Advanced Energy Perspectives

Photo by Alan Stark, used under a Creative Commons license. 

With the Trump Administration clear on its intentions to repeal and replace the Obama Administration's Clean Power Plan (CPP), the Environmental Protection Agency (EPA) on August 21 finally released its "Affordable Clean Energy" proposal. Given the name, one might expect the so-called ACE rule to lean on current market trends toward low- and non-emitting advanced energy technologies, such as natural gas, solar, wind, and energy efficiency, on the basis of cost. That’s what the CPP attempted to do, doubling down on these trends and allowing states to design compliance plans using market-based trading to find the lowest-cost paths to compliance. ACE, in contrast, takes a hard turn away from lower-cost advanced energy options and market-based trading in favor of old-fashioned command-and-control regulation that would only allow costly investments at existing coal-fired power plants—which is bad news for consumers and the advanced energy industry alike.  

Just over a month ago, AEE launched a new group of advanced energy users, called the Advanced Energy Buyers Group, led by member companies including Microsoft, Amazon, Walmart, and others. The concept is simple: Just as AEE is the business voice of advanced energy, the Advanced Energy Buyers Group serves as the policy voice of energy users. In practice, that means the Buyers Group will weigh in on a range of energy policy issues that matter to companies on the customer side of the meter, specifically on behalf of companies seeking ways to increase their use of advanced energy.

In the month since its launch, the Buyers Group has kept busy on two high profile issues, both with big implications for large consumers: the Section 201 Solar Trade Case now before the U.S. International Trade Commission and the “Grid Pricing Rule” proposed by the Department of Energy late last month and under consideration by the Federal Energy Regulatory Commission.

Let’s dig in.

This is Part Two of a two-part blog series on design of utility renewable energy tariffs. Part One (last week) addressed the needs of participating corporate customers, and Part Two considers the needs of nonparticipating customers.

Last week, we dug into the topic of renewable energy tariffs from the lens of prospective participants, listing out some of the considerations that make the difference between success and failure when it comes to customer uptake. In this post, we turn the tables and look at the same programs from a different perspective—that of nonparticipating customers. This post draws from the lessons offered by AEE Institute’s recent paper, Making Corporate Renewable Energy Purchasing Work for All Utility Customers, which looked at case studies of eight programs across seven states.

This post is Part One of a two-part series on design of utility renewable energy tariffs. Part One addresses the needs of participating customers, and Part Two (next week) considers the needs of nonparticipating customers.

Followers of the advanced energy sector are, by now, very familiar with the trend of leading companies, cities, universities, and other organizations choosing to source their electricity from renewable energy. To date, the majority of renewable energy projects contracted to meet this demand have been in restructured states, where companies face few regulatory barriers to signing a power purchase agreement (PPA). That’s not to say, however, that states with traditionally regulated utilities are doomed to miss out on the headline-grabbing, job-creating, tax-income-generating benefits of corporate renewable energy deals. On the contrary, utilities in vertically integrated states are developing programs to allow voluntary renewable energy procurement, often termed renewable energy tariffs, or “green” tariffs. But the experience to date of these renewable energy tariffs has been mixed, with some failing to generate much interest from corporate purchase because of their cost or terms, and others questioned for their impact on utility customers who are not part of the program.

A recent policy brief from AEE and new report from AEE Institute consider best practices for design of renewable energy tariffs that meet the needs of both corporate participants and for other utility customers. This post explains what we mean by “renewable energy tariffs,” and walks through the needs and preferences of corporate participants. Next week’s post will dive into detail on designing programs with all customers in mind, including nonparticipants.