Best Practices in Electric Sector Load Forecasting

Authors: Elizabeth A. Stanton, PhD, Alicia Zhang, Sagal Alisalad, Bryndis Woods, PhD

November 2024

This Applied Economics Clinic (AEC) white paper examines best practices of annual and peak electric demand forecasting and provides additional examples for South Carolina. AEC asserts that conventional load forecasting methods must be updated to reflect the rapid transformation of demand trends and real-word conditions. To address these concerns, AEC recommends eight best practices to ensure thorough, transparent, and accurate load forecasts: model and data transparency; emerging policies and technologies; large industrial loads; non-energy constraints; forecasting innovation; uncertainty analysis and multiple future scenarios; post-modeling adjustments; and stakeholder review. Adopting contemporary best practices in load forecasting benefits consumers, utilities and regulators with lower costs, increased reliability, and improved facilitation of state-mandated decarbonization plans.

Link to Report

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Bringing Equity into Energy Reliability Decisions

Client: Environmental Defense Fund

Authors: Bryndis Woods, PhD, Sachin Peddada, Sagal Alisalad, Jordan Burt, Elisabeth Seliga, Tanya Stasio, PhD, Eliandro Tavares, Grace Wu, Elizabeth A. Stanton, PhD

AEC staff prepared a report on behalf of the Environmental Defense Fund that analyzes the connection between issues of energy system reliability and equity. This data-driven report utilizes case studies of advocates’ for more equitable energy systems real-world experiences to assess how decision-makers should account for equity when making decisions regarding system reliability. The report concludes with recommendations for future decision-making in energy system reliability, including strengthening consumer and community representation. A common theme across the real-world experiences of the advocates discussed in this report is the ways in which community engagement efforts in energy system decision-making often fall short of creating real change in energy sector decisions, and environmental justice and other under-resourced and underserved communities are often left out and left behind in decisions that directly disproportionately harm the health and wealth of their communities.

Link to Full Report

Link to Press Release

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Overburdened Communities and Power Plants in New Jersey

Authors: Researcher Tanya Stasio, PhD, Assistant Researchers Sagal Alisalad, Elisabeth Seliga, and Sachin Peddada, and Research Assistant Jordan Burt

Researcher Tanya Stasio, PhD, Assistant Researchers Sagal Alisalad, Elisabeth Seliga, and Sachin Peddada, and Research Assistant Jordan Burt prepared a policy brief on how New Jersey power plants disproportionately affect overburdened communities.

New Jersey environmental justice law defines overburdened communities as census blocks where at least a third of the household is low income, 40 percent of residents identify as racial-ethnic minorities, or 40 percent have low English proficiency. These communities are disproportionately affected by the pollutants emitted by power plants. AEC researchers explain that environmental justice initiatives will require full understanding of the impacts on vulnerable communities.

Link to Policy Brief

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Economic Impacts of a Clean Energy Transition in New Jersey

Authors: Joshua R. Castigliego, Sagal Alisalad, Sachin Peddada, Liz Stanton, PhD

June 2022

Researcher Joshua Castigliego, Assistant Researchers Sagal Alisalad and Sachin Peddada, and Senior Economist Liz Stanton, PhD prepared a report on the economic impacts associated with a clean energy transition in New Jersey that aims to achieve the State’s climate and energy goals in the coming decades. AEC staff find that adding in-state renewables and storage, and electrifying transportation and buildings creates additional job opportunities, while also bolstering the state’s economy. From 2025 to 2050, AEC estimates that New Jersey’s clean energy transition will result in almost 300,000 more “job-years” (an average of about 11,000 jobs per year) than would be created without it. AEC also identifies a variety of additional benefits of a clean energy transition, including several benefits that are conditional on the design and implementation of the transition.

In a companion publication to this report—Barriers and Opportunities for Green Jobs in New Jersey—AEC discusses equity, diversity and inclusion in New Jersey’s clean energy sector along with barriers that impede equitable representation in New Jersey’s green jobs.

Link to Report

Link to Presentation

Link to Press Release

Media Coverage - NJBiz - June 9, 2022

Media Coverage - NJ Spotlight News - June 8, 2022

Media Coverage - Asbury Park Press - June 8, 2022

Media Coverage - NJ101.5 - June 7, 2022

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Decarbonizing Building Heat in Massachusetts

Client: HEET

Authors: Tanya Stasio, Joshua Castigliego, Sagal Alisalad, and Liz Stanton, PhD.

March 2022

On behalf of the HEET, Researchers Tanya Stasio and Joshua Castigliego, Assistant Researcher Sagal Alisalad, and Director and Senior Economist Liz Stanton, PhD explored the feasibility of injecting green hydrogen and/or upgraded biogas (also known as “renewable” natural gas) into Massachusetts’ existing gas supply as a building decarbonization strategy. AEC compared these alternatives to gas heating and modern electric heat pumps in terms of price, feasibility, supply, and safety, and found that upgraded biogas and green hydrogen are infeasible, expensive, and unsafe strategies for decarbonization of building heating. Moreover, a green hydrogen/fossil gas blend is not feasible before 2040; For a green hydrogen/fossil gas blend to be a viable heating fuel, gas utilities would need to replace all of Massachusetts’ leaky-prone pipes.

AEC also estimated annual home heating costs for an average Massachusetts home using different heating options and found that by the mid-2030’s heating with air-source heat pumps, ground-source heat pumps, and/or networked geothermal systems will be more affordable than heating with fossil gas.

Link to White Paper

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Equity Measurement and Targeting Underserved Communities in Massachusetts’ 2022-2024 Energy Efficiency Plan

Client: Green Justice Coalition

Authors: Bryndis Woods, PhD, Sagal Alisalad, Eliandro Tavares, Myisha Majumder, and Liz Stanton, PhD

December 2021

On behalf of the Green Justice Coalition, AEC staff developed three white papers on equity measurement and how underserved communities will be served in the implementation of Massachusetts’ 2022-2024 Energy Efficiency Plan. The first paper, Equity Measurement for Massachusetts’ 2022-2024 Energy Efficiency Plan, builds on the equity recommendations of the Energy Efficiency Advisory Council’s (EEAC) Equity Working Group (EWG) and the Green Justice Coalition by describing metrics needed to evaluate progress towards equity goals. The second paper, Energy Efficiency and Equity Efforts Nationwide, provides examples from other jurisdictions around the nation on the state of equity programming in energy efficiency policies. The third AEC white paper, Targeting Underserved Communities in Massachusetts’ 2022-2024 Energy Efficiency Plan, is a detailed review of Massachusetts towns identified as underserved by the energy efficiency program administrators and their partners.

Link to White Paper 1: Equity Measurement for Massachusetts’ 2022-2024 Energy Efficiency Plan

Link to White Paper 2: Energy Efficiency and Equity Efforts Nationwide

Link to White Paper 3: Targeting Underserved Communities in Massachusetts’ 2022-2024 Energy Efficiency Plan

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Energy Storage for Winter Grid Reliability: How Batteries Became the Low-Cost Solution for Power Assurance in Massachusetts

Client: Clean Energy Group

Authors: Joshua R. Castigliego, Liz Stanton, PhD, Sagal Alisalad, and Eliandro Tavares

December 2021

On behalf of the Clean Energy Group, Researcher Joshua Castigliego, Senior Economist Liz Stanton, PhD, and Assistant Researchers Sagal Alisalad and Eliandro Tavares evaluated the value of winter reliability services and the opportunity to provide these services economically in New England using distributed battery storage. AEC finds that the value of winter peaking capacity services from distributed (customer-sited) resources is incorrectly assumed to be $0 in the battery program cost-benefit analyses that determine performance payments to battery storage owners.

The value of winter electric capacity is treated by electric distributors as distinct from that same value in summer, and it has been dubbed “winter reliability” to distinguish it from “summer capacity.” When calculating customer performance payments, summer capacity services are valued, but winter reliability services are not. In this report, AEC introduces a winter reliability metric defined as the assurance of adequate electric capacity during periods of critical need, called—following ISO-New England’s convention—capacity scarcity condition (CSC) events. AEC calculated a “winter reliability value” measured as the net dollar value to supply any given peak supply technology (i.e., gas peaker or large-scale battery storage) on a per kilowatt-hour (kWh) basis during a CSC period.

Link to Report

Link to Presentation

Media Coverage

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PJM's Capacity Market: Clearing Prices, Power Plants, and Environmental Justice

Authors: Joshua R. Castigliego, Liz Stanton, PhD, Sagal Alisalad, Tanya Stasio, Eliandro Tavares

October 2021 (Updated November 2021)

Researcher Joshua Castigliego, Senior Economist Liz Stanton, PhD, Assistant Researcher Sagal Alisalad, Researcher Tanya Stasio, and Assistant Researcher Eliandro Tavares prepared a report reviewing the economics of power plants in the PJM region, focusing on the "capacity payments" given to owners of generating units that promise to be available if needed to generate power at times of peak customer demand. AEC finds that PJM has consistently overestimated its peak demand and as a result spent too much money on capacity payments, and generating units—including many in or near Environmental Justice (EJ) communities—are kept online despite being uneconomic and unnecessary to provide reliable electric service.

AEC adjusted PJM’s forecasts and market design to better represent customer demand and other market conditions, and estimated the prices that individual generating units bid into the 2021/22 capacity auction, which took place in 2018. The actual bids by power plant owners are not made public, so we model them based on available cost and revenue data. PJM’s overestimate of customer demand and costs of new generating units raises market clearing prices and capacity payments to power plant owners, resulting in what we call a “fat market” with payments made to unnecessary power plants and higher costs to customers. In place of PJM’s $140 per megawatt-day (MW-day) fat market clearing price, we estimate a clearing price of $100 to $104 per MW-day to serve customer needs without adding unnecessary costs. Our leaner, adjusted clearing price would lower customer bills without sacrificing reliable electric service and put an end to capacity payments propping up the bottom lines of uneconomic power plants, many of them in or near EJ communities.

Link to Report (Updated 11/30/2021)

Link to Presentation for PJM Cities & Communities Coalition

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Recommendations for Cities and States to Improve Equity Evaluation and Reporting in Energy Efficiency Programming

Client: American Council for an Energy-Efficient Economy (ACEEE)

Authors: Bryndis Woods, PhD, Liz Stanton, PhD, and Sagal Alisalad

October 2021

On behalf of the American Council for an Energy-Efficient Economy (ACEEE), this Applied Economics Clinic white paper recommends measures that cities and states can undertake to facilitate equitable energy efficiency evaluation and reporting of energy efficiency efforts, based on the results of our review of low-income energy efficiency efforts in ACEEE’s top-scoring cities and states in their 2020 City and State energy efficiency scorecards.

We find that the cities and states most highly-rated for energy efficiency offer programs for low-income community members, but fail to take critical actions necessary for equitable evaluation and reporting to facilitate equitable outcomes. Based on our review of these programs, we find that—while these programs have made important progress on addressing equity concerns by offering efficiency programming specifically to low-income households—more robust energy efficiency evaluation and reporting are needed to shine a light on city and state equity-focused energy efficiency programming and ensure that efficiency benefits are equitably distributed. We recommend three main improvements that would drastically enhance the ability to evaluate these programs for their equity-related impacts:

• Mandate disaggregated efficiency program performance reporting;
• Identify, track, and target vulnerable populations; and
• Integrate energy efficiency, climate, and equity planning and reporting.

Link to Report

Link to ACEEE's Leading with Equity Initiative White Paper

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ConnectedSolutions: A Program Assessment for Massachusetts

Client: Clean Energy Group

Authors: Bryndis Woods, PhD, Liz Stanton, PhD, Eliandro Tavares and Sagal Alisalad

September 2021

On behalf of the Clean Energy Group, this Applied Economics Clinic report assesses the design and performance of the Massachusetts ConnectedSolutions program. Massachusetts’ ConnectedSolutions program offers incentives to customers in exchange for allowing their electric supplier to draw on the energy stored in their grid-connected batteries and/or to curtail energy use via smart thermostats or electric vehicle charging at times of peak electric demand. Launched as a full program offering in 2019, ConnectedSolutions had about 34,000 customer participants with 310 megawatts (MW) of capacity enrolled by the end of 2020.

This report compares the Massachusetts ConnectedSolutions program, as it has been administered in the first three-year program cycle, with related programs in other states across the country. In several important areas, the Massachusetts program administrators could benefit from best practices implemented elsewhere; chief among these is the treatment of income-eligible customers and those in historically underserved communities.

Link to Report

Link to Webinar

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Assessment of Backup Diesel Generators in Massachusetts and New York City

Client: Bloom Energy

Authors: Joshua R. Castigliego, Tanya Stasio, Sagal Alisalad, Liz Stanton, PhD

August 2021

On behalf of Bloom Energy, Researchers Joshua Castigliego and Tanya Stasio, Assistant Researcher Sagal Alisalad, and Senior Economist Liz Stanton, PhD prepared two reports assessing backup diesel generators in Massachusetts and New York City. AEC compiled inventories of backup diesel generators in each jurisdiction based on publicly available data and reviewed the quantity, combined capacity, proximity to environmental justice (EJ) communities, and emissions impact of backup diesel generators.

AEC found that there is an abundance of backup diesel generators throughout both areas that are commonly sited near EJ communities and represent a considerable—and largely avoidable—source of air pollution and greenhouse gas emissions that threaten public health and the environment.

Link to Massachusetts Report

Link to New York City Report

Link to Download Shapefile for Massachusetts Environmental Justice Communities

Link to Download Shapefile for New York City Environmental Justice Communities

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Background Report: Benefits of Coal Ash Cleanup and Remediation

Client: Earthjustice

Authors: Joshua R. Castigliego, Tyler Comings, Sagal Alisalad, Liz Stanton, PhD

July 2021

On behalf of Earthjustice, Researcher Joshua Castigliego, Senior Researcher Tyler Comings, Assistant Researcher Sagal Alisalad, and Senior Economist Liz Stanton, PhD prepared a report outlining the benefits of coal ash cleanup and remediation at three power plants: Montana’s Colstrip Steam Electricity Station, South Carolina’s Grainger Generating Station, and Indiana’s Michigan City Generating Station.

AEC staff found that the more complete and more effective cleanup scenarios with full excavation of coal ash in contact with groundwater and contaminated soils results in more than double the jobs compared to the less effective cleanup plans. In all three case studies, workers’ income and local economic activity follow this same pattern with more stringent clean up protocols resulting in greater benefits for both workers and the community.

Following release of this report, on August 6, 2021, Michigan City Council passed a unanimous resolution supporting the more stringent coal ash cleanup option. Read the resolution below.

Link to Report

Link to Earthjustice Publication

Link to Press Release

Link to Resolution

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“Measuring Climate Equity" at LIEN Annual Conference 2021

Event:
“Measuring Climate Equity" at the Low-Income Energy Network (LIEN) Annual Conference 2021

Speaker:
Sagal Alisalad

July 2021

AEC Assistant Researcher, Sagal Alisalad presented on “Measuring Climate Equity" at the Low-Income Energy Network (LIEN) Annual Conference 2021. Ms. Alisalad gave a primer on climate equity, described AEC’S climate and social equity framework, and introduced four types of metrics for climate equity: Outcome Metrics, Distributional Dimensions, Process Metrics, and Structural Metrics. This year’s LIEN conference focuses on Energy Equity: Using Energy Efficiency to Fight Energy Poverty in Canada.

Link to Presentation Slides

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Ameren MO IRP Comments

Source: USFWS Midwest Region

Authors: Tyler Comings, Joshua Castigliego, Sagal Alisalad, Eliandro Tavares, and Sierra Club

March 2021

AEC co-authored (with Sierra Club) comments on the Integrated Resource Plan (IRP) from Ameren Missouri. The comments discuss Ameren's failure to: economically optimize coal unit retirements, adequately address substantial costs from pending litigation, and adequately consider low-cost solar and solar-battery hybrid resources.

Link to Comments

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What the COVID-19 Pandemic Can Teach Us About Climate Justice

Authors: Sagal Alisalad, Eliandro Tavares, Tanya Stasio, and Myisha Majumder

February 2021

The ongoing COVID-19 pandemic has had massive impacts on nearly all aspects of human life—from jobs to food security to healthcare. Black, Indigenous, and people of color (BIPOC) are disproportionately impacted by this unprecedented health crisis as a result of preexisting socioeconomic and environmental disadvantages. Assistant Researchers Sagal Alisalad and Eliandro Tavares, and Research Assistants Tanya Stasio and Myisha Majumder prepared an AEC policy brief that focuses on the relationship between preexisting racial inequality and the economic and health consequences of the COVID-19 pandemic. In this brief, AEC finds a substantial overlap between vulnerability to COVID-19 and vulnerability to climate change. Much like the global climate crisis, some groups, especially Environmental Justice communities, are more likely to bear the brunt of the ongoing health crisis.

Link to Policy Brief

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Inflection Point: When Heating with Gas Costs More

Client: HEET

Authors: Joshua R. Castigliego, Sagal Alisalad, Tanya Stasio, and Liz Stanton, PhD

January 2021 (Updated March 2021)

On behalf of the HEET, Researcher Joshua Castigliego, Assistant Researcher Sagal Alisalad, Research Assistant Tanya Stasio, and Clinic Director and Senior Economist Liz Stanton, PhD compared the annual energy cost of heating the average-sized home in Massachusetts using either a gas furnace or electric heat pumps. This analysis focuses exclusively on a home’s annual heating bill as it is the most relevant measure for Massachusetts households. Home heating bills influence fuel choice and put a disproportionate burden on low- and moderate-income families that spend a larger share of their income on energy bills. In this white paper, AEC finds that while today’s gas heating bills are less expensive than the electricity needed to run an air-source heat pump (ASHP), this relationship will reverse. Heating with ASHPs will become less expensive than heating with gas, with an inflection point occurring at some point between 2026 and 2030.

Link to White Paper Updated (3/19/2021)

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Risks Outweigh Rewards for Investors Considering PJM Natural Gas Projects

Client: Energy Foundation

Authors: Bryndis Woods, PhD, Liz Stanton, PhD, Eliandro Tavares, Sagal Alisalad, Myisha Majumder; and Dennis Wamsted from the Institute for Energy Economics and Financial Analysis (IEEFA)

October 2020

On behalf of the Energy Foundation, the Applied Economics Clinic and the Institute for Energy Economics and Financial Analysis (IEEFA) prepared a report that assesses the substantial risks to financial entities investing in natural gas-fired power plant development in the Pennsylvania-New Jersey-Maryland (PJM) region—the largest independent power system operator (ISO) in the United States. 

AEC and IEEFA identify six overarching threats that pose growing risks for investors in new PJM gas-fired power plants: increasing price competitiveness of clean solar, wind, demand response and battery storage alternatives; significant existing over-capacity, flat demand growth and market turmoil; high-impact, unpredictable global events such as COVID-19 that radically reshape markets and expectations of future demand; uncertainty over the future direction of gas prices, particularly given the substantial increase in U.S. liquefied natural gas (LNG) exports; actions by state governments within the PJM market to limit future fossil fuel generation and/or even withdraw from the market entirely; and public opposition that can delay project development and raise overall costs.

Link to Report

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Benefits of Community Choice Energy for the City of Chelsea

Link to Policy Brief

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Client: GreenRoots

Authors: Bryndis Woods, PhD, and Sagal Alisalad

September 2020

This Applied Economics Clinic policy brief—prepared on behalf of GreenRoots, a Chelsea-based organization working to achieve environmental justice—presents ways in which Community Choice Energy (CCE) programs can provide important benefits for vulnerable communities, including better community control and participation in energy choices, protection from predatory suppliers, more renewable content, and lower costs than Eversource and National Grid’s basic electric service rates.

Municipal Light Plants and Energy Efficiency

Client: Massachusetts Climate Action Network

Authors: Bryndis Woods, Sagal Alisalad, Myisha Majumder, Liz Stanton, PhD

September 2020

On behalf of the Massachusetts Climate Action Network, the Applied Economics Clinic reviewed over 60 Municipal Light Plants (MLPs) and electric cooperatives across 27 states to identify leaders in energy efficiency, renewable energy, and beneficial electrification programs. This white paper includes case studies of effective programs implemented by electric providers in this assessment. Overall, AEC found that MLPs in Massachusetts can utilize energy efficiency, renewable energy, and beneficial electrification to improve their energy programs.

Link to White Paper

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Visualizations of Racial Inequity

Client: Renew New England
Authors: AEC Staff

August 2020

On behalf of the Renew New England coalition, AEC used publicly available data to produce visualizations of racial disparities. 

There are three sets of data graphics:

1) The first set shows disparities in rates of incarceration, average income, COVID-19 cases, and unemployment across as many as five racial categories: Asian, Black, Indigenous, Latinx and white. This data is presented for each of the New England states and the U.S.

2) The second set shows Black/white disparities across as many as 23 measures (e.g. homelessness, infant mortality, educational attainment). This data is presented for Massachusetts and the total U.S.

3) Black/white unemployment for all U.S. states and the U.S. average. 

The data demonstrate that racial inequalities are pervasive across common measures of well-being like employment, incarceration, poverty status and educational attainment. These inequalities are consistent across New England and the rest of the United States. For example, across the United States today, a Black individual is 6.4 times more likely than a white individual to be incarcerated, 2.4 times more likely to have a positive COVID-19 test, and 2.2 times more likely to be unemployed.

Link to Presentation

Link to Downloadable Images

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