Institute for Sustainable Energy Eastern Connecticut State University Energy Issues Driving Energy Prices in Connecticut CT Chapter National Association of Housing and Redevelopment Officials August 27, 2007 Presented by William Leahy Institute for Sustainable Energy At Eastern Connecticut State University

Agenda Energy Supply and Demand Issues Assessing Savings Opportunities Competitive Purchasing & Aggregation Utilizing Efficient Technologies Finding Funding for your Projects

CT’s Energy Profile Source: DOE EIA

How We Use Energy Source: DOE EIA

The Shift to Natural Gas is On! Source: DOE EIA

1998 Electric Industry Restructuring Remains Regulated Competitive Market Deregulated Retail Customers Generation Transmission Distribution

How your Electric Cost is Divided Connecticut Department of Public Utility Control

Source: 2006 CT Energy Plan

Source: ISO-NE - Feb. 2006

PTF Map CT Transmission Lines & Generators Source: CT Siting Council 23

Peak Demand The Summer Peak Demand is over 20% of the total generation Requirement and less than 150 hours long. The Peak grew by over 7% each of the past two years http://www.ctenergy.org/images/2006Plan.doc\

The Red Zone!!! ”Connecticut may become a separate pricing zone for electricity if it does not control growth in use and demand and build 900 MW of Generation by the end of 2009” Energy use is growing by Less than 2% per year Growth in CT System Peak has grown by 7% two years in a row CT Peak grew from 6400 MW to 7400 MW in two years ISO Day-ahead Pricing

What is CT doing about it? 1998 Connecticut Energy Efficiency Fund 1998 Connecticut Clean Energy Fund 2005 Climate Change Action Plan 2005 PA 05-1 Act for Energy Independence 2006 Distributed Generation and CHP 2006 ISO NE Demand & Price Response 2007 PA 07-272 Act for Energy Efficiency 2008 Fuel Diversity & Biofuels

On the Road to Recovery Meeting 2010 capacity deficiency Energy Efficiency (60MW/yr) 180 MW Renewable Energy 100 MW RFP for New Supply 600 MW Demand Response 420 MW Distributed Generation 200 MW 1400 MW

Defining Demand Management Efficiency: Install equipment and systems that perform and use less energy Conservation: Not using energy consuming systems in order to reduce costs Load Management: Controlling your electric demand during on-peak periods Demand Response: Reduce your electric loads to help preserve system reliability (and get paid for it) Distributed Resource: Providing supply or demand management beyond the meter

Cost Reduction Strategies Energy Efficiency Commodity Purchases Distributed Generation (DG, CHP) Demand and Price Response (LM) Forward Capacity Markets (FCM) Green Building Design Renewable Energy Sources

Energy Efficiency is 67% Cheaper than ANY other Supply Option $0.000 $0.020 $0.040 $0.060 $0.080 $0.100 $0.120 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 $/kWh Levelized Electric Supply Cost in New England (includes generation, T&D capacity and line losses) Levelized Total Resource Cost of Energy Efficiency Source: NEEP

Lighting and Lighting Controls Lighting uses 25% of all electrical energy in the US. This is despite a 50%+ drop in connected lighting power per unit area since 1973. New Trends in Lighting CFLs T-5 Lighting Dimmable Metal Halide Light Emitting Diodes (LEDs)

Life Cycle Financial Analysis: Tale of TWO LIGHT BULBS: Energy Efficient Bulb: Longer life: 10,000 hours Uses less electricity: 14 W Costs $4 for one bulb Standard Bulb: Short life: 900 hours Uses more electricity: 75 W Costs $1 for one bulb At 15 cents per Kilowatt-hour…

Inefficient vs. Efficient Life-Cycle Cost of Two Light Bulbs: Inefficient vs. Efficient Save over $60 in lower electric bills over the life of a single lamp! Total Cost (Bulb + Energy) Hours of Use

New Generation of Technology T-5 90% efficient Two level dimmable electronic ballast Excellent color rendition Low and high-bay applications 3 lamp T8 w/85% efficient ballast = 94 watts 2 lamp T5 w/90% efficient ballast = 47 watts 50% energy and demand reduction Equal light output and lamp life

HVAC Systems Savings Opportunities Efficient Chiller or DX Unit DDC Controls Plate and Frame Economizer Efficient Fan Motor VFD on Pumps and AHU Heat Recovery http://www.purdue.edu/envirosoft/child/checklist/vent_m.htm

High Performance Building Standards Reduce operating costs 30% Solar Orientation and Daylighting requires fewer lights DDC Controls keep lights and HVAC off when not needed using schedule, motion and CO2 Energy Star appliances reduce energy costs Advanced building design techniques and superior insulation cuts heating & cooling expenses Heat recovery reduces overall heating costs Controlled Ventilation improves air quality Gray Water Reduces Water and Sewer Costs Life Cycle Analysis Reduces Maintenance Costs

www.CTSavesEnergy.org

CT Leads in Demand Response Load Management contributes to Capacity Incentive can be $1,000 per KW Over 400MW in 2007

Distributed Resources Energy Independence Act (Public Act 05-01) Emergency Generation $250/kW Southwest Connecticut* $200/kWRemainder of Connecticut Must enroll in ISO-NE Demand Response Program Additional $50/kW only available for units operational before April 30, 2008

Demand Response includes Embedded Energy Efficiency

Demand Response Options Run local generation in demand response and to control peak (within environmental regulations) Re-schedule large loads to off-peak hours and change hours of operation or occupancy Reduce loads via meters, DDC, temperature settings, duty-cycling, motor speed controls, etc. Store energy during low-demand hours for use on peak (ice storage)

Distributed Generation Combustion Turbines .5 – 10MW Microturbines 30 – 250 kW IC Engines 30 kW – 5 MW Fuel Cells 200 kW – 1 MW 25% - 40% Electricity 50% - 60% WASTE HEAT

Combined Heat and Power (CHP) CHP: Onsite coincident production and use of electrical or mechanical power and thermal energy.

How CHP Saves Energy

Utility Rate Discounts Natural gas rates will be reduced for Customer-side generation projects that use natural gas by waiving as distribution charges. Electricity rates for power used when base load customer-side generators are out of service will be reduced by eliminating backup rates and demand ratchets for these customers. Incentives for installing CHP $450/500 per KW. Loan available at 1% under Prime

CHP Benefits “Considered the #1 option for reducing operating costs and reducing Green House Gases” NEG/ECP Improved fuel efficiency (70% to 80% efficient) Improved power quality/reliability Improved energy cost predictability Lower emissions per unit of useful output Reduces land-use impacts and NIMBY issues Optimizes scarce natural gas resources Creates demonstration of new high-tech Reduces vulnerability of the grid Reliability provides security and life safety benefits

CHP Project Financing (Capital Cost + Cost of $) + (Annual Maintenance Cost + Fuel) X project life = Life Cycle Cost Deduct DPUC incentives form Capital Cost Deduct interest saving from DPUC Loan Deduct deferred electricity from annual electric bill Deduct fuel savings from thermal recovery Deduct rate concessions from natural gas Consider 3rd Party Financing Utilize Performance Contracting and Guarantees Utilize tax credits and depreciation allowance

Electric and Gas Commodities Purchasing Electric and Gas Commodities Compile Energy History by Account Develop Load Profile Develop Terms and Conditions Send RFQ to registered suppliers Consider Marketers vs Brokers Send RFP to selected Suppliers Conduct Reverse Auction Award Contract

Actual Meter Readings

Load Duration Curve Load Factor or Interruptible Load. 55% 65% 10% Eff 75% 25% LM

“New Game in Town” Forward Capacity Market $5 billion program of ISO-New England: Created ratepayer fee structure to pay electricity generators to address capacity concerns Opportunity for Efficiency and Demand Management to capture a significant share of the market Increased Energy Efficiency, Demand Management and CHP/DG could meet increased demand, reduce emissions, provide economic benefit (lower cost, jobs)

Renewable Energy Costs are Declining 40 30 20 10 100 80 60 40 20 Wind PV COE cents/kWh 1980 1990 2000 2010 2020 1980 1990 2000 2010 2020 70 60 50 40 30 20 10 0 10 8 6 4 2 0 15 12 9 6 3 0 Geothermal Solar thermal Biomass COE cents/kWh 1980 1990 2000 2010 2020 1980 1990 2000 2010 2020 Source: NREL Energy Analysis Office (www.nrel.gov/analysis/docs/cost_curves_2002.ppt) 1These graphs are reflections of historical cost trends NOT precise annual historical data. Updated: October 2002

Off Site Supply - Wind Power

On Site Supply - Solar Power For more information and a copy of this presentation, please visit: http://www.easternct.edu/depts/sustainenergy/energy/solar.htm

Connecticut Clean Energy Fund Program Funding = $21 Million Maximum Project Funding Limit: $2 Million

www.ctcleanenergy.com

Opportunities to Lower Cost Maximize Efficiency with CEEF Participate in Demand Response Purchase from a Competitive Supplier as a single load or join an Aggregation Consider Distributed Resources, including Combined Heat and Power Consider Renewable Energy through CCEF

www.ctenergyinfo.com

Thank You For Your Interest Questions? www.sustainenergy.org Thank You For Your Interest