LOW INCOME SOLUTIONS IN A HIGH DER FUTURE...housing stock and reliance on energy-intensive heating...
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A POTENTIAL eLAB INITIATIVE LOW INCOME SOLUTIONS IN A HIGH DER FUTURE RMI. Creating a clean, prosperous, and secure energy future. TM
Transcript of LOW INCOME SOLUTIONS IN A HIGH DER FUTURE...housing stock and reliance on energy-intensive heating...
A POTENTIAL eLAB INITIATIVE !
LOW INCOME SOLUTIONS IN A HIGH DER FUTURE!
RMI. Creating a clean, prosperous, and secure energy future.TM !
• Thesis:!– Low income and fixed income (LI/FI) customers are critical
segments that are at risk in a transition towards a more distributed and renewable electricity system. !
– To enable a successful transition to this future, the concerns of these customers must be addressed.!
• Guiding Questions!– What are the characteristics and concerns of LI/FI customers?!– In what ways are these concerns at odds with a highly renewable and
distributed electricity system?!– What solutions already exist that could be the focus of scaling or
replication?!– What are the unmet needs and how can they be addressed?!– What role can eLab play?!
OVERVIEW!
2!
LOW AND FIXED INCOME CUSTOMER SEGMENTS!
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Both groups!• Geographically diverse and live in
both single- and multi-family homes!• Spend as high as 20% of income on
energy!• Have diverse energy use profiles and
may have difficulty shifting usage!
1. Ensuring New York Solar Programs reach low-income residents. Jospe C. et. al. 2014. !2. Unlocking Energy Efficiency for Low-Income Utility Customers. Opower. 2014.!
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assume that low-income households are typically smaller than other households and,
therefore, use less energy. However, Opower data from seven programs indicates low-
income populations have varying consumption patterns and, in some cases, even exhibit
greater energy use than their higher-income counterparts (see Figure 3).
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In one large Midwestern deployment, low-income customers consume almost 26% more
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Western deployment consume 27% less. Examining geographical trends, relatively high
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housing stock and reliance on energy-intensive heating and cooling units in low-income
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“For some utilities, low-income households consume more energy than their higher-income counterparts.”
15,500
13,500
11,500
9,500
7,500
5,500
Weste
rn U
tility
1
Weste
rn U
tility
2
Weste
rn U
tility
3
Midwestern
Utili
ty 1
Eastern
Utili
ty 1
Eastern
Utili
ty 2
Eastern
Utili
ty 3
Low-income
Ann
ual E
lect
ricity
C
onsu
mpt
ion
(kW
h)
Non-low-income
-27%
-21%
-17%26%
-22%
-5%
16%
Low-income Electricity Consumption Varies Widely
Low Income (LI)!• Often fall below 150-200% of poverty
level as defined by US Census (ex. $36,000 for a family of four)!
• 10 million low income families in the US!• LI communities have a history of being
politically and economically marginalized!
Fixed Income (FI)!• Live on income that does not increase
annually (such as pensions)!• 40 million individuals 65 or older live in
the US!• 50% of seniors live at or below 250%
of poverty level!• 1 million social security disability awards
in 2013!!
3. National Council on Aging. http://www.ncoa.org/press-room/fact-sheets/economic-security-for.html.!4. Social Security Administration. http://www.ssa.gov/OACT/STATS/dibStat.html. !
Social!• Equal representation: LI/FI concerns must be fairly accounted for and cross subsidies that harm LI/
FI customers must be avoided!• Customer experience: rate structures and technologies must be accessible and understandable!• Health and Safety: continue to provide access to basic needs; continue to improve air quality and
other benefits!
!!
CONSUMER ADVOCATE CONCERNS!
4!Adapted from “Finding Common Ground among Public Interest Advocates.” Migden-Ostrander, J. et al. 2014.!
Financial!• Rate Affordability: LI/FI consumers must not be overly burdened by bills due to rates & rate structures!• Technological Affordability: must not be prevented from participation or excluded from benefits by
high cost capital equipment!• Consumer protections: protections like arrears repayment schedules and others should not be
dissolved or weakened!• Split Incentives: especially in multi-family housing, building owners’ and occupants’ interests do not
align and so occupants should be protected!• Energy efficiency: weatherization and similar energy efficiency programs that mitigate bill impacts
should continue to be promoted!
Lack of trust!• LI/FI consumer advocates have resisted aligning with environmental and other DER supporting groups!
FINANCIAL NEEDS SOLUTION MAPPING!
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Consumer Protections (arrears collections & disconnect policies)!!
Split Incentives!
LI Concerns!
Technological Affordability!
Energy Efficiency!
Rate Affordability!
Current !Solutions!
!
Rebate Programs!
Non-pay disconnect policies!
Rate Subsidies!
Potential Conflicts with DER Technologies and
Approaches!
Distributed Renewables!
Rate/Bill Increases!
Smart Grid!
Energy Storage!
Distributed Renewables!
Energy Efficiency!
Unmet Needs!
Incentive distribution!
Financing Programs!
Weatherization, EE!
SOCIAL AND TRUST NEEDS SOLUTION MAPPING!
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LI Concerns!
Equal Representation!
Customer Experience!
Health and Safety!
Unmet Needs!
Access to benefits!
Fair rate structure!
Potential Conflicts with DER Technologies and
Approaches!
Distributed Renewables!
Sophisticated Rates!
Distributed Renewables!
Demand Response!
Sophisticated Rates!
Smart Grid!
Energy Storage!
Load Curtailment, DR!
Trust! Trust building, collaboration!Lack of Trust!
Current Solutions!
Customer Education!
Customer Engagement!
Strong Regulation!
Job creation/training!
Automation, IT solutions!
IDENTIFYING OPPORTUNITIES FOR ELAB TO MAKE DISTINCTIVE CONTRIBUTIONS!
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Current Solutions!
Which solutions is eLab most capable of scaling or improving?!
Unmet Needs!
How can eLab address these unmet needs?!
Rebate Programs!
Non-pay disconnect policies!
Rate Subsidies!
Financing Programs!
Weatherization, EE!
Customer Education!
Customer Engagement!
Strong Regulation!
Job creation/training!
Access to benefits!
Fair rate structure!
Trust building, collaboration!
Automation, IT solutions!
Incentive distribution!
APPENDIX!
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Case! Description! Scenario! DER Technologies and Approaches!
Reforming the Energy Vision (Con Edison)!
Non-traditional customer side and utility-side demand reduction in Brooklyn/Queens to defer new substation!
• Urban!• Low Income!• High unemployment –
unique load profile!
• Energy efficiency!• Demand management!• Distributed generation!• Micro grids!
Salt River Project! Time-based pricing since 1980 along with smart metering!
• Rural and urban!• Mixed Income!
• Time of Use pricing!• Prepayment!• Smart metering!
Low-Income Programs of the California Solar Initiative!
Higher up-front incentives for both single-family and multi-family low income customers to meet California’s 2017 goal of 2000 MW solar capacity!
• Statewide!• Single-family!• Multi-family!
• Solar PV!
EXAMPLE CASES!
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EXAMPLES OF CONCERNS IDENTIFIED BY CONSUMER ADVOCACY GROUPS!
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1. AARP Comment - Cases 14-M-0101. AARP. 2014.!2. BEA Comment – Docket No. NOI-2011-0001 . NCLC. 2011.!3. “The Need for Essential Consumer Protections: Smart Metering...” AARP, et. al. 2010.!4. “Ensuring New York Solar Programs Reach Low-Income Residents.” Jospe, J, et. al. 2014.!
Case! Concerns of Consumer Advocacy Groups! Consumer Advocacy Groups Involved!
Reforming the Energy Vision (Con Edison)!
• Affordability – decoupling and other means may come at an additional cost not offset by potential savings!
• Misrepresentation – benefits in return for higher costs may not be delivered to all customers !
AARP !
Salt River Project! • Consumer protections – loss of incentive to negotiate reasonable payment agreements prior to disconnection!
• Health and safety – continual threat of service disruption!• Misrepresentation – prepayment targeted at low-income
households !
NCLC !
General concerns with Smart Meters and TOU rates (related to SRP)!
• Rate structures – time of use rates must not be mandatory, opt-in not opt-out!
• Consumer protections – levels must not be reduced, especially relating to remote disconnection, traditional billing, and dispute rights!
• Privacy and cyber-security !
AARP!NCLC!NASUCAU!Consumers United!Public Citizen!
General Solar Concerns (related to California Solar Initiative)!
• Capital Investment – lack creditworthiness to obtain low-cost, long-term financing !
• Landlord/Tenant Issues – renters unable to benefit directly from tax benefits!
GRID Alternative!
Case Solutions Reforming the Energy Vision (Con Edison)!
• Still in RFI process
Salt River Project • Customer education • Customer engagement and interaction • Program opt-out • Untargeted, equitable prepayment
plans Low-Income Programs of the California Solar Initiative!
• $160 million in incentives • Green-jobs training program
SOLUTIONS TO CASES!
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EXAMPLES OF FINANCIAL BENEFITS!
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Figure 1. Summary of Low Income Customer Responsiveness to Dynamic Prices Relative to Average Customer Response
Low Income Customer Responsiveness Relative to Average Customer Response
22%
50%
66% 66%
85%
100% 100%
84%
0%
20%
40%
60%
80%
100%
120%
California SPP:CARE vs.Average
PG&ESmartRate
2009: CARE vs.Average
PG&ESmartRate
2008: CARE vs.Average
CL&P's PWEPProgram (PTP
high):Hardship vs.
Average
California SPP:Low Income vs.
Average
Pepco DC(price only):
Low Income vs.Average
Residential
BGE 2008:Known LowIncome vs.
KnownAverage
Customer
CL&P's PWEPProgram:
Known LowIncome vs.
KnownAverage
Customer
Peak
Red
uctio
n
Average customer response
Note: For the PepcoDC pilot, the average residential response excludes low income customers that qualify for the RAD program.
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Figure 4. Residential and Low Income Bill Impacts Based on CPP Rate Design #1
Distribution of Dynamic Pricing Bill ImpactsResidential and Low Income Customers on CPP Rate (Design #1)
-15%
-10%
-5%
0%
5%
10%
15%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Percentile
Cha
nge
in A
vera
ge M
onth
ly B
ill
Residential SampleLow Income Sample
Residential "Winners" Residential "Losers"
Low Income "Winners" Low Income "Losers"
Next, we simulated the impact of a Peak Time Rebate (PTR) which featured a rebate of $1.10
per kWh during the critical peak periods for low income customers. All customers continued on
the existing rate of 13 cents per kWh.
� As shown in Figure 5, the Peak Time Rebate (PTR) rate has no impact on bills before demand response. Thus, when thinking about the immediate (that is, before demand response) beneficiaries of a dynamic pricing rate, the CPP may be superior in that it creates instant winners out of more than half of the low income customers. At the same time, the CPP rate also creates a smaller number of instant losers, whereas the PTR rate leaves all customers’ bills unchanged in the absence of demand response.
Financial!• Rate design solutions can have positive financial impacts on LI/FI
households, such as reduced energy consumption and lower bills from sophisticated rates!
“The Impact of Dynamic Pricing on Low Income Customers.” The Edison Foundation. 2010.!
• Telecom!– Rapidly expanding and technology dependent sector!– Consumer advocacy groups are heavily involved in ensuring low income
groups can continue to participate as technologies change (mobile phones, broadband) and rates rise!
– Federal programs, such as Lifeline – discounts for prepaid mobile, landline, and broadband services – are heavily influenced by CAGs!• NCLC and others support Lifeline modernization efforts that allow customers
to choose between wireline phone, wireless plan or broadband service!• Transportation!
– California effort to ensure one million zero-emissions vehicles by 2023 with the Charge Ahead California Initiative!• Recent legislation has been passed in an effort to expand rebates for low-
income customers!
NON-INDUSTRY EXAMPLES!
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