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2010 State Energy Legislative Updates

State Energy Legislation: 2010 Update

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Sources of energyIn the 2010 legislative sessions, states introduced at least 2,000 bills relating to energy. These bills considered issues such as net metering, green jobs, coal technology, alternative fuels, energy efficiency, fossil fuels and renewable energy.

Net Metering

In 23 states, 115 bills are currently pending related to net metering policies. Of these states, four have recently enacted legislation further clarifying net metering policies within their boundaries.

Net metering programs are an important incentive for getting consumers to invest in renewable energy generation. Net metering lets them to use their own generation to offset their consumption over a billing period by allowing their electric meters to turn backwards when they generate electricity in excess of their demand. Net metering is viewed as essential to successfully integrating rooftop solar, small wind and other distributed renewable generation systems.

In 2010, Colorado enacted legislation establishing net metering credits for community solar gardens. Similarly, New Hampshire enacted legislation requiring net metering tariffs to be made available to eligible customer-generators by each electric distribution utility. New Jersey’s new law requires electric power suppliers and basic generation service providers to offer net metering at non-discriminatory rates to industrial, large commercial, residential and small commercial customers. Utah also enacted legislation in 2010 that clarified the state’s net metering policy by defining “public utility,” and allowing a facility that supplies energy for a specific customer to qualify as a consumer generation system for net metering purposes.

Green Jobs

Ten states and the District of Columbia have recently enacted legislation to promote green jobs, and 60 bills in 22 states and the District of Columbia are currently pending related to green jobs. Training the workforce for the new “green” economy has become a popular policy effort in states. These policies promote workforce investment activities that help train workers for clean energy industries.Bills currently pending encourage energy research and development, job creation in the renewable energy sector, clean technology education, and/or establishing training programs for employment in environmentally-friendly industries.

Minnesota, New Mexico, Virginia, Wisconsin and the District of Columbia enacted legislation that appropriates additional funding and/or provides tax credits for green jobs creation. New Mexico, New York and Tennessee passed laws that establish green jobs training programs. Minnesota and Washington enacted legislation to study the barriers to green jobs creation and to identify opportunities to increase the number of green jobs within each state. Illinois, South Carolina and Washington enacted legislation creating initiatives to design, create and maintain green infrastructure and to create and recruit new green jobs. Connecticut passed a law that creates a new academic degree and certification programs related to the green jobs industry and allows loan forgiveness or reimbursement for in-state students with majors in “green technology business.”

Coal Technology

Clean Coal Technology

There are currently 65 bills pending in 18 states pertaining to clean coal technology. In 2010, 5 states enacted 10 bills relating to clean coal.

“Clean coal” is used to describe those technologies being developed to reduce the environmental impact of coal energy generation. Clean coal techniques include chemically washing minerals and impurities from the coal, gasification, treating the flue gases with steam to remove sulfur dioxide, and carbon capture (i.e. storage) technologies.

In 2010, 5 states – Illinois, Kentucky, Ohio, West Virginia and Wyoming – enacted 10 bills pertaining to clean coal technology. Of these states, Illinois and Kentucky enacted the most clean coal legislation with 3 bills each. Ohio enacted 2 bills and West Virginia and Wyoming enacted 1 bill each. Illinois’ legislation established a “clean coal portfolio standard,” requiring that 25% of the electricity used in the state “be generated by cost-effective clean coal facilities” by January 1, 2025. Kentucky developed a clean coal incentive tax credit for clean coal facilities and further, appropriated state funding to further clean coal technology research. Similar to Kentucky’s clean coal incentives, Ohio’s legislation provided property tax exemptions for clean coal facilities and Wyoming’s legislation provided appropriations in the amount of $ 14,000,000 for clean coal technology research. Finally, West Virginia’s legislation creates the “Governor’s Commission to Seize Future Energy for America” to develop an energy policy and development plan for the state to include the state’s adoption of clean coal technology.

Carbon Capture

Currently, there are 72 bills pending in 19 states related to carbon capture. Of these 19 states, 5 enacted legislation pertaining to carbon capture technology.

Carbon capture and sequestration begins with the separation and capture of carbon dioxide from power plant “flue” gas. Next, the carbon dioxide must be stored. The primary means for carbon dioxide storage is injecting it into geologic formations such as oil and gas reservoirs, unmineable coal seams and underground saline formations.

In 2010, 5 states – Iowa, Kentucky, Minnesota, Ohio and Rhode Island – enacted legislation pertaining to carbon capture technology. Iowa’s enacted legislation requires certain rate-regulated public utilities to prepare for the addition of carbon capture and storage facilities in order to reduce the state’s carbon emissions. Kentucky’s legislation requires certain energy facilities to provide the state with a “carbon capture readiness” description of the facility. “Carbon capture ready” is defined as planning for or anticipating capture of carbon dioxide in a manner to facilitate continued operation of the facility in compliance with applicable federal requirements. Kentucky’s legislation also provides that facilities using carbon capture technology will qualify for coal severance tax incentives. Minnesota and Rhode Island both passed legislation that provides for the use of carbon capture, storage and/or sequestration technology to meet each state’s greenhouse gas reduction goals. Ohio’s legislation requires applicants for telecommunication facility permits and carbon capture and storage pipeline permits to provide proof that they are a party to a lease, easement, or license for the construction, placement, or operation of such facility or pipeline in or on a transportation facility.

Alternative Fuels

Currently, 185 bills are pending in 35 states related to alternative fuels. In 2010, 13 states enacted 23 alternative fuels-related bills.

Some of the trends among these 13 states include encouraging use of alternative fuels in state vehicles and public school buses, offering tax credits for alternative fuel use, granting tax credits for hybrid vehicle purchases and setting labeling requirements for biodiesel fuel. Arizona, Georgia, Kentucky, Louisiana, Maine, Ohio, Oregon, South Dakota, Utah, Washington and Wisconsin passed legislation in 2010 encouraging the use or further development of alternative fuels within each state through financial incentives such as sales tax exemptions, tax credits, coal severance tax incentives, revolving loan programs, incentive grant programs, and appropriations. Additionally, Louisiana and Washington enacted legislation in 2010 that provided financial assistance to various political subdivisions of the state for the purpose of converting all or a portion of each state’s fleet of motor vehicles to “qualified clean fuel vehicles” that use alternative fuels.

Biodiesel

260 bills are currently pending in 37 states pertaining to biodiesel. Of these states, 22 enacted 38 biodiesel-related bills in 2010.

Biodiesel is often derived from vegetable oil – most often, soybean oil. Other products such as canola oil, sunflower oil, animal fats and even recycled restaurant greases may be used to produce biodiesel. Additionally, lipids from micro algae have also been used to produce biodiesel, although the process remains in the research and development phase.

In 2010, 22 states enacted legislation pertaining to biodiesel. Of these states, Washington enacted the 6 bills, with Illinois a close second enacting 4 bills. A vast majority of the legislation related to biodiesel regulation (e.g. sulfur content and labeling requirements), and financial incentives for the further use and development of biofuels such as tax credits and other tax incentives, appropriations and loan and grant programs.

Arizona, Connecticut, Iowa, Illinois, Kansas, Kentucky, Minnesota, Oklahoma, Oregon, South Carolina and Washington enacted legislation in 2010 relating to biodiesel regulation. Arizona’s law, prohibits the sale of biodiesel blends that contain sulfur in excess of 500 parts per million and establishes labeling requirements for biodiesel blends.

In 2010, 19 states enacted legislation pertaining to financial incentives for biodiesel: Connecticut, Georgia, Iowa, Idaho, Illinois, Kansas, Kentucky, Louisiana, Michigan, Missouri, North Carolina, Ohio, Oklahoma, Oregon, South Carolina, South Dakota, Washington, Wisconsin and West Virginia. Connecticut, enacted legislation providing for grants to entities that intend to engage in the production of biodiesel for commercial purposes.

Electric Vehicles

There are currently 91 bills pending in 19 states related to electric vehicles. In 2010, ten states enacted 12 electric vehicle-related bills.

Electric vehicle legislation focuses on encouraging the widespread use of electric vehicles through tax incentives, setting standards for low-speed neighborhood electric vehicles, and offering businesses tax credits for charging station installation.

In 2010, ten states – Arizona, Colorado, Hawaii, Idaho, Illinois, Maryland, Oregon, Rhode Island, Tennessee and Washington – enacted legislation pertaining to electric vehicles. Arizona, Maryland, Rhode Island and Tennessee enacted legislation pertaining to tax incentives for electric vehicles. Tennessee’s legislation provides for grants and rebates for the purchase of electric vehicles, while Arizona’s legislation provides a business investment tax credit for the installation of an electric vehicle charging station. Finally, 6 states, Colorado, Hawaii, Idaho, Illinois, Oregon and Washington enacted legislation regulating the use of electric vehicles. Hawaii’s legislation provides that no person shall be prevented by any covenant, declaration, restriction, deed or similar agreement, from installing an electric vehicle charging system on or near the parking stall of any multi-family residential dwelling.

In 2010, 3 states introduced legislation allowing hybrid vehicles, regardless of occupancy, to be used in HOV lanes, 2 states enacted this legislation.

Allowing energy efficient vehicles in high-occupancy vehicle (“HOV”) lanes is an incentive that a few states – California, Florida and Virginia – examined in 2010. California and Florida both enacted legislation pertaining to hybrids in HOV lanes. Both states’ enacted legislation allowing hybrid, regardless of occupancy, to use the HOV lane. California’s legislation requires hybrids using HOV lanes to display the appropriate identifier issued by the state’s Department of Motor Vehicles.

Energy Efficiency

In 2010, 11 states considered making state-funded buildings more energy efficient. Of these states, 6 enacted legislation to promote energy efficiency in state buildings.

In 2010, state legislatures continued to search for ways to cut state spending. One of the more common measures used to reduce state spending was through legislation requiring energy efficient state buildings. This 2010 legislation focuses on energy standards for all public buildings and includes a variety of plans, mandates and appropriations measures.

Legislation related to energy efficiency in state-funded buildings is currently pending in 5 states. Alaska, Connecticut and Rhode Island considered legislation relating to green building standards, such as requiring compliance with the International Energy Conservation Code and Green Buildings requirements, the development and installation of energy efficient measures and equipment and the installation of renewable energy. Additionally, North Carolina, Rhode Island and Washington considered legislation to increase funding for green building requirements in state facilities through appropriations.

Six states enacted legislation in 2010 promoting energy efficiency in state buildings. In 2010, Delaware, Kentucky and New Mexico enacted legislation requiring any energy efficiency improvements in state government buildings to be “planned or realized” through use of the LEED rating system, the Green Globes rating system, ENERGY STAR-qualified products, and/or guaranteed energy savings performance contracts. Colorado, Kentucky and Utah enacted legislation increasing state funding for energy efficiency improvement projects to state capital buildings through appropriations.

Fossil Fuels

There are currently 155 bills pending in 33 states and the District of Columbia relating to fossil energy. Of these, 14 states and the District of Columbia enacted fossil fuel energy legislation in 2010.

In 2010, 14 states and the District of Columbia enacted 18 bills relating to fossil fuels. The legislation varied from increased regulations relating to oil and gas drilling, to providing incentives for renewable energy development in order to reduce future reliance and dependence on fossil fuels. For example, Colorado enacted legislation in 2010 promoting the development of biomass energy to reduce the state's dependence on fossil fuels. Similarly, Florida enacted legislation authorizing local governments to provide financial incentives in the form of non-ad valorem assessments to fund energy efficiency improvements to real property to reduce the state's reliance on fossil fuels. Both Kentucky and Ohio enacted legislation in 2010 increasing regulations related to oil and gas drilling. Kentucky's legislation amended its statutes to regulate the mining and processing of oil shale within the state in order to reduce soil erosion and water pollution. Ohio's legislation revises the state's oil and gas law to provide for further regulation of oil and gas drilling and leasing, as well as hydraulic fracturing.

Diesel

Currently, there are 563 bills pending in 40 states and the District of Columbia pertaining to diesel. In 2010, 29 states enacted 55 bills related to diesel.

The trends among the 29 states that enacted diesel-related legislation in 2010 included regulations pertaining to "dyed" diesel, underground storage tank regulations, implementation or amendment of the state motor fuel tax, biodiesel regulations, and appropriations.

Regarding "dyed" diesel, South Dakota enacted legislation that does not exempt motor fuel or un-dyed diesel from the state's fuel excise tax. Illinois and Kansas appropriated funding towards dyed diesel measures.

Underground Storage Tanks

Alabama, Minnesota and New Hampshire enacted legislation in 2010. Alabama's legislation, prohibits the construction and operation of a storage facility, part of which is used for the storage and distribution of hazardous materials, within a certain proximity of a public water supply intake facility. For purposes of the legislation, diesel fuel is identified as a hazardous fuel.

State Motor Fuel Taxes

Illinois, Nebraska and New Jersey enacted legislation pertaining to state motor fuel taxes. Illinois' legislation, amended the state's Motor Fuel Tax Law to increase the tax imposed on motor vehicles using diesel fuel.

Diesel Appropriations

Many states enacted appropriations-based legislation pertaining to diesel in 2010 - Colorado, Illinois, Kansas, Louisiana, Mississippi, New Jersey, Oklahoma, Pennsylvania, Rhode Island, Virginia, Washington and Virginia. An example of appropriations legislation in support of diesel is found in Washington's legislation, which appropriates $400,000 towards a diesel fuel -specific study.

Gasoline

There are currently 775 bills pending in 45 states and the District of Columbia relating to gasoline. In 2010, 31 states and the District of Columbia enacted 85 gasoline-related bills.

In 2010, 31 states and the District of Columbia enacted 85 bills relating to gasoline. Trends included the imposition and/or amendment of the state motor fuel tax, appropriations in the form of bonds, tax credits and/or tax revenue, underground storage tank facility regulations, regulations pertaining to ethanol/gasoline blends, and fuel mandates for state fleets.

Alabama enacted legislation prohibiting the construction and operation of an underground hazardous material storage facility within a certain proximity of a public water supply intake facility due to the "significant and unacceptable risk" hazardous materials, like gasoline, pose to public water supply systems. In 2010, Delaware, Illinois, Kentucky, New Hampshire and Utah enacted similar legislation.

Idaho enacted legislation pertaining to its state motor fuel tax, amending its existing law to revise the definition of "motor fuel" to include ethanol, ethanol blended fuel, gasoline blend stocks and natural gasoline. Missouri, New Jersey, New Mexico, Oklahoma, Rhode Island, Tennessee, Virginia, Vermont, Washington and the District of Columbia enacted similar legislation in 2010.

Kentucky enacted legislation in 2010 that appropriated funding, in the form of tax credits, to support "alternative transportation fuels." Alternative transportation fuels include petroleum, jet fuel, gasoline, diesel fuel, hydrogen derived from coal and diesel fuel and ethanol derived from biomass. Similarly, Michigan enacted appropriations legislation in 2010, providing state funding for a gasoline inspection and testing fund. Arkansas, Georgia, Maine, Missouri, Mississippi, New Mexico, Oklahoma, Rhode Island and Washington all enacted appropriations-type legislation for gasoline.

Renewable Energy

Solar

Currently, there are 915 bills in 45 states and the District of Columbia pertaining to solar. In 2010, 39 states and the District of Columbia enacted 144 solar bills.

2010 solar legislation includes offering tax credits for research and development related to solar technology and for equipment using solar power, restricting the use of covenants that prohibit the installation of solar power technology, and creating or increasing state RPS goals and mandates related to solar.

Arkansas enacted legislation declaring a state energy policy to receive 50% of its electric generation from renewable and alternative energy sources – including solar – by 2025. Arizona enacted legislation providing income tax credits for research and development in the solar industry – more specifically, the solar liquid fuel industry. Arizona’s legislation also provides tax credits for contractors that provide and install solar energy devices. Colorado enacted legislation allowing the creation of “community solar gardens” – a concept that allows renters, low-income utility customers and agricultural producers to own interests in solar generation facilities. Delaware and Louisiana enacted legislation restricting the use of covenants that prohibit or unreasonably restrict installation and use of ground mounted solar energy systems on land zoned residential. Hawaii enacted legislation requiring solar water heater systems in the construction of new single-family dwellings.

Wind

Currently, there are 1,029 bills in 46 states and the District of Columbia relating to wind. In 2010, 36 states enacted 114 wind bills.

With a 39% average growth rate over the past five years and 10,000 megawatts of new generating capacity installed in 2009, wind is at the forefront of renewable energy development in the United States. Pending and enacted wind legislation in 2010 included increased renewable portfolio standards specifically related to wind energy generation, appropriations, bonds and tax breaks for wind technology, and increased support for offshore wind development.

Maine enacted legislation implementing the recommendations of the Governor’s Ocean Energy Task Force which promotes offshore wind development. Similarly, New Jersey enacted legislation establishing an offshore wind renewable energy certificate program to take advantage of the off shore opportunities within the state. Rhode Island’s enacted legislation authorized the Narragansett Electric Company to enter into an amended agreement with a developer of offshore wind for the purchase of energy, capacity and other environmental and market attributes in order to facilitate the development of a small offshore wind project in the state’s waters.

Another pattern found in 2010 wind energy legislation was the leasing of state lands for wind farm development. Louisiana, Minnesota and Nebraska enacted legislation providing for the lease of state lands for the construction and development of wind energy systems. Nebraska went further and enacted legislation restricting the use of eminent domain for wind energy systems development to government entities and exempting any property used directly for wind energy generation from the state property tax.

Oklahoma enacted eight separate pieces of wind energy legislation in 2010– ranging from an increase in Oklahoma’s renewable portfolio standard to the increased regulation of lands in close proximity to a public-use airport (thereby limiting wind farm development near airports), and the implementation of state tax credits for the sale of renewable resources-generated electricity (specifically including wind).

Transmission

102 bills in 30 states are currently pending relating to electricity transmission. In 2010, 10 states enacted legislation relating to transmission.

Delaware and Massachusetts enacted legislation authorizing cities condemnation and/or easement granting authority to ensure efficient transmission expansion. Three states - Arizona, New Mexico and Oregon - enacted legislation providing financial incentives for transmission expansion. Arizona's legislation took the form of tax credits while New Mexico's legislation provided for the issuance of revenue bonds. Oregon's legislation allows for the "timely recovery of costs prudently incurred" by an electric company for the construction or acquisition of renewable energy generation facilities and for the expansion and/or improvement of electricity transmission.

Renewable Energy Zones

In 2010, two states - California and Hawaii - considered legislation establishing renewable energy zones.

A renewable energy zone is defined as an area with high concentrations of developable renewable energy resources that can meet a region's energy demand. States are looking to establish these zones in order to coordinate the building of transmission and renewable energy development in the most efficient and cost-effective manner.

California's pending bill would require the adoption of the "Desert Renewable Energy Conservation Plan" in order to identify renewable energy zones based on renewable energy development potential and environmental, wildlife, and conservation criteria. Hawaii's bill, which failed in the House, would have directed the Department of Business, Economic Development and Tourism and the Department of Land and Natural Resources to identify renewable energy zones within the state for purposes of renewable energy development.

Renewable Portfolio Standards

Currently, 38 states and the District of Columbia have some type of renewable portfolio standard. In 2010, 7 states considered legislation pertaining to renewable portfolio standards.

A renewable portfolio standard is the requirement that an electric power provider generate or purchase a specified percentage of the power it supplies/sells from renewable energy resources. Other common names to describe a state's renewable portfolio standard include renewable energy standard, renewable energy portfolio goal, alternative energy law, energy portfolio standard, and renewable electricity standard.

Illinois and Rhode Island enacted legislation amending their renewable portfolio standards. Illinois' renewable portfolio standard is 25% by compliance year 2024-2025. Illinois also enacted legislation clarifying the use of renewable energy credits for purposes of complying with the state's renewable portfolio standard, providing that an alternative retail electric supplier that uses a renewable energy credit to comply with a renewable portfolio standard imposed by any other state may not use the same credit to comply with Illinois' renewable portfolio standard. Rhode Island's renewable portfolio standard - referred to as a renewable energy standard by state law - is 16% by compliance year 2019. Also, Rhode Island enacted legislation establishing contract standards for renewable energy projects and clarifying that a landfill gas-fueled electric generation facility constitutes a "renewable energy resource" for purposes of the state renewable energy standard.

For more energy legislation see: The Energy and Environment Legislation Tracking Database.

 

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