States Tackle Energy
Volume 6: Energy Security
Access to reliable energy is critical to the nation’s economy, so many states are working to ensure the reliability of the electricity and natural gas distribution systems. These efforts include legislation to improve the capability of these systems to withstand natural and human-caused disasters through diversification of energy supplies, increasing production of locally available energy sources, increasing resiliency of infrastructure and development of state energy emergency plans. Energy security is critical to state policymakers due to the cascading effects that disruptions in the energy system could have on the economy, public health and safety. In 2010, at least twenty states introduced legislation related to energy security.
Four states introduced legislation related to pipelines. Alaska adopted legislation, HCR 2, which requests the governor to pursue the development of a natural gas pipeline in order to provide greater energy security to the state. Maine enacted HB 1274, which amends laws governing energy infrastructure including generation facilities, energy transport pipelines, energy infrastructure corridors, transportation efficiency and reduced reliance on fossil fuels, and alternative energy funds. Minnesota's enacted legislation, HB 1182, relates to the use of eminent domain for the construction or expansion of high-voltage transmission lines, natural gas or petroleum pipelines, and compressor or pumping stations. New York enacted legislation, AB 9706, to enhance the security of critical infrastructure within the state, including petroleum and natural gas pipelines.
At least three states introduced legislation related to Smart Grid Technology and energy security. California enacted SB 17, requiring the Public Utilities Commission to determine the requirements for smart grid deployment plan. California's failed 2009 legislation, AB 238, would have declared that smart grid technology would be needed to help the state reach energy efficiency standards and renewable energy goals. New Jersey's Pending legislation, AB 913, would appropriate grants for a Smart Grid Pilot Program and Smart Grid Technology Research Center at Rutgers University. Maine enacted legislation, HB 1079, for the employment of smart grid technology in order to promote energy efficiency, greater choice to consumers, and energy security.
Local Production of Energy and Reducing Reliance on Oil
A number of states considered legislation related to local production of energy and reducing reliance on oil. Hawaii enacted SB 1202, establishing the Transportation and Energy Transformation Grant Fund Program, which is charged with promoting an electric vehicle infrastructure and helping the state meet its goal of developing a transportation system that is not reliant on fossil fuel. The legislation also creates a priority list for purchasing energy-efficient vehicles and urges the clean energy initiative to bring together building industry stakeholders to work towards the design and construction of net zero energy buildings. Hawaii's failed carryover legislation from 2009, HB 1197, would have focused on improving the state’s economic and energy security position by establishing a preference for locally produced alcohol fuels. Hawaii’s SB 1146, which failed, have established the Hawaii Energy and Food Security Authority to plan, coordinate and address its energy and food security needs.
Maine enacted SB 710, requiring the Governor's Energy Office of Energy Independence and Security to work with the State Housing Authority and the Efficiency Maine Trust to develop incentives and recommendations for installation of residential geothermal heating and cooling systems. The legislation implements the recommendations of the Governor's Ocean Energy Task force creating incentives to convert homes and businesses to electric-powered systems related to ocean wind and other renewable energy resources. This includes development of commercial renewable ocean energy projects, leasing of submerged lands for ocean energy projects, tax exemptions on equipment and machinery, land use regulations, and the permitting of such projects. Pennsylvania's pending legislation, HB 1040, would provide grants for the Fuels for Schools and Beyond Program to aid schools in converting traditional heating systems to biomass energy as a primary fuel source. Illinois adopted legislation, SJR 42, expressing support for the goal of having agriculture provide renewable energy and affordable food. Oklahoma enacted HB 3028, creating a state renewable energy standard covering natural gas, demand side management by electricity generating entities, and wind energy transmission.
At least seven states had legislation on financing energy in order to provide greater energy security. Alaska has pending legislation, HCR 19, that urges the Alaska Industrial Development and Export Authority to present a plan and cost-benefit analysis for a state-built and privately operated fuel storage facility that would provide Alaskans with various fuels at competitive prices. Colorado enacted HB 1328, creating the New Energy Improvement District, which is authorized to issue bonds to help raise funds on new energy improvements. Florida enacted HB 7179, authorizing property owners to enter into financing agreements with local governments to make specified energy improvements to real property. Florida's failed legislation, HB 21, allows sales and use tax exemptions for fuel efficient vehicles to promote energy conservation and security. Hawaii's legislation, SB 1202, relates to renewable energy development zones and tax credits that promote energy efficiency and renewable energy.
Hawaii has also been active in improving financing to promote energy security, introducing HB 1678, which authorizes special purpose bonds to increase production of ethanol and biofuels. Pennsylvania's pending legislation, HB 2644, would authorize municipalities to provide clean energy financing to residential and commercial property owners through the Property Assessed Clean Energy Program. Washington's enacted legislation, HB 2289, expands the Energy Freedom Program to allow grants or loans to applicants for projects that will result in energy efficiency improvements, renewable energy improvements, or innovative energy technologies.
At least six states introduced legislation concerning energy security and utilities. Maine enacted SB 582, requiring proposals for expedited wind energy development projects to demonstrate lower long-term electric rates. South Carolina enacted SB 1096, enabling electric cooperatives and municipal electric systems to finance and purchase systems for residential energy efficiency improvements. Hawaii's failed legislation, HB 2324, would have required two percent of each utility's portfolio be from biofuel or agricultural producers by 2015. Hawaii's failed legislation, SB 2635, would have expedited the process for permitting, developing, constructing, and operating a renewable energy facility. Arizona passed legislation, HCM 2014, encouraging the development of nuclear energy in order to meet environmental goals and for energy security purposes. Maryland's failed legislation, HB 1534, would have required all retail electricity distributors to meet renewable energy portfolio standards.
At least five states had legislation concerning fossil fuels and energy security. Alaska passed SJR 16, calling for drilling of oil off of Alaska's coast in an environmentally and culturally sensitive manner in order to promote energy security. Illinois' pending legislation, H 465, calls for support from federal and state agencies in the greater use of coal as a source of energy, claiming it would provide for greater energy security. Florida's failed legislation, HB 563, asked the U.S. Congress to lift a ban on exploration for oil and natural gas off of the coast and to include Florida in revenue sharing from oil and gas production off of Florida's coast. North Carolina's failed legislation, SB 1085, would have established a legislative study commission on gasoline shortages.
At least seven states had legislation related to future policy analysis and proposals related to energy security. Hawaii enacted SB 868 to address deficiencies in Hawaii's energy resource coordination statutes and to provide policy guidance for energy data analyses. Colorado adopted legislation, HJR 1028, which requests the U.S. congress to increase national energy and economic security through the promotion of renewable energy. New York has pending legislation, AB 8981, which would create an energy storage and transportation security plan in the event of a terrorist attack. West Virginia's enacted SB 518 to create the Governor's Commission to Seize Future of Energy for America which will develop energy policy and development plans for different classes of energy users and the different forms of energy production. Maine enacted HB 1221, requiring the Office of Energy Independence and Security to consider waste-to-energy power for renewable resource portfolio requirements. Georgia's failed legislation, HR 1767, would have created a House Study Committee on Renewable Energy in order to promote greater energy security.
Energy plays an important role in the security of the United States. Energy security refers to a resilient energy system capable of withstanding threats through diversified (and, often, locally available) energy sources, state energy emergency plans and reliance on infrastructure that is less vulnerable to natural and human-caused disasters. Energy security matters to state policymakers because of the cascading effects that disruptions in the energy system could have on the economy, public health and safety, and the environment.
In 2009, 64 bills focusing on energy security were introduced in 27 states. Much of this legislation focused on energy security plans in emergencies, reducing reliance on foreign oil, establishing programs and authorities to promote energy security and production of local oil and gas. A number of these bills are still pending and will carryover into the 2010 session.
Oil and Gas
In 2009 Alaska, Missouri, North Carolina and Florida introduced legislation relating to oil and gas supplies, development and production. Alaska's adopted legislation will support environmentally sound and culturally sensitive development of the oil and gas resource in federal waters off of Alaska's coast as a means to ensure energy independence and security. Missouri's failed legislation urged Congress to secure greater energy independence by allowing new offshore drilling. Florida introduced two pieces of legislation which both failed. Both bills urged Congress to support the expiration and removal of the moratoria prohibiting exploration and production of natural gas in federal waters surrounding Florida. North Carolina's enacted legislation states that if the Governor declares the existence of an abnormal market disruption with respect to petroleum, the Governor will seek all applicable waivers under the federal Clean Air Act and any other applicable federal law to facilitate the transportation of fuel within the state in order to address or prevent a fuel supply emergency.
Four bills were introduced in Alaska and one in Arizona focusing on oil and gas pipelines. All four pieces of legislation in Alaska are currently pending and will carryover into Alaska's 2010 session. These bills request the governor of Alaska to provide energy security for all Alaskans by pursuing development of a natural gas bullet pipeline from the North Slope to the Cook Inlet region. The legislation also requests the governor to identify and negotiate with natural gas producers from the Gubik area and other areas on the North Slope if necessary in order to support a bullet pipeline project.
The enacted bill in Arkansas amends the Oil and Gas Commission's authority concerning rules for administering the Natural Gas Pipeline Safety Act of 1968 and amends the definition of transportation of gas under the Act to exclude the gathering of gas in rural locations.
Renewable/Local Production of Energy and Reducing Reliance on Oil
Four states introduced bills which focus on deriving energy from sources other than oil and also using less energy in general. Hawaii has two pending bills which focus on improving the state’s economic and energy security position by establishing a preference for locally produced alcohol fuels. Vermont has pending legislation which supports the development of renewable energy for the purposes of energy security.
Washington enacted a bill which declares the intent of the legislature to expand the Energy Freedom Program in order to receive federal funds and other sources of funding that will result in increased support for the state or any political subdivision of the state for research, demonstration, and commercialization of energy efficiency improvements, renewable energy improvements, and innovation energy technologies..
Maine has two pieces of legislation. One pending bill focuses on ensuring energy security and reducing dependence on oil. The second bill, which did not pass in 2009, focused on setting aside revenues derived for the Regional Greenhouse Gas Initiative to immediately establish an insulation and energy auditing training program at every community college while providing a tax exemption for purchase of building insulation.
Hawaii has two pieces of pending legislation that establish electric generation and delivery initiatives to help foster a transition of the state’s energy sector to 70 percent non-petroleum sources by 2030, in order to decrease dependence on oil imported from the mainland that powers three-fourths of its electricity generation.
In 2009, a large portion of the states that introduced energy security legislation focused on emergency plans. Hawaii has three pieces of legislation. One failed bill allowed authorized state agencies to use fuel cell power systems for emergency backup power applications. The other two pending bills address deficiencies in Hawaii's energy emergency preparedness statutes and provide up-to-date policy guidance needed for emergency management policies and plans. Louisiana has failed legislation which required generators to be used at gas stations during declared emergencies and disasters.
New York introduced two bills, both of which are still pending. The first piece of legislation exempts any facility of refuge that is registered with the State Emergency Management Office from payment of any exit fee or any lost revenue resultant from the installation and operation of cogeneration equipment at the facility. A facility of refuge is a facility owned and operated by a municipality or a school district that is capable of providing shelter for a significant portion of the local population during times of man-made or natural disaster. The second bill directs the Public Service Commission to calculate fiscal impacts and actual costs for planning, implementing and maintaining emergency preparedness for nuclear generation facilities.
North Dakota enacted legislation that will create a state disaster relief fund and also allows the Department of Transportation to borrow funds from the Bank of North Dakota for a disaster. Rhode Island has two pending bills, both of which establish a dispatch office where all natural gas emergencies would be reported and response coordinated. Texas enacted a bill which will relate to disaster preparedness and emergency management. Texas also has a failed bill which made provisions for energy emergencies.
In 2009, Arkansas, Kentucky, New York, South Dakota and Texas introduced legislation focusing on utilities' actions in emergencies. Arkansas enacted legislation which will authorize electric utilities to recover the cost of restoration of damages caused by storms and related perils through securitization. Kentucky failed to pass legislation that would have required regulated energy, water, and communications utilities to provide a daily updated report to the Division of Emergency Management during a state of emergency that results in the loss of electric power, water, or communications. Massachusetts has a pending piece of legislation that requires background checks from the Department of Public Safety for grid workers before they work on the Utility Distribution System. New York has a pending bill which requires gas and electric corporations to prepare emergency response plans covering interruptions of services. Texas has three pieces of failed energy security legislation. The first two bills allowed the Public Utility Commission to require an electric utility to sell electricity to another utility that is unable to supply power to meet customer demand due to a natural disaster or other emergency. The third bill enabled an electric utility to obtain timely recovery of system restoration costs following a hurricane, tropical storm or other weather-related events.
Price of Gasoline
Louisiana and Tennessee both proposed legislation focusing on the price of gasoline during an emergency. Louisiana enacted a bill which will prohibit excessive gasoline or diesel fuel pricing during a declared state of emergency and allows sales below costs during such time. Tennessee has two pending bills that both make price-gouging of gasoline during a state of emergency a Class A misdemeanor.
Authorities/Programs Established for Energy Security
Nine states introduced legislation relating to establishing and managing authorities and programs to promote energy security. Connecticut considered and did not pass legislation which would have created an energy independence strategy board, in addition to coordinating and centralizing energy efficiency programs. Hawaii has one pending bill that establishes the Hawaii Energy and Food Security Authority to plan, coordinate and address its energy and food security needs. Maine considered legislation that would have created the Energy Trust Authority under the Governor's Office of Energy Independence and Security.
Michigan has pending legislation which increases funding for the Centers of Energy Excellence Program. New York has pending legislation that directs an investigation and study on the establishment of a state energy security program.
Oklahoma also enacted the State Energy Independence Act. Rhode Island is considering the Rhode Island Energy Independence and Climate Solutions Act which attempts to reduce greenhouse gases.
Texas has two failed bills which focused on combined heating and power systems. Each bill would have required that entities consider installation of a combined heating and power system during construction or full remodeling of critical government facilities. If the system would be projected to save enough energy to pay for its purchase and maintenance, the entity would have been authorized to equip the facility with a combined heating and power system.