Tuesday, May 24th, 2016 - posted by Amber Moodie-Dyer
Three-part series highlights energy efficiency on-bill Financing as a unique opportunity for our region
If you happened to miss our first energy efficiency on-bill financing webinar on May 11, don’t despair. You can watch a recording of the webinar, which is the first in a series describing the benefits of on-bill financing entitled “Leveraging Energy Savings: On-bill Financing as an Economic Opportunity in the Southeast.”
At this point you may be wondering, what is on-bill financing and why might I want to watch a webinar about it? Do you care about saving money on your electric bills, minimizing energy waste, helping the environment and your local economy? Energy efficiency on-bill financing can address all of these concerns. With on-bill financing, people can make energy efficiency improvements to their home without having to foot the bill upfront. Instead, residents pay for the improvements over time through a monthly charge on their electric bill. With a well-designed program, many residents will have lower bills even while paying back the project cost because of the energy savings they’re achieving.
Curious? Watch the webinar below to learn more!
You can watch the one-hour webinar, or simply review the slides here. In the video above you’ll hear Appalachian Voices Energy Policy Director Rory McIlmoil discuss the effects of energy waste in the Southeast and Appalachian region, how energy efficiency programs can benefit communities by saving people money and creating jobs, the best practice Pay-As-You-Save® model of on-bill financing for weatherization improvements, sources of capital for on-bill financing programs, case studies of successful on-bill finance programs and ways you can engage in our campaign.
Keep a look out for an announcement about the second webinar in the series next month that will delve into what we’re learning about on-bill financing from a number of electric cooperatives throughout the country who offer this program (including some in our own region and state). Visit the Energy Savings for Appalachia homepage to learn more about campaign, and while you’re there, be sure to go to our Energy Savings Action Center to submit a letter to your utility provider a letter asking them to offer on-bill financing.
Each month, Appalachian Voices Executive Director Tom Cormons reflects on issues of importance to our supporters and to the region.
Three years ago, we launched our “Energy Savings for Appalachia” program with high hopes of making home energy efficiency improvements more affordable for more people in the region. Saving energy saves families money, results in more comfortable and healthy homes, creates local jobs, and reduces the environmental impacts from burning fossil fuels to meet our energy needs.
We reached a major milestone in April when Blue Ridge Electric Membership Corp. (BRE), a rural electric cooperative in western North Carolina, announced a new financing option for its members. In short, the co-op will pay the upfront costs of energy efficiency improvements for eligible members, who repay the co-op over time through a new charge on their electric bill while immediately reaping the benefits.
Appalachian Voices has worked for two years with BRE staff, local businesses, community organizations and residents to establish the program, known as “on-bill financing.” BRE is committing $100,000 and plans to expand later this year. We’re delighted that four of BRE’s five approved energy service contractors are folks we partner with to raise awareness of the tremendous economic opportunity this kind of program offers.
Appalachian Voices staff helped Zach Dixon, winner of our 2014 High Country Home Energy Contest, make his home more energy efficient through weatherization and other home improvement techniques.
As we help BRE publicize and further improve the program, we are expanding our on-bill financing campaign to the French Broad and Surry-Yadkin electric co-ops, also in western North Carolina. And to broaden our impact, Appalachian Voices co-founded the North Carolina On-Bill Working Group with several other nonprofit partners to extend the benefits of on-bill financing to families across the state.
We don’t stop there. In 2013, we also launched the campaign in East Tennessee, and have been working with the Department of Environment and Conservation, the Tennessee Electric Cooperative Association and Appalachian Electric Cooperative to design a statewide on-bill financing program, on track to be finalized soon. Due to our boots-on-the-ground education and community outreach efforts, more than half of East Tennessee’s eight co-ops have shown strong interest in joining the program and offering on-bill financing for their members.
By this time next year, we anticipate that at least several million dollars in new energy efficiency investments will have been made in Appalachia as a result of our efforts. But there’s more work to do to reach the region’s full energy savings potential. Appalachian Voices is committed to achieving that potential and realizing a more sustainable energy and economic future for Appalachia.
Tammy Owens, owner of Foxfire Farm in Dickenson County, Va., at the Southwest Virginia Economic Forum in May.
At a recent economic summit in Wise, Va., Tammy Owens paused at a display booth about the benefits of reclaiming abandoned coal mines as sites for new business. Owens owns land in nearby Dickenson County that years ago was a strip mine; it’s now in pasture for livestock as part of her organic commercial farm, established in 2011.
She also owns land along the Russell Fork River and wants to start an outfitter company that runs river trips. She’s working with the county and the U.S. Forest Service to put the take-out site downstream from her property, on another abandoned strip mine.
“It all circles back to sustainability, with the way our land is, the way it’s laid out, and keeping the natural beauty while we have a new economy,” she says. “It’s really exciting, there’s so many possibilities.”
Owens was one of more than 300 people who attended the 2016 Economic Forum on May 12, hosted by the University of Virginia’s College at Wise. The school is a key player in efforts to improve the region’s economy, and hosted the forum — with the tagline “Discover. Connect. Ignite.” — as a way to bring together the many public, private and nonprofit entities working on economic development initiatives to help move Southwest Virginia forward.
Deputy U.S. Assistant Secretary of Commerce for Economic Development addresses the audience. Copyright Tim Cox.
“Our commonwealth cannot be successful unless all our communities and regions are successfully growing,” said Matt Erskine, Deputy U.S. Assistant Secretary for Commerce for Economic Development and the morning’s featured speaker. “Yes, there are longstanding challenges in this region … but there is good reason to be optimistic.”
Under the Obama administration’s POWER Initiative to boost areas around the country hit hard by coal’s decline, the 2016 federal budget includes a total of $65 million for matching grants. The key, Erskine said, is partnership and collaboration. “It is not and cannot be a silver bullet,” he said. “It’s not a hand out. It’s all merit-based and competitive, and regional and local entities have to have skin in the game.”
To help encourage the dialogue needed to foster collaboration, the conference planning partners — which included Appalachian Voices — set up a series of breakout sessions for the afternoon. Topics covered education, workforce development, health and wellness, keeping and supporting existing businesses, attracting new businesses, developing the region’s agricultural and natural assets, and tapping into emerging industries like solar energy.
Appalachian Voices, along with many other groups, companies and government agencies, had an information booth at the conference, and solar was one of our featured topics. Over the past several months, Appalachian Voices has been intensively researching the opportunities for community-scale solar energy in the region. It’s one of the fastest growing sectors in the U.S. economy, and we’re seeking ways to help Southwest Virginia tap into it. Our emphasis is on building local wealth, developing local systems and capacities that “in-source” labor, services, materials and procurement.
Adam Wells, Appalachian Voices’ Economic Diversification Campaign Coordinator, who is based in our Norton, Va. office.
The other topic displayed at our booth was the opportunity for turning abandoned mine lands (generally strip mines closed prior to 1977) into a force for positive development, including solar energy but also a variety of other economic endeavors. Appalachian Voices is currently working to identify optimal sites for potential funding under the RECLAIM Act, bipartisan legislation that would release $1 billion over five years for remediation of sites that have a post-cleanup economic benefit.
The concept resonated with Didi Caldwell, an international expert in industrial site selection. Caldwell stopped by the Appalachian Voices booth to talk about reclamation opportunities, and during her address to the conference she mentioned the idea and our work.
It’s also what intrigues Tammy Owens of Dickenson County.
“How do we go from the industry of coal that all these generations have grown up with … into something that’s drastically new?” she asks. As she has talked with people in the region, she has found some still deny coal’s decline, but more often she finds hesitation, misgivings, a “fear of the unknown.” “We’re at the point now, coal is gone forever and it’s not coming back. We’ve had lean years before and could wait it out.”
But this time, Owens says, the region has to embrace the chance to reinvent its economic future. Judging from the turnout and enthusiasm around the UVA-Wise Economic Forum, she’s not alone.
“We wanted it to build positive energy and we definitely accomplished that,” said Shannon Blevins, Associate Vice Chancellor at UVA-Wise and head of the school’s Office of Economic Development and Engagement. As far as she knows, it was the first time in the region so many people had come together to focus on solutions. “I think there’s power in getting that many people together who care about the region, and their neighbors.”
Hundreds of ideas came out of the breaking sessions, which Blevins and others have grouped into six broad areas and will post on UVA-Wise’s website inviting people to join those groups and keep the conversation going.
In the week since the forum, Blevins has heard positive feedback from people who attended, including one woman who told her it felt like a pivotal moment, “like in five years we’ll point back to the forum as the day things really started to turn the corner.”
Editor’s note: The following op-ed about how far the N.C. Department of Environmental Quality has strayed from its mission appeared in The News & Observer on Monday, May 16. On Wednesday, the department announced tentative closure deadlines for coal ash ponds at Duke Energy facilities across the state, but told lawmakers it wants to revisit those rankings in late 2017. Read our statement on the tentative rankings here.
Dangerous attempts to cover up, rather than clean up, drinking water contamination only reveal how detached DEQ has become. Lawmakers should acknowledge DEQ’s failures and focus on moving forward on truly cleaning up coal ash ponds.
Sworn testimony of a state epidemiologist that became public over the weekend confirms what many North Carolinians living near Duke Energy’s coal ash ponds already assumed. Health experts who developed the drinking water standard that led officials to tell hundreds of residents last year that their water is not safe did not support the McCrory administration’s decision in March to rescind the warnings.
The disclosure comes as state lawmakers consider a bill that would prohibit local health departments from issuing health advisories to private well or public water users unless contaminants exceed levels set by the federal Safe Drinking Water Act. But that law is intended as a backstop to be built upon, not as a floor for states like North Carolina that are content with the bare minimum.
From the state’s perspective, the bill is a quick fix to make certain that officials with the Department of Environmental Quality and Department of Health and Human Services never again suffer the backlash they have seen since lifting the warnings about high levels of vanadium and hexavalent chromium – potentially due to proximity to coal ash ponds. Residents were told their water was unsafe to drink or use for cooking. There is no federal drinking water standard for vanadium or hexavalent chromium.
These are just the latest examples in a long pattern of attempts by the McCrory administration to insulate itself from outside criticism and, more importantly, from citizens’ legitimate concerns. These tactics have been central to the dismantling of DEQ, where I worked for nearly nine years. I resigned in 2013, around the time former Secretary John Skvarla pledged to transform the agency into a “customer-friendly juggernaut” with the primary role of serving industry.
After Skvarla’s departure, the promotion of Donald van der Vaart to the position showed McCrory’s skill at hand-picking leaders guided by an ideological compass that points away from environmental protection. Enabled by anti-regulatory powers in the legislature, DEQ’s leadership has abandoned the principles necessary to serve the public. North Carolinians across the political spectrum should be alarmed at the state of the agency today.
As we await the announcement this month of DEQ’s final plans for closing coal ash ponds across the state, we recognize that there has been progress toward addressing this significant problem. But the pledges to safely close ponds and protect communities after the Dan River disaster are distant memories now. Instead, DEQ’s top-down decision-making has dominated the process.
The final months of the coal ash pond ranking process have been particularly frustrating for citizens, advocates and, presumably, many of the rank-and-file at DEQ. After a draft report leaked last December revealed that DEQ’s own experts recommended full closure of most coal ash ponds, van der Vaart stepped in, assuring the public that the draft was based on “incomplete data.” Two weeks later, the agency’s final report listed only eight of the state’s 32 ponds as being “high” risk and deserving full closure. Most are now proposed as “low” or “low-intermediate” risk, meaning the coal ash could be capped in place and continue to threaten to water quality.
What would have been the only remaining line of defense, the Coal Ash Management Commission, was created in part to review DEQ’s recommendations before they become final. But McCrory disbanded the commission in March as a series of hearings to gather public input on the state’s coal ash sites was underway. Rather than acknowledging the independent role the commission was created to play, van der Vaart has asserted that his department has everything under control.
DEQ leaders know citizens are concerned about their water and health. The Alliance of Carolinians Together Against Coal Ash, a statewide coalition of North Carolinians living near Duke Energy’s coal ash sites, has made that evident. They’re concerned with good reason. When the U.S. Commission on Civil Rights arranged a town hall meeting in Walnut Cove near Duke’s Belews Creek power plant, it wasn’t to spotlight DEQ’s success mitigating an environmental injustice.
Some state lawmakers are taking urgent action to re-establish the Coal Ash Management Commission. I’m glad; a strong independent commission is critical to earning the public’s trust and properly closing coal ash ponds. But dangerous attempts to cover up, rather than clean up, drinking water contamination only reveal how detached DEQ has become.
Lawmakers should acknowledge DEQ’s failures and focus on moving forward on coal ash cleanup, not continuing to enable an agency that has lost its way.
This post was co-authored by North Carolina Energy Savings Outreach Coordinator Amber Moodie-Dyer.
Will Haddaway, owner of HomEfficient, seals Blue Ridge Electric member Vance Woodie’s leaky air ducts before insulating them.
As advocates and organizers working to solve big problems, we often forget to celebrate the incremental success of our campaigns and jump right into the next problem to solve. Just last month, one of those noticeable steps toward achieving our larger goals occurred in our Energy Savings for Appalachia campaign, so we want to acknowledge the moment even as we continue to expand our work throughout the region.
The Blue Ridge Electric Membership Corporation (BRE) rolled out a pilot energy efficiency financing program called the Energy SAVER loan program. In short, the co-op pays the upfront costs of energy efficiency home improvements for eligible members, who repay the money over time as a charge on their electric bill while immediately benefitting from a more comfortable, healthy home.
Appalachian Voices has worked for two years with BRE and organizations, residents and businesses throughout the High Country to establish this kind of “on-bill financing” program with the co-op. These days it is rare to come upon an issue that is a win-win for everyone involved and on-bill financing offers just that kind of opportunity.
Our Energy Savings campaign is focused on promoting energy efficiency programs to benefit the people, economy and environment of our region. Our goal is to help rural Appalachian communities tap into these benefits by working with electric membership cooperatives to develop a financing program that simultaneously reduces energy costs, makes people’s homes more comfortable and healthy, creates local jobs in energy services industries and reduces our carbon footprint. We’re now expanding this work to the French Broad and Surry Yadkin co-ops.
On-bill financing enables people to make energy efficiency improvements without having to foot the bill upfront. Instead, residents pay for the home improvements over time through a monthly charge on their bill. With a well-designed on-bill financing program, many residents will have lower electric bills because of the energy savings they’re achieving.
BRE provides electricity to more than 65,000 residents of all or parts of seven counties in western North Carolina, so its commitment to this program has the potential to make a big impact. We commend BRE for taking this step and we thank the many partners and volunteers who worked to make it happen. Residents, volunteers and allied organizations knocked on doors, made phone calls, spoke at press events and shared their stories at the BRE annual member meeting last year to ask for such a program, and BRE listened.
John Kidda, owner of reNew Home Inc., conducts a blower door test on the home of Blue Ridge Electric member Sean Dunlap.
The Energy SAVER program will provide loans of up to $7,500 to qualifying BRE customers to make energy efficiency improvements such as increased insulation, air sealing, duct sealing, basement and crawl space sealing and upgrading heating and cooling systems. These types of upgrades can save between 10% and 40% of energy use consumed.
While we applaud this achievement, based on what we’ve seen with other on-bill finance programs in North Carolina and other states in the Southeast, we also know there is room for improvement. For instance, eligibility for BRE’s program is limited to owner-occupied properties, meaning that renters — which account for approximately 9,500 dwellings in the BRE service area — cannot apply.
Additionally, because the program is structured as a loan, anyone who sells their home before paying off the loan must repay the full remaining principle to BRE before the home is sold. As a result, anyone who is uncertain whether they will remain in the same house for the next seven years may not want to take on new debt, regardless of the benefits they would receive from the energy efficiency improvements. So unfortunately, the cycle of energy waste and higher-than-necessary energy bills would likely continue for subsequent property owners.
Another shortfall of BRE’s loan program is that the repayment term is limited to seven years, making it unlikely that most participants would see a lower monthly electric bill. Only participants who consume around 3,000 kilowatt hours (approximately $300) a month or more–at a $7,500 loan amount–would see a net reduction in their electricity costs, while most others would likely see a net increase due to new monthly loan charge that is greater than the savings achieved as a result of the efficiency improvements. This provides a disincentive for most customers to participate in the program.
Despite all of this, BRE’s Energy SAVER loan program is an important first step toward expanding access to energy efficiency financing to all of BRE’s members. Appalachian Voices will continue working with BRE to make the necessary adjustments to the program to achieve that goal.
The most important adjustment we’d like to see in BRE’s program is to convert it from a loan-based offering to a program structured on the Pay As You Save (PAYS) tariff-based model of on-bill financing. The PAYS model solves each of the problems listed above by: (a) tying the repayment obligation to the meter instead of the customer; (b) extending the repayment term to a maximum of 15 years; and, (c) only financing appliance upgrades or weatherization improvements that can achieve an annual cost savings that exceed the annual payments to the utility over the repayment term.
While loans of all types have been around since the dawn of capitalism, tariffed on-bill financing is relatively new, debuting with the launch of the How$mart Kansas program in 2007. Since then, tariffed programs based on, or strongly reflecting the PAYS model have been developed in Kentucky,South Carolina,North Carolina, and Arkansas. Each one is achieving significant energy savings of between 25% and 40% for participating customers while achieving a net reduction in annual energy bills of as much as $300. And in order to maximize the local economic benefits associated with the new energy efficiency investments, some programs such as Roanoke Electric’s Upgrade to $ave program are combining the on-bill financing with a concerted workforce training and development component in collaboration with Advanced Energy.
Given the success these other co-ops have achieved through tariffed on-bill energy efficiency financing, we hope that BRE will ultimately follow their lead and adopt the PAYS model as well. Only by doing so can BRE, and all rural electric co-ops across Appalachia and the Southeast, achieve a measurable impact for their members and for the local economies in the communities they serve.
If you’d like to add your voice to the chorus and send a letter to your electricity provider asking for a tariff-based energy efficiency on-bill financing program, visit our Energy Savings Action Center. And to volunteer with our campaign contact Amber by email or phone at 828-252-1500.
Patrick lives on Rockhouse Creek. She said that as she watched the bright yellow plume move down the creek, she took a sample of the water and put it in a paint bucket under her porch. Two curious newborn puppies on her property found the paint bucket and drank its contents. They became violently ill and died later that day.
At the end of April, the Kentucky Energy and Environment Cabinet released a report detailing the state’s investigation into the spill, but there was no mention of Patrick’s dead dogs. Although many local residents thought the pollution might have been related to fracking — an oily sheen was noticed on the surface of the water — the state claimed that yellow highway-marking paint was to blame. According to Lanny Brannock, a spokesman for the Energy and Environment Cabinet, regulators do not know if someone intentionally put paint in the creek or if it was an accident.
But many Martin County residents still have questions, and that’s not uncommon in a county that has seen its fair share of coal slurry spills and municipal water problems. The Mountain Citizen, located in the county seat of Inez, has doggedly reported water quality and environmental issues for decades. In fact, the newspaper’s diligence, combined with the hard work of local organizers, prompted the Kentucky Public Service Commission to investigate the county’s water system, which has a water loss rate of more than 60 percent and often delivers smelly, foul water.
In the aftermath of Flint, Mich., this video from Martin County caught the attention of consumer advocate and environmental activist Erin Brockovich, who posted it to her Facebook page.
When I spoke with Inez resident Josie Delong back in February, she was very clear about the long-term burdens that come with having bad water:
The biggest [burden] is definitely health issues. But also the fact that most of us are on a fixed income here. Everybody’s losing their jobs in the mines, losing their jobs here or there, and can’t afford these high water bills, and we can’t even use the water. We’re paying these bills and yet still having to go to the store and get water, and we don’t know what it’s doing to us. And that’s the big fear. We have no idea.
In 2015, the Martin County Water District accrued multiple non-compliance violations for known carcinogens such as trihalomethanes and haloacetic acids. In the offices of the Mountain Citizen, editor Gary Ball points to the back of his latest water bill, which includes a notice for anyone with an immunodeficiency disorder: do not drink the water. “In other words, if you’re as healthy as a horse, drink away,” Ball says. “But sooner or later it’s going to get to you.”
Ball and the Mountain Citizen have also extensively documented the unequal way in which water is distributed in the county, and how many customers are often not informed of boil water advisories or shut-offs in the system. According to Gary and Lisa Smith Stayton, owner and publisher of the Mountain Citizen, the excessive water loss rate often impacts the poorer or more remote areas of the county first. As water is diverted to more populated and wealthy areas in the county, some customers are forced to go without.
Sometimes there’s no water at all. As Ms. McCoy explains in this Facebook post, not having water creates all kinds of social and financial hardships on her day-to-day schedule.
Officials in the county have adamantly denied the extent of the problems, and often portray concerned citizens as alarmists and idealists. The Martin County Judge Executive, Kelly Callaham, has publicly stated that the 60 percent water loss rate in the system is due to people stealing water from fire hydrants and industrial coal mine sites. (I reached out to Mr. Callaham and the Martin County Water District; neither returned my requests for a comment).
“Our officials downplay every single issue, and go to great extents to discredit those who speak up,” says Lisa Smith Stayton. She described a recent fiscal court hearing that turned into an attempt to publicly discredit a Mountain Citizen report about disinfection byproducts in the water. Lisa was incredulous. “One magistrate even said ‘you’re more likely to get cancer from eating a hot dog.’”
In late March, due to pressure from citizens like Delong, Ball and Stayton, state Senator Ray Jones convened a meeting at his office in Frankfort to discuss issues with the water system. Watching footage of the meeting is frustrating; a great deal of time is wasted on discussing surreal and overstated accusations of “water theft.” At several points in the conversation, some variation of this statement is heard: “Martin County is not the only county where these problems occur.”
This is a familiar tactic deployed by the powerful: make the victims appear as if their demands are inherently selfish because, after all, it’s happening to everyone. If you can portray the powerless as hyperbolic and alarmist, you eventually start to convince them that their demands are crazy. This is known as “gaslighting,” and it’s a depressingly effective way to evade accountability.
But residents like Delong aren’t deterred. As she told me:
The more people who talk about it and share their concerns, the better. Because, I’ll be honest, I sat back for a long time and said, “Well why should I say anything about it? I’m just one person. That’s not gonna change anything.” And then the very second I did mention it on social media, and posted a picture, I saw a huge response. And that gave me confidence. Maybe we can change this.
Motivated by health problems that she believes to be caused by the water, as well as mounting medical bills, Delong started a public Facebook forum. She began polling her friends to see if they suffered from similar afflictions and medical costs. The results are astounding in their detail and specificity; many respondents reported skin irritations, stomach issues and autoimmune disorders.
It’s obvious from reading the comments on Delong’s poll, as well as the many comments on the Martin County Water Warriors’ Facebook page, that the public health costs of living in coalfield counties are increasingly burdensome. My own experience bears that out; I live in Letcher County, Ky., about an hour and a half south of Martin County. I spend upwards of $50 each month on bottled water, and most of my friends and neighbors do the same. With coal severance funds declining, we’re also forced to pay more for basic services like trash and recycle collections. The Letcher County Recreation Center, built with coal severance funds, is constantly at risk of closing.
In fact, Gina Patrick’s anxiety about having to switch from well water to potentially-dangerous municipal water is not uncommon. Whether it comes from a well or a municipal system, the drinking water of many eastern Kentuckians is at risk of being polluted. When a dangerous acid mine drainage spill occurred five miles upstream of the Letcher County water intake in March, we were reminded of the many times our water system was poisoned by diesel fuel from local oil magnate Don Childers. It doesn’t help knowing that the state actively works to sweep those violations under the rug, or that it neglects to include important factors like dead dogs in its investigation of a bright yellow creeks.
Delong articulates the full scope of this problem and the struggle to stay:
It just feels like we’re going downhill so fast. I’ve had a lot of friends move out of the county. And it’s sad. I grew up here. And everyone’s just leaving. And it’s becoming a ghost town. And I don’t want to leave. I mean, I could, I’m sure. But who’s going to want to buy a home in this county? How could you sell your home? When someone away from here looks up Martin County, they automatically see repeats of all these troubles and problems and people moving away and no jobs and no opportunities. It’s gonna be impossible to sell your home right now. And I don’t want to leave. I want to do what I can — I’m just one person but I want to do what I can to try and make things better for us, instead of just watching it go downhill.
Officials say that they want people to stay. Some even say that they want economic transition. But what are they doing to help us save money where it matters — on very basic needs like food, water and healthcare? The solutions to these needs amount to the most basic and essential forms of economic development: safe drinking water, functioning local services, affordable healthcare and access to adequately funded social programs. They are simple solutions to very real problems that would save people money and help them stay in the region that they love.
Editor’s note: This is the second post in a series about the ways our Energy Savings for Appalachia campaign is expanding to increase access to energy efficiency programs in western North Carolina. Read Part 1 here.
Announcing our new Surry-Yadkin electric co-op campaign
Pilot Mountain in Surry County. Photo by Joe Potato / iStockPhoto
Throughout 2015, we engaged with communities surrounding our Boone, N.C., office about the widespread benefits of energy efficiency. Now our local electric membership cooperative, Blue Ridge Electric, is offering the Energy SAVER Loan Program, an on-bill financing program for residential energy efficiency upgrades. After achieving success in the North Carolina High Country, we are expanding our efforts to additional electric cooperative service territories.
To the east of the Blue Ridge Electric territory is the Surry-Yadkin Electric Membership Corporation (EMC). Surry-Yadkin EMC provides utility service to over 27,000 people in the beautiful Yadkin Valley and surrounding areas. This region, nestled in the Blue Ridge Mountains, is known for its agricultural heritage, vineyards and music festivals.
Surry-Yadkin EMC currently offers programs that demonstrate its commitment to energy savings for its members, including rebates on the purchase of energy-efficient heat pumps for home and water heating. While these programs are healthy incentives for those in the market for an upgrade, most families cannot afford the upfront costs of standard efficiency retrofits which average $6,500, according to local weatherization programs.
In Surry, Yadkin and Wilkes counties, which make up more than 80 percent of Surry-Yadkin EMC’s service territory, the median household income is approximately $7,000 less than the North Carolina average and $13,000 less than the national average. To put that in perspective, residents of the area who live in manufactured housing have stated that their energy bills are 25 percent of their monthly income in the winter. More than half of all the housing units in the area are at least thirty years old and likely have common needs for efficiency upgrades.
Members of Surry-Yadkin EMC are in an ideal situation for achieving high energy savings because the area experiences cold winters and hot summers. With proper insulation and air sealing, both heating and air conditioning can be maintained efficiently. If Surry-Yadkin EMC introduces an on-bill financing program, members could save on average over $100 each year on their energy costs while enjoying increased comfort and home health.
Download our Surry-Yadkin EMC resource guide to learn more about public and private home energy services and assistance in Forsyth, Stokes, Surry, Wilkes and Yadkin counties Madison, Yancey and Mitchell counties.
Our Energy Savings for Appalachia team has met with community organizations to learn about the need for local residents to lower their energy bills and we’ve met with energy efficient businesses that recognize the benefit that energy savings can provide in job growth and increased local capital. In addition to developing these partnerships, we have presented to local groups about home energy improvements and options their utilities provide with the goal of increasing understanding about energy efficiency and successful programs across the Southeast.
We are hopeful that we can work alongside Surry-Yadkin EMC to provide an accessible program for its members and to cultivate a broad awareness of the need to expand energy efficiency programs throughout the region.
Do you know what energy efficiency options your utility offers? Visit the Energy Savings Action Center to find out! And if you are a Surry-Yadkin EMC member, take action here or contact firstname.lastname@example.org to learn about volunteer opportunities.
Thursday, April 28th, 2016 - posted by guestbloggers
Special to the Front Porch: Our guest today is Cathy Kunkel, an energy analyst with the Institute for Energy Economics and Financial Analysis, and lead author of a new report on the overbuilding of natural gas pipelines in the mid-Atlantic. Kunkel has undergraduate and master’s degrees in physics, was a senior research associate at Lawrence Berkeley National Laboratory, and has testified before regulatory bodies.
We’ve published a report today that concludes that two natural gas pipelines proposed for construction from West Virginia into Virginia and North Carolina are indicative of a rush toward industry overbuilding.
The study, “Risks Associated With Natural Gas Pipeline Expansion Across Appalachia,” examines the proposed Mountain Valley Pipeline, which would traverse West Virginia into eastern Virginia, and the proposed Atlantic Coast Pipeline, which would cross Virginia and branch deeply into North Carolina. The pipelines combined would run for more than 800 miles and together would cost roughly $9 billion.
There’s a widespread assumption that such pipelines would only be proposed if they were necessary. This assumption is not supported by the facts.
We found that the dynamics of the pipeline business tend toward overbuilding, toward building excess pipeline capacity. Major pipeline companies are competing with each other to build out the best, most well-connected pipeline networks. And utility companies are entering the pipeline space because much of the risk of overbuilding can be pushed off onto captive ratepayers. And natural gas production companies are entering the pipeline business because their core business — drilling — is underperforming and they are looking for ways to boost revenue and investment value. These kinds of financial considerations on the part of individual companies do not add up to socially rational, prudent long-term planning.
The pipeline business is able to attract more capital than is needed—because of the high rates of return that pipeline companies typically earn. Pipeline rates are regulated by the Federal Energy Regulatory Commission (FERC). FERC allows higher rates of return for pipeline companies than it does for electric transmission companies or than state utility commissions typically allow for state-regulated utilities. For example, by policy FERC allows a 14 percent rate of return, while regulated utilities at state public service commissions typically are only allowed in the 10 percent range.
The tendency towards overbuilding is widely understood in the industry -— executives and analysts talk openly about it -— and FERC’s regulatory process currently misses this dynamic. There is no regional planning process for natural gas pipeline infrastructure in the way that there is for electric transmission lines, for example. FERC looks at pipelines on a project-by-project basis. The agency considers a line necessary if the project developer is able to enter into contracts for the majority of the capacity of the project. What we’ve found in the Atlantic Coast and Mountain Valley Pipeline cases is that the project developers and the shippers who are entering into contracts with the pipeline are subsidiaries of the same company. So the fact that a pipeline developer is signing a contract with an affiliate is strong evidence that there is financial advantage to the parent company from building the pipeline, but not necessarily that there is an independently established basis for the pipeline need. The private assumptions of individual pipeline developers are not adequately checked against broader standards of the public interest.
The Atlantic Coast Pipeline is a good example of this. If it is approved it appears that two separate pipelines will serve the same power plant -– an example of too much pipeline capacity. The Atlantic Coast project is a joint venture with Duke, Dominion, Piedmont Natural Gas and AGL Resources having ownership interests and are the developers. The main shippers on the project are subsidiaries of Duke and Dominion — those two companies have contracted for 68 percent of the capacity on the pipeline. Consumers will bear the risk of higher rates if project assumptions do not materialize. The cost of building the pipeline, including the profit for the developers, will be passed through to the shippers of the pipeline who will be able to recover it from their ratepayers through rates established by state public service commissions.
Put another way, the regulatory structure gives Duke and Dominion an incentive to prioritize building their own pipeline rather than using that of another company. If the demand for the capacity along the Atlantic Coast pipeline does not materialize, ratepayers will still be on the hook to pay for that capacity.
It appears that the need for the Atlantic Coast pipeline has been overstated. In its application to FERC, Atlantic Coast asserts that one use of the gas from the pipeline will be for Dominion’s new Brunswick and Greensville natural gas plants. But in its applications to the State Corporation Commission to build those power plants, Dominion asserted that the plants will be fueled from the Transco line. In the case of the Brunswick plant, a spur from the Transco line to the plant has already been built. Without better coordination and planning it appears that two pipelines are being built to supply one power plant. The Atlantic Coast pipeline is a relatively low risk venture for Duke and Dominion, the main project developers. Most of the risk for the project is borne by those utility customers in Virginia and North Carolina.
The Mountain Valley Pipeline has a different risk profile. The Mountain Valley pipeline is a supplier-driven pipeline. The majority-owner of the project is an affiliate of EQT, one of the largest Appalachian shale gas drillers, and the entity that has contracted to ship the largest volume of gas on the pipeline is EQT. We found that the biggest risks of this project stem from the financial weakness of EQT. EQT is not doing badly relative to other Appalachian shale drillers, but the entire sector is in turmoil because of sustained low natural gas prices, which are widely expected to remain low into 2017. EQT’s credit ratings are one notch above junk, and its stock has fallen 26 percent since January 2014. Bankruptcies are widely expected in the natural gas drilling sector this year, and banks are expected to cut back on lending. EQT has diversified into the pipeline business presumably because of the traditionally stable and higher returns to be found in this sector.
Communities along the pipeline route also bear risks that stem from EQT’s financial weakness. EQT does not appear to be a stable, long-term partner for these communities. EQT’s weakened financial position suggests it will adopt only a limited commitment to communities or perhaps be forced to sell its ownership interests to a new company that is not part of current deliberations
To sum up, our study finds that natural gas pipeline infrastructure out of the Marcellus and Utica regions will become overbuilt within the next several years, an outcome recognized by many in the industry itself.
The economic and financial factors that incentivize companies to invest in the development of new natural gas pipelines will not produce a socially rational outcome. Without a coordinated approach to natural gas pipeline planning, as exists for many other types of infrastructure, the FERC cannot make an honest determination of the need for these pipelines. Ratepayers and communities will shoulder much of the costs and risks of the Atlantic Coast and Mountain Valley pipelines, investments of nearly $9 billion that are poised for approval without adequate scrutiny.
Editor’s note: This is the first post in a series about the ways our Energy Savings for Appalachia campaign is expanding to increase access to energy efficiency programs in western North Carolina. Read Part 2 here.
Announcing our new French Broad electric co-op campaign
Marshall, N.C., on the French Broad River
Appalachian Voices’ Energy Savings for Appalachia program is expanding in western North Carolina.
Throughout 2015, we engaged with communities surrounding our Boone, N.C., office about the widespread benefits of energy efficiency through our Energy Savings for Appalachia campaign. Now our local electric membership cooperative, Blue Ridge Electric, is offering the Energy SAVER Loan Program, an on-bill financing program for residential energy efficiency upgrades.
It is our goal to see all of the electric membership cooperatives (EMC) in Appalachia join other utilities in offering on-bill energy efficiency financing programs. On the coast, Roanoke EMC started up a distinguished program called Upgrade to $ave in 2015, but there are also more established, successful programs in eastern Kentucky and South Carolina. For Appalachian Voices, western North Carolina is our focus for building a movement around affordable energy efficiency for all.
Covering much of the French Broad River watershed, French Broad EMC provides electric service to more than 33,000 people across northern Buncombe, Madison, Yancey and Mitchell counties in North Carolina and part of Unicoi County in Tennessee. The region is rural and mountainous, bordered by the Appalachian Trail and famous for whitewater rafting and its high peaks.
We see great potential for an on-bill energy efficiency financing program here. French Broad EMC has been offering low-interest on-bill financing for mini-split electric heat pumps, a highly energy-efficient heating system, for the past two years. The success of this program has led to its continuance, which we see as a stable foundation for a larger, more encompassing energy efficiency financing program.
Download our French Broad EMC resource guide to learn more about public and private home energy services and assistance in Madison, Yancey and Mitchell counties.
Over the past few years we have developed strong connections with the kind, hardworking people who serve those in need in the area. We’ve also learned of the high demand for assistance with energy bills in the cold winter months among the area’s residents. In the three counties that make up most of French Broad EMC’s service territory, the median household income is approximately $10,000 less than the North Carolina average and $15,000 less than the national average. Additionally, half of all the housing units in this area are more than 30 years old.
There are thousands of homes and residents in need of energy efficiency improvements, and few programs available to most residents who cannot afford the upfront cost of those improvements. In other words, there exists a gap where many would be supported by an energy efficiency financing program provided by French Broad EMC.
To further Appalachian Voices’ advocacy and education around energy use, I am working on the ground in French Broad EMC’s service territory, generating public dialogue around energy efficiency by talking to the community about how to save money and energy. By helping those who struggle to pay their energy bills and keep their house warm, we hope to raise awareness about the need for a debt-free, on-bill energy efficiency financing program.
Do you know what energy efficiency options your utility offers? Visit the Energy Savings Action Center to find out! And if you are a French Broad EMC member, take action here or contact email@example.com to learn about volunteer opportunities.