Taking on the questions of who pays for and benefits from the clean energy transition, Commissioner Harold Gray of the Delaware Public Service Commission moderated the 2022 PJM General Session’s second panel Tuesday, “Ensuring/Enhancing Energy Equity and Environmental Justice through the Transition.”
Gray asked panelists to discuss the concepts of energy equity and environmental justice, how these topics are observed in industry practice, and where progress is most needed. Three industry experts joined Gray to explore these issues:
- Colette D. Honorable, Partner, ReedSmith LLP, former Federal Energy Regulatory Commission Commissioner and former Chair, Arkansas Public Service Commission
- Joseph P. Kennedy III, Managing Director, Citizens Energy Corporation and former U.S. Representative
- Damali Rhett Harding, US Managing Principal, Regulatory Assistance Project
For consumers, principles of energy equity and environmental justice are founded in expanding public literacy about how the bulk electric system operates, Harding said. The Regulatory Assistance Project is a nonprofit, nonpartisan organization that supports energy equity education and outreach to underrepresented consumers.
Energy equity, she said, is defined as the intentional design of systems, technology procedures and policies that lead to fair and just distribution of benefits in the energy system. One example is the concept of “energy burden,” a term used in the context of energy equity. Consumers bear different costs of the energy transition in different ways according to their household resources.
Reimagining performance metrics for utility companies may involve standards for equity across households’ ability to participate in demand response and energy efficiency programs, she said. Expanding stakeholder conversations to include consideration of who is excluded, or what the unintended consequences of energy policy are, represents another opportunity for needed change, she added.
Gray asked Commissioner Honorable to square free market principles with these emerging social considerations. Demand for social change has grown following the COVID-19 pandemic and the killing of George Floyd, and in light of the looming economic recession, Honorable said. Principles of environmental justice and energy equity dovetail with PJM’s goal of maintaining system reliability amid the evolving generation mix, she said. That’s because ratepayers will ultimately bear the costs of new transmission and state policies aimed at facilitating decarbonization. As a result, efforts to make grid processes more transparent are critically important.
Broadening stakeholder processes and industry outreach to be more transparent and inclusive is imperative in the light of the tremendous tasks ahead to enable the energy transition, Kennedy said.
As much as three times the current electricity demand will be needed in a decarbonized future, Kennedy added, imposing burdens on the already sluggish permitting processes for new transmission infrastructure. As a nonprofit, Citizens Energy works with utilities to help finance the capital needs for bulk electric system infrastructure and then return a portion of their profits to fulfill community needs.
Gray asked panelists how to best educate ratepayers about the need for and value of grid generation resources and infrastructure required for the energy transition.
Honorable welcomed FERC’s new Office of Public Participation to enable broader input from ratepayers and industry advocates. Listening to communities and engaging with people so that they feel part of the process is essential, Kennedy added.
Today, one in three households are energy insecure, Harding said. The U.S. is fortunate, she said, to have energy abundance and as such can afford to push for an energy transition to help cope with the effects of climate change. When asked about equity, panelists repeatedly returned to the theme of the human element and the importance of examining why reliable electric service is so vital to everyday life.
In state processes, some utility regulators are already requiring proof of environmental justice and energy equity services as a component of investor-owned utilities’ rate filings, Honorable said.
Opportunities remain to broaden inclusion in grid operator proceedings, Honorable said. Wholesale electricity markets, she added, were created as a function to award the most economic resource. We have to ask ourselves, she said, if we can do better. Programs are needed more than ever to educate the public on bulk electric system concepts in everyday terms, she added.
Prompted by an audience question from Marji Phillips of LS Power, the panel addressed how energy equity and environmental justice could apply to PJM and the RTO/ISO space in general. The panel agreed that regulators and utilities played an important role in ensuring energy equity and environmental justice, but also stated that there is a role for RTOs/ISOs as well. PJM Board of Managers Chair Mark Takahashi asserted PJM’s commitment to these issues in closing the session.
“Looking forward, there are challenges ahead. It is this community that will have to take on these challenges,” Takahashi said. “We take diversity, equity and inclusion very seriously at PJM. I heard a lot of great ideas as well as appropriate challenges. We can always improve on energy equity and environmental justice. It is the job of all of us to improve in those areas.”