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ISSUES FOR CONSIDERATION WITH EFFICIENCY UTILITIES
APPLIED SOLUTIONS, MAY 2011
This paper provides a broad overview of selected factors impacting the energy markets at the local level
in the United States. This paper is written as supportive background information towards
implementation of a proposed operational structure termed Efficiency Utilities.
Efficiency Utilities are a mechanism to generate and deliver low carbon, renewable power and
implement energy efficiency programs at utility scale. These entities serve as an operational structure to
facilitate broad, regional transformation of energy use through energy reduction, decarbonization and
development of local energy management and renewables projects to stimulate local economies and
increase energy security. Given the enormous amount of embodied energy in water as well as the
anticipated impacts on water supplies by climate change, such a structure also would be well placed to
implement and manage water programs and systems.
Establishment of mechanisms such as Efficiency Utilities will require four pieces: political will, financing,
regulatory support and natural resources. The below paper analyzes the last three issues as they are
relevant to policy makers and investors in assessing the market for efficiency utilities. The sections
contained in this paper include demand projections, economic considerations, investment forecasts,
financing, policy considerations and natural resources asset mapping. Most of the information in this
document was obtained from government resources. Graphics and information obtained from non-
governmental sources has been noted where used.
I. DEMAND AND SECTORAL ANALYSIS
The below section looks at the global and national sources of energy use and projections in order to
understand the holistic state of energy inputs and how the United States fits into the overall picture.
Global Energy Demand Projections 1
In the global economy in which we live, energy and commodity markets are fungible. What happens
outside of the United States borders impacts our economy. When a resource supply is impacted,
depending on how elastic the demand for that commodity is, prices could skyrocket. Rising prosperity in
China and India will create a huge demand for energy and the resultant shortage of natural resources
could cause havoc on our economy. For this reason, it is necessary to examine estimated future energy
demand to inform future decision making. Below are some projections provided by the International
Energy Agency:
1
World Energy Outlook 2009; IEA
• In a business-as-usual (reference) scenario, worldwide energy demand is projected to increase
40 percent by 2030.
• Non-OECD countries represent 90 percent of that incremental demand increase. Of this, China
and India's demand represent 53 percent.
• Fossil Fuels account for 77 percent of the projected worldwide energy increase. (24 percent for
oil, 53 percent for coal and 42 percent for natural gas.)
• Electricity demand grows by 76 percent in 2007-2030, requiring 4 800 gigawatts (GW) of
capacity additions – almost five times the existing capacity of the US Coal remains the dominant
fuel of the power sector, its share of the global power generation mix rising by 2 percentage
points to 44 percent in 2030.
Current National Energy Sources 2
Below is a breakdown of our current sources of energy as of 2009. As shown about 40 percent of our
supply is imported which provides opportunity to capture substantial revenues being sent abroad and
using them to invest in our local communities.
37 percent oil
25 percent natural gas
2
http://tonto.eia.gov/energyexplained/index.cfm?page=renewable_home
21 percent coal (only about 3 percent is imported, rest is domestic and much is exported, mostly to EU) 3
9 percent nuclear
8 percent Renewable (1 percent solar, 5 percent geothermal, 6 percent biomass, 20 percent biofuels, 24
percent wood, 35 percent hydropower)
The 60 percent domestic resources being converted into energy also represents an opportunity to
diversify our energy base towards more renewable sources and capture jobs existing in the home-grown
energy industries. The national energy resources also tend to have devastating environmental impacts
which costs billions of dollars every year in mitigation through direct environmental degradation such as
polluted water to more indirect effects such as health impacts.
Historical and Projected National Energy Consumption by Primary Fuel 4
Below is a projection of total national energy sources utilized as compiled by the U.S. Energy Information
Administration. As shown, the mix is not expected to change much aside from a slight reduction in oil
use and a corresponding slight increase in renewables. Again, here lies an opportunity to step into this
void and capture vast amounts of revenues currently going towards non-renewable energy sources.
US Electricity Production 5
Compounding the opportunities discussed above, is a regular expansion of the market. Electricity use is
expected to continue to increase as we become increasingly reliant upon electronic devices, move
towards electric vehicles and overall population growth. Total electricity consumption, including both
3
U.S. Coal Supply and Demand; U.S. Energy Information Administration; 2009
4
AEO 2011 Early Release Overview; U.S. Energy Information Administration; December 16, 2010.
55
AEO 2011 Early Release Overview; U.S. Energy Information Administration; December 16, 2010.
purchases from electric power producers and on-site generation, grows from 3,745 billion kilowatthours
in 2009 to 4,880 billion kilowatthours in 2035 in the AEO2011 Reference case, increasing at an average
annual rate of 1.0 percent.
Global Renewable Energy Analysis 6
A matter of major concern with respect to energy production is illustrated by a recent analysis by the
Pew Charitable Trusts. In their review of the current state of clean energy within the G-20 it is clear that
the United States is rapidly losing its competitive edge in this field. In 2009 the United States was second
worldwide in renewable energy investment behind China. However, by 2010 the US slipped to third
place behind both China and Germany.
China's investments were dominated by wind while Germany's by solar, unsurprising given the strong
feed-in-tariff support for photovoltaics. A bright spot in this competitive landscape is what the United
States leads by far in venture capital/private equity financing of renewable technologies (approximately
$8 billion) which is an indicator of broader investment to come. However it is likely that if the policy
environment is not stabilized, much of the benefit of the research and development indicated by the
VC/private equity investment will move to countries with clear leadership direction such as China and
Germany.
Impact of the Water-Energy Nexus
Substantial opportunities exist to reduce energy use through reduction in water use. Water uses
enormous amounts of energy. In California water conveyance, treatment and heating account for 33
percent of natural gas and 19 percent of electricity use statewide. In addition, being a declining resource
necessary for human well being, it is increasingly becoming clear that water needs to be managed more
6
Who's Winning the Clean Energy Race?; The Pew Charitable Trusts; 2010.
as a valued commodity than a free right of the public. Water supplies within the United States and
worldwide are already strained and will become even more so through increased electricity production
(electricity production uses enormous amounts of water), population growth and climate change
impacts. Efficiency Utilities may be an appropriate mechanism through which to operate water use
reduction programs.
In addition, water systems in the United States are in extremely deteriorated condition. As it is hard to
sell to the public the need to invest in infrastructure buried under the ground, out of sight, priority is
often given to water delivery than the sewer systems. 7 Leakages from water lines waste enormous
amounts of drinking water, depleting supplies unnecessarily while increasing treatment and pumping
energy costs. Infiltrations to wastewater lines raise the amount of water coming into highly energy
intensive treatment systems and lead to polluting overflows during wet conditions.
From a business perspective, investment in water management and infrastructure can yield a high
economic return through avoided costs related to water pollution, contamination and disasters. 8
Unfortunately, too often this holistic view is not how values are calculated when assessing infrastructure
projects.
Analogous to managing an energy efficiency program, water efficiency programs can provide savings
through avoided costs of expanding infrastructure. Implementing systems of water reduction, reuse and
infiltration can reduce the need for traditional "grey" infrastructure controls such as stormwater
management, sewer overflow and treatment systems, piping, storage, etc. 9
An example illustrating this is Seattle's Street Edge Alternatives Project where a number of bioswale and
infiltration systems yielded cost savings of 15-25 percent as opposed to conventional stormwater
system design. An additional example is the use of permeable pavement in Iowa reducing the need to
for salt on roadways up to 75 percent improving water quality through salinity reduction while reducing
slip and fall hazards.
II. ECONOMIC CONSIDERATIONS
As discussed in the previous section, substantial opportunity exists for domestic economic development
in capturing capital currently moving offshore to foreign markets. While it is well known that a
significant trade deficit exists with oil, Clean and Renewable Energy Technologies are being imported to
the tune of $7.4B in 2008. With the establishment of large numbers of efficiency utilities across the
nation, all focused on reducing energy use and developing renewables, substantial market power could
be brought to bear on not only the purchase price and design of Clean and Renewable Energy
Technologies but a home-grown market of scale could foster growth of these industries in the United
States.
Environmental Goods Trade Issues and Opportunities
7
World Water Markets; Deutsche Bank Research; 2010.
8
Water in a Changing World; United Nations World Water Assessment Programme; 2010.
9
The Value of Green Infrastructure; Center for Neighborhood Technology; 2010.
In the last five years, the U.S trade deficit in renewable energy products increased by 350 percent to
nearly $6.8 billion.
That is according to a report on the opportunities and challenges America faces in the production and
export of environmental goods, including clean energy technologies, published in December 2009 by
the Senate Subcommittee on International Trade, Customs, and Global Competitiveness, chaired by
Senator Ron Wyden (D-OR). 10 The global trade in Environmental Goods and Services doubled between
2004 and 2008, with more than 70 percent of these associated with renewable energy production. The
U.S. is the world‘s largest producer and consumer of Environmental Goods and Services importing
13 percent of global environmental goods in 2008. This domestic trade generates $282 billion in
revenues and $40 billion in exports while supporting 1.6 million U.S. jobs. However, due to trade
barriers and manufacturing costs, we are losing market share to foreign manufacturers, particularly
China.
The graphic below (from the same report) illustrates this deterioration in the U.S. trade balance in
environmental goods, nearly completely due to increased demand for renewable energy products being
met by imports from Asia and the EU.
REP: Renewable Energy Products
CRET: Cleaner or More Resource Efficient Technologies
At the same time, during this period from 2004-2008 U.S. exports of environmental goods increased 70
percent, with three quarters of this being renewable energy products. The scale of trade in this arena
coupled with the potential of recapturing the domestic market presents a significant opportunity for
innovation and manufacturing in the United States.
10
Major Opportunities and Challenges to U.S. Exports of Environmental Goods; Senator Ron Wyden; December
2009.
Imports and Production of Fuel
Net imports of energy meet a large, but declining, share of total U.S. energy demand (see chart
below) 11. According to the U.S. Energy Information Administration, the projected growth in energy
imports could actually be larger however is moderated by increased use of biofuels (much of which are
produced domestically), new efficiency standards, and rising energy prices. Rising fuel prices are also
projected to spur domestic energy production across all fuels, particularly shale natural gas, and temper
the growth of energy imports. The net import share of total U.S. energy consumption in 2035 is
estimated at 18 percent, compared with 24 percent in 2009. This further demonstrates the domestic
opportunity available to capture market share and reduce exposure to foreign price shocks, political
instability and supply constraints.
Source: U.S. Energy Information Administration
Price Volatility of Oil and Natural Gas
The below two charts serve to illustrate the exposure of the US economy to reliance on a dominant fuel,
particularly from supplies outside of domestic control. Prices of oil and natural gas have become
increasingly volatile which creates economic instability. Reducing this risk exposure through
development and localized resources would be prudent.
11
AEO 2011 Early Release Overview; U.S. Energy Information Administration; December 16, 2010.
The Opportunity of Local Job Creation
Many estimates of job creation impacts have been made from sweeping, national jobs-per-dollar figures
to the project specific. Clearly unarguable however is that construction and operation of regional
energy and water projects creates local jobs. One such example is the analysis performed for New
Jersey Natural Gas to determine the impacts of a gas pipeline project, a solar lease project and a solar
energy program. Combined the three projects would create 396 direct jobs, 119 indirect and induced
jobs and $30.5M in New Jersey income. 12 A second example is the Spanish Fork Canyon, Utah, Wind
Power Project. Utilizing NREL's JEDI model, the project was estimated to create 38 direct and induced
jobs during construction and 7 jobs long term while providing local clean energy and revenues to
support the local government systems. 13
Aside from the direct benefit to household through job creation comes the well known indirect effects
of prosperity through economic multipliers of wages and retained earnings of local energy producers.
12
Economic Impacts of Energy Infrastructure Investments; Edward Bloustein School of Planning and Public Policy;
October 2010.
13
Generating Economic Development from a Wind Power Project in Spanish Fork Canyon, Utah: A Case Study and
Analysis of State-Level Economic Impacts; Center for the Market Diffusion of Renewable Energy and Clean
Technology, Utah State University; 2009.
III. INVESTMENT FORECASTS
Capital Investment Implications of Global Energy Demand 14,15
As stated in the beginning of this paper, while the ultimate focus of this paper is towards support of
local energy systems, the energy market is global and shortages and strains on power systems
worldwide will impact prices and supplies at every local point.
At the global, national and statewide level, the amount of investment which will be made over the
coming years in the energy and water sectors will be enormous. Even if only the minimal investment
required to maintain our existing systems and grow capacity enough to meet organic demand is made,
the amounts are staggering. Additionally, the financial crisis has dramatically slowed existing
investment in energy infrastructure. Energy investment worldwide has plunged recently in the face of a
tougher financing environment, weakening final demand for energy and falling cash flows — the result,
primarily, of the global financial and economic crisis. As these expenditures will be made in the energy
infrastructure under any circumstance to meet growing demand and catch up to "time lost", if those
investments where channeled to integrated, efficient and renewable systems, great long-term gains
could be realized in ongoing operational savings.
Two studies were reviewed to assess the projected investments necessary to build out clean energy
economies. The 2009 World Energy Outlook published by the International Energy Agency (IEA) analyzes
the investments needed worldwide to achieve 450 ppm CO2 levels by 2030. The Pew Charitable Trust
examined a narrower scenario, modeled by Bloomberg New Energy Finance's Global Energy and
Emissions Model, looking at the potential private investment in the power sector of the G-20 necessary
to achieve 350 ppm CO2 levels by 2020.
According to the IEA's 2009 World Energy Outlook, given the business-as-usual scenario, the capital
investment required to meet the energy demand by 2030 is $26 trillion. $10.5 trillion additional
investment is needed to maintain a lower greenhouse gas emissions level of 450 ppm.
14
World Energy Outlook 2009; IEA
15
Global Clean Power: A $2.3 Trillion Opportunity; The Pew Charitable Trusts; 2010
The Pew study concluded that within the G-20, $2.3 trillion will be spent in renewable energy assets
over the next decade if goals to stay within a 350 ppm CO2 atmospheric level are to be attained (2oC
increase.) The United States specifically would receive $53 billion in private investment. These
investments would occur in three categories - asset financing, public markets and venture
capital/private equity. In the Pew scenario, wind energy would reflect the largest investment as asset
finance as it is relatively mature and cost competitive, followed by solar and then a relatively small
amount of geothermal, biomass, marine and small-hydro.
IV. FINANCING CONSIDERATIONS AND MODELS
Efficiency Utilities could be capitalized under a variety of structures. They could be structured as public-
private partnerships, wholly private or wholly public. The ideal would be that they simply serve the goals
of providing cleaner energy, providing local employment, reducing energy risk and providing a healthy
return on investment while serving the public good.
Two main types of functions are envisioned to be provided under Efficiency Utilities: Energy Efficiency
projects and Renewable Energy development. Additionally, as mentioned above, Efficiency Utilities
would be ideal to implement low water use infrastructure systems. These functions have the secondary
effect of stabilizing and strengthening local economies through direct both job creation and reducing
funds spent on energy to distant locales. This effect further bolsters the buying power of the Efficiency
Utilities customers - local residents and business - which reduces risk to investors.
Within the above two main categories are two additional categories which again, drive participation and
uptake. Projects can be developed either as utility scale, power plant-type projects or they can occur
more at the household and business level. The larger projects clearly have the benefits of economies of
scale. However, implemented at the household level, an efficiency utility can be extremely effective. The
ability to aggregate purchases and contracts of efficiency and renewable equipment coupled with the
ability to eliminate all upfront costs for the consumer has the potential to unlock vast legions of
customers.
Municipal Debt/ Capacity 16
As local governments would likely be an integral, if not leading, participant in the formation of Efficiency
Utilities, their ability to shoulder the upfront investment costs is essential. An analysis from Bernstein
Global Wealth Management in 2010 argues that due to the extraordinarily conservative nature of
municipal debt local governments typically have ample capacity to borrow. Contrary to the headlines,
as of July 2010, the total shortfall of municipal finances accounted for $44B or 1.6 percent of total
outstanding municipal debt.
The type of debt which would be issued to develop localized renewable energy generation would be
considered infrastructure debt. This type of municipal debt (issued in the form of long-term municipal
bonds) is not viewed as a negative as it increases a city or county's appeal, assists in economic
development (which brings in revenues to service the debt) and adds value. Such debt is also paid off
over the useful life of a project. In addition, these would be considered general obligation bonds, the
payments of which take precedence over other expenditures so default of such debt is remote.
Financial Opportunities with Efficiency 17
Efficiency Utilities could fund not only energy generation projects but they could fund energy efficiency
projects and monetize the savings. Customers receive the benefits of a more stable energy bill,
improved properties, the opportunity to replace old and failing equipment and roofs and more
comfortable buildings. Additional financial opportunities aside from monetizing savings could include
carbon credits as the market develops.
According to the 2009 McKinsey report Unlocking Energy Efficiency in the US Economy, " Energy
efficiency offers a vast, low-cost energy resource for the U.S. economy – but only if the nation can craft
a comprehensive and innovative approach to unlock it. Significant and persistent barriers will need to be
addressed at multiple levels to stimulate demand for energy efficiency and manage its delivery across
more than 100 million buildings and literally billions of devices. If executed at scale, a holistic approach
would yield gross energy savings worth more than $1.2 trillion, well above the $520 billion needed
through 2020 for upfront investment in efficiency measures (not including program costs). Such a
program is estimated to reduce end-use energy consumption in 2020 by 9.1 quadrillion BTUs, roughly 23
percent of projected demand, potentially abating up to 1.1 gigatons of greenhouse gases annually."
16
Municipal Market Update: State and Local Governments Face Difficult Decisions; Bernstein Global Wealth
Management; July 2010.
17
Unlocking Energy Efficiency in the Global Economy; McKinsey; 2009
While the above discusses the potential savings for full implementation of comprehensive efficiency
efforts, the relative ratio of savings to cost demonstrates to potential for regional impacts.
Even if efficiency efforts were to be implemented at full penetration of a local market, this would not
eliminate the necessity to build new or rebuild existing infrastructure. Construction of new power
plants, pipelines, etc. will still be necessary to address growth, replacement of economically and
environmentally obsolete systems and additional demand such as electric cars and trains. 18
Funding Models
Funding will likely be a combination of private capital, public agency subsidy and revenues from
customers or existing utilities. Efficiency markets will have the ability to access both equity and debt
markets where financial instruments issued can be bought or sold. An efficiency utility will have the
ability to securitize and aggregate smaller projects for sale on the bond or secondary market. As asset
back securities with an ongoing funding stream and a committed customer base, these products should
be attractive to investors. This ability to access the liquid markets is an enormous advantage and as
efficiency utilities proliferate, the market will become increasingly comfortable with them. 19
Feed-in-Tarriffs (FIT): Feed-in-tarriffs have been introduced into most major EU economies and China. 20
FITs guarantee a long-term premium price to clean energy producers.
Public Goods Charges or Wire Charges: A charge on utility bills which fund projects for the "public
good." These funds could be used to build new generation, microgrid infrastructue and efficiency
programs. A paper by NASEO 21 outlines a number of efficiency programs such charges could support
such as efficiency building commissioning and retrofit, industrial assessment, ESCO functions, loan
facilitation and bulk procurement of technologies and materials.
Assessment District Financing: Utilizes a funding vehicle attached to a parcel of property which allows
the debt to act more as a fixed asset rather than a personal obligation.
Green Bonds: Banks could issue debt then securitize these asset-backed securities into "green bonds".
These depend on banks to act as intermediaries between investors and purchasers.
Energy Efficient and Micro-Generation Leases: Leasing scheme to allow principal and interest payments
on equipment to match energy cost savings through payoff. Barclay's 2011 report (referenced below)
estimates that many such schemes involve a 7-10 year payback with equipment operational far beyond
this time frame. Such lease payments, being asset-backed, could also be securitized themselves and sold
on the secondary market.
V. Policy Considerations
18
Unlocking Energy Efficiency in the Global Economy; McKinsey; 2009
19
Carbon Capital: Financing the Low Carbon Economy; Barclays; 2011
20
Carbon Capital: Financing the Low Carbon Economy; Barclays; 2011
21
www.naseo.org/committees/energyproduction/documents/wirecharges/index.html
The fragmented state of energy regulations, transmission, governance and incentives is a challenge and
has been mentioned in many of the documents reviewed for this paper as a main hurdle and barrier to
private investment in renewable technologies.
At a national level, incentives must be stable in order to attract long term investors and reduce risk
pricing. 22 Establishment of Efficiency Utilities as operational entities and the long term projects
necessary to transform the energy sector require a stable regulatory environment where project costs
and returns can be projected out for a number of years. In an unstable environment where investors do
not know if incentives will be in place more than a year or two in the horizon, capital will not be
available at the scale needed to realize projects.
A number of policy options have been put forward to facilitate renewable energy development. This list
includes 23:
1. Pricing Carbon Emissions
2. Renewable Portfolio Standards
3. Clean Energy Tax Incentives and/or Accelerated Depreciation to spur asset development
4. Feed-In-Tariffs to provide price stability and encourage investment in renewable projects
5. Government-scale procurement
6. Reverse Auctions to secure long term power contracts
Aside from incentivizing policies, many additional technical factors will influence a state's ability to
implement efficiency utilities. Whether or not the electricity and gas markets are regulated and
interconnection policies will greatly affect the ability to establish competitive generation and programs.
A lack of consistency will necessitate some level of "reinventing the wheel" with state-by-state
implementation of efficiency utilities. However, the geographical distribution of natural resources will
require this anyways. Below a number a regulatory and policy hurdles will be mapped out on a state by
state basis. Such visual analysis allows an assessment in determining states with high potential and
political will to develop efficiency utilities and publically owned renewable energy.
States with Renewable Portfolio Standards 24
24 States plus the District of Columbia have Renewable Portfolio Standards (RPS) policies in place.
Together these states represent more than half the electricity sales in the US. Renewable Portfolio
Standards are essential in signaling to the marketplace that renewable energy development is a true
priority and provides a demand market for renewable generation.
The most aggressive RPS polices near-term are:
New York - 24 percent by 2013
22
Carbon Capital: Financing the Low Carbon Economy; Barclays; 2011
23
Global Clean Power: A $2.3 Trillion Opportunity; The Pew Charitable Trusts; 2010
24
http://apps1.eere.energy.gov/states/maps/renewable_portfolio_states.cfm
Nevada - 20 percent by 2015
Maine - 40 percent by 2017
State RPS Goals and Generations 25
The below two maps illustrate each state's renewable energy generation in-state as a percentage of the
state's overall power generation for 2009 as well as those states with RPS goals. The picture is
complicated by the fact that many states import power from other states, which counts towards their
renewable energy goals. A definitional inconsistency also exists as some states consider large-scale
hydro power to be a renewable energy source, while others do not.
25
http://www.npr.org/templates/story/story.php?storyId=129183207
Source: State Goals Map: Database of State Incentives for Renewables & Efficiency. Current Renewable
Generation Map: The Energy Information Administration as compiled by the National Renewable Energy
Laboratory
State Renewable Energy Profiles 26
Nationwide renewable capacity increased by 8 percent or 8,469 megawatts in 2008, 96 percent of which
is due to wind development as was also discussed in the Pew study. This represents an increase of
nearly 8 percent over the 2007 level. Below is a screen shot depicting State renewable electricity
profiles from the Energy Information Administration. The map is interactive so unable to be inserted
directly.
26
U.S. Energy Information Administration, August 2010 (data from 2008)
Also from the Energy Information Administration are the below charts depicting the mix of renewables
nationwide utilized for summer loads compared to year round.
3rd Party PPA Authority
The ability for municipal governments or utilities to procure power through private developers or other
renewable generators is essential in allowing the flexibility and price stability to obtain project funding
at a reasonable rate. In addition, governments are unable to take advantage of the tax incentives
offered to private developers which greatly raises the respective price of power. Power Purchase
Agreements enable this public-private relationship and are currently available in 19 states according to
the Department of Energy.
3 rd -P arty Solar P V P ow er P urchase Agreem ents (P P As)
www.dsireusa.org / January 2011
UT: limited to
certain sectors
AZ: limited to
certain sectors
At least 19
states + PR
authorize or
allow 3rd-party
Authorized by state or otherwise currently in use solar PV PPAs
Apparently disallowed by state or otherwise restricted by legal barriers
Status unclear or unknown Puerto Rico
Note: This map is intended to serve as an unofficial guide; it does not constitute legal advice. Seek qualified legal expertise before making binding
financial decisions related to a 3rd-party PPA. See following slide for authority references.
Deregulation of Electricity and Gas Markets 27
Whether or not electricity or natural gas is deregulated in a State has significant implications on the
ability to develop competitive mechanisms to bring local control and increased renewable energy to the
power mix. Below is a breakdown of the status of electricity and natural gas regulation by State.
State Electricity Gas
Alabama No No
Alaska No No
Arizona Yes No
Arkansas Yes No
California Yes PC - Partial Choice
Colorado No No
Connecticut Yes No
Delaware Yes PC - Partial Choice
Florida No Yes
27
http://www.electricitybid.com/electricity/index.php/2008/05/05/list-of-electricity-deregulated-states-in-the-
usa/
State Electricity Gas
Georgia No Yes
Hawaii No No
Idaho No No
Illinois Yes Yes
Indiana No Yes
Iowa No Yes
Kansas No No
Kentucky No No
Louisiana No No
Maine Yes No
Maryland Yes Yes
Massachusets Yes Yes
Michigan Yes Yes
Minnesota No No
Mississippi No No
Missouri No PC
Partial Choice
Montana Yes Yes
Nebraska No No
Nevada Yes Yes
New Hampshire Yes No
New Jersey Yes Yes
New Mexico Yes Yes
New York Yes Yes
North Carolina No No
State Electricity Gas
North Dakota No No
Ohio Yes Yes
Oklahoma Yes No
Oregon Yes No
Pennsylvania Yes Yes
Rhode Island Yes Yes
South Carolina No No
South Dakota No No
Tennessee No No
Texas Yes PC - Partial Choice
Utah No No
Vermont No No
Virginia Yes Yes
Washington No No
Washington DC Yes Yes
West Virginia No Yes
Wisconsin No No
Wyoming No PC - Partial Choice
Interconnection Policies
As shown below, 41 states have adopted interconnection policies, and essential element in feeding non-
utility generation back onto the power grid and represents the capacity for private development. Note
the broad variation in caps.
I nterconnection P olicies
www.dsireusa.org / January 2011
WA: 20,000
ME: no limit
MT: 50*
MN: 10,000 VT: no limit NH: 100*
OR: 10,000 MA: no limit
WI: 15,000 NY: 2,000
SD: 10,000 CT: 20,000
MI: no limit
WY: 25*
PA: 5,000* NJ: no limit
IA: 10,000
NE: 25* OH: 20,000
MD: 10,000
NV: 20,000 IN: no limit
CO: 10,000 WV: 2,000 DE: 20,000*
IL: 10,000
CA: no limit KS: 25/200* DC: 10,000
UT: 25/2,000*
MO: 100* KY: 30* DC
VA: 20,000
NC: no limit
AR: 25/300* SC: 20/100
NM: 80,000
GA: 10/100*
LA: 25/300*
HI: no limit
TX: 10,000
41 States +
FL: 2,000*
DC & PR have
State Standard adopted an
interconnection
State Guideline PR: no limit
policy
* Standard or Guideline only applies to net-metered systems
Notes: Numbers indicate system capacity limit in kW. Some state limits vary by customer type (e.g., residential/non-residential).“No limit” means that there is no stated
maximum size for individual systems. Other limits may apply. Generally, state interconnection standards apply only to investor-owned utilities.
Grant Programs for Renewables
Grant programs represent an additional incentive towards renewable energy development.
Grant P rogram s for R enew ables
www.dsireusa.org / March 2011
DC
21 states
State program(s) only
offer grant
Utility, local, or private program(s) only Puerto Rico programs for
State program(s) + utility, local, and/or private program(s) renewables
Notes: This map only addresses grant programs for end-users. It does not address grants programs that support R&D, nor does it include grants for
geothermal heat pumps or other efficiency technologies. The Virgin Islands also offers a grant program for certain renewable energy projects.
Loan Programs for Renewables
Additional incentives and more broadly available are loan programs for renewable energy development.
Loan P rogram s for R enew ables
www.dsireusa.org / March 2011
DC
State program(s) only
34 states
Puerto Rico
Utility and/or local program(s) only offer loan
State program(s) + utility and/or local program(s) programs for
Note: This map does not include loan programs for geothermal heat pumps renewables
or other energy efficiency technologies.
VI. Natural Resource Mapping
As stated in the introduction, natural resources are essential to developing local renewable energy
supplies. Below are a series of maps depicting geographical distribution of geothermal, wind, solar and
biomass resources. This information is essential in understand the potential for regional energy
portfolios. Information has been obtained directly from the U.S. Department of Energy and the National
Renewable Energy Laboratory.
Renewables Mapping - Geothermal Resources 28
Most of the geothermal reservoirs in the United States are located in the western States and Hawaii.
California generates the most electricity from geothermal energy. "The Geysers" dry steam reservoir in
northern California is the largest known dry steam field in the world and has been producing electricity
since 1960.
Geothermal resources are located all throughout the United States. While the West has the highest
concentration of natural resources lower temperature geothermal assets are all throughout the
Country. These different types of geothermal activity lend to two different, but equally useful types of
energy. High temperature goethermal resources produce steam to drive turbines and yield electricity.
Low temperature resources enable low energy buildout of district and system-scale infrastructures.
28
U.S. Department of Energy, Energy Efficiency & Renewable Energy
Renewables Mapping - Wind
Wind speed varies throughout the United States. It also varies from season to season. In Tehachapi,
California, the wind blows more from April through October than it does in the winter. This is because of
the extreme heating of the Mojave Desert during the summer months. The hot air over the desert rises,
and the cooler, denser air above the Pacific Ocean rushes through the Tehachapi mountain pass to take
its place. In a state like Montana, on the other hand, the wind blows more during the winter.
Fortunately, these seasonal variations are a good match for the electricity demands of the regions. In
California, people use more electricity during the summer for air conditioners. In Montana, people use
more electricity during the winter.
Large wind turbines (sometimes called wind machines) generated electricity in 35 different States in
2009. The top five wind power producing States with the most wind production were Texas, Iowa,
California, Minnesota, and Washington.
Renewables Mapping - Solar
Solar energy is by far the Earth's most available energy source. Solar power is capable of providing many
times the total current energy demand. But it is an intermittent energy source, meaning that it is not
available at all times. However, it can be supplemented by thermal energy storage or another energy
source, such as natural gas or hydropower.
Concentrating solar power technologies use mirrors to reflect and concentrate sunlight onto receivers
that collect the solar energy and convert it to heat. This thermal energy can then be used to produce
electricity via a steam turbine or heat engine driving a generator.
Low-temperature solar collectors also absorb the sun's heat energy, but instead of making electricity,
use the heat directly for hot water or space heating in homes, offices, and other buildings.
Even larger plants than exist today are proposed for construction in the coming years. Covering 4
percent of the world's desert area with photovoltaics could supply the equivalent of all of the world's
electricity. The Gobi Desert alone could supply almost all of the world's total electricity demand.
Renewables Mapping - Biomass Resources 29 (to include embedded maps of each of the below would
increase the document size too much. The maps are available at the link referenced.)
Crop residues
The following crops were included in this analysis: corn, wheat, soybeans, cotton, sorghum, barley, oats,
rice, rye, canola, dry edible beans, dry edible peas, peanuts, potatoes, safflower, sunflower, sugarcane,
and flaxseed. The quantities of crop residues that can be available in each county are estimated using
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http://www.nrel.gov/gis/biomass.html
total grain production, crop to residue ratio, moisture content, and taking into consideration the
amount of residue left on the field for soil protection, grazing, and other agricultural activities. Source:
USDA, National Agricultural Statistics Service; five-year average: 2003-2007.
Forest residues
This category includeslogging residues and other removable material left after carrying out silviculture
operations and site conversions. Logging residue comprises unused portions of trees, cut or killed by
logging and left in the woods. Other removable materials are the unutilized volume of trees cut or killed
during logging operations. Source: USDA, Forest Service's Timber Product Output database, 2007.
Primary mill residues
Primary mill residues include wood materials (coarse and fine) and bark generated at manufacturing
plants (primary wood-using mills) when round wood products are processed into primary wood
products, such as slabs, edgings, trimmings, sawdust, veneer clippings and cores, and pulp screenings.
Source: USDA, Forest Service's Timber Product Output database, 2007.
Secondary mill residues
Secondary mill residues include wood scraps and sawdust from woodworking shops — furniture
factories, wood container and pallet mills, and wholesale lumberyards. Data on the number of
businesses by county was gathered from the U.S. Census Bureau, 2002 County Business Patterns.
Urban wood waste
Urban wood waste includeswood residues from MSW (wood chips and pallets), utility tree trimming
and/or private tree companies, and construction and demolition sites. Source: U.S. Census Bureau, 2000
Population data; BioCycle Journal: "State of Garbage in America", January 2004; County Business
Patterns 2002.
Methane emissions from landfills
The methane emissions are estimated for each landfill considering total waste in place, landfill size, and
location (arid or non-arid climate), and then aggregated to county level. Note: this dataset doesn't
include all landfills in the United States due to gaps in either precise geographic location or waste in
place. Source: EPA, Landfill Methane Outreach Program (LMOP), April 2008.
Methane emissions from manure management
The following animal types were included in this analysis: dairy cows, beef cows, hogs and pigs, sheep,
chickens and layers, broilers, and turkey. The methane emissions were calculated by animal type and
manure management system at a county level. Source: USDA, National Agricultural Statistics Service,
2002 data.
Methane emissions from domestic wastewater treatment
The methane emissions are estimated using the methodology from the EPA Inventory of U.S.
Greenhouse Gas Emissions and Sinks: 1990-2003. Source: U.S. Census Bureau, 2007 County Population.
VII. Conclusion
Enormous opportunities are available from an economic, environmental and security standpoint in
developing localized, efficient and renewable power supplies. Large investments will be made in
infrastructure to repair degrading systems and meet growing demand. We have the opportunity to
direct those investments in a manner to yield ongoing return and prosperity. Efficiency Utilities are one
governance mechanism to achieve this vision and would yield multiple benefits while retaining local
control for the public good.
For additional information please contact Amy Bolten at amy.bolten@scwa.ca.gov or (707) 547-1981.
