1. The Green Communities Act: WMECO perspective
9/12/2008 Boston, MA Jim Robb
Senior Vice President Enterprise Planning & Development

2. MA policy goals are laudable
Build on technology heritage with clean tech focus
Drive economic development and create green collar jobs
Expand energy efficiency and renewables
Timing is perfect
Energy prices
CO2 “realities” and will
Supply security and fuel diversity
Demand growth increasingly “on peak”
New supply limitations
Customer needs /desires for “control”

3. Top 5 List Expansion of Energy Efficiency Market*
Utility Investment in Distributed Resources*
Green Power Product Offering
Broader Access to Renewables*
Smart grid technology evaluation
* Discussed further

4. Achieving our energy efficiency goals:
Drive implementation through the utilities and leverage their scale economies, branding, and low cost customer access
Move forward with decoupling utility revenues from sales volumes
Develop a new funding and incentive mechanism
Over time, migrate from “kwh saved” to “CO2 avoided” focus and capture increasingly feasible tradeoffs among
Good old fashioned energy efficiency investments and behavior incentives
Maturing technologies (AMI, renewables, distributed generation)
Emerging end use fuel switching opportunities (PHEV, electric heat pumps, etc.)
Restructuring generation fuel mix (swap high carbon for low carbon generation)

5. Solar economics: need to get the “flywheel” turining
Program Design Concept
Economic Impact
100 KW units
Deploy 1000 KW/year for 3 years
Utility owns and unit rate based with a generation ROE
Power supplied to grid – simplifies billing and likely interconnections and socializes costs amongst all customers – “public good”
Customer receives lease payment for roof
Third party likely will perform actual installation
Capital Cost ($/kw)
Levelized cost
c/kwh)
System rate impact
No incentive
$6420
66 cents
+0.23%
MTC incentive
$3299
42 cents
+0.12%
MTC + ITC* incentive
$2503
38 cents
+0.10%
Several solar panel providers project costs approaching “grid parity” within next 2-3 years; until then subsidy and social support will be key
* may need special investment vehicle to capture Federal ITC

6. Solar programs are all about will, not the resource
Germany: ~1,000 MW in 2006
United States: ~100 MW in 2006
Source: EPRI

7. Renewables: Great potential; remote from load
Class 6 & 7 Potential
Source: Levitan & Associates

8. Where should we go from here?
The “Pickens Plan”
Develop midwestern wind
Develop long distance high voltage transmission to wheel power to load centers
Replace natural gas generation with wind
Use displaced gas to fuel natural gas vehicles
Reduce dependence of foreign oil

9. Where should we go from here?
…TO
The “Robb Plan”
Expand funding and create the right incentives for conservation to reduce load growth
Develop local renewables and transmission to wheel renewables and hydro power from northern New England and Canada to southern load centers to meet growth and displace fossil generation
Develop smart infrastructure (PHEV, DG and AMI)
Substantially reduce carbon emissions and improve air quality

10. Where should we go from here?
…OR TO
The “Raab Plan”
Expand funding and create the right incentives for conservation to reduce load growth
Develop local renewables and transmission to wheel renewables and hydro power from northern New England and Canada to southern load centers to meet growth and displace fossil generation
Develop smart infrastructure (PHEV, DG and AMI)
Substantially reduce carbon emissions and improve air quality