Transcript Slide 1

Demand-Side Management
in B.C.:
A Green Ratepayers’ Perspective
Presentation to the
Fourth Annual BC Power Summit
March 28-29, 2007
Vancouver, BC
by
William J. Andrews
Barrister & Solicitor
SCCBC, BCSEA and PVEA
• Sierra Club of Canada (B.C.)
– is a non-profit organization of British Columbians from all walks of life
who care about a broad range of environmental issues.
• B.C. Sustainable Energy Association
– is a non-profit association of citizens, professionals and practitioners
committed to promoting the understanding, development and adoption
of sustainable energy, energy efficiency and energy conservation in
British Columbia.
• Peace Valley Environment Association
– is a registered non-profit society established in 1975 to preserve and
protect the Peace River Valley and its watershed. In the early 1980s, the
PVEA actively defended the integrity of the Peace River Valley in
relation to the proposed Site C hydroelectric project.
Green ratepayers:
• Many members of SCCBC, BCSEA and
PVEA are ratepayers of BC Hydro and
• want the electricity they purchase to be
from a sustainable electricity system.
Legal interests of
SCCBC, BCSEA & PVEA
in energy regulation:
• public interest advocacy organizations,
and
• BC Hydro ratepayers
Environmental groups and energy
conservation in B.C. ‘go way back’
• 1982-83: BCUC re Site C (PVEA)
• 1985: federal-provincial environmental
assessment of West Coast Offshore Exploration
(“Offshore Alliance”)
• 1980s: advocacy by SPEC, WCELA (BC Hydro’s
PowerSmart launched in 1989)
• 1991: BC Hydro says Site C is shelved; cites
reliance on PowerSmart, cogen, ResourceSmart
and IPPs [www.wcel.org/4976/15/15_03.html]
• 1990s: BCUC proceedings (BC Energy
Coalition)
Environmental opposition to B.C.
gas-fired electricity strategy
• 2000-03: NEB-CEAA re GSX pipeline proposal,
BC Hydro-Williams (GSXCCC)
• 2003: BCUC re CPCN application for VIGP
(GSXCCC-NCOC)
• 2004-05: BCUC re BC Hydro-Duke Point
electricity purchase agreement (GSXCCCBCSEA-SPEC)
• 2005: BCCA re applications for leave to appeal
re Duke Point (GSXCCC-BCSEA-SPEC); BCH
cancels DPP project
Re-regulation of BC Hydro
• amendments to the Utilities Commission
Act effective May 29, 2003
• BC Hydro must file plans under s.45(6.1)
regarding
– planned capital expenditures,
– electricity acquisition, and
– demand reduction
SCCBC, BCSEA, PVEA support for
DSM, sustainable renewables
• 2003-04: BC Hydro F06-F07 Revenue
Requirements Application, 2004 Integrated
Electricity Plan, 2004 Resource Expenditures
and Acquisitions Plan (SCCBC)
• 2005: BC Hydro 2005 Resource Options Report
(BCSEA-SCCBC)
• 2005: BC Hydro stepped rates NSP (BCSEASCCBC)
Recent and ongoing interventions
in BCUC proceedings
• 2006: BC Hydro F07-F08 RRA (SCCBC-BCSEA-PVEA)
• 2006-07: BC Hydro 2006 IEP-LTAP (SCCBC-BCSEAPVEA)
• 2006: 38 EPAs from F2006 CFT (SCCBC-BCSEAPVEA)
• 2006: BC Hydro Conservation Research: Time of Use
rates pilot (PVEA-SCCBC-BCSEA)
• 2006: BC Hydro-Alcan LTEPA+ (SCCBC-BCSEA-PVEA)
• 2007: BC Hydro Rate Design Application (SCCBCBCSEA-PVEA)
One reason
to care about DSM:
• Climate change is a problem
• Carbon dioxide emission is the biggest cause of
climate change
• Burning fossil fuels is the biggest source of
carbon dioxide emission
• Generating electricity is a major reason to burn
fossil fuels
• DSM reduces the need to generate electricity
• Therefore, DSM mitigates climate change
Climate change is real
• Intergovernmental Panel on Climate
Change (IPCC)
• Climate Change 2007: The Physical
Science Basis: Summary for Policymakers
• February 2007
• Contribution by Working Group 1 to Fourth
Assessment Report
www.ipcc.ch/SPM2feb07.pdf
Report describes:
• human and natural drivers of climate
change,
• observed climate change,
• climate processes and attribution, and
• estimates of projected future climate
change.
The energy balance of the climate
system is altered by changes in:
• atmospheric abundance of greenhouse
gases and aerosols,
• solar radiation,
• land surface properties.
“radiative forcing”
• = a measure of the influence that a factor
has in altering the balance of incoming
and outgoing energy in the Earthatmosphere system
• Positive forcing tends to warm the surface
• Negative forcing tends to cool it
• expressed in watts / square metre (Wm-2)
“Global atmospheric concentrations
• of carbon dioxide, methane and nitrous
oxide
• have increased markedly
• as a result of human activities since 1750,
and
• now far exceed pre-industrial values
determined from ice cores spanning many
thousands of years.”
Atmospheric concentrations of carbon
dioxide over the last 10,000 years
Atmospheric concentrations of
methane over the last 10,000 years
Atmospheric concentrations of N2O
over the last 10,000 years
Global increases in CO2 concentration
due primarily to fossil fuel use and
land-use change
Global increases in methane and nitrous
oxide concentrations
due primarily to agriculture
“Carbon dioxide is the most important
anthropogenic greenhouse gas”
• “Atmospheric concentration of carbon
dioxide has increased from a pre-industrial
value of about 280 ppm to 379 ppm in
2005.
• The atmospheric concentration of carbon
dioxide in 2005 exceeds by far the natural
range over the last 650,000 years (180 to
300 ppm) as determined from ice cores.”
• “The primary source of the increased
atmospheric concentration of carbon
dioxide since the pre-industrial period
results from fossil fuel use,
• with land use change providing another
significant but smaller contribution.”
“The understanding of anthropogenic
warming and cooling influences on
climate
• has improved since the 2001 Third
Assessment Report (TAR),
• leading to very high confidence
• that the globally averaged net effect of
human activities since 1750 has been one
of warming,
• with a radiative forcing of +1.6 [+0.6 to
+2.4] W m-2.”
“Warming of the climate system
• is unequivocal,
• as is now evident from observations of
increases in
global average air and ocean
temperatures,
widespread melting of snow and ice,
 and rising global average sea level.”
Changes in global average
temperature
Changes in global average
sea level
Changes in
Northern Hemisphere snow cover
“At continental, regional, and ocean
basin scales,
• numerous long-term changes in climate
have been observed:





Arctic temperatures and ice,
precipitation amounts,
ocean salinity,
wind patterns, and
aspects of extreme weather….”
“Most of the observed increase in
globally averaged temperatures since the
mid-20th century
• is very likely due to the observed increase
in anthropogenic greenhouse gas
concentrations.
• This is an advance since the 2001 Third
Assessment Report’s conclusion that
‘most of the observed warming over the
last 50 years is likely to have been due to
the increase in greenhouse gas
concentrations’.”
“Discernible human influences now
extend to other aspects of climate,
including
•
•
•
•
ocean warming,
continental-average temperatures,
temperature extremes and
wind patterns.”
Black line = observed temperatures
Pink = models of both natural and anthropogenic
Blue = models of natural only
Global Surface Warming:
observed and predicted
Various
scenarios
Year 2000
constant
concentrations
Connecting 6 billion dots…
Global Population: 0 to 500 A.D
10
9
8
6
5
Popn
4
3
2
1
47
0
44
0
41
0
38
0
35
0
32
0
29
0
26
0
23
0
20
0
17
0
14
0
11
0
80
50
20
0
Ye
ar
Billion
7
99
0
96
0
93
0
90
0
87
0
84
0
81
0
78
0
75
0
72
0
69
0
66
0
63
0
60
0
57
0
54
0
51
0
Billion
Global Population: 500 to 1000 A.D.
10
9
8
7
6
5
Population
4
3
2
1
0
10
00
10
30
10
60
10
90
11
20
11
50
11
80
12
10
12
40
12
70
13
00
13
30
13
60
13
90
14
20
14
50
14
80
Billion
Global Population: 1000 to 1500 A.D.
10
9
8
7
6
5
4
3
2
1
0
Population
15
00
15
30
15
60
15
90
16
20
16
50
16
80
17
10
17
40
17
70
18
00
18
30
18
60
18
90
19
20
19
50
19
80
Billion
Global Population: 1500 to 2000 A.D.
10
9
8
7
6
5
4
3
2
1
0
Population
Global Population: 2000 to 2500 A.D.
10
(Stabilization scenario)
9
8
6
5
4
3
2
1
0
20
00
20
30
20
60
20
90
21
20
21
50
21
80
22
10
22
40
22
70
23
00
23
30
23
60
23
90
24
20
24
50
24
80
Billion
7
Population
Global population: 0 to 2050 A.D.
You are here
10
9
8
7
6
5
4
3
2
1
0
Y
r
ea
40
90 14 0 19 0 24 0 29 0 34 0 39 0 44 0 49 0 54 0 59 0 64 0 69 0 74 0 79 0 84 0 89 0 94 0 99 0 0 40 0 90 1 40 1 90 2 40 2 90 3 40 3 90 4 40 4 90 5 40 5 90 6 40 6 90 7 40 7 90 8 40 8 90 9 40 9 90 0 40
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
http://www.un.org/esa/population/publications/sixbillion/sixbilpart1.pdf, p.5
http://www.census.gov/ipc/www/worldpop.html; http://www.census.gov/ipc/www/worldhis.html
(Back to DSM in B.C.)
Free-riders
…are not Free-loaders!
DSM, conservation and efficiency
• Efficiency = less energy for same work
• Conservation = less energy
• Demand-side management = conservation
& efficiency caused by a DSM program
Free-rider definition
•
•
•
•
•
From the perspective of a DSM program
aimed at inducing behaviour X (“X-DSM”),
a “freerider” is a customer
who does X during the X-DSM program
but would have done X without the X-DSM
program.
Free-riders don’t count re X-DSM
• In evaluating the X-DSM program,
• add up the electricity saved by all
customers who did X,
• subtract the electricity saved by free-riders
(who would have done X despite X-DSM),
• to get the electricity saved by the X-DSM
program.
Counting free-riders
• How do you determine how many
customers meet the definition of freerider
(did X but would have done X without the
X-DSM program)?
• (estimation task: hypothetical but doable)
“Free-rider” concept has its place
• Evaluating a single DSM program without
counting energy savings by free-riders is
correct and logical.
• BUT…
But what about free-riders and…
• Market transformation DSM programs?
• Utility DSM programs other than X-DSM?
• DSM programs other than same-utility
DSM?
• Personal conservation ethic?
‘Free-riders’ and
market transformation DSM
• Objective is to be a catalyst
• to spark popular consumer demand for X
• to spark mainstream supply of X (cheap
and accessible)
• Ex. ‘seasonal LEDs’
• Free-riders are the objective
‘Free-riders’ and
other same-utility DSM programs
• Individual DSM programs require general
conservation awareness
• Conservation awareness is created (in part) by
utility education programs, plus the utility’s other
DSM programs (A-DSM, B-DSM, C-DSM, etc.)
• Free-rider who would have done X despite XDSM might not have done X without utility’s
conservation education and other DSM
programs
• Also, X-DSM might induce customer to do A, B
or C even in the absence of A-DSM, B-DSM or
C-DSM
‘Free-riders’ and DSM
other than same-utility DSM
• Energy conservation is promoted by DSM
activities by other utilities, conservation groups,
government programs, media, schools,
individuals
 Cumulative, synergistic effects on conservation
awareness
• Is a utility that approves only DSM programs that
meet financial tests without free-riders itself
acting as a free-rider in relation to other DSM
providers?
‘Free-riders’ and
the personal conservation ethic
• 2007 Throne Speech -- comprehensive
climate change and energy strategies:
a new personal conservation ethic
intergenerational equity
2007 Energy Plan –
• energy conservation and efficiency
targets:
“50% of BC Hydro’s incremental resource
needs through conservation by 2020”
energy efficient building standards by 2020
Energy Plan 2007
• Achieving conservation target:
“will require building on the ‘culture of
conservation’ that British Columbians
have embraced in recent years”
Energy Plan 2007
• “Future energy efficiency and conservation
initiatives will include:
… efforts to educate customers about
the choices they can make today with
respect to the amount of electricity they
consume
Energy Plan 2007
• “The plan confirms action on the part of
government
• to complement these conservation targets
by working closely with BC Hydro and
other utilities
• to research, develop, and implement best
practices in conservation and energy
efficiency and
• to increase public awareness.”
‘Free-riders’ and
the personal conservation ethic
• Customers with an active personal conservation
ethic are more likely to be ‘free-riders’ in relation
to DSM programs than customers with a low
conservation ethic.
• If all DSM programs are evaluated and approved
‘net of free-riders,’ then DSM programs will
come not to serve free-riders.
• DSM programs designed not to serve customers
with a high conservation ethic may alienate the
very customers who ought to be ‘partners’ in
spreading the conservation message.
Free-riders aren’t Free-loaders…
• Free-riders are Conservation Heroes!
New Energy Plan and…
BCUC’s role in
social and environmental
costs and benefits
Cost effectiveness v. Sustainable electricity
• BCUC: “…the
Commission Panel notes
that once a competitive
market-based process
has been undertaken and
firm commitments from
bidders have been
obtained, a competitive
process should, in most
circumstances, be
accepted as persuasive
evidence of the costeffectiveness of the
resultant successful bid.”
[E-1-05, p.13]
• Energy Plan: “The BC
Energy Plan clarifies that
social, economic and
environmental costs are
important for ensuring a
suitable electricity supply
in British Columbia.”
Upcoming review:
• “Government will review the BC Utilities
Commission’s role in considering social,
environmental and economic costs and
benefits,
• and will determine how best to ensure
these are appropriately considered within
the regulatory framework.”
Step One: hear Green Ratepayers
Participant funding and B.C. groups
representing green ratepayers and
public interest environmental concerns
Utilities Commission Act, s.118
• Participant costs
118 (1) The commission may order a
participant in a proceeding before the
commission to pay all or part of the costs
of another participant in the proceeding.
Participant Assistance/Cost Award
Guidelines
• “In determining an award of all or any
portion of a Participant’s costs, the
Commission panel will consider the
following:
(i) Does the Participant represent a substantial
interest in the proceeding and will the
Participant be affected by the outcome?
(ii) Has the Participant contributed to a better
understanding of the issues by the
Commission?” […]
PACA procedure
• “Participants who intend to apply for a cost award must
submit a Budget Estimate…
• The Budget Estimate should address the Participant's
eligibility,…identify the key issues that the Participant will
examine, indicate whether the Participant expects to
lead evidence, and include an estimate of proceeding
and preparation days…
• Commission staff will reply with a review letter that
includes an estimate of proceeding days and an estimate
of the preparation days that may be funded…
• The Commission staff advice is not binding on the
Participant or the Commission panel and is provided only
to forewarn Participants of potential issues that may not
be funded by the Commission.”
BCUC denies SCCBC, et al PACA
request in F07-F08 RRA proceeding
• March 2006: BC Hydro begins what become F07-F08 RRA and
2006 IEP-LTAP proceedings
• SCCBC, et al intervene, participate fully
• August 2006: BCUC Panel partly separates the two proceedings
• SCCBC, et al file Budget Estimates under PACA Guidelines for case
manager, legal counsel and experts
• BCUC staff review letters say “the issues you have identified…fall
within the scope of the Commission Panel’s jurisdiction and appear
relevant to this proceeding”
• SCCBC, et al file expert evidence, participate in F07-F08 RRA
negotiated settlement process (NSP); NSP reaches agreement;
agreement approved by Commission Panel
• SCCBC, et al file PACA application (as do traditional intervenors)
• January 2007: Panel disallows $42,021.69 out of SCCBC, et al’s
$49,501.41 PACA application [reconsideration request outstanding]
Panel’s reasons:
• “The Commission Panel determines the
demand side management (“DSM”) issues
raised by SCCBC do not represent
substantial issues in the F07/08 RRA
proceeding.”
http://www.bcuc.com/Documents/Orders/2007/DOC_14250_F-3-07_BCH_F2007-08%20RR%20-%20Reasons.pdf
BCUC denies SCCBC, et al PACA
request in LTEPA+ proceeding
• August 2006: In the course of the F07-F08 RRA and 2006 IEP-LTAP
proceedings, BC Hydro files LTEPA+ with Alcan Inc. under s.71
• SCCBC, et al intervene, participate fully
• SCCBC, et al file Budget Estimate
• BCUC staff review letter states “the key issues you identify generally
appear to be relevant to the proceeding. Providing you focus on
issues that are within the scope of the proceeding, Commission staff
believe that the effective participation of SCCBC, et al in the
proceeding will be supported by a cost award that is consistent with
your budget and is based on the funding levels in the Guidelines.”
• December 2006: oral hearing; written argument; Panel quashes
LTEPA+
• SCCBC, et al file PACA application (as do traditional intervenors)
• February 2007: Panel disallows all but $1,074.72 of SCCBC, et al’s
application for a participant assistance cost award of $33,552.45
• [reconsideration request outstanding]
Panel’s reasons:
• “SCCBC, et al’s objective of ‘minimizing environmental
harm from Alcan’s smelter operations’ is, in the
Commission’s view, far removed from the key issues
under consideration in this proceeding.
• The Commission Panel also finds that SCCBC, et al has
not established how the groups that comprise SCCBC,
et al will be impacted by the outcome of the proceeding.
• However, SCCBC, et al was an active participant in the
proceeding and will receive an award equal to its out-ofpocket expenses for the case manager to attend the
hearing.”
http://www.bcuc.com/Documents/Orders/2007/DOC_14404_F-5-07_PACAs%20BCH%20Alcan.pdf
But…
• SCCBC, et al addressed (in detail) the key
issues within the scope of the proceeding
• -- their motivation for doing so is their
choice as Green Ratepayers.
• Is it the Commission’s role to judge the
validity of ratepayers’ priorities?
"It's Not Easy Bein' Green"
Apologies to Joe Rapposo, lyricist
The End
Deep Cove, BC