Integrating Public Benefit Funded EE with New & Emerging ...

[Pages:23]Integrating Public Benefit Funded EE with New & Emerging Energy,

Economic, & Environmental Policies

A Regulator's Perspective By Clifton Below,

Commissioner, NHPUC

ACEEE Market Transformation Symposium March 20, 2007, Washington, D.C.

CB p. 1

Integrating Energy, Economic & Environmental Goals & Policies

Disclaimer: The views expressed herein are my own and not those of the NHPUC.

Also, some slides and images are borrowed from other sources as indicated on those slides.

KEY POLICY DRIVERS: ? Global Warming & Climate Change Risk Mitigation ? Energy Affordability & Economic Competitiveness ? Fuel Diversity & Energy Independence ? Air Quality (coincidence of peaks) ? Reliability & Meeting Electric & Gas System

Capacity Needs at Least-Cost: Supply, T, & D.

CB p. 2

Global Warming & Climate Change

Risk Mitigation

? Conference of New England Governors & Eastern Canadian Premiers (NEG/ECP): Climate Change Action Plan, 8/01: "Long-term Goal: Reduce regional GHG

emissions sufficiently to eliminate any dangerous threat to the climate; current science suggests this will require reductions of 75% to 85% below current levels." (p.7, neg-ecp- )

? 2006 Stern Review: The Economics of Climate Change: "There is still time avoid the worst impacts of climate

change, if we take strong action now." Power sector will need to be 60% to 75% decarbonized (more in developed world) by 2050 to stabilize at or below 550ppm CO2e. EE has the potential to be the single biggest source of GHG reductions and with economic and other environmental benefits.

? Many local, grassroots & state level initiatives.

CB p. 3

RGGI Emission Allowances & Offsets

? Minimum of 25% of each State's emissions budget allocated to public benefits (primarily EE), potentially all emissions allowances to be auctioned.

? Consideration to 2X EE programs. ? Some offset allowances allowed that are "real, additional,

verifiable, enforceable, and permanent within the framework of a standards-based approach." ? BUT not within electric sector or (which is the capped & reduced sector in RGGI). Eligible projects include those for the

"reduction or avoidance of CO2 emissions from natural gas, oil, or propane end-use due to end-use energy efficiency."

CB p. 4

RGGI Imports & Leakage Issue

"Increasing commitments to well-designed energy

efficiency programs and standards ... is a no-regrets

strategy that would provide continued reductions in both

electricity and natural gas demand. These reductions would

result in direct regional economic benefits by lowering

wholesale energy costs, avoiding the need for new

transmission and distribution infrastructure, improving

electricity system reliability, and lowering consumer energy

bills."

-- From: "Potential Emissions Leakage and the Regional Greenhouse Gas Initiative

(RGGI): Evaluating Market Dynamics, Monitoring Options, and Possible Mitigation

Mechanisms: Initial Report of the RGGI Emissions Leakage Multi-State Staff Working

Group to the RGGI Agency Heads," March 14, 2007.

CB p. 5

Energy Affordability & Economic Competitiveness Fuel Diversity & Energy Independence

? Concerns about

growing reliance on

natural gas &

imported fossil fuels,

for cost, volatility &

energy security.

? NH Governor's Job

Cabinet looking at EE

initiatives for business

retention & economic

development (JOBS).

? Economic &

? Low-income affordability and

Environmental

workforce housing.

Sustainability

? RPS & ACP (alt. compliance pmt.).

? Green Buildings

? Thermal EE (non-regulated fuels).

CB p. 6

Supply Outlook: New Supply Needed

40,000

35,000

30,000

Summer Megawatts

25,000 20,000 15,000

Total Net Capacity

90/10 Load Plus Operating Reserves 50/50 Load Plus Operating Reserves

10,000

5,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

The results above do not reflect generation unit additions, retirements, or deactivations that could occur during the study period.

? 2006 ISO New England Inc.

CB p. 7

Forward Capacity Market (FCM)

? 3/06 Settlement to litigation when ISO-NE proposed large increase in payments to LICAP (locational installed capacity).

? 1st FCA (forward capacity auction) 2/08 for capacity starting 6/10.

? Up to 5 year commitment for new resources ? Supply & Demand Resources (DR) include

EE, Load Mgmt., Dist. Gen. & Dem. Resp. ? HOWEVER, traditional generation & DR

must be available 12 mos. (annual capacity)

CB p. 8

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