energy efficiency in minnesota’s · 2018-06-07 · energy efficiency in minnesota’s clean power...
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The Regulatory Assistance Project (RAP)®
Energy Efficiency in Minnesota’s Clean Power Plan
Non-Energy and Public Health Benefits of Energy Efficiency
Minneapolis, Minnesota
Christopher James, Principal
Ken Colburn, Principal
17 December 2015
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Introduction
• The Regulatory Assistance Project (RAP) is a global, non-profit team of energy experts, mostly veteran regulators, advising current regulators on the long-term economic and environmental sustainability of the power and natural gas sectors. (www.raponline.org)
• Foundation-funded; some contracts
• Non-advocacy; no interventions
• Chris James is a Principal at RAP. His experience as an air quality regulator came as Air Director for the State of Connecticut and from US EPA Region 10 (Seattle).
• Ken Colburn is a Principal at RAP. His experience as an air quality regulator came as Air Director for the State of New Hampshire and as Executive Director of NESCAUM.
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IEA2012
Why limit ourselves to only one element of benefits?
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Utility System Benefits
These benefits are most commonly considered by regulators,
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BUT:• Many exclude or undervalue T&D benefits• Most undervalue line losses and reserves• Most exclude or undervalue risk benefits• Most undervalue environmental costs
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Participant Benefits
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Regulators rarely consider non-electricity participant benefits; these can be very significant.
• Can affect consumer willingness to pay
• If ignored, many cost-effective measures may be omitted from utility programs
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Participant Benefits:Water, Sewer, Other Resources
Northwest Power and Conservation Council:
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Cost-effective, but not electricity-only; Partner with natural gas and water utilities.
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Participant Benefits: Health
• New Zealand “Heat Smart” Efficiency Retrofit Program for ALL Low-Income Households
• 90% of benefits were health-related.
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Hospital Admissions for Respiratory Ailments Down 43%
Days off Work Down 39%
Days off School Down 23%
Significant Mortality Benefits: ~18 deaths/year
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Missouri: Healthy Homes Initiative
• Some Missouri hospitals subject to penalty for respiratory infection recidivism
• Launched Healthy Homes Initiative, echoing NZ’s Heat Smart program • Free weatherization to Medicare-eligible seniors with history of
respiratory infections
• Used hospital unrestricted funds for weatherization, in order to protect hospital Medicare reimbursement
• 3-day hospitalization costs about $6,000; weatherization about the same• Suggests it would pay Medicare to weatherize sick houses; at least
partnering with utilities to do so.
• Societal benefits too (e.g., less supply-side air pollution)
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Societal Benefits
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Societal Benefits: Emissions
• Damage costs are larger than mitigation costs, but are often considered “externalities”
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Emission Type Mitigation Cost Damage Cost
Mercury – lb. $33,000 $181,500
PM2.5 – ton $13,000 $60,000
CO2 – ton $8 $80
Illustrative Mitigation and Damage Costs
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Societal Benefits: Water
“No water, no energy. No energy, no water.”
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Power production = 2nd-largest water consumer (after irrigation);
Water production, pumping, and wastewater treatment are large users of electricity;
Anything that saves water OR electricity saves bothwater andelectricity.
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• Good CPP choices can help air quality; good air quality choices can help CPP compliance
• Ditto for increasing water concerns
• Integrated multi-pollutant, multi-media approach can lower cost, risk (see RAP’s IMPEAQ paper)
Energy Efficiency
Energy and Demand Resource Management
Combined Heat & Power
Wind, Solar, Tidal
Low- and Zero-Emission Vehicles
Carbon Capture & Storage
Flue Gas Desulfurization
(Scrubbers)
Three-Way Catalysts (Petro)
Diesel Particulate Filters
Uncontrolled Fossil Fuel
Combustion in Stationary and Mobile Sources
Increase in “Uncontrolled” Diesel
Biofuels
Biomass
Buying Emissions Credits Overseas
www.raponline.org/document/download/id/6440
Multi-Pollutant Reductions + Water Savings
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More Stringent Ozone Standards (EPA, Ozone Concentrations, 2012)
EPA has announced
new ozone standard
of 70 ppb.
Areas in orange may
be required to develop
new control measures
for VOC and NOX
(ozone precursors).
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EE = Least-Cost Approach(Levelized Cost of Energy ($/MWh), Lazard, Version 8, 2014)
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If EE isn’t prominent in your state’s CPP plan, your state
doesn’t have a least-cost plan.
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Conclusions
• Focusing on EE in state CPP compliance makes the plan:
– More cost-effective, because EE is the least-cost option
– Better able to achieve/maintain attainment of air quality standards, because EE reduces all air pollutant emissions
– More protective of public health for the same reason
– More protective of multi-media (e.g., less water demand, ash, etc.)
– More protective of low-income consumers and their exposure to unhealthy indoor pollutants (e.g., through the CEIP)
– Less vulnerable to risk (e.g., stranded costs; industry transformation, etc.)
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Related RAP Publications
• Recognizing the Full Value of Energy Efficiency (2013)www.raponline.org/document/download/id/6739
• Energy Efficiency Cost-Effectiveness Screening (2012) www.raponline.org/document/download/id/6149
• US Experience with Efficiency As a Transmission and Distribution System Resource, (2012) www.raponline.org/document/download/id/4765
• Valuing the Contribution of Energy Efficiency to Avoided Marginal Line Losses and Reserves (2011) www.raponline.org/document/download/id/4537
• Preparing for EPA Regulations (2011) www.raponline.org/document/download/id/919
• Incorporating Environmental Costs in Electric Rates (2011) www.raponline.org/document/download/id/4670
• Clean First: Aligning Power Sector Regulation With Environmental and Climate Goals www.raponline.org/document/download/id/12
• Integrating Energy and Environmental Policy (2013) www.raponline.org/document/download/id/6352
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About RAP
The Regulatory Assistance Project (RAP) is a global, non-profit team of experts that focuses on the long-term economic and environmental sustainability of the power sector. RAP has deep expertise in regulatory and market policies that:
Promote economic efficiency Protect the environment Ensure system reliability Allocate system benefits fairly among all consumers
Learn more about RAP at www.raponline.org
Ken Colburn – [email protected]
Christopher James- [email protected]