Relative to some of its utility industry brethren, Progress Energy Carolinas has a reputation as a good corporate citizen. So it came as a shock to many residents of its Western North Carolina service area when a deal was struck with the Buncombe County Board of Commissioners to build a new ultra-low sulfur oil-fired peaking power plant in Woodfin, a small town north of Asheville. The plan was foiled by public opposition, but the supply and demand problem remained. Previous installments, 1/07-3/08
The stories below continue an account of the maneuverings between Progress and local civic leaders about how to meet the electrical needs of an area beset by rampant high-end real estate development. Despite the national economic crisis, or perhaps because of it, Progress customers in WNC burned through to a new peak demand record, 1050 megawatts, on the morning of January 16, 2009. The company hadn't projected a number that high even in its forecast for the year 2015.
Gearing Up for Action (at some point), April 11, 2008
Measurable Progress, May 9, 2008
Talking Turkey at the Birthday Party, June 13, 2008
Turning Wishes to Horses, July 11, 2008
Amazing Savings: Progress discovers finger power, August 8, 2008
CEAC and the Iron Equation, September 12, 2008
Welcome to My World: CEAC XVI, October 10, 2008
News You Can Use, November 14, 2008
Taking Stock, December 12, 2008
The Year of Implementation, January 9, 2009
Fiddling While Rome Burns, February 13, 2009
Subsequent reports, April, 2009 -
Gearing Up for Action (at some point)
Progress Energy’s regional VP Robert Sipes described the April 11th meeting of the Community Energy Advisory Council (CEAC) as, “the point I’ve been waiting for, for a year.” By this he meant the council is transitioning from talk to action.
As promised, company officials got together late last month to operationalize a list of 23 projects related to, but not necessarily the result of, February CEAC recommendations. Progress manager, Chris Edge, presented one of them, titled Energy Audits, to the council. In overview, the company will encourage consumer energy audits and promote efficiency upgrades in residential, commercial, and industrial sectors.
Council members were eager to support the proposal by launching a coordinated public awareness and education campaign. Robin Cape, citing positive public response to Asheville’s recent request for water conservation, said people are ready to act on energy issues if they know what to do. She’s prepared to take proposals to city council as soon as they become available. Rick Lutovsky committed the Asheville Chamber of Commerce to the effort. After an inconclusive discussion of when and how such a multi-pronged blitz should be launched, a subcommittee was appointed.
Time constraints prevented presentation of the other 22 action plans. They will be discussed at an extended public session on May 9th.
One or more of the yet to be discussed projects may tie in with CEAC’s recommendation for restructured electric rates in North Carolina. Rates and rate structures can incentivize both consumers and utilities to pursue conservation and efficiency. Last month, the NC Utility Commission called for comments on this issue. Several environmental groups filed “interventions” in response. Proposals included tiered rates (charging higher prices for electricity use exceeding set limits), charging more for electricity used during peak hours, and “decoupling” utility profit incentives from sales volume.
Sipes reported that Progress is sending the commission a letter as well. The company favors “rate designs that involve pricing that varies throughout the year, season, and day . . . to provide price signals sufficient to encourage customer load response.” In English, this means using rates as both carrot and stick to shape consumer behavior. Progress also favors financial carrots for utilities to engage in energy efficiency programs. Not surprisingly, the company didn’t propose any negative incentives for itself.
The letter opposes decoupling sales from profits. It claims, accurately, that some consumer groups oppose decoupling and opines that decoupling is an idea still too untested for adoption in North Carolina. It suggests that the Enron-era bankruptcy of Pacific Gas & Electric may have been due in part to decoupling programs in California that went into effect after the oil shocks of 1973.
There may be some truth in Progress’s contention, but PG&E is still around and appears to be a proponent of decoupling. A 2006 PG&E workshop presentation is titled, “Decoupling in California: More Than Two Decades of Broad Support and Success.” The California Energy Commission credits decoupling with half of California’s success in curtailing per capita electricity use. That success has been dramatic. In 2001 the average Californian used about 7,000 kilowatt hours of electricity per year compared to a national average of 12,000 kWh. The American Council for an Energy-Efficient Economy (ACEEE) also favors the decoupling programs springing up around the country.
However, a 2006 report to ACEEE from a “consumer advocate’s perspective” suggested that decoupling may be less effective in the long run than regulatory reductions of utility profit margins for energy generation and higher margins for effective efficiency and conservation programs.
A Progress plan to implement a “smart grid” predated the February recommendations but easily ties in with them. Phase I, scheduled for full implementation by 2012, permits better monitoring and control of grid voltages, simplifying the addition of third party generators, such as homeowners with solar power to sell. In addition, Progress VP Lee Mazzocchi told CEAC that the new technology will allow Progress to “shave demand peaks.”
Because the electric grid doesn’t contain giant batteries or other energy storage devices, power companies have to constantly match the amount of electricity generated with the amount used by customers. But it’s not a precise science. Grid voltage constantly fluctuates due to minor generation/consumption mismatches. We only think the socket in the wall supplies a steady 110 volts. In reality, regulators allow utilities to deliver electricity anywhere in a range between 114-126 volts.
The smart grid enables tighter control of voltage fluctuations. During hours of peak demand, Mazzocchi expects to be able to downregulate voltage to the vicinity of the legal minimum, shaving about 2% off peak usage. In WNC, 2% amounts to about 20 MW. That’s a lot of juice. Consumers, Mazzocchi said, won’t notice any difference in the function of appliances, lights, or electronic equipment.
CEAC recommendations weren't the source of a company load control proposal either. Almost since the council's inception, Progress officials have been talking about convincing customers to allow company managers to remotely regulate air conditioners and space and water heaters during demand spikes. Company estimates of potential power savings are on the order of 30 MW. Last month, the utilities commission finally announced its new rules for energy efficiency projects. Progress intends to submit the load control proposal soon, Edge said. After which there will be another set of built-in bureaucratic delays. The project, initially envisioned for a spring rollout, seems likely to be delayed at least until fall.
Sam Waters, director of system planning for Progress, announced that the company has signed a second power purchase contract with Southern Company. The contract will enable Progress to buy an additional 100 MW of peak power, temporarily eliminating the looming peak power shortfall that provoked the Woodfin showdown last year. Waters said the Southern contracts, together totaling 250 MW, will extend through at least 2010, possibly longer.
Progress is adding hybrid vehicles to its corporate fleet, according to company spokeswoman Martha Thompson. Six hybrid Ford Escapes are on the road and another five are on the way. Progress will also buy one plug-in hybrid. More significantly, especially for company linemen, Progress is investing in hybrid bucket trucks. These replace the idling diesel engine at worksites with battery power, saving fuel and workers’ lungs.
Sipes revealed that Progress sent a letter to Westinghouse reserving slots in the Westinghouse nuclear plant construction lineup for two new reactors at the Shearon Harris plant outside Raleigh. Despite recent strongly pro-nuclear statements by Progress CEO Bill Johnson, Sipes says a final decision on construction isn’t expected until next year.
What does it all mean?
CEAC is restless and champing at the bit to take the sorts of action Sipes says he’s been looking forward to. And then some. But the primary take home from the April meeting may be that peak power contracts with Southern have relieved some of the acute pressure on Progress for definitive solutions. One year after the defeat of the Woodfin plant, and due in part to regulatory factors beyond company control, we have yet to see much actual progress toward implementing effective conservation and efficiency measures in WNC.
The proposed smart grid and load control initiatives could reduce local peak demand by 50 MW or 20% of the load the Woodfin plant was supposed to supply. That’s great but nowhere near good enough, even without factoring population growth into the equation. It remains to be seen whether and to what degree the utilities commission will weigh in with revised electric rates and profit rules for utilities.
Progress is clearly investing in efficiency and conservation, and those initiatives have a friend in Robert Sipes. But outside the CEAC meeting room, Progress is also pursuing a course that looks a lot like utility business as usual. It favors nuclear power for baseload electricity and in 2007 helped defeat federal requirements for renewable power generation. Last year Progress also worked to water down NC Senate Bill 3 requirements for renewables while backing the resurrection of Construction Work In Progress (CWIP) financing for new plants. CWIP allows utilities to shift the financial risk for nuclear and other large construction projects to ratepayers, whether or not the plants ever generate a watt.
It will be instructive to learn the number and quality of action projects actually based on council recommendations. Next month, those cards will allegedly be on the table. Then, at some point, Progress will turn CEAC loose to help with implementation. But, good as the conservation and efficiency proposals may be, there seems little reason so far to hope that they will derail company proposals for additional fossil fuel and nuclear power plants.
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Progress Energy’s first round of energy conservation and efficiency proposals have moved a step closer to implementation, company officials said at the May 9th meeting of the Community Energy Advisory Council (CEAC). The council got a peek at the status of company responses to its February recommendations, and Progress Energy Carolinas general counsel, Len Anthony, was on hand to explain how the company wants to be paid for energy efficiency programs it sponsors.
Moving the process
In January, Progress announced that it would make $25,000 available to local nonprofits for projects related to the efficient use of electricity. Winners for 2008 were revealed this month. Funded or partially funded projects include solar hot water and other alternative generation systems, compact fluorescent lighting installations, and training for high school students to perform energy efficiency retrofits. Three of the six recipient organizations are closely associated with CEAC members: A-B Tech (Vernon Daugherty), Asheville Housing Authority (Isaac Coleman), and Clean Air Community Trust (Margie Meares). The other successful applicants are The Nature Center, Mountain Housing Opportunities, and Haywood Community College.
Chris Edge, demand side manager for Progress Carolinas, announced that the company submitted its EnergyWise residential load control program to the NC Utilities Commission. Homeowners would be offered $25 yearly in return for allowing Progress to remotely control air conditioning and electric space and hot water heater units during peak demand spikes. A second filing would launch Phase I of the energy saving smart grid proposal. A third submission institutes a set of building-related energy audit/efficiency programs. The Residential Home Advantage Program offers $400 per living unit to developers or contractors of new residential space who build to EnergyStar or higher standards. For commercial, industrial, and governmental customers, Progress would pre-qualify private contractors to assist with energy audits and upgrades.
Progress responds to CEAC recommendations
Company managers presented an overview of responses to February’s list of CEAC recommendations. Twenty-two responses/plans/policies were unveiled. Three, under the heading of Conservation & Efficiency, [see sidebar following report] are addressed by the Utilities Commission filings and community grants. Edge said the other project in this category, encouraging industry to make productive use of wasted heat, will also go before the commission this year. Major components of these initiatives have been in the works for many months, but Robert Sipes, western regional Progress VP, credited CEAC with encouraging a harder look at demand side management and solar hot water.
The single item listed under System Planning & Generation has little new about it. Progress files an annual Integrated Resource Plan with the Utilities Commission in September. This year, Progress manager Sam Waters said he’ll approach the task a bit differently. Rather than presenting commissioners with a single “least cost” analysis of how the company will produce electricity, he will lay out multiple scenarios, taking into account different cost estimates associated with potential regulations on CO2, mercury emissions, and other variables.
Initial or general thoughts regarding 17 other responses were presented as well, though detail on critical success factors, metrics, deliverable actions, and timelines was sparse. Progress is complying with Senate Bill 3 renewable energy requirements. Some electric rate issues are covered in Utility Commission filings. The company is pursuing efficiency and conservation public relations opportunities. CEAC’s Community Education and Engagement subcommittee asked to address the latter during the June 13th CEAC meeting. The council agreed.
Council members praised the responses. Edge’s Conservation & Efficiency programs have the potential to significantly impact electricity consumption, and community education and buy-in will be essential for success. Apart from these concrete initiatives, however, the word of the day seemed to be “exploring.” It remains to be seen how much exploration will translate to action and how much is a variation on the classic Meatloaf dodge in “Paradise by the Dashboard Light,” Let me sleep on it.
Energy conservation and efficiency come with a price tag that, one way or another, must be borne by energy users and/or taxpayers. Questions of how costs are divvied up and how much profit utilities should derive from sponsoring efficiency initiatives are the subject of debate across the country.
It flies in the face of all that’s capitalistically holy for a private company to encourage customers to consume less of its product. Decoupling profits from sales volume is one partial answer. As discussed in last month’s report, despite notable success in California, decoupling scenarios can draw opposition from consumer groups and utility companies. Duke Energy favors decoupling. Progress opposed it in a recent letter to the NC Utilities Commission.
Independent of decoupling, six states, not including North Carolina, have opted to avoid some conflicts of interest by creating public benefits boards to oversee efficiency programs. In these states, utility company involvement may be reduced to collecting money from ratepayers on behalf of the board. Progress attorney Len Anthony said, prior to the passage of Senate Bill 3, Progress had been interested in the possibility of a North Carolina public benefits board.
For now, Progress and Duke are independently moving forward with proposals to make conservation and efficiency programs profitable. Duke’s Save-A-Watt plan has been submitted in several states, including North Carolina, but approved in none. It considers efficiency as a “fifth fuel” after coal, nuclear power, gas and renewables. In essence, Save-A-Watt proposes that Duke be paid 90% of the avoided costs of building new power plants. Customers keep only 10% of the savings realized by their energy conservation efforts. An Indiana regulatory analyst crunched the numbers and determined that Duke could reap a 39% rate of return under the program. Link Other Save-A-Watt critics say the plan encourages Duke to engage in only the least expensive efficiency programs, may provide an inadequate incentive to customers, and is unlikely to reduce electricity use enough to avoid new power plants..
Progress proposed a different payment mechanism in its recent Utility Commission filings, a formula based on kilowatt hours saved rather than avoided power generation.
- Reimburse all costs related to sponsored efficiency programs,
- Plus net lost revenue due to the programs. (Effective programs cause a net decrease in company earnings from electricity sales. Progress wants to be repaid that amount.)
- Plus a 50-50 split with ratepayers on savings from decreased use of electricity deemed by certain tests to be due to its efficiency programs.
As Progress sees it, the first two terms make efficiency programs financially neutral for the company but provide no positive incentive. Therefore the third factor. “If I would have made an extra $10 million without the program,” Anthony said, “give me $5 million of it.”
The first two factors should prove more effective than Save-A-Watt in curbing the desire to build new baseload power plants, according to informed sources outside the company. But they are withholding judgment on the incentive element of the formula. One said, “Lower incentives, in the range of 10-20%, have been implemented elsewhere. But whether it’s reasonable depends on how they’re calculating net lost revenue.”
Meanwhile, recall that Senate Bill 3 mandated the Utilities Commission to study possible revisions to electric rate structures. The report is due in September. This month, the commission posed additional questions to the utility companies including one on appropriate performance incentives for utility initiated efficiency programs. I asked James McLawhorn of the Utilities Commission Public Staff if commission decisions on efficiency proposals might be delayed pending the rate study and subsequent actions. He said no; it may be that various payment formulas are in use at the same time.
Just one more question
Progress recently released a report to shareholders on global climate change. In it, the company seeks federal action adhering to a series of principles. One “Allows a climate change program to operate efficiently by precluding overlapping state and federal requirements.”
However, CEAC minutes from last December’s meeting contain the following passage: “Sipes and [Progress Energy Carolinas CEO, Lloyd Yates] invited dialog on recent press coverage of Progress Energy’s opposition to energy tax credits and renewables in the US Senate Energy Bill. Yates explained that Progress is against a one size fits all standard, because it would drive up costs, and buying energy credits from other states would transfer wealth from North Carolina. The state regulators also opposed the legislation.”
A cynic might interpret this pair of statements as requesting a muzzle on state regulators so that Progress can more efficiently oppose meaningful federal requirements on “one size fits all” grounds. I raised the issue with Progress spokeswoman Martha Thompson. The company’s unedited reply closes this report:
“It’s important to realize that a national renewable portfolio standard (RPS) is different than a national climate change policy and has very different objectives. An RPS is designed to increase renewable energy resources “on the ground” whereas a policy to address global climate change is focused on reducing greenhouse gas (GHG) emissions.
“One might pursue an RPS for a variety of reasons, including energy security, smog issues or economic development. Reducing GHG emissions is a typical side effect of an RPS, but that is not always the case and is not necessarily the main purpose. Thus, an RPS can be one tool to reduce local GHG emissions, but is not a global climate change policy.
“A global climate change policy is focused on reducing GHG emissions on a large scale. Because global climate change is such a broad issue, it requires a broad solution. Our report states that Progress Energy supports a market-based national policy framework that supports the development and deployment of the breakthrough technologies needed to reduce GHG emissions substantially. We outline in the report our nine principles for an effective federal climate change policy that we would support. Among them is the requirement that a national policy would preclude overlapping state climate change policies. This is to prevent a confusing, contradictory and potentially ineffective patchwork of policies and to protect regional customers from paying for local policies that do not ultimately affect global GHG levels. Our company’s support for a federal climate change policy does not preclude support for state renewable portfolio standards, because they are different than climate change policies.
“We believe that requirements on renewable resources are best set at a state level to take into account the unique resources of each region. Progress Energy worked closely with elected officials in North Carolina to pass an aggressive REPS last year in Senate Bill 3. North Carolina's REPS is the first of its kind in the Southeast.
“I hope this helps clear up the confusion between the comments made at the December CEAC meeting and our company’s position on global climate change policy.”
Progress Energy Recommendations and Responses to CEAC
Conservation & Efficiency
- Energy audits
- Waste heat utilization & combined heat and power
- Phase out electricity for hot water and home heating
- Increase demand side management programs and education on peak demand
Renewables & Alternative Energy
- Selling renewable energy
- Renewable energy rebates—schools
- Renewable energy rebates—residential
- Renewable energy rebates—commercial/industrial
- Solar electric on Progress Energy’s WNC headquarters
- Pilot utility scale wind and solar
System Planning & Generation
Regulatory & Governmental
- Energy-efficient building codes
- Rate structure
- Corporate commitment to a clean energy economy
- Rate structure to promote clean energy over fossil-fired plants
- Local partnerships for education advocacy
- Increase education of public about peak demand usage
- Embrace sustainable economics and decision making
- Carbon neutrality
- Energy hierarchy
- Openness and transparency
- Annual climate champion awards
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Talking Turkey at the Birthday Party
Progress Energy’s Community Energy Advisory Council (CEAC) has been in existence for a year. But the council had little time for self-congratulation at its June 13th anniversary meeting. The discussions that displaced organic carrot cake and ice cream were a mark of how far the CEAC process has come and how far it has yet to travel if the community model the council represents is to realize its potential.
Power stations get more press, but power lines are equally critical to keeping society’s lights on. Water and natural gas reach consumers through tree-like distribution systems. The Asheville Water Department pumps water into the big end of the pipe; we, at our various little ends, remove it by opening our taps. The power grid is different. It’s more like a network of highways and roads. Electricity can theoretically be added to the system at many more points. And if one transmission line is blocked, the electrical “traffic” instantaneously seeks alternate routes. The grid is also two-way—along different wires—flowing in a closed loop or circuit. That’s why there are at least two prongs in an electric plug and two wires serving an electric fixture. One is incoming, the other outgoing. In simplified schematic terms, the electrical transmission system isn’t a tree; it’s a circle.
Sam Waters, director of system planning for Progress Carolinas, took the first half of the meeting to present an upcoming transmission issue facing the WNC territory. In part, he said, it’s a result of the massive Northeastern blackout of August 14, 2003. (technical discussion link). Waters described that blackout as a typical “cascading event.” On a hot August afternoon, a power plant in Ohio went off-line at a time of high demand. Electricity from elsewhere streamed in along alternative routes, heating high voltage lines and causing them to sag more than usual. Some drooped into trees FirstEnergy Corp. hadn’t gotten around to trimming. The trees shorted out one line after another, overloading additional lines. The industrial equivalent of circuit breakers tripped, removing more lines from service and eventually more than 100 power plants as well. At the end of the day, a tree-trimming failure had cascaded into a blackout affecting fifty million residents of the US and Canada.
Federal regulators, having decided the free market had failed to adequately self-regulate, responded with a raft of new rules—including more aggressive tree-trimming requirements. Waters said the new rules, along with changing mix of electricity suppliers and increasing demand, have driven Progress to rethink the adequacy of the high voltage (115 kilovolt) line from Asheville to Enka.
Beginning in 2010, when the company imports peak power to WNC, a problem along the Asheville-Enka line could initiate a cascading event by shunting large amounts of electricity to a parallel line, potentially overloading it. A first step toward correcting the vulnerability, Waters said, is to increase voltage on the Asheville-Enka line to 230 KV and bring the voltage down with additional transformers at Enka. The preliminary estimated price tag is $6 million.
Robin Cape said, “I’m frustrated that [with this change] we’re locking in old-style central generation and not distributed generation.” Margo Flood and Vernon Daugherty pressed the point, Daugherty asking, “Does this build-out consider upcoming distributed resources?”
Waters replied that it didn’t. In his mind, the issues are different. Distributed or decentralized generation could strengthen or weaken the grid depending on where it occurs along the transmission lines and how much control Progress dispatchers have over when the power comes online. “We have preferences,” Waters said. A wind farm tied in at a line already used to near capacity could threaten an overload. The same windmills connected at a line with plenty of excess capacity could strengthen the grid. Waters added that beefing up the Asheville-Enka line isn’t the only available option. But he thought it was best in this instance.
The Lieberman-Warner Climate Security Act
The day’s other major topic was Progress Energy’s role in shaping climate change policy. The Lieberman-Warner bill, defeated in the Senate on June 6th, would have imposed national CO2 emission targets and a carbon cap and trade system. The latter included a program of annual auctions for carbon allowances. Auction proceeds would have been redistributed to rate payers, industry, research, and environmental remediation. Utility companies—and environmental groups—were divided in their support for Lieberman-Warner. Duke and Progress, both heavily dependent on coal-fired plants, came out against.
Robert Sipes, Progress Carolinas western regional vice president, launched the discussion by saying he’d emailed CEAC members as soon as he became aware that Progress had a position on Lieberman-Warner. By doing so, he hoped to avoid a repeat of CEAC’s surprise at the company’s intervention with the 2007 federal energy bill [see “The Other Face of Progress”]. Sipes also arranged for corporate environmental specialist, Mike Kennedy, to appear and explain Progress’s opposition in person.
Kennedy began by recognizing the reality of global warming and human activity as a major cause of it. Progress, he said, sees a need for major reductions in CO2 emissions. In principle, it supports a carbon cap and trade program with shrinking carbon allocations over time.
According to Kennedy, the company’s objection to Lieberman-Warner arose from two considerations. First, it believes the bill’s near-term CO2 targets and timetables were overly optimistic. CO2 emissions were to be reduced to 1990 levels by 2020. Kennedy cited an Electric Power Research Institute (EPRI) study suggesting that emerging technology and plant construction timetables make 2030 a more realistic year for emission reductions to 1990 levels. (Note: The EPRI study envisions an energy future dominated by new nuclear power and coal—clean, of course.) Kennedy said Progress didn’t have a problem with the more remote Lieberman-Warner targets, or even an 80% reduction of CO2 below 1990 levels by 2050.
Not surprisingly, the bill’s carbon cap and trade provisions were the other stumbling block for Progress. The company prefers a free distribution of emission allowances, following the model of the 1990 Clean Air Act amendments. Those permits capped and reduced smog-causing gases over time by virtue of dwindling permit allowances. Companies emitting less than allowable maximums may sell their unneeded permit tonnage to companies exceeding permitted targets.
Lieberman-Warner also allowed for an aftermarket in carbon allowances but would have phased-in an auction process for obtaining permits in the first place. System-wide, Progress emits about 60 million tons of carbon per year from its power plants in Florida and the Carolinas. Kennedy noted that the annual cost of purchasing carbon allowances would be burdensome for ratepayers even at a bargain basement price of $10/ton.
Dave Hollister fussed, “Whenever things like this come up, the cost card comes out like a club over the heads of the masses.” Richard Fireman, a retired physician, said cheap energy should no longer be a national goal. He compared the energy crisis to a patient who comes to the doctor complaining of chest pain. “The doctor isn’t going to prescribe a [high sugar] diet even if it’s the cheapest. The patient needs to cut his [sugar] intake.” Paul Szurek replied that, at the end of the day, there are political realities and that cost would always be one of them.
Other council members sought to broaden the scope of the discussion. Michael Shore asked Kennedy whether Progress would proactively come forward with alternative proposals or continue to sit back and oppose bills on the legislative table. Kennedy replied that Progress would be happier with a 2025 or 2030 date for carbon reductions to 1990 levels.
Cape said, “I’d love it if Progress took leadership on costs.” She thought the company could do much to explain to customers that climate inaction also carries a price tag, referring to extreme weather, health, and other issues.
Sandy Pfeiffer, president of Warren Wilson College, recalled last year’s agreement between his school and the City of Asheville to collaborate on climate change practices and initiatives. He hoped Progress would get on board with what he said is already being referred to as “The Asheville Model.” He believed such a commitment could spearhead a broad new collaborative model for energy leadership and climate change solutions in the United States. Margo Flood (also of Warren Wilson) seconded Pfeiffer’s notion, as did Shore. He asked Progress take public stands on what it supports in terms of targets and how it proposes to achieve them.
What wasn’t discussed
In May, CEAC planned to focus the June meeting on devising a plan for community education and engagement with energy issues. That conversation becomes ever more pressing. Progress recently announced its intention to raise electric rates for residential customers by an average of 16.2% on December 1. If approved by the Utilities Commission, most of the rate increase would go toward offsetting increased fuel costs. The remainder would pay for the company’s energy efficiency and demand-side management proposals as well as renewable energy expenses.
Thank you, Margie
Robert Sipes regretfully announced that health issues have forced Margie Meares to resign her council seat. Margie figured prominently in CEAC’s first year and in these reports. She will be greatly missed. More power to you, Margie.
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Turning Wishes to Horses
Observing the July 11th meeting of Progress Energy’s Community Energy Advisory Council (CEAC) was almost as exciting as watching green tomatoes. Important things were probably happening, but the red remained elusive.
Council members were asked to arrive prepared to discuss how they, their organizations, and CEAC can contribute to implementing the twenty-three action projects MAY generated from its February recommendations. Two absent CEAC members, Buddy Gaither of Milkco and Patrick Fitzsimmons of the Red Cross, sent messages outlining steps their organizations are taking to improve energy conservation and efficiency. Gaither, later seconded in the meeting by Nathan Ramsey and Paul Szurek, hoped to expand the discussion to include new generation. Szurek said, “We don’t want do-it-yourself power to spring up if people become afraid of brownouts.”
But conservation and efficiency action items remained the topic of the day. The current report on the overall list contained status information on less than half of the individual projects. Still fewer were fleshed out with critical success factors, metrics, deliverables, or timelines. Among the most detailed was Project 2C:
2C - Renewable Energy Rebates - Residential
Recommendation: Progress Energy will implement a household renewable energy rebate program.
Status: Progress Energy is committed to a solar PV [photovoltaic] mass-marketing rebate program.
Critical Success Factors:
- Deliverable: Residential-focused rebate program.
- Timeline: Within 2008
Further corporate and/or regulatory action is required to achieve any of the project goals. But the success of several, including renewable energy rebates, also depends on community acceptance. Here, CEAC could play a crucial role. Council members shared their ideas on public education and involvement campaigns, mainly in the areas of housing and home energy use.
Early on, there was brief discussion about CEAC membership and organization. No decision had been made on filling Margie Meares’ seat. At least three names were under consideration. It was also suggested that CEAC might develop a lower tier of focused subcommittees, permitting broader community participation.
LaVoy Spooner floated the idea of a community ambassador program for energy efficiency. John Oswald of Mills Manufacturing suggested that he and other employers could do more to involve employees in energy efficiency and conservation efforts. For example, his company recently switched to a 4/10 work week to help employees save gas. Robert Sipes, Progress regional VP, said Progress has done the same.
Formal education programs
Council facilitator, Steve Cochran, reported on a meeting with the Alliance to Save Energy, a national education, research, and policy advocacy consortium. The Alliance has created educational modules for kids and is in search of school systems to implement them. Cochran wondered whether there might be local interest. Terry Albrecht said that a national energy industry group, The National Energy Education and Development Project (NEED), has also developed K-12 curricula on energy-related matters.
Cochran advocated for the formation of a regional Higher Education Conservation Consortium, perhaps led by Warren Wilson College, to coordinate college level instruction, research, and policy advocacy. Warren Wilson council representatives weren’t present to respond, however the college is already active in this area with sister institutions and the City of Asheville.
Vernon Daugherty said A-B Tech is launching a National Center for Sustainable Technologies. The Land of Sky Regional Council and Waste Reduction Partners, represented on CEAC by Albrecht, is also involved. Part of the Center’s focus will be on training construction workers in energy efficient methods. This year, the program received a $2500 CEAC community action grant to help pay for a photovoltaic array on A-B Tech’s green technology demonstration house.
Building and construction trades
Szurek, of the real estate development company Biltmore Farms, liked the Higher Education Consortium idea and hoped for an ongoing series of conferences focused on builders. His high-end residential customers are embracing energy efficient construction and HealthyBuilt Home designation, but cost and a scarcity of qualified subcontractors limit the penetration of new technologies to lower-priced homes. “Good ductwork shouldn’t be more expensive,” he said, “but few [subcontractors] are trained today.” In response to a question from Ramsey, Daugherty said A-B Tech could accommodate more construction trades students.
Albrecht reminded the group that Waste Reduction Partners, the State Energy Office, and the WNC Green Building Council, are also already working on conservation and efficiency. An Energy Office program, the Utility Savings Initiative, had, to date, saved $62 million in electric bills. The Green Building Council does educational outreach and could probably do more with additional funding.
Cochran said the Alliance to Save Energy projects that 40% of increased electric consumption will be due to phantom loads. Phantom or vampire load is electricity used by electronic equipment in stand-by mode. Even when turned off, these devices sip electricity on a 24/7 basis unless unplugged or connected to a surge protector in the “off” position. Televisions, stereo equipment, microwaves, and computers are typical examples. Harry Harrison saw an opportunity to use a Phantom mascot as an educational tool.
Caution to users of desktop computers: I spoke with Sean Donahue, tech spokesman for Dell computers, about the effect of unplugging a desktop PC from the wall when not in use. There is a small battery on the motherboard called a CMOS battery. It’s responsible for powering automatic day-date functions when the computer isn’t plugged in. CMOS battery life is normally 3-4 years, Donahue said. If a system were consistently unplugged when not in use, accelerating the drain on this battery, users could expect to replace it in as little as one year. All CMOS batteries, Apple or PC, are nonrechargeable according to local Geek Squad tech Jason Trump. The replacement part is cheap, he said, but nonetheless. . . . It might be best NOT to make a habit of unplugging desktop computers.
So what are we really going to do?
Scattered throughout the discussion were comments on priorities. Sipes said, “Our core focus is a power shortfall; let’s not lose focus on that.” Ramsey urged CEAC to come up with a few initiatives to engage regular homeowners, “We can’t make it too complicated or expensive.”
Waynesville town manager Lee Galloway said the lion’s share of peak demand goes to home heating, air conditioning, and hot water. He was averaging a call per week from residents concerned about winter heating fuel prices. These people were thinking of switching to electric heat pumps. Dave Hollister described this as a perfect example of the cost of doing nothing. He expected the use of highly inefficient space heaters to drive demand peaks higher this winter. Delaying effective conservation and efficiency measures invites such costs. This reality should be recognized in CEAC educational efforts.
CEAC could set concrete target goals, Sipes said, an idea welcomed around the table. He reported that Chris Edge, who oversees demand-side management programs for Progress, is working to create an efficiency and sustainability index for public use. In addition to some methodological issues, he’s concerned that an index based on megawatts might not have much community traction. This reporter said Asheville may not be galvanized by megawatts but it is by smokestacks. He suggested a smokestack symbol for Edge’s index. One smokestack represents a number of megawatts generated by fossil fuels or nuclear power, say 150 MW. (For reference, each coal-fired stack at Lake Julian is the exhaust pipe for 175 megawatts of electric generation.)
In other business
Sipes credited CEAC as an impetus for the formation of a new corporate group within Progress Energy. The Efficiency and Innovative Technology Department will pull together the company’s formerly dispersed efforts. The VP in charge of the new department is Rob Caldwell. He will report to Senior VP John McArthur. McArthur, Sipes said, first had the idea for CEAC.
Good news. But it is tempered by statements company officials including McArthur made to Wall St. analysts in February. At that time, Progress considered renewables more costly and less reliable than conventional power plants. McArthur said the public had unrealistic expectations of renewable energy. Given the skyrocketing construction estimates for the company’s nuke plant proposals in Florida and Shearon Harris facility in North Carolina, Progress may have a ways to go before efficiency, conservation, and renewable energy are as prominent in corporate thinking as they are in the new organizational chart.
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Amazing Savings: Progress discovers finger power
At the outset, the August 8th meeting of Progress Energy’s Community Energy Advisory Council (CEAC) looked like a snooze through summer doldrums. Half the council was absent. But looks can be deceiving.
Progress’s western regional VP, Robert Sipes, opened the session by announcing three new CEAC appointments:
Maggie Ullman, energy coordinator for the City of Asheville
Jonah Bucher, chair, Clean Air Community Trust
Larry Shirley, director, NC State Energy Office (represented by Reid Conway)
The group welcomed its new members. Robin Cape and LaVoy Spooner urged that future appointments keep an eye on diversity. Spooner observed, for example, that the Latino community is unrepresented. Cape suggested that CEAC also pay more attention to attendance and participation. Inactive members should be considered for replacement.
Sipes agreed and singled out Cape, Paul Szurek, and Dave Hollister for their well-received panel presentation on CEAC at the mid-year meeting of the company’s “Energy Delivery” group.
How low can you go?
Sipes again lauded CEAC for pressing Progress to take an active lead in energy conservation and efficiency. The encouragement led him last winter to initiate an energy audit on the nine buildings Progress occupies in WNC. He appointed field supervisor Todd Dunn (since transferred to Raleigh) to head up an “Energy Efficiency & Conservation Team.”
Dunn presented results for the first seven months, prefacing his remarks by underlining a lack of prior experience in this area. Also, his team had no budget for equipment upgrades until June. Before that time, all conservation improvements were due to behavioral changes, such as turning out lights in unoccupied rooms. Greater awareness of thermostat settings, appliances, bay doors, and heaters also accounted for savings.
Dunn said he’d been advised to shoot for a first year electric use reduction of 5%. But he opted against setting a target figure. Instead, he took a mutual education approach with his coworkers and launched a friendly competition between facilities based on the monthly kilowatt hour and peak demand figures for each building. The program, he said, has proved popular with employees.
After a rocky start, which saw electricity use climb by 12.8% in January (compared to January 2007), the numbers turned Dunn’s way. Year-to-date, Progress western region has cut its own power consumption and electric bills by 14.6%.
When budget money became available, the installation of motion sensors and programmable thermostats produced even greater across-the-board savings: more than 30% for the months of June and July. Dunn predicted that first year results will show overall reductions well in excess of 15%.
Internal peak demand, the maximum amount of electricity Progress buildings use at a moment in time, also fell: 19.8% year-to-date.
In coal-fired terms, the 154,680 kwh the company has so far saved is equivalent to not burning 107,822 lbs. of coal and preventing 160,279 lbs of smokestack emissions. (Emitted CO2 weighs more than the coal that produced it because the CO2 combines coal carbon with oxygen from combustion air.)
Clyde Satterfield, from the Haywood county office, and Sandy Barnhill, Spruce Pine, described their experience with the new program. Both said they’re impressed by the power of a finger on a switch. They’ve become aware of needless lights wherever they go and are taking home the lessons learned.
Satterfield reported one unexpected behavior change among Haywood staff. Because restroom lights in the building are now controlled by motion detectors, employees wear a hat to the john. “If you sit too long,” he said, “the lights go out. So you throw your hat.” There have been no reports of two-hat emergencies, he told me.
The Efficiency & Innovative Technology Department
Progress VP Rob Caldwell was on hand as well to describe and discuss his new corporate department. Efficiency & Innovative Technology brings Florida and Carolinas conservation, efficiency, and new technology programs together under one departmental roof. While Progress has historically had a predominantly short-term planning focus, Caldwell said, “We need to think more long-term.” He noted that this remains a minority opinion.
Efficiency & Innovative Technology will focus on three areas, he said:
1) Demand side management and energy efficiency
2) Renewable Generation
3) Emerging technologies
The company’s first North Carolina demand side management projects are expected to emerge from the Utilities Commission this fall. These include voluntary load control programs and a solar-thermal hot water incentive for new construction.
Among emerging technologies, Caldwell is particularly watching developments in solar generation, lighting, plug-in hybrid vehicles, and storage devices for electricity. Progress, he said, is also open to wind power proposals and is talking with a wind developer in Eastern North Carolina.
With respect to storage technologies, Caldwell highlighted batteries but said thermal storage is of interest too. I asked whether industrial-sized batteries weren’t a bit futuristic and pricey. He replied, “Today megawatt-sized batteries are a bit expensive, but I would not call them futuristic. We are in talks with a supplier to pilot a large battery in the next two to three years.”
Obviously impressed by Dunn’s report, Caldwell envisioned Progress as a leader by example, “and not only in-house.” He said that public education, awareness, and engagement are necessary but cautioned that success will also involve a value proposition for all concerned. CEAC didn’t pursue the definition of “value proposition” with him.
Vernon Daugherty asked whether Caldwell’s department is studying the capture of waste industrial heat to generate electricity. Support for cogeneration was among the February CEAC recommendations. Caldwell said Progress isn’t in a position to fund research, but he’s following technological developments.
Community initiatives and metrics
Sipes and CEAC facilitator Steve Cochran finished the session with overviews of how to measure success and the status of choosing specific projects to be lead by the council. Among CEAC members, the top vote getters from a list of possible initiatives included engaging the public in easily understandable programs, a focus on K-12 education, a major media campaign for adults, coming up with clear measuring sticks for success, and interventions related to electric hot water and strip heating.
Hollister reminded the group that high fuel prices this winter are likely to drive people to use electric space heaters, causing a jump in winter peak demand. Chris Edge, who heads up demand side management for Progress, shared Hollister’s concern but offered no suggestions about what might be done.
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CEAC and the Iron Equation
On September 12th, the Community Energy Advisory Council (CEAC) met for the first time without Progress VP Robert Sipes sitting at the head of the table. Sipes was in Kansas City cheering his company’s entrants in the National Lineman’s Rodeo. CEAC might have called off the September session but decided to press ahead with discussing how to involve the public in energy conservation and efficiency.
Chris Edge, Progress demand-side manager, reported that NC utilities commission approval is still pending for the company’s first round of efficiency programs. He expects good news “any day now.” The submissions include incentives to promote energy efficiency in new buildings—companion programs for retrofits will be applied for shortly—and a residential load control project called EnergyWise.
EnergyWise will pay customers $25/year per qualifying electric heat, hot water, or air conditioning system, in return for allowing grid managers to remotely cycle those appliances off and on to blunt demand spikes. While some customers will be allowed to sign up this fall, a major rollout isn’t planned until early next year.
According to Edge, programs like EnergyWise are typically adopted by 20-25% of eligible customers within the first 5-7 years of operation. He guesstimates an eventual ability to shave 30-35 megawatts (MW) off a WNC demand peak. He added that local demand for electricity is increasing by 20-30 MW per year.
Progress has also requested utility commission approval for a massive rate hike. The residential bite is 16.2%. About a fifth of the money will support the new efficiency programs. Higher fuel costs and past “under-recovery” of expenses account for the remainder, said Martha Thompson, Progress community relations manager. The company wants to phase in the increase over three years. Residential customers would see an initial bump of 11.2%. A hearing on the matter is scheduled for September 16.
Former CEAC member Margie Meares will be pleased to learn that Progress is supporting an effort to strengthen North Carolina building codes. The state won a $499,190 Department of Energy grant to fund development and implementation of higher building code efficiency standards. The governor’s office, State Energy Office, the NC Department of Insurance, Appalachian State University, and Mathis Consulting of Asheville participated in the grant request. Current CEAC member and Mathis employee, Jonah Butcher, is assigned to the project.
CEAC facilitator, Steve Cochran, announced that he is part of a group hoping to convert the Haywood Park Hotel and Starnes Building in downtown Asheville to a state-of-the-art efficient National Center for Sustainability. The Center would house organizations and business groups oriented toward sustainability issues in a variety of fields including heavy industry and retail business.
Some other announcements could have been made, but weren’t. A recently inked deal between Progress, FLS Energy, and Biltmore Farms Hotels will outfit the Hilton on the Biltmore Park Town Square with solar-thermal hot water. The system should provide 2,000 gallons per day and save an estimated $10,000 per year in fuel costs.
Meanwhile, Appalachian Energy is preparing to install WNC’s largest photovoltaic (solar cell) array on the roof of Jim Barkley Toyota. The project involves 336 solar panels and will produce 75-kilowatt of power to be sold to Progress. According to press reports, Barkley expects to recoup its investment within five years.
Thompson and Cochran then divided council members into breakout groups: Government, Business, Industry, Education, and Community, to discuss how the “sectors” might foster community engagement. Worksheets to focus the talks and provide feedback were distributed and collected at the end of the session. There was no discussion of results.
The meeting ended with a CEAC video segment from the locally produced variety show, Green Radio Bistro.
A peanut gallery commentary
CEAC has much to be proud of.
- It is pioneering a new model for constructive engagement between a corporation and its customers.
- CEAC has shown itself to be a powerful tool for the mutual education of all involved.
- CEAC has produced solid suggestions for how Progress might adapt its business to a new century with markedly different environmental conditions. Many of these ideas are gaining traction.
- CEAC connections have facilitated significant community projects. Had it not been for CEAC, Paul Szurek told me, the Hilton wouldn’t be getting solar hot water. His isn’t an isolated testimonial.
And yet, CEAC isn’t measuring up to the sum of its diverse and accomplished parts. The council remains strangely inert where it most counts. Demand for electricity continues to rise unchecked. There’s no community action plan to promote conservation and efficiency, let alone any concerted community action.
The crazy thing is that Robert Sipes may be among those who’d rather not build a new peaking power plant, with all the burning of fossil fuels, greenhouse gas emissions, and community consternation it would entail. But the iron equation of the electric grid may push him to propose it anyway.
Electricity Supply = Electricity Demand
Even a momentary imbalance in the equation equals deep doo-doo. We’re staving off 250 MW worth of peak power doo-doo with stop-gap contracts.
Why has CEAC been content to fret and talk about public engagement when it could long since have been rallying member constituencies and lobbying hard with others, such as the local news media? From my seat in the peanut gallery, I see problems with issues of ownership.
They’re present in the CEAC charter:
“The CEAC will function as an advisory group. The primary purpose of the group is to provide input to PEC on local opportunities and concerns in the region and to provide PEC a local means of advising the company in developing the best overall energy strategy for meeting growing demands in the region.”
Progress owns CEAC. It created the group, defined its scope, selected the members, and provides the funds. This past March, when CEAC asked to stretch the boundaries and address electric rate structures with the utilities commission, permission was denied. The council’s ownership arrangement, necessary as it may have been from the corporate point of view, created a subservient group. Progress drives CEAC. Council members are along for the ride.
There’s a second, perhaps more destructive, ownership assumption also contained in that charter passage. Progress implies that it owns both sides of the grid equation, Supply and Demand.
As a practical matter, by virtue of power plants and transmission lines, electric utilities do own Supply. However, Demand is a manifestly different story. Demand is owned by the demanders, the community of ratepayers. Community behavior can be shaped by load control incentives, and I applaud Progress for proposing them. But, apart from the company’s impressive demonstration of how a simple in-house energy audit can reduce wasted electricity, this is not ownership. On the Demand side of the equation, utility companies are relegated to the backseat.
Demand in WNC is now driven by a disorganized and largely unconscious populace. CEAC is in a unique position to alter that dangerous state of affairs if it so chooses. This doesn’t require anyone’s permission. What it requires is a transformation of group consciousness to one that takes active ownership of Demand. Such a CEAC will reach into the community for whatever allies it needs to ensure the necessary action.
I enjoy Chris Edge’s reports, but I also want to hear about Buncombe County trends in Healthy Built homes and watch the PowerPoint on how Chamber of Commerce members are progressing with efficiency measures. When will Ned Doyle be asked to come in and explore possible CEAC interfaces with the Southern Energy & Environment Expo? Where are the energy audits on the public schools? What changes are occurring as a result?
One other re-vision may help finesse the ownership contradictions. What if CEAC becomes less about an organizational construct than a dependable location where Progress (Supply) and the community (Demand) coordinate efforts on shared goals?
I’ll close with a plea to Progress. Why not go ahead and announce what you already know? that without a major downturn in the Demand trend, you’ll have to try for another peaking power (Supply) plant in the near future? Tell us now, while there’s still time to avoid another fossil fuel solution to the grid’s iron equation.
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Welcome to My World: CEAC XVI
The October 10th meeting of the Community Energy Advisory Board (CEAC) featured an appearance by Progress-Carolinas CEO Lloyd Yates. The session was unusually well attended. Only three council members were absent. Observers in the peanut gallery included media personality and SEE Expo impresario Ned Doyle, Citizen-Times publisher Randy Hammer, and Asheville mayor Terry Bellamy.
Regional VP Robert Sipes announced that Progress customers may now purchase carbon offset credits in addition to blocks of NC GreenPower. The 500 lb. CO2, or equivalent, offsets are available at $4 each. The credits will be monitored for legitimacy, Sipes said.
Some community “sector” subcommittees had met since last month, but the council was more interested in quizzing Yates. For the sake of coherence, this report is organized by topic rather than chronology.
Yates prefaced the wide-ranging discussion by observing that Progress Carolinas customers are increasing at a rate of about 20,000 per year. The service area totals 1.3 million customers. Demand for electricity continues to increase. New baseload power plants (plants operating on a 24/7 basis) may be needed within ten years. Progress has submitted preliminary paperwork for two new nuclear reactors at the Shearon Harris site, but no final decision to build them has yet been made.
Note: At an October 9th meeting, Sipes told a group of local leaders that peak power (brief periods of high demand) remains a problem in the WNC service territory. When the Woodfin peaking plant proposal met defeat last year, Progress obtained new contracts to import power, but these are costly and only in force through 2011. The company is waiting to see what can be achieved with energy conservation and efficiency before pursuing a new peaker in the west.
The nuclear option
Several council members expressed concern about the plan to expand nuclear generation. Jonah Butcher inquired about construction costs, given sharply rising steel and concrete prices. Yates stood by the six-month-old $14 billion construction estimate Progress gave for a similar pair of reactors scheduled for Florida. The project would create 5,000-7,000 new jobs during the construction phase, Yates said, and 800-900 permanent jobs. He figured the annual economic benefit at $100-150 million.
Isaac Coleman, Margo Flood and others questioned the wisdom of committing huge sums of money to nuclear rather than conservation and efficiency projects with more immediate impact. Yates replied that despite advances in appliance efficiency, “people are plugging in more stuff.” Progress believes that the only large-scale source of reliable baseload electricity—other than fossil fuel plants—is nuclear power.
Coleman also worried about the disposition of spent fuel. Yates sidestepped concerns from Asheville city councilwoman Robin Cape and Mayor Bellamy about possible transportation of high-level radioactive waste through Asheville, initially assuring them that spent fuel would remain on company property. He later said the United States needs a permanent storage or reprocessing program. Although either of these would require mass shipments of spent fuel, Yates didn’t revisit the question of transport.
Cape asked how Progress plans to deal with water supply issues involving coal and nuclear plants. Normal operations can require tens of millions of gallons per day. In October, 2007, Harris Lake, which supplies water to the existing Shearon Harris reactor, dropped to within 2.2 feet of causing a plant shutdown. Elsewhere in North Carolina, disputes have erupted about proposed transfers of water from one river basin to another. Yates replied that Progress may augment Harris Lake with gray water from sewage treatment facilities. In addition, the company is exploring alternative methods for cooling power plants. These weren’t specified.
The new reactors proposed for Shearon Harris have a rated capacity of 1100 megawatts (MW) each. If they produce as well as current models over time, the actual electricity generated would average about 90% of rated capacity. This percentage is termed the plant’s “capacity factor.” By way of comparison, a coal plant might have a 74% capacity factor; a wind farm might manage 35%. Baseload electricity comes from facilities with high capacity factors.
Nathan Ramsey asked how many renewable generation units it would take to match the juice pumped out by new nukes. Kent Fonvielle, one of three Progress-Carolinas staff tasked with rustling up contracts for renewables, replied, “A lot.” The company is working with private contractors in the eastern service territory to bring two large solar panel projects on line by the end of the year. Each is rated at 1 MW. A similar project will soon be announced in the Asheville area, he said. Deltec Homes already has a 55 kW solar cell array to the roof of its manufacturing plant. Jim Barkley Toyota is installing a 75 kilowatt rooftop array, and the new Hilton hotel in Biltmore Park will employ solar thermal hot water.
One problem with solar panels, Fonvielle warned, is a capacity factor of only 18-20%. They produce when the sun shines, not necessarily at times of peak demand. Among renewable sources, he added, only big woodchip burners have a high enough capacity factor for use as baseload generators.
Ramsey sounded flummoxed as he weighed the carbon undesirability of new fossil fuel plants against the high cost of nuclear, the number of alternative power sources necessary to make an impact, and the complexity of conservation and efficiency programs. “Welcome to my world,” Yates replied.
A portion of the North Carolina requirement for renewable energy can be met by purchasing Renewable Energy Credits (RECs) from third parties that produce alternative energy not destined for Progress Energy’s section of the grid. Michael Shore, whose business includes solar thermal hot water systems, made a pitch for Progress to better integrate solar thermal projects into its REC portfolio.
Terry Albrecht deplored the relatively small amount of money, $20 million, Progress is annually allowed for the purchase of renewables. By his account, the yearly contribution from residential customers is only $3.80. Worse, large commercial and industrial customers can opt-out of contributing to the fund. Yates concurred. There was talk of inviting members of the Utilities Commission Public Staff to an upcoming CEAC meeting to discuss this and other matters.
Electric supply and demand must match on a continuous basis because the grid doesn’t incorporate any means of storing power. The addition of storage components would alleviate some of the problems with low capacity factors, intermittent sun and wind, and sudden needs to increase supply during demand spikes. Yates said Progress has received an acceptable bid for the installation of a 1 MW battery somewhere along the grid. Not that he’s sold on batteries. In response to a question from Flood, Yates cautioned that battery technology is still a breakthrough shy of good enough. There’s a fine line between fully charging a high performance battery and causing it to explode.
Other methods of “storing” power also exist. Sipes used demand-side management programs as examples of thermal storage. If Progress briefly turns off a hot water heater or air conditioner at a time of peak demand, the water in the tank stays hot and the house remains cool. (More ambitious forms of thermal storage are springing up elsewhere. Some large buildings have switched from standard AC to systems that make ice during off peak nighttime hours and blow air through it the next day to cool the building. Solar heat is also being collected and used to generate steam for industrial-scale turbines.) Vernon Daugherty told Yates that Progress shouldn’t forget about chemical means of storing power, such as hydrogen.
Conservation & Efficiency
With heating fuel prices rising, Daugherty said he anticipates more use of electric space heaters this winter, driving up peak demand spikes. Yates regretfully acknowledged the possibility, adding that Progress has doubled its contribution to “Energy Neighbors,” a company and customer-sponsored assistance program. Rick Lutovsky reported that the Asheville Chamber of Commerce, Mayor Bellamy, and County Commission Chairman Ramsey are meeting on how to approach the public about space heater hazards, including fire.
Richard Fireman joined Flood and Sandy Pfeiffer in urging a discussion of energy conservation in general and residential conservation in particular. Warren Wilson College manages a small volunteer program that insulates homes for low-income people. Flood said its most recent project was for a family with an annual income of $10,000 and $3,000 worth of utility bills. Warren Wilson is able to do only three homes a year.
There are 44,000 similar dwellings in Buncombe County, Fireman said. How can Progress help? Yates, assisted by Chris Edge, described the company’s continuing negotiations with utility commission staff about balancing rate hikes with consumer benefits, especially for low-income ratepayers. Progress will soon submit a proposal targeting insulation needs.
Bellamy mentioned that Mountain Housing Opportunities and the Eblen Charities are also working on these problems for needy locals. She took the opportunity to inform Yates that the upcoming 11% electric rate hike will bite the City of Asheville to the tune of $143,000 a year.
Martha Thompson said there’s no need to wait on the utilities commission to take action on conservation and efficiency.
An impatient Dave Hollister brushed her implication aside and jumped in to demand of Yates, “At what point do we really start to make it happen? We have to fundamentally change the way we relate to each other and the biosphere.” He cited the response to the recent banking crisis as the level of intervention he had in mind.
Yates didn’t want to go there. “Small steps lead to big steps,” he said. “There’s a difference between evolution and revolution. Many stakeholders have to be heard and considered. That takes time. Drastic steps don’t happen unless there’s a major unraveling.”
Note: Tax benefits for renewable generation and energy efficiency projects are detailed in the national Database of State Incentives for Renewables and Efficiency, a project of NC State University.
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News You Can Use
In a meeting unusually rich in news, the November 14th session of Progress Energy’s Community Energy Advisory Council (CEAC) closed with a tantalizing opportunity for ratepayers who like their conservation and efficiency spiced with competition.
How low can you go?
Almost since CEAC’s inception, Progress has been asked about the possibility of fostering conservation and efficiency contests among its customers: school classrooms, areas of the county defined by power substation, business vs. business, etc. The latest in this series came from CEAC peanut gallery regular Jim Barton, the director of Smith Mill Creek Permaculture School.
During the public comment period at the conclusion of the meeting, Barton said it was his understanding that Progress has the capacity to track electric consumption for individual customers and adjust the numbers to account for weather conditions. This, he thought, should enable self-selected groups of ratepayers to compete with each other in saving electricity.
Western region VP Robert Sipes agreed that such contests are “doable” and would require only a list of participating customer account numbers. He was careful to condition the statement, however, saying that it would be “a fairly manual process for us.”
After the meeting, I asked Sipes for additional details. Initially, he told me, he’d have to restrict participation to no more than several hundred accounts. These could be residential, commercial, or industrial. Staff time and expense are limiting factors, he said. “We’d take it on as a ‘proof of concept’ thing, to show people the progress they’re making at what cost [in terms of company support services].” If the early cost benefit returns are good, “We could make a business case to open it up. The costs involved are very low compared to other demand side management programs.”
Barton envisioned customers being charged a participation fee. Conceivably such revenue could be partially returned in the form of prizes. Sipes said Progress wouldn’t and probably couldn’t collect money without explicit permission from the utilities commission. He’d eat the expense of hiring a part-time staffer to crunch the numbers. Beyond that, contestants would be on their own.
Go to it.
New transmission line
Sipes announced that Progress intends to upgrade an existing high voltage transmission corridor in south Buncombe County and add a new one in the same general vicinity. The exact route remains to be determined.
CEAC first learned about local transmission dilemmas in June from Sam Waters, Progress-Carolinas director of system planning. Waters attributed these to new federal regulations and the impending changeover of peak power purchasing contracts at the end of 2009. After that time, peak power will be imported from the south. Existing high voltage lines between the Skyland plant at Lake Julian and the Enka substation don’t meet minimum regulatory requirements to carry the additional load, he said.
Waters returned this month for further discussion of electric supply issues. The first phase of the south Buncombe transmission line project will increase voltage on the existing Skyland-Enka lines from 115 kilovolts (kV) to 230 kV. However, as the grid is presently structured, a power outage along that line after 2009 could trigger a widespread blackout. Electricity, like water, would instantly rush into other available paths, the extra load potentially overheating and disabling an expanding number of additional transmission lines.
The proposed new 115 kV corridor would eliminate that risk by providing a parallel route of flow from Skyland to Enka. Adding another wire to the existing towers isn’t good enough, Waters said, because we’d still be susceptible to a “common tower outage” in violation of federal regulations.
Waters then sped through a PowerPoint presentation on the Western Region Resource Plan, available online via the CEAC meetings page. He focused on two issues.
Electricity consumption in WNC continues to grow at a rate of 15-20 megawatts (MW) per year. Waters forecasted demand side conservation and efficiency initiatives to cut the growth rate by half in 2015. But this still translates to increasing demand for peak power, he said, and contracts for peak power purchases outside the area are good only through 2012. The failed plant proposal for Woodfin was intended to eliminate the need for contract electricity. Without it, the underlying problem continues to worsen over time.
Waters described three means of addressing peak demand.
- Spinning reserves—these are off-line auxiliary fossil fuel plants kept running at low speed. They can be revved up and brought online but not within the ten-minute regulatory window electric utilities are allotted to correct sudden supply shortfalls. In addition to the two baseload electricity coal-fired plants at the Asheville plant in Skyland, Progress operates two combustion turbines there that fall into the spinning reserve category. Waters said they’re expensive to operate because they burn fuel whether or not they generate electricity. (Not to mention greenhouse gases.)
- Fast start reserves—are fossil fuel plants that can go online within ten minutes. Similar in concept to jet engines, this type of combustion turbine was proposed for Woodfin. There are no fast start plants in Progress’s western region.
- Reduced customer demand
Waters suggested that the lack of local fast start reserves may become a problem. Federal regulations may eventually give utility companies less leeway about how they respond to power shortfalls. In response to a question, he acknowledged that electric storage devices, such as giant batteries, hydrogen, compressed air, etc. are likely to become economically viable but not until “the second half of the next decade.”
Utility commission action
The first batch of Progress Energy demand side reduction programs has emerged from the utilities commission. Harold James, who directs renewable and wholesale power initiatives for Progress, reported on these and three new proposals recently filed with the commission.
Approved were EnergyWise, the long-awaited residential heating and air-conditioning control program, as well as contractor incentives for efficient residential construction. New and retrofit incentives for commercial, industrial and government customers were green-lighted as well. James said these will be rolled out within the next few months. Sipes encouraged council members and other community leaders to sign up early and set a positive example.
New filings include:
- An energy improvement program for existing homes would provide assistance and incentives for efficiency upgrades.
- Up to 150 homeowners also stand to benefit from a pilot project offering $1000 to defray the expense of installing a solar hot water system.
- Finally, commercial, industrial and government customers would be offered more technical assistance and incentives for efficiency upgrades to new and existing facilities.
Council members Richard Fireman and Isaac Coleman asked James to seriously consider programs aimed specifically at low-income customers. James agreed this was a good idea.
Sunny day at the landfill
Progress renewables spokesman Kent Fonvielle and Dale Freudenberger of FLS Energy jointly announced a 1 MW photovoltaic array to be built on the site of the Haywood County landfill. The solar farm will occupy 7 acres and incorporate 3200 solar panels able to track the sun from east to west, a feature expected to increase solar gain by up to 30%. When asked how FLS plans to use the ground underneath the array, Freudenberger joked about employing pygmy sheep to cut the grass. Otherwise, he said, his wife might have to do it.
Fonvielle and Freudenberger fielded several other questions on this and related topics. There might be some experimentation with batteries at the Haywood site, Freudenberger said, but this isn’t part of the current plan. Fonvielle responded to Nathan Ramsey’s inquiry about parking lot solar panels by saying that Progress is talking with a third party about such a project, but they are relatively expensive. Another question involved photovoltaic arrays in unbuildable flood plains. Financing and insurance are prohibitive barriers, Fonvielle said. Vernon Daugherty asked about roof-top photovoltaic installations. They usually aren’t as efficient as the ground-based variety, Freudenberger responded, because they tend to be fixed panels, unable to track the sun. Panels with tracking capability must be securely bolted down, posing a risk for roof leaks. LaVoy Spooner wondered whether the glare from a multi-acre solar farm might blind general aviation pilots. Fonvielle said solar panels are low in reflectivity and don’t pose a problem.
Facilitator Steve Cochran said that all the recently designated community “sector” groups had met within the last month and called for reports.
Rick Lutovsky, point person for the Business sector, had little to say about sector progress but has continued meeting with local government officials in an Energy Task Force intended to address heating fuel and space heater issues.
Daugherty said the Education sector is looking at programs Warren Wilson College is running with 3rd grade students and also at the college’s Project Insulate, previously discussed in CEAC. Daugherty and his sector colleagues wanted Progress to consider hiring an educator to assist with community outreach.
Government sector spokeswoman Maggie Ullman reported that she and her City of Asheville interns have established a carbon footprint baseline for city government operations: 34,000 tons/year. This is the number the city will work from to achieve its goal of an 80% reduction by 2050. Ullman expected to have a comparable countywide baseline by the end of the year and later told me that Buncombe County government is doing its own governmental assessment. Her sector group is exploring public access TV and public service announcements as educational platforms. She wondered who might be the best “faces” for these efforts and who—Progress, CEAC, or another entity—would take ownership of the effort. Drew Elliot, Progress communications specialist, replied that his company has no particular ownership or branding desires in this area. “Progress will be supportive,” he said, “but we have our own Save-the-Watts educational program.” Sipes, also speaking of ownership, said, “We learned at Woodfin that this isn’t a Progress issue. It’s a community issue.”
Fireman, of the Home & Community sector, stressed the importance of an actively engaged print media, especially the Asheville Citizen-Times. Coleman added that low-income people often don’t read the paper. “We need visuals,” he said, and to emphasize dollar savings. Coleman also wished for programs providing “young men and women with an opportunity to make a living and do some good.” He cited the Asheville Green Opportunities Corps as an example he’d like to see expanded.
Daugherty attempted to draw several of these ideas together by suggesting an extreme makeover project on an older and energy inefficient house, with local students and volunteers doing the work.
This report ends where the actual meeting began, with several health-related announcements. Sipes regretted to report the passing of Christina Nelson, who had been a CEAC co-facilitator along with Cochran. Two other people closely associated with the council lost members of their immediate family in the days prior to the meeting. Members offered their condolences. Robin Cape then lightened the atmosphere by sharing the news that the health of former councilmember Margie Meares has taken a dramatic turn for the better. Hooray, Margie!
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Progress Energy’s Community Energy Advisory Council (CEAC) closed out its year by reviewing Progress’s 2008 achievements and thinking ahead to 2009. Along with the attaboys and good cheer some news items surfaced.
SmartGrid—Robert Sipes, Progress western regional VP, announced agreement in principle with the NC utilities commission public staff on Phase 1 of the company’s SmartGrid proposal. Phase 1 includes the deployment of devices to permit tighter control of transmission line voltages. This will enable Progress to blunt peak power spikes and ease difficulties associated with adding electricity generated by third parties to the grid.
SmartGrid had languished at the utilities commission since last spring. Progress spokesperson Drew Elliott told me the hold-up with the public staff was over whether the power savings were creditable under North Carolina’s 2007 energy legislation. Although Progress intended to pursue SmartGrid either way, Elliot said, he’s glad officials now agree that the savings should be counted toward meeting state requirements. In 2009, Progress expects the first SmartGrid elements to avoid 20 megawatts (MW) of systemwide peaking power. Eventually, the company projects 20 MW worth of savings in the WNC service area alone.
Microturbines—Martha Thompson, Progress community relations manager, revealed that the company is working with Enviro Energies to pilot three rooftop wind turbines in North Carolina, one of them in WNC. No final site decision is expected until wind studies are completed. Unlike windmills, these turbines are relatively compact and spin on a vertical axis. While the exact model hasn’t been selected—again pending site wind studies—the larger capacity turbines are rated at 10 kilowatts (kW) and should produce an average 2,200 kWh per month.
Progress and Sundance Power Systems are preparing to install small windmill turbines at three Madison County schools and the county’s cooperative extension office. The first installation, at Hot Springs Elementary, is scheduled for completion in May.
Progress Energy Foundation grant—Thompson announced that the foundation has awarded $75,000 to support an energy and conservation education curriculum at the Health Adventure’s new facility. Momentum: Science & Health Adventure Park is under construction on a 10-acre campus near the Botanical Gardens at Asheville. Momentum will be Leadership in Energy and Environmental Design (LEED) certified and showcase the energy and cost savings possible using LEED principles. A “Pinwheel Educational Garden Exhibit” will demonstrate to children how sun, wind and water can generate electricity, Thompson said.
Obama Energy Transition Team—Council member and State Energy Office director Larry Shirley reported a meeting with the Obama energy transition team. The new administration intends to invest heavily in conservation, efficiency and alternative energy projects, he said, particularly where they also provide near-term jobs. Existing block grant programs will be fully funded. Dollars may be available about six months after the inauguration. Shirley added that low-income home weatherization is one area of federal interest.
Terry Albrecht cautioned that the availability of block grant money depends on community preparedness with proposals. He hoped Progress could use its commercial and industrial account representatives to encourage ideas. Shirley said “targeting” grant requests—singling out a particular sector such as nonprofits or government buildings—may help. Isaac Coleman advocated for finding ways to hire low-income people.
Electricity consumption drops in 3rd quarter—The Wall Street Journal recently reported unexpected decreases in demand for electric power. Duke’s third-quarter residential electricity sales, for example, were down 9% for Midwestern customers compared to the previous year. Duke sales in the Carolinas were off by 4.3% during the same time period.
Sipes confirmed that Progress has observed the same phenomenon but provided no numbers. He said the decrease didn’t track with weather conditions. A direct connection to the economic downturn hasn’t been established. Sipes didn’t speculate on what mechanisms might be responsible. Spokesman Elliott said there’d been an increase in the number of disconnect orders from very low use accounts. He thought these might represent infrequently occupied vacation homes.
County commission CEAC representation—newly elected Buncombe County commissioner Holly Jones will replace outgoing commission chairman Nathan Ramsey on CEAC. Ramsey is being asked to stay on the council as a private citizen.
Looking back and forward
Elliott walked council members through a two-page summary of 2008 Progress Energy conservation, efficiency, and related corporate accomplishments. Among those not previously discussed in Electrifying Developments was participation in the development of a North Carolina Quality Solar Installer Network certification process. The program, to be rolled out in 2009, is a collaboration between utility companies, the State Energy Office, the NC Solar Center and trade representatives. Elliott said more information would be forthcoming on the Go Solar NC website.
Ken Fonvielle, representing Progress’s new energy efficiency and innovative technology department, said the company is committed to working with solar thermal projects and hopes to streamline the currently onerous paperwork burden in the coming year.
Progress is piloting an LED streetlight project in Raleigh. The lights, provided by Cree, carry a high price tag, but this may be offset by longevity and power savings of up to fifty percent. Maggie Ullman, council member and City of Asheville energy coordinator, said Asheville might be interested in converting some of its 10,000 streetlights if Progress could offer a reasonable rate. Sipes said the Raleigh experience will enable the company see what it can do. Asheville is testing Cree LEDs in a parking garage, Ullman said, adding that the energy savings so far are less than anticipated.
Progress has taken delivery of its first WNC plug-in Prius. Motorists will be readily able to identify it. Apart from the vehicle’s total body tattoo job, the proud driver, Martha Thompson, said she’ll be in the slow lane wringing out every possible tenth of a mile per gallon. She’s often able to peg the dashboard display at 99.9 mpg but averages 60 mpg.
The first WNC plug-in bucket truck has gone into service as well. In this instance, the electrical system allows workers to operate the bucket without running the truck engine. This translates to breathing less diesel fumes. Next year, if Ford is still around, Progress hopes to test plug-in Ford Escapes.
Council member Rick Lutovsky reported that he, Sipes and others continue to meet to discuss broad local energy issues. They’ve moved beyond heating oil and space heaters to take up the stability of gasoline supplies with distributors and representatives of the Colonial pipeline, exploring ways to avoid recurrences of gas shortages in the mountains.
Two CEAC “sectors” reported major activity in the past month. Business and Industry announced that the Asheville Chamber of Commerce will host the first of a series of informational seminars for business people on how to take advantage of new Progress efficiency initiatives. Other business organizations are also being approached as future hosts.
The Home and Community sector is working toward a “monster consortium” of community organizations and associations. The idea is engage residents in the same way Business and Industry plans to engage commercial enterprises. Sipes reminded council members of his hope that they and their organizations will be early adopters of the company’s new efficiency programs.
Noting president-elect Obama’s nomination of Stephen Chu to be the new Secretary of Energy, Chuck Pickering wondered if it might be possible to persuade Chu to visit Asheville next year. An appearance could boost CEAC’s visibility, familiarize Chu with the CEAC model, and might assist in coordinating efforts between local and federal officials.
Vernon Daugherty reiterated his vision for a local extreme home makeover for a leaky house.
It only remained for Dave Hollister to cap the discussion by mentioning the elephant in the room. “This is all great,” he said, “but it’s still a drop in the bucket. You can see Sam [Waters, Progress director of system planning] massaging us to prepare the ground for a new peaking power plant. In 2009, I challenge CEAC to give Progress enough technical and operational support to help it move away from dirty energy.”
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The Year of Implementation
Progress Energy’s Community Energy Advisory Council (CEAC) kicked off the new year with a nuclear plant controversy and a January 9th meeting devoted to updates and discussion of company data and initiatives.
How much electricity do we need?
Robert Sipes, Progress western regional VP, began the session by dubbing 2009 “the year of implementation” and reporting year-end results of Progress western region’s internal energy audit and efficiency campaign, (see Amazing Savings). During 2008, company facilities decreased overall electrical use by an average of 20.8%, a figure wildly surpassing expectations. Council members were impressed.
Sam Waters, director of system planning, was on hand to address a question from the December meeting about utility reports of downturns in sales of electricity. He confirmed that Progress has seen declines. Preliminary sales from the fourth quarter of 2008 were off by 3.76% compared to the same period in 2007.
The industrial sector was primarily responsible, Waters said. Sales there were down 13.08%. Commercial sales dropped 3.87%. Residential consumption rose 3.03%. Average use by individual residential customers dropped slightly, but that effect was swamped out by continued population growth.
Do the figures signal a durable change in habits, or are they a transient reflection of economic woes? Waters, speaking on his own and not for the company, blamed the economy, citing the coincidence of massive industrial job losses and decreased industrial use of electricity. He expected demand to rebound with the economy.
He has, however, revised his projections for peak demand in WNC. Last winter’s new one-hour record was 984 megawatts (MW), higher than anticipated. Nevertheless, early results from the company’s efficiency initiatives have been better than expected. While demand for peak power will continue to climb in WNC, Waters said, SmartGrid, EnergyWise, and other demand-side initiatives should hold peaks in 2015 down to 1024 MW. This compares to an earlier estimate of 1100 MW for that year.
Robin Cape asked whether Waters’ revised projection considers conservation and efficiency initiatives other than those sponsored by Progress. Demand-side program manager Chris Edge replied that only company programs were considered. Jake Butcher, a council member working on energy efficiency upgrades to North Carolina building codes, said that his group is shooting for an average 30% improvement in the efficiency of “building envelopes,” the ability of walls, windows, ceilings, and floors to keep outside temperatures out and inside temperatures in. If adopted, the new codes would further reduce peak demand.
Utility commission updates
Edge followed Waters to report on utility commission negotiations and actions regarding Progress’s conservation and efficiency proposals. It now appears that EnergyWise will have a public roll-out around the first of May. EnergyWise pays residential customers for the right to wirelessly control air conditioners, electric water and space heating systems during periods of peak demand.
Progress has decided against offering free walk-through energy audits, Edge said. Residential walk-throughs price out at $200-$300 each. Electricity savings would be unlikely to offset this cost, even if participating customers paid half the tab. Reid Conway concurred, saying that high bills drive the demand for residential audits. “Customers are more interested in why they had a high bill. Audits don’t usually lead to major efficiency changes.”
Edge said Progress still plans to offer free telephone, mail-in, and online audits to residential customers. Programs for industrial and commercial customers will allow them to recoup some of the expense of hiring energy auditors.
Following up on a previous presentation from Progress attorney Len Anthony (see Getting Paid), Edge reported agreement with the utilities commission public staff on a reimbursement formula for the company’s demand side efficiency programs. In addition to recovering costs and lost revenues, Progress would keep 13% of the money customers save by participating in company efficiency programs. Anthony had originally proposed keeping half the savings as a reward for offering effective programs. Under the Anthony plan, if residential customers reduced electrical use by $1 million due to Progress programs, their power bills would reflect only $500,000 of the savings. Progress would keep the rest. The present 13% agreement raises the customer share of realized savings to $870,000 and cuts the Progress incentive to $130,000. The utilities commission has yet to act on the proposal.
Margot Flood voiced concern about the impact of the reimbursement formula on independent efficiency programs. Warren Wilson College, for example, runs an insulation program for low-income homeowners. Might Progress reimbursement wipe out the financial benefit to customers for investing in energy efficiency?
Edge said, no. Credit for efficiency savings is determined by formulas approved by the utilities commission. Only savings directly attributable to Progress initiatives can be included in the realized savings pot of money. All ratepayers, participating or not, share the burden of paying for the company’s efficiency programs. Customers able to trim consumption by whatever means will save money on their power bills.
Edge went on to acknowledge that low-income people do present a challenge. “Twenty-five percent of our customers are low-income and constitute a hard-to-reach market.” They’re unlikely to be able to afford to participate in the existing programs. To give them value for the higher electric rates they’ll pay along with everyone else, Progress will soon present the utilities commission with a proposal similar to the Neighborhood Energy Savers program in Florida. That plan offers free home energy audits coupled with $150 worth of on-the-spot free efficiency upgrades (such as caulking, lightbulb replacement, weatherstripping, hot water heater insulating blankets, and low-flow showerheads) to selected neighborhoods where customers live at less than 150% of the poverty level.
Lee Mazzocchi, vice president of electricity distribution, returned to CEAC to update the council on SmartGrid, a plan to increase real-time monitoring of grid status and communications between suppliers, dispatchers, and end users of electricity. Phase 1 of the project, currently in the early stages of implementation, allows tighter regulation of delivered voltage and works with EnergyWise to begin the process of enabling dispatchers to regulate peak demand. Later phases of SmartGrid will build on these advances and eventually include electrical storage capacity (batteries or equivalent). Phase 1 carries a $260 million price tag. When fully implemented a few years from now, it should produce annual system-wide savings of 247 MW. The WNC share will be a $23 million investment and a projected 20 MW savings. According to Mazzocchi, early SmartGrid results show better than expected effects on peak demand and underlie Waters’ improved WNC projections for 2015.
Since Phase 1 relies heavily on slight reductions in voltage delivered at the outlet, I asked Mazzocchi why Progress isn’t planning to hold voltage near the regulatory minimum of 114 volts at all times (the acceptable regulatory range is 114-126 volts). Mazzocchi replied that the question is actively debated in utility circles. In his opinion, voltage reductions should be reserved for periods of peak demand because low voltage might not actually reduce generation needs on a 24-hr basis. For instance, motors may lose efficiency at lower voltages and have to run longer in consequence.
The nuclear option
A Progress Energy press release announcing that contracts have been signed for the construction of two new nuclear reactors in Levy County, Florida, provoked a flurry of emails between CEAC members prior to the council meeting. Richard Fireman started the ruckus with a message referencing recent articles in Time and the Atlanta Journal-Constitution that raise financial flags about new investments in nuclear power. Dave Hollister expanded the objection by distributing a report from the Oxford Research Group suggesting that a nuclear renaissance makes bad sense for other reasons as well, not least of which is a debunking of the common claim that nuclear power is carbon-free.
In the meeting, Paul Szurek said it’s hard to know how to understand reports about greenhouse gas emissions associated with various products and technologies. “It’s important to look at all these alternatives holistically, over the entire lifecycle.” Maggie Ullman agreed, saying there is no universal procedure for determining what should be counted in lifecycle calculations of energy use and greenhouse gas emissions. Szurek said he’s even seen an automotive analysis purporting to show that the lifecycle energy cost of a Prius is higher than for an average conventional automobile.
To discuss the general topic of Progress and nuclear energy, Sipes brought in Bob Kitchen, who manages nuclear plant licensing for the company. Kitchen opened by reiterating the line about nuclear plants producing few greenhouse gases but was immediately forced to acknowledge that he was referring only to the power generation phase of the nuclear cycle.
He then addressed the state of affairs in Florida. “Does signing the contracts mean we’ve made the final decision in Florida? No it doesn’t. Does it mean we’re serious about the possibility? Yes, it does.” Kitchen went on to describe general features of the greenfield coastal site near existing nuclear and fossil fuel plants at Crystal River. The new reactors, he said, would enable Progress to retire 800 MW worth of coal-fired generation. He praised passive safety features in the Westinghouse design. Ed. note—While the Westinghouse AP1000 seems to be a popular design choice for utility companies here and abroad, none have yet been built. The world’s first AP1000 is scheduled to go on line in Sanmen, China, in 2013.
Progress is also in the process of considering two new Westinghouse reactors for the Shearon Harris facility in North Carolina. I asked Kitchen if the Levy County decision means we can anticipate Shearon Harris contract signings in the near future. He didn’t think so, saying the supply situation is more acute in Florida.
Kitchen responded to my raised eyebrow about a current construction cost estimate of $14 billion, identical to one the company gave a year ago, by saying agreements on some of the major costs were reached last year and still stand. Sipes said cost remains Progress’s greatest concern regarding new nuclear power
Although no final decision to build the Levy County reactors has been made, this month Florida ratepayers will begin paying a portion of the project costs. I contacted Tim Leljedal, a spokesman for Progress-Florida, who told me that a residential customer using 1000 kWh per month will see a monthly charge of $11.42 directly due to the Levy County nuclear project.
North Carolina also allows utility companies to bill customers for construction work in progress (CWIP) regardless of whether the projects ever generate a watt of power. (Differences in state law may mean CWIP charges to North Carolinians are different from those billable in Florida.
What about electric rates after new reactors go on line? A recent report in the energy industry press estimated operating costs for a new nuclear plant at thirty cents per kilowatt-hour for twelve or thirteen years until construction costs are paid down. Costs might then drop to eighteen cents per kWh. Billed rates would, of course, be higher. Leljedal didn’t have information on what Florida ratepayers might be charged for Levy County nuclear power. As for the costs given in the news story, he said, “Without knowing the derivation, we can’t really comment.”
Coloring outside the company lines
Robin Cape, another participant in the nuclear email flurry, had asked to hear other perspectives on nuclear power at the January meeting. When facilitator Steve Cochran broached the subject, Sipes said he’d vetoed the idea due to a full agenda and the limitations of CEAC’s advisory role. Cape said she needed more information before she felt comfortable offering Progress any advice on nuclear energy. She volunteered to arrange an educational session to hear experts such as John Wilson from the Southern Alliance for Clean Energy and Lou Zeller of the Blue Ridge Environmental Defense League. Michael Shore, saying he didn’t know much about nuclear, thought it would be a good idea.
After the meeting, Cape told me she understood Sipes’ decision to nix her request. She planned to proceed with organizing one or more educational sessions for CEAC members aimed at broadening the council’s familiarity with contentious, complicated, or community-centered topics.
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Fiddling While Rome Burns
Last winter, January, 2008, Progress Energy customers in Western North Carolina set a new record for peak electric demand: a one-hour average of 984 MW. Such numbers weren’t expected until 2011. This winter, on the morning of January 16th, WNC blew that mark away. According to the revised estimate of Progress system planner Sam Waters, we burned through 1050 MW, far surpassing the company’s peak demand forecast for 2015.
The news set a grim and occasionally contentious tone for the February 13th meeting of Progress Energy’s Community Energy Advisory Council (CEAC). Waters described how company dispatchers managed the demand spike using existing local resources, a soon-to-expire contract from American Electric Power (AEP) for power imported from coal-fired plants located in Indiana, a power transfer from the Progress eastern region and a spot purchase of 100 MW from Duke. Progress still had about 200 MW of juice available in reserve, Waters said, but had one of the coal-fired units at Lake Julian gone down, the system would have been close to maxing out.
Waters did not take the opportunity to announce plans for a peaking power plant in Buncombe County. Instead, he spoke about a new pact with Duke Energy. Beginning in 2010, Progress may increase the amount of electricity shifted to WNC from eastern generating sites via Duke transmission lines from 136 MW to 300 MW. Waters cautioned that Duke will be allowed to interrupt Progress power transfers for up to 1200 hours/year during the first four years of the new contract. If such an interruption occurs during a WNC demand spike, the company could find itself scrambling.
Progress issued a press release concerning the January 16th spike, but the Mitchell News-Journal, based in Spruce Pine, may have been the only mainstream media to pass the information on to readers. Martha Thompson, community relations manager for Progress, expressed frustration about the lack of coverage but told me the company has been courting the Asheville papers for months. She doesn’t know what more Progress can do to impress them with the seriousness of the issue.
Taken aback by the new peak demand record, council members weighed in with their own frustrations. Robin Cape, recalling that local opposition doomed the Woodfin peaking plant proposal, decried the apparent local comfort with importing coal-fired and nuclear power from elsewhere. Also, “Per capita electric consumption in the United States is very high,” she said. “[CEAC] isn’t really addressing that.” She laid part of the blame for that at the doors of utility companies. “We’re wedded to entrenched power sources. This isn’t just a customer problem. They don’t have much choice about how their power is generated.” She contrasted the current model for front-loading costs of solar energy to how people are charged for cell phones. “If you charged people the 20-year cost upfront for their cell phones, nobody’d have a cell phone.”
Michael Shore understood the inherent slowness of legislative and bureaucratic processes, but complained that the timeline for reform is disappointing. Vernon Daugherty groused that heating and cooling controls in schools are 30 years out of date. “You know that on the morning the schools were closed the buildings were heated like there were students there, while the people stayed home and turned on their TVs.”
Dave Hollister pled with Thompson and western regional VP Robert Sipes to be clearer with the public about the consequences of consumption as usual. “Your press release didn’t express any concern about the new record. If we communicate honestly with the public they’re more likely to do something. If you don’t communicate that we need to cut demand, we’re going to wind up with a new peaking power plant. People don’t know. They’d do something if they did.”
Paul Szurek didn’t entirely agree. “I don’t know anybody who’s not aware of climate change and that we should reduce electric consumption,” he said. But it’s not happening. Progress is putting programs forward, but what are we doing outside this room?”
Sipes chimed in to liken the problem to being overweight. “Pushing away from the table is hard.” He announced that Progress has created a new group called “Customer Behavior” intended to learn what will get customers to push away from the table.
Space and water heating comprise the bulk of WNC’s residential winter peak demand. Jake Butcher said that energy efficiency is relatively easy to mandate in new construction. Things aren’t that simple for existing structures.
Hollister commented, “I’m optimistic about humanity, but we’re hitting a wall. The next steps will be difficult. [CEAC] needs to morph to a deeper discussion about how to move forward. Progress needs a seat at the table, but it should not be the table. We have to shift this forum to more group consciousness.”
Maggie Ullman, speaking for the Government sector, said that the City of Asheville is soliciting energy efficiency and conservation proposals suitable for submission to the federal government for stimulus bill funds. A submission form and links to the legislative specifications may be found on the city’s website. She said the city is also reviewing its property holdings to determine how they can contribute to efficiency and conservation efforts. Cape told council members, “Weatherization will be big. Read the stimulus plan and tailor proposals to fit it.”
Representing the Business & Industry sector, Terry Albrecht reported that plans for the first commercial and industrial forum on upcoming Progress Energy demand-side management programs are moving forward, but the date is uncertain. Buddy Gaither emphasized the importance of business as a means of spreading the word on conservation and efficiency.
Vernon Daugherty, for Education, said his subcommittee hopes to build on existing 3rd grade “Ecoteam” programs, extending them to new districts and broadening the focus to include energy use. In future years he also hopes to bring in other elementary school grade levels, perhaps two grades at a time. High school curriculums might need to be separately designed, he said.
Butcher, speaking for the Home & Community subcommittee, said the group has narrowed its focus to publicizing Progress’s new demand-side management programs. He offered no specifics.
A regulatory perspective
North Carolina residents are represented before the regulatory “court” that is the state’s utilities commission by a body called the “public staff.” James McLawhorn, director of the public staff’s electric division, made the trip out from Raleigh to address CEAC questions about state bureaucracy impacts on energy initiatives.
McLawhorn, who’d sat through the earlier discussion, began by commiserating with frustrations about the pace of regulatory action. Negotiations about cost recovery formulas for efficiency and alternative energy programs took months for the public staff and Progress to conclude, but were completed before Christmas. The utilities commission has yet to make a final ruling on the agreed plan.
Sipes probably spoke for several council members when he asked McLawhorn’s opinion of tiered rates, charging customers incrementally more for higher levels of electric consumption. McLawhorn replied that he didn’t foresee any wholesale conversion to a tiered rate structure in the near future. Pending smart electric meters and other technological advances, he said, it would be difficult for residential customers to “take advantage of those rates.”
Albrecht complained about the relatively miniscule amount of money [GS 62-133.8(h)(4)], something on the order of $20 million, that NC electric utilities may charge customers for alternative generation projects, noting particularly a provision in the law and subsequent state rules [see Rule 8-69(a)(3)] allowing medium-sized and larger commercial and industrial customers to opt out of paying for the programs. They need only claim to be implementing their own unspecified efficiency initiatives. Such a policy, Albrecht said, imposes unrealistic caps on available funds and constitutes an impediment to progress in North Carolina.
Hollister noted that the commission had recently rejected a solar project from Duke and wondered why. McLawhorn said it was determined to be too expensive, adding that a single high-dollar project might use all the money available under Duke’s funding cap. Hollister shot back, “Then raise the cap.” McLawhorn said the utilities commission can’t do that because the cap limits are imposed by law. They were a price Senate Bill 3 proponents paid to avoid an opposition lobbying from industry groups.
Hollister asked about utilities commission progress with “net metering” issues, the process by which third parties may sell electricity to utility companies. McLawhorn said the commission hasn’t made a final decision. Ditto his response to a question from Cape about making combined heat and power generation more financially attractive for industry.
Hollister sensed “resistance within the utilities commission to alternative energy.” He scoffed at the idea that nuclear and fossil fuel generation meet the commission’s “least cost” criterion when the full costs to people and the planet are considered. Solar and wind power are already less expensive than nuclear, he said. By the way, he concluded, where are those formulas? Why can’t people see the numbers?
McLawhorn said “least cost” calculations are based on sophisticated proprietary software programs leased by the utility companies, a point seconded by Waters. “We aren’t allowed to give out the formulas or spreadsheets,” Waters said. “But if you want to watch while we’re running the program, you’re welcome to.” Cape said it sounded like buying a product based on research by the salesman. McLawhorn replied that the utilities commission has the authority to ask for modifications to the assumptions utility companies use in their calculations. For example, McLawhorn said, referring to Duke Energy’s controversial coal-fired plant project at Cliffside, “At Cliffside we needed baseload power. Wind farms were not an option.”
After the meeting I asked McLawhorn to clarify this statement about wind farms. Is there a list of generating technologies considered appropriate for baseload power (electricity available on a fulltime basis)? McLawhorn said, “There’s no hard and fast rule. Typically we consider generation with a capacity factor greater then 60% (percentage of the rated capacity actually produced over the course of an average year) to be baseload.” Coal and nuclear meet that criterion. Wind and solar, due to the intermittent nature of their power sources, do not.
In response to those who say distributed generation and other factors expand the possibilities for alternative technologies, he said, “For baseload electricity we can’t think the power’s going to be there. We have to know it is.” It wouldn’t be good enough to count on coastal wind farms or a sunny day to make up for a lack of wind to turn the blades of mountain windmills. Wind or solar generators would have to be backed up by fast-start combustion turbine plants—such as the defeated Woodfin plant—to adequately address contingencies. McLawhorn said combination plans like this would be a very expensive solution to baseload power generation.
Changes in the wind?
For only the second time in CEAC history, the council will skip a monthly session, facilitator Steve Chochran said. Rather than a meeting in March, he and Progress officials will conduct extensive one-on-one sessions with council members to gather impressions of how the council is going and how best to proceed from here. Hmm.
Unexpected pollutant releases from Lake Julian?
There was no time to discuss the recent windblown dispersal of “cenospheres,” tiny gas-filled combustion byproducts of burning coal, from the ash pond at Lake Julian. A report of soil samples—presumably in the vicinity of the same ash pond—contaminated with high levels of arsenic didn’t make the agenda at all. Arsenic isn’t included in the list of pollutants Progress reported to the EPA in 2006, the most recent year for which toxic release data are available. Thompson told me she didn’t know about any arsenic at the power plant or what to think about the report. The company hoped to get more specific information on sample locations and methodology. She also said Progress chemists were looking into the matter.
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