New Rules Project - Democratic Energy

January 31, 2006

DOE Seeking Distributed Generation Success Stories

The Distributed Energy Program from the Department of Energy's (DOE) Office of Electricity Delivery and Energy Reliability (OE) is seeking public input for a study of the potential benefits of distributed generation required by section 1817 of the Energy Policy Act of 2005.

DOE invites interested parties to relate experiences, convey data, communicate results of case studies or analyses, or provide other information pertaining to the planning, installation, commissioning and operation of distributed energy systems.

Interested parties may submit comments by e-mail to DG1817report@energetics.com in PDF or Word formats by February 23, 2006. Submissions should include a cover page containing the commenter's name, affiliation, telephone number, mailing address, and e-mail address. DOE will consider all comments received.

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U.S. Department of Energy: Study of the Potential Benefits of Distributed Generation Home Page

January 30, 2006

Public Power Leads Charge for Plug-in Hybrids

Last week, a dozen cities, over 100 public power utilities, businesses and a host of national policy groups kicked off a nationwide campaign to urge automakers to accelerate development of plug-in hybrid vehicles. The "Plug-In Partners" campaign is hoping to demonstrate a large market potential so that automakers will start producing plug-in vehicles.

Plug-in Hybrid Electric Vehicles (PHEVs) would combine today's new gas-electric hybrid technology with larger batteries that could provide an all-electric operating range of 25 to 35 miles or more. The result is an 80+ mile-per-gallon vehicle.

Plug-ins could be recharged by plugging into a standard wall socket, delivering "electric" gallons of gas for about $0.75-$1.00 per gallon. Experts estimate there is sufficient generation in place and available at night to charge up to one-third of all vehicles in America, if they were plug-ins.

Austin, TX, has pledged $1 million in city rebates to help citizens and businesses purchase the first wave of plug-ins to roll off assembly lines. The campaign has been led by the municipally-owned utility in Austin. They have called for cities to initiate citizen petition drives and to encourage government and businesses to issue soft orders or expressions of interest in purchasing plug-ins. In Austin, 11,000 citizens have signed petitions calling on automakers to produce plug-ins, and soft orders for 600 plug-in vehicles have been received from government and businesses.

Non plug-in hybrid vehicle sales are projected to triple over the next six years, as more people demonstrate their desire for better fuel economy and lower emissions. According to the Electric Power Research Institute (EPRI), half the cars in the U.S. are driven just 25 miles a day or less. This provides a perfect match for PHEVs to meet the majority of our transportation needs through electricity rather than liquid fuels.

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Plug-In Partners

January 25, 2006

MN Bonding Projects Should Be Climate Neutral

A recent column by Democratic Energy's editor, John Bailey, outlines how potential building projects in the Governor's $900 million bonding proposal in Minnesota should be constructed so that there are no net increase in greenhouse gas emissions.

New Minnesota Building Should Not Increase Greenhouse Gases - by John Bailey, published in St. Paul Pioneer Press, January 24, 2006

January 13, 2006

Seven NE States Agree to Global Warming Pollution Caps

Seven northeastern states have signed a Memorandum of Understanding (MOU) to implement a Regional Greenhouse Gas Initiative (RGGI). The MOU outlines the program to cap greenhouse gas emissions through 2014 and reduce emissions by 10 percent by 2019, including the framework for a Model Rule to be released in draft form in 90 days.

RGGI will stabilize greenhouse gas pollution from the power sector at approximately current levels from the start of the program in 2009 through the beginning of 2015. From 2015 through 2018 emissions will decline, achieving a 10% reduction from current levels by 2019. An emissions trading program will be established that will allow some of the emission reductions to be achieved outside the electricity sector through emissions offset projects.

The design of RGGI, like any other cap-and-trade program, includes the following basic components:

First, the states determine the emissions sources to be covered by the cap.

Second, the states establish the total amount of emissions to be allowed from all of the sources, commonly referred to as the "emissions cap".

Third, each state issues one allowance for each ton of emissions, up to the amount of the cap, and those allowances are distributed to the generators and the market.

Lastly, every covered source is required to have enough allowances to cover its emissions at the end of each compliance period.

Sources that do not have enough allowances to cover their projected emissions can either reduce their emissions, buy allowances on the market, or generate credits through an emissions offset project. Sources that reduce their emissions and have excess allowances may either bank those allowances or sell them to other sources. Emissions trading guarantees that the most cost-effective reductions are implemented

RGGI is designed to allow sources to use more offsets allowances if the cost of the carbon allowances exceeds prescribed thresholds. If the cost of allowances reaches $7 on a sustained basis, for example, sources will be permitted to cover up to 5.0% of their emissions with offsets allowances. If the cost per ton exceeds $10, then sources may cover up to 20% of their emissions with offsets allowances.

Once a final model rule for RGGI is established it will become the basis for individual state rulemakings. In some states, such as New Hampshire, legislative approval is necessary before the rulemaking may begin. In other states, such as New Jersey and New York, the rulemaking will commence shortly after the model rule is finalized.

Massachusetts and Rhode Island actively participated in the design of RGGI and the negotiation of the Memorandum of Understanding among the states, but they have not yet agreed to implement the program in their states.

Projected direct electricity bill impacts due to RGGI average from $3 - $16 per household annually in 2015.

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Regional Greenhouse Gas Initiative (RGGI) Home Page

Update: California PUC Approves Solar Initiative

Yesterday, the California Public Utilities Commission approved the California Solar Initiative, a comprehensive proposal that provides an additional $2.9 billion in incentives toward 3,000 MW of solar development over the next 11 years.

The California Solar Initiative includes the following provisions:

Incentives of $2.9 billion over a 10-year period. Initial PV incentive levels are set at $2.80 per watt effective Jan. 1, 2006, reduced by an average of approximately 10 percent annually. Incentive levels for solar thermal electric projects and solar heating and cooling will be determined in 2006. Funds will come from electric and gas distribution customers of investor-owned utilities, and will go toward the installation of solar photovoltaics initially, with solar hot water heating and solar heating and cooling systems being added after workshops are conducted later this year.

The California Energy Commission (CEC) will oversee one component of the program to focus on builders and developers of new housing, to encourage solar installations in the residential new construction market. The PUC will oversee the remainder and majority of the California Solar Initiative, which will cover existing residential housing, as well as existing and new commercial and industrial properties.

The program sets aside 10 percent of program funding for low-income customers and affordable housing installations. The PUC will also explore the option of offering low-cost financing options to those types of installations in workshops this year.

The program includes an additional amount of up to 5 percent of the annual budget for potential research, development, and demonstration activities, with emphasis on the demonstration of solar and solar-related technologies.

The program includes a requirement that solar incentive payments be made not just for installed capacity, but also with emphasis on the performance and output of the solar systems installed, to ensure that these solar investments are delivering clean energy as promised. Until such time as the Commission makes a determination on performance-based incentives, which they intend to do in 2006, the incentives would continue on the basis of installed capacity.

The program design requires all facilities that receive an incentive to undergo an energy efficiency audit (at a minimum) to identify more cost-effective energy efficiency investment options at the building. The PUC also intends to have further workshops to determine incentives for newly constructed buildings that participate in utility energy efficiency new construction programs and exceed the existing building standards by a certain threshold.

The estimated average cost to a residential electric customer will be approximately $12 a year; the average residential natural gas cost will be $1.40 per year. However, the total impact on a residential customer's monthly bill is expected to be minimal in most cases, because the cost of this program will be largely offset by the expiration, at the end of 2007, of a surcharge on utility bills to repay rate reduction bonds authorized in 1996 for electric sector restructuring.

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Background and Description of the California Solar Initiative proceedings - from the California PUC

Vote Solar Initiative

Environment California

California Solar Energy Industries Association

January 10, 2006

Update: New Mexico Regulators Promote On-Site Solar Projects

The New Mexico Public Regulatory Commission (PRC) has ordered the state's largest utility, PNM, to pay 13 cents/kWh for the "green attributes" of interconnected solar photovoltaic systems under 10 kW. The program becomes effective as of March 2006 and has funding available for about 1.2 MW worth of solar projects over the life of the program. The PRC ruling actually provided 2 cents/kWh more than what was initially proposed (see previous story in Democratic Energy).

The program is on a first-come, first-served basis and existing net metered solar projects are eligible to participate. About 170 kW worth of projects can be developed under the program in 2006 and an additional 90 kW per year for the remaining years of the program.

Possible drawbacks and barriers in the program include a $100 application fee for residential customers. For commercial customers, there is a $225 application fee. This fee is in addition to the $50 net-metering application fee required to establish an approved interconnection with PNM. Participants will also be responsible for installing a second meter on the site in order for PNM to monitor the output of the solar system.

The new incentive for solar production will work in tandem with New Mexico's existing net metering law. Once the green attributes are purchased, PNM will be able to apply these renewable energy credits (RECs) towards their obligations under the New Mexico's renewable portfolio standard (5% starting this year, ramping up to 10% by 2011). Unlike most renewable standards, New Mexico's law allows PNM to count each kilowatt-hour of solar power as equivalent to three kilowatt-hours of wind power toward their renewable energy requirements.

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PNM's New PV Incentive Program

New Mexico Coalition for Clean Affordable Energy (CCAE)