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Addressing Electric Reliability and High Energy Costs This Winter and Beyond

Addressing Electric Reliability and High Energy Costs This Winter and Beyond. Electricity Restructuring Roundtable #92 Boston December 9, 2005 Jerrold Oppenheim 978-283-0897 JerroldOpp@ DemocracyAndRegulation.com www.DemocracyAndRegulation.com. Gas prices: + 50% 2 years + 80+% 3 years.

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Addressing Electric Reliability and High Energy Costs This Winter and Beyond

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  1. Addressing Electric Reliability and High Energy CostsThis Winter and Beyond Electricity Restructuring Roundtable #92 Boston December 9, 2005 Jerrold Oppenheim 978-283-0897 JerroldOpp@DemocracyAndRegulation.com www.DemocracyAndRegulation.com

  2. Gas prices: + 50% 2 years+ 80+% 3 years Jerrold Oppenheim www.DemocracyAndRegulation.com

  3. Jerrold Oppenheim www.DemocracyAndRegulation.com

  4. Jerrold Oppenheim www.DemocracyAndRegulation.com

  5. media.washingtonpost.com/.../PH2005072701614.jpg /jimwestphoto.com/galleryEconomic/p-hg-42-13.jpg Jerrold Oppenheim www.DemocracyAndRegulation.com

  6. Jerrold Oppenheim www.DemocracyAndRegulation.com

  7. Jerrold Oppenheim www.DemocracyAndRegulation.com

  8. We have a good start Jerrold Oppenheim www.DemocracyAndRegulation.com

  9. Prices: Price levels; price stability • Efficiency • Procurement Jerrold Oppenheim www.DemocracyAndRegulation.com

  10. Efficiency lowers price • 1% reduction in national natural gas demand lowers long-run price by 0.8% - 2.0% • … and maybe much more in short-run -- R. Wiser, M.Bollinger, M. St. Clair, Easing the Natural Gas Crisis, Lawrence Berkeley National Lab (LBNL 56756, Jan. 2005, pp. 18-19, http://eetd.lbnl.gov/EA/EMP) Jerrold Oppenheim www.DemocracyAndRegulation.com

  11. HEAT (c. 140) • Extend existing program 5 years • Tax credits • Zero/low-interest loans • Public building investments • PV loans • Fuel cell partnership • Appliance efficiency standards (c. 139) Jerrold Oppenheim www.DemocracyAndRegulation.com

  12. Price Stability Jerrold Oppenheim www.DemocracyAndRegulation.com

  13. DTE 05-85 (NSTAR) settlement • Laddered electricity procurement: 50% one year, 25% each 2 & 3 years • Work cooperative with AG and LEAN re: possible longer terms for gas and electricity (secs. 2.21, 2.22) • Also FERC litigation Jerrold Oppenheim www.DemocracyAndRegulation.com

  14. More strategies to address high prices: HEAT • LIHEAP supplement • Broaden eligibility for low-income rate • Moderate income tax deductions to $800 • Utility arrearage management Jerrold Oppenheim www.DemocracyAndRegulation.com

  15. Every state should have a foreign policy Jerrold Oppenheim www.DemocracyAndRegulation.com

  16. Arrearage management . Utility Agency Customer/client Jerrold Oppenheim www.DemocracyAndRegulation.com

  17. LEAN Case Management . Partial and preliminary data Note: 1-year TNP +~1/3 Note: 2/3 of case mgmt arrears stable or declining Jerrold Oppenheim www.DemocracyAndRegulation.com Jerrold Oppenheim www.DemocracyAndRegulation.com

  18. Value of low-income rate has eroded Jerrold Oppenheim www.DemocracyAndRegulation.com

  19. D.T.E. 05-27 (Bay State Gas, Nov. 30, 2005) • “The discount level currently available to the R-4 [low-income] rate class should not erode” (p. 330) Jerrold Oppenheim www.DemocracyAndRegulation.com

  20. DTE 05-85 (NSTAR) settlement • NSTAR, AG, LEAN will confer about possible adjustments to low-income rates (sec. 2.8) Jerrold Oppenheim www.DemocracyAndRegulation.com

  21. Reliability • “many generators have interruptible [gas] contracts … the availability of gas transportation for non-firm customers within New England was a limiting factor and a root cause of … gas unit unavailability. Additionally, some generators with firm gas transportation engaged in fuel arbitrage, selling their firm gas supplies” (pp. 1-2) • “the January 2004 Cold Snap … did push the electricity system in New England close to its limits.” (p.2) Source: ISO New England Market Monitoring Dept., “Final Report on Electricity Supply Conditions in New Endlgnad During the January 14-16, 2004 Cold Snap” (Oct. 2004) Jerrold Oppenheim www.DemocracyAndRegulation.com

  22. Reliability • long-term contracts of sufficient duration to ensure that the following generation can be financed: • renewable energy generation needed to meet the RPS • generation needed for reliability Jerrold Oppenheim www.DemocracyAndRegulation.com

  23. W W W.DEMOCRACYANDREGULATION.COM • 1-978-283-0897 • JerroldOpp@ DemocracyAndRegulation.com Jerrold Oppenheim www.DemocracyAndRegulation.com

  24. About the Speaker Jerrold Oppenheim is an independent consultant and attorney who has advised and represented low-income and other utility consumer advocates, government agencies, and utilities across the country for almost 35 years. A graduate of Harvard College and Boston College Law School, he led utility litigation and argued precedent-setting cases for four Attorneys General in New York State and Massachusetts and for Legal Services in Boston, Chicago and New York City. He has spoken and published on four continents, including Democracy And Regulation with Theo MacGregor and Greg Palast, published by Pluto Press (London) and winner of the ACLU Upton Sinclair Award. Jerrold Oppenheim www.DemocracyAndRegulation.com

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