Smart Grid Library » NARUC

Laboratories for Energy and the Environment

Christine Hertzog — Mon, 13 Dec 2010 15:40:56 +0000

“It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” If Supreme Court Justice Louis Brandeis were alive today, he might add “energy and environment” experiments to his quote.

Three different associations that focus on state-based issues around clean air and energy recently held their inaugural meeting to share information about how the states can ensure reliable electricity while complying with environmental regulations. The participating associations were the National Association of Clean Air Agencies (NACAA), the National Association of Regulatory Utility Commissioners (NARUC), and the National Association of State Energy Officials (NASEO). NACAA is an organization of air pollution control agencies in 53 states and territories and over 165 major metropolitan areas across the U.S. NARUC is the association for state Public Utility Commissions (PUCs), the entities that regulate investor-owned electricity, gas, and water utilities. NASEO represents the governor-designated energy officials from each state and territory, and is focused on improving the effectiveness of state energy programs and policies. If these organizations achieve their objectives of sharing ideas and best practices, these could be important processes that mitigate the lack of a federal energy policy and accelerate deployment of Smart Grid technologies and services.

The states serve as innovation incubators for policy and regulation, and there are many examples of states addressing energy and pollution challenges well in advance of federal action. The Smart Grid sector knows that the cleanest energy is the negawatt – the energy that is not used as a result of energy efficiency. Consider the success of the aggressive energy efficiency standards for buildings and appliances enacted in the state of California – annual electricity consumption in California has remained steady at 7,000 kWh per capita while electricity consumption has risen on average to 12,000 kWh per capita in the rest of the USA. Other states have taken notice, and over half of them have now adopted or plan to adopt energy efficiency standards to save energy, avoid buildouts of new generation facilities, and reduce utility bills for their constituents.

While some politicians proclaim that cap and trade markets are dreadful theories (ignoring the immensely successful SO2 cap and trade program to address acid rain), the Regional Greenhouse Gas Initiative (RGGI) launched in 2009 in 10 Northeast and Mid-Atlantic states as the first mandatory, auction-based program to reduce greenhouse gas emissions in the U.S. The participating states are Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont. Each state has an emissions budget, and allowance prices are uniform across the region, with a common objective to reduce CO2 emissions from the power sector by 10 percent by 2018. At least 25 percent of the auction revenues must be used to promote low carbon-energy development and offer other consumer benefits. Some states are using auction revenues to resolve budget shortfalls.

Now that Proposition 23 has been shellacked, the California Air Resources Board is also moving forward to implement a cap-and-trade program in 2012 based on Assembly Bill 32 (AB32). If the proceeds from this cap and trade program would be disbursed to all California citizens – an idea known as cap and dividend, that would make the program hugely popular, and a laboratory experiment that would get the attention of many other states.

This is Progress? Same Old Guzzlers, Same Old Market Assumptions

Christine Hertzog — Mon, 17 Aug 2009 15:21:01 +0000

The latest electric vehicle (EV) or plug-in hybrid EV (PHEV) announcements from Detroit deliver good and bad news. While the Chevy Volt may not actually give the average driver 230 miles per gallon, it is certainly much better than the current fleet. I’m pleased with that news. However, recent announcements that GM and other manufacturers – traditional and new – are introducing electric SUVs makes me question if they learned anything from the recent bankruptcy debacle.

There seems to be this shared fantasy amongst car companies and industry watchers that since the cost of electric charging will be less than the cost of gas tank refills, these SUVS are “economical” options for consumers. Well guess what. Unless you can fully rely on electricity generation through your personal microgrid, sooner or later you will be buying electricity from a utility or an electric charging station, and it is going to cost you money and time.

Even with Time-of-Use (TOU) pricing and software to program a car to only charge when electricity is cheapest, charging fees will still add up. At the recent National Association of Regulatory Utility Commissioners (NARUC ) summer session, discussions about electricity prices had a recurring theme – in the future, electricity will cost more in every region of the USA.

There is also a set of unspoken assumptions made about the drivers of electric vehicles that don’t model real life. Apparently, EV drivers have no social life because once they are home every evening after work, they won’t drive again until it’s time for that morning work commute. EV drivers are also assumed to be exceptionally well-organized and always charge their vehicles when the rates are cheapest – model citizens of rational behavior.

And finally, cars are still seen as consuming electricity, but not as storage devices that could actually sell electricity too. An electricity-sipping vehicle might possibly make more money for its owner than an electricity-guzzling vehicle, but Smart Grid infrastructure and regulatory policies must be deployed to support full bi-directional electricity flow

We desperately need a new way of thinking about electric vehicles. A good start would be with new standard metrics. Using miles per gallon won’t tell the full story of an EV car’s energy costs and potential profits. What are the miles per kilowatthour (KWh)? This metric is like mpg – and consumers can determine their costs based on energy prices in their region. What is the potential amount of KWh that a consumer can negotiate to sell back to a building or utility and still make it to their destination and/or cheapest charging option?

We also need new market models. Wouldn’t it be fantastic if you drove a car off a lot, and instead of it instantly losing a couple thousand dollars in value, it was going to earn you money as an energy storage device? Software that projects these potential earnings could help justify the purchase of an EV, but it needs to be independent of the car manufacturer to be considered credible.

The bottom line is that real energy economy comes from smaller EV vehicles, not electric SUV behemoths similar to the ones that currently roam our highways and suburban roads. Exchanging one form of energy guzzling for another isn’t smart and any car manufacturer that bets its product line on electricity guzzlers will be looking for another taxpayer bailout in a few years. We can’t afford to continue using today’s market models for EVs either. If consumers have options to make money from the EVs as electric storage devices that can sell electricity during peak demands, they’ll embrace the technology.

I’ll be at the Green Software Unconference on Wednesday, August 19th in Mountain View, CA to facilitate discussions about the Smart Grid. Join me there to continue this conversation. http://greensoftwareunconference.eventbrite.com/

O Give Me a Home where the Electric Vehicles do Roam

Christine Hertzog — Tue, 28 Jul 2009 19:35:46 +0000

Electric vehicles (EVs) and plug-in hybrid vehicles (PHEVs) were a hot topic at last week’s National Association of Regulatory Utility Commissioners (NARUC) summer session. There were many interesting discussions, and it’s important to be aware of them as regulatory commissions will influence decisions about the Smart Grid infrastructure that must be built to support the anticipated proliferation of EVs and PHEVs.
EVs and PHEVs can play several roles in the Smart Grid. They may not only take electricity from the grid or from a building, but they can also be used to return electricity under certain conditions. Their strategic importance as collective energy storage can help set the agenda for the construction of new power generation sources – how much new energy is needed for peak demand, and how much of that peak demand could be intelligently managed with storage.
But underlying all these questions is something of a more fundamental nature: How to manage billing for consumers with roaming EVs/PHEVs that need to recharge? The answer has significant implications for regulatory agencies, utilities, manufacturers and consumers regarding the infrastructure for EVs and PHEVs, the design of batteries (speed of charge and discharge), the use of EVs and PHEVs in electricity demand projections and changing load shapes, the software to manage EV/PHEV billing, and the costs of electricity to consumers.
With today’s current grid, if you drive your EV or PHEV to a friend’s house and plug in there to recharge, your friend will get the bill for the electricity you consumed to recharge your battery. My friends are generous to a fault, but I’m not accustomed to asking them to reimburse me for the gasoline used driving to and from their homes, and my EV/PHEV shouldn’t ask that of them either. Here are a three options that could help form that infrastructure and handle this billing question.
1. Street side charging stations that activate charging with a credit card. The upside – it’s simple and convenient. The downside – it’s hard enough to find parking in many urban areas – try finding a parking spot with a charging station. Wild card – impacts the electricity demand in a utility footprint, and seems to be set up to mostly draw electricity from the grid, not deliver it back to the grid. Bottom line – requires lots of buildout of hard infrastructure like streets, sidewalks, additional electrical lines. Who pays for that?
2. Utility billing software that uses the car’s Vehicle Identification Number (VIN) as the unique identifier. The upside – your EV/PHEV roaming charges appear on your utility bill. The utility may offer great EV rate plans if you agree to let them use your car for energy storage and only recharge at certain times. The downside – utilities’ software systems are not set up today to accommodate anything other than a meter, and roaming often crosses utility boundaries. Deploying these sorts of solutions will incur utility costs that need to be recovered. Wild card –just how scary-looking is that utility billing system. Can it be modified without sending electricity rates sky-high for expensive cost recovery? Bottom line – less hard infrastructure required, but lots of soft infrastructure needed in the form of software.
3. Third party companies that manage the roaming charge processes and negotiates with utilities to set up rate plans for EV/PHEV owners. The upside – reduces the software burden on utilities, they only worry about the millions of meters out there, not the additional millions of cars. These third parties may become energy aggregators that can offer wide scale storage management. The downside – these companies don’t exist, or haven’t come across my radar yet. Wild card – Would utilities work with them? Bottom line – costs are off-loaded from utilities and ratepayers, risks and rewards stay with EV/PHEV owners and these aggregators.
Your local regulatory agencies will have key roles in influencing the options outlined here as well as other possibilities. As much as they don’t want to pick winners and losers in different technologies and services, they will work to keep electricity rates low for consumers.
In the meantime, many people are involved in defining standards for interoperability and security that includes these scenarios. The Smart Grid will have the intelligence and the bandwidth to accommodate millions of EVs and PHEVs, and we’ll give the same amount of thought to where and when we drive as we give to our mobile phone calls – our behaviors and bills will be based on our local or national charging/discharging plans.