Thank you for visiting this page.  Your visit here is a deeply appreciated step on behalf a myriad of goals including slowing climate change, creating jobs, lowering energy prices, and creating sustainable pockets of resilience, etc. (A more complete list is found below, and a much larger list is found within the various links referred to on this page.)

Customer Lowered Electricity Price, (CLEP) was invented in 2015 and introduced into the 2015 Entergy New Orleans Integrated Resource Planning Docket in 2016.  Less than two years ago, CLEP was renamed to ProRate.  This website, www.BuildingScienceInnovators.com, has many explanations of CLEP in various formats.  A 7-minute video is the newest and is found here.  A very informative, 1 hour, YouTube video that starts with a 35-minute explanation and ends with a 25-minute Q&A is found here. These videos go a long way to explain what CLEP is, how it works, what it does.
 
Understanding CLEP must begin with understanding how electricity is sold before CLEP is adopted.

1. The price a customer pays for a kWh = Cost of Energy PLUS Cost of Service
   1. Where Cost of Energy is the average wholesale electricity price of the current month.
   2. Cost of Service depends upon customer class, e.g., residential Cost of Service is around 8¢/kWh while the cost of service for small commercial is around 6¢/kWh
2. Except for residential, all customers also pay a demand charge often near $10/KW, for the largest demand in any 15 minutes of that month; this refers to the speed energy is consumed.

A very simple explanation of the CLEP rate design is:

1. CLEP customers buy kWhs at the constant price described in the small commercial rate in ENO’s rate schedule except do not pay demand charges.
2. However, CLEP customers also get two extra cash flows: CLEP5 and CLEPm. 
3. These are bi-directional, i.e., for purchases and sales, meaning a customer will pay ENO both CLEP5 and CLEPm when a kWh is purchased, and ENO will pay these to the customer when a kWh is sold.
4. CLEP5 = the current wholesale electricity price MINUS the cost of energy.
5. CLEPm = 50¢/kWh during the 500 hours nearest to the utility’s annual peak demand times, otherwise CLEPm is zero; in this way, CLEPm replaces the demand charge.
6. CLEP customers get net bills every month, i.e., if CLEP5 PLUS CLEPm is big enough, ENO pays the customer the net bill that month; thus, unlike Net Energy Metering there is $0 to carryover to future months.

Notes

1. On average, new CLEP customers will not see significant changes in their bills if they do nothing to take advantage of the opportunity.
2. Modest efforts to reduce bills can change a $150/m bill to $50/m.
3. Aggressive use of CLEP can reduce bills by 200%.
4. CLEP increases the payments for rooftop and community solar by around 13%.
5. CLEP completely “finances” large battery purchases out of utility bill savings faster and does that within the expected lifetime of the battery.
6. A microgrid is an island of electricity supply that will not go down in a major grid failure.
7. A sustainable microgrid runs on renewable energy.
8. Therefore, CLEP makes putting a sustainable microgrid in your home cost-effective. And provides for thousands of pockets of resilience in New Orleans in the face of the next major storm, like Ida.
9. There are numerous examples of rates that have been implemented in the US and abroad that have features similar to CLEP; however, we think CLEP is exceptionally good.

 
 


The short-term goal we want is to get the City Council of New Orleans to seriously consider allowing all Entergy New Orleans, (ENO) ratepayers to choose the ProRate electricity rate design and mandate that situation. That is the goal of the submission by ProRate Energy in the testimony it submitted on July 1 and can be found at here.

Clearly, concerted political action is needed to reach this goal.

Multiple experts who have a large, composite experience have asserted what we need are two kinds of letters,
 1.  one set from national and international electricity consulting experts that attest to the need, usefulness, and established effectiveness of a rate design like ProRate and
 2.  another set of letters from local people and community organizations who assert that they would definitely take full advantage of the ProRate electricity rate design if given the chance.

If you live in or near New Orleans or Louisiana and do not fall within the first category, we want you to compose a letter of the 2nd type using the following template.

Email it to [email protected]
 
In the subject field write: “Letter of Support for ProRate in UD-21-03”

Addressed the letter to "ProRate Energy, Inc"

In your own words, phases, jargon and temperament assert the first of these and at least four of the following but not all and preferably not in the provided order.
 
Please at least include this text: “IF GIVEN THE CHANCE, I WOULD DEFINITELY OPT IN AND CHOOSE ProRate TO BUY AND SELL ELECTICITY FROM / TO ENTERGY NEW ORLEANS AND USE ProRate TO LOWER MY ELECTRICITY BILL, THE BILLS OF MY NEIGHBORS, AND EVEN TRY TO INSTALL A SUSTAINABLE MICROGRID  BEFORE THE NEXT MAJOR HURRICANE.”
 
Buy-in must include a signed and substantial list of local individuals and/or organizations 

1.    with real interest who do not just give vague endorsements but have signed-on to be willing to accept both parts of ProRate, namely both CLEP5 and CLEPm as means to buy electricity from and sell electricity to ENO.
2.    understand that this opportunity requires more thinking and understanding than was needed for the same-old constant-priced rates we have been using until now, 
3.    understand the WHY and CONSEQUENCES of this choice and 
4.    are willing to best take advantage of ProRate to lower their electric bills  
5.    will try to most cost-effectively invest in batteries and/or solar to create sustainable microgrids in time for the next major hurricane
6.  without CLEP or something like it, ratepayers cannot afford to buy batteries.  With CLEP, batteries can be financed out of utility-bill savings AND do that far faster than the lifetime of the investment.
7. Using 2018 wholesale prices, the cash flow for ratepayers from CLEP with rooftop or community solar would have received almost 14% higher income than for the same solar panel set up without CLEP.
8. Because CLEP customers can get paid, i.e., have negative utility bills, investments that further lower a utility bill past zero are no longer constrained.  Consider that that not allowing a utility bill to go negative has been a deterrent to investing in highly cost-effective energy efficiency improvements when a home’s rooftop solar causes the bill to be “too close to zero”. CLEP lifts the veil on this “taboo”.
9. Understand that the primary components of sustainable microgrids, solar panels and batteries, are the same proposed by the Together New Orleans (TNO), non-profit, for the microgrids in its Lighthouse Project and microgrids installed in the New Orleans area restaurants by the Red Beans non-profit.
10. An important and perhaps indispensable path to a renewable energy future is a battery in almost every home; this is because renewable energy cannot be throttled (turned off and then on at any time because it depends upon when the sun shines or wind blows); therefore, to fully run our homes on all renewable energy we must acquire kWh's in advance of need and store their energy for later use.  Without an "almost every home has a battery" world, renewable energy cannot adequately compete with fossil-fueled electricity generators.  With enough batteries, natural market forces will cause the shutdown of fossil-fueled electricity generation.
11. Batteries in homes are needed to allow rooftop solar electricity generation to be accessible to the homeowner following a storm.  This is a built-in safety measure to protect electricity line workers who fix downed power lines after a storm... For this reason, every inverter connected to a solar panel is engineered to stop electricity delivery unless the inverter’s output port senses the presence of AC that normally is provided by the grid.
12. Microgrids are sustainable if and only if they are powered by renewable energy.  Thus, they are cleaner, better for the environment, safer for the homeowner (because they cannot produce deadly carbon monoxide) and cannot run out of fuel.
13. Both batteries and solar panels are two kinds of Distributed Energy Resources (DERS), but they are not the only kinds.  DERS also include timed/programmed use of dishwashers, timed standard electric tanked water heaters, heat pump water heaters, ice-making air conditioners, wind power and electric vehicles.  Some DERS are amazingly inexpensive, but all of them are far more difficult and many are impossible to finance with utility-bill savings without CLEP, but all can be financed with CLEP.
14. Community solar is currently under rewarded and therefore less accessible to the public without CLEP than with CLEP.
15. CLEP has an equity part that is not found in any other rate design wherein lower income ratepayers who live in older homes get a benefit in lower-priced electricity on the front-end and more payback when electricity is sold to the grid.
16. Customers with rooftop solar outside of New Orleans but in Louisiana currently do not have a way to sell electricity back to the grid... If CLEP is considered successful in New Orleans, and it performs as expected to pay for rooftop solar electricity as well as or better than at the standard retail rate, then the Louisiana Public Service Commission, will be "forced" to roll out CLEP for all customers.  
17. This docket is about finding the best and least expensive way to "heal" NOLA's grid: i.e., to make it more resilient against strong winds and a host of other ways the grid can fail.  Although the standard way to do this is by improving "WIRES": i.e., poles, substations, transformers, etc., there is a proven way to heal the grid without as much investment in “wires.” This is the so called "non-wires alternative", or NWA.  Since 2017 and more recently, evidence shows that the NWA is at least twice as cost-effective as the standard way to heal ENO's distribution system; in fact, one of the first NWA examples was 2016 in New York City (Brooklyn-Queens Demand Management project) where the cost effectiveness ratio was five times cheaper.  The NWA method requires deep investments in DERS, and "orchestrating" (i.e., remotely controlling) them to allow critical loads like our refrigerators, hospitals, AC for the elderly, etc. to be supplied power almost come what may, and curtail the least critical loads like water heating when the grid is stressed for whatever reason.  ProRate "finances" the purchases of these DERS via utility bill savings.
18. Perhaps the cheapest investment and the retrofit with the biggest “bang for the buck” is setting a standard electric water heater to only heat water at 2 AM every day.  The ProRate Energy team showed that using only a one-time, $50 investment in a timer (including materials and labor) a ProRate customer would save $285/year. No part of this cashflow is available without CLEP or a similar rate design.
19. CLEP slows down the greatest single cause of climate change, namely the greenhouse gases produced to power buildings. It does it by paying customers to do the right thing with respect to the environment but doing what they would want to do in any case, lower their electricity bills.  This can be summarized as: CLEP harnesses the marketplace to slow down climate change.  This works primarily because, by and large, the cheapest wholesale electricity has the lowest carbon footprint.  See the first video mentioned above.
20. Lowering a utility bill does not always mean using less electricity.  Most consumers value their comfort over environmental concerns.  Saving money with ProRate does not require ANY LIFESTYLE changes, or any kind "doing without ". Via electric and thermal batteries, which are in many to most cases are already in our homes, ProRate can lower your bill without causing you any inconvenience.  ProRate saves money more by concentrating on WHEN electricity is bought instead of HOW MUCH is bought.
21. Unlike CLEP, most traditional electricity rates cause customers to inadvertently steal from each other.  (This is a kleptomania.) CLEP extinguishes this.  This happens because with standard electricity rates, we all buy electricity at a fixed price, which is set less often than once a year for the "cost of service" part and set once a month for the "cost of energy" part.  This necessarily means that if customer A buys electricity when the wholesale (energy) price is high, she inadvertently spreads that burden onto all customers. Similarly, or conversely, if customer B buys electricity when the wholesale price is low, he is not fully compensated for that action and instead the benefit is spread among all customers.  Either action, buying when the wholesale price is high or low causes an adverse cross-subsidy from customers like B TO customers like A.  CLEP extinguishes this subsidy and instead pays customer B most of the savings his purchase created and charges customer A all the burden she caused.  Via CLEP5 all purchases and sales to ENO lower the cost of energy and thereby the price of electricity paid by every ratepayer, indeed, that is why ProRate was first named: “Customer Lowered Electricity Price”.
22. A similar cross-subsidy is inherent and has been the primary reason for the demise of net energy metering (NEM) in many states including Louisiana and California.  This is the most difficult to circumvent hurdle to solar panel installation in the US. Affluent ratepayers are, by and large, the only ones who can afford to pay for rooftop solar.  However, when they sell electricity to the grid, it is not sold at the current wholesale price but instead at the retail price.  That means, the low-income customers pay more than their fair share to subsidize this payment to their more affluent neighbors. This is neither fair nor equitable. In many places including New Orleans, this situation persists because, the penetration of rooftop solar is so small and he effect on low-income customers bills is considered too small and the desire to promote rooftop solar for environmental reasons is too great.  That argument did not convince the LPSC (Louisiana Public Service Commission), so NEM was dropped for most of Louisiana.  However, in CA the penetration of rooftop solar is so high that consumer advocates in that state have lobbied hard and forced major changes in NEM... and almost killed it.  CLEP supplies more payment than the retail price for electricity sold from rooftop solar... It does it without creating a cross-subsidy because CLEP5 plus the average wholesale (a.k.a., "the cost of energy for that month) price IS the current wholesale price and CLEPm is the either $0.00 or $0.50 /kWh and is the higher value when that kWh is sold during near peak demand times.  CLEPm is precisely set to match the average demand charge paid by all non-residential customers measured in KW-y...  That value in New Orleans is about $120/KW-y.  There are about five hundred such hours in a year.  (A simple multiplication shows that 500 x $0.50 = $250 and thus, this is cash flow appears to be twice as high as it should be, but in fact, the cashflows match almost exactly; this is explained in the direct testimony.)
23. The cost to implement ENO's plan is roughly $1.5 billion.  The cost to implement Together New Orleans's Plan is about $27 million, and the cost to implement ProRate Energy plan is less than $10 million.  ENO will build about seven microgrids for about $200 million or about $28 million per microgrid.  TNO will spend about $0.6 million per microgrid before discounts from federal subsidies and philanthropic donations, for a net cost to ENO ratepayers of about $200,000 per microgrid for eighty-five microgrids.  However, ProRate Energy expects ratepayers, themselves will create many tens of thousands of microgrids fully paid out of avoided costs of the utility and with no cross-subsidies.  In fact, even the $10 million will be paid by the transactions like those done by Customer B as explained above. Namely, the cost per CLEP financed microgrid is negligible to negative and the number of microgrids is two orders of magnitude higher than TNO and ENO proposals together.  If both ProRate Energy and TNO's plans are accepted, TNO's microgrids will be completely financed with rates and have no burden on ratepayers.  On the other hand, if ENO's plan were accepted, count on having a rate increase impact on electricity bills more than two times what happened with NOPS. You remember NOPS; that is the $200 million peaking plant approved in 2018 that did not do as promised during Hurricane Ida to protect us when everything else failed. 
24. If ProRate were successful as we expect, it can be promoted, scaled and exported to all utilities in the world and thereby have a great impact on slowing the causes of climate change.

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