Strategic Thinking About Vermont’s Electricity Future Michael H. Dworkin, Chairman Vermont Public...
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Transcript of Strategic Thinking About Vermont’s Electricity Future Michael H. Dworkin, Chairman Vermont Public...
Strategic Thinking AboutVermont’s Electricity Future
Michael H. Dworkin, Chairman
Vermont Public Service Board
University of Vermont
April 20, 2004
Presentation Outline
1) Three Good Things (and One Bad)
2) Vermont’s Electric Energy Needs
3) Major Options -- and Some Pros and Cons of Each
4) Future Policy Options – Federal, State, and the PSB
Three Things to be Proud of Since 1984 peak demand in VT has risen by 132 MW, all
met by new, in-state renewables
• 40 MW - small hydro, IPP, WEC, GMP • 88 MW - McNeil and Ryegate wood chip plants• 6 MW - Searsburg wind project• Small landfill gas projects – Brattleboro and Burlington
Vermont’s energy efficiency efforts, including Efficiency Vermont, have saved over 87 MW of demand
Bottom line – current portfolio mix is very high renewables, and America’s lowest in CO2
But… At a PriceRemember! Price does not equal Cost, Rates do not equal Bills
TotalAverage Revenue (cents) per Kilowatthour, YTD December, 2001
9.6 10.010.7 11.0 11.0 11.1
0
2
4
6
8
10
12
14
CT ME VT RI NH MA
Vermont’s Electric Needs 1,000 MW peak demand now
Growing at about 2 MW per year since 1992; 100 MW 1984-92, But 550 MW will need to be replaced in 2012 - 2015 timeframe!!
Current Sources Vermont Yankee - about 30% demand and 36% energy
• Contract Expires 2012 Hydro Quebec - about 30% demand and 32% energy
• Contract expires from 2012 to 2020, most expiring in 2015 Independent Power Producers - about 10% demand and 5%
energy (all renewable) • Contracts expire 2008 to 2020+
Other sources - about 30% of demand and 27% of energy
Residential Electricity Use kWh per customer per year, 1940-2001
0
2,000
4,000
6,000
8,000
10,000
12,000
1940
1942
1944
1946
1948
1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
kW
h p
er
cu
sto
me
r p
er
ye
ar
USA New England Vermont
Net Metering Statistics 108 applications, 107 approved
• 80 photovoltaic only
• 28 wind or wind and photovoltaic
– 24 uncontested – only 4 contested applications
– 3 approved by Board
– 1 denied by Board – because it was proposed directly in front of a neighbor’s picture window - denial upheld by Supreme Court
Vermont’s Electric Needs
Major Options: Some Pros and Cons
Efficiency and Conservation
VT Yankee Shift to Fossil Plants New Cogen in VT Spot Market
Major In-State Renewables
HQ Connecticut River
Dams Small Distributed
Generation Blended Balance
Efficiency and Conservation Should be cost-effective
Probably won’t meet all new demand
Keeps jobs and $ in VT
Excellent climate-change effects
Power Costs vs. Efficiency Vermont Costs for 2002 - 2/2004NE-ISO Average Monthly Price
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Cen
ts p
er K
illo
wat
tho
ur
EfficiencySavings:
from1 cent/KWh(Jan 2002),
to more than6 cents/KWh(Jan 2004).
Delivered Cost of Wholesale Power * Wholesale Spot Market Price Efficiency Vermont, Contract Price
Major Options: Some Pros and Cons
Efficiency and Conservation
VT Yankee Shift to Fossil Plants New Cogen in VT Spot Market
Major In-State Renewables
HQ Connecticut River
Dams Small Distributed
Generation Blended Balance
Vermont Yankee VY license extension still unresolved Assumes new VY contract acceptable Waste disposal issues still unresolved Effect of NRC safety rulings still unknown Price should probably be competitive Good climate change effects, compared to
others Some jobs and $ in VT
Major Options: Some Pros and Cons
Efficiency and Conservation
VT Yankee Shift to Fossil
Plants New Cogen in VT Spot Market
Major In-State Renewables
HQ Connecticut River
Dams Small Distributed
Generation Blended Balance
Out-of-State Fossil Plants
Price probably competitive; but could be volatile
Very poor climate-change and health effects
Exports jobs and $ Moderate transmission constraints
Major Options: Some Pros and Cons
Efficiency and Conservation
VT Yankee Shift to Fossil Plants New Cogen in VT Spot Market
Major In-State Renewables
HQ Connecticut River
Dams Small Distributed
Generation Blended Balance
VT Gas-Fired Cogen Plants
Siting may be difficult Requires new gas pipeline capacity Price could be high and volatile Keeps some jobs and $ in VT Poor climate-change effects Could have high efficiency, if part of
district heating project
Major Options: Some Pros and Cons
Efficiency and Conservation
VT Yankee Shift to Fossil Plants New Cogen in VT Spot Market
Major In-State Renewables
HQ Connecticut River
Dams Small Distributed
Generation Blended Balance
Spot Market Purchases
May have high price risk (or at least may be highly volatile)
Poor climate-change effects Exports jobs and $ (most large scale
supply out-of-state)
Major Options: Some Pros and Cons
Efficiency and Conservation
VT Yankee Shift to Fossil Plants New Cogen in VT Spot Market
Major In-State Renewables
HQ Connecticut River
Dams Small Distributed
Generation Blended Balance
Major In-State Renewable Plants – Combination Wind, Biomass
Possibly higher, but predictable cost Less exposure to vagaries of market and fossil price
changes Availability of sufficient biomass resources may be an
issue Keeps jobs and some $ in VT (could help stimulate in-state
renewable businesses) Excellent in terms of climate-change effects Some already at proposal stage (proposed wind, and WEC
landfill gas, investments) Limited in-state hydro site options; but retrofit potential
looks significant
Major Options: Some Pros and Cons
Efficiency and Conservation
VT Yankee Shift to Fossil Plants New Cogen in VT Spot Market
Major In-State Renewables
HQ Connecticut River
Dams Small Distributed
Generation Blended Balance
HQ System Power
HQ’s path to expansion is unclear, given internal Quebec issues
Price may be competitive Good climate-change effects Exports jobs and $
Major Options: Some Pros and Cons
Efficiency and Conservation
VT Yankee Shift to Fossil Plants New Cogen in VT Spot Market
Major In-State Renewables
HQ Connecticut
River Dams Small Distributed
Generation Blended Balance
Connecticut River Dams
Stable price (FDR’s lesson) Environmentally neutral, assuming
someone would operate them Known technology; limited cost risk Purchase price unknown, size of offered-
asset unknown; each could be determinative
Major Options: Some Pros and Cons
Efficiency and Conservation
VT Yankee Shift to Fossil Plants New Cogen in VT Spot Market
Major In-State Renewables
HQ Connecticut River
Dams Small Distributed
Generation Blended Balance
Small-Scale Distributed Generation
Price may be issue Probably won’t meet all new demand Will siting issues limit broad wind
deployment?? Good to excellent climate policy Good for jobs and $ in VT
Major Options: Some Pros and Cons
Efficiency and Conservation
VT Yankee Shift to Fossil Plants New Cogen in VT Spot Market
Major In-State Renewables
HQ Connecticut River
Dams Small Distributed
Generation Blended Balance
Blend Incremental Capacity from Several of Above
Some new transmission may be required Advantages and disadvantages blended Key is how to weight the blending! We CAN tip it towards price stability,
low pollution, independence, and job creation: through far more renewables and efficiency.
Road to the Future: Federal, State, and PSB Policy Options
Federal Policies Ensure that wholesale markets let renewables
compete: Standard Market & Interconnection Rules National Renewable Portfolio Standard Continued federal funding of renewables research,
including biomass gasification Encourage creation of a “Green Buildings” Incentive
Program (new construction program that incorporates renewables)
Tax credit program for renewables, including extension of wind production tax credit
State Policy Options
Vermont Renewable Energy Fund could:• Provide equipment buy-down $• Give production credits ($)• Provide low interest loans• Focus on: job training, education, and project
guidance
Pass a Renewable Portfolio Standard• 15 States with RPSs: AZ, CA, CT, HI, IA, MA, ME,
MN, NV, NJ, NM, NY, PA, TX, and WI; (PSB recommendation to Vt legislature)
Public Service Board Options Reactivate utility Integrated Resource Planning: Plan
replacement of existing and new supply Encourage utilities to adopt voluntary “Green Tags”
programs• Example: NativeEnergy and GMP
Review proposed utility “Green Pricing” programs• Example: CVPS proposal now pending
Explore Renewable Funds with residual receipts from Vermont Yankee sale (already $1.345 million, might be several million more)
Public Service Board Options (cont.)
Activate Vermont disclosure statute Brochure to help site small wind turbines Explore more net metering
• Farm Group Net Metering
Recognize value of commercial-scale wind• Board has said it will consider societal benefits of wind
production when deciding whether an adverse aesthetic impact is “due” or “undue”
• Motion to reconsider that concept is now before the Board
1) Reliable, efficient, cost-effective electric power
2) Build jobs in VT Renewables and Efficiency Sectors:
Create our “tool & die industry” for the 21st century.
3) Build towards real power options for Vermont by 2012
Three Key Goals for All of Us