We felt we needed a thorough examination of the wide range of past PIM results in order to help others avoid some common pitfalls and use these tools successfully.
BOULDER, Colo. (PRWEB) July 30, 2020
As more states work toward transitioning to a cleaner and more flexible grid, there is an increasing need for a clear set of utility business model tools and regulatory pathways. Rocky Mountain Institute’s Electricity Program is developing a series of reports that go in depth on some of these most promising opportunities.
RMI’s new report, PIMs for Progress, reviews a selection of historical performance incentive mechanism (PIM) examples and provides a simple taxonomy of their results to identify important lessons for future PIM development. By exploring why some PIM proposals are rejected by regulators and others are accepted, as well as what happens to PIMs after acceptance, we can learn how these regulatory tools can be best leveraged to support public interest goals in a shifting energy landscape.
What are PIMs?
PIMs are a regulatory tool to help transition the utility business model to one where an increasing share of revenues rely on utility efforts to meet the customer, policy and technological demands emerging from the transformation taking place in the power sector.
PIMs can motivate utilities with financial rewards and penalties to deploy and utilize distributed energy resources, improve resilience, better engage customers and deliver greenhouse gas emissions reductions. As utilities and regulators try to balance these new expectations with existing responsibilities, PIMs provide utilities with the flexibility needed to meet both traditional and emerging demands, while still serving shareholder, customer and broader public interests.
From a historical perspective, PIMs have a mixed track record in delivering effective and sustainable changes to utility performance. While there are plenty of success stories, there are also many examples of PIMs that did not motivate desired utility behavior, created perverse incentives, or either over- or under-compensated utilities relative to the customer benefits created. Given the great potential of well-designed PIMs, we need to understand their past results to identify what characteristics make PIMs successful.
“PIMs have the potential to be an enormously powerful tool in the energy transition. But our experience and research has shown that not all PIMs are created equal. We felt we needed a thorough examination of the wide range of past PIM results in order to help others avoid some common pitfalls and use these tools successfully,” said Cara Goldenberg, Manager, Electricity Practice at Rocky Mountain Institute.
Eight Recommendations to Improve PIM Results
Based on research and interviews with stakeholders involved in PIM development, the report offers eight recommendations to regulators, utilities and other stakeholders looking to integrate PIMs into their regulatory frameworks:
1. Determine what role PIMs can play in supporting public policy goals
2. Evaluate how PIMs can work within current regulatory frameworks
3. Consider how PIMs can support utility growth into new service areas
4. Strive for outcome-based PIMs where possible
5. Leverage data to better understand utility operations
6. Align incentive structures with expected benefits
7. Prioritize flexibility and learning
8. Design effective approaches for stakeholder participation
Whether the intent is a broad vision for utility transformation or a narrower exploration of how incentives can improve specific programs, utility regulators and stakeholders looking to develop PIMs can learn from the range of historical PIM experiences across time and geography. While it may be premature to make a final assessment of their results, important lessons are already emerging from ongoing PIM processes in states such as Rhode Island, New York, Minnesota and Hawaii.
As more and more states attempt to update the traditional regulatory compact of yesteryear to reflect what is in today’s public interest, PIMs are a tool to remake how utilities are compensated for new services while ensuring customers and wider society benefit as well.
To Download PIMs for Progress, please go to
Media Inquiries please contact:
Alex Chin, Media Relations Associate, T: +1 973-262-0002, E: email@example.com
Notes to Editors
About Rocky Mountain Institute
Rocky Mountain Institute (RMI)—an independent nonprofit founded in 1982—transforms global energy use to create a clean, prosperous, and secure low-carbon future. It engages businesses, communities, institutions, and entrepreneurs to accelerate the adoption of market-based solutions that cost-effectively shift from fossil fuels to efficiency and renewables. RMI [i1] has offices in Basalt and Boulder, Colorado; New York City; the San Francisco Bay Area; Washington, D.C.; and Beijing.
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GM Unveils Factory ZERO
General Motors says its Detroit-Hamtramck Assembly Center will be known as Factory ZERO, reconfigured to an all-electric vehicle assembly plant.
The name Factory ZERO reflects the significance of this facility in advancing GM’s zero-crashes, zero-emissions and zero-congestion future. Factory ZERO will be the launchpad for GM’s multi-brand electric vehicle (EV) strategy. The facility has advanced technology and tooling and was designed with a focus on sustainable manufacturing. The GMC HUMMER EV pickup and the Cruise Origin, a purpose-built electric, self-driving, shared vehicle – and other GM EVs will be built at Factory ZERO. Production of the GMC HUMMER EV pickup will begin in late 2021.
“Factory ZERO is the next battleground in the EV race and will be GM’s flagship assembly plant in our journey to an all-electric future,” says Gerald Johnson, executive vice president of global manufacturing at GM. “The electric trucks and SUVs that will be built here will help transform GM and the automotive industry.”
GM’s $2.2 billion investment in Factory ZERO will position the facility to build EVs at scale. It represents the single largest investment in a plant in GM history. Once fully operational, the plant will create more than 2,200 good-paying U.S. manufacturing jobs.
Both the upcoming GMC HUMMER EV and the Cruise Origin will be built on GM’s Ultium battery platform. Ultium is flexible enough to build a wide range of EVs – cars, trucks and more – and is the heart of GM’s future EV lineup.
Factory ZERO is being transformed with sustainability in mind. During the plant’s physical transition, concrete waste was repurposed to create temporary roadways. The site also recycled stormwater to reduce discharge costs and offset the cost of potable water. Treated stormwater will be used in cooling towers and the fire suppression system. Recognized by the Wildlife Habitat Council, the site also features a 16.5-acre wildlife habitat and is home to species such as monarchs, foxes and turkeys.
GM is committed to sourcing 100% of its U.S. facilities with renewable energy by 2030, and all global facilities by 2040. All DTE-supplied GM facilities in southeast Michigan, including Factory ZERO, will be powered by renewable energy by 2023. The factory also features a 30 kW solar carport and 516 kW ground-mount photovoltaic solar array from DTE.
Volvo Trucks Receives Grants to Deploy VNR Electric Trucks in Southern California
Volvo Trucks North America was awarded $21.7 million in grants to deploy 70 VNR Electric trucks in Southern California for regional freight distribution and drayage.
The U.S. Environmental Protection Agency’s (EPA) Targeted Air Shed Grant Program is providing $20 million in funding, supplemented by $1.7 million from the South Coast Air Quality Management District (South Coast AQMD) for charging infrastructure – to improve air quality in the region.
Volvo Trucks will deliver the EPA-funded VNR Electric trucks to Southern California fleet operators starting in 2021 through the third quarter of 2022, allowing for at least a full year of operations by the end of the project period in 2023. The announcement comes as Volvo Trucks nears the official commercial launch of its VNR Electric truck model later this year.
Volvo Trucks will leverage best practices learned from the Volvo LIGHTS (Low Impact Green Heavy Transport Solutions) project – its collaboration with South Coast AQMD and 13 other organizations – to develop an end-to-end blueprint to successfully introduce battery-electric trucks and equipment into the market at scale. Combined with the other 25 truck deployments through the Volvo LIGHTS project, Volvo Trucks is committed to delivering nearly 100 VNR Electric trucks to the region for zero-emission freight transport.
“This grant provides Volvo Trucks with an excellent opportunity to further expedite the success of the ecosystem designed through the Volvo LIGHTS project to support the wide-scale deployment of battery-electric heavy-duty trucks,” says Peter Voorhoeve, president of Volvo Trucks North America. “We applaud the EPA and South Coast AQMD for addressing the key issues in advancing electromobility and incentivizing technology investments in the region, and are proud they continue to trust in Volvo Trucks North America in the acceleration of Class 8 zero-emission vehicles.”
The EPA Targeted Air Shed Grant Program focuses on the regions that have the highest ozone and particulate matter (PM) pollution, including California’s South Coast Air Basin. South Coast AQMD is the agency responsible for attaining state and federal air quality standards for this region – including the counties of Los Angeles, Orange, San Bernardino, Riverside and the Coachella Valley. As part of the project, South Coast AQMD will lead a data analysis effort to evaluate the full breadth of emission reduction opportunities presented by battery-electric trucks.
Volvo Trucks will also gather deployment data to further refine the total cost of ownership calculations including actual vehicle maintenance and fuel cost savings – which can be even lower when combined with low carbon fuel standard credits and managed charging to reduce demand charges. Learnings from this project will allow Volvo Trucks to fine-tune the production at its New River Valley plant in Virginia, enabling seamless integration of the VNR Electric truck model into its manufacturing process for optimized, quality production.
Photo: A Volvo VNR Electric recently led a clean-energy truck parade of Southern California fleet operators to commemorate the opening of the new Port of Long Beach bridge
CEC Approves Plan to Boost Adoption of Zero-Emission Vehicles
The California Energy Commission (CEC) has approved a $384 million plan for critical clean transportation investments to boost the adoption of zero-emission cars and trucks and help the state reach its climate, clean energy and public health goals. The plan focuses on closing gaps in zero-emission fuels and infrastructure to support Gov. Gavin Newsom’s executive order phasing out the sale of new gasoline-powered passenger vehicles by 2035.
“The zero-emission transportation market continues to be California’s for the making, delivering jobs and cleaner air especially in communities most in need of relief,” says Patty Monahan, lead commissioner for transportation. “This funding plan is another down payment on electrifying transportation while helping ensure everyone can take part through access to convenient refueling, innovative mobility options, workforce training programs and more.”
The 2020-2023 Investment Plan Update for the CEC’s Clean Transportation Program (formerly known as the Alternative and Renewable Fuel and Vehicle Technology Program) prioritizes funding for zero-emission vehicle (ZEV) infrastructure, related workforce development and manufacturing.
The approved plan includes:
-$132.9 million for light-duty electric vehicle (EV) charging infrastructure
-$129.8 million for medium- and heavy-duty ZEVs and infrastructure
-$70 million for hydrogen refueling infrastructure
-$25 million for zero- and near-zero-carbon fuel production and supply
-$10 million for recovery and reinvestment
-$9 million for ZEV manufacturing
-$7.5 million for workforce development
The funds will become available over the next three years and will be distributed to projects through a mix of competitive funding solicitations and direct funding agreements. The plan was guided by input from newly appointed members of the Clean Transportation Program Advisory Committee, reflecting a broad array of stakeholders representing community-based organizations, social and environmental justice advocates, alternative vehicle technologies, as well as workforce and labor interests.
Investments reflect market potential and technological need and are designed to complement other state programs and policies. In response to engagement with the program advisory committee and the Disadvantaged Communities Advisory Group, the CEC will seek to provide 50% of funds from this plan to projects that benefit low-income and disadvantaged communities. Staff will also explore quantifying benefits in new ways that go beyond measuring funding amounts within a given location, to ensure the dollars meaningfully advance equity within the state.
Created by Assembly Bill 118 (Núñez) in 2007 and reauthorized by Assembly Bill 8 (Perea, 2013), the Clean Transportation Program is one of the first transportation-focused funding efforts established to help advance the state’s climate change policies. Now in its 12th year, the program has provided nearly $900 million to projects across the state covering a broad spectrum of alternative fuels and technologies.
Photo: Gov. Gavin Newsom
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