Callahan’s Cleveland Diary

Cleveland City Council Public Utilities Committee
Investigation re: Adoption of PURPA Standards by Cleveland Public Power

Written comments submitted by Bill Callahan
February 15, 2007

The Committee has asked for public comment on several possible electric rate initiatives covered by proposed PURPA standards for Cleveland Public Power. I have some specific suggestions on time-based rates and “smart metering”, but first I’d like to make two general observations about this discussion of possible CPP ventures into distributed power sourcing and demand-shaping.

1) I’m a fairly well-informed Cleveland citizen and CPP customer, but I have zero access to information about CPP’s current or projected power needs, contract portfolio, demand profile, daily or seasonal variations in that profile, customer class and end-use components of that profile, power and demand costs associated with various components of the profile, etc. As far as I can discover, none of this information is on the public record. So I have no way of guessing what CPP’s management may hope to accomplish by adding elements of distributed supply or customer demand management to CPP’s system.

It makes little sense to have a public discussion about these subjects without first giving us all some basic context. What’s the value proposition to CPP of buying extra power from somebody’s PV or cogen installation? At what price point would this value proposition turn negative? Is CPP management (or Council) interested in developing a local/renewable supply component of its portfolio, and if so, is some period of incentive pricing needed to prime the pump? Are there high-cost elements of CPP’s daily or seasonal load profile that can be effectively targeted for reduction through customer scheduling choices – e.g. morning or evening lighting loads, summer cooling loads? These are just a few of the basic context-setting questions for a useful, concrete discussion of the proposed standards.

Answers to these questions may appear in CPP’s five-year plan document(s), which was supposed to be finished in December — but that plan has not been made public yet, so it’s no help to the public.

I urge the Committee and CPP management to provide us with more information about CPP’s current and anticipated power supply situation, including the issues mentioned above, soon enough to allow public commenters to take it into account and still meet the April 2 deadline.

2) Of course implementation of the PURPA standards may serve objectives other than simply meeting or shaping CPP’s power requirements. Council may want to encourage independent renewable power investments in the city for environmental or development reasons, even if their contribution to CPP’s power supply is negligible. Or Council may want to give residential and small business consumers a way to reduce our high CPP bills without a general rate reduction, by offering us a chance to dodge some of the impact of high-end purchased power through smart metering.

But then, why discuss the PURPA standards in isolation from those broader policy goals and other programs to pursue them? For example: For customers to use smart metering effectively as a means to reduce our electric bills, we’ll have to do more than change when we do laundry. We’ll have to understand and act on measures like lighting changes (e.g. switching to CF bulbs), improvement to air conditioning and refrigerator efficiency, etc. Most CPP customer households will at least need some training to identify and implement these changes, and many – the households that need the bill reductions most — will need hand-holding or financial help. Simply adopting a standard, offering a smart metering option or even installing the appropriate metering equipment will have little impact unless there are companion efforts to help households use their new tools effectively.

I’m not sure how to add this kind of larger-policy context to the process Council has laid out, but I think it’s an important issue for the parties to consider. I’ll try to help on one front with my comments on smart metering that follow.

Suggestions re: Adoption of time-based rate schedules and smart metering

Focussing on the possible creation of a smart metering option for CPP residential customers, here are my four initial suggestions:

1. From the standpoint of system power supply planning, the value of time-sensitive residential rates will depend entirely on how much “schedule-able” residential uses contribute to CPP’s peak demands on a daily or seasonal basis. This information is not available to the public. It would be much easier to discuss this whole topic if it CPP could make it available.

2. Chicago’s Center for Neighborhood Technology recently concluded a four-year pilot project in partnership with Commonwealth Edison which gave 1,500 Chicago households a chance to use smart meters and online hourly price information to control their electric bills. After evaluating the results, the Illinois Public Service Commission has ordered the expansion of the program for customers of ComEd as well as another Illinois utility.

I suggest that Council and CPP ask for CNT’s assistance in considering the implementation of a smart metering option for CPP. It might also be helpful to ask a CNT representative to come to Cleveland to present the Chicago experience to Council as well as interested members of the public.

CNT’s home page for the project is www.energycooperative.org/index.php . The project manager for the CNT Community Energy Cooperative is Anne Evans, 773-269-4045. The CEC’s policy director is Anthony Star, 773-269-4017. I have spoken with Mr. Star, and he assures me that he and Ms. Evans would be happy to assist City Council and CPP in this investigation.

3. To the extent that smart metering of time-sensitive rates is seen as a way to lower household electricity costs, it should be considered as just one element of a general initiative to support electric efficiency and conservation by CPP customers.

Council and CPP certainly should be considering such an initiative, because CPP remains one of the most expensive electric utilities in Ohio (charging an average of more than 11.5 cents per kilowatt-hour for normal home use in 2006), serves some of the state’s poorest households, and has revealed no other plans for rate relief. If CPP is no longer able to deliver kilowatt-hours at an affordable price, then as a public service organization it should certainly be trying to help its customers – especially the poor — to use fewer expensive kilowatt-hours.

Time-sensitive rates and smart metering may be a way for CPP to accomplish this with less risk to its own finances. Such a win-win scenario would be welcome, but it’s not a substitute for measures that help consumers actually reduce unnecessary kwh consumption, such as CF light bulb substitution and appliance efficiency measures. At the moment CPP is offering this help to a very limited number of its low-income customers through the Cleveland Housing Network. It’s long past time for the City to offer an effective kwh reduction assistance program to all CPP households – with or without a smart metering component.

4. As the Chicago Community Energy Cooperative program shows, it’s much easier for computerized, networked households to participate in a smart metering program than for households with no such capability. The Chicago project routinely used a website to post daily price information and email to communicate price alerts.

The majority of Cleveland’s low-income households don’t have Internet access. However, the city has numerous neighborhood computer centers (CTCs) that could help smart-metered CPP customers acquire the necessary computer skills, cheap computers and online access. Through Cleveland Digital Vision, these CTCs are part of the City’s ongoing discussions about “digital inclusion” strategies.

If CPP decides to go forward with a residential smart metering program similar to Chicago’s, I suggest a collaboration with the city’s CTC network to make sure that low-income households will have access to the online resources to fully participate. Cleveland Digital Vision can help facilitate such a collaboration. I serve as its director and, in this capacity, can be reached at 216-391-0900 or bill@clevelanddigitalvision.org.

(Please note, however, that these are my personal comments as a Cleveland resident and CPP customer, and are not made on behalf of Cleveland Digital Vision.)

Thanks for the opportunity to submit these comments!