Your Clean Energy Future- Developing Utility Renewable Energy Models for National Key Accounts Customers

Transcription

1 Your Clean Energy Future- Developing Utility Renewable Energy Models for National Key Accounts Customers Phil Dion Vice President, Technology Business Development American Electric Power Tom Maclean Manager, Customer RE Programs Puget Sound Energy Marty Spitzer Director, U.S. Climate & Renewable Energy Policy World Wildlife Fund EEI National Key Accounts

2 Corporate Large-Scale PPA Market 2

3 60% of Fortune 100 and 43% of Fortune 500 have a climate or renewable energy goal. July 15, 2014 Corporate America Steadily Steering Climate Solutions Despite Congressional Stalemate 3

4 Corporate Renewables Partnership Simplifying and increasing access to corporate renewables Transformational CORPORATE RENEWABLE ENERGY BUYERS PRINCIPLES Goal: By 2025, grow corporate renewables by 60 GW Future of Internet Power Sector-specific Transactional 4

5 5

6 Renewable Energy Buyers Principles 6

7 Companies Need Offsite, Grid-tied RE Options 7

8 Corporate Buying Renewables in Many Ways Unbundled RECs Green Power Programs REC contracts with projects Purchases from brokers Energy + RECs Rooftop or Community Solar Green Tariffs PPAs via Direct Access Contracts for Differences / Virtual PPAs Direct project investment 8

9 Green Tariffs: The Idea Energy + RECs Fixed / predictable price for energy Protection from a fuel charge May allow lower than retail rates for the energy Expanding on regulatory models such as combined heat and power or direct access 9

10 Collaborating to Make the Principles a Reality States with limited or no electricity retail choice States with electricity retail choice States with green tariff offerings (on the books) States with green tariff offerings (in process) Green Tariff Table on buyersprinciples.org/resources Top Down National level collaboration and engagement with NARUC, and EEI Bottom Up New RE offerings in process Large regulated utility-customer RE deals executed 10

11 Spectrum of Green Tariff Approaches Subscriber Shaped Energy PPA 11

12 Spectrum of Green Tariff Approaches Xcel MN (proposed) RMP UT NV Energy - NV Duke NC Tariff type New tariff New tariff Rider Rider Contract Terms Energy demand Power demand Cost-competitive w/retail rates Contract length Flexibility Discount possible over-time Month-to-month; 5 year; 10 year Yes (across facilities) Energy demand Possible Premium over retail rates Negotiated Negotiated; min 2 years Yes (across facilities) Yes (in trans. design) Energy demand Premium over retail rates Negotiated; 3 15 years Possible ROI for Yes Yes Yes No utility RE deals N/A Apple, Switch Google, 2 addtl. 12

13 WWF EEI WRI Collaboration

14 Main Goals of the Collaboration Joint learning & development of new utility scale RE products sharing lessons from existing models, collaboratively developing and demonstrating new products that drive value for both utilities and customers. Facilitate education and outreach to regulators and other stakeholders to create the enabling conditions for new solutions and models to succeed.

15 Utility Landscape 2016 Technologies are transforming both sides of the meter Customers needs and priorities are changing - More control, choices, cleaner, resilient, reliable EEI Members are dialed-in to offering more customized products and services - Empower customers with more choices and control, while ensuring that our electricity supply is safe, reliable, affordable, and clean Challenged with providing customized services in a legacy regulatory environment - Regulatory models must evolve The grid is being modernized - An integrated grid is the backbone of our economy - And an enabler! - Customer-Utility Relationships must evolve, enhance communications 15 15

16 Key Challenge: Gaining Flexibility Cost of service regulation built for standard services Services all customers take (no choice) Least-cost planning Costs recovered in large rate classes (residential, commercial, industrial) Large customers want optional services Services about which they have choices May be premium services Costs only recovered from customers who want the services 16

17 Flexible Pricing Options Regulatory precedent Discounts from standard tariffs Optional tariffs open to all qualifying customers Special (aka negotiated) customer-specific contracts New services Discretionary services Special service packages (which may include standard services as components) 17

18 Renewable Energy for Customers Internal Hurdles and Regulatory Process Thomas MacLean, PhD Manager of Customer Renewables

19 PSE Headquarters - Bellevue, Washington Service Area - 6,000+ square miles in 11 Counties Electric - Customers 1.05 million Natural gas - Customers 725,000

20 Request for a new program Increased renewable energy development A hedge value with known future energy costs to manage budgets Reduced carbon footprint Connection to a specific resource Customer can promote increased sustainability 20

21 Lessons learned Get a reliable resource Local is better Make sure customer understands energy delivery RECs are okay RECs are necessary 21

22 Macro Barriers Regulated Utility Culture Culture eats strategic plans* for breakfast -Peter Drucker [*and a lot more] 22

23 Macro Barriers Business Model 23

24 A Modern Model 24

25 Micro Barriers Load vs. Supply balancing period Open access customers schedule on hourly basis Green-e/RPS: Annual + Q4 Prior year + Q1 Subsequent year Incremental costs need to be allocated to the voluntary customers Risk Management: Utility doesn t want to sign a premium contract without a binding offtake agreement. 25

26 Areas of Common Interest 1. Additionality: Customers want to be able to claim they made a new project happen 2. Cost competitiveness: Customers and utilities are seeking partnership opportunities that provide value to both parties without impacting other rate payers 3. Price Predictability: Customers and utilities both want price predictability and cost recovery 4. Flexibility Contract terms: Spectrum of customer needs for long and short-term Location: Most customers prefer local but want options that maximize cost-effectiveness and both utilities and customers want optimized grid deployment Scale: Mostly large-scale but different customer needs 26

27 Areas of Common Interest 5. Low transaction costs: Customers and utilities want to explore ways to partner that lower the transaction costs 6. Enabling credible claims: Two issues: Customers need the RECs to make claims but can end up competing with the utilities, who also need the RECs for compliance against RPS and now EPA Clean Power Plan Customers and utilities agree that more education is needed on how renewables actually work 7. Transparency: Customers and utilities support more transparency of costs (charges) and savings (credits) on the bill 8. Grid Modernization: Utilities and customers agree that the grid needs to be modernized as an enabler of more renewables integration 27

28 Improving on Current Renewable Energy Products Developing pilots for cost-effective partnerships to create and test new RE products Increasing price predictability Supporting customer claims of additionality Coordinating grid-optimized deployment Increased transparency of costs (charges) & saving (credits) 28

29 Action Plan of the Collaboration A. Provide an internal and external communication platform: Regularly exchange case studies, lessons-learned and best practices Broaden outreach to regulators to evolve regulatory models as needed, by showcasing RE product wins with key stakeholders, and by building awareness of the opportunities for utility-customer collaboration. B. Advance pilots on cost-effective partnerships to Develop new RE products, and improve existing ones Test grid-optimized deployment of RE facilities. C. Explore scenarios for allocation of RE attributes (RECs and others) Develop a white paper to broaden the understanding of shifting implications on RE claims from policy changes (e.g. CPP) Explore satisfactory allocation of Renewable Energy Certificates (RECs) and other attributes associated to a RE facility that serves specific customer.

30 Thank You! Phil Dion Vice President, Technology Business Development American Electric Power Tom Maclean Manager, Customer RE Programs Puget Sound Energy Marty Spitzer Director, U.S. Climate & Renewable Energy Policy World Wildlife Fund EEI National Key Accounts