Algonquin Power & Utilities Corp. Completes Acquisition of The Empire District Electric Company

Massachusetts Solar Net Metering faces new demand charges and elimination of residential time-of-use rates under an MDPU order, as Eversource cites grid cost fairness while clean energy advocates warn of impacts on distributed solar growth.

Key Points

Policy letting solar customers net out usage with exports; MDPU now adds demand charges and ends TOU rates.

✅ New residential solar demand charges start Dec 31, 2018.

✅ Optional residential TOU rates eliminated by MDPU order.

✅ Eversource cites grid cost fairness; advocates warn slower solar.

A recent Massachusetts Department of Public Utilities' rate case order changes the way solar net metering works and eliminates optional residential time-of-use rates, stirring controversy between clean energy advocates and utility Eversource and potential consumer backlash over rate design.

"There is a lot of room to talk about what net-energy metering should look like, but a demand charge is an unfair way to charge customers," Mark LeBel, staff attorney at non-profit clean energy advocacy organization Acadia Center, said in a Tuesday phone call. Acadia Center is an intervenor in the rate case and opposed the changes.

The Friday MDPU order implements demand charges for new residential solar projects starting on December 31, 2018. Such charges are based on the highest peak hourly consumption over the course of a month, regardless of what time the power is consumed.

Eversource contends the demand charge will more fairly distribute the costs of maintaining the local power grid, echoing minimum charge proposals aimed at low-usage customers. Net metering is often criticized for not evenly distributing those costs, which are effectively subsidized by non-net-metered customers.

"What the demand charge will do is eliminate, to the extent possible, the unfair cross subsidization by non-net-metered customers that currently exists with rates that only have kilowatt-hour charges and no kilowatt demand, Mike Durand, Eversource spokesman, said in a Tuesday email. 

"For net metered facilities that use little kilowatt-hours, a demand charge is a way to charge them for their fair share of the cost of the significant maintenance and upgrade work we do on the local grid every day," Durand said. "Currently, their neighbors are paying more than their share of those costs."

It will not affect existing facilities, Durand said, only those installed after December 31, 2018.

Solar advocates are not enthusiastic about the change and see it slowing the growth of solar power, particularly residential rooftop solar, in the state.

"This is a terrible outcome for the future of solar in Massachusetts," Nathan Phelps, program manager of distributed generation and regulatory policy at solar power advocacy group Vote Solar, said in a Tuesday phone call.

"It's very inconsistent with DPU precedent and numerous pieces of legislation passed in the last 10 years," Phelps said. "The commonwealth has passed several pieces of legislation that are supportive of renewable energy and solar power. I don't know what the DPU was thinking."

 

TIME-OF-USE PRICING ELIMINATED

It does not matter when during the month peak demand occurs -- which could be during the week in the evening -- customers will be charged the same as they would on a hot summer day, LeBel said. Because an individual customer's peak usage does not necessarily correspond to peak demand across the utility's system, consumers are not being provided incentives to reduce energy usage in a way that could benefit the power system, Acadia Center said in a Tuesday statement.

However, Eversource maintains that residential customer distribution peaks based on customer load profiles do not align with basic service peak periods, which are based on Independent System Operator New England's peaks that reflect market-based pricing, even as a Connecticut market overhaul advances in the region, according to the MDPU order.

"The residential Time of Use rates we're eliminating are obsolete, having been designed decades ago when we were responsible for both the generation and the delivery of electricity," Eversource's Durand said.

"We are no longer in the generation business, having divested of our generation assets in Massachusetts in compliance with the law that restructured of our industry back in the late 1990s. Time Varying pricing is best used with generation rates, where the price for electricity changes based on time of day and electricity demand and can significantly alter electric bills for households," he said.

Additionally, only 0.02% of residential customers take service on Eversource's TOU rates and it would be difficult for residential customers to avoid peak period rates because they do not have the ability to shift or reduce load, according to the order.

"The Department allowed the Companies' proposal to eliminate their optional residential TOU rates in order to consolidate and align their residential rates and tariffs to better achieve the rate structure goal of simplicity," the MDPU said in the order.

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PG&E property tax payments bolster counties, education, public safety, and infrastructure across Northern and Central California, reflecting semi-annual levies tied to utility assets, capital investments, and economic development that serve 16 million customers.

Key Points

PG&E property tax payments are semi-annual county taxes funding public services and linked to utility infrastructure.

✅ $230M paid for Jul-Dec 2017 across 50 California counties

✅ Estimated $461M for FY 2017-2018, up 12% year over year

✅ Investments: $5.9B in grid, Gas Safety Academy, control center

Pacific Gas and Electric Company (PG&E) paid property taxes of more than $230 million this fall to the 50 counties where the energy company owns property and operates gas and electric infrastructure that serves 16 million Californians. The tax payments help support essential public services like education and public health and safety actions across the region.

The semi-annual property tax payments made today cover the period from July 1 to December 31, 2017.

Total payments for the full tax year of July 1, 2017 to June 30, 2018 are estimated to total more than $461 million—an increase of $50 million, or 12 percent, compared with the prior fiscal year, even as customer rates are expected to stabilize in the years ahead.

“Property tax payments provide crucial resources to the many communities where we live and work, supporting everything from education to public safety. By continuing to make local investments in gas and electric infrastructure, we are not only creating one of the safest and most reliable energy systems in the country, including wildfire risk reduction programs and related efforts, we’re investing in the local economy and helping our communities thrive,” said Jason Wells, senior vice president and chief financial officer for PG&E.

PG&E invested more than $5.7 billion last year and expects to invest $5.9 billion this year to enhance and upgrade its gas and electrical infrastructure amid power line fire risks across Northern and Central California.

Some recent investments include the construction of PG&E’s $75 millionGas Safety Academy in Winters in Yolo County, which opened in September. Last year, PG&E opened a $36 million, state-of-the-art electric distribution control center in Rocklin.

PG&E supports the communities it serves in a variety of ways. In 2016, PG&E provided more than $28 million in charitable contributions to enrich local educational opportunities, preserve the environment, and support economic vitality and emergency preparedness and safety, including its Wildfire Assistance Program for impacted residents. PG&E employees provide thousands of hours of volunteer service in their local communities. The company also offers a broad spectrum of economic development services to help local businesses grow.

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Hong Kong Electricity Tariff Increase reflects a projected 1-2% rise as HK Electric and CLP Power shift to cleaner fuel and natural gas, expand gas-fired units and LNG terminals, and adjust the fuel clause charge.

Key Points

An expected 1-2% 2018 rise from cleaner fuel, natural gas projects, asset growth, and shrinking fuel cost surpluses.

✅ Expected 1-2% rise amid cleaner fuel and gas shift

✅ Fuel clause charge and asset expansion pressure prices

✅ HK Electric and CLP Power urged to use surpluses prudently

Hong Kong customers have been asked to expect higher electricity bills next year, as seen with BC Hydro rate increases in Canada, with a member of a government panel on energy policy anticipating an increase in tariffs of one or two per cent.

The environment minister, Wong Kam-sing, also hinted they should be prepared to dig deeper into their pockets for electricity, as debates over California electric bills illustrate, in the wake of power companies needing to use more expensive but cleaner fuel to generate power in the future.

HK Electric supplies power to Hong Kong Island, Lamma Island and Ap Lei Chau. Photo: David Wong

The city’s two power companies, HK Electric and CLP Power, are to brief lawmakers on their respective annual tariff adjustments for 2018, amid Ontario electricity price pressures drawing international attention, at a Legislative Council economic development panel meeting on Tuesday.

HK Electric supplies electricity to Hong Kong Island and neighbouring Lamma Island and Ap Lei Chau, while CLP Power serves Kowloon and the New Territories, including Lantau Island.

Wong said on Monday: “We have to appreciate that when we use cleaner fuel, there is a need for electricity tariffs to keep pace. I believe it is the hope of mainstream society to see a low-carbon and healthier environment.”

Secretary for the Environment Wong Kam-sing believes most people desire a low-carbon environment. Photo: Sam Tsang

But he declined to comment on how much the tariffs might rise.

World Green Organisation chief executive William Yu Yuen-ping, also a member of the Energy Advisory Committee, urged the companies to better use their “overflowing” surpluses in their fuel cost recovery accounts.

Tariffs are comprised of two components: a basic amount reflecting a company’s operating costs and investments, and the fuel clause charge, which is based on what the company projects it will pay for fuel for the year.

William Yu of World Green Organisation says the companies should use their surpluses more carefully. Photo: May Tse

Critics have claimed the local power suppliers routinely overestimate their fuel costs and amass huge surpluses.

In recent years, the two managed to freeze or cut their tariffs thanks to savings from lower fuel costs. Last year, HK Electric offered special rebates to its customers, which saw its tariff drop by 17.2 per cent. CLP Power froze its own charge for 2017.

Yu said the two companies should use the surpluses “more carefully” to stabilise tariffs.

Rise after fall in Hong Kong electricity use linked to subsidies

“We estimate a big share of the surplus has been used up and so the honeymoon period is over.”

Based on his group’s research, Yu believed the tariffs would increase by one or two per cent.

Economist and fellow committee member Billy Mak Sui-choi said the expansion of the power companies’ fixed asset bases, such as building new gas-fired units and offshore liquefied natural gas terminals, a pattern reflected in Nova Scotia's 14% rate hike recently approved by regulators, would also cause tariffs to rise.

To fight climate change and improve air quality, the government has pledged to cut carbon intensity by between 50 and 60 per cent by 2020. Officials set a target of boosting the use of natural gas for electricity generation to half the total fuel mix from 2020.

Both power companies are privately owned and monitored by the government through a mutually agreed scheme of control agreements, akin to oversight seen under the UK energy price cap in other jurisdictions. These require the firms to seek government approval for their development plans, including their projected basic tariff levels.

At present, the permitted rate of return on their net fixed assets is 9.99 per cent. The deals are due to expire late next year.

Earlier this year, officials reached a deal with the two companies on the post-2018 scheme, settling on a 15-year term. The new agreements slash their permitted rate of return to 8 per cent.

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U.S. power grid cyberattacks expose critical infrastructure to Russian hackers, DHS warns, targeting SCADA, smart grid sensors, and utilities; NERC CIP defenses, microgrids, and resilience planning aim to mitigate outages and supply chain disruptions.

Key Points

U.S. power grid cyberattacks target utility control systems, risking outages, disruption, requiring stronger defenses.

✅ Russian access to utilities and SCADA raises outage risk

✅ NERC CIP, DHS, and utilities expand cyber defenses

✅ Microgrids and renewables enhance resilience, islanding capability

The U.S. Department of Homeland Security has revealed that Russian government hackers accessed control rooms at hundreds of U.S. electrical utility companies, gaining far more access to the operations of many more companies than previously disclosed by federal officials.

Securing the electrical grid, upon which is built almost the entirety of modern society, is a monumental challenge. Several experts have explained aspects of the task, potential solutions and the risks of failure for The Conversation:

1. What’s at stake?

The scale of disruption would depend, in part, on how much damage the attackers wanted to do. But a major cyberattack on the electricity grid could send surges through the grid, much as solar storms have done.

Those events, explains Rochester Institute of Technology space weather scholar Roger Dube, cause power surges, damaging transmission equipment. One solar storm in March 1989, he writes, left “6 million people without power for nine hours … [and] destroyed a large transformer at a New Jersey nuclear plant. Even though a spare transformer was nearby, it still took six months to remove and replace the melted unit.”

More serious attacks, like larger solar storms, could knock out manufacturing plants that build replacement electrical equipment, gas pumps to fuel trucks to deliver the material and even “the machinery that extracts oil from the ground and refines it into usable fuel. … Even systems that seem non-technological, like public water supplies, would shut down: Their pumps and purification systems need electricity.”

In the most severe cases, with fuel-starved transportation stalled and other basic infrastructure not working, “[p]eople in developed countries would find themselves with no running water, no sewage systems, no refrigerated food, and no way to get any food or other necessities transported from far away. People in places with more basic economies would also be without needed supplies from afar.”

2. It wouldn’t be the first time

Russia has penetrated other countries’ electricity grids in the past, and used its access to do real damage. In the middle of winter 2015, for instance, a Russian cyberattack shut off the power to Ukraine’s capital in the middle of winter 2015.

Power grid scholar Michael McElfresh at Santa Clara University discusses what happened to cause hundreds of thousands of Ukrainians to lose power for several hours, and notes that U.S. utilities use software similar to their Ukrainian counterparts – and therefore share the same vulnerabilities.

3. Security work is ongoing

These threats aren’t new, write grid security experts Manimaran Govindarasu from Iowa State and Adam Hahn from Washington State University. There are a lot of people planning defenses, including the U.S. government, as substation attacks are growing across the country. And the “North American Electric Reliability Corporation, which oversees the grid in the U.S. and Canada, has rules … for how electric companies must protect the power grid both physically and electronically.” The group holds training exercises in which utility companies practice responding to attacks.

4. There are more vulnerabilities now

Grid researcher McElfresh also explains that the grid is increasingly complex, with with thousands of companies responsible for different aspects of generating, transmission, and delivery to customers. In addition, new technologies have led companies to incorporate more sensors and other “smart grid” technologies. He describes how that, as a recent power grid report card underscores, “has created many more access points for penetrating into the grid computer systems.”

5. It’s time to ramp up efforts

The depth of access and potential control over electrical systems means there has never been a better time than right now to step up grid security amid a renewed focus on protecting the grid among policymakers and utilities, writes public-utility researcher Theodore Kury at the University of Florida. He notes that many of those efforts may also help protect the grid from storm damage and other disasters.

6. A possible solution could be smaller grids

One protective effort was identified by electrical engineer Joshua Pearce at Michigan Technological University, who has studied ways to protect electricity supplies to U.S. military bases both within the country and abroad. He found that the Pentagon has already begun testing systems, as the military ramps up preparation for major grid hacks, that combine solar-panel arrays with large-capacity batteries. “The equipment is connected together – and to buildings it serves – in what is called a ‘microgrid,’ which is normally connected to the regular commercial power grid but can be disconnected and become self-sustaining when disaster strikes.”

He found that microgrid systems could make military bases more resilient in the face of cyberattacks, criminals or terrorists and natural disasters – and even help the military “generate all of its electricity from distributed renewable sources by 2025 … which would provide energy reliability and decrease costs, [and] largely eliminate a major group of very real threats to national security.”

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Maryland Community Solar Program enables renters and condo residents to subscribe to offsite solar, earn utility bill discounts, and support projects across BGE, Pepco, Delmarva, and Potomac Edison territories, with low to moderate income participation.

Key Points

A pilot allowing residents to subscribe to offsite solar and get bill credits and savings, regardless of home ownership.

✅ 5-10 percent discounts on standard utility rates

✅ Available in BGE, Pepco, Delmarva, Potomac Edison areas

✅ Includes low and moderate income subscriber carve-outs

Maryland has launched a pilot program that will allow anyone to power their home with solar panels — even if they are renters or condo-dwellers, or live in the shade of trees.

Solar developers are looking for hundreds of residents to subscribe to six power projects planned across the state, including recently announced sites in Owings Mills and Westminster. Their offers include discounts on standard electric rates.

The developers need a critical mass of customers who are willing to buy the projects’ electricity before they can move forward with plans to install solar panels on about 80 acres. Under state rules, the customer base must include low- and moderate-income residents, many of whom face energy insecurity challenges.

The idea of the community solar program is to tap into the pool of residential customers who don’t want to get their energy from fossil fuels but currently have no way to switch to a cleaner alternative.

That could significantly expand demand for solar projects, said Gary Skulnik, a longtime Maryland solar entrepreneur.

Skulnik is now CEO of Neighborhood Sun, a company recruiting customers for the six projects.

“You’re signing up for a project that won’t exist unless we get enough subscribers,” Skulnik said. “You’re actually getting a new project built.”

It could also stoke simmering conflicts over what sort of land is appropriate for solar development.

The General Assembly authorized the community solar pilot program in 2015. But not-in-my-backyard opposition and concerns about the loss of agricultural land have slowed progress.

Community solar could force more communities to confront those sorts of clashes — and to consider more carefully where solar farms belong.

“We are going to see a lot more solar development in the state,” said Megan Billingsley, assistant director of the Valleys Planning Council in Baltimore County. “One of the things we haven’t seen is any direction or thoughtful planning on where we want to see solar development.”

The General Assembly authorized about 200 megawatts in community solar projects — enough to power about 40,000 households — over three years.

Customers can sign up for projects built within the territory of their electric utility. About half of that solar energy load has been allotted for the region served by Baltimore Gas and Electric Co.

By subscribing to a community solar project, customers won’t actually be getting their electricity from its photovoltaic panels. But their payments will help finance it and, in some cases, complementary battery storage solutions as well.

The Public Service Commission has approved six projects so far: Two in BGE territory, in Owings Mills and near Westminster; one in Pepco territory, in Prince George’s County; two in Delmarva Power and Light territory, in Caroline and Worcester counties; and one in Potomac Edison territory, in Washington County where planning officials have developed proposed recommendations.

More projects are expected to win approval in the next two years.

But none of them can be built unless they catch on with electricity customers. The developers are looking for 2,600 customers statewide.

Skulnik would not say how many customers an individual project needs to get the green light. But he said that the Prince George’s proposal, a 25-acre array atop a Fort Washington landfill is the closest, with about 100 subscribers so far.

The terms of subscription vary by project, but discounts range from 5 percent to 10 percent off utility rates. Customers are asked to commit to the projects for as long as 25 years. (They can break the contracts with advance notice, or if they move to a different utility service area.)

Maryland joins more than a dozen states in advancing community solar projects, as scientists work to improve solar and wind power technology.

Corey Ramsden is an executive for Solar United Neighbors, a nonprofit that promotes the solar industry in eight states and the District of Columbia.

He said potential customers are often confused by the mechanics of subscribing to community solar, or hesitant to commit for years or even decades. The industry is working to answer questions and get people more comfortable with the idea, he said.

But it has been a challenge across the country, including debates over New England grid upgrades, and in Maryland. Advocates for solar say there is broad support for renewable energy generation. The state has set goals to increase green energy use and reduce greenhouse gas emissions.

Still, many Marylanders don’t welcome the reality when a project attempts to move in.

Rural land is often the most desirable for solar developers, because it requires the least effort to prepare for an array of panels. But community groups in those areas have asked whether land historically used for farming is right for a more industrial use.

“People are very much in favor of going for a lot more renewables, for whatever reason,” said Dru Schmidt-Perkins, the former president of the land conservation group 1,000 Friends of Maryland. “That support comes to a screeching halt when land that is perceived to be valuable for other things, whether a historic view­shed or farming, suddenly becomes a target of a location for this new project.”

Such concerns have at least temporarily stalled the momentum for solar across the state. Anne Arundel County had at least five small community solar projects in the pipeline in December when officials decided to pause development for eight months. Baltimore County officials imposed a four-month moratorium on solar development before passing an ordinance last year to limit the size and number of solar farms.

Billingsley said the Valley Plannings Council, which advocates for historic and rural areas in western Baltimore County, is frustrated that there hasn’t been more discussion about which areas the county should target for solar development — and which it shouldn’t.

She said she fears that pressure to expand solar farms across rural lands is only going to grow as community solar projects launch, and as lawmakers in Annapolis talk about more policies to promote investment in renewable energy.

Schmidt-Perkins called community solar “an amazing program” for those who would install solar panels on their roofs if they could. But she said its launch heightens the importance of discussions about a broader solar strategy.

“Most communities are caught a little flat-footed on this and are somewhat at the mercy of an industry that’s chomping at the bit,” she said. “It’s time for Maryland to say, ‘Okay, let’s come up with our plan so that we know how much solar can we really generate in this state on lands that are not conflict-based.’”

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U.S. Electricity Demand Decoupling signals GDP growth without higher load, driven by energy efficiency, LED adoption, services-led output, and rising renewables integration with the grid, plus EV charging and battery storage supporting decarbonization.

Key Points

GDP grows as electricity use stays flat, driven by efficiency, renewables, and a shift toward services and output.

✅ LEDs and codes cut residential and commercial load intensity.

✅ Wind, solar, and gas gain share as coal and nuclear struggle.

✅ EVs and storage can grow load and enable grid decarbonization.

By Justin Fox

Economic growth picked up a little in the U.S. in 2017. But electricity use fell, with electricity sales projections continuing to decline, according to data released recently by the Energy Information Administration. It's now been basically flat for more than a decade:

Measured on a per-capita basis, electricity use is in clear decline, and is already back to the levels of the mid-1990s.

Sources: U.S. Energy Information Administration, U.S. Bureau of Economic Analysis

*Includes small-scale solar generation from 2014 onward

I constructed these charts to go all the way back to 1949 in part because I can (that's how far back the EIA data series goes) but also because it makes clear what a momentous change this is. Electricity use rose and rose and rose and then ... it didn't anymore.

Slower economic growth since 2007 has been part of the reason, but the 2017 numbers make clear that higher gross domestic product no longer necessarily requires more electricity, although the Iron Law of Climate is often cited to suggest rising energy use with economic growth. I wrote a column last year about this big shift, and there's not a whole lot new to say about what's causing it: mainly increased energy efficiency (driven to a remarkable extent by the rise of LED light bulbs), and the continuing migration of economic activity away from making tangible things and toward providing services and virtual products such as games and binge-watchable TV series (that are themselves consumed on ever-more-energy-efficient electronic devices).

What's worth going over, though, is what this means for those in the business of generating electricity. The Donald Trump administration has made saving coal-fired electric plants a big priority; the struggles of nuclear power plants have sparked concern from multiple quarters. Meanwhile, U.S. natural gas production has grown by more than 40 percent since 2007, thanks to hydraulic fracturing and other new drilling techniques, while wind and solar generation keep making big gains in cost and market share. And this is all happening within the context of a no-growth electricity market.

In China, a mystery in China's electricity data has complicated global comparisons.

Here are the five main sources of electric power in the U.S.:

The big story over the past decade has been coal and natural gas trading places as the top fuel for electricity generation. Over the past year and a half coal regained some of that lost ground as natural gas prices rose from the lows of early 2016. But with overall electricity use flat and production from wind and solar on the rise, that hasn't translated into big increases in coal generation overall.

Oh, and about solar. It's only a major factor in a few states (California especially), so it doesn't make the top five. But it's definitely on the rise.

What happens next? For power generators, the best bet for breaking out of the current no-growth pattern is to electrify more of the U.S. economy, especially transportation. A big part of the attraction of electric cars and trucks for policy-makers and others is their potential to be emissions-free. But they're only really emissions-free if the electricity used to charge them is generated in an emissions-free manner -- creating a pretty strong business case for continuing "decarbonization" of the electric industry. It's conceivable that electric car batteries could even assist in that decarbonization by storing the intermittent power generated by wind and solar and delivering it back onto the grid when needed.

I don't know exactly how all this will play out. Nobody does. But the business of generating electricity isn't going back to its pre-2008 normal. 

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