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february 2014 energy newsletter plugged in.

Plugged In

 

SPARKS OF NEWS

  • Where There is a Will, There is a Whey: A Wisconsin energy company, GreenWhey, has begun to convert cheese industry wastewater into methane for diesel generators. The company uses anaerobic digesters to convert 500,000 gallons of whey to 3.2 MW of energy daily, with by-products of clean water and fertilizer.

STATE LEGISLATIVE ACTION

Responding to U.S. EPA Greenhouse Gas Regulations

  • A number of states have introduced legislation or resolutions in 2014 relating to the U.S. Environmental Protection Agency’s (EPA) emissions standards for existing power plants. Legislation in Florida, Missouri and West Virginia would authorize flexibility in meeting federal standards. Resolutions in Alabama, Arizona, Florida (H.M. 1027, S.M. 1174) Georgia (H.R. 1158 and H.R. 1159), Illinois (H.R. 782 and S.R. 912), Indiana (H.C.R. 44, H.R. 11), Ohio, South Dakota, Utah, West Virginia and Wyoming emphasize the role of states in regulating emissions, providing consultation in meeting these standards or flexibility in meeting standards. A Kansas resolution urges Congress to oppose the President’s Climate Action Plan, while resolutions in Missouri and Ohio calls for the cessation in the development of EPA standards. Resolutions in West Virginia express concern about the EPA’s ability to regulate emissions and seek to protect industry jobs. Bills in Illinois, Missouri and Virginia would begin compliance with the standards for existing generating sources; a bill in Kentucky would begin compliance with standards while asserting states’ authority in regulating emissions.

Increasing Natural Gas Infrastructure

  • U.S. Representatives Sam Graves (R-Mo.) and Lee Terry (R-Neb.) introduced three bills on Jan. 28 to expand natural gas use in the long-haul trucking industry and help meet the transportation sector’s growing demand for alternative fuels. The bills would establish natural gas fueling corridors (H.R. 3938), create a task force to evaluate the challenges transitioning from diesel fuel to natural gas (H.R. 3937), and provide an interstate weight limit exemption for natural gas vehicles to account for the heavier weight of natural gas tanks (H.R. 3940). Several states have already passed weight limit exemptions to allow natural gas vehicles to carry more freight without being penalized. In 2013, Indiana and Ohio passed bills (H.B. 1324 and H.B. 51 respectively), which allow a natural gas vehicle to exceed the state’s gross vehicle limit by 2,000 pounds. Additionally, Colorado allows alternative fuel vehicles, including natural gas vehicles, to exceed the gross vehicle weight rating limits by 1,000 pounds, but this exception does not apply to alternative fuel vehicles using the interstate system.

Net Energy Metering

  • Efforts to address utility concerns regarding the cost of connecting rooftop solar to the grid are arising in a number of state legislatures. In Utah, Senate Bill 208 would allow utilities to assess a reasonable fee if the Public Service Commission determines that the utility will incur direct costs from the net metering program that exceed benefits.  In Oregon, House Bill 4042, which has passed both the House and the Senate, would permit the Public Utility Commission to allow electric utilities to charge rooftop solar and other distributed generation owners a fee, if the direct costs of connecting the system and running the net metering program outweigh the electric system, environmental and public policy benefits.

Oregon RPS

  • An Oregon House bill on renewable energy credits has passed the both first chamber and the Senate Committee on Business and Transportation. The bill directs the state public utility commission to investigate the feasibility of allowing Oregon's largest utilities to sell renewable energy to large industrial customers under a green tariff. The bill also allows smaller utilities to meet a percentage of their renewable energy requirement with unbundled renewable energy certificates generated by existing wind and solar farms. Under current law, utilities that serve more than three percent of the state’s load must sell 25 percent of their electricity from renewable sources by 2025, while smaller utilities must sell either five or 10 percent of their electricity from renewable sources.

States Generate Revenue

  • Pennsylvania is once again considering legislation to impose a severance tax on hydraulic fracturing in the state. Most oil and gas producing states implement a severance tax—an excise tax on the resource when it’s severed from the earth. The severance tax would tie state revenue to production, providing more money to the state during high-production periods. The state legislature is looking at several severance tax bills with rates ranging from 4 percent to 5 percent. Pennsylvania currently levies an impact fee on every producing oil and gas well in the state, regardless of the volume produced. The fee is based on a 15-year sliding scale that allows oil and gas operators to pay more in the first years, when the well is typically at its highest period of output. Severance tax proponents point out that the current impact fee fails to generate the type of revenue possible with a state severance tax because severance tax revenue fluctuates with production, meaning that the more gas that is extracted, the more money that goes to the state.

Offshore Wind Taking Off

  • A New Hampshire bill would establish a committee to study offshore wind in the state. The bill’s sponsor credits strong findings from a Maine offshore wind study as a driver for the legislation. And Maine’s Public Utilities Commission recently gave approval to the 12 MW Maine Aqua Ventus offshore wind farm pilot. Farther down the coast, America’s first utility-scale, offshore wind farm may be off the coast of Rhode Island. Deepwater Wind announced an agreement to purchase five 6 MW turbines from the French manufacturer Alston, likely securing a federal investment tax credit. On the other side of the country, the Bureau of Ocean Energy Management released a determination of no competitive interest for a 15-square-mile area off the coast of Oregon. Seattle-based Principle Power plans to use the area as a testing ground for the WindFloat Pacific Project, a 30 MW floating offshore wind farm expected to be operational by 2017, also the west coast’s first offshore wind project.

Wind PTC

  • The Iowa Senate passed S.R. 103 earlier this month, supporting the federal wind production tax credit (PTC). Iowa is the third largest producer of wind energy in the nation, behind Texas and California. Proponents of the PTC claim that the intermittent nature of the credit has caused boom-and-bust cycles for wind development while critics state that wind has become sufficiently cost-competitive to no longer need the PTC. Installation of new wind turbines fell 90 percent in 2013, attributed to the uncertainty of the PTC. However 12,000 MW of new wind energy is due to come online in 2014-2015,in part due to the PTC extension according to the American Wind Energy Association.

STATE ENERGY NEWS

Threats to Substations Drive Debate Over Security

  • Dominion Virginia Power, the state’s largest electricity provider has proposed spending up to $500 million to protect its transmission substations and other critical infrastructure. The investments, which must be approved by the State Corporation Commission, are in response to the devastation caused by Superstorm Sandy in 2013 and the 2013 attack on the Pacific Gas and Electric Co. substation in California. Dominion Virginia Power is not the only company to consider investments to protect the nation’s electric infrastructure. New York’s Public Service Commission approved an order this month requiring Con Edison, a New York City utility, to take steps to plan for and protect its systems from extreme storms. Jon Wellinghoff, a former Federal Energy Regulatory Commission (FERC) chairman, recently told the Wall Street Journal that the incident in California was "the most significant incident of domestic terrorism involving the grid that has ever occurred." Wellinghoff also reported that he has grown increasingly concerned about other potential attacks. Other FERC Commissions are warning, however, overreacting to a physical attack on the grid in California could cost the electric industry billions of dollars.

Missouri Sunshine

  • A rebate program in Missouri may have become too successful: the $2 per watt rebate—authorized via a ballot initiative in 2008—combined with decreasing equipment costs and federal tax credits has put rooftop solar energy systems in reach of thousands of customers. The state initially authorized $175 million for rebates and this fund is nearly depleted. To extend the longevity of these funds, the legislature enacted a bill in 2013 allowing for a decrease of the rebate to $1.50 per watt ahead of the 2015 deadline. The rebate has raised questions about how much should solar development be subsidized—and by whom.

Colorado Approves Methane Emission Rules

  • Colorado’s Air Quality Control Commission approved new rules on Feb. 23 to regulate air emissions from oil and gas drilling. The rules also seek to reduce the amount of methane and other volatile organic compound released into the air. The regulations will require oil and gas drilling companies to closely monitor tanks and pipelines for leaks, and report monthly on large sources of methane emissions.

Adaptation Dollars

  • Massachusetts Governor Deval Patrick announced he will commit more than $50 million to help communities prepare for destructive storms and rising sea levels related to climate change. Nearly $40 million of the funds will be in the form of municipal and local grants for backup power systems and renewable energy sources, such as solar panels and advanced energy storage systems. The remaining $10 million will be spent on seawalls and other coastal barriers.

Fines for Refusing Smart Meters

  • Illinois state regulators decided this month that electricity customers in the state will now be charged $21.53 if they refuse to have smart meters installed. Smart meters can track energy use and send the data back to power companies, which eliminates the need for meter readers. Proponents of smart grid technologies argue that tools such as smart meters help utilities identify outages, cut energy costs and improve emergency response. The Energy Infrastructure Modernization Act of 2011 requires Commonwealth Edison, the electric utility serving approximately 3.8 million customers in northern Illinois, to install smart meters for all by 2022.

The Way the Wind Blows

  • A recent study by the London School of Economic found that homes located within 1.2 miles of wind turbines faced an 11% decrease in home property values, although findings in the United States differ. Another study from the Laboratoire des Sciences du Climat et de l'Environnement in France found little climatic impacts from wind farms in Europe. The study measured whether wind farms could generate temperature changes that could affect regional climates. However natural fluctuations in temperature were found to be greater.  Additionally, the U.S. Geological Survey and the Department of the Interior released a new wind turbine mapping software in February that could reduce the impacts of wind development on surrounding landscapes.

Green Banks

  • States may be looking to “green banks” to help finance energy efficiency and renewable energy projects. Green banks are quasi-governmental agencies that leverage a small quantity of tax payer or rate payer dollars to attract private investments in energy efficiency and renewable energy and provide low interest loans to customers. Both Connecticut and New York have green banks currently, while California has pending legislation. The Coalition for Green Capital recently launched a Green Bank Academy for state governments to explore green banks.

FEDERAL ENERGY NEWS

Heavy Duty Stuff

  • On Feb. 18, President Obama directed the Environmental Protection Agency (EPA) and the Department of Transportation (DOT) to develop new fuel efficiency and greenhouse gas standards for medium- and heavy-duty vehicles within a year and to issue them by March 2016. This second round of fuel efficiency standards will build upon the model year 2014-2018 standards that were finalized in the president’s first term. See NCSL’s Info Alert for more details.

Pipe-ing Hot News

  • The U.S. Department of State released the final environmental impact study for the potential construction of the Keystone XL pipeline project. The study found that rejecting the pipeline would not stop development of the Canadian oil sands and that carrying the crude oil by rail instead of pipeline had the potential to yield 28 to 42 percent more annual emissions. The study also stated that the crude oil transported by the pipeline would generate between 1.3 million and 27.4 million more annual tons of carbon emissions than conventional fuel. The study will be open for public comment until March 7, 2014.

Nuclear Option

  • DOE Secretary Moniz announced the approval of $6.5 billion in federal loan guarantees for construction of a nuclear reactor in Georgia, during a visit to the plant on Feb. 19. The reactors at the Vogtle nuclear plant are currently under construction and the project is expected to cost a total of $14 billion. Construction is not expected to be completed until 2018, at the earliest.

Credit Worthy

  • Senators Amy Klobuchar (D-Minn.) and John Hoeven (R-N.D.) introduced a bill, S. 1899, that would provide a consumer renewable tax credit intended to create an incentive for utilities to increase their investment in wind and solar power. The measure is meant to supplement, not replace, the current renewable energy production tax credit.

Everything’s Bigger in…California?

  • The Department of Energy (DOE) held an opening ceremony for the Ivanpah Solar Energy Generating System, the world’s largest concentrating solar power project. Ivanpah, located in California, has the capacity to generate enough energy to power 94,400 average American homes. It is one of five concentrated solar power projects that received loan guarantees from DOE.

Energy Security Means Renewable on Military Bases

  • A report released by the Pew Project on National Security, Energy and Climate in January found that the number of energy efficiency and renewable energy projects at military bases increased by 54 percent from fiscal year 2010 to fiscal year 2012. Currently, the military uses four percent of facility energy from renewable sources. The report specifically examines the Department of Defense’s use of third party energy financing tools for efficiency and renewable energy. In December 2011, President Obama called for a boost in the third-party, energy efficiency financing tool energy savings performance contracts.

NEW NCSL RESOURCES & UPCOMING EVENTS

A Cost-Benefit Look at Renewable Energy Standards Webinar

  • State renewable energy mandates, also called renewable portfolio standards (RPS), are helping to drive substantial increases in renewable energy production. As the share of electricity produced by renewable sources rises, many are interested in the effect that these policies are having on retail electricity rates. Register for this March 20 webinar to hear the latest on how different state RPS implementation costs and benefits compare and the reasons for variations.

Everybody Wins—Driving Economic Growth and Energy Efficiency Webinar

  • Energy efficiency financing policies, such as on-bill financing, help home and building owners overcome the upfront costs that often put energy efficiency improvements out of reach. On-bill financing eliminates the cost barrier by allowing consumers to finance efficient upgrades and pay finance costs on their energy bill. This Feb. 20 webinar explored state on-bill financing programs enacted through legislation, including the case study of the “Help My House” on-bill financing pilot program in South Carolina. View a recording of the webinar and presentations here.

Metal Theft: 2013 Legislative Update

  • Increased incidents of metal theft in recent years have provoked states, utilities, local police forces and industry to act by regulating metal sales, increasing requirements for licensed dealers and increasing penalties for illegal activity. Read our 2013 legislative update to learn more about ways in which states are addressing metal theft.

Disruptive Energy Technologies

  • Advances in technology are fueling dramatic strides in efficiency, natural gas extraction, locally generated energy and smart grid technologies and altering how policymakers, utilities and energy businesses approach all aspects of the industry—from production and delivery to regulation. Read this State Legislatures Magazine article exploring the energy revolution and what it means for consumers, utilities and policymakers.

Midwest Environmental Health Summit Presentations

  • NCSL hosted a summit on state environmental health issues and policies on Feb. 20-21 in Springfield, Ill. The summit highlighted environmental health concerns confronting Midwestern states. Session topics included alternative fuels and vehicles, state trends in hydraulic fracturing and the impact of climate change on natural disasters. View the presentations here.

NCSL Energy Program Contacts: Denver

NCSL Energy Program Contacts: Washington, D.C.

  • Ben Husch, committee director, NCSL Natural Resources and Infrastructure Committee, 202-624-7779
  • Melanie Condon, policy associate, 202-624-3597

 

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