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Electrifying Developments 3

 

Relative to some of its utility industry brethren, Progress Energy Carolinas has a reputation as a good corporate citizen. It came as a shock to many residents of its Western North Carolina service area when, in December 2006, the company struck a deal with Buncombe County to build a new peaking power plant in Woodfin, a small town north of Asheville.

The plan was foiled by public opposition, but the supply and demand problem remains. Population in the Asheville area continues to grow. WNC shattered its previous peak electrical demand record on the morning of January 16, 2009. The company hadn't projected numbers that high for at least another five years.

These reports continue an account of maneuverings between Progress and the Community Energy Advisory Council (CEAC) it appointed to advise the company on meeting WNC's electrical needs. In March, 2009, Progress regional VP Robert Sipes, who shepherded CEAC since its inception, was promoted and replaced by John Smith III. The change occured at a time when CEAC was reassessing its usefulness and the company was finally rolling out the first in a series of long-awaited efficiency programs.

Reports prior to April, 2009, are available are available: 1/07-3/08 and 4/08-2/09.

ACT III, Scene I: New guy keeps head down, April 24, 2009
Of Action and Operating Reserve, June 12, 2009
Light at the End of the Tunnel, August 14, 2009
A CEAC Thanksgiving, November 13, 2009


ACT III, Scene I: New guy keeps head down

Progress Energy’s Community Energy Advisory Council (CEAC) met on April 24th at a crossroads in the council’s existence. Robert Sipes has been promoted to VP for Distribution (SmartGrid planning and implementation) and was replaced as western regional VP by John F. Smith III. The change comes at a time when the proper role of the council has been opened to debate, the first of Progress’s long-awaited efficiency programs are rolling out, and peak demand for electricity in WNC is higher than ever.

New leadership
Sipes and Smith were both on hand for the April meeting. Everyone thanked Sipes for his service here and wished him well on his promotion.

Smith is a 26-year veteran of the electric utility business. He’s been with Progress for 6 years—none stationed in WNC. He previously worked for Exelon in Texas and Pennsylvania where his jobs were related to nuclear, fossil-fuel and hydro generation. Since joining Progress Smith has been involved with power transmission, most recently managing transmission construction and engineering for Progress Carolinas. He introduced himself in a gracious and soft spoken manner. After that he was content to observe Sipes and Progress CEO Lloyd Yates in action with the council.

EnergyWise and solar hot water
Sipes announced that the EnergyWise program is now available. Residential customers are offered as much as $75 dollars per year to allow Progress to regulate electric hot water, home heat, and air conditioning systems at times of peak demand. The company will install wireless switches on participating appliances. Progress says customers are unlikely to notice a functional difference but that the impact on demand spikes should be substantial.

Fifty WNC residential customers will also be selected to participate in a solar hot water pilot program. The company is offering an incentive of $1000 to offset installation costs and pay for the inconvenience of allowing Progress to monitor the new solar thermal systems. Company spokesperson Martha Thompson told me that the program could be more widely available by the end of the year.

Yates in the house
Progress CEO Lloyd Yates is not a newcomer to CEAC. He was on hand for the first two council meetings and returned in December 2007 to—retrospectively—defend Progress’s opposition to provisions for a Renewable Energy Standard (RES or REPS) in 2007 federal energy legislation. CEAC hadn’t been happy to learn after the fact that Progress helped torpedo RES. Requirements for utility companies to obtain a certain percentage of electricity from renewable sources are widely considered fundamental to the advancement of wind, solar, and other alternative power generation.

Yates’s began this month’s appearance by congratulating CEAC, Sipes and Progress for the achievements of the last two years. Then he revealed that energy politics were once again on his mind. He’d just returned from talking with members of Congress about the “American Clean Energy and Security Act of 2009” (ACESA) proposed by Reps. Waxman and Markey.  For an overview of the bill’s reception in the House, see Link. Among other things, ACESA would:

  • Establish RES, requiring 25% of electricity to come from renewables by 2025.
  • Initiate a carbon cap and trade program—unclear whether initial emission allowances would be auctioned and who gets the revenue produced for the government.
  • Set national efficiency standards for buildings, appliances, and other sectors including utility companies. By 2020 electric utilities must show a 15% reduction in electricity consumption compared to “Business as Usual” projections.

Yates couched his comments in the context of “getting the greatest reduction of carbon at the least cost to customers.” He believes the 25% renewable energy target is too high. It would, he said, result in driving green jobs and money to states “richer” in solar and wind resources than the Carolinas. As in 2007 it appears that Progress will oppose a national RES, preferring that states set their own.

(During the discussion period following Yates’s presentation, Michael Shore disputed the assessment that NC would be a loser if a high national RES is adopted. “We have excellent solar and wind resources. Ten companies are already manufacturing components for wind and solar equipment.” Robin Cape wanted to know, “What’s wrong with sending money to other states to pay for renewable power? We send money out of state to pay for coal.”)

Yates said that his company supports a cap and trade program for carbon emissions but is opposed to auctioning emission allowances. Auctions would drive up utility bills. He believes that public revenues from cap and trade should be distributed to the states. If Washington keeps the money who knows where it would go?

(Vernon Daugherty, Cape and other council members agreed with Yates about sending cap and trade revenue to the states, where it is more likely to be used to offset adverse impacts on low-income customers, improve the energy efficiency of school buildings, etc.)

Yates closed his presentation by reminding CEAC about the local peak power dilemma. “In our territory energy use has flattened out, partly due to the economy and partly due to efficiency and conservation. But we added 17,000 customers in 2008 and set a peak demand record in WNC that we didn’t expect until 2014. We’re required to be able to replace the power of our largest generating unit [a coal unit at Lake Julian] within a few minutes. … This group needs to address the operating reserve issue [federally required immediately available excess generating capacity]. Come up with a plan that the community will accept. It’s time to start making the tough decisions.”

Dialogue
With a single exception, see below, CEAC members more or less joined Yates in praising CEAC and the progress of the past two years. Shore likened it to changing the direction of an ocean liner. Council members then proceeded to raise a variety of issues.

North Carolina is second only to Georgia as an importer of coal obtained by mountaintop removal. NC State Rep. Pricey Harrison has again introduced legislation to ban the importation or burning of such coal. Cape asked Yates where Progress stands on the issue. Yates ducked, saying that Progress hasn’t weighed in on mountaintop removal.

Daugherty wondered what Progress is doing to capture more energy from existing power plants. Yates said that increases in nuclear plant efficiency provide “a good bang for the buck.” The company is also exploring the possibilities of combined cycle generation.

In response to a question from Terry Albrecht, Yates said Progress is still mulling over the idea of an efficiency standard for utility companies. “With all the layering [RES + cap and trade + efficiency standard] we don’t know what it would mean for customers’ electric bills. Would the average $100 bill go to $200? Is that affordable?” Yates thought it might be better to allow states to have different efficiency standards. Patrick Fitzsimmons liked the idea of regional standards. Yates contrasted the low price of a kilowatt hour here with higher rates in other parts of the country. He said low energy prices are good for economic development. 

Dave Hollister agreed with Yates that understanding costs and consequences are important. He wondered when that logic would truly be applied to the burning of fossil fuels. Conservation and efficiency measures are already cheaper than continued attachment to fossil fuels, he said.

Hollister also hoped Yates would consider supporting feed-in tariffs as a means of encouraging alternative energy. The existing Renewable Energy Credit (REC) system for selling electricity to Progress is unwieldy and financially risky, he said. “The market for commercial-sized projects is dead in North Carolina,” he told me. “There’s no assurance about what you’ll be paid for electricity.” Feed-in tariffs obligate a utility to pay a set price per kilowatt hour and to maintain that price for an extended period of years. Albrecht, Shore and Richard Fireman favored the feed-in tariff idea.

Isaac Coleman asked whether Progress could kick in any money or resources to stretch the effect of stimulus funds allocated to the Asheville Housing Authority. Yates said he’d put Coleman in touch with some people. Larry Shirley was pleased to note that conservation and efficiency programs seem to be moving through the utilities commission at a quicker pace this year. Shirley and Buddy Gaither said knowledgeable businesses and members of the Asheville community are eager to invest in energy efficiency. Progress was urged to help CEAC do more to spread the word.

Richard Fireman induced a case of conversational whiplash by refusing to make nice. “This dialogue is self-congratulatory. In two years we’ve failed to prevent a new peak power record. We knew we were in deep trouble with climate change and power. We haven’t done anything to change direction, even after the Intergovernmental Panel on Climate Change issued its 2007 report. Framing the issue in terms of dollar cost misses the boat. There have been six mass extinction events in the history of the planet. We’re heading into another one. I don’t agree with the mission of this committee. We shouldn’t be talking about a balanced solution. We should be talking about survival.” Fireman went on to second Cape’s concerns about mountaintop removal, posing the problem as one of morality and science rather than narrowly defined fuel costs. He advocated a full auction process for awarding emission allowances in a cap and trade program, referencing Europe’s experience with giving allowances away. For another perspective see Link. In response to Yates’s ominous dangling of $200 monthly power bills, Fireman asked whether building $14 billion worth of new nuclear reactors at Shearon Harris wouldn’t have a similar outcome for customers. Finally he encouraged CEAC to investigate North Carolina House Bill 1050, an act that would establish an independent (non-utility) energy efficiency administrator in the state.

Shore responded that, “It’s important to celebrate our victories.”

Harry Harrison said, “We need to think about revolutionary change. Policies and ideas will have to change. It won’t be popular because it will be radical. Let’s do something that allows us to sustain life.”

Rick Lutovsky, a devoted runner, told of his recent visit to Shanghai. The air was so polluted he couldn’t run outside. During his nine-day stay he saw only three birds and two squirrels. He’s learned that some areas of California are having trouble meeting air quality standards because of particulate pollution crossing the Pacific from China.

Cape implored Yates, “Don’t use us as fluff PR. Let’s go [to legislators and regulators] as one voice but send your people to work with us on things like feed-in tariffs. We want you to use the resources you have here.”

Yates had the last word. “We burn mainly coal and nuclear fuel. In order for us to change the way we burn energy we need to engage the public about how they use energy. Forty percent of greenhouse gases come from power plants, 40% from transportation, and 20% from industry. I challenge you to get people to understand they need to change the way they use energy.”

There will be no CEAC meeting in May. The next scheduled session will be on June 12th.
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Sidebar
During the CEAC hiatus, facilitator Steve Cochran interviewed CEAC members and this reporter about perceptions of the council. The executive summary of the findings are reprinted here in their entirety. I have not seen the full report.

CEAC Strategic Planning Interview Process
March and April, 2009 – Steve Cochran, Sustainability Strategies LLC

Overview
As a component of the CEAC strategic planning process personal interviews were held with all 24 CEAC members and with Michael Hopping, for his unique perspective as CEAC ‘reporter’. All individuals were asked the same 5 questions:

  1. What (if anything) is Working and Effective with CEAC?
  2. What’s Not?
  3. What is the Critical Future Direction for CEAC?
  4. How can I (Steve) Better Support the Effort?
  5. What Other Input Would You Like to Offer?

 

Individual responses to each question (with attribution by initials) are shown in the attachment. As may be expected, they encompass a broad range. The gamut ranges from majority enthusiasm and high praise for the effort and it’s leadership so far to a small minority’s frustration with the pace of implementing regional energy efficiency and conservation programs, tackling the large social issues – and in some cases with the narrow viewpoint of some fellow members.

In general, however, there is a decidedly positive opinion of the effort so far and a similarly strong desire for CEAC to continue, expand its scope and structure and become the driver for implementing a regional energy strategy. Without exception, the cross-sector connections, regional partnerships, and energy sector educational opportunities CEAC has fostered are seen as groundbreaking, critical and needed. The openness of PGN and the access to its leadership by CEAC members is viewed as a landmark effort, and one that must continue. The increased understanding of the complexity and inter-connected regulatory nature of the energy business is regarded as a revelation by many.

Similarly, but with several notable exceptions, the large majority of CEAC members see their role as focused on regional energy efficiency and conservation imperatives and implementation – not as a forum for debate of overarching societal issues and energy policy.

Members see themselves as front line “we need to make it happen” leaders helping their constituencies get into action for specific results, with a need for a “moon shot” collective goal that all can support, and measure. The need for many diverse efforts like the recent Business Forum, and the need for PGN to support such efforts, via the sector teams is clear.

An expanded and action-oriented CEAC that includes and is supported by, but is not solely driven by PGN is seen as a community imperative – there is virtually no dissent on that point.

Finally, there is a keen desire for continuous updating and understanding of the implementation and progress of the 23 regional programs and projects. In some cases, members were not aware of their existence or thought they had been tabled.

CEAC members in general see this period as a necessary evolution of the effort and this time of transition in PGN leadership as an opportunity for greater personal ownership and action, in partnership and with the support of PGN, but not mandated by PGN.

—Michael Hopping
copyright © 2009 all rights reserved
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Of Action and Operating Reserve

On June 12th Progress Energy’s Community Energy Advisory Council (CEAC) began its third year of existence in the throes of multiple transitions. Regional Progress leadership has passed from Robert Sipes to John Smith III, a man new to WNC in addition to his job and the council.

Meanwhile a broader leadership issue has become a chronic CEAC subtext. The group is finding it difficult to move from talk to community action. At an earlier meeting Dave Hollister framed it as, “Progress needs a seat at the table, but it should not be the table.” How CEAC could become the table is unclear given its charter limitations. Progress had hoped to promote more council ownership of public outreach by dividing CEAC members into community sector action teams but results have been spotty.

Progress CEO Lloyd Yates stepped into the Alphonse and Gaston environment at CEAC's April session to, in effect, call the central question. How should his company address the 200-250 megawatt (MW) shortfall in operating reserve (federally mandated generating capacity sufficient to meet peak demand even if the largest single power source goes down) in a manner acceptable to the community?

Sector and company updates
But updates and announcements first. None of the sector teams had formally met in the seven weeks since CEAC’s April meeting. Members of some sectors collaborated informally. Rick Lutovsky, reporting for Business, said he’d received positive feedback about the commercial and industrial energy efficiency forum his sector sponsored. “We’ll probably be doing something again,” he said.

The Education sector concentrated on Wilson College’s EcoTeam teaching module for third grade students. Vernon Daugherty and Margot Flood envisioned building climate and energy education components into the curriculum and offering EcoTeam to additional schools. Flood said that demand consistently exceeds availability.

Robin Cape, speaking for Government, reported that the City of Asheville submitted a proposal to the Southeast Energy Efficiency Alliance to create and fund a sustained community energy alliance. The winning government entity plan should “achieve unprecedented gas, electricity and water savings by retrofitting buildings and installing renewable technologies in all end-use sectors.” Also Asheville is actively pursuing federal stimulus money to help with energy-saving building retrofits. The Asheville-Buncombe Sustainable Community Council is in search of funds to implement “Reading, Riding, and Retrofit a project to retrofit school buildings, purchase hybrid buses, and educate students about energy.

Jonah Butcher had nothing to report for the Home & Community sector. Instead he challenged Progress to reconsider the urgency of its response to what he described as “a huge energy efficiency gap in this country as well as carbon and peak energy problems everywhere.” Progress excels at responding to localized emergencies such as ice storms, he said, but the energy and climate change emergencies haven’t generated that sort of a response. “We’re wasting probably 50% of the energy in buildings,” he said, asking Smith and Martha Thompson, “Do you take this personally?”

Thompson replied, “Our country has been lulled into an expectation that energy can be taken for granted. [Progress] can do more but we’re making great strides. I’m proud of my company for saying we don’t have all the answers and asking for help.”

Smith followed her lead, “We’ve got a long way to go but I’m proud of what we’ve done in the last hundred years. Our core business is safe, reliable cheap power that customers can use as they choose. Our core business is changing to the use of power efficiently, effectively and responsibly.”

Following a pat on the back to CEAC for past achievements, Smith moved on to announcements about new Progress efficiency and conservation developments. The company is talking with the City of Asheville about a pilot project for LED streetlights. Progress filed dockets with the utilities commission to implement a Commercial, Industrial, and Governmental (CIG) demand response program and a low-income residential retrofit program titled Neighborhood Energy Saver. Another new name is SunSense, a suite of photovoltaic and solar hot water offerings for residential and commercial customers in the works. SunSense would also outfit select schools with 2-kilowatt photovoltaic arrays. Some program components have received utility commission approval. Thompson wasn’t sure whether other elements, such as paying residential customers $1.50-$2.00 per installed watt of photovoltaic power, would require a go ahead from the commission.

Early figures on WNC customer enrollment in the new EnergyWise program have been disappointing, Thompson said, noting that only one CEAC member had signed up. Smith added that the success of demand side management programs depends on the degree of market penetration.

Operating reserve
Estimates of the gap between locally generated electricity and Progress’s federally mandated operating reserve in WNC have been revised upward to 270 MW. This is about 100 MW higher than it was two years ago when CEAC was formed to offer the company advice on reducing the deficit. (Expensive spot power contracts with other utility companies should continue to fill the gap through 2011 or 2012.)

Brainstorming about the operating reserve problem got off to a rocky start. CEAC facilitator Steve Cochran laid out a structured input format: two rounds of suggestions from council members (with two and one minute time limits respectively) taken in the order of seating. Progress would analyze the ideas and report back at an expanded August meeting. CEAC wouldn't meet in July..

Robin Cape objected. She hadn’t understood this meeting to be a one-shot opportunity and would have prepared differently for it if she had.

Smith responded, “CEAC has had two years already. Progress needs to set its goals and move forward to meet our commitments for peaks.”

Richard Fireman noted the absence of several council members with technical expertise. He considered their input crucial and requested that it be obtained before the company starts making decisions. He also requested that Ned Doyle (see below) be heard at length about the energy efficiency and conservation initiative he’s rolling out this summer. Fireman suggested wanted Progress to bring in experts such as ACEEE that deal with these issues on a regular basis. (LaVoy Spooner later agreed that it isn't necessary to “reinvent the wheel,” and Cape renewed her offer to arrange a visit from officials of the cutting edge Texas municipal utility, Austin Energy.)

Cochran declined to move Doyle up on the agenda but softened his description of the brainstorming session. It became, “a chance to start the dialogue.”

Deficiencies in our physical system of grid and buildings Butcher followed his earlier emergency comments with the suggestion that Progress file a petition of need with the utilities commission for funds necessary to create 200 MW of demand reduction. “South Carolina has the ability to regulate building efficiency,” he said. “Treat it like an engineering project.”

Larry Shirley, Cape, Flood and Lutovsky also focused on inefficient buildings, the largest “consumers” of electricity. Lutovsky said residential weatherization produced major savings in Illinois. According to Flood, Warren Wilson College is reducing its electric demand by 25% overall (1 MW) in five years. She challenged colleagues around the table to lead similar efforts in their own organizations and churches. Her college also has experience with weatherizing the homes of low-income Buncombe County residents. There are 44,000 such households in the county, she said. Weatherization would cut their electricity demand by 30% and save money on power bills, but the work must be subsidized. Shirley agreed that financing is important, suggesting that Progress institute on-bill financing for efficiency improvements.

According to Reid Conway, as much as 60-70% of generated electricity may be lost in transmission. (Smith replied that Conway’s estimate was on the high end, citing other estimates as low as 6%. He didn’t know the magnitude of losses in the Progress sections of the grid.)

Inducing customer behavioral change “The pubic considers adequate electricity to be Progress’s problem and Progress thinks it’s the customers’ problem,” Harry Harrison said. Rather than wait for a grid emergency, he called for public education now, including information on the power consumption of common household appliances and equipment. Conway wanted to outfit homes with interactive power meters that inform people about how much power they’re using in real time. Ullman complained that Progress’s online interface makes it difficult for her to monitor the City of Asheville’s electric consumption.

Spooner suggested a door-to-door campaign to encourage people to take part in EnergyWise and other efficiency programs. Butcher thought a door-to-door campaign apart from Progress might have more options. He shook his head at the company’s promotion of the $17 billion (Levy County, FL) nuclear project as a job creator. It would create only 500 permanent jobs, he said. “It’s tough to swallow Progress’s messaging about nuclear power.”

Additional supply/generation Daugherty said he’d been talking with (absent) council member Michael Shore about the feasibility of adding solar thermal generation to the grid in a peaking capacity. Unlike photovoltaic arrays, solar thermal has the ability to store power for use when the sun isn’t shining. Sunlight can be used much more than it is for daytime lighting, he said, using technologies such as Solatube. He also hoped Progress would consider implementing cogeneration at the Lake Julian power plant to harness the heat of waste steam.

Lutovsky said that uncertainty about the adequacy of electric supply puts jobs at stake. He wondered about siting a new peaker plant, solar or otherwise, on the Lake Julian campus.

Coloring outside the lines Maggie Ullman observed that CEAC mainly consists of idea people, not doers. She thought a hired staff person might be able to organize the council around a single dynamic proposal and facilitate its accomplishment. Flood said Progress and its customers need to take more steps to move away from coal. Cape complained that the centralized generation/operating reserve model is bad. “Denmark and some other places in Europe have distributed generation systems [numerous small producers scattered throughout the grid that usually rely on renewable sources] and do well with half the sunlight we have. Progress could become a leader in this new model.”

Fireman used his time to ask whether Progress is really serious about engaging with the climate emergency. He, like Butcher, saw little evidence that the company is in emergency mode and suggested that it should get behind the NC Save$ Energy bill, HB 1050, instead of proceeding with a costly mainly nuclear plan to increase supply and investing small amounts in conservation and efficiency. NC State Rep. Pricey Harrison, one of HB 1050’s primary sponsors, told me that the bill is unlikely to emerge from committee this year unless state budget wrangling extends the session. Butcher said there should at minimum be a full discussion of decoupling the connection between company profit and electricity sales. See “Electric Rates

The discussion closed with Cochran promising to consider the usefulness of a July CEAC meeting to collect other ideas. Butcher asked that the full list be made available online.

200 (now 250) MegaWatts of Community Action
Coincidentally, an ambitious community action plan independent of Progress and CEAC is beginning this summer. Ned Doyle, having learned of CEAC’s June agenda, had asked for time to discuss the upcoming campaign. He was told he’d have to settle for speaking during the public comment period. His three minutes increased to six when I ceded my comment time to him. This reporter has been a regular volunteer at Doyle’s flagship project, the Southern Energy and Environment Expo (SEE Expo). He has also appeared on Doyle’s weekly public affairs radio program dealing with energy, environment and economic issues, “Our Southern Community,” as have several CEAC members and Progress officials including recently departed Western Regional VP Robert Sipes. Doyle has an impressive thirty year résumé in the alternative energy field, beginning at Mother Earth News Magazine's Eco Village Research Center. The SEE Expo he coordinates is the second largest event of its kind in the United States and is in its ninth year. “Our Southern Community” has been a Sunday morning programming fixture on WNCW 88.7 FM since 2003.

Prior to the meeting Doyle had emailed CEAC members a thumbnail of his then “200 MegaWatts of Community Action” plan. An updated description of “250 Megawatts of Community Action” is available online. The increase, he said, reflected revised estimates of the operating reserve deficit. He invited CEAC to endorse his action plan, observing that events are moving on around the group and that action to drastically increase conservation and efficiency is long past due. What he proposed, “isn’t the final answer but it is a starting point for action that isn’t happening now. I’m offering you a chance to get on board.”

Doyle later said that, after the meeting, he was asked to submit a formal request for consideration and told that it is unprecedented for CEAC to endorse an action.

—Michael Hopping
copyright © 2009 all rights reserved
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Light at the End of the Tunnel

Progress Energy’s Community Energy Advisory Council (CEAC) was back in session on August 14th after foregoing a meeting in July. Company officials said the hiatus was needed to digest a list of 71 recommendations council members submitted about how to address an upcoming deficit in WNC operating reserve. The recommendations followed an April challenge from Progress CEO Lloyd Yates to, “Come up with a plan that the community will accept. It’s time to start making the tough decisions.”

Updates
Prior to hearing the Progress response to CEAC suggestions, western region VP John Smith distributed a list of the company’s fourteen energy efficiency, demand-side management, and solar initiatives. These include programs for residential, commercial, industrial, and government customers. Some are operational; others remain in process. Public education efforts such as SaveTheWatts.com are also underway.

CEAC sector teams were invited to share their action updates. Reporting for Education, Vernon Daugherty said that draft curriculum modules to expand the Warren Wilson College EcoTeam environmental education unit for third graders are being reviewed. None of the other sectors had met. Jonah Butcher of Home & Community said he’s exploring ideas for a phone-based community canvass in support of energy efficiency programs.

Paul Szurek announced the opening of the Biltmore Park Hilton. It will be LEED certified, at what level remains to be determined. Daugherty noted that A-B Tech is retrofitting three campus buildings with solar hot water.

Operating reserve
Progress Energy is required to be able to replace the output of its largest single electricity supply source within ten minutes, should it or any other source go down. This emergency capacity is known as operating reserve. Today, operating reserve in the Progress WNC region is provided by a purchase contract from PJM Rockport, an out-of-state coal-fired utility. But that contract expires at the end of the year. According to Progress system planner Sam Waters, who addressed CEAC via conference call, new purchase agreements coupled with existing local generation and power transfers from the company’s eastern service territory will delay the need for installation of a fast-start combustion turbine (peaking power plant) until December, 2012.   

Fog prevented in-person appearances by Waters and several other Progress executives tasked with responding to the CEAC recommendations. Pertinent written materials also missed the plane. Clarity was further impeded by a suboptimal phone link and PowerPoint slides that didn’t include answers to recommendations. These factors along with the sheer volume of verbiage preclude a comprehensive summary of what was said. But several points, in addition to Waters’ perhaps inadvertent revelation, stood out.

Several suggestions involved new investments in technology. Progress officials held ideas for roof-top wind generators, solar thermal additions to existing fossil fuel generating plants, commercial-sized electricity storage devices, etc. at arm’s length. A few are being tested in pilot projects—Florida will get a 75 megawatt (MW) 500-acre solar thermal plant; WNC will get a 500 kilowatt battery. But emerging technologies specialist Grant Blume said these technologies aren’t commercially viable at present. Kent Fonvielle, alternatives and renewables honcho, added that technological solutions “must make sense for our ratepayers.”

The council was told that Progress is pressing ahead with SmartGrid (see overview at SmartGrid) and will meet or exceed obligations for alternative generation imposed by North Carolina law. Fonvielle reported that existing Progress contracts for solar generation are far in excess of NC requirements. Blume, Fonvielle and Harold James were unable to provide timeframes for the adoption of new technology.

James, who has responsibility for SmartGrid and other efficiency programs, said Progress has applied for federal stimulus money to assist with SmartGrid.  The upgrades will, among other things, support more distributed generation. CEAC member Jonah Butcher was puzzled because the stimulus bill requires states receiving money for energy programs to be moving toward the decoupling (see discussion at Electric Rates) of utility profits from electricity sales volume. Progress has opposed decoupling. Gene Upchurch, speaking on policy and regulatory issues, acknowledged that this is a challenge.

Upchurch and others rejected CEAC recommendations to support several regulatory and legislative changes. Progress doesn’t want to mandate customer participation in efficiency programs or push for incentives to conserve electricity through alterations in rate structure. Tiered rate schedules might, for example, charge customers higher rates for higher consumption or for power used during hours of peak demand. James said Progress and Duke Energy continue to oppose NC Save$ Energy. This unratified state bill would take utilities out of the efficiency program driver’s seat and give the job to an independent administrator. Progress also opposes changes to the North Carolina energy efficiency law, popularly known as S 3, that would increase funding available for efficiency programs and reduce the number of large industrial customers able to opt-out of contributing to the fund.

In response to recommendations for boosting local public awareness, Smith and Martha Thompson didn’t think it was wise to try to rally the community around a single efficiency program because too many are important. As a “for instance,” Thompson announced that Pisgah View and some other low-income neighborhoods in Asheville are being considered for inclusion in the forthcoming Neighborhood Energy Saver retrofit program. She went on to say that Progress is partnering with and rallying around the S.E.E. Expo’s 250 MegaWatts of Community Action campaign kicking off at the WNC Ag Center on August 21-23.

Another recommendation concerned hiring a person to oversee and organize community efficiency efforts. Smith and Thompson said the company has account reps to help companies along these lines. Residential customers receive encouraging ads and mailers. Maggie Ullman replied that actual people tend to be more effective outreach agents.

But what about operating reserve?
Progress officials repeatedly highlighted the relation—or alleged lack of it—between recommendations and the issue Yates posed: how to resolve the operating reserve problem. Waters spoke about possibilities for generating more local power in fast-start combustion turbines. He said Progress is open to a variety of site options, including the Lake Julian campus, for a new peaking power plant.

Natural gas isn’t a viable fuel option, Waters said, because of the limited amount of gas flowing into WNC. A new gas-fired combustion turbine would require Progress to build a supply pipeline through the mountains, a project fraught with real estate headaches and high fixed costs—estimated several years ago at $20 million/year. Gas and plant would be extra. The existing peaker plants at Lake Julian are able to burn gas during the summer when other demands for it are low. During the heating season residential customers have priority, and the turbines switch over to oil-fired operation.

Waters ruled out multi-fuel power plant alternatives involving biomass as well. Burners are incapable of efficiently using both solid and liquid fuels. Biodiesel might be an option, he said, though ensuring a reliable and sufficient supply would be problematic.

Smith said new generation of some sort will also be necessary in WNC because of continued population growth. [Readers are reminded that, apart from the operating reserve dilemma, Progress pegs the gap between local generation and peak demand at 250 MW. SmartGrid is expected to take care of 20-25 MW. Company projections of the combined effect of efficiency programs may shave peaks by another 40-50 MW. However customers aren’t flocking to participate in the most powerful residential initiative, EnergyWise.]

Next steps
A frustrated Dave Hollister asked, “What are we trying to do? If our goal is no peaking plant, it helps set priorities. If that’s not a clear goal there’s less incentive to increase market penetration of the efficiency programs and a new plant is more likely. I feel like there’s always a little massage going on that we’re going to build a new power plant. Let’s set a goal.”

Smith intervened at that moment to cut off discussion and set out next steps for CEAC. He described this meeting as a milestone. The next council session, which won’t occur until November 13, will assess how the CEAC recommendations address operating reserve. He encouraged sector teams to meet and determine how they can impact the issue. Council members are free to call the Progress office at any time for assistance. The company stands ready to help in any way it can.

—Michael Hopping
copyright © 2009 all rights reserved
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A CEAC Thanksgiving

At the close of the 24th meeting of Progress Energy’s Community Energy Advisory Council (CEAC), Western Regional VP John Smith announced a major shift in the council model going forward. CEAC will henceforth meet only twice a year—May and November—to, as Smith put it, “share progress and get your advice.” Goals will be to “focus on maximizing the saturation rates [for public acceptance of efficiency programs] and growing relationships [between Progress and the community].”

Facilitator Steve Cochran then outlined a complementary alteration. Noting the council’s chronic and pervasive restlessness with CEAC charter constraints, he proposed reconvening the council as an independent action-oriented group. The new entity, provisionally called the “Community Energy Action Council” or CEAC (2), could more easily expand membership and concentrate on local projects. “Progress will have a seat at the table instead of being the table,” he said, paraphrasing a memorable complaint from council member Dave Hollister.

Cochran thought CEAC (2) might be administratively handled as a project of the Clean Air Community Trust. CACT is a local non-governmental umbrella organization with wide governmental, environmentalist and business support (including Progress Energy). CEAC already has strong CACT ties. CEAC member Jonah Butcher replaced former member Margie Meares as CACT chair. Cochran has a seat on the board.

CEAC members, Progress, and certain other community leaders are responding enthusiastically to the CEAC (2) idea, Cochran told me. While plans are not yet formalized, he imagined meetings on a frequent, perhaps monthly, basis. He anticipated renewed emphasis on the “CEAC Sector Team” action approach.

Local projects
The present status of the sector teams might be described as moribund. They weren’t even mentioned in the day’s agenda. Richard Fireman’s resignation from the council also went unremarked. His August resignation letter cited dissatisfaction with Progress’s “outdated business model of a ‘balanced solution’” including new fossil and nuclear plants. He also doubted the utility’s commitment to achieving the massive reductions in electrical demand he believed necessary to meet the challenge of global warming.

But that was August and this was November. CEAC’s almost bipolar character was in the mood for Thanksgiving.

  • In cooperation with Progress, Sundance Power, represented by Hollister, installed a 2 kilowatt (kW) wind turbine at the Hot Springs Elementary School.
  • Asheville Middle School, Owen Middle, and North Buncombe High are WNC finalists for a Progress SunSense grant of a 2 kW photovoltaic array at their school.
  • Progress will soon begin fueling some bucket trucks with biodiesel produced by Blue Ridge Biofuels.
  • Michael Shore reported that the first segment of FLS Energy’s 1 megawatt (MW) solar array at the closed Haywood County landfill has been turned on. FLS is also a principal in the largest residential solar-thermal project planned in the eastern United States, beginning with 900 residential units at Camp Lejeune. His company now employs more than forty people and continues to expand at a new office on Amboy Road.
  • Paul Szurek said Biltmore Farms has seen an up-tick in housing starts. Customers are all asking for HealthyBuilt homes. Occupancy at the new Hilton in Biltmore Park  is running ahead of schedule, better than competing hotels. Szurek attributed this to consumer demand for green accommodations; the new Hilton is pursuing LEED certification. New lighting technology saves Biltmore Farms 30% on parking lot lighting expenses.
  • Progress Energy’s Neighborhood Energy Savers program in the Carolinas kicked off in Asheville last month. (see below)

These reports of positive action, though often on a small scale, were so numerous that Robin Cape was moved to an emotional reflection on how far Progress and the community have come in three years. “It feels like we’re turning a corner. I just want to say ‘Thank you.’”

Status of the balanced solution for meeting electrical demand
Progress Energy’s balanced solution has three elements.

  • Increased energy efficiency. Goal is 2,000 MW in the company’s Carolina service areas.
  • Investment in renewable energy sources and other emerging energy technologies.
  • Upgrading existing power plants and building new plants as needed.

Chris Edge updated CEAC on the efficiency component. Edge, who manages demand side reduction programs for Progress, distributed “2009 A Year of Progress” listing company achievements so far this year.

He said the WNC service territory continues to grow, albeit at a rate half that of recent years: 10,000 new hookups so far. On a per capita basis, Progress has seen a 2% decrease in per capita residential demand for electricity in 2009. It is too soon to assess the impact of efficiency programs, but this will be forthcoming. Demonstrations of effectiveness are required by the utilities commission.

Overall, Progress has eight demand side reduction programs operating in the Carolinas. The newest, Neighborhood Energy Savers, launched in Asheville. Residents of the Pisgah View and Livingston Heights communities are the first low-income neighborhoods in the Carolinas to be offered free residential energy efficiency upgrades. To date, Edge reported, 275 homes had been served. He expected a 60-80% participation rate among the approximately 1300 eligible homeowners.

Plant closures and cutbacks probably accounted for the bulk of this year’s 19% decrease in Progress energy sales to industry. However, Edge was pleased by the early results of company incentives for Commercial, Industrial, and Governmental (CIG) customers. Power savings were running “well above our projected goal,” he said, noting that the CIG sector typically accounts for about fifty percent of system-wide improvements in areas with major efficiency campaigns. Reid Conway commended Progress on getting the word out about its CIG offers. “Duke has similar programs,” he said, “but they’re not marketing them. People don’t know what’s available.”

Holly Jones asked Edge why the WNC service territory seems to be running ahead of other areas in adopting efficiency measures. Edge said, “That isn’t always the case, but there’s a lot of business and community interest here.” Szurek emphasized the importance of allowing people to learn and explore profitable possibilities rather than imposing preconceived plans and mandates. “What we’ve done is increase the energy and opportunity in the community,” he said.

Progress is pursuing two additional residential demand side reduction programs. One would subsidize the purchase of compact fluorescent lights in partnership with existing retailers. The other would purchase used but working refrigerators for $50. The old appliances would be 95% recycled. That program has yet to be submitted for utilities commission approval.

For a report on renewable generation and emerging technologies, Smith turned to Harold James, director of alternative energy projects for Progress. James announced that the company’s SmartGrid upgrades received a $200 million boost from federal stimulus money. Progress also stands to realize $2 million worth of assistance from stimulus funds awarded to General Motors for the installation of electric vehicle charging stations in Raleigh and St. Petersburg, Florida. A deal with Ford will provide Progress with additional electric vehicles.

James said Progress is on track to meet North Carolina requirements for renewable generation through 2012. Solar projects dominate, but landfill gas projects are also becoming popular with county governments. Progress is looking to add contracts for 2013 and beyond. Purchasing off-shore wind energy may be a possibility. [Three WNC state legislators blocked ridgetop wind development in the west this year.] Vernon Daugherty asked about the status of harnessing ocean current or tidal power. James said the costs are still prohibitive.

The third leg of the Progress balanced solution relates to conventional fossil fuel and nuclear power generation. Martha Thompson, Progress community relations manager, announced that the company has received approval to build a new 950 MW gas-fueled combined-cycle plant outside Goldsboro. The new plant will replace three coal-fired units nearby. 

Smith told CEAC that operating reserve remains a major concern. Compared to doing nothing, SmartGrid and the new efficiency measures are projected to reduce peak demand in the WNC service territory by 63 MW in 2013. The federal requirement for operating reserve here is approximately 200 MW. For now, Progress meets the requirement at times of peak demand by contracting for power imported from outside the area. The contracts expire at the end of 2011 and may be extended one year. Smith said, “I’m not optimistic about renewing existing contracts.” Progress is exploring other importation opportunities but, he said, “we have to get firm ‘dispatchable’ transmission,” meaning that the power lines bringing power in have to be available 24/7 at a moment’s notice. With that, Smith left the issue hanging.

The power plant discussion ended with a question and a comment. Daugherty remarked that if electricity could be stored on an industrial scale, there’d be no problem with peak power here. He asked Smith about storage prospects. Smith replied that cost-effective technology isn’t available.

Shore said, “Please tell Raleigh to back carbon caps.” Both Progress and Duke have lobbied against proposed federal legislation to charge utilities for the carbon they produce. Caps would raise electric rates in the Southeast, where cheap coal is a major energy source. Smith said, “Our generation portfolio here is heavy on coal, about 50%.” Shore said that recent renewable energy developments in the Southeast belie the conventional wisdom that the area is poor in sources of renewable energy.

—Michael Hopping
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