Transcript The Evolution of Energy Efficiency at National Grid

National Grid Implementation of Green
Communities Act
Massachusetts Energy Roundtable
September 12, 2008
National Grid Implementation Plans
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Energy Efficiency
Decoupling
Solar
Long Term Contracting for Renewables
Conclusion
Our Commitment to Energy Efficiency
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National Grid supports the expansion of
energy efficiency programs to
 Reduce costs for customers
 Reduce environmental impact of energy
usage
 Improve the efficiency of the electricity
and natural gas delivery systems and
lower system costs over the long term
Benefits for Customers
 Lower total bills - Energy efficiency offers customers $3 of savings
for every dollar spent
 Enhanced customer service
 Reduced operating costs
 Access to trusted technical expertise and financial assistance
 Help in meeting environmental objectives
Energy Efficiency – Program Scope
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Reviewing program designs in light of the Green
Communities Act
Increasing electric energy efficiency funding ahead of this
heating season by $4.3 million
Increasing gas energy efficiency funding in 2008 by $3
million (25%)
Integrating gas and electric energy efficiency programs to
provide one-stop energy efficiency service to our
customers
Expanding program options such as "On-Bill Financing" for
cities and towns, solar heating and water heating and
deeper residential retrofits
Energy Efficiency at National Grid
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Increasing Internal and External workforce
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National Grid Demonstrating
Leadership
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Increasing staff to support program ramp-up in Massachusetts as
well as other states
Expanding training internally and externally to develop the "green
collar” workforce
Designing its new Massachusetts
office building to achieve LEED Gold
standard
Net Metering and Smart Grid Pilot
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New Net Metering law
 2 MW for solar and wind
 Allows transfer or credits or ‘virtual wheeling’ of power
to other accounts
Smart Grid/Meter pilot
 Advanced metering with optional hourly pricing
offering
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Goal is 5% energy reduction per participant
Distribution automation for improved reliability
Working on location and technology options
Expanding Energy Efficiency in MA
Electric
2008
2009
$62 million
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2010
2011
$120 million
2012
$160 million
Green Communities legislation was passed in July 2008
Requires least-cost procurement for new resources
First 3 year plans to be filed April 1, 2009
Gas
2008
$16 million
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2009
2010
$22.5 million
Plan to double gas efficiency programs over 5 years
Recent approval from DPU to continue programs through 2009
Note: Spending is used as a proxy for savings throughout all slides
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2011
2012
$32 million
Decoupling: The Rationale
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Traditional utility ratemaking sets delivery rates based on
 Costs to provide safe and reliable service (revenue
requirement)
 Divided by forecasted use to get volumetric charge
($/kWh or therm)
Utility recovers costs of providing safe, reliable and efficient
delivery service through rates only if customers use the
level of energy forecasted in setting rates
Therefore, traditional ratemaking presents obstacle to
aggressive energy efficiency
Decoupling and Energy Efficiency
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With decoupling, utility can pursue energy efficiency
aggressively
Customers benefit from fewer (costly) rate cases and more
stable rates
Increase in delivery rates more than offset by avoidance of
commodity costs for participating customers
Per the MA DPU order, National Grid will propose
decoupling mechanisms
 For electric rates in 2009 to be effective 1-1-2010
 For gas rates in early 2Q 2010 to be effective 3Q 2010
Utility Ownership of Solar
National Grid is excited to be part of
advancing Solar across the
Commonwealth.
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GCA allows ability to own up to 50 MW
of PV by 2010
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Main areas of focus:
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Utility-scale on National Grid property
Customer Facilities
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Filing expected late summer 2008
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state agencies
municipalities
Significant permitting and contractual
effort
Long Term Contracting for Renewables
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Long term contracts (10-15 years) as way to encourage
renewable energy development
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Facilitate project financing
Provide a potential hedging value and rate stability benefit for all
distribution customers.
Energy may be retained for sale to distribution company
customers or sold on the wholesale market
Renewable Energy Credits (REC’s) can be retained to satisfy RPS
requirements or sold/auctioned to the wholesale market.
Provides 4% remuneration to distribution utility to
compensate for accepting long term obligation of the
market
Distribution utilities are not required to exceed 3% of their
peak load
Long Term Contracting Implementation
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Flexibility for distribution utility to develop an approach to
solicitation, selection and contracting that balances
development incentives and customer interests
Timetable and method for solicitation and execution of
contracts to be proposed in consultation with DOER, and
approved by DPU
National Grid is developing its preferred general approach,
based on its past experience and a review of programs in
neighboring states
Conclusion
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National Grid vision:
“We are committed to being an innovative leader in energy
management and to safeguarding our global environment for
future generations.”
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National Grid applauds Legislature for Green
Communities Act and DPU for Decoupling Order
 Energy efficiency saves customers money and reduces
environmental impacts of energy use
 Renewable energy also reduces environmental impacts
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