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UTILITIES: Xcel Energy wants time-of-use rates to be the default billing system for its Minnesota residential customers, proposing to double prices for power during peak late afternoon and early evening hours. (Energy News Network)
WIND:
GRID:
PIPELINES:
RENEWABLES: A Michigan panel allows organizers to start collecting signatures for a ballot initiative seeking to overturn a state law giving state regulators authority over renewable energy permitting. (Bridge)
ELECTRIC VEHICLES:
NUCLEAR: The South Dakota House passes a bill to clarify that the governor can enter into federal agreements on nuclear power development in preparation for a new potential plant. (SDBA)
CLEAN ENERGY: A Michigan lawmaker says the timing of the federal Inflation Reduction Act was a significant reason why the state passed sweeping clean energy reforms last year. (Volts)
STORAGE:
Xcel Energy customers in Minnesota will likely soon have good reason to hold off on running dishwashers or charging vehicles until bedtime.
The state’s largest utility is asking regulators to approve a major change to how residential customers have paid for their electricity for decades.
In December, the company proposed moving away from the standard, flat hourly rate that almost all its customers currently pay and replacing it with a variable “time-of-use” rate design that charges more for power during periods of high demand.
Rates between 3 p.m. and 8 p.m. weekdays would be twice the rate customers currently pay, and seven times higher than the proposed overnight “off peak” rate between 12 a.m. to 6 a.m. Other hours of the day would be charged a “base” rate.
Winter electricity would be, on average, more than 30% cheaper for base and peak rates than Xcel’s summer rates. Xcel told regulators that typical customers will pay 17.8% more for electricity in summer and 10.6% less in winter, assuming no behavioral changes in consumption. Xcel customers use roughly 20% less electricity in winter as most currently heat their homes with natural gas.
Xcel wants time-of-use to be the default billing system for all residential customers, though customers could opt-out.
The proposal follows a two-year pilot project Xcel operated in neighborhoods in suburban Eden Prairie and the Longfellow area of South Minneapolis. The company found a modest shift in customers reducing energy in peak periods, enough to support broader adoption across its Minnesota territory, according to Xcel spokesperson Theo Keith.
“This new proposal will make our successful pilot available to more customers,” he said. “During the pilot, we saw that participants saved a modest amount on their energy bills even with a modest increase in overall energy usage. Customers responded to the pilot rate design by shifting some usage away from peak times with the highest energy prices.”
The new pricing structure is possible because of Xcel’s installation of more than 500,000 smart meters that will allow customers to better track their energy use through an online portal, Keith said. The proposal also fulfills a Public Utilities Commission requirement that Xcel move to time-of-use rates, he said.
The concept has parallels with the growth of dynamic pricing by hotels, airlines, ride-hailing services and sports and entertainment tickets. California has been the leader in time-of-use utility pricing, with power companies there using it as the default for billing customers. Several other utilities nationwide have similar rate programs or are studying its potential to help prepare the grid for more electrification and renewable energy. And Xcel’s Colorado subsidiary has begun rolling out time-of-use rates there.
The utility believes that by shifting consumption to later and overnight hours, it can take advantage of the abundant wind energy typically available during those periods, Keith said. Shifting to non-peak times also helps Xcel avoid building more power plants, especially peaker plants that operate only a handful of hours annually but often create high emissions.
Xcel is part of the Midcontinent Independent System Operator (MISO) regional energy market, one of two in the country forecasted to have a “capacity crunch” over the next five years, said Gabe Chan, an associate professor and energy policy expert at the University of Minnesota. He said that trying innovative approaches such as time-of-use to reduce consumption at high demand times will help balance the electric grid.
Citizens Utility Board of Minnesota executive director Annie Levenson-Falk said time-of-use rates could be more fair than the current rate because, under a flat rate, customers pay more than it costs to produce electricity in low-demand periods and less than the cost during high-demand times.
The consumer advocacy nonprofit’s Illinois affiliate found in a study “that time-of-use rates are more equitable” because lower-income households didn’t use much energy in peak periods than higher-income households, Levenson-Falk said.
Using 2016 data from Commonwealth Edison, Illinois’s largest utility company, the report showed that 97% of its customers would save money under a time-of-use plan without making any behavioral changes. They would reduce their bill by an average of 13.2%, with low-income households seeing an additional 1% savings.
Shifting electricity use to base and non-peak hours tends to reduce emissions, too, Levenson-Falk said. Wind energy is widely available at night, while solar energy tops out in the middle of the day. She said that as solar power grows in Minnesota, Xcel could adjust the peak to take advantage of the sun.
But there are drawbacks. Levenson-Falk said customers using power during peak hours will see substantial bill increases. Some low-income households may not have the ability to change consumption patterns. And customers may find it hard not to use electric stoves, heat pumps or water heaters during peaks.
“Are we going to be disincentivizing beneficial electrification?” she asked.
There’s also the problem of reducing peaks during some hours only to create them in other hours. A University of Texas study of 100 Austin homeowners using time-of-use rates found most shifted use of appliances such as heating, ventilation, and air conditioning equipment to non-peak times — so much so that they created a higher residential peak in lower-cost hours.
Xcel’s two-year “Flex Pricing” pilot study that ended in 2022 involved nearly 17,000 ratepayers in Eden Prairie and Minneapolis, with 10,000 in the time-of-use program and the rest in the control group. Working with consulting firm Guidehouse, Xcel discovered in the pilot that electricity demand during peak periods was “modest” in Eden Prairie. In Minneapolis, the same was true in the pilot’s first year before trailing off in year two.
The pilot found a small subsector of participants drove much of the reduction in energy use during peak times. Representing around 10% of the participants, these “highly engaged” customers understood time-of-use rates and made proactive decisions to decrease their electricity use.
Xcel concluded in its regulatory filing that “the demand impact was close to achieving the goal of incentivizing less energy consumption during peak times in a revenue-neutral manner.” The study saw customers increase their energy consumption slightly, shifting electricity use rather than reducing it.
Customer bills in Eden Prairie grew slightly and declined marginally in Minneapolis. Participants paid more than they would at the standard rate in summer and less in winter, but Eden Prairie did not see enough decline to make up the difference. The highly engaged participants made the most progress in seeing their bills decline yet averaged just a $4 monthly decrease.
The pilot’s income-qualified customers, mostly living in Minneapolis, saw bills reduced by 3%. Those customers were “statistically significantly more satisfied with the pilot than the general population was,” Xcel said. “This was like the response from participants who were seniors, renters, or those who use a smart thermostat.”
Matthew Grimley, a University of Minnesota researcher at the Chan Lab, said Xcel likely did not achieve more demand response because not all customers had the technology to control demand and reduce consumption, such as smart thermostats, controllable and electrified water heaters, and electric vehicles.
Xcel reported that fewer than 50% of pilot participants knew about energy efficiency kits the company made available to help them reduce energy use. Just 20% went through the process of receiving a kit. Grimley said Xcel will have to do a better job of sharing time-of-use kits for the rates to work.
Chan added that the variable rates should be only the start of a new way of thinking about how the electric grid operates. He believes giving rebates during critical peaks and using text messaging to ask customers to reduce their electricity might be “a more direct way that achieves the same goals at potentially much more effective scaling.”
Organizations and individuals can now forward comments to Xcel’s time-of-use docket. The Public Utilities Commission has not scheduled any hearings yet, but the utility hopes to begin dynamic pricing in 2025.
CLEAN ENERGY: Virginia lawmakers consider legislation to make way for more clean energy produced by customers and third-party wind and solar to increase market competition and lower rates as the state aims to meet clean energy goals. (Energy News Network)
ALSO: Georgia Gov. Brian Kemp tells leaders at the World Economic Forum that his state needs more clean energy to attract economic projects such as the electric vehicle and battery factories that have settled there. (Associated Press)
CLIMATE:
ELECTRIC VEHICLES:
OIL & GAS:
GRID: Experts say Texas’ renewable-energy building spree has strengthened the state power grid so that it’s better prepared to handle extreme winter weather. (Washington Post)
PIPELINES: Mountain Valley Pipeline developers adjust plans for its proposed Southgate spur into North Carolina, shortening the extension by more than half but widening its diameter and capacity. (Inside Climate News)
COAL:
HYDROGEN: Federal officials award a $70 million grant to build hydrogen fueling stations at Texas truck stops. (Texas Standard)
OVERSIGHT: Georgia regulators seem skeptical of Georgia Power’s request to buy more energy and build new batteries and gas turbines to meet the news of a surging state economy they say has produced 40 years’ worth of growth in just two years. (WABE)
COMMENTARY:
NUCLEAR: U.S. Rep. Cori Bush of Missouri says the country should not expand nuclear power until it can address the health and environmental harms caused by existing nuclear waste, including in her predominantly Black St. Louis-area district. (Missouri Independent)
SOLAR:
WIND: Last week’s high winds that accompanied winter storms created record output for MidAmerican Energy’s Iowa wind farms. (Radio Iowa)
OIL & GAS:
UTILITIES:
AIR QUALITY: Michigan environmental justice and health care groups back a lawsuit challenging the U.S. EPA’s decision to label metro Detroit in compliance with federal ozone standards. (Michigan Advance)
RENEWABLES: Michigan’s top energy regulator downplays concerns about a new law allowing state approval of renewable energy projects, saying local input will still play a key role in decision making. (9&10 News)
ELECTRIC VEHICLES:
GRID: Omaha Public Power District customers played a key role by conserving energy this week as the utility’s four coal units were offline during frigid weather. (World-Herald)
CLEAN ENERGY: A new report challenges assumptions that the global cost of the clean energy transition will be astronomical, but rather much less when accounting for the loss in fossil fuel spending. (Inside Climate News)
BIOFUELS: Iowa’s congressional delegation joins eight Midwestern governors in a letter calling on the Biden administration to allow year-round sales of higher blends of ethanol. (Cedar Rapids Gazette)
COMMENTARY: A researcher says the U.S. corn belt would be better served by large solar installations to power electric vehicles than inefficient ethanol production to power internal combustion vehicles. (The New Republic)
OIL & GAS: California Gov. Gavin Newsom proposes ending some longstanding tax breaks for oil and gas producers, saying it would save the state up to $22 million annually. (Politico)
ALSO:
SOLAR:
WIND: Washington state regulators are slated next week to consider a proposed 600-1,100 MW wind power facility in the southern part of the state. (Center Square)
STORAGE: A company breaks ground on a 312-battery energy storage system in Phoenix, Arizona. (Arizona Republic)
OVERSIGHT: A Utah lawmaker introduces legislation aimed at allowing the state not to comply with federal regulations it doesn’t like, giving the U.S. EPA’s ozone transport rule as an example. (Utah News Dispatch)
NUCLEAR: A Washington state lawmaker introduces legislation that would provide tax incentives for nuclear power equipment manufacturers. (Center Square)
UTILITIES: Colorado natural gas utilities plan to rely on energy efficiency, demand response and biofuels to achieve state-mandated greenhouse gas emissions reductions. (S&P Global)
HYDROPOWER: U.S. Rep. Dan Newhouse, a Washington state Republican, looks to use a federal infrastructure bill to block a proposal to breach four Northwest hydropower dams. (Idaho Statesman)
ELECTRIC VEHICLES:
TRANSITION: An activated carbon air and water purification manufacturer establishes a facility in northwest New Mexico as part of an effort to diversify the region’s fossil fuel-reliant economy. (Daily Times)
ELECTRIFICATION: Palo Alto, California, stops enforcing a ban on natural gas hookups in new construction following a court order axing Berkeley’s similar rule. (Daily Post)
COAL: Montana utility observers ask why the Colstrip coal plant remained offline during a recent cold snap even as utilities had to import power to keep the lights on. (Missoula Current)
GRID: Another severe winter storm pounds utility equipment in the Northwest, leaving more than 40,000 customers without power in Portland, Oregon. (KGW)
Newly empowered Virginia Democrats are pushing legislation this session that would elevate the role of customers and private developers in meeting the state’s clean energy targets.
A chief aim of the ARC bill — shorthand for Affordable, Reliable and Competitive — is to significantly expand the amount of power generated by less expensive, third-party solar and onshore wind projects in the service territories of both Dominion Power and Appalachian Power.
After legislators green-lighted the bold Virginia Clean Economy Act (VCEA) in 2020, regulators capped those types of projects at 35% of an investor-owned utility’s renewable energy portfolio.
Backers of the ARC legislation, House Bill 638 and Senate Bill 230, are calling for that 35% to act as a floor rather than a ceiling.
“We know the market can support at least 35%,” said Nate Benforado, senior attorney with the Southern Environmental Law Center. “We’re not saying the new target should be 100%. Whatever the number is, it’s best left to the discretion of the State Corporation Commission.”
Benforado’s organization collaborated with policy specialists at organizations including Advanced Energy United and the Sierra Club to shape the ARC legislation. They expect the proposal — with its emphasis on increasing market competition and lowering costs — will attract Republican supporters on its way through the General Assembly.
“This is one of those issues that is bipartisan,” he said about adjusting the existing statutory framework to escalate growth of renewables.
Briefly, the VCEA requires Dominion to incrementally meet a goal of 100% clean energy generation by 2045. Targets for 2025 and 2035 are 26% and 59%, respectively. Appalachian Power is supposed to follow suit by 2050.
Del. Rip Sullivan, a Fairfax County Democrat, is the patron of HB 638, while Sen. Ghazala Hashmi, a Democrat representing the Richmond region, is sponsoring the upper chamber version.
Just days after the legislative session convened on Jan. 10, Sullivan told attendees at a Virginia Grassroots Coalition online gathering that he was reluctant to attempt to tweak the VCEA until Democrats again regained majorities in both chambers.
That happened during the November election when Democrats held on to a slim majority in the Senate and flipped the House back to their control. Still, narrow vote margins mean they don’t have the supermajorities necessary to override vetoes or enact new laws that Republican Gov. Glenn Youngkin opposes.
Sullivan’s bill would also require the two large utilities to allow a fivefold increase in the percentage of distributed energy generated by small-scale solar and solar storage projects.
Solar installers are on the verge of exceeding the 1% renewable portfolio limit included in the VCEA because of customer demand for closer-to-home energy.
Bumping that upward to 5% is an incentive to let Virginia unlock the lowest-cost path to clean energy because it veers away from a utility-only approach, said Robin Dutta, acting executive director of the Chesapeake Solar & Storage Association.
His organization represents renewable energy developers in Virginia, Maryland, Delaware and the District of Columbia.
“There’s a huge climate argument for distributed generation,” Dutta said. “By lowering peak (energy) demand as much as possible, utilities don’t have to build out the grid with transmission lines and other infrastructure.”
The legislation would allow local, small-scale projects — which include rooftop solar, community solar and related storage — to be as large as 3 megawatts. That triples the current 1 MW cap.
Inviting the private sector to play a larger role not only drives technical innovation, but also lets non-utility entities and regular ratepayers be armed with their own power generation, Dutta said.
He praised Sullivan’s bill for folding in a pair of renewable stalwarts — third-party-owned solar projects and distributed energy — that green the grid and protect affordability for ratepayers.
“Those two pieces move the ball forward in two different ways,” Dutta said. “And that leads to a more equitable clean energy transition for ratepayers.”
One advantage of distributed generation is that solar panels aren’t covering acres of farmland, Benforado said. Instead, projects are sited near the people using the renewable energy, which avoids costly transmission and distribution upgrades.
Despite industry enthusiasm, Dominion Energy has a “number of concerns with the legislation” and is “working with the sponsor to hopefully address some of them,” utility spokesman Aaron Ruby told the Energy News Network.
The utility’s most pressing issue revolves around raising the distributed solar carve-out. Dominion claims that boosting it to 5% would require the utility to buy renewable energy credits from roughly 3,700 megawatts of distributed solar projects by 2048.
That is “completely unrealistic,” Ruby said, adding that adhering to the increase would cost Dominion about $260 million in penalties annually for being out of compliance with the incremental renewable energy goals laid out in the VCEA.
Ruby explained that Dominion has lowered customer electricity rates significantly and is more than a year ahead of schedule on meeting its renewable energy requirements.
“This legislation heads in the opposite direction on both scores,” he said. “You’ve heard the old saying, ‘If it ain’t broke, don’t fix it.’ I’d go even further. If it’s working, don’t break it.”
Third-party solar developers in Virginia — and elsewhere — usually engage in a mutually beneficial arrangement known as a power purchase agreement, or PPA for short, to help customers meet sustainability goals.
Generally, those deals allow the builder to install, own and operate the energy system on land the customer owns. The customer receives stable, often low-cost electricity with no upfront cost for a predetermined length of time, which enables the owner to take advantage of tax credits and earn income from the sale of electricity.
Environmental advocates maintain that solar projects built, operated and maintained by third parties are less expensive than those coordinated by utilities. For one, utilities receive a return on equity for capital expenditures and project costs are then passed on to ratepayers.
However, third-party builders are not only competing for business but investing their own capital, which means they assume all financial risks. That alone is incentive enough to deliver a successful project at a reasonable cost.
“With the Clean Economy Act, we have a path and a structure to improve the affordability of this transition to clean energy,” the SELC’s Benforado said. “We don’t want to see lower-cost options for customers dismissed because of a 35 percent cap.”
He pointed to testimony presented last January to utility regulators by Gregory Abbott on behalf of Appalachian Voices, an environmental nonprofit. Abbott, who had recently retired from the SCC after 24 years in the commission’s Division of Public Utility Regulation, was commenting on a case involving Dominion’s renewable energy portfolio.
Abbott stated that third-party-owned solar projects are a more affordable and “attractive option for captive customers” because of lower risks associated with performance and project development
Abbott also noted that Dominion has consistently left lower-cost, third-party solar projects out of its renewable energy mix because of its interpretation of 35% as an exact number instead of a suggestion.
On the Senate side, the bill has been referred to the full Labor and Commerce Committee. Over in the House, it was in front of a Labor and Commerce subcommittee as of Jan. 16.
“Virginia’s curve is headed up when it comes to renewables and clean energy,” said Sullivan, the House sponsor. “Despite what you may be hearing from some quarters, we can and should be on track to meet our goals. Having said that, we need to do better, we need to do it faster and we need to do more.”
WORKFORCE: Renewable energy is boosting West Virginia with a series of new factories and projects, but the state is hampered by a low labor force participation rate and lack of policies supporting smaller community-scale projects. (Mountain State Spotlight)
GRID:
STORAGE: A Louisiana parish board votes to approve tax incentives for a chemical company to build a $491 million factory to make materials for electric vehicle batteries. (NOLA.com)
EFFICIENCY: Duke Energy introduces a North Carolina program to incentivize homeowners with high energy usage to add energy-efficient HVAC systems, insulation and other measures. (Raleigh News & Observer)
SOLAR:
CLIMATE:
PIPELINES: A North Carolina county board delays approval of a permit for Dominion Energy to use a property as an operational base to build a pipeline after residents raise concerns about safety and pollution. (Salisbury Post)
COAL: A federal judge orders a helicopter owned by West Virginia Gov. Jim Justice’s coal companies to be prepared for sale to satisfy a debt to a company for royalty payments for mined coal. (WV Metro News)
OIL & GAS: Wind carries a natural gas odor from an oil field into Austin, Texas, fueling concerns from residents. (KVUE)
UTILITIES:
COMMENTARY:
POWER PLANTS: South Dakota regulators ask Xcel Energy to reconsider closing two large Minnesota coal plants in the coming years based on concerns over whether there will be adequate power on the grid. (Utility Dive)
ALSO: Dozens of residents, local officials and business leaders are divided over Minnesota Power’s plans for a 550 MW natural gas plant in northern Wisconsin near Lake Superior. (Northern News Now)
ELECTRIC VEHICLES:
BIOGAS: Michigan environmental groups raise concerns over legislation that would define biogas from animal waste at industrial farms as clean energy. (Metro Times)
NUCLEAR: Despite growing public and governmental support for nuclear power, industry experts say it’s unclear when the next U.S. reactor may come online. (Canary Media)
EFFICIENCY: An Illinois school district saved $4.3 million in energy costs by investing in energy efficiency measures at multiple schools. (WGLT)
SOLAR:
CLIMATE: Indiana youth climate activists call on state lawmakers to pass bills supporting community solar, creating incentives for wetland protections and requiring permits for large water withdrawals. (Indiana Public Radio)
RENEWABLES: A western Nebraska county board approves a six-month moratorium on utility-scale wind and solar projects as it considers local regulations. (Nebraska Rural Radio)
COMMENTARY:
SOLAR: The U.S. military will install rooftop solar panels on the Pentagon as part of a $250 million package announced Wednesday to reduce emissions from federal buildings. (Associated Press)
ALSO:
ELECTRIC VEHICLES:
NUCLEAR:
POLITICS:
WORKFORCE: Renewable energy is boosting West Virginia with a series of new factories and projects, but the state is hampered by a low labor force participation rate and lack of policies supporting smaller community-scale projects. (Mountain State Spotlight)
GRID:
SOLAR: The Biden administration adds Idaho, Montana, Oregon, Washington and Wyoming to the original six states in its federal land solar development plan, saying the additional 22 million acres are needed to meet the nation’s clean energy needs. (The Hill)
ALSO:
CLEAN ENERGY: Fierce debate breaks out over proposed Alaska legislation that would require utilities to generate 80% of their electricity from renewable sources by 2040. (Northern Journal)
OIL & GAS:
NUCLEAR: The Biden administration approves spending $1.1 billion to help keep the Diablo Canyon nuclear plant in California running beyond its previously scheduled 2025 retirement date. (Associated Press)
UTILITIES:
CLIMATE: Washington voters will have a chance this November to vote on a ballot measure to repeal or uphold the state’s two-year-old landmark climate policy. (Spokesman-Review)
ELECTRIC VEHICLES: A California air pollution control district receives $56 million in federal funds to develop an electric freight-truck charging network. (Turlock Journal)
COAL: A Colorado private equity firm throws a financial lifeline to a struggling Wyoming coal processing company that claims a cleaner production method. (Cowboy State Daily)
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