NASEO 2018 Western Region Meeting Rural Energy Affordability, - PowerPoint PPT Presentation

NASEO 2018 Western Region Meeting Rural Energy Affordability, Efficiency, and Economic Development Michael Leitman Strategic Analyst NRECA Business and Technology Strategies michael.leitman@nreca.coop

Co-ops in NASEO Western Region • 6 G&Ts, 110 Distribution Utilities (includes 16 NRECA member public, tribal and mutual utilities) • Serve about 1.4 million consumer-members and 2.7 million people • About 7% of nationwide co-op sales and consumer-members . • Nationwide, 42% of distribution lines 8 meters per line mile.

Power Supply and Affordability • Affordability starts with power supply. • Hydropower is a vital resource in the West, supplying around 45% of the power sold by co-ops in the region. • Wind and solar generation are also seeing rapid growth. • Renewables play a particularly helpful role in affordability in non-grid areas of the region by offsetting diesel generation. • Co-ops are experimenting with storage and microgrids. • Consideration of joining or forming new organized markets.

Co-op Demographic Challenges • Co-ops serve about 2.7 million people across the region. • Average household income in co-op areas is about 16% below the regional average, and 10% below the U.S. average. • 31% of households have incomes under $35k most vulnerable to increased home energy costs. • Population in poverty is about 16%, about 2% higher than the regional and U.S. average, but with particularly high rates of over 20% in Arizona and New Mexico, including persistent poverty counties facing long term challenges. • Affordable electricity is a cornerstone for electric cooperatives.

Co-op Housing Stock Challenges • Housing stock is dominated by single detached homes, with low density and fewer large multi-unit structures, making large efficiency projects difficult. • There is a much higher share in manufactured (mobile) homes, about 17%, three times the regional average. • Households primarily heated by electricity matches the regional average of 34%, co-op areas have lower availability of utility natural gas (35% vs. 55%). • Rural areas often lack a network of trained installers for efficiency and weatherization improvements.

Co-op Demand Side Programs • Cooperatives in the region offer a variety of demand-side programs. • Energy audits for various consumer types (e.g. residential, C&I, farm) are widespread, and many offer weatherization programs directly or through approved local area service providers. • Many offer rebates and/or financing programs promoting efficient technologies, especially HVAC, water heating, and large appliances, many as part of the Energy Star program. • A growing number offer some form of time-based rates, which can incentivize participants to shift usage to less expensive times, reducing costs for all members.

Beneficial Electrification • Beneficial Electrification: The use of electricity in end-uses that would otherwise be powered by fossil fuels (natural gas, propane, fuel oil, or gasoline) to reduce greenhouse gas (GHG) emissions. • The low-carbon energy mix in much of the West puts the region in a particularly good position to capture these gains. • Heat-pump technologies are more efficient for HVAC and water heating. • These tend to have higher up front costs than alternatives, so programs to help reduce these costs are helpful. • Congress just extended tax-credits for geothermal HVAC through 2021.

Beneficial Electrification, ctd. • Growing opportunities around electric vehicles, both for business and private use. • Western Farmers Electric Cooperative Geo Validation Pilot Program installed ground loops and heat pumps in Oklahoma and New Mexico. • Some members are testing a “Thermal Services” model in which the cooperative installs, owns and maintains the ground loop and is repaid over time through on-bill payments based on verified energy savings. • Work with a consortium of vetted and verified installers. • Having a big impact in ensuring that new-build housing developments come equipped with ground source heat pumps infrastructure.

Manufactured Home Programs • Mobile homes make up about 16% of the housing stock in co-op areas, three times the regional average. • These are particularly challenging from an efficiency standpoint. • The vast majority were manufactured before HUD increased efficiency codes in 1994, and a good share before any codes at all. • BPA has taken a lead in programs

Manufactured Home Programs, ctd. • Mobile homes make up about 16% of the housing stock in co-op areas, three times the regional average. • These are particularly challenging from an efficiency standpoint. • The vast majority were installed before HUD increased efficiency codes for manufactured homes in 1994, and a good share before any codes at all. • Northwest Energy Efficient Manufactured Housing (NEEM) program is national model.

Community Solar & Storage • Cooperatives are leaders in Community Solar programs nationwide. • While solar costs have declined rapidly across the board, utility-scale projects remain more cost effective. • This shared model of service allows all members to participate even if they are renters or lack a suitable rooftop. • NRECA is working with partners and members on Community Storage programs, including battery and thermal storage options.

Community and Economic Development • Co-ops have a long history of fostering development in their communities. • Many co-ops have economic development programs, using financing from USDA REDL&G loans and grants, partnerships with credit unions and other lenders, and unclaimed capital credits to finance local renewable projects, business parks, and community resources. • LIHEAP and programs such as Operation-Round-Up used to help members, often through charitable foundations. • Also offer youth programs and college scholarships for local students. • Today, broadband is a major focus, leveraging the infrastructure from wide- spread AMI deployment to attract broadband developers, form partnerships, or in some cases set up broadband subsidiaries. • Nationwide, co-ops also return more than $1 billion in capital credits annually to members, keeping money in the local economy.

Policies to Aid Affordability • Expand the trained workforce in rural areas for energy efficiency and other demand side projects through local community and technical colleges. • Support Beneficial Electrification to replace less efficient non-electric technologies, as well as supporting the replacement of less efficient electric and mixed systems at the end of their life. • Help promote more efficient new manufactured housing, repairs and retrofits to existing stock, and programs to promote the replacement of the oldest pre- 1976 stock (e.g. “Cash for Clunkers”). • Policies that support community options for renewable and storage.