EDITOR’S NOTE: The Energy Times recently discussed the most pressing energy issues of the day with a panel of state regulators, including the top leadership of the National Association of Regulatory Utility Commissioners, at their summer meeting in Nashville. The exchange, edited for style and length, was sponsored by Oracle Utilities. This is part of a five-part series.
Philip Jones – Washington Utilities and Transportation Commission, past president of NARUC
Travis Kavulla – Montana Public Service Commission, president of the NARUC
Richard Mroz – New Jersey Board of Public Utilities
Robert Powelson – Pennsylvania Public Utility Commission, incoming president of the NARUC in 2017
Scott Rupp – Missouri Public Service Commission
Greg White – National Association of Regulatory Utility Commissioners, executive director
ENERGY TIMES: What is the role of state regulators in boosting energy efficiency?
MROZ: It is here to stay for a couple reasons. One of which is that it's the easiest course. The technology now is driving it. We would not have thought five years ago about the savings that come from a simple change in lighting to LEDs. The impact particularly on the generation industry as well as the distribution industry is real. State regulators are looking at ways to ensure that it does not financially disadvantage utilities because we are after all the financial regulator of those companies. We do need to look at decoupling or other mechanisms to ensure the financial viability of those companies. We are doing it state-by-state. Energy efficiency is certainly here to stay.
Philip Jones /// Photos by Martin Rosenberg
JONES: The Northwest has been a leader in this since 1980 after the region’s the nuclear power plant financial debacle. We've been required to do long-term integrated resource planning, and energy efficiency has always been the top resource. In our region, electric power is at about 2.8 cents a kilowatt-hour. Nothing is cheaper. Efficiency is the most cost effective, easily procurable resource out there. There's lots to be done with commercial buildings. There's still a lot to do in the residential area. But a challenge is the utility business model. We've adopted decoupling. Other jurisdictions haven't. We are required by law to procure. We have an energy resource efficiency standard and it is mandatory. It has to be cost effective. We have to get better on what is called EM&V - evaluation, measurement, and verification. The energy efficiency savings have to be real and reliable. When power is dispatched, the control room can say, ‘That savings is really coming in.’ States have to be better about some of the implementation challenges.
RUPP: Efficiency is here to stay because it has reached the kitchen table of the family. After the great recession, the mindset of families forever changed. With all the information and technology that is now available to the average mom and dad sitting down, there's no reason that would not continue with energy savings. In the corporate boardrooms, they are looking for every way they can to increase their quarterly earnings.
KAVULLA: There are two tracks towards energy efficiency. The first is either through the organic decisions of customers responding to a retail price signal. Or it can be a mandate requirement and subsidy cycle that gets built on top of the bevy of state and federal policies. The people promoting energy efficiency who want to sell it to consumers have to decide which track they want to pursue. There's also an irony that's emerged in some markets. The single biggest competitor to energy efficiency is zero-variable cost renewable energy. Wind has eroded the value proposition of energy efficiency in the Northwest. Because energy is so cheap in that market right now, it has made many energy efficiency measures that once looked cost effective look far too costly.
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