Energy Efficiency

Chicago Sun-Times Editorial: Exelon’s rate-hike proposal is a bad bill

Exelon, which operates six nuclear power plants in Illinois, says it needs help because — although it made more than $2 billion last year —  it has lost about $1 billion in the past five years on three of its plants: Clinton, Quad Cities and Byron. The nuclear plants are having a hard time competing in the marketplace partly because plentiful supplies have driven down the price of natural gas.

The utility says it is unwilling to run any nuclear plant at a loss, though its nuclear fleet is profitable overall. It says Illinois needs all of its nuclear plants for reliability and low-carbon power generation. It also warns that 8,000 jobs in Illinois would be lost if the plants were shuttered.

To save the three plants, then, Exelon wants to raise electricity bills by $300 million a year under what it calls a market-based plan that would benefit all types of low-carbon generators of energy, including solar, wind and nuclear. The company says it is asking only for the same favorable treatment renewable energy gets.

The problem, critics accurately say, is that the bill is designed to funnel the new money into Exelon’s pockets while doing almost nothing to help generators of renewable energy.

Before Exelon digs deeper into your wallet, let’s demand at least a limited look at its balance sheet. The company says it has provided such information to legislative leaders, but does that give you much confidence? You, the ratepayers who would have to pony up, deserve a look-see, too.

Second, how is it Exelon can say it is unfair, when sizing up this bill, to consider the profitability of the company’s nuclear fleet as a whole, though all ratepayers — including Chicagoans who get their electrical power from profitable plants — would be forced to pay the surcharge? There is a feeling here of a company trying to socialize the risks while keeping the profits private.

Third, any low-carbon bill that emerges out of Springfield cannot favor Exelon. Renewable energy is the future, and the state should be making that a priority, not nuclear plants. It’s not prudent to put renewable energy at a disadvantage.

Exelon’s bill, which has both House and Senate versions, is one of three energy-related proposals on the docket in his session. Possibly, it will be rolled with others into an omnibus bill.

Whatever emerges must put ratepayers first. And it must not undercut our state’s truly green energy future.

WBEZ Worldview: Earth Day Quiz

Midwest Energy News: Critics say Michigan utility aims to ‘monopolize’ community solar

Michigan’s first proposed large-scale community solar program is coming under fire from clean-energy advocates who say it would prevent independent third parties from developing their own programs.

Within the next month, the Michigan Public Service Commission is expected to rule on Consumers Energy’sproposed 10 MW community solar pilot program, which would be the first program of its kind from one of the two major investor-owned utilities here. Smaller-scale projects are underway or in development elsewhere in the state.

But a group of clean-energy advocacy groups have intervened in the case before the MPSC, claiming that Consumers’ proposal would “monopolize” the community solar market, as the utility seeks to prevent independent third parties from developing projects within its service territory.

The utility disputes this point, saying third parties are allowed to develop projects within the program as long as they enter into power-purchase agreements with Consumers.

Further, advocates have raised concerns about the way Consumers has determined a value of solar, a contentious undertaking in other states where utilities and consumer advocates have argued over how much solar users should be compensated for generating the energy. Critics of the plan say Consumers is undervaluing customers’ investments.

The solar coalition — made up of the Environmental Law and Policy Center, the Ecology Center and the Great Lakes Renewable Energy Association — also says the utility is missing opportunities for strategic site planning, which could include contaminated brownfield properties around the state.

Brad Klein, staff attorney with the Chicago-based ELPC, said shutting out third parties is a “major issue.”

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WI State Journal: Opponents continue attack as major Wisconsin utility merger moves forward

Opponents continue to fight plans by Wisconsin Energy Corp., Milwaukee, to buy Integrys Energy Group, Chicago, even though the Federal Energy Regulatory Commission approved the $9.1 billion deal this week.

The Wisconsin Citizens Utility Board called it “a bad idea,” in comments submitted Monday.

“WEC has shown how the proposed transaction will provide hundreds of millions of dollars in benefits for shareholders, lawyers, bankers, and customers in other states while providing nothing for Wisconsin customers but increased risks,” CUB wrote.

If approved, the huge utility will serve more than 4.3 million customers.

Wisconsin Energy subsidiary, We Energies, provides electricity to residents as far west as the Deerfield and Marshall areas in Dane County. Integrys includes Green Bay utility company Wisconsin Public Service.

The Environmental Law and Policy Center of Chicago said the merged company — to be called WEC Energy Group — will have too much control over American Transmission Corp., which owns and operates high-voltage transmission lines in Wisconsin and Michigan’s Upper Peninsula.

The center said WEC should have no more than 34 percent ownership or voting rights in ATC.

Wisconsin Energy spokesman Brian Manthey said FERC’s decision “represents one more positive and important step in the process of finalizing our acquisition.”

Regulators in Wisconsin, Illinois, Minnesota and Michigan are expected to act on the proposal by early July. Wisconsin’s Public Service Commission could cast its vote later this month, Manthey said.

Midwest Energy News: Can better utility planning replace clean-energy standards?

A key component of energy proposals emerging from the Michigan legislature is that more robust long-term planning requirements for utilities can effectively replace renewable energy and efficiency standards.

Known as Integrated Resource Plans, Republicans in the House and Senate say requiring utilities to file these every three to five years will produce the most cost-effective resource mix into the future, eliminating the need for meeting goals under a renewable portfolio or energy efficiency mandate.

Formal IRPs are required in 28 states and come in various forms. Typically they are filed every two to five years and forecasts of supply, demand and other market factors can stretch upwards of 20 years.

While experts who follow clean-energy policies say such planning can be helpful in outlining long-term needs for utilities, some argue that — if the goal is expanding renewables or energy efficiency — IRPs are unable to produce the same results as clearly defined standards. Moreover, they are liable to become esoteric exercises in utility planning.

“It’s pretty apparent to those of us keeping a close eye on these types of things that an IRP process is not a substitute for renewable energy and energy efficiency standards,” said Sam Gomberg, Midwest energy analyst for the Union of Concerned Scientists.

“Standards really provide a tremendous amount of certainty of both utilities and the state to ensure these resources are brought online to a significant degree. The evidence is so clear that not only is it cost effective, but they also bring a lot of benefits to the ratepayer. An IRP can be a great complement to those standards.”

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AP: Nation’s Biggest Nuclear Firm Makes a Play for Green Money

The biggest player in the beleaguered nuclear power industry wants a place alongside solar, wind and hydroelectric power collecting extra money for producing carbon-free electricity.

Exelon Corp., operator of the largest fleet of U.S. nuclear plants, says it could have to close three of them if Illinois rejects the company’s pitch to let it recoup more from consumers since the plants do not produce greenhouse gases.

Chicago-based Exelon essentially wants to change the rules of the state’s power market as the nuclear industry competes with historically low prices for natural gas. Dominion Resources Inc. recently closed the Kewaunee Power Station in Wisconsin for financial reasons, and Entergy Corp. likewise shuttered its Vermont Yankee plant.

Plans for a new wave of U.S. nuclear plants have been delayed or cancelled, aside from three projects deep into construction at Plant Vogtle south of Augusta, Georgia; V.C. Summer Nuclear Station north of Columbia, South Carolina; and Watts Bar Nuclear Plant in eastern Tennessee. Electric utilities in those states do not face competition.

Nuclear plants provide about 97 percent of the electricity supply in Exelon’s Midwest market, according to company filings.

“We’re not looking for a bailout from market conditions,” said Joseph Dominguez, executive vice president for governmental and regulatory affairs at Exelon. “We are looking for policy support that every other technology receives in Illinois that produces zero-carbon electricity with the exception of nuclear.”

Though it wants financial assistance, Exelon will not release detailed information about the cost of running the three Illinois plants in Quad Cities, Byron and Clinton that company officials say are most at-risk. An analysis by state agencies estimated the cost of producing power at those plants may exceed the payments they get, though they could not be certain.

Exelon and other around-the-clock plants sometimes take losses when wind turbines produce too much electricity for the system.

Exelon remained profitable overall, making $1.6 billion last year.

“If the question is, ‘Are they under economic threat?’ I don’t think there’s any question they are,” said Paul Patterson, a utility analyst for Glenrock Associates LLC, who referred to nuclear plant closures elsewhere as evidence. “Will they shut down? I think it depends at what plant you’re looking at.”

The Illinois proposal would reward nuclear plants. Under the system, electric suppliers would have to buy credits from carbon-free energy producers. Exelon says the plan would benefit nuclear plants, hydroelectric dams, and other solar and wind projects.

Critics are concerned the rules are so narrowly drawn that the primary winner would be Exelon’s own nuclear fleet. For example, there are limits on the size of participating hydroelectric dams. Clean energy sources built in regulated markets don’t count. Neither do any renewable energy sources that have long-term contracts to sell their power to other buyers.

Crain’s Chicago Business: ComEd adds heat to already-boiling Illinois energy politics

As energy politics heat up in Illinois, Commonwealth Edison is throwing some more logs on the fire.

The utility is backing legislation being introduced today in Springfield that effectively is a response to the clean-jobs bill backed by Chicago Mayor Rahm Emanuel and a coalition of environmental, consumer and labor groups, along with renewable power developers and energy-efficiency firms.

ComEd’s 11th-hour bill, coming as the spring session is well underway, also could be intended to build more support for a bill pushed by ComEd parent Exelon to raise electricity rates throughout much of the state in order to increase revenue at Exelon’s six Illinois nuclear plants.

Environmentalists and others have positioned the clean-jobs bill, which would boost state goals for renewable energy and more efficient use of electricity and create what its proponents say would be tens of thousands of new jobs, as an alternative to Exelon’s bill. Somewhat surprisingly, given that Exelon is one of Illinois’ most politically potent corporations, the clean-jobs coalition has won more support thus far in terms of co-sponsors than Exelon. Exelon’s bill would funnel most of the $300 million in additional ratepayer payments to Exelon’s plants, preserving the jobs that already exist there.

Exelon has threatened to shutter as many as three of its six Illinois power stations if it can’t get state financial help.

ComEd’s bill, to be introduced by Sen. Kimberly Lightford, D-Maywood, and Rep. Bob Rita, D-Blue Island, is designed to foster growth in clean energy like solar power for households and micro-grids providing greater reliability and resiliency to sensitive facilities like the Federal Aviation Administration’s air-traffic control center in Aurora.

ComEd also proposes a $100 million program to build 5,000 Chicago-area charging stations to increase demand for electric vehicles.

BOTTOM-LINE BOOST

The bill would increase ComEd’s bottom line in the future as decreased customer demand for power hits its revenue by permitting the utility to profit on its state-authorized energy efficiency program. Currently, ComEd only charges ratepayers to reimburse it for its costs in running the program.

But the trade-off, ComEd says, is that it would achieve the 2 percent reduction in power usage called for in an earlier state law by more efficiently controlling voltage on ComEd’s power lines, so that less excess electricity is lost before reaching customers’ homes and businesses.

In addition, the bill would overhaul how ComEd’s power-delivery rates are set. Currently, customers pay delivery rates mainly based on how much power they consume in a month. Beginning in 2018, they would pay based on how much electricity they consume during the highest-demand days of the year. Some customers would benefit and some would pay more under the new system. ComEd hasn’t yet determined how it would affect individual types of households.

But it would help ComEd by making its cash flow more predictable, executives said.

It also might help customers take better advantage of the smart meters ComEd is installing in their homes. Those meters, which give the utility remote access to customers’ actual usage on a real-time basis, have the potential to foster new efficiency programs in ways where households can see savings from changes in usage.

The bill, ComEd CEO Anne Pramaggiore told reporters, “is designed to deliver the next wave of value from that (smart grid) system.”

And all of this comes at no additional cost on a net basis to customers over the 10 years the new program would be in place, ComEd said. The utility says it would see a negligible $20 million in additional revenue over that 10-year period if the bill becomes law.

CRITICS WEIGH IN

One environmental group immediately blasted ComEd’s proposal as a pale imitation of the clean-jobs bill.

“Unfortunately, Exelon’s and ComEd’s legislative proposals would raise utility bills for most consumers, create barriers to competition and constrain energy efficiency and diverse solar energy development for the future,” said Howard Learner, executive director of the Chicago-based Environmental Law and Policy Center, in a statement. “ComEd’s legislative proposal forecloses flexibility that Illinois needs to transition to a cleaner energy future and locks out competitors.”

Other members of the clean-jobs coalition were more open to some of ComEd’s ideas.

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Utility Drive Op-Ed: A view from Wisconsin on fixed charges and utility-solar troubles

The following is an opinion piece written by Tyler Huebner and Brad Klein. Huebner is the executive director of RENEW Wisconsin, a renewable advocacy organization in the state. Klein is a senior attorney at the Environmental Law & Policy Center, an environmental advocacy organization in the Midwest.

Last fall, we participated first-hand in three Wisconsin utility proposals relating to fixed charges and distributed generation.

More recently, we have followed the recent op-eds in Utility Dive from Dr. H. Edwin Overcast and Dr. Ashley C. Brown on fixed charges and net metering. One thing stood out to us in their editorials: Lots of words, but almost no actual data!

To remedy this — as our organizations did in last year’s rate cases for these Wisconsin utilities — we will provide some numbers.

Digging into the data

In Wisconsin, all three utilities argued that customers with solar panels are not paying their fair share of the utilities’ fixed costs, and therefore every single customer should see their monthly connection fee go up from $9-$10 per month to $16-$25 per month.

Raising the monthly connection fee hurts low-using energy customers, who, asthe National Consumer Law Center found, are often low-income, minorities, fixed-income, apartment dwellers, and senior citizens.

Let’s put Wisconsin’s level of solar adoption in perspective compared with the dramatic fixed charge increases requested.

Wisconsin Public Service

Wisconsin Public Service (WPS), based in Green Bay, serves approximately 445,000 electric customers. Of these, only 340 have installed distributed generation in the past 10 years — 0.08% of their customer base.

Further, even WPS conceded that the majority of those customers — 65%, or 221 homeowners — were fully paying their fixed costs under the utility’s way of counting. That is because, although they have solar, these 221 customers’ photovoltaic systems don’t provide all their electricity usage.

The total unrecovered revenue requirement — what the utility thinks it should earn but doesn’t because solar customers invest in solar on their roofs — amounts to only $21,000 for the entire year. That is approximately 0.002% of the company’s total 2013 monopoly revenue.

This is how WPS solves its “problem” — it seeks to shift $6.5 million from variable rates into unavoidable monthly fees for each customer, in order to offset a theoretical shortfall of only $21,000 caused by 119 customers who installed solar equipment largely at their own expense.

We Energies

Next up: We Energies, based in Milwaukee, which serves approximately 1.1 million electric customers. It requested an increase in monthly connection fees from $9.13 to $16, which will shift more than $7 million a year from usage-based rates to guaranteed fixed monthly fees. We Energies also proposed to apply additional charges on residential and small business customers with their own distributed generation systems, which would amount to about $20 per month for a 5 kW solar PV system — $3.80 per kW per month, to be specific.

About 450 We Energies customers have distributed generation and use net metering, or just 0.04% of their customers. The increased fixed charges and solar charges on those 450 customers will amount to about $117,000, or about 0.004% of the utility’s revenues.

Madison Gas & Electric

Finally, Madison Gas & Electric used similar arguments to request monthly fixed fees rise from about $10 to $19 (after backing off plans to raise them significantly higher in future years). Just 0.14% of their customers use net metering.

‘Swatting a fly with a nuclear weapon’

Collectively, only 6 out of every 10,000 customers for these utilities have distributed generation. “Swatting a fly with a nuclear weapon” is the type of analogy that should be used when considering these Wisconsin proposals, and the result is a “cure” that’s much worse than the disease.

Especially when the disease hasn’t even been proven to exist. The only analysis in the record concerning Wisconsin-based costs and benefits of distributed generation was gathered through a data request: a 2009 study commissioned by We Energies and conducted by Clean Power Research, which concluded that solar PV is worth about 15 cents per kWh at a levelized value for 30 years (see page ES-3). Since We Energies’ electric rates were about 13.9 cents per kWh in 2014, it turns out that solar customers may very well be subsidizing all other We Energies ratepayers.

Unfortunately, none of the utilities offered any new analysis of the benefits of distributed generation in these proceedings. Nearly every intervening organization suggested that the Wisconsin Commission conduct real studies looking at the costs and benefits of net metering and distributed generation as has been done in Vermont (see section 3.3.3), Nevada, Mississippi, Minnesota, and other states. The Utah Commission told Rocky Mountain Power to beef up their analysis, too (see page 66). But in Wisconsin, that suggestion was denied.

Wisconsin’s Public Service Commission has been approving the utilities’ distributed generation restrictions for years despite the repeated lack of evidence. RENEW Wisconsin, the local renewable energy advocacy organization, has been forced to take these unsupported decisions to court. Luckily, it has prevailed on three of the four counts brought the past two years, with the judge remanding decisions back to the Commission for further fact-finding. Along with The Alliance for Solar Choice (TASC), RENEW hasappealed the 2014 We Energies solar charge decision as well.

Does net metering really hurt the poor?

In an op-ed in Utility Dive, Dr. Brown states that one of his primary concerns with net metering is that it may hurt the poor.

In his testimony here in Wisconsin, he provided absolutely no state-specific data to support his theory that solar owners, who make up just 4 of every 10,000 We Energies customers, are causing undue hardship on the poor. Further, he offered no alternative to the higher fixed customer charges which unquestionably do hurt many of We Energies’ low-income ratepayers.

The result of the Wisconsin rate cases is that a typical apartment-dwelling customer served by these utilities will pay $60-$75 more each year for electricity. Even granting the utilities’ extreme position that excess solar is worth nothing more than the cheapest electron you can buy on the market — contradicted by We Energies’ own 2009 study mentioned above — those same customers paid no more than a dime a year extra due to current solar customers.

As the recent Washington Post article exposed, this solar battle is not really about customer fairness, it is about protecting utilities from competition, plain and simple. (Note that Dr. Brown’s Harvard Electricity Policy Group issupported heavily by the electric utility industry.)

Solar customers and the future of the utility industry

There is no doubt that the electricity industry is entering a new phase in Wisconsin and other states due to declining sales and the ever-increasing affordability of solar panels for customers. Thus far however, the small number of solar customers here in Wisconsin does not require wholesale changes to how we set rates. We have plenty of time to get these policies right and many, if not almost all, other states are in the same boat.

Our advice from the trenches in Wisconsin to utilities and Commissions in other states: Follow the lead of Vermont, Nevada, Mississippi, Minnesota, Maine, Utah, and other states on this issue — not Wisconsin’s 2014 decisions. Do the studies. Get the data. Hash out the details.

The best way to address this industry transition is with solid analysis of the utility’s actual situation, open discussion, and a long-run, forward-looking view. Not by ramming through “back to the past” electric rate policies against broad objections from citizens and that undisputedly harm low-use and fixed-income customers who can least afford the higher bills they now have to pay.

Statement: Latest Proposal Undercuts Competitive Markets, Leaves State’s Renewable Energy Portfolio Standard Broken

Illinois Clean Jobs Bill Remains Sole Option to Drive Wind Power and Solar Energy, Stimulate Needed Job Growth

 

STATEMENT BY HOWARD A. LEARNER
Executive Director, Environmental Law & Policy Center

“Illinois consumers are poised to gain the job creation, environmental quality and economic benefits of competing new clean energy technologies and suppliers.

“Unfortunately, Exelon’s and ComEd’s legislative proposals would raise utility bills for most consumers, create barriers to competition, and constrain energy efficiency and diverse solar energy development for the future. ComEd’s legislative proposal forecloses flexibility that Illinois needs to transition to a cleaner energy future and locks out competitors.”

“The Illinois Clean Jobs Bill brings Illinois into a more positive energy future.  Illinois policymakers should move forward promoting new innovative technologies, instead of Exelon’s and ComEd’s old monopoly approach that raises consumer’s electricity bills and imposes regulatory barriers that create more problems than positive solutions.”

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ELPC’s Founding Vision is Becoming Today’s Sustainability Reality

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ELPC’s Founding Vision is Becoming Today’s Sustainability Reality

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ELPC’s Founding Vision is Becoming Today’s Sustainability Reality

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ELPC’s Founding Vision is Becoming Today’s Sustainability Reality

Support ELPC’s Next 20 Years of Successful Advocacy

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ELPC’s Founding Vision is Becoming Today’s Sustainability Reality

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