Aldermen approve Emanuel's energy switch to Integrys from ComEd

By Julie Wernau, Chicago Tribune

December 13, 2012

Chicagoans could find out as soon as Thursday exactly how much they will pay for electricity under a plan approved Wednesday that switches about 1 million people to Integrys Energy Services.

Mayor Rahm Emanuel received unanimous City Council approval Wednesday to negotiate most details of the transaction.

Michael Negron, deputy chief of policy and strategic planning for the Emanuel administration, said Integrys, a sister company to Peoples Gas, is carefully timing its bulk electricity purchase in order to strike a good deal for Chicago. It could happen Thursday.

"Typically in this industry, when you lock down a rate it's for minutes or hours," he said. "We want to be in a position to get us the best possible prices."

The city hopes to be a model for other communities because its contract calls for consumer protections and elimination of power produced by burning coal.

"For protecting our residents and protecting our environment, we have taken, I think, a significant step, and one that's a model that other cities will look at," Emanuel said.

Integrys must deliver prices at or below what residents would have paid Commonwealth Edison through 2015 and cannot charge early termination fees to consumers who decide to seek alternative suppliers or deny service as a result of their credit history. Consumers can also opt out.

Emanuel has said consumers could see savings of about $150 per household through May 2015.

David Kolata, executive director of the Citizens Utility Board, a Chicago-based consumer advocate, applauded the deal, which he said had "consumer protections that are stronger than we've seen in any other community."

ComEd, which will deliver electricity purchased by Integrys, will still be responsible for billing and fixing power outages.

An earlier plan to siphon a portion of consumer savings to invest in rooftop solar panels and energy efficiency upgrades in Chicago buildings didn't get out the door. Some critics said the plan would be akin to a hidden tax.

Mark Pruitt, of the Delta Institute, a consultant to the city on the issue, said Integrys is being encouraged to make investments in energy efficiency improvements as it hedges its Chicago portfolio.

Just as Integrys can purchase megawatts from power plants to increase its electricity supply, it can also fulfill its obligations by purchasing so-called negawatts, which decrease demand for power. For instance, rather than buying power from a natural gas plant, Integrys can pay a large manufacturer to power down at certain times to decrease electricity demand.

"The innovation can still continue as the contract begins," said Jack Darin, executive director of Sierra Club's Illinois chapter and a member of the advisory committee for the electricity deal.

Chicago is the largest city in the country eligible to adopt such a plan under state laws. Only Ohio and Illinois laws allow for such efforts, according to city officials. Hundreds of suburbs have adopted the electricity arrangement in recent years.

http://www.chicagotribune.com/business/ct-biz-1213-chicago-aggregation--2-20121213,0,4748379.story

The missing element of the Renewable Energy study

12.03.12

Tim Redmond

San Francisco Bay Guardian

Since San Francisco's Local Agency Formation Commission is meeting Dec. 7 to talk about renewable energy, I went and read the 100-page report of the Mayor's Task Force on Renewable Energy, which offers 39 different suggestions for meeting the goal of 100 renewable electricity in the city by 2020.

That's a pretty ambitious goal. The guy who set it, Gavin Newsom, loved lofty, ambitious projects, particularly when he was never going to be the one to carry them out. So too here: Newsom announced the city's goal in 2010, shortly before he left for the Lieutenant Governor's Office. Ed Le convened the task force earlier this year, and the members, most of whom have legitimate qualifications for the job, got right to work.

The most important conclusion of the report: Yes, it's financially and technologically feasible to generate all of San Francisco's electricity from reneweable sources, and we can get their in a short eight years. One key element: More distributed generation -- that is, the city needs to create financial and regulatory incentives for people to put solar panels on their roofs. In San Francisco, with sun much of the year (and small houses), a rooftop solar installation can pretty much power the average single-family home and can pick up a fair share of the load of the typical four-unit building.

But while the report gives a shout-out to CleanPowerSF, which will soon be offering 100 percent renewable energy service (for a slightly higher price), and talks about the need for the city to build its own renewable generation facilities, which have to be a part of the plan. But it has a glaring omission -- it doesn't once mention public power.

Why is that an omission? Because San Francisco is never getting to 100 percent renewables while Pacific Gas & Electric Co. still controls the grid.

Right now, with today's technology, you can't get close to 100 percent without a significant amount of distributed generation. Lots and lots of people have to generate their own power -- at which point, they no longer need PG&E (except that, by law, the grid is the default storage battery, but that's going to change soon, too). In simple terms, distributed generation puts private utilities out of business. So they won't ever go for it, and will -- quietly, behind the scenes -- so everything possible to keep if from happening.

Likewise demand management, something the Renewable Energy Task Force discusses at length. San Francisco already gets about 40 percent of its electricity from the Hetch Hethcy hydro project; If the city could reduce its energy use by 20 percent, that's 20 percent we don't have to generate. And reducing use is way cheaper than building new generation facilities.

But why would PG&E want to sell less electricity? There are all sorts of state laws mandating efficiency, but no PG&E CEO is going to make that a big push; it costs the company money. A PG&E that sells 20 percent less electricity is a smaller PG&E, with smaller staff, smaller revenue, and smaller profits. 

That's why the only way the key components of distributed generation and demand management are ever going to work is if San Francisco gets rid of PG&E and sets up a municipal system. Around the country, the munis are leading the way in renewables, because they have no stockholders to satisfy.

At least that ought to be part of the report, no?

http://www.sfbg.com/politics/2012/12/03/missing-element-renewable-energy-study

Using Carbon Credits To Pay For Energy Retrofits

By Justin Gerdes

Forbes

9/25/12

One of the signal achievements of the Obama administration is a success hidden in plain view. Scorned by Republicans and rarely mentioned by Democrats, the American Recovery and Reinvestment Act (ARRA), or simply “the stimulus,” was many things at once – tax cut, lifeline for cash-strapped states and local governments, and, as noted by Michael Grunwald in his important new book The New New Deal, “the biggest and most transformative energy bill in U.S. history.”

The stimulus directed $3.2 billion to the Energy Efficiency and Conservation Block Grants program. As I wrote at this blog in January and again in June, these grants have enabled dozens of California cities to slash their energy bills by investing in LED streetlights and other energy-saving upgrades.

The stimulus also included a one-time supplemental appropriation of $5 billion for the U.S. Department of Energy’s Weatherization Assistance Program. In December 2011, DOE announced it had reached its goal, three months ahead of schedule, of weatherizing 600,000 low-income homes nationwide. According to DOE data, as of January 2012, 612,390 homes or apartments had received energy retrofits courtesy of the stimulus.

Many states dramatically scaled up staffing and other resources to handle the surge of energy efficiency-related stimulus funding. What happens now that the ARRA spigot has run dry?

Weatherization and carbon trading

In a September 19 post at Home Energy magazine’s blog, Macie Melendez reported on a plan that could enable states to maintain their scaled up weatherization programs. A major topic of discussion at the recently convened annual conference of the National Association for State Community Services Programs (NASCSP), Melendez wrote, was how to keep weatherization programs relevant and funded in a post-ARRA world. Carbon markets just might be the answer.

One of the presenters at the NASCSP conference was the organization’s new Carbon Trading Project Director, Jo-Ann Choate. Melendez recounted Choate’s plan:

Weatherization reduces carbon but states/companies/organizations aren’t currently being monetarily rewarded for doing so. In order to leverage additional funding for WAP [Weatherization Assistance Program] and receive those ‘rewards,’ NASCSP is currently developing a national framework to measure carbon emission reductions from weatherization activities and sell carbon offsets in the voluntary carbon markets in compliance with the Verified Carbon Standard (VCS).

The NASCSP would verify, register, and sell carbon offsets for the participating states. After credits are sold in carbon markets, NASCSP would distribute the proceeds back to each state.

The plan is not without precedent. In December 2010, the Verified Carbon Standard approved the first new methodology for crediting reductions of greenhouse gases achieved through home weatherization. The methodology was developed by MaineHousing for the Efficiency Maine program. The operating assumption is that weatherized homes that perform better than a pre-determined benchmark are eligible for salable carbon credits.

The Maine program has been beset by controversy surrounding its cost and alleged conflict of interest among its key stakeholders, but many states are keen to press ahead. Melendez reported that 17 states have signed on to participate in NASCSP’s Carbon Trading Initiative.

Carbon metering

How confident can NASCSP or Verified Carbon Standard be that a weatherized home produces measurable energy and carbon savings? In search of an answer, I recently spoke with Mark Aschheim, Professor and Chair, Department of Civil Engineering, Santa Clara University (SCU). Aschheim and Jorge Gonzalez, a former SCU mechanical engineering professor now at City College New York, co-lead a team that developed a carbon metering method that quantifies real-time energy savings in buildings and associated carbon offsets. The technology, Carbon Meter, was developed to measure the energy performance of Santa Clara University’s entries into the 2007 and 2009 Solar Decathlon.

One of the goals of the Carbon Meter, Aschheim told me, is to be able to measure the gap in performance of a house or commercial building performing to a baseline (say, California’s Title 24 building energy efficiency standards) and one going beyond it. Once you quantify that differential, he said, it opens up other possibilities, including salable carbon credits. The meter also quantifies the benefit of electricity generated by photovoltaic cells.

With the ability to measure real-time energy performance, Aschheim said, you can quickly develop a thermal model for how the building is performing – as a system, not just individual components. “That can be useful because you can verify that performance met the intention,” he said.

LEED and other green building rating programs are good on paper, Aschheim commented, but not so good with verification. “This is a way to field verify that you’re getting the performance you intended,” he said. “It might tie into guidance as to what the best retrofit options are – given that your house is performing this well and you have these kinds of windows and insulation, here’s the best bang for the buck.”

California regulators have approved four categories of carbon offsets in its soon-to-launch cap-and-trade program: forestry, urban forestry, ozone depleting substances, and agricultural methane. On September 17, Reuters reported on an American Carbon Registry study finding that California’s carbon market could be 29% short of offsets in its pilot phase (2013-2014) and 67% short of offsets in its third phase (2018-20), unless regulators expand the categories of approved offset project types.

At a minimum, the Carbon Meter represents for California regulators a potential new offset category: carbon savings from retrofits. Coupled with NASCSP’s Carbon Trading Initiative, the Carbon Meter presents California and other states with the means to generate a source of salable carbon offsets that could help keep weatherization programs alive.

Aschheim conceded that he and his team have focused more on the technical demands of the Carbon Meter project than financial returns. They filed both an invention disclosure and patent application but have not marketed the tool.

The Carbon Meter is listed at the Stanford University Office of Technology Licensing portal. (Stanford handles intellectual property for Santa Clara University, Aschheim told me.)

“It’s out there waiting to be grabbed and used,” he said. Entrepreneurs, get on it.

This article is available online at:

http://www.forbes.com/sites/justingerdes/2012/09/25/using-carbon-credits-to-pay-for-energy-retrofits/

Cities Enticed by Pay-if-You-Save Energy Deals

October 23, 2012

By JIM WITKIN

NY Times

WHEN the city of Brea, Calif., about 25 miles southeast of Los Angeles, set out to reduce its carbon emissions and save money on energy costs, the challenge was the same faced by many other cities nationwide: allocating the funds to pay for the program.

Finding projects to make city buildings more energy efficient was far easier. So the city turned to a form of financing that has become common among government agencies at all levels: an energy-savings performance contract that requires no upfront costs and allows the city to pay for the project over time using the savings on utility bills.

“There is no other way we could have undertaken this scope of project in this efficient a manner or time frame,” said Charlie View, Brea’s director of public works. The project included installing high-efficiency lighting systems in 14 city buildings and 4,000 street lamps, updating heating and cooling systems at six buildings and installing 1.8 megawatts of solar panels at three sites.

An energy service company, Chevron Energy Solutions, a unit of the Chevron Corporation, performed all the work and provided all the new equipment. The company’s contract with the city guarantees the project will deliver a certain level of savings on energy costs. If the project fails to perform to the guarantee, the energy service company is on the hook to make up the difference. If savings exceed the guarantee, the city keeps the excess.

The project, completed in 2011, is expected to save the city 40 percent on energy costs and $13 million over the next 25 years. Performance shows the project is exceeding these estimates by about 10 percent, said Mr. View. From the savings, the city will pay off two bonds issued to finance the project; the payback period is about 20 years, which is common for these types of projects.

The business model and performance-based contracting offered by energy service companies are not new; the market began to form in the early 1980s after the energy crises of the previous decade, which saw prices rise drastically. Today, about 35 large energy service companies offering contracts with guaranteed savings as their core business model dominate the market, according to the National Association of Energy Service Companies, a trade association.

What has changed is the growing appeal of the model among public entities. Now, 80 to 90 percent of energy service company revenues come from projects with municipalities, public universities and schools, hospitals and federal government agencies.

“Most public facilities in most parts of the country are starved for any kind of investment for improvements,” said Don Gilligan, the trade association president. Many of these aging buildings are wasting 25 to 35 percent of what they pay on their energy bills, he estimated.

“A performance contract allows them to redirect the money they currently spend on wasted energy to pay for the capital cost of an improvement with no tax increases,” he said. “That is a very big payment stream and a very attractive driver for public institutions.”

At the federal level, since 1998, 25 agencies have used performance contracts on about 580 projects, saving $13.4 billion and enough energy to power a city of 900,000 residents for a year, according to the Federal Energy Management Program.

Wide use of performance-based contracts has also required a reworking of purchasing policies for public agencies. Long-term agreements with vendors were outside the bounds of traditional procurement rules, so legislation authorizing the use of performance contracts for federal agencies was enacted as part of the Energy Policy Act of 1992. Now almost all states have passed similar legislation.

Unlike some aspects of energy policy, the legislation has generally received bipartisan support, said Charles H. Goldman, a senior scientist at Lawrence Berkeley National Laboratory in Berkeley, Calif., who has studied the market since 2000. The energy service company market “is an example of a successful private sector industry that is relatively self-sustaining and doesn’t rely on a lot of incentives or subsidies outside the basic economics of these projects,” he said.

Today, energy service companies account for 10 to 15 percent of the jobs created among companies that provide energy efficiency improvements, and many of these jobs are local, Mr. Goldman said, because there “are often provisions in the contracts that strongly encourage the use of local small businesses as subcontractors.”

Still, performance-based contracts are not suitable for every market, every project or every type of building, said Brittany Gibson, an analyst with Pike Research, an energy research and consulting company — notably for residential or private commercial property owners, for a variety of reasons.

In the commercial sector, the hurdle is often the so-called split-incentive problem, she said. Renters in commercial buildings typically pay their own energy bills. This reduces the incentive for building owners to commit to long-term contracts to pay for energy-efficiency improvements because the owners do not benefit from the savings.

Yet in the public sector, opportunity abounds, she said. Based on a study completed this year, Pike Research is expecting the energy services market to grow annually by 11 to 14 percent through the end of the decade, reaching an estimated $13 billion to $16.5 billion by 2020.

Driving this growth, said Ms. Gibson, are federal and state policies that set aggressive energy conservation goals for their buildings. At the same time, she said she expected capital budgets for such projects to remain tight.

In 2007, for example, Congress passed a law requiring all federal agencies to improve the energy efficiency of their buildings 30 percent by 2015. And in December 2011, President Obama directed agencies to spend $2 billion on energy efficiency projects through the end of 2013, specifically using performance-based contracts. Suitable projects should be easy to find; federal agencies occupy nearly half a million buildings.

This article has been revised to reflect the following correction:

Correction: October 29, 2012

An article on Wednesday, about the popularity of energy efficiency programs guaranteed by utility companies, misstated the origin of a mandate on energy use in buildings that house federal agencies and described the mandate itself incorrectly. The mandate requires a 30 percent increase in energy efficiency by 2015, not a 30 percent reduction in energy consumption by that time, and it resulted from a law passed by Congress in 2007, not an executive order signed by President Obama in 2009.

http://www.nytimes.com/2012/10/24/business/energy-environment/energy-service-contracts-a-boon-for-public-agencies.html?_r=0

Can Energy-consumption Data Change Consumer Behavior?

By Knowledge@WhartonNov. 16, 2012

Time magazine

Do you know how much energy you consume every 15 minutes? Most would say that’s a hard — if not impossible — question to answer, but San Francisco-based utility provider Pacific Gas and Electric (PG&E) now has access to that information for 30,000 of its residential customers, thanks to its “SmartMeter” program. PG&E’s SmartMeters are its prime vehicle to fulfill its mandate from the state of California to get people to use less energy.

For 36 months (January 1, 2009, through December 31, 2011), PG&E has used SmartMeters to collect consumer energy-use data in Northern California. The devices measure residential customers’ electricity and gas usage at daily, hourly and 15-minute intervals. The goal of the program, according to PG&E, is to help customers better understand their energy usage and find ways to save on their energy bills. According to the PG&E website, customers who participate in the program have the ability to be notified by email, text message or phone when their utility use “is moving toward a higher-cost tier.”

The energy consumption data will supplement existing information on customers’ demographics, billings and payments, call center reports and utility pricing, among other variables. The company states that by studying all of this information, it hopes to gain insights into how its SmartMeter platform might be used “to engage customers, reduce energy consumption and offer customers appealing alternative pricing schemes.”

But with so much data to sort through, that’s a tall order. PG&E has partnered with the Wharton Customer Analytics Initiative (WCAI) to lead the effort, which will help identify academic research groups across the world to study the data. Peter Fader, Wharton marketing professor and WCAI co-director, notes that the PG&E project has wider implications for businesses that increasingly use data analytics to extract business intelligence, by offering a model on how to determine the volume and quality of information they need to track in order “to change behavior in meaningful ways.”

“This is a unique data set, and we don’t know of any other that has this level of granular data,” noted WCAI research director Ben Adams during a webinar announcing the research project earlier this month. In addition to energy usage data, researchers will get information about PG&E’s energy efficiency rebates, demand response programs and special rate plans that were available to the customers covered in the data. PG&E will safeguard customer privacy and sign nondisclosure agreements with researchers, company executives said at the webinar.

Studying data collected by the meters will help the company figure out “which message to send to which household at which time in order to get them to conserve energy,” says Fader. “Our job is to find the right academics out there who will help them answer [these] questions.” Those who are selected will receive PG&E’s data sets, and are expected to spend a year studying them before they file their findings and recommendations.

http://business.time.com/2012/11/16/can-energy-consumption-data-change-consumer-behavior/#ixzz2CgwrzJfl

Energy Efficiency’s Next Great Leap: Predicting the Weather

By Hannah Miller | November 19th, 2012

Triple Pundit

A small metal box in the basement of the InterContinental Mark Hopkins Hotel in San Francisco is thinking about the weather. And what time of day it is. And when the sun will rise and set.

This box, part of the first installation of the new Stem Energy system, is paired with a battery, and will be using all that atmospheric and environmental data to make a second-by-second decision about whether the hotel should pull from the meter for its energy, or run on battery power. It’s a new online, data-driven energy management system designed to reduce peak usage based on the type of multi-variable modeling used in the financial industry.

And best of all, these meter-battery hookups require no action by users to maintain it or to hook it up to the HVAC system – nor any behavioral change, no turning lights off or the thermostat down. They just sit there (there’s no charge to rent them) and mint money, the savings split between Stem and the customer. (In the case of InterContinental, a 50-50 split.)

On Thursday night, Stem CEO Salim Khan, founder Brian Thompson, and InterContinental‘s Harry Hobbs led tours and had a kickoff event for the installations in the two hotels in SF, one of them a razor-sharp new Gold LEED hotel, and the other an 85-year old masterpiece. Under Hobbs’ leadership, both hotels have instituted major efficiency measures over several years, but the Stem system “has really filled a gap,” according to Hobbs: Specifically, knowing to the second when to switch to battery power to save on peak usage charges.

For a hotel like the Mark Hopkins, with an average monthly electricity bill of $60,000, this is no small matter. (They get calls from the utility to turn down the AC during peak demand in the city). Hobbs said he expected the Stem system to cut their bill by 15 percent.

Stem was founded in 2009 by Thompson, whose background is in e-commerce and investment banking. One of the main problems in renewables is predicting when energy will be available – based on weather patterns, cloud cover, etc. – and Thompson sought to apply the sophisticated financial models developed for e-commerce to the field of energy. Reports of past demand in the buildings are combined with data from Weather Underground’s API, for example, to create a predictive model to run the system.

What he came up with was a cloud-based algorithm that applied not just to solar, but to all energy consumption, regardless of source. They partnered with LA-based CODA, manufacturer of EV car batteries and storage cells; based on mostly work of mouth, they are almost to their capacity for orders in 2013, mostly to mid-size commercial buildings like hotels, restaurants and gas stations.

“The Stem system… well, it’s a battery…and…” said Thompson, mic in hand at the event, speaking to a Greenbuild crowd. “This feels like the early days of the Internet when no nobody knows what it is and I am trying to explain what Mosaic is.”

Stem employs 45 people currently, and found its first customer through the SF Community Power, a nonprofit that runs efficiency programs with groups like small businesses and low-income residents, Thompson said.

The systems in the InterContinentals required permits and were treated like a solar system by PG&E, which has been very supportive, according to Stem staff.

Hobbs, who is on the Sustainability Committee for the InterContinental chain, hopes that sustainability and luxury can be seen as something to go together.

“I’m encouraging the rest of the hospitality industry to get on board,” he said. “There is a lot of room for improvement.”

http://www.triplepundit.com/2012/11/cloud-computing-energy-efficiency-stem/

Chicago sets brisk timeline for electric aggregation deal

By Julie WernauChicago Tribune

November 8, 2012

The City of Chicago laid out a timeline Thursday for how it intends to quickly complete a deal that would move approximately 950,000 Chicagoans to a new electricity supplier.

The timing of the deal is important because Chicagoans stand to save the most money over Commonwealth Edison's rate between now and June 2013, when ComEd's prices are expected to drop because pricey contracts they entered into years ago will expire. The timeline has Chicagoans moving to the new supplier in February 2013.

In Tuesday's election, Chicago voters passed a proposal to allow the city to negotiate for better electricity prices on behalf of residential customers and small businesses. The city is one of hundreds of Illinois communities participating in so-called electricity aggregation and is by far the largest city in the nation to attempt such a large bulk purchase for electricity.

Michael Negron, deputy chief of policy and strategic planning for the mayor's office, said electricity suppliers have shown great interest in snagging Chicago's service. Nearly 100 people packed a conference Monday for the city's "request for qualifications" process. The bidders ranged from multi-billion corporations to smaller providers from all over the country, he said. Industry analysts say the deal could be worth hundreds of millions of dollar to the winning supplier or suppliers.

The timeline is as follows:

Nov. 14: Municipal aggregation ordinance introduced as substitute ordinance in city finance committee

Nov. 21: Bidder responses to request for qualifications due

Nov. 26 - Dec. 11: Finance committee will conduct two public hearings on aggregation ordinance

Early December: City and Delta Institute convene stakeholder process for identifying options for a portion of savings to go toward increased energy efficiency or the development of cleaner, renewable energy sources.

Dec. 5: Qualified pool of energy providers announced

Dec. 6: Issuance of request for pricing; responses due within days. The sole selection criteria at this point will be price because the RFQ phase will have screened out bidders based on their capacity, financial stability, customer service and ability to deliver cleaner energy. 

Dec. 12: City Council considers aggregation ordinance

Mid/Late-December: Opt-out letters are sent to approximately 1 million customers

Early January: Opt-out data processed and final customer list prepared. 

February: Participating Chicago customers are switched over the course of the month

March: All Chicago ratepayers who have not opted out are under the new supplier. City will announce its plan for investment of savings into cleaner energy or improved energy efficiency.

http://www.chicagotribune.com/business/breaking/chi-chicago-sets-brisk-timeline-for-electric-aggregation-deal-20121108,0,1338243.story

Cities Take On Utility Role --- Chicago and Other Communities Buy Cheaper, Often Cleaner Energy for Residents

By Mark Peters and Rebecca Smith

12 November 2012

The Wall Street Journal

More U.S. cities are jumping into the electricity-buying business, in an effort to capture cheaper -- and often cleaner -- power available through the open market.

Chicagoans passed a ballot measure last week that authorizes the city to buy bulk power on behalf of residents and small businesses, no longer leaving it up to the local utility. The move makes Chicago the largest U.S. city to start buying consolidated power, a growing trend known as community aggregation.

Community aggregation has been around for a while, but only now is it attracting large numbers of participants. While big energy users have been tapping the open market since electricity retail markets were deregulated a decade ago in many states, the latest moves by cities and towns to give consumers a chance to reap the benefits without having to negotiate prices themselves.

Some communities are using aggregation as a way to buy energy from renewable sources, but in many cases, municipalities continue to get their energy from traditional producers while supporting cleaner energy by buying credits from wind, solar and other generation projects. These credits, which are sold on a secondary market, allow renewable generators to capture additional revenue.

San Francisco and Cincinnati are among the other U.S. cities using aggregation. Cincinnati officials estimate the typical household there saves about 26% on their kilowatt-per-hour rate for electricity, or an average of about $133 a year.

Even in places that don't aggregate, consumers have seen their power bills decline in recent years. Electricity prices have fallen as the cost of power-plant fuels, such as natural gas, have declined sharply, and the sluggish economy has led to lower demand for energy.

Despite the growing trend, community aggregation has faced some opposition. Some Illinois communities have rejected it, in part because of the complexity of the programs and concerns over municipal governments wading into energy markets, state and local officials say.

In San Francisco, Mayor Edwin Lee opposed a program because of concerns residents would automatically be enrolled, getting cleaner power but possibly at higher rates. Mr. Lee said he would prefer a purely voluntary "opt in" program that left the initial decision up to individual households. But the city's board of supervisors approved the program in September.

"While I enthusiastically support expanding our clean-energy resources, I continue to have serious concerns about enrolling San Franciscans into a program without their initial consent that coerces them to pay a premium," Mr. Lee said this fall.

Like in San Francisco, Chicago residents automatically will be enrolled, unless they opt out, and city officials estimate a large majority will participate.

In Illinois, existing rules and the short-term nature of power contracts are raising concerns that aggregation will do little to spark renewable projects. But already in Illinois 165 municipalities have made the switch to locally purchased power or have submitted requests to utilities, and nearly 200 others voted last week in favor of starting aggregation programs like Chicago.

Under Chicago's plan, the city will negotiate the commodity cost of electricity with suppliers such as power-plant owners and commodity trading firms. That cost typically makes up about two-thirds of a consumer's or business's power bill. The remaining third of the total bill -- the cost of distribution and delivery -- wouldn't change, and goes to Commonwealth Edison Co., a utility owned by Exelon Corp.

Citizens Utility Board, a consumer advocacy group, estimates Chicago's plan could cut monthly bills by nearly 30%. The current rates Chicago residents pay include legacy contracts negotiated before a sharp drop in power prices triggered in part by the weak economy.

Expiration of those contracts next spring would deliver similar savings, but David Kolata, executive director of the Chicago utility board, estimates negotiating the deals earlier could result in more than $100 in total savings for a typical household over the first five months of 2013.

"There is an element of community control here. Energy is a big expense," he said.

Anne Pramaggiore, chief executive of Commonwealth Edison, said her utility supports local buying efforts. It wouldn't lose anything because it handles only distribution, which wasn't affected by Illinois's 1997 deregulation law that opened power generation to competition.

Those most likely to lose out as cities handpick their electricity suppliers, experts say, are companies that produce electricity from dirtier sources, such as coal-fired power plants, which are sometimes shunned by cities. But they likely will find other buyers for their electricity.

Already, some communities are using aggregation to support renewable energy. Cincinnati signed contracts this year that lowered rates and require its supplier to purchase credits that benefit wind and other cleaner projects across the country.

In Marin County, Calif., about 90,000 homes and businesses now get their electricity from the Marin Energy Authority, which gives customers a choice of electricity plans that are 50% to 100% renewable -- besting state goals for utilities to obtain a third of their electricity from clean sources by 2020.

As of July, the Marin agency's residential customers paid an average of $3.85 a month more on a typical $93 bill to get energy that was 50% renewable, compared with what they had paid the big utility. The agency said its costs are lower, but the utility imposes an "exit fee" of about $5 a month on customers who switch. Still, some residents say they are happy to pay more to get a cleaner product.

San Francisco's program initially will enroll about 27% of residents in a 100% renewable-energy program, bypassing electricity currently furnished by PG&E Corp. Pricing is will be determined in the next couple of months.

Charles Sheehan, spokesman for San Francisco's municipal utility, said: "We want to control our energy destiny. That's the impetus for this effort, plus the opportunity to reduce our greenhouse-gas footprint and incubate our own clean-energy industry."

http://online.wsj.com/article/SB10001424052970204707104578095323990799636.html?mod=googlenews_wsj

City of Chicago to move swiftly with aggregation to help customers capitalize on energy savings

City of Chicago to move swiftly with aggregation to help customers capitalize on energy savings

U.S. Panel to Hear Opponents of Indian Point Nuclear Plant

By MATTHEW L. WALD

New York Times

October 11, 2012

The Indian Point nuclear plant is going on trial.

On Monday, the federal Nuclear Regulatory Commission will open a hearing to determine whether opponents, among them the Cuomo administration, have valid arguments against a 20-year extension of operating licenses for the Westchester County site’s reactors.

Three administrative law judges from the commission will take up an unusually long list of issues at the hearing, which will take place at a hotel in Tarrytown, N.Y., on 12 days in October and December.

In granting license extensions for reactors around the country, 70 to date, the commission has usually agreed to hear arguments on only a few technical issues. But in the case of Indian Point, the judges will hear at least 14.

Some of the issues from parties in the case are mechanical. Has Entergy, the plant’s owner, properly accounted for the possibility of corrosion in old pipes? What is the condition of the plant’s electrical cables, some of which are submerged in water and cannot be easily inspected? Has the plant been adequately monitoring buried pipes, some of which have already leaked, that carry radioactive materials?

Others are more slippery, like calculating the potential human costs of a major release of radioactive materials from the plant, in Buchanan, about 35 miles north of Midtown Manhattan.

James Steets, a spokesman for Entergy, suggested that the plant’s opponents would try “to throw as much mud against the wall as they can and hope some of it sticks.”

“But by the same token,” Mr. Steets added, “it’s a process that allows for those who seriously have concerns to raise issues in a very public process.”

Either way, the tug of war over Indian Point’s future will probably go on for years. Ordinarily, the commission’s decisions on extending licenses take two and a half years. But Indian Point’s renewal application is now more than five years old, and the hearings have not even started.

The 40-year licenses of the plant’s two reactors are set to expire in September 2013 and December 2015. But under agency rules, the licenses will remain in effect until the commission makes a final ruling.

Since his days as the New York State attorney general, Gov. Andrew M. Cuomo, a Democrat, has been arguing that the plant should be closed — that the reactors have safety problems and are vulnerable to terrorism. He has cited their proximity to nine million people in the New York metropolitan region.

The current attorney general, Eric T. Schneiderman, whose office represents the state in the hearings, has been slightly less emphatic.

“Whatever it is that the state determines to do, I’m the state’s lawyer and I will defend that,” Mr. Schneiderman, a Democrat, said last summer in an interview with WMHT, a public television station in Albany. “But I think they have a pretty steep hill to climb given the location of the plant and the population density around it and some of the problems that have come up with the plant.”

In a way, the Nuclear Regulatory Commission is on trial, too, given that its staff has already concluded that relicensing is warranted.

After the three administrative law judges — two engineers and a lawyer — rule on the challenges, the losing side is expected to appeal directly to the five-member commission in Washington. If the commission upholds a challenge, Entergy will have to change hardware or procedures at Indian Point to solve the problem unless it decides that the cost makes retiring the plant more prudent economically.

Expert testimony from Entergy and the plant’s opponents has already been filed, so much of the hearing will consist of cross-examination of witnesses and questions from the judges. The state is pressing for additional opportunities to cross-examine witnesses, and the commission plans to rule on that request on Friday.

Another avenue the state is pursuing to shut down Indian Point, the denial of a state water-use permit, could threaten the plant regardless of the commission’s final decision. The state contends that the plant’s cooling water technology kills too many fish when it draws water from the Hudson River and that Entergy should build cooling towers.

But a court could reverse that decision if it found that the state’s real motivation was nuclear safety, a federal responsibility.

http://www.nytimes.com/2012/10/12/science/earth/hearings-set-on-renewing-indian-point-reactors-licenses.html?_r=1&ref=nyregion

Board to decide fate of city’s long-debated clean-energy program

Joshua Sabatini | 09/12/12 
SF Examiner 

Read more at the San Francisco Examiner: http://www.sfexaminer.com/local/2012/09/board-decide-fate-city-s-long-debated-clean-energy-program#ixzz26M6BMn7B

The Board of Supervisors on Tuesday is expected to decide the fate of San Francisco’s long-debated public-power program, but whether the program can overcome the mayor’s concerns and PG&E’s opposition is far from clear.

For the past eight years, the San Francisco Public Utilities Commission has worked on a program to compete with PG&E by offering customers 100 percent renewable energy for an extra fee.

Under a 2002 state law, municipalities can form such programs to purchase electricity. Only Marin County has done so, and now San Francisco wants to follow suit. So supervisors are set to vote on the $19.5 million CleanPowerSF program, which includes $13 million that would be placed in reserve.

It is the latest political battle at City Hall in which progressives are backing a program opposed or questioned by moderates. It would take six votes to approve and eight votes to override a veto from Mayor Ed Lee.

 “The mayor continues to have concerns about the risks, costs and benefits of entering into a contract with Shell, and he hopes the discussions at the board address his concerns,” Lee spokeswoman Christine Falvey said Wednesday.

But SFPUC head Ed Harrington, who has postponed his retirement to see the vote through the board, framed the proposal in a positive light during Wednesday’s meeting of the Board of Supervisors Budget and Finance Committee.

“This is the single biggest program that is even on the horizon within the city and county of San Francisco to make any difference toward any of the goals that you have set as board members in terms of having a change in greenhouse gas emissions and climate change,” Harrington said. “This program can make a dramatic change.”

The committee voted 2-1 to send the proposal to the full board with a recommendation for its approval.

Supervisors John Avalos and Jane Kim backed it, while Supervisor Carmen Chu opposed it.  Chu said she opposed it because it automatically enrolls city residents as participants unless they opt out and because it does not put the onus on ratepayers to pay back the program’s reserve funds.

Under state law, such programs automatically sign up customers who then must opt out to stay with their current utility provider.

The City would enter into a five-year contract with Shell Energy, which would provide the program’s
energy. The hope is to use the program’s revenue stream to ultimately fund the construction of renewable energy projects such as wind or solar.

The initial phase is expected to roll out to 90,000 customers. For the average energy user expected to remain with the program, their bills are expected to increase by about $9 a month.

 http://www.sfexaminer.com/local/2012/09/board-decide-fate-city-s-long-debated-clean-energy-program#ixzz26M60lSh2

Taxes Show One Way to Save Fuel

September 11, 2012

By EDUARDO PORTER

NY Times

Just the other day, President Obama unveiled another example of how our hostility to anything that even remotely looks like a tax is leading us down the wrong path, ultimately making us worse off.

The president proudly announced energy-efficiency standards negotiated with the nation’s carmakers, which will have to nearly double the average fuel economy of cars and light trucks sold, hitting 54.5 miles a gallon in 2025.

“It’ll strengthen our nation’s energy security, it’s good for middle class families and it will help create an economy built to last,” he said in an official statement.

The rules are a significant step in the battle against global warming. The Environmental Protection Agency and the National Highway Traffic Safety Administration, which developed the standards, said they will reduce our energy use by 12 billion barrels of oil and cut carbon emissions spewed by our cars, pickups and sport utility vehicles in half by 2025. They should also cut down on other forms of pollution, helping with problems like asthma and acid rain.

What the government didn’t mention is that these improvements come at a high cost for drivers, automakers and society in general. They could be achieved much more cheaply by raising taxes on gasoline to a level comparable to that of pretty much every other industrialized nation.

The new mileage rules are so expensive, in fact, that even if one factors in all the expected gains from the policy — like less damage from climate change and fewer deaths from respiratory disease — many economists think that the costs actually outweigh the benefits.

The reason is fairly straightforward. Fuel-efficiency standards do not really change drivers’ behavior in a helpful way. Gas taxes do.

Consider how a gas tax would work. Because it would make gas more expensive at the pump, we would drive less. When time came to replace the old family S.U.V., we would be more likely to consider a more fuel-efficient option. As more Americans sought gas-sipping hybrids, carmakers would develop more efficient vehicles.

This is not theory. We’ve seen it happen. In 2008, when the price of gas shot abruptly past $4 a gallon, Americans cut back sharply on their driving. Total miles driven on American highways declined for the first time since 1980 and gas use fell more than 4 percent. General Motors ditched the Hummer, and gas-guzzling pickups were briefly dislodged from the perch they had occupied since 1992 as the nation’s most popular light vehicle.

Driving levels started creeping back up as soon as gas prices started receding, but a gas tax would be permanent and would lead to even bigger changes in habits. And the cost is lower than it seems. Economists point out that the energy savings would not change if the government returned all the revenue raised by a gas tax to Americans — perhaps through rebates for low-income people who spend a bigger share of their money on gas.

The weakness with the fuel-economy rules is that they don’t affect people’s behavior the way higher gas prices do. They apply only to new vehicles — not the ones on the road now — so it takes quite a long time to alter our overall gas use. And they carry perverse incentives: because new vehicles go farther on a gallon of gas, they give us a reason to drive more, leading to more congestion, accidents, pollution and gas consumption.

The incentives to carmakers can also be weird. The original standards for fuel economy in the 1970s exempted light trucks, which were a small share of the market. That decision was critical to the explosive growth of the S.U.V. In 1973, light trucks amounted to 3 percent of new vehicle sales. Today they account for half.

Who knows what distortions the new rules will bring? The standards vary according to the footprint of the car — the length between the axles multiplied by the width. So maybe cars will be boxier in the future.

Automakers will make the most efficient cars they can that customers will buy. A gas tax that goads drivers to choose gas-sippers takes advantage of this fact. A mileage standard does not.

Christopher Knittel, an energy economist at the Massachusetts Institute of Technology, estimated that if carmakers had devoted all their technological progress since 1980 to improving fuel efficiency, gas mileage would have improved 60 percent by 2006. Instead, they put most of their effort into more power and weight, and fuel economy gained less than 12 percent.

All this makes mileage standards an expensive way to restrain our energy use.

According to the government’s analysis, the additional production and maintenance costs made necessary by the mileage rules will rise gradually to about $31.7 billion in 2025 — which will add about $1,900 to the average price of cars and light trucks. There are other costs, too. Some Americans will not be able to afford a new car. Profits of some automakers and dealers are likely to decline. Greater congestion will impose an added burden on health.

According to economists crunching the numbers, this makes mileage standards somewhere between 2.4 and 13 times more expensive than a gasoline tax as a tool to reduce our use of fuel. Indeed, by some calculations, raising fuel-economy standards is more costly than climate change itself.

The government has to predict how much climate change will cost us in the future — through lost agricultural productivity, poorer health, bigger hurricanes and the like — to figure out how much we should spend today. It does so through a measure called the “social cost of carbon,” which captures the added damage that will be caused by adding one more ton of CO2 into the air.

The government’s estimate of the cost to our society covers a wide range of $5 to $68 a ton and increases over time. Several economists have concluded that cutting carbon emissions via fuel-efficiency standards may be even more expensive. Adding in benefits not related to global warming — like less pollution, less reliance on foreign oil, and less time spent filling up — the mileage standards may still cost more than their benefits.

The Obama administration will say that mileage standards are the best we can do to limit our gas usage. The president’s proposal to create carbon allowances, which would act like a tax to limit companies’ carbon emissions, withered in Congress two years ago despite the plan to use the money to provide tax credits to low-income families. A tax on gasoline doesn’t stand a chance.

And doing nothing about global warming might seem crazy considering how little we really know about the potentially devastating consequences of climate change.

Still, we could do much better if taxes were on the table.

The United States has the lowest gas taxes by far among the industrialized nations. This includes countries with mandatory fuel-efficiency standards and countries without them. It includes big countries and little ones. Among them, guess who uses the most transportation fuel of all?

Hint: in Britain, where gas and diesel are taxed at $3.95 a gallon, the American automaker Ford sells a compact Fiesta model that will go nearly 86 miles on a gallon. In the United States, where gas taxes average 49 cents, Ford’s Fiestas will carry you only 33 miles on a gallon of gas.

http://www.nytimes.com/2012/09/12/business/fuel-efficiency-standards-have-costs-of-their-own.html?src=rechp