Net-Zero Energy Communities and Utility Decoupling

I read an article in the Davis Enterprise called “Study Shows net-zero Davis is possible, and needed” which sparked my interest in the idea of a city being net-zero carbon.  Davis, CA, is the first city in the nation to adopt the goal of being carbon neutral by the middle of this century [1].  The three phases of the process are: net-zero electricity, net-zero energy and, finally, net-zero carbon, as outlined by the NREL technical report titled “Definition of a ‘Zero Net Energy’ Community” [2].  The white paper, issued by the UC Davis Energy Institute and the Valley Climate Action Center, states that maximum cost-effective reductions in demand for energy supplemented by solar, wind, bioenergy, and geothermal energy are needed to realize these goals [3].

Graphical Representation of the Net-Zero Energy concept  [2]

One disadvantage that Davis faces is the fact that 51% of the homes in Davis are rented, making renter/owner relationships and who pays for the energy savings that will be seen in the bill.  However, advantages include that the residents are environmentally conscious.  7MW of solar capacity has already been installed by private investments, which makes up 14% of the city’s 50MW demand.  Additionally, Davis has an extensive bicycle path network with many residents already meeting their transportation needs with zero-carbon pedal power.  The nearby UC Davis campus’ expertise in energy efficiency is also valuable.  [1]

Though Davis is the first city with such goals, it isn’t the first example of a net-zero community.  West Village, on the UC Davis campus is the largest planned zero net-energy community in the United States, which the city will take many lessons from.  In El Paso, TX, the Paisano Green Community is a net-zero energy senior housing development expected to open on Earth Day this year.  El Paisano is one of 36 communities (the only in Texas) to have received competitive grants from the American Recovery and Reinvestment Act to build green affordable housing [4].

The different between those projects and the City of Davis project, is that the former are new developments and the latter is being performed on existing buildings.  This presents a challenge.  If Davis is successful in its endeavors I think that other communities are likely to follow.  How realistic the goals of the project are has received some skepticism from online bloggers on the who don’t believe the policy or funding will be there and some who complain about energy efficient devices working poorly [5].

Another blogger points out that California’s mandate to decouple utility (gas and electric) revenue from sales give efficiency and conservation a better chance of implementation.  Decoupling is a rate adjustment mechanism that ensures utilities from fixed costs remain at a level that’s reasonable and fair and means that utilities will no longer have incentive to sell more energy to make more profits [6].  A utility’s cost for infrastructure and services are largely fixed, whereas the commodity price varies.  Utility’s generally pass commodity prices along to customers as a separate cost adjustment in their bill in addition to a fixed monthly charge which pays for a fraction of the utility’s fixed costs.  This means that in order to recover all of the utility’s fixed costs, they must recover part from the sale of energy thus creating an incentive to sell (which NREL calls a throughput incentive) and a disincentive to promote customer energy efficiency.  [6]

According to NREl, decoupling offers two rate settling options: deferral decoupling or current period decoupling.  Deferral decoupling means that a utility maintains an over or under collection of revenue in a balancing account.  This balancing account then becomes allowed revenue in subsequent periods as either lower or higher per-unit price.  Current price decoupling means that rates are adjusted each billing cycle to so that the utility collects the allowed revenue.  Below is a map of the sates participating in decoupling and their degree of participation.  [6]

Decoupling in the United States  [6]

[1] Braly, Mark. “Study Shows Net-zero Davis Is Possible, and Needed.” Davis Enterprise. 28 Mar. 2012. Web. 07 Apr. 2012. <;.

[2] Carlisle, Nancy, Otto Van Geet, and Shanti Pless. “Definition of a “Zero Net Energy” Community.” National Renewable Energy Laboratory. Nov. 2009. Web. 7 Apr. 2012. <;.

[3] Braun, Gerald et. al. “Net Zero Davis Project.” Dec. 2011. Web. 7 Apr. 2012. <;.

[4] Ramirez, Cindy. “Eco-friendly Housing Project Paisano Green Community 1st of Its Kind.” El Paso 10 Nov. 2011. Web. 07 Apr. 2012. <;.

[5] “The People’s Vanguard of Davis – The Investigative Eye.” The People’s Vanguard of Davis. 28 Mar. 2012. Web. 07 Apr. 2012. <;.

[6] “Decoupling Policies: Options to Encourage Energy Efficiency Policies for Utilities.” National Renewable Energy Laboratory. Dec. 2009. Web. 7 Apr. 2012. <;.


1 Comment

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One response to “Net-Zero Energy Communities and Utility Decoupling

  1. This is a great article on energy efficient policies. Keep up the good work!

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