After the purchase, the municipality owns the system and pays the utility a rate for the electricity consumed as they would with any other facility for which they pay an electric bill.  

The Right Price
The same approach -- using the depreciated value as a starting place -- that works for Rhode Island would make sense for Pennsylvania. When a utility submits a street lighting tariff for approval before the Pennsylvania Public Utility Commission (PUC), they spread out the price for the lighting unit and the cost of maintenance, and include a profit margin for that charge against the lighting unit in a monthly charge. So, depending on when the lighting unit was installed, that depreciated value could be zero or could be many thousands of dollars. If zero, it means that, in effect, the municipality has already paid for the unit through the monthly tariff the utility charges.  

Obstacle Course
Aside from a fair price, it is also important that the fees that a utility would charge, related to the transfer, don't create onerous obstacles for a municipality. For instance, PPL Electric Utilities in Pennsylvania has taken a positive step by outlining a process in which a municipality can purchase their lights. However, they are charging significant "make ready" fees for each light. These fees are supposed to cover the cost of moving wires to make the poles "safe" for a lighting contractor to install or maintain the lights. What they don't recognize is that the contractors that would be installing the new lighting units are certified and trained to the same, or better, standard as the utility line workers. Consequently, this fee represents an unnecessary burden on the municipality.

Inspection fees, inventory fees, and "pole space" fees are also common barriers that are put in place to make municipal ownership an unattractive option. None of these fees were allowed to stand in Rhode Island's Municipal Streetlight Investment Act.  

It's time to fast forward to 2015. For Pennsylvania, following Rhode Island's lead in carving a clear and reasonably priced path for municipal ownership of streetlights makes sense and cents.

Click here for part 1 of this series.
Click here for part 2 of this series.

Evan Endres is program manager for the PennFuture Energy Center and is based in Pittsburgh. He tweets @ER_Endres.

On methane leakage, Pennsylvania should lead

Last month, Environmental Protection Agency (EPA) Administrator Gina McCarthy announced plans to propose new limits on methane emission leakage from the oil and gas industry that will result in a 40 to 45 percent reduction over the next ten years. We don’t know exactly what that rule is going to look like, but we can make some pretty good guesses. EPA has said it is going to "build on its 2012 New Source Performance Standards" (NSPS) using "both regulatory and voluntary approaches."

To the extent a NSPS is the regulatory mechanism used, the Clean Air Act requires those standards to “reflect the degree of emissions limitation achievable [through] the best system of emissions reduction which (taking into account the cost of achieving such reduction and any non-air quality health and environmental impact and energy requirements)... has been adequately demonstrated.

There is a lot packed into that sentence, but it’s basically telling us that the EPA will look at the sources of emissions and what is being done to control those emissions. Out of the available controls, they are going to focus on those that are the most cost-effective. EPA has, in fact, already started the analysis process. Last year, they released a series of five white papers on various topics. Along with those white papers, they have also released comments from peer reviewers in industry, academia, government, and the nonprofit community.

Having EPA take action by setting a minimum standard for the industry is a positive step, but Pennsylvania should look to being a leader rather than a follower. In 2013, Pennsylvania was responsible for more than 12 percent of the U.S. production of natural gas and was the number two state behind Texas. With that much production in a relatively small area, we will likely see more negative impacts than many other states if we aren’t also a leader in emissions controls. We may also find that controls can be cost-effective here that wouldn’t be economically justified in a state with a fraction of our production.

The Clean Air Act gives states the authority to develop their own standards of performance for sources. If the EPA finds these are adequate, they must delegate authority to the states to implement those standards. Our Governor and Legislature should make sure we take advantage of this opportunity to implement the best possible plan for Pennsylvania.

Rob Altenburg is director of the PennFuture Energy Center and is based in Harrisburg. He tweets @RobAltenburg.

Wednesday, February 4, 2015

Achieving 100 percent Renewable Energy IS Possible

Last week, West Virginia showed us what not to do when it comes to renewable energy. This week, Pennsylvania can look to the Green Mountain State as inspiration for adding to our Renewable Portfolio Standard (RPS) goal.

Background Information on Pennsylvania's and Vermont's RPS

As mentioned in previous blog posts, Pennsylvania’s Renewable Portfolio Standard is called the Alternative Energy Portfolio Standard (AEPS). Our state’s goal for the AEPS is to have 18 percent of our electricity from electric distribution companies (EDCs) and electric generation suppliers (EGSs) and sold to retail electric customers be supplied by alternative energy resources by compliance year 2020-2021.

Vermont’s RPS is called the Sustainably Priced Energy Enterprise Development (SPEED) Program. The state’s goal for SPEED is to have 20 percent of statewide electric sales be generated by new renewable sources by 2017. Unlike Pennsylvania’s AEPS, Vermont’s SPEED program is not binding on the utilities. Only if the minimum obligations laid out in the legislation are not met, will they be required to meet a binding RPS.

Vermont is well on its way to meeting its 20 percent goal by 2017. As of 2013, 16 percent of statewide electric sales were generated by new renewable sources. Vermont also has "Total Renewables Targets": 55 percent of  each retail  electricity provider’s annual electric sales during the year beginning January 1, 2017, increasing  by an additional 4 percent each third January thereafter until reaching 75 percent on January 1, 2032, must consist of total renewable energy.

Although Pennsylvania and Vermont may seem like two states with nothing in common, I know from personal experience that that is not the case. Sure Pennsylvania is a much larger state with a much larger population, but both states have a lot of open land and mountains (both good for renewable sources such as wind and solar). We both have thriving dairy industries and are known for popular dessert brands -- Hershey’s and Ben and Jerry’s. Our populations also consist of mostly middle-aged folks with varying political views (despite what you may think, not everyone in Vermont is a Democrat and they don’t all support renewable energy).

However, what Pennsylvania has and Vermont doesn’t includes an Environmental Rights Amendment in its state constitution and binding Renewable Portfolio Standards. So why are they beating us at achieving their renewable energy goal? I could provide a list of reasons (or excuses, such as our electricity portfolios being very different) as to why we are slacking on our AEPS and why it may be “easier” for VT to install renewable energy. Instead, I am going to suggest that we look to Burlington, Vt. to see how achieving 100 percent renewable energy is possible.

How is Burlington achieving 100 percent renewable energy? 

Burlington, Vt., with a population of a little over 42,000, is the “big city” when you are living in Vermont. By comparison, Burlington has about the same population as York, Pa. What Burlington lacks in population, it makes up for in spirit. The city set out to achieve 100 percent renewable energy and it is now the first city in the U. S. to use 100 percent renewable energy for its residents' electricity needs. That is certainly no small feat.

About one-third (roughly 35 percent) of this renewable energy comes from a biomass facility, and 20 percent is from nearby wind turbines and solar arrays. The rest comes from two hydroelectric dams, one in Vermont and one in Maine.

Taylor Ricketts, professor of Environmental Science at the University of Vermont, says “Burlington has shown that cities can play a role in addressing our dependence on burning fossil fuels, which is the principal driver of climate change.”

Ken Nolan, who helps run the local utility company, Burlington Electric, emphasized that the decision to go 100 percent renewable was both the right environmental call and the right economic one. It turned out that using all renewables was the lowest cost long-term financial investment the city could make. The city will save nearly $20 million by about 2035 and customers will not see any increase in their electric rates. Nolan also mentioned that "The prices are not tied to fossil fuels — they're stable prices — and they provide us with the flexibility, from an environmental standpoint, to really react to any regulation or changes to environmental standards that come in the future." Such as the Clean Power Plan.

There are some critics who say Burlington should not include the old Shawmut Hydro Dam, located in Maine, as part of its 100 percent renewable energy profile because having all new sources would be the best and most environmentally friendly option. However, when we are advocating for renewable energy, we are not looking for perfection. It's going to take time and money to install all new renewable sources. The main takeaway from Burlington’s accomplishment is that it is absolutely possible for a city to run its electricity entirely on renewable energy. In other words, we can run our heating, cooling, appliances, and lighting without fossil fuels.

PBS posted a video recently describing the renewable energy movement in Burlington.

Other examples of renewable energy efforts by cities include Aspen, Colorado and Bonaire in the Caribbean, both looking to achieve 100 percent renewable electricity by 2015. Munich, Germany is also making progress on its goal of achieving 100 percent renewable electricity by 2025 and San Diego, California is hoping to meet the mark by 2035.

Check out other 100 percent renewable energy projects happening around the world at www.go100percent.org.

Jennie Demjanick is energy policy analyst for the PennFuture Energy Center and is based in Harrisburg. She tweets @JennieDemjanick.

The remarkable thing about street lighting: Part 2

In my last Re: Energy blog post, I blogged about the remarkable amount of energy savings that can be achieved by switching the municipal streetlights managed by just one Pennsylvania utility to the Light Emitting Diode (LED) technology that is available right now. I can recap that post by saying...it's a ton of energy savings!

But energy savings, although important -- and very important to us here at the PennFuture Energy Center -- is not enough to make a case for many whose job it is to manage the finances and day-to-day operations of our Commonwealth's nearly 2,600 municipalities. I noted in last week's post that a second remarkable thing about LED street lighting is that, for the first time, municipalities could save money by owning and maintaining their own lights. This is due in large part to a perfect storm of low-cost LED options, low expected maintenance, long life, and extremely low energy use.

I'll break it down by comparing the monthly differences between ownership cost and the ongoing cost of the tariff.

Before I go on, however, the ownership portion of this comparison assumes that the utility transferred ownership of 1,000, 100 watt streetlights at a depreciated book value of zero, with no associated fees for that transfer. And, that the municipality is starting with new equipment. Now, this brings up a lot of intriguing issues about what a utility can, or should, charge for transferring control of streetlights, including "make ready" charges, pole charges, and the like. Noting that this is where the issue gets meaty and controversial, these items will be discussed next week in part three of this series. For now, let me illustrate that, independent of these issues, municipal ownership and management of streetlights is not a pie in the sky concept, and the costs and savings actually leave more pie on the table for municipal budgets and taxpayers.

Utility tariffs 

The cost for having a utility own and maintain the lights is pretty straightforward. There is usually a distribution tariff that represents the amortized cost of installing and maintaining the light throughout its life. Sometimes this is included in the energy charge on a per kWh basis, and sometimes it is flat.

Here are two examples of utility tariffs and associated monthly costs for 1,000, 100 watt (or 100 watt equivalent) streetlights.

Monthly costs for High Pressure Sodium


Monthly Tariff for 1,000, 100 watt High Pressure Sodium lights
Tariff
$12.51 X 1,000 = $12,510
Energy Charges

$1.22 X 1,000 = $1,220
Total Cost Per Month

$13,730



Monthly costs for LED


Monthly LED Tariff for 1,000, 100 watt equivalent lights
Tariff
$11.16 X 1,000 = $11,160
Energy Charges

$.59 X 1,000 = $590
Total Cost Per Month

$11,750


Municipal Ownership

Now, let's compare this to what a municipality could expect to pay to purchase, install, and maintain 1,000, 100 watt equivalent (42 watt) LED streetlights. There are many more individual costs, but the end result is less expense overall.

This example is based on the real world experience of communities and consultants. It should also be noted that this example outlines a payment of $1,921 against a 10-year bond issuance for purchase and installation of new LED units. After this 10-year period, the assets are paid for and the monthly expense is further reduced.

It should further be noted that ownership allows the municipality to shop the generation portion of their electric bill, which could yield greater energy savings. Finally, there is a charge outlined below for replacement escrow. This is typically built into monthly costs as a way to prepare for an incident that could damage multiple lights, such as an accident or storm. At a certain point, the escrow may not need to be continuously replenished.

Monthly costs to own and maintain your own LED streetlights


Monthly LED cost for 1,000, 100 watt equivalent lights
Electricity (.13 per kWh)

$1,911

Payment on $185,000 for purchase and installation at 2.46%

$1,921
Monthly cost to contract third party maintenance

$1,500
Monthly suggested escrow for incidental replacement

$1,000
Total Cost Per Month

$6,332


Experiences may vary but the savings potential is very real. The difference is a savings of over $65,000 per year for 1,000 lights. Your town may have far more than 1,000 lights so the savings potential may be much greater.

It is clear that a municipality can own and manage its own street lighting at a lower cost than what utilities currently charge. Despite this fact, there is no clear path toward fair and cost-effective ownership to enable these cost savings. Join us next week for Part 3 of this series, where we will discuss models that can be employed to level the playing field.

Click here for part 1 of this series.
Click here for part 3 of this series.

Evan Endres is program manager for the PennFuture Energy Center and is based in Pittsburgh. He tweets @ER_Endres.

Wednesday, January 28, 2015

Smog and mirrors in West Virginia

Since it was signed into law in 2004, Pennsylvania’s Alternative Energy Portfolio Standard (AEPS) has guaranteed a certain percentage of the electricity sold at retail in the state comes from clean and renewable sources. When fully implemented in 2020, this will mean .5 percent of our electricity will come from solar, 7.5 percent from clean “Tier 1” renewables like wind power, and an additional 10 percent from “Tier II” alternative sources such as waste coal.

According to the Pennsylvania Public Utility Commission's (PUC) 2014 annual report on the program, the 16 MW of solar installed the prior year “resulted in $171 million of investments that help sustain the 2,900 person workforce from 428 companies involved in manufacturing, sales, distribution and installation of solar power components and systems in Pennsylvania.” Similarly for wind, the PUC reported more than 1,000 direct and indirect jobs (including jobs at 28 in-state manufacturing facilities). This is a positive step but we have barely scratched the surface of our potential for solar and wind, and for the jobs and other economic benefits clean power would provide.

For all the good news, Pennsylvania’s AEPS has fallen behind surrounding states. Compared to our program, New York, New Jersey, Delaware, Maryland, and Washington, D.C. all require 20 percent or more renewable energy between 2015 and 2026. Even Ohio is ahead of us with a 12.5 percent standard. While we could be moving forward and joining our neighboring states, opponents of clean energy are hard at work to prevent this.

It looks like our neighbors in West Virginia will succumb to politics and be the first to take a giant leap backwards. The state had enacted a portfolio standard in 2009 that would have required 25 percent of electricity coming from renewable and “alternative” sources. At the time, the coal industry supported and even helped draft the law. (Not surprisingly, they managed to ensure a number of different coal technologies could generate credit under their plan.) Now, the industry has had a change of heart and is claiming the plan threatens jobs.

With economic indicators such as jobs, earnings, consumer spending, and housing starts all up since 2009, are we to believe that this law creates a “jobs problem” that didn’t exist prior to the economic recovery? It wasn’t the technology or economics that changed so much in six years—just politics. One industry representative was quoted as saying this was a reaction to new Environmental Protection Agency (EPA) emissions regulations. That is no doubt true, but there's a bit more to the story...

In its Clean Power Plan, the EPA made sure its targets were achievable by basing them on existing state plans. West Virginia has one of the more complex laws out there so it’s hard to guarantee how much clean renewable energy will result. Although they would probably need to modify their rules to make reductions under the law creditable, it’s possible that the existing law would result in enough clean energy resources being built.

While most folks would think this was good news, it put the state's coal industry between a rock and a hard place. Continuing to support the law they helped draft could be seen as supporting one element of the Clean Power Plan. Worse yet, it would make it much more difficult to peddle the talking point that no element of the plan is achievable. There was only one solution—their own law had to go.

When the industry wants to convince people to vote for more pollution, less clean energy, and worse public health, there is only one way to go: Cloud the issue with smog and mirrors and then threaten jobs.

This might not impact Pennsylvania directly but our own law could very well see a similar challenge. Hopefully, Pennsylvania Governor Tom Wolf and enough of our legislators will see through the industry’s smog screen and keep our AEPS law in place.

Rob Altenburg is director of the PennFuture Energy Center and is based in Harrisburg. He tweets @RobAltenburg.

Distributed generation and grid security: Sometimes you have to go back to move forward

For more background on Grid Security, see my previous post from January 7, 2015: "Should we be worried about an attack on our electric grid?"


Electricity has become a Necessity

During the aftermath of Hurricane Sandy in 2012, over 8 million people (myself and other eastern Pennsylvanians included) along the U.S. East Coast lost power for days. The blizzard that just struck New England left thousands without power and shut down the entire island of Nantucket. Now, I fully understand that millions of people around the world go without power on a daily basis. As well, some members of the Amish community right here in Pennsylvania choose to go without electricity and they do just fine. 

But let’s not forget that our country is fully dependent on our electric grid. We need it to run our utilities, to communicate with each other and other countries, to defend our country -- the list goes on and on. So, how is it that one of the most powerful countries in the world still suffers from widespread power outages on a regular basis? There has to be a solution, right?  Well, lucky for us, there are solutions and one of the most recognized solutions is distributed generation.  

What is Distributed Generation?

According to the U.S. Department of Energy (DOE), “distributed energy consists of a range of smaller-scale and modular devices designed to provide electricity, and sometimes also thermal energy, in locations close to consumers.” The devices include “fossil and renewable energy technologies (e.g., photovoltaic arrays, wind turbines, microturbines, reciprocating engines, fuel cells, combustion turbines, and steam turbines); energy storage devices (e.g., batteries and flywheels); and combined heat and power systems.”  

Utilizing clean distributed generation (meaning generation from renewable energy sources and combined heat and power) is the best option because as defined by the Environmental Protection Agency (EPA), it "does not include those types of small generators that have emissions levels (pollutant per kWh) that are higher than an average power plant." Distributed generation from clean renewable energy sources is all about generating energy right at the load demanding the energy. This reduces the amount of energy lost and decreases the need for costly transmission systems and distribution lines that are susceptible to storm damage (and even squirrel chews). 

Distributed generation is not a new concept. In fact, by employing more distributed generation, we would be going back to the beginning to help us move forward. Small, localized generation stations were used before Thomas Edison thought of having one large centralized facility, the first one being the Pearl Street Station in New York City
Distributed generation also works well for microgrids (small localized electric grids that can operate separately from the main electric grid). A microgrid consisting of multiple distributed-generation technologies could be brought together in a concentrated, flexible cluster of power when needed to maintain reliability in situations where the main grid is damaged due to a storm or security issue. In fact, during Hurricane Sandy, a microgrid system at the U.S. Food and Drug Administration (FDA) and General Services Administration (GSA) campus in White Oak, Maryland disconnected from the power grid and kept the campus running while utility-dependent customers in the area remained powerless. During natural disasters, having a microgrid would provide utilities with more time to fix the damaged areas of the grid. 
This all may sound quite complex and costly, but engineers have been working more intensely on interconnection and interoperability issues over the past few years which will allow distributed generation and microgrids to be cost-effectively, securely, and safely deployed.
Distributed generation has other benefits including lowering costs to homeowners and businesses that offset part of their consumption of utility-provided power or sell power back to the grid. Additionally, instead of plugging your refrigerator and other “necessity” appliances into a noisy and costly backup generator, you would have an onsite power source that can easily come online when your electric utility is experiencing an outage. Critical facilities such as hospitals and emergency centers that depend on backup generators during power outages can also take advantage of the more reliable off-grid power from renewable energy. 

Check out our Clean Energy Wins: A Policy Roadmap for Pennsylvania Report for more about "Promoting Distributed Generation in Pennsylvania," starting on page 44.  

Proponents of Distributed Generation

In 2005, the U.S. Naval Inspector General stated thatone potentially effective and protective option for improving energy security is distributed generation” and “by distributing smaller generating capacity at multiple locations, the pitfalls of relying on a single remote source of power are greatly reduced.” In 2012, U.S. Representative Roscoe Bartlett (R-MD), Rep. Yvette Clarke (D-NY), Rep. Trent Franks (R-AZ), and Rep. Hank Johnson (D-GA) introduced a resolution to encourage “community based civil defense preparations, including distributed generation of 20% of local electricity needs.” Rep. Bartlett said implementing more distributed generation and being “self-sufficient independent of the electric grid” was in the interest of national security. 

Considering the recent reports on climate change that describe the potential for more devastating natural disasters and reports showing an increase in cybersecurity threats, now (not tomorrow or a few years down the road) is the time to act on implementing widespread distributed generation. 


Jennie Demjanick is energy policy analyst for the PennFuture Energy Center and is based in Harrisburg. She tweets @JennieDemjanick.

The remarkable thing about street lighting: Part 1

Street lighting and the application of more Light Emitting Diode (LED) technology may be one of the most overlooked efficiency opportunities within the state of Pennsylvania. In this three-part blog series, we will look at savings, both in terms of energy and cost; political and market barriers; and explore a path forward to making sure our state can achieve the energy and cost savings that other states -- and taxpayers within those states -- enjoy.

Our Commonwealth has over 2,600 individual municipalities. The majority of these municipalities do not own or maintain the streetlights within their borders, rather, the EDC (Electric Distribution Company) serving that municipality provides street lighting operation and maintenance based on a monthly tariff. Options to apply new energy efficient lighting applications through these tariffs have been limited despite the cost reductions and efficiency development of LED street lighting technology.

In communities where the street lighting is owned and maintained by the municipality, the obvious savings in electricity and maintenance costs from more efficient and longer lasting LED application has led many to begin the process of conversion. Projects in Philadelphia, Pittsburgh, Bethlehem, Berlin, Harrisburg, Altoona and many other cities and towns are currently underway. Pittsburgh alone expects that a full conversion of 40,000 lights to LEDs would cut $1.7 million off its annual $4.2 million budget. 

To illustrate the potential energy savings from converting utility owned and maintained street and area lighting to LED technology, we can look at the Pennsylvania Electric Company (Penelec). One of seven regulated electric utilities in the state, Penelec is the largest electric utility service territory in terms of land area served. We aren't picking on Penelec but it happens to be the only utility for which we have the lighting inventory (and, for what its worth, this data is not easily obtained). Penelec maintains over 974,000 individual streetlights of varying applications and sizes. These lights utilize High Pressure Sodium (the ones that you probably have in your town, with the orange hue) and Mercury Vapor (that's even older lighting technology with a blue hue) lighting types. The projected annual energy use of these lights is 630 gigawatt hours of electricity per year.

File:Street lights, Jefferson Avenue at night (2899348024).jpg

Now, here's the first "remarkable" thing about street lighting. If you part and parcel out the tested LED lighting technologies available in the market today and apply those as replacements for each of these 974,000 lighting units in Penelec's territory, the energy savings that can be achieved, just for that one service territory, would be about 433 Gigawatt Hours (that's 433,000,000 kWh) per year. This is equivalent to the annual energy that 40,000 homes use in one year. Imagine what the impact could be if the streetlights in all seven of the regulated utility service territories were switched to the advanced LED technologies we have today. 

So, you may be saying to yourself, "It's great that we can save energy, but your advanced LED technologies cost a fortune." Not so fast. There have been substantial breakthroughs in reducing the cost for LED technologies, and you need only peruse the aisles of your local hardware store to prove it.

Domestic LED light bulbs that were $20- $50 per bulb just four years ago are now in the $7-$14 range, and the same holds true for LED streetlights. Units that sold for $300 four years ago can now be purchased for $144. Costs across the board have come down significantly.  And for a utility or municipality, those costs are not just measured in the price for the light. Maintenance savings from the longer usable life, and decreased likelihood of the unit failing, significantly reduce the cost of ownership. Energy savings for a municipality are also a clear piece of the cost puzzle, with your typical High Pressure Sodium streetlight using about 600 kWh per year compared to an LED replacement that uses just one third of that at 175 kWh per year.

All of these cost reductions lead to a second remarkable thing about streetlights. For the first time, the low cost of ownership and low frequency of maintenance provided by LED streetlights means that municipalities can save big money by owning and maintaining their own streetlights over what they currently pay utilities for that service in tariffs.

Read next week's blog post, "The Remarkable Thing about Street Lighting: Part 2," for a more in depth rundown of the costs and savings for typical ownership vs. what utilities charge.

Click here for part 2 of this series.
Click here for part 3 of this series.

Evan Endres is project manager for the PennFuture Energy Center and is based in Pittsburgh. He tweets @ER_Endres.

Wednesday, January 14, 2015

Climate Change: Lessons from our past

In the environmental field, fifty years ago was a long time ago. Groups like the Sierra Club (1892), the National Audubon Society (1905), the National Wildlife Federation (1936), and others have certainly been hard at work for much longer. Rachel Carson’s classic Silent Spring (1962) is also a little over 50 years old. But the Environmental Protection Agency (EPA), the Clean Air Act, the Clean Water Act, the Endangered Species Act, and the bulk of our environmental laws are all younger than 50. If you had to put an age on our modern concept of environmental protection, it’s probably 40-something.

By comparison, this year marks the 50th anniversary of a report called Restoring the Quality of Our Environment issued by the Environmental Pollution Panel of President Lyndon Johnson’s Science Advisory Committee in 1965. In the introduction, the President said “our present efforts in managing pollution are barely enough to stay even, surely not enough to make the improvements that are needed.” Fortunately, the legislature and (once established) the EPA would begin to address many of these issues within the decade.

If our President today were making a speech on climate change, Lyndon Johnson’s quote from 50 years ago wouldn't seem out of place. What we are doing is “surely not enough to make the improvements that are needed.” Hopefully, as was the case in 1965, significant progress is just around the corner. With the soon-to-be-finalized Clean Power Plan, increased attention to methane leakage, and fossil fuel alternatives such as solar power getting cheaper all the time, we have the potential to make significant progress over the next few years.

There is, however, a more direct link between the 1965 report and climate change—Dr. Roger Revelle and his team provided 22 pages of the report that specifically addressed the issue. It began by stating that “man has begun to burn the fossil fuels that were locked in the sedimentary rocks over five hundred million years and this combustion is measurably increasing the atmospheric carbon dioxide.” It then noted that as early as 1899, the geologist Thomas Chamberlin proposed that changes in climate could result from changes in the concentration of carbon dioxide. And it also warned that such climatic changes “could be deleterious from the point of view of human beings.”

To be sure, we have certainly learned a lot about climate change since 1965 but the link between fossil fuel combustion and atmospheric carbon dioxide was already apparent. The report noted, “the data show, clearly and conclusively, that from 1958 to 1963 the carbon dioxide content of the atmosphere increased by 1.36 percent...By comparing the measured increase with the known quantity of carbon dioxide produced by fossil fuel consumption... we see that almost exactly half of the fossil fuel CO2 remained in the atmosphere.”

The report concluded by saying that by dumping all this CO2 in the atmosphere, “Man is unwittingly conducting a vast geophysical experiment.Now, fifty years later, we are seeing the results of that experiment more clearly. I think we can safely say that now is a good time to end this experiment and act on climate.


Rob Altenburg is senior energy analyst for PennFuture and is based in Harrisburg. He tweets @RobAltenburg.

Solar increases home value, PA markets need to keep up

We've become accustomed to hearing about home value increases that residents in solar mega-states like Colorado and California have enjoyed due to the decision to install solar. But we've never been certain of how that same lesson applies to Pennsylvania. A study just released by the Department of Energy’s (DOE) Lawrence Berkeley Laboratory, has widened the scope of their prior investigations to include states in the mid-Atlantic region, namely our own Keystone State. 

The findings hew closely to findings from former studies that focused on Colorado and California. In Pennsylvania, as part of a six-state sampling that included Connecticut, North Carolina, New York, and Massachusetts, homes with solar sold for a premium equivalent of up to $4 per watt based on the size of the solar installation. That means a $15,000 price increase for a newer $3.5 kW solar install. 

Having a study to back up home value increases from home-scale solar is an important step forward but it's not the end of the story. Solar industry representatives and the real estate industry need to work together to consistently and accurately value solar energy as a home improvement that returns real dollars to a property owner. Solar professionals need to do their part to make sure solar owners are armed with accurate information on their installation that can easily and consistently be translated to real estate professionals in the event that they need to sell. 

Solar, as a home feature, needs to find a permanent place in the searchable fields of databases that appraisers use to find "paired comparable" properties for the purposes of home valuation. This includes modernizing Multiple Listing Services (MLS) to include solar, efficiency scores, and other green features and supporting data for all of these. Without that step, home value increases will not be applied consistently and may not come through for the purposes of mortgage home appraisals, a critical step for the growth of a healthy solar (and home energy efficiency) market. 

With proof of a $15,000 premium, there's much to be gained by working together to make sure our solar and real estate industries are keeping up with the Solar Joneses.

Evan Endres is program manager for the PennFuture Energy Center and is based in Pittsburgh. He tweets @ER_Endres.

Wednesday, January 7, 2015

Between the lines of your electric bill

Before the holidays, PennFuture worked with a coalition of other organizations to prepare a series of recommendations for the Public Utility Commission (PUC) on the upcoming Phase III of the Act 129 Energy Efficiency Program. Technical comments like these won’t make the news but the issues are important.

Since deregulation, our local power companies are no longer in the generation business. They are now known as electric distribution companies (EDCs) and are responsible for delivering power, reading meters, maintaining the local lines and poles, responding to outages, and other services that deliver the power. The folks that actually sell power are known as Electric Generation Suppliers (EGSs). You can go to www.papowerswitch.com and pick the EGS from which you purchase your power. Since we don’t want dozens of companies all running power lines to every neighborhood, EDCs remain regulated utilities with monopolies in their service areas.

Unfortunately, the way the system is set up, residential customers tend to pay for distribution services based on a cost per kilowatt hour (kWh) just like they pay for generation. This means EDCs stand to make higher profits if customers use more power. So, customers installing renewable energy sources like solar power or energy efficiency measures such as new appliances or LED lights could mean less money in EDC pockets.

Act 129 of 2008 was an important piece of legislation that began to address this issue. It requires Pennsylvania’s EDCs to implement cost-effective measures to reduce energy consumption and demand. Phase I of the program was a great success, ultimately returning nearly $3 to consumers for every dollar spent. We are currently in Phase II of the program and most EDCs are well on their way to achieving their targets. The PUC has begun work on the process of setting the Phase III targets.

While we addressed a number of more technical points in our comments, perhaps the most important issue raised is how we determine what is cost effective. The PUC must evaluate programs using a Total Resource Cost (TRC) test. Because the Act defines this test in terms of “monetary cost,” the PUC has interpreted this to exclude consideration of health and environmental benefits, even when they can easily be monetized. It’s great that Phase I was still highly cost effective under this overly restrictive test but ignoring many of the costs and benefits doesn’t make sense.

Just because costs don’t appear on our energy bills, it doesn’t mean we don’t have to pay for those costs. When children repeatedly miss school because of asthma attacks or other respiratory diseases caused by pollution, parents take more time off from work. The lost productivity contributes to higher prices, the higher medical bills mean higher insurance premiums, and the lost time in school could lead to a lifetime of lower paying jobs for the children. Individually, these costs may seem small but when multiplied by the 30 million asthma sufferers in the country, we see millions and millions of lost days of work or school. On this scale, the costs start to soar. When we add other costs of environmental damage such as lost tourism, costs to maintain clean water, damage to crops, etc., the costs get even higher.

This issue isn’t limited to Act 129. Whenever a program is proposed that will protect public health and the environment, it’s a good bet a polluter will soon be telling us that it “costs too much.” It’s also a good bet that the polluter is only talking about the costs that come out of his pocket, not ours.

Rob Altenburg is senior energy analyst for PennFuture and is based in Harrisburg. He tweets @RobAltenburg.

Should we be worried about an attack on our electric grid?

So, should we worry about attacks to our electric grid? The short answer is yes, but implementing widespread renewable energy and energy efficiency policies could come to our rescue.

Considering the recent hacking incident at Sony, you may be wondering how vulnerable the U.S. is to future attacks. More specifically, how vulnerable is our electric grid to an attack by hackers shutting it down from outside the U.S. or by shooting at or driving/flying into our substations. It turns out that due to aging infrastructure built long before cyber-security was even a word, we are very vulnerable to such an attack.

Our 1970s-era technology has not been upgraded due to fears of interrupting power service. David Kennedy, CEO of TrustedSec, says “The energy industry is pretty far behind most other industries when it comes to security best practices and maintaining systems." A survey by ThreatTrack Security found hackers had breached security at 37 percent of energy companies.

To make matters worse, a lot of utilities are not continually monitoring their systems to see if anything out of the ordinary is occurring. Pacific Gas and Electric Co. finally hired a new security company to protect the Metcalf substation near San Jose, California that was shot at and robbed in two separate incidents. The shootings in April 2013 resulted in over $15 million in damage to 17 transformers and almost caused a blackout in the Silicon Valley.  The following August, equipment and tools were stolen from the substation.  The previous security company had disregarded the fence alarms so no one was ever apprehended for either crime. Jon Wellinghoff, former chairman of the Federal Energy Regulatory Commission (FERC) notes that "It would not be that hard to bring down the entire region west of the Rockies if you, in fact, had a coordinated attack like this against a number of substations.”

Potential Attacks
Our grid can be damaged or destroyed in the following ways, according to the website SecureTheGrid.com: a nuclear weapon that generates an EMP (Electro-Magnetic Pulse) effect; a geo-magnetic storm from the sun that also can generate an EMP effect; a smaller, localized EMP that can be created with everyday equipment from Radio Shack; cyber warfare; and direct physical attacks. If a terrorist group were to set off a nuclear weapon creating an EMP, which is essentially a huge energy wave strong enough to knock out systems that control electricity flow across the country, the result would be catastrophic.
Another example of a potential attack is referred to as an AURORA which, as noted in the publication POWER, results when a circuit breaker or breakers are opened and closed, resulting in an out-of-phase condition that can damage alternating current (AC) equipment connected to the grid. According to cybersecurity analyst Joe Weiss, "Aurora is the cyber exploitation of the physical gap in protection of the electric grid affecting every substation."

David Whitehead, research director for Schweitzer Engineering Laboratories, says that back in 2007, Aurora was the most fearsome cyber-security threat but utilities are not currently addressing the Aurora concerns because other threats have taken priority. The only good news is that it would take someone with a lot of insight to pull off an Aurora attack because they would have to overcome network password and authentication procedures. Tests were conducted in 2007 to see what an Aurora attack would look like and as you can see in this leaked video, the results were quite destructive to the generator involved.

Current Threats to Our Grid
The head of the National Security Agency and the U.S. Cyber Command has recently stated that “unnamed foreign nations and groups have gained the technical capability to take down control systems that operate U.S. power grids, water systems and other critical infrastructure.” According to Navy Admiral Michael Rogers, "it is only a matter of when, not if, we are going to see something dramatic."
Michael Assante, former chief security officer of the North American Electric Reliability Corp., the U.S. grid security monitor, says attackers “learn how to modify malware, to hide it, to test it to make sure they can get under your radar.” Once they gain access, they can send a signal telling power generators to go offline and even alter the transmission system so that power cannot be distributed.
The cyber-security firm Cylance Inc. has warned that "Iran is the new China" in a report that shows hackers from Iran attempting to enter our systems (“Operation Cleaver”). Eric Cornelius, director of critical infrastructure and industrial control systems at Cylance and a former Department of Homeland Security official, says the attackers possess "the sophistication to cause physical damage if they were so inclined."
According to Fred Hintermister, manager and key member of the Electricity Sector Information Sharing and Analysis Center (ES-ISAC), an industry-run source for cyber intelligence, cyber attacks "arrive in the middle of the night or on a Friday afternoon when operators are changing shifts or when we have low reserve margins on a very hot day in the summer."
The one defense utility control networks do have is that they are all very distinct from one another and hackers would have to figure out the idiosyncrasies of each system. Mike Kuberski, manager of grid protection and automation for Pepco Holdings, calls this feature "security by obscurity."
Changes to Security Protocol
Under the Energy Policy Act of 2005, FERC has the authority to approve mandatory cyber-security reliability standards. FERC recently approved new reliability standards that “require owners and operators of the Bulk-Power System to perform a risk assessment of their systems to identify critical facilities; evaluate potential threats to, and vulnerabilities of, those facilities; and develop and implement a security plan to protect against attacks on those facilities. Additionally, in an attempt to address concerns, the Department of Homeland Security is holding secret meetings with energy company leaders to discuss "ongoing" cyber threats.

To be continued: The threat to our aging grid infrastructure provides another argument for making our grid "smarter" and implementing distributed generation.

Jennie Demjanick is energy associate for the PennFuture Energy Center and is based in Harrisburg. She tweets @JennieDemjanick.

Wednesday, December 17, 2014

Yes, Senator Casey, we can

On December 10, Senator Bob Casey issued a statement entitled The Need to Act on Climate Change. The statement began on a very positive note, saying We must take action on climate change because it poses a serious threat to public health, the environment and national security. It then went on to voice support for the Environmental Protection Agency's (EPA) Clean Power Plan and highlighted a number of reasonable points.

With the other member of our U.S. Senate delegation in Pennsylvania, Senator Pat Toomey, completely opposed to limiting carbon pollution, and even our own Pennsylvania Department of Environmental Protection (DEP) opposing many of EPA’s efforts, Senator Casey deserves our thanks for being a voice of reason.

As much as we would like to praise the entire statement, there is one sentence with which we take issue. Midway through the document, the Senator says:
"EPA’s renewable energy target for Pennsylvania imposes an unequal burden on the Commonwealth relative to other states with much greater renewable energy potential, and it wouldn’t be possible to get greater carbon pollution reductions from the other three building blocks in Pennsylvania."
While we can appreciate constructive criticism that fosters debate and will ultimately make a good rule better, this particular statement takes an overly pessimistic view of the EPA’s proposal.

The claim that EPA imposes an unequal burden on us sounds bad, and it is bound to be repeated often by those opposed to the Plan. But, is it really surprising that EPA is proposing more reductions from states that emit more carbon pollution? Sometimes, being unequal is not only fair but also reasonable public policy.

The EPA derived its regional renewable generation targets by averaging existing renewable portfolio standards (RPS) in nearby states. This guarantees that the regional standard will be more moderate than what other states have already found to be achievable. Of the states with existing standards in our region, Pennsylvania is in last place with an 8 percent target—half of the 16 percent average. So, it’s not surprising that we need to do a little extra to catch up. (West Virgina and Virginia are even further behind as neither has a state RPS.)


Because we generate more electricity (and emit more pollution) than many other states, we also need more renewable generation to see the same percentage improvement. Of course, just because it’s unequal doesn’t mean it’s a burden. As a state with more generation, we also have the potential for more cost-effective reductions in many cases. Also, when we consider the benefits of having a clean and inexhaustible energy supply that protects public health and the environment, creates local jobs, avoids volatile fuel prices, and provides a more resilient power grid, the real burden would be remaining dependent on fossil fuels for another generation.

We Can Do It

The second part of the Senator’s statement is not only more troubling but saying that we can’t achieve more from the other elements of the EPA plan is just plain wrong.

The EPA’s plan sets a state’s target by calculating what is achievable using four building blocks (see graphic). These building blocks are simply used as a means to calculate the target. EPA does not require Pennsylvania to use any particular block in its plan nor does it require any particular facility to achieve any specific reduction. States will have the flexibility to choose what measures are best and most cost effective. We could follow the EPA plan; we could choose to pool our resources in a multi-state approach (which could be as much as 30 percent cheaper); and we could even make use of other sources of emission reductions that EPA didn’t consider. Even if we stick to the EPA’s building blocks, we can clearly achieve far more reductions than they have assumed.


We certainly have the potential to exceed EPA’s target for renewable generation (Block #3). Their plan assumes we can get about 35,000 GWh total renewable generation by 2029. Our existing Alternative Energy Portfolio Standard (AEPS) should get us about halfway to that goal with more than 18,000 GWh expected by 2020, leaving us nine years to install the rest. Between solar and wind alone, we have the potential to exceed that target.

A 2009 study showed Pennsylvania could get over 29,000 GWh from on site solar alone and such resources have already become more cost effective. A study from the U.S. Department of Energy showed we could get over 20,000 GWh from offshore wind in lake Erie. Additionally, a study from the National Renewable Energy Laboratory (NREL) showed we could get almost 10,000 GWh from land-based wind. That doesn’t even consider out-of-state resources that could be used if they prove more cost effective.

Not only can we meet the goal, but doing so looks more and more like a smart business choice even without an EPA rule. An analyst at Deutsche Bank recently found that the cost of rooftop solar will reach grid parity in all 50 states by 2016 (ten states are already there.) Our grid operator, PJM, reported that getting 30 percent renewable penetration in our grid (mostly solar and wind) would reduce production costs by up to 16 percent over business as usual and can reduce wholesale electricity prices by over 21 percent.

While we can get all the expected reductions from renewable energy, that isn’t the only option. Contrary to what Senator Casey has said, we can get more reductions than the EPA predicted from many of the building blocks.
  • For redispatch of coal generation to gas (building block #2), we already have. Over the past several years, a number of old coal-fired power plants have either retired or announced their retirement. As as result of low natural gas prices, these are being replaced, for the most part, with new natural gas capacity.
  • For more clean and renewable generation (building block #3), we can take credit for more than just new renewable energy. Because of uprates in capacity at an existing nuclear plant, we are already achieving more than EPA estimated.
  • For energy efficiency (building block #4), we probably have the most potential to exceed EPA’s projections. A recent PUC report prepared by an independent evaluator noted that we could likely triple EPA’s projection with cost-effective measures. These are measures that are already putting roughly $3 into consumers’ pockets for every $1 spent.
The Time is Now

Senator Casey, you said we must take action on climate change. The Clean Power Plan will keep energy cleaner and more affordable. It will create more jobs for Pennsylvania workers. It will protect the health of our citizens, particularly children and the elderly. And, it will help keep Pennsylvania a leader in technology and innovation.

We’ll keep up the fight to reach these goals but your full support would help a great deal. Are you with us?


Rob Altenburg is senior energy analyst for PennFuture and is based in Harrisburg. He tweets @RobAltenburg.