Testimony
of
Lara Levison, Energy Committee Chair
Sierra Club, Washington DC Chapter
on the
Public Service Commission of the District of Columbia
Public Witness Hearing
Committee on Business and Economic Development
Submitted June 3, 2020
Councilmember McDuffie, thank you for holding this hearing for public witnesses. I am testifying today regarding the DC Public Service Commission.
My name is Lara Levison. I am a member of the Executive Committee of the DC Chapter of the Sierra Club and the Chair of its Energy Committee. We are the nation's oldest and largest environmental advocacy group, with more than 3,000 dues-paying members and more than 10,000 supporters in DC. We are working to shift away from the fossil fuels that cause climate change and instead move toward a clean energy economy.
I want to first thank the Council for the important work it is doing in response to COVID-19. Supporting DC residents and businesses, especially the District’s essential workers and most vulnerable residents, must be our priority during the pandemic.
The District should also move forward with preparations against another major threat to our community: climate change. Like the novel coronavirus, the impacts of the climate crisis are especially harmful to vulnerable populations such as low-income communities and the elderly.
Public Service Commission Budget
The Sierra Club Supports the Mayor’s FY21 proposed budget for the Public Service Commission of $17.5 million, an increase over the current year’s budget of 7.7%. The Commission provides important services by overseeing electric, gas, and telecommunications companies in the District to seek safe, reliable, and quality services at reasonable rates for residential, business, and government customers. The agency’s mission includes “the preservation of environmental quality, including effects on global climate change and the District’s public climate commitments.” The Council added the explicit reference to climate change in the CleanEnergy DC Omnibus Act that passed in 2018. As soon as it is possible to do so in this tough budget climate, we strongly support funding for the Commission to hire in-house experts to assess the environmental and climate impact of matters before the Commission.
Long-Term Power Purchase Agreements
We applaud the Commission's recent order requiring Pepco to procure renewable energy for 5% of its Standard Offer Service load through new long-term contracts. These power purchase agreements (PPAs) provide critical long-term income streams to renewable energy companies, enabling them to build new solar and wind farms. The PPAs will help the District move closer to its climate commitment of carbon neutrality while protecting ratepayers from volatility in energy markets. We commend the Commission for its leadership, and we urge the Commission to implement the PPA swiftly.
Emissions from the Gas Sector
On Earth Day, April 22, the Sierra Club and more than two dozen other organizations sent a joint letter to you, Councilmember McDuffie, raising awareness about the danger from continued emissions of greenhouse gases by Washington Gas. We called on you to hold a public hearing with Washington Gas, the Public Service Commission, and community stakeholders to discuss pathways for DC’s gas utility to reduce its greenhouse gas emissions 50 percent by 2032 and to end all greenhouse gas emissions by 2050, as required under the Merger Agreement between WGL and AltaGas and DC’s public climate commitments. In our letter, we pointed out that Washington Gas responded to the merger requirement to provide a business plan that supports the District’s 2050 climate commitments with a bogus plan that greenwashes the continued sale of fossil fuels. The plan relies on mixing into the District’s gas pipeline so-called biogas, which is expensive and in very limited supply. Furthermore, Washington Gas still plans to use fracked gas for more than 40 percent of its sales in 2050, in clear violation of the District’s 2050 commitment of climate neutrality. Although, we did not receive a response to our letter, we hope you can give us an answer today and tell us whether this committee will hold a public hearing.
At this Committee's January 22, 2020 oversight hearing on the Commission, Chairman Willie Phillips said the Commission is “looking for each and every opportunity to engage the public to make sure that the Commission is no longer this black box. We've heard for years that an application or some type of filing is made at the Commission, we start a new initiative, and no one in the public has an opportunity to weigh in.” At the same hearing, Chairman Phillips said: “The Commission remains willing, ready and able to do whatever we can to assist Washington Gas in making sure they meet their commitment and to help the stakeholders get to where we need to get to meet our climate commitments.”
The Sierra Club was disappointed that despite Chairman Phillips’ statements before this committee, the Commission rejected our request to join the proceeding in which the Commission is considering the “climate business plan” that Washington Gas purports will bring the utility to carbon neutrality by 2050. In light of this, we believe the Commission should open a new proceeding on how the gas utility will reach carbon neutrality by 2050.
Grid Modernization
In 2015, under pressure from citizen activists, the Commission opened a proceeding on modernizing the electricity grid (Formal Case 1130, Modernizing the Energy Distribution System for Increased Sustainability, or MEDSIS). Five years later, this proceeding has yielded only piecemeal progress without advancing a comprehensive vision for grid modernization. The proceeding was siloed such that an integrated analysis of grid planning, rate incentives, and how to incorporate distributed energy resources and consumer protections did not occur. Instead, disjointed reports from six different workgroups offered unrelated recommendations. Although we support many of the recommendations, no road map to grid modernization materialized, and the utilities were able to block any initiatives that challenged business as usual. Extending 20th century utility business plans into the future is not the solution.
In Formal Case 1156, a multi-year electricity rate case, an effort was made to incorporate consideration of performance-based ratemaking into the rate case. The endeavor was insufficiently staffed by the Commission, there was insufficient time allowed for discussion of a very complex subject, and ultimately parties were deterred from pursuing the effort. While Sierra Club lauded the Commission for taking up the challenge of advancing consideration of performance-based ratemaking to align Pepco's business model with DC's efficiency and clean energy commitments, the effort was ill-informed. The Commission should build on the extensive foundation of discussion in the 1130 docket and initiate further formal discussion of a grid modernization strategy to implement the District’s clean energy statutory commitments. This work is not complete.
Transportation Electrification
To meet DC’s climate commitments, the District will need to dramatically expand electric vehicle (EV) usage across personal, commercial, and public vehicles. The Public Service Commission and Pepco have a vital role to fill to help ensure our grid is prepared for the increased load, as well as an important role in shaping the public-private strategy for EV charger deployment.
The Public Service Commission recently convened a transportation electrification working group as part of orders 19898 and 19983 to examine a series of proposals that Pepco offered to pilot rebates for EV chargers, as well as install service equipment for public EV chargers. We believe that these size-limited proposals are prudent for expanding charger availability in the District, and we recommend the Public Service Commission adopt these proposals. In addition, these EV chargers will enable Pepco to test Time-of-Use (TOU) rates and load management programs for electric vehicles, potentially saving money both for EV owners, as well as long-term savings for all ratepayers by avoiding costly grid upgrades.
Public Service Commission Vacancy
There is currently a vacancy on the DC Public Service Commission. It is our hope that the Mayor will nominate, and the Council will confirm, a commissioner who shares DC’s vision for aggressively meeting the climate crisis and who will carry out the Commission’s statutory obligation to ensure that DC reduces carbon pollution 50 percent from 2006 levels by 2032 and achieves carbon neutrality by 2050.
Meeting DC’s appropriately robust climate commitments will require significant vision and expertise by the Commission. The Public Service Commission is one of the key players in implementing these climate change mitigation policies, but progress on climate and energy commitments has been slow at this agency.
On-bill financing for energy efficiency upgrades
“Pay As You Save” energy efficiency programs require utilities to pay for efficiency upgrades with ratepayers incrementally paying back the cost on their monthly bills. Such programs are available to ratepayers regardless of income or credit history. “Pay As You Save" programs are administered by about 15 utilities across the country, mostly small rural electric cooperatives. The Sierra Club believes a “Pay As You Save" program is worth exploring in the District, either through a pilot program offered through the DC Sustainable Energy Utility (SEU) and mandated by the Public Service Commission or by the DC Council providing funding to the Office of the People’s Counsel to conduct a feasibility study on the issue.
The details of such a program would need to be carefully considered to ensure minimal ratepayer impact and maximum impact on energy efficiency and greenhouse gas reductions.
Conclusion
The Sierra Club believes the Public Service Commission needs a renewed focus on climate emissions from DC’s utilities, especially our gas utility. For the Commission to effectively lead the utilities’ transition to net-zero emissions, the Commission will need added expertise on climate and clean energy issues. The Sierra Club asks this Committee and DC Council to instruct the Commission hire expertise necessary to assess the environmental and climate impact of matters before the Commission. The climate and clean energy issues facing DC are sufficiently important and complex for the Commission to hire expertise from this purpose.
It is time to transform our electricity grid to enable widespread, rapid adoption of existing and emerging energy efficiency and renewable energy technologies. Meeting the District’s climate commitments by implementing and building on its path-breaking policies is essential—and achievable, with sustained dedication from the Council, the Commission, and other DC government agencies. As importantly, by ensuring these climate commitments are met, DC is providing a roadmap for other cities to follow as we work together to address the climate crisis in the United States. Moreover, expanding DC’s clean energy economy brings business opportunities that create jobs to DC.
The Commission needs strong leadership and vision to match the bold climate commitments that the Council and Mayor have made. The District is fortunate to be home to many smart, talented, and creative energy experts who can ensure that DC meets its 2032 and 2050 climate commitments. The Sierra Club urges the Council to commit to confirm an individual who will bring knowledge and urgency to the task of implementing DC’s climate commitments.