November, 2007
Nov. 8, 2007
Capacity auction accepts demand resources
ISO New England Nov. 6 qualified demand resources
totaling 2,483 MW as eligible to bid in its first
forward capacity market auction.
Pro-conservation groups have carefully watched
development of the new auction because it marks the
growing treatment of efficiency as a market resource.
In all, the ISO accepted 227 new projects, totaling
6,102 MW of demand and supply resources, to participate
in the auction, scheduled for February 2008. Winners
will help meet New England’s installed capacity
requirement, or ICR, for June 2010 through May 2011.
The demand response resources that were selected to
participate include energy efficiency, load management,
and distributed generation. Energy-efficiency projects
make up over 590 MW of that total. Proposals from both
demand- and supply-side resources are concentrated in
Massachusetts and Connecticut, the two states with the
highest electricity demand in New England.
The ISO had received applications from parties with
projects totaling 12,000 MW. The grid operator chose the
winners based on their ability to provide useful
capacity and assist the overall ISO system.
The Forward Capacity Market was developed by ISO New
England, the six New England states, and industry
stakeholders to promote investment in demand- and
supply-side resources.
Further information is available in the ISO’s Federal
Energy Regulatory Commission filing at
http://www.iso-ne.com/regulatory/ferc/filings/2007/nov/index.html
Efficiency reduces carbon restriction costs
Energy efficiency can reduce carbon restriction costs--by four to six times--under carbon reductions established in the Regional Greenhouse Gas Initiative, according to a leading environmental organization.
Environment Northeast uncovered the savings in its analysis, “Modeling Results &
Setting the Cap Level,” a document that looks at the multi-state cap-and-trade program designed to reduce carbon emissions in Northeast and Mid-Atlantic states.
Known as RGGI (pronounced Reggie), the program is considered the most advanced of the carbon cap-and-trade programs being developed by various states. RGGI requires that the states reduce greenhouse gas emissions to 1990 levels by 2010; and to 10 percent below 1990 levels by 2020.
“Increased energy efficiency investments, which are cost-effective and save consumers money by reducing their energy consumption, also reduce the market clearing price for power and reduce the cost of electricity for all consumers in the region; the larger the efficiency investment, the larger the reduction in the wholesale electric price,” said the report.
The report projects increases of wholesale electric prices of about $1-2/MWh or 1-2 percent, under RGGI. But combining this with a doubling in efficiency investments yields a reduction in prices, the report said.
Earnings Reports
Comverge revenue up 211 percent
Revenues soared 211 percent for Comverge in the third quarter compared with the same period in 2006, according to an earnings report released Nov. 6 by the New Jersey demand-response company.
"Comverge saw dramatic expansion in its business and in the demand response and the energy efficiency sectors overall in the third quarter,” said Robert Chiste, Comverge’s chairman, CEO and president. “Through Comverge's disciplined execution and two market-defining strategic acquisitions completed this quarter, we continue to establish our foundation for accelerated growth in 2007 and beyond. “
Chiste credited Comverge's 272 employees for the strong quarter. The company added 155 new employees this year, more than doubling its workforce.
Third quarter revenues were $10 million, compared with $3.2 million in the third quarter of 2006. Revenues for the third quarter of 2007, excluding Enerwise, were $5.6 million, a 74 percent increase compared with the third quarter in 2006. Net loss for the third quarter of 2007 was $5.3 million or $0.28 per share, compared with a net loss of $4.5 million or $1.39 per share for the third quarter of 2006.
The company’s business highlights for the quarter include:
ˇ Completed acquisition of Enerwise Global Technologies, which allows Comverge to dramatically expand its offerings for commercial and industrial consumers
ˇ Completed acquisition of Public Energy Solutions, which allows the company to expand into base load capacity reduction
ˇ Increased by 110 percent contracted revenues from $122 million to $257 million year-over-year
ˇ Increased contracted capacity 145 percent, as measured in megawatts under long-term capacity contracts, from 220 to 539 MW year-over-year.
Comverge recently won a long-term 130-MW virtual peaking contract (VPC) with Connecticut Light and Power. The deal allows Comverge to use a portion of its existing assets from its expiring ISO New England contracts. The company also secured a 50-MW long-term VPC contract for commercial and industrial capacity with Southern California Edison. Finally, it entered into a multi-year hardware, software, and services contract with Tampa Electric Company to provide a two-way fully automatic metering and price based demand response system.
The company forecasts its full-year 2007 revenues to range from $50 million to $55 million, a year-over-year increase of about 55 percent. It expects further acceleration in 2008.
EE state news
California
California utilities must prepare single plan for energy efficiency under new order
California utilities must prepare a single strategic plan for energy efficiency through 2020 under the California Public Utilities Commission’s (CPUC) Oct. 18 order affirming cost-effective energy efficiency measures as the state’s highest energy priority.
Such a plan, which would not be limited by the utilities’ jurisdictional boundaries, would incorporate the ideas and resources of other market and government actors, such as local governments, manufacturers and businesses, said the CPUC.
Maximizing energy savings opportunities requires that market players and local governments be actively engaged in planning and portfolio development, said the CPUC in its order.
Some of the parties argued that such coordination is necessary in order to improve compliance with building codes and to pursue more stringent building standards than now required by the state.
The Sacramento Municipal Utility District (SMUD) pointed out that collaboration would increase customer participation, reduce costs and provide a package of integrated services for the customer, according to the order.
“At a minimum, all parties agree that California (and likely other regions as well) will achieve far greater savings if the IOUs and the Commission actively engage in coordinated, long-term planning,” said the order.
Utilities now develop a portfolio of energy efficiency program to achieve adopted targets. This approach is limited in its ability to achieve long-term savings, said the CPUC.
The CPUC directed the utilities to submit a single, joint, statewide strategic plan in addition to their individual applications for the 2009-2011 energy efficiency program portfolios.
“The Plan must be specific enough to serve as a roadmap to meaningful action in the near term, while providing direction for future program design and development through 2020 and beyond. Each utility's 2009-2011 proposed program portfolio should reflect the Plan, as well as circumstances unique to the utility, its customer base, service territory, and other factors,” the commission said.
Connecticut
Customer-side DG grants approved
The Department of Public Utility Control has approved grants for nearly 300 MW of customer-side distributed generation, including several combined heat and power or “CHP” plants.
CHP is considered a highly efficient form of generation because it uses one fuel to produce two sources of energy: heat and electricity. Because it is so efficient, Connecticut’s renewable portfolio standard includes a requirement that 4 percent of electricity sales come from CHP or energy efficiency measures by 2010.
In all, distributed generation projects totaling 413 MW have applied for the grants, and projects totaling 288 MW had won grants as of Nov. 2. The grants range from $200/kWh to $500/kWh. Winning projects must be no more than 65 MW in size.
New York
The Public Service
Commission on November 7 began seeking public comment on
a draft energy efficiency environmental impact
statement.
The document is the latest move in the state’s plan to
create an energy efficiency portfolio standard (EPS)
that reduces consumption by 15 percent.
The commission staff found that the portfolio standard
would benefit the environment in many ways, but could
create some secondary harm. The purpose of the review
is to identify and address the potential secondary harm.
Further information is available at www.dps.state.ny.us,
File Room, Case 07-M-0548, or at www.dps.state.ny.us/Case_07-M-0548.htm,
the web page created especially for the EPS proceeding.
***
Nov. 1, 2007
ACEEE report: Portfolio standard would save $35 billion
A national renewable energy standard that includes energy efficiency could save consumers up to $35 billion by 2030, according to a study by the American Council for an Energy-Efficient Economy (ACEEE).
The Washington, D.C. group released an analysis Nov. 1 of a proposal before the US House of Representatives (HR.3221), which would require that 15% of US electricity be from renewable energy by 2030. States could use efficiency measures to meet up to 27% of that requirement.
The analysis found that the renewable energy standard, or RES, would reduce carbon dioxide emissions by 121 million metric tons, avert usage of 22 billion kWh of electricity, create 41,000 new jobs, and avoid construction of 16,000 MW of conventional power plants by 2030.
“This analysis dashes the notion that RES raises electricity rates. Our modeling shows that the RES reduces power prices, customer bills, and capacity needs in all parts of the United States,” said Bill Prindle, ACEEE policy director. “Since renewable and efficiency resource standards also cut carbon emissions, they should be the cornerstones of U.S. energy and climate policy for the power sector.”
Savings would be even greater if Congress pursued what ACEEE calls a 15-15 policy – a more aggressive package of renewable and efficiency standards that would require 15% of electricity come from renewables and a separate 15% from energy efficiency. Under this scenario, the country would avoid construction of an additional 105,000 MW of new power plants, reduce electricity prices by up to 0.7 cents per kWh, save another 480 billion kWh of electricity usage per year, and reduce annual carbon emissions by another 590 MMT per year. The “15-15” policy also would create an additional 166,000 new jobs in 2030.
The report noted that 25 states, plus the District of Columbia, have renewable portfolio standards and 13 states have energy efficiency portfolio standards. It is necessary to pursue both strategies in a coordinated way, ACEEE says. Efficiency will reduce use of conventional power plants, so that renewables can become a larger part of the energy mix. By displacing conventional fossil fuel generation, renewable energy will reduce the country’s carbon footprint.
In addition, a partnership between efficiency and renewables helps avert concerns that some states lack enough renewable energy resources to meet a portfolio standard. Allowing states to achieve part of their requirement with efficiency relieves this concern by giving the states more flexibility.
A summary of the analysis results is available at http://www.aceee.org/energy/national/RESanalysis11-1.pdf.
ACEEE plans to release a full length report with detailed results in December.
Earnings Reports
EnerNOC reports record third-quarter earnings
EnerNOC, a Massachusetts-based company that provides demand response services, reported record earnings for the third quarter, as it strengthened its position in existing markets and expanded to new geographic locations.
Revenue for third quarter 2007 was $19.1 million, up from $11 million for the same period in 2006, an increase of $8.2 million, according to the Nov. 1 report. This represents the highest quarterly revenue performance in company history and brings total revenues for the nine months ending Sept. 30, 2007 to $41.1 million.
Demand response services accounted for most of the third quarter growth, according to the company.
"We are very excited about the growth that we achieved this quarter," said Tim Healy, the company’s chairman. "Our core demand response business experienced continued momentum in existing markets and we were able to expand into new geographic regions. In addition, we continued to develop our technology infrastructure, add to our deep talent base, and execute along our strategic roadmap to deliver innovative energy management solutions to our customers."
Business highlights for EnerNOC’s third quarter include:
ˇ Purchase of MDEnergy, a leading energy procurement services provider, for $7.9 million in cash and EnerNOC common stock, as well as some performance-based future payments
ˇ Approval by the Florida Public Service Commission of EnerNOC’s exclusive 25-MW contract with Tampa Electric Company
ˇSigning a 5-year demand response capacity contract with Southern California Edison to provide, demand response capacity, pending regulatory approval
ˇ Approval by the New Mexico Public Regulatory Commission of a 30-MW long-term demand response capacity contract with Public Service Company of New Mexico
ˇ Growth of commercial, institutional, and industrial demand response customers served by EnerNOC to 691 customers across 2,034 customer sites, up from 595 customers across 1,852 sites, as of the end of the second quarter of 2007
ˇ Expansion of demand response megawatts under management to approximately 918, an increase of approximately 162 MW during the quarter
Editor’s Note: Watch for an earnings report Nov. 6 from Comverge, a New Jersey-based demand-response company.
EE state news
Florida
-- Tampa
Electric Company has signed a multi-year deal for a
price response program offered by Comverge for
residential customers. The program is expected to
produce 12 MW of demand response capacity over three
years.
The price response system allows two-way communication
technology for demand response and automated meter
reading. Customers can adjust their energy usage based
on price changes during the day and seasonally, using a
programmable thermostat and the Internet.
"Demand Response is an important energy component to a
utility's resource plan," said Robert Chiste, Comverge
president and CEO. "Our Maingate Home technology will
provide Tampa Electric a cost-effective and
environmentally responsible solution to implement a
price based demand response solution - one that allows
the end customer choice through a state- of-the art,
automated energy management system for their home."
He
added: "Our Smart Grid Solutions Group again has
demonstrated its ability to provide cutting-edge clean
energy demand response solutions to utilities across the
country, and we believe will continue to be a leading
provider of demand response solutions as major Advanced
Metering Infrastructure initiatives are rolled out
across North America using time of use and critical peak
pricing models to achieve demand response."
Maryland --The state Department of General Services has signed on with NORESCO, of Westborough, Mass., for energy efficiency performance contracting services that are projected to save Spring Grove Hospital Center $36 million over 13 years. The state expects to see the hospital’s annual utility costs drop by 47.9 percent and its annual energy consumption by 60 percent.
The savings will fund facility improvements at no upfront cost to taxpayers, because savings realized from reduced energy consumption will pay for equipment investment, installation, and related financing. NORESCO contractually guarantees project savings over the 13-year term. The amount of the construction and maintenance contract awarded to NORESCO is $27.6 million.
The project involves complete replacement of the existing main heating plant and steam heating system with 33 new boilers, as well other efficiency improvements throughout the campus.
NORESCO is one of the largest U.S. energy services companies specializing in the development, design, construction, financing, and operation of energy and environmental efficiency projects, performance contracting, and central energy plants.
New York – The state Public Service Commission will hold its next roundtable discussion on energy efficiency portfolio standards Nov. 6 in New York City. The discussions bring together community and business leaders committed to addressing energy efficiency and conservation.
New York is considering a portfolio standard to help it achieve a 15 percent reduction in electricity usage below 2015 forecasted levels. The commission describes the goal as one of the most ambitious among the states.
New York has seen a steady increase in energy usage, and the trend is expected to continue. Electricity sales increased 1.3 percent and natural gas usage 2.2 percent between 2004 and 2005, according to the commission. The state expects electricity usage to be about 13 percent higher by 2015 than it is today.
The contact for registration is Pamela Carter 877-661-9223, energy_efficiency@dps.state.ny.us. Information about the energy portfolio proceeding is available at www.AskPSC.com.