Grateful 7 speech thanking everyone that has helped.pdf
Texas Winter Brings Increased Energy Usage and Efficiency Opportunities
1. Update on the
Texas Electric Industry
February 23, 2010
Legislative advertising paid for by: John W. Fainter, Jr. • President and CEO Association of Electric Companies of Texas, Inc.
1005 Congress, Suite 600 • Austin, TX 78701 • phone 512-474-6725 • fax 512-474-9670 • www.aect.net
2. AECT Principles
• AECT is an advocacy group composed of member companies committed to:
- Ensuring a modern, reliable infrastructure for the supply & delivery of
electricity.
- Supporting efficient competitive markets that are fair to customers and
market participants.
- Supporting consistent and predictable oversight and regulation that will
promote investment and ensure the stability of Texas’ electric industry.
- Promoting an economically strong and environmentally healthy future for
Texas, including conservation and efficient use of available resources.
• AECT member companies remain dedicated to providing Texas customers with
reliable service and are committed to the highest standards of integrity.
The Association of Electric Companies of Texas, Inc. (AECT) is a trade organization of investor-
owned electric companies in Texas. Organized in 1978, AECT provides a forum for member
company representatives to exchange information about public policy, and to communicate with
government officials and the public. For more information, visit www.aect.net.
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3. U.S. Divided into Eight
Reliability Regions
• The eight reliability regions in the FERC
continental U.S. are subject to the
oversight and enforcement authority of NERC
the North American Electric Reliability
Corporation (NERC), which is subject to
the Federal Energy Regulatory
Commission’s (FERC) oversight. NERC
is responsible for developing standards
to ensure and improve reliability for
delivery of electricity on the bulk power
system.
• Electric systems in Texas are located
within four separate reliability regions:
- Texas Regional Entity (TRE),
which oversees participants in the
Electric Reliability Council of
Texas (ERCOT);
- SERC Reliability Corporation;
- Southwest Power Pool (SPP); and
- Western Electricity Coordinating
Council (WECC).
(ERCOT)
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4. AECT Member Companies
Within ERCOT
Retail Electric Providers
Transmission and Distribution Utilities
Generation Companies
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5. AECT Companies
Outside of ERCOT
SERC Reliability Corporation
Southwest Power Pool (SPP)
Western Electricity Coordinating
Council (WECC)
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7. Background
• Heating Degree Days (HDDs) are an indicator of how cold it is,
and how much energy is required to heat one’s home
• HDDs are calculated each day as follows: 65° – (Avg. Temp)
• A higher number of HDDs indicates colder conditions
• In Dec 09 and Jan 10, areas in Texas experienced more HDDs
than normal – as a result, energy usage increased
• Parts of Texas are in the midst of one of the coldest winters on
record
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8. Inclement Winter Weather Bringing
Increased Energy Usage
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• Using Killeen as an example, heating degree days are far higher than last year,
making increased electric consumption and bringing higher bills.
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9. Inclement Winter Weather Bringing
Increased Energy Usage
Texas power usage sets
another winter record
January 8, 2010
Electricity usage in Texas rose Friday as arctic air covered most of the state, hitting
another winter power record after setting one just the night before, according to initial data
from the state grid operator.
The Electric Reliability Council of Texas (ERCOT) said power use as of 8 a.m. CST (9
a.m. EST) reached 55,856 megawatts, surpassing the winter peak set Thursday evening of
52,001 MW and the previous record of 50,408 MW in February 2007.
ERCOT reported no major power problems.
Temperatures across Texas are running about 15 to 20 degrees Fahrenheit below normal,
according to DTN Meteorlogix.
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10. Key Factors Affecting Electricity
Consumption in Winter
• Age of home
• Size of home
• Insulation
• Efficiency of heating equipment
• Thermostat setting
• Seasonal lighting
• Longer use of lighting
• Increased use of electronics
• Increased run times for pool equipment
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12. Energy Efficiency Tips
• Check insulation
• Install a programmable thermostat
• Check your air filter
• Change light bulbs to compact fluorescents
• Avoid lighting empty rooms
• Caulk and weather-strip all doors and windows
• Keep shades and curtains open during the day on the south
side of your home
• Make sure radiators and vents aren’t blocked
• Make sure fireplace damper is closed when not in use
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13. Energy Efficiency in Texas:
Overview
• Texas continues to be an energy leader through policies designed to improve
the state’s energy efficiency programs and bring improved technologies to the
electric market.
– Utility-run programs have reduced customer consumption, thereby reducing the need
for the construction of new generation.
– Advanced metering provides information and opportunities that enable customers to
take better control of their energy consumption and bills.
– Houston and Dallas-Fort Worth ranked 1 and 2 nationally in number of homes that
qualified for EPA’s “Energy Star” designation.
• The Texas Electric Choice Act requires electric utilities to provide energy
efficiency programs and incentives, including efficiency programs for low-income
customers.
• ERCOT competitive retailers are developing innovative plans and products
designed to help customers use less energy (e.g., customer education
programs, energy audits, programs to benefit from use of Internet-controllable
thermostats, etc.)
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14. Energy Efficiency Programs
Have Exceeded Goals
Total Energy Savings by Investor-Owned Utilities
2003 - 2008
• In 2008, utilities in Texas achieved 202 MW of peak demand reduction in 2008, which was
76% above their 115 MW goal.
• Utility programs implemented for the years 1999 through 2008 have put measures in place
that produced 1,125 MW of peak demand reduction and 3,014 GWh of energy savings.
Source: Frontier Associates LLC, “Energy Efficiency Accomplishments of Texas Investor Owned Utilities, Calendar Year 2008” 14
15. Energy Efficiency Resources
• Customers can contact their electric utility to find out what programs
are available, or to find a contractor or vendor who participates in the
state energy efficiency programs.
• Customers can call 2-1-1, the Texas Health and Human Service
Commission's information and referral network to learn about programs
available in the area.
• Additional resources:
– Texas Department of Housing and Community
Affairs: www.tdhca.state.tx.us/assist_repair.htm
– U.S. Department of Energy:
www.energy.gov/energyefficiency
– Get Energy Active: www.getenergyactive.org
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16. Benefits of Advanced Metering
• Advanced meters and other new technologies
and associated infrastructure will provide information
and opportunities that will enable customers to better
understand the impact of controlling their energy
consumption.
• By controlling their energy consumption, customers
can better manage their bills and lessen their
environmental impact.
• Advanced meters will allow for more automation of utility functions such
as meter reading and connections/disconnections, which help to reduce
costs.
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17. The Smart Grid Transforms the Way
We Buy, Deliver and Use Electricity
Key Stakeholder Benefits
• Automated meter reading
Electric • Improved system reliability and greater ease/timeliness of power restoration
• Improved line fault detection and diagnostics
Utility • Real time grid feedback allows for more effective loading of utility assets
• Enables increased monitoring and diagnostics to enhance the life of utility assets
• Electric reliability improvements
• Friendly access to detailed consumption information to make informed choices
Consumers and enable faster transactions
• Enables and promotes energy conservation
• Efficient switching and connections/disconnections
• Expands retailer’s ability to offer new products
• Establishes platform to offer future home appliance monitoring and control
Retailers • Allows retailers to offer pre-payment programs
• Efficient switching and connections/disconnections
• Enables demand-side management
• Facilitates integration of solar and wind generation into grid
Environment • Promotes energy efficiency through immediate energy consumption awareness
• Facilitates reduced electric consumption which leads to reduced power plant
emissions 17
18. Advanced Metering Activities
in Texas
• The approved deployment plan for CenterPoint Energy calls for installation of advanced
meters over five years beginning in March 2009. In 2009, CenterPoint Energy was named
as a recipient of a Federal Smart Grid Investment Grant that should enable installation of all
meters by late 2012. Through year-end 2009, CenterPoint Energy installed 152,275
advanced meters, and another 42,815 were installed in January 2010.
• Oncor’s approved deployment plan initiated in late 2008 will have installation of advanced
meters completed by the end of 2012. To date, Oncor has installed 709,435 meters.
• The AEP Texas deployment plan was approved in December 2009 and installation of
advanced meters will be completed by the end of 2013. To date, nearly 5,000 meters have
been installed in Portland, Texas, in order to conduct a system acceptance test. Full-scale
deployment will begin in the second quarter of 2010.
• The cost for the meters and associated communications and computer equipment will be
recovered through a monthly surcharge, which can be adjusted over time to reflect both the
inclusion of AMS costs in future base rates and variances between the estimated versus the
actual cost of implementing the deployment plan. The respective surcharges for both Oncor
and CenterPoint Energy take into account the savings advanced meters are expected to
bring each company.
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20. Better Prices Available Today
Than One Year Ago
February 23, 2009 February 22, 2010 Percent Change
# of 1-Year Fixed-Price
Products
30 50 67% more offers
Average 1-Year Fixed-
Price Offer
12.72¢/kWh 11.33¢/kWh 11% decrease
Lowest 1-Year Fixed-
Price Offer
11.6¢/kWh 10.4¢/kWh 10% decrease
Lowest Offer Available
in the Market
9.7¢/kWh 8.6¢/kWh 11% decrease
Source: www.powertochoose.org; prices are a simple average among service territories. 20
21. Lower inflation-adjusted prices available
today than before competition began
Dec. 2001
Lowest Fixed-Price Lowest Dec. 2001
prices, not
Service Area Offer Variable Price prices, adjusted
adjusted for
(>12-month term) Offer for inflation
inflation
AEP Texas Central 10.8¢/kWh 9.1¢/kWh 9.6¢/kWh 11.7¢/kWh
AEP Texas North 9.9¢/kWh 8.8¢/kWh 10.0¢/kWh 12.2¢/kWh
CenterPoint
Energy 10.7¢/kWh 8.8¢/kWh 10.4¢/kWh 12.7¢/kWh
Oncor 10.1¢/kWh 8.2¢/kWh 9.7¢/kWh 11.8¢/kWh
TNMP 10.4¢/kWh 8.1¢/kWh 10.6¢/kWh 12.9¢/kWh
Sources: PUC Historical Data, Bureau of Labor and Statistics, www.powertochoose.org offers as of February 22, 2010 21
22. Retail Electric Prices Have Grown
Far Less Than Other Energy
Commodities
Percentage Change in
Commodities
December 2001 - February 2010
Sources: Public Utility Commission of Texas, U.S. Energy Information Association, NYMEX Commodity Exchange, Bureau of Labor Statistics.
Notes: Commodity prices latest available as of February 22, 2010; coal percentage increase is approximate.
Inflation covers period from 2001 to 2009 22
23. ERCOT Generation Mix
In 2009
Source: Public Utility Commission of Texas (PUC) Chair Barry Smitherman Presentation to the Gulf Coast Power Association, Oct. 6, 2009 23
24. Texas Market Compares Favorably to Other
States Utilizing Natural Gas as the Primary
Generation Source
Average Lowest Available
Price in ERCOT Competitive
Market In October 2009:
9.1¢/kWh
February 2010: 8.6¢/kWh
Sources: Energy Information Administration (data as of October 2009); EIA natural gas-intensive states;
powertochoose.org as of 10/15/09 and 2/22/10
Note: Texas statewide average price includes prices from both competitive and regulated areas of the state.
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