Energy Trust and the Big Hope 13

Comments View as Flat

1. 

   SteveH Posted 9:25 am
   30 Oct 2009

   With increasing requirements for utilities to offer efficiency programs, it really makes a whole heckuva lot of sense to develop well-funded, statewide programs. The required fee is one that I do like as well, as the alternative is for the utilities to raise rates without a true accounting for their efficiency programs. I live in an area with a progressive efficiency program within a not-so-progressive municipal utility. But if I were to live a mere one mile further north, I would have a co-op as my electric utility. Now these guys are top-notch linemen, but their efficiency programs are virtually non-existent. Statewide programs modeled after Energy Trust would be a good thing to include in the cap-and-trade legislation.
   
   Oh, and regarding your solving climate change is going to hurt line; a good comparison is a pinch in your wallet now or punch in the gut later.

   Permalink

2. 

   Jesse Jenkins Posted 4:37 pm
   30 Oct 2009

   Auden, great article in general. The Energy Trust of Oregon (ETO) is a model for the world and the intrepid folks who work there are stellar. ETO is Oregon's answer to decoupling: don't expect utilities to get excellent at efficiency. It's not their core business (producing, transmitting and selling energy). So instead of decoupling rates to try to get utilities into the efficiency business, create a public non-profit like ETO, give them what the utilities were expected to spend on efficiency anyway, and have them hire a whole team of experts who's core focus is to help Oregonians save energy. They've been remarkably successful. ETO also has a division designed to spur clean energy sources in the state, helping cover above-market costs for technologies in the early stages of launch. That's a big part of how the first few utility-scale wind farms in Oregon got built, and once they were up, and people could go "kick the tires" and see that they worked, didn't shut off the lights and were good for our economy, things went rolling from there.
   
   However, I'm going to have to call BS on this remark:
   
   "Energy Trust is funded to the tune of $130 million annually through a public purpose charge on Oregonians’ utility bills. That alone is arguably part of a solution to climate change—it’s a price signal on energy costs that will force people to conserve. (By the way—it’s also a sign of things to come, and the program’s enormous success puts the lie to the delusional notion that to solve climate we need to make energy cheap (that might happen one day, but first it will have to get expensive. No freebies on this one, techno-optimists.)"
   
   That is most certainly NOT the intent - nor the practical effect - of the 3% public purpose charge that funds the ETO.
   
   First, the 3% charge was more or less the amount ratepayers were already paying utilities for efficiency programs. Rates didn't go up much at all when the charge was instated, and it was designed specifically to stay small enough not to trigger backlash - i.e. to be small enough most people don't know its even there. Ask an average Oregonian and I bet 9 out of 10 have no idea it's even there.
   
   Second, a 3% charge is hardly a motivator for conservation. I'd put the onus on you to show any indication that the public purpose charge has spurred conservation through it's price signal. Similarly, a $10-15 per ton CO2 price, like the one we're going to get out of Kerry-Boxer or Waxman-Markey (according to EPA) isn't going to spur much conservation either. That's 10-15 cents per gallon of gas, hardly out of the noise of normal fluctuations in gas prices and not much (if anything) more than the typical difference between the price of gas at two different stations in the same part of town.
   
   If you're a carbon price proponent looking for a model of what the future should hold in your mind - i.e. higher prices for dirty energy that spur conservation and encourage cleaner energy - ETO and the Oregon public purpose charge isn't it. It's more an example of the exact opposite approach, a proactive investment driven approach to spurring clean energy and efficiency of the kind advocated by the Breakthrough Institute, where this Oregonian ex patriot now works (see http://thebreakthrough.org/ideas.shtml)
   
   Instead of trying to make dirty energy more expensive to change consumer behavior and make clean energy sources relatively cheaper, the public purpose charge and the Energy Trust of Oregon is a model of the exact opposite: let's raise as much money as we can without triggering public backlash, and invest it directly in the things we want to see happen - busting barriers to efficiency down and spurring the accelerated commercialization and deployment of clean energy sources, helping establish economies of scale and learning by doing to make clean energy cheaper in real, unsubsidized terms.
   
   That's a strategy that can work in the world we live in: the one were the public doesn't want higher energy prices and doesn't like to be told we're jacking up their rates to change their behavior. As environmentalists, we may want to see that kind of action, but if we can see the same goals realized - the kinds of goals advanced effectively by ETO - through a fee and proactive investment model that can make clean energy cheaper over time, that's the route we should be going. Given my experience with the ETO (I served on their Renewables Advisory Committee for about a year and worked with ETO staff for a couple years on Oregon renewable energy issues), that's the lesson from Oregon. It's also a lesson of hope. In that, we're in 100% agreement. Bravo to ETO and their staff.
   
   Jesse Jenkins
   Director of Energy and Climate Policy
   Breakthrough Institute: http://thebreakthrough.org

   Permalink

3. 

   Gene Preston Posted 7:14 am
   02 Nov 2009

   Here is a scenario for a 150 house subdivision in which each house has 10 kW rooftop solar, two PHEVs, and a 1.5 MW wind generator nearby: http://egpreston.com/costofsolar.pdf. Then I replaced the rooftop solar with centralized solar and each household saves about $45000, see http://egpreston.com/costofcentralsolar.pdf. Why would we want to install rooftop solar when centralized solar is twice as cost effective?

   Permalink

4. 

   Auden Schendler Posted 10:48 am
   03 Nov 2009

   Gene: I agree with you, and the only counter point would be that people WANT solar on their roofs. So this is a way to provide the customer with something they want, more cheaply. And I'd argue that the clean energy movement has suffered from a terrible lack of tangibility--with wind purchases leading the charge on that. So on-site solar is a massive educational tool. But centralized solar--especially if investors can go visit the site nearby--takes the idea even further and it's cheaper, so that is probably where we end up.
   
   Jesse: I'll concede that 3% is not going to drive conservation. And clearly driving conservation through increased cost wasn't the point of the program. But I differ from you in that I don't think, given the scale of the climate problem, that we can come close to solving it without an increased price on energy. And when that happens, as it will, to be politically viable it will have to start low--maybe at a level on the order of the Energy Trust cost--and grow over time. In a way, then, Energy Trust meets both our critera now, but later, it's only going to meet my criteria, because the price of the ticket is going to have to go up if we want to solve the problem.

   Permalink

5. 

   Jesse Jenkins Posted 10:59 am
   03 Nov 2009

   Auden: Thanks for the response. I welcome (and advocate) a low and gradually rising carbon price that will increase energy prices over time. But that price, as you note, will start low to remain politically sustainable. And it's primary purpose, as it is with ETO, will be to invest in clean and efficient energy technologies to drive climate mitigation and a transition to a cleaner energy system. The carbon price itself will be first and foremost a funding source and secondarily a supportive, but not overly impactful, market price signal. Over time, if these investments are structured correctly, they will both reduce people's energy consumption and make clean energy technologies cheaper. The latter trend will mean we will require a lower carbon price in the future to fully catalyze a clean energy transition, and the second will ensure that if per unit energy prices increase due to a gradually rising carbon price, overall energy bills will barely take note. Both will help ensure that energy prices remain politically sustainable. If we fail to keep them politically sustainable, we face public backlash, the gutting of climate and clean energy strategies, and the stalling of critical progress. Thus, a low and gradually increasing price on carbon - or on energy consumption, as in the ETO public purpose charge - used primarily to fund investments in clean and efficient energy technologies, is the course to accelerating and effective climate action. I hope you'll agree, and also take note of how this approach differs from the approach generally envisioned by carbon price and cap and trade (or dividend) advocates, who consider the carbon price itself the primary objective, as an effort to close externalities and provide the "accurate market signals" that will cement a clean energy transition." I contend that that approach both lacks political viability and ignores multiple non-price-signal-related barriers to both clean energy and efficiency (which I'm sure the ETO staff could espouse on at great length). It will therefore fail on both political and substantive grounds and alternative approaches are sorely needed. For more, see http://thebreakthrough.org. Cheers,
   Jesse

   Permalink

6. 

   Auden Schendler Posted 11:51 am
   03 Nov 2009

   Jesse:
   
   I'd agree with you if there weren't such extreme urgency on the climate issue. What you're suggestiong simply won't stabilize warming at or below 2 degress C, or 450 ppm. And worse, the technological implementation can't happen fast enough without a carbon price signal. What you describe is beautiful and wonderful but isn't based in the realities of cliamte science. It doesn't reflect a path that will get us to where we need to be fast enough. The role of a cap and trade system isn't going to be primarily to invest in new technologies. It's going to create the economic incentives to solve climate. And I strongly disagree that it's not politically viable. It's going to happen. (In part because the EPA has a hammer to drop if congress doesn't pass legislation.) Meanwhile, I think tepid action on climate is going to become increasingly unacceptable politically.

   Permalink

7. 

   Jesse Jenkins Posted 12:41 pm
   03 Nov 2009

   Auden, I'd love to think Congress was ruled by any sense of what's scientifically necessary. But I think we both know that's not the case.
   
   I too am motivated by the same sense of critical urgency you describe. I've devoted my career to finding solutions that can avert climate catastrophe and seize the urgent opportunities of a clean and sustainable energy economy. But those solutions have to work in the real world, and so I devote my attention and effort to solutions that can operate within our political system, that can be quickly established, and create self-sustaining and self-accelerating political momentum. That's what I've described above.
   
   Others see fatal flaws in our current body politic and so work to change it, through organizing, electoral reform and protest. Both strategies are valid and likely needed in some capacity.
   
   But both begin from a recognition that our current political system will NOT deliver the kind of binding cap on emissions you seem to think is around the corner. It's not. The current climate bills in Congress will allow firms to offset enough emissions to continue with BAU practices and investments until as late as 2037. It will not make significant investments to catalyze clean and efficient energy technologies. And because of the political constraints we've been over before, the carbon price signal it establishes will be low, just $10-20/ton CO2, or the equivalent of just 10-20 cents per gallon of gasoline, for at least the next decade. See http://thebreakthrough.org/blog/2009/06/aces_analysis_full_breakthroug.shtml and http://thebreakthrough.org/blog/2009/10/greenpeace_climate_legislation.shtml
   
   If you think the Obama administration will implement economy-wide limits on greenhouse gases through the EPA, you're also overly-optimistic (to put it kindly). At best, EPA will establish requirements for the use of "best available control technology" (not currently defined) and/or emissions performance standards (in tons/MWh) for NEW or retrofitted major point source emitters (>25,000 tons CO2 per year). There will be no limits on emissions from existing sources, nor any economy-wide limits. Those are the rules EPA is already moving ahead with establishing (and which the House climate bill will preempt). See http://www.nytimes.com/2009/10/01/science/earth/01epa.html?_r=1&hp;
   The Administration and EPA already done their thing for vehicles (in the form of new fuel economy standards), which while they are great step forward, are still modest compared to where the EU, Japan and China are at already. Despite his lovely rhetoric, I see absolutely zero indication that Obama is willing to wield EPA authority like a club to establish economy-wide limits on emissions, again for the same political constraints that bind the efficacy of any command and control regulatory approach or carbon pricing strategy like cap and trade or carbon taxes.
   
   We need to either find solutions that work within our current political realities - and by work, I mean put the U.S. and world on a path to avert damaging climate change and transform our global energy system - or work hard to change current political realities. Any other approach I worry will ultimately fail, as the current Congressional climate legislation strategy is bound to do.

   Permalink

8. 

   Auden Schendler Posted 3:59 pm
   03 Nov 2009

   Jesse:
   
   I guess I fundamentally disagree with you on multiple points, and with limited time (it's election day and we're helping to run this campaign: http://www.voteyes1A.org) I'll steer readers to Joe Romm's response to Breakthrough Institute analysis.
   http://climateprogress.org/2009/09/28/markey-the-breakthrough-institute-romm-technology-climate-bill/.

   Permalink

   1. 

      Mike D Locavore Posted 8:17 pm
      03 Nov 2009

      Auden, I like your points. But, too bad you had to throw Romm's baseless and rather suspect screeds against The Breakthrough Institute out there instead of continuing what was an interesting and fruitful back and forth (maybe after election day?) While I find much of what Romm writes helpful, his frothing, emotional, insult-laced attacks on Breakthrough and Andy Revkin and Roger Pielke Jr are the part when I start tuning Joe out. I read counter-points and counter-comments but never see Romm address them head-on!
      
      Auden, don't be that guy... stick to the substance that Jenkins is trying to get at, even if it comes across as less than optimistic -- it's sobering! Like, for example, the recent COLD BATH courtesy of Williams and Zabel at http://www.carbonfees.org/home/?page_id=35

      Permalink

9. 

   Jesse Jenkins Posted 4:42 pm
   03 Nov 2009

   Well I certainly understand the importance of election-day efforts, but I'd be remiss to not note that other than slander, ad hominem attacks, and incorrect information, Mr. Romm provides no actual instances where the Breakthrough Institute's analysis is incorrect or in error. My analysis has been widely cited by journalists, Congressmen and advocates and is corroborated on numerous fronts. Romm unfortunately insists on trashing our work at every turn, which contributes little to our mutually-desired 'climate progress.' If you're interested, once election day is passed, you can find several factual rebuttals to Romm's screeds below. The fact is, Romm simply gets lots of this stuff wrong, including his characterization of our work. I'd love to engage on substance rather than character attacks:
   
   http://thebreakthrough.org/blog/2009/07/joe_romm_ignores_facts_in_atta.shtml
   http://www.thebreakthrough.org/blog/2009/05/romm_attacks_breakthrough_for.shtml
   http://www.thebreakthrough.org/blog/2009/04/is_joe_romm_an_energy_challeng.shtml

   Permalink

10. 

    SteveH Posted 8:31 am
    04 Nov 2009

    Probably one of the most important parts of any climate bill will be the visible reinvestment of increased energy costs into energy efficiency. As a voter and taxpayer, and a visible advocate for sustainability in the community, the impression people need is that their hard earned cash spent on modest increases in their utility bills is coming back to them in some form. Most importantly, energy efficiency efforts tied to government regulation of carbon should make the legislation more palatable to at least some of our congressional representatives in the midwest. What I believe Auden and Dr. Romm (Jessie, I see you trying to make character attack by calling him Mr. Romm) are advocating is that efficiency efforts come first. It makes no sense to put money into clean energy if the energy is wasted on inefficient homes and business. The last thing we want is for our money to be squandered on the promise of clean energy generation, when it is a better use of our money to fund efficiency efforts and support the development of local green building codes.

    Permalink

    1. 

       Jesse Jenkins Posted 12:50 pm
       04 Nov 2009

       @Steveh: It was not my intent "to make character attack (sic)" on Romm by referring to him as "Mr." That was unintentional and Dr. Romm has my apologies for that. I'm awaiting his apologies for inaccurately slandering my work, at various points accusing me and my colleagues of lying and plagiarism, and referring to me as "a leading disinformer." I won't hold my breath though.

       Permalink

11. 

    Crank5000 Posted 12:40 pm
    04 Nov 2009

    That you for the props Auden. Energy Trust wasn't set-up to address climate change but our work is increasingly being connected with migating emissions. As people save energy or generate their own clean power the entire grid and natural gas pipeline network become more efficient. If we're able to meet load growth with efficiency and renewables emissions per capita will go down. If no new power plants will be needed emissions will be stable and per capita emissions will go down as the population goes up. It would be sweet if we could save enough energy or generate enough clean energy to bring a power plant or two offline. That would be epic. Such a feat will take power plant like funding, something in the neighborhood of $2.3 billion (the average cost of any type of large scale power plant these days). That will get shit done.

    Permalink