Connecticut’s Energy Future Removing Barriers to Promote Energy Sustainability: Public Policy and...
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Connecticut’s Energy Connecticut’s Energy FutureFuture Removing Barriers to Promote Energy Removing Barriers to Promote Energy Sustainability: Public Policy and Sustainability: Public Policy and FinancingFinancing
December 2, 2004December 2, 2004
Legislative Office Legislative Office BuildingBuilding
Hartford, CT Hartford, CT
Daniel L Sosland, Executive Director
December 2, 2004December 2, 2004 Environment NortheastEnvironment Northeast 22
Environment Northeast
Non-profit environmental research and Non-profit environmental research and advocacy organization with staff of advocacy organization with staff of legal and policy experts located in legal and policy experts located in Hartford, New Haven and MaineHartford, New Haven and Maine
Advocated for Energy Conservation Advocated for Energy Conservation and Clean Energy Funds; RPS, Green and Clean Energy Funds; RPS, Green Power Choice; member of the Energy Power Choice; member of the Energy Conservation Management Board; Conservation Management Board; active in numerous DPUC proceedings active in numerous DPUC proceedings and at the General Assemblyand at the General Assembly
December 2, 2004December 2, 2004 Environment NortheastEnvironment Northeast 33
Factors Driving Connecticut Factors Driving Connecticut Energy PoliciesEnergy Policies
• Key DriversKey DriversCongestion in Congestion in
Southwest Southwest ConnecticutConnecticut
Energy Prices Energy Prices Environmental Environmental
IssuesIssues• Air QualityAir Quality
• Climate Change Climate Change GoalsGoals
• Key Priorities:Key Priorities:Energy Efficiency Energy Efficiency
FundsFunds• Electric, Gas and OilElectric, Gas and Oil
Remove Barriers to Remove Barriers to Advance EfficiencyAdvance Efficiency• Utility Rate ReformUtility Rate Reform
Advanced Building Advanced Building DesignDesign
Distributed Distributed GenerationGeneration
December 2, 2004December 2, 2004 Environment NortheastEnvironment Northeast 44
Connecticut is Making Significant Progress Connecticut is Making Significant Progress Promoting Sustainable Energy PoliciesPromoting Sustainable Energy Policies
1998 20041998 2004
• Inadequate Energy Inadequate Energy Conservation Fund – missing Conservation Fund – missing key savings and key key savings and key customerscustomers
• No renewable investment fundNo renewable investment fund• Interconnect engineering Interconnect engineering
standards obstaclestandards obstacle• Building Code in need of Building Code in need of
updatingupdating• Efficiency Standards need Efficiency Standards need
updatingupdating• No green power marketNo green power market
– No Renewable Portfolio No Renewable Portfolio StandardStandard
– No Green OfferNo Green Offer– No Efficiency OfferNo Efficiency Offer
• Conservation Fund increased Conservation Fund increased in 2000 and producing large in 2000 and producing large cost effective savingscost effective savings
• Clean Energy Fund existsClean Energy Fund exists• Uniform interconnect Uniform interconnect
standards adoptedstandards adopted• Building energy code Building energy code
updatedupdated• Efficiency standards bill Efficiency standards bill
enactedenacted• Green power offer pendingGreen power offer pending• Efficiency offer pendingEfficiency offer pending• Renewable Portfolio Renewable Portfolio
Standard kicking in Standard kicking in • Project 100: Installing Project 100: Installing
Renewable Energy in Renewable Energy in ConnecticutConnecticut
December 2, 2004December 2, 2004 Environment NortheastEnvironment Northeast 55
Good Public Policy Can Promote Solutions:Good Public Policy Can Promote Solutions:Connecticut’s Conservation Fund A Connecticut’s Conservation Fund A Nationally Significant Success StoryNationally Significant Success Story• Cumulative summer peak load savings of 630 MW Cumulative summer peak load savings of 630 MW
that would otherwise hit the lines-- 10% of state’s that would otherwise hit the lines-- 10% of state’s installed generating capacityinstalled generating capacity
• Energy efficiency resources are achieved at costs Energy efficiency resources are achieved at costs from $.02 to $.05 per lifetime kWh savedfrom $.02 to $.05 per lifetime kWh saved
• Significant environmental benefits in avoided Significant environmental benefits in avoided emissionsemissions
• Since 2000, producing net benefits of Since 2000, producing net benefits of approximately $ 1.4 billion dollars in avoided approximately $ 1.4 billion dollars in avoided energy costs over life of the conservation energy costs over life of the conservation investmentsinvestments
• Significant Public Input and Oversight – A Model Significant Public Input and Oversight – A Model for Good Policy Developmentfor Good Policy Development
December 2, 2004December 2, 2004 Environment NortheastEnvironment Northeast 66
Impact of Fund: Making Connecticut Impact of Fund: Making Connecticut More Efficient and Reducing Consumer More Efficient and Reducing Consumer CostsCosts Current programs Current programs
if fully funded if fully funded avoid over 60MW avoid over 60MW annuallyannually
Reduces state’s Reduces state’s annual growth in annual growth in capacity demand capacity demand from 1.7% to 0.6%: from 1.7% to 0.6%: 80% reduction80% reduction
5800
6000
6200
6400
6600
6800
7000
W/O
EE
GeneratingNeedWithout EE
GeneratingNeedWithEE
December 2, 2004December 2, 2004 Environment NortheastEnvironment Northeast 77
$0.00
$200.00
$400.00
$600.00
$800.00
$1,000.00
$1,200.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hour
$/MW ECP w/ DSM
ECP w/out DSM
Efficiency Impact: Reducing Market Prices to Efficiency Impact: Reducing Market Prices to ConsumersConsumers
115 MW in energy efficiency load reductions avoided about $6.7 million in additional costs (06/07/99)
December 2, 2004December 2, 2004 Environment NortheastEnvironment Northeast 88
We Can Do More: Achieve Level or We Can Do More: Achieve Level or Reduced Growth in DemandReduced Growth in Demand
Figure 1-2 - Connecticut Energy Forecast (GWh):Base Case, Continued Current Energy Efficiency, and
Maximum Achievable Cost Effective Potential
27,000
28,000
29,000
30,000
31,000
32,000
33,000
34,000
Year
GW
h
Base Case (no C&LM)
Continued Current EnergyEfficiency
Maximum Achievable CostEffective Potential
For the "Continued Current Energy Efficiency" scenario, values for the years 2009 - 2012 are estimates prepared by GDS Associates.
December 2, 2004December 2, 2004 Environment NortheastEnvironment Northeast 99
Connecticut Demand Growth:Connecticut Demand Growth:The Need for Policy ActionThe Need for Policy Action
Sources and Projected Growth in Demand and Resulting Sources and Projected Growth in Demand and Resulting Increases in CT Carbon Emissions (MMTC) Increases in CT Carbon Emissions (MMTC)
CategoryCategory 20002000 20502050 % Increase% IncreaseElectric powerElectric power 2.542.54 3.78 - 8.043.78 - 8.04 50% - 220%50% - 220%MobilityMobility 4.144.14 6.676.67 61%61%Residential Residential 2.212.21 2.212.21 0%0%IndustrialIndustrial 1.501.50 1.881.88 25%25%Commercial Commercial 1.061.06 1.061.06 0% 0% State totalState total 11.3311.33 16.21 - 20.4716.21 - 20.47 43% - 81%43% - 81%
2050 Target2050 Target 2.83 MMTC2.83 MMTC (75%)(75%)
December 2, 2004December 2, 2004 Environment NortheastEnvironment Northeast 1010
Sustainable Energy Policies: Sustainable Energy Policies: Where To Next?Where To Next?
• Natural Gas: Increase Efficient Natural Gas: Increase Efficient UseUse
• Home heating oil efficiencyHome heating oil efficiency• Remove barriers to additional Remove barriers to additional
cost-effective energy efficiencycost-effective energy efficiency Reform Outdated Utility Rate Design Reform Outdated Utility Rate Design
that Discourages Conservation and that Discourages Conservation and Promotes Inefficient SalesPromotes Inefficient Sales
• Pursue Advanced Building Pursue Advanced Building Energy standardsEnergy standards
• Protect the Conservation and Protect the Conservation and Clean Energy Funds from further Clean Energy Funds from further raidsraids
December 2, 2004December 2, 2004 Environment NortheastEnvironment Northeast 1111
Natural Gas and Oil Natural Gas and Oil ConservationConservationNatural Gas: Why Promote ConservationNatural Gas: Why Promote Conservation
Natural gas use increasing – Connecticut Natural gas use increasing – Connecticut becoming more dependent on natural gas for becoming more dependent on natural gas for powerplant generation powerplant generation
Provide benefits to natural gas customers that Provide benefits to natural gas customers that are only available now to electric customersare only available now to electric customers
Studies show natural gas conservation is highly Studies show natural gas conservation is highly effective way to reduce electricity and gas effective way to reduce electricity and gas prices by reducing marginal demand prices by reducing marginal demand
A modest fund of 3% of gas utility revenues A modest fund of 3% of gas utility revenues would provide substantial economic, consumer would provide substantial economic, consumer and environmental benefitsand environmental benefits
December 2, 2004December 2, 2004 Environment NortheastEnvironment Northeast 1212
Connecticut Needs to Promote Connecticut Needs to Promote Gas Efficiency to All CustomersGas Efficiency to All Customers
States with Natural Gas Conservation Projects in States with Natural Gas Conservation Projects in GreenGreen
December 2, 2004December 2, 2004 Environment NortheastEnvironment Northeast 1313
Natural Gas Conservation Natural Gas Conservation Reduces Gas PricesReduces Gas PricesNatural Gas Price Effects of Energy Efficiency and Renewables Policies
New England Gas Market
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
2001
2002
2003
2004
2005
2006
2007
2008
Date
Pri
ce (
$/M
cf)
Business as Usual Forecast
EE & RE Policy Impacts
December 2, 2004December 2, 2004 Environment NortheastEnvironment Northeast 1414
Oil ConservationOil Conservation• Connecticut consumes around 1 billion gallons of distillate Connecticut consumes around 1 billion gallons of distillate
oil annually at cost of over $1.3 billionoil annually at cost of over $1.3 billion• Oil consumption is nearly equivalent to natural gas on btu Oil consumption is nearly equivalent to natural gas on btu
basisbasis• Substantial savings to consumers with the creation of a Substantial savings to consumers with the creation of a
modest fuel oil efficiency programmodest fuel oil efficiency program Provide oil customers efficiency optionsProvide oil customers efficiency options
• Upgrade boilersUpgrade boilers• Perform thermal insulationPerform thermal insulation
Modest fund would save 6 million gallons a year at Modest fund would save 6 million gallons a year at benefit to cost ratio likely greater than 3.0benefit to cost ratio likely greater than 3.0
Joint Fuel Programs Joint Fuel Programs Whole Building Treatment: Thermal, Electric, Gas End Whole Building Treatment: Thermal, Electric, Gas End
UsesUses Avoids Equity issue of electric ratepayers funding Avoids Equity issue of electric ratepayers funding
measures that save gas and oilmeasures that save gas and oil
December 2, 2004December 2, 2004 Environment NortheastEnvironment Northeast 1515
Utility Rate Design: Remove Utility Rate Design: Remove Disincentives to Use Fuels EfficientlyDisincentives to Use Fuels Efficiently
• Current electric and gas utility rates provide Current electric and gas utility rates provide increased profits as sales volumes increase increased profits as sales volumes increase
• Result is a disincentive to promote efficient Result is a disincentive to promote efficient use of fuelsuse of fuels
• Remove this barrier by reforming revenue Remove this barrier by reforming revenue collection methodscollection methodsUtilize an adjustment mechanism to make Utilize an adjustment mechanism to make
utilities indifferent to salesutilities indifferent to salesExamine performance based ratemakingExamine performance based ratemaking
December 2, 2004December 2, 2004 Environment NortheastEnvironment Northeast 1616
Tax Incentives and Leading By Tax Incentives and Leading By ExampleExample
Tax incentives to promote Tax incentives to promote renewable energy, DG and CHP renewable energy, DG and CHP are importantare important
Key example: Federal wind tax Key example: Federal wind tax credit supports wind credit supports wind developmentdevelopment
State: examine the State: examine the effectiveness of approaches effectiveness of approaches such as sales tax exemptions for such as sales tax exemptions for renewables, impact of property renewables, impact of property tax exemption for renewables tax exemption for renewables and cogenerationand cogeneration
State procurement policies: State procurement policies: green purchases, building green purchases, building design standardsdesign standards
December 2, 2004December 2, 2004 Environment NortheastEnvironment Northeast 1717
Further InformationFurther Information
Environment NortheastEnvironment Northeast
http://www.env-ne.org/Sustainable_Connecticut.htmhttp://www.env-ne.org/Sustainable_Connecticut.htm
28 Grand Street, Hartford, CT 06106 860-246-712128 Grand Street, Hartford, CT 06106 860-246-7121
101 Whitney Avenue, New Haven, CT 06510 203-101 Whitney Avenue, New Haven, CT 06510 203-495-8224495-8224