Powering up a carbon-free, energy efficient future requires united effort
Utilities, the United States government, state regulators, and myriad customers from across industry sectors and including low-income residential must all be involved in advancing carbon-free, energy efficient solutions in America — and their collective work needs to pick up speed, sources said Wednesday.
“We need to act now. This is a decade of action,” said Andrew Mayock, federal chief sustainability officer for the White House Council on Environmental Quality, during the Institute for Electric Innovation (IEI) Powering the People 2021: Achieving a Carbon Free Energy Future virtual event held Nov. 10.
Mayock, who leads President Joe Biden’s efforts to improve the sustainability of the federal government, including by helping federal agencies prepare for and respond to the impacts of climate change on their operations and services, said the U.S. should lead by example, with a focus on additionality, as well as the federal government’s actions to accelerate the clean energy transition.
“We must turn the climate crisis into an economic opportunity,” Maylock said in opening statements prior to two panel discussions at the IEI event on advancing carbon-free energy solutions for corporate and federal customers, and rethinking energy efficiency as a carbon resource to help both customers save energy and electric companies reduce their carbon emissions.
Many opportunities exist for industry sectors and the federal government to reach a carbon-free future, said Mayock, particularly as Biden is poised to sign into law the Infrastructure Investment and Jobs Act. The so-called Bipartisan Infrastructure Deal will deliver tens of billions of investment dollars to improve America’s infrastructure, including by upgrading the nation’s power infrastructure to deliver clean, reliable energy across the country and deploy cutting-edge energy technology to achieve a zero-emissions future, while also making the nation’s infrastructure resilient against the impacts of climate change, cyberattacks and extreme weather events.
Getting to 100-percent, carbon-free energy is also critically important to the Edison Electric Institute (EEI) and its member companies, which are all of the nation’s investor-owned utilities, said Stephen Kiesner, EEI’s senior director of National Customer Markets. “It’s really important to tackle climate change effectively,” he said, adding that EEI has been working with corporate companies on this task for the last two years or so.
“The federal government and corporate customers really get the importance of advancing the 100-percent renewable goal of 24/7/365 carbon-free energy,” Kiesner said, pointing out that the U.S. government is the largest energy customer. “And as the federal government sets out on its journey, I think it’s going to be essential for it to work hand-in-hand with EEI member companies, which are making aggressive commitments to reduce carbon as fast as they can without impacting reliability and affordability.”
Mayock asked panelists to consider how to sequence the forthcoming federal infrastructure investments, which also will go toward energy transmission, electric vehicle (EV) chargers, broadband deployment, and much more. “This is about scaling and growing,” he said.
Kiesner said EEI members are already increasing their own investments to about $120 billion per year to make the energy grid much more cleaner, smarter, resilient, and efficient.
And as utilities and major corporate energy customers move in such directions as part of their climate change initiatives, Mayock said that the Biden administration — which is working to transition national fleets to zero-emission vehicles, electrify and enhance the resilience of government buildings, and establish sustainable procurement policies — is analyzing their playbooks on how to be successful.
The Florida Power & Light Co. (FPL), for instance, which serves more than 5.6 million customer accounts supporting more than 11 million residents across Florida, operates one of the cleanest power generation fleets in the U.S. and in 2020 won the ReliabilityOne National Reliability Excellence Award for the fifth time in the last six years.
Panelist Matt Valle, vice president of development for FPL, explained that the utility is providing low-carbon and carbon-free solutions to all customers, not just those that are federal and corporate, by creating a variety of programs to meet the needs and goals of all customers while also protecting them.
“As utilities, we serve everybody,” Valle said, including “those who are low-income and are just trying to get by.”
In late October, for example, the Florida Public Service Commission unanimously approved FPL’s comprehensive, four-year rate settlement agreement developed jointly with the Florida Office of Public Counsel, the Florida Retail Federation, the Florida Industrial Power Users Group, and the Southern Alliance for Clean Energy. The approved agreement will phase in new rates starting in 2022 and supports continued long-term investments in infrastructure, clean energy and innovative technology, including the largest solar buildout in the United States, said Valle.
Specifically, the new agreement directly supports several FPL programs, such as its “30-by-30” plan to install 30 million solar panels in Florida by 2030, and the expansion of its FPL SolarTogether community solar program. The agreement also supports FPL’s green hydrogen pilot project in Okeechobee County, Fla., an innovative technology that could one day unlock 100-percent, carbon-free electricity that’s available 24 hours a day, as well as the FPL Manatee Energy Storage Center, the world’s largest integrated solar-powered battery system that’s projected to begin serving customers later this year.
“Choice is important,” said Valle.”You have to serve all needs and if you do not, it may be at your peril.”
The utility industry has to be creative and must bring along regulators, too, he said. This will help ensure that a clean energy future will be fair and work for everybody, said Valle, who added that utilities don’t want all customers paying for a program that not all are involved in, for example.
Regulators on board
Speaking during the second panel, Charlotte Mitchell, chair of the North Carolina Utilities Commission and co-vice chair of the Energy Resources and the Environment (ERE) Committee at the National Association of Regulatory Utility Commissioners (NARUC), pointed out that state utility regulators are on the same page with utilities and customers when it comes to providing carbon-free energy alternatives.
In fact, the ERE Committee’s resolution on Increasing the Role of Energy Efficiency in Achieving Cost-Effective Energy Supply and Decarbonization was adopted on Nov. 9 by the NARUC Board of Directors at NARUC’s 2021 Annual Meeting in Louisville, Ky. The resolution recommends NARUC member states consider four principles:
- Utilities and states should take action to maximize the impacts of energy efficiency programs for controlling energy costs and rates, and, where applicable, cost-effectively achieving decarbonization;
- States should leverage utilities’ relationships with their customers to help effectively implement energy efficiency programs and achieve maximum impacts;
- Planning frameworks and modeling tools should be designed to reflect research findings on energy efficiency costs and decarbonization impacts and ensure energy efficiency opportunities are accurately; and appropriately considered in utility and commission decisions related to resource planning; and
- Utilities should explore options to provide customers with real-time consumption data, which can help encourage behavior-based savings and encourage deeper participation in energy efficiency offerings.
“The next step,” Mitchell said, “is to utilize energy efficiency as one of the tools to achieve these goals.”
Kiesner added that it’s also important for customers to work with EEI members on educating regulators about customer needs, which are changing right alongside technology at a very fast pace. EEI has mobilized customer groups, for instance, to support such efforts before commissions, he said.
Rethinking energy efficiency
Customers must be the main focus of rethinking energy efficiency as a carbon resource, said panelist Katie Sloan, vice president of customer programs and services at Southern California Edison (SCE), a subsidiary of public utility holding company Edison International that provides electricity to 15 million customers across much of Southern California.
Like FPL, SCE provides many programs to help incentivize customers to improve their energy management, Sloan said, such as SCE’s Customized Energy Efficiency Incentives program, which offers incentives to business customers for qualifying energy efficiency projects involving the installation of new, high-efficiency equipment or systems, operational improvements, or whole building measures.
Sloan said SCE also offers “a huge suite of low-income programs, including a new one for those living just above the poverty line who need additional help with energy efficiency.”
“Customers and utilities can work together to make energy efficiency a more wholesome opportunity,” she added.
Ralph Cavanagh, energy co-director for the Climate and Clean Energy Program at the Natural Resources Defense Council (NRDC), said that customers also would benefit from the electric industry joining with the transportation industry on energy efficiency.
Updated federal regulatory guidance could help that relationship, said Cavanagh, who suggested, for instance, that such guidance be provided for a tax code section offering a financial incentive to improve energy efficiency in buildings that was made permanent by Trump in December 2020.
“It’s fasten-your-seatbelt time,” said panelist David Nemtzow, director of the Building Technologies Office at the U.S. Department of Energy, who pointed out that 39 percent of the nation’s electricity is used in buildings. “We need to make buildings half as sexy as EVs because the carbon reduction potential in buildings is tremendous.”
Currently, the work being done to do so is not up to the challenge, said Nemtzow. Utilities and the federal government “need to pick up the pace.”
For her part, North Carolina Commissioner Mitchell plans to make clear in her state that regulators “are going to go after energy efficiency to meet mandates we have to benefit the system and customers. I will expect the utilities to use every tool and competency available to bring us innovative solutions.”
