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january 2014 energy newsletter plugged in

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SPARKS OF NEWS

  • Welcome to 2014! Did you know that in 2013, all 50 states, plus the commonwealths and territories, met in regular session and enacted nearly 40,000 bills and resolutions? Test your knowledge of the new laws that went into effect on Jan. 1, 2014 by taking this quiz.
  • Future Rhubarb Scarcity? Researchers at Harvard University unlocked a key discovery in battery technology this month: certain quinone organic molecules hold electric charges particularly well in flow batteries. The most successful quinone molecule found is one nearly identical to that in rhubarb.

STATE LEGISLATIVE ACTION

California’s Legislative Analyst’s Office Critiques Governor’s Budget Proposal
  • California’s nonpartisan Legislative Analyst Office (LAO) cautioned state lawmakers to carefully consider some provisions in Governor Jerry Brown’s recently released draft budget request.  Included in the budget is a proposal to spend $250 million in revenues from the state’s carbon cap-and-trade program to help finance California’s $68 billion high-speed rail project. The LAO said the proposal "likely would not maximize the reduction" of greenhouse gas emissions, as the project will not be finished by 2020. It called the proposal "legally risky. The budget request also includes $600 million toward renewable energy and energy efficiency, which the LAO analysis does not address.
Faster Building Permits
  • The New Jersey Legislature—which ended its 2012-2013 session on Jan. 13, 2014—passed legislation to expedite the permitting process for “green building” projects. Permit applications for buildings seeking LEED, Energy Star, Green Globe or National Green Building certification will receive priority considerations by the necessary state and municipal offices. The bill has been sent to the Governor for approval.
States Increase Overall Gas Taxes
  • Pennsylvania Governor Tom Corbett signed a comprehensive transportation funding package into law on Nov. 25, 2013. Among other provisions, House Bill 1060 repeals the state’s 12 cents-per-gallon gas tax altogether and phases in an increase to the state’s percentage-based Oil Company Franchise Tax. The multi-billion-dollar legislation makes Pennsylvania the sixth state in 2013—after Maryland, Massachusetts, Vermont, Virginia and Wyoming—where the legislature enacted a bill to increase overall state gas taxes. Notably, except for Wyoming, all of these states moved toward a gas tax that tracks with the economy to some degree, either by tying the rate to inflation or basing it on the price of fuel. By contrast, no state enacted a gas tax increase of any kind in 2010, 2011 or 2012. Check out NCSL’s Transport Report for additional information.
Efficiency Abuzz
  • A number of energy efficiency-related bills have been introduced in state legislatures in 2014. A Michigan bill would amend the Clean, Renewable and Efficient Energy Act to include advanced waste energy recovery, while a Missouri bill would reauthorize the income tax deduction for energy efficiency audits. A New Hampshire bill would create a committee to study energy efficiency in the state; pre-filed legislation in New Mexico would appropriate funds to expand a residential energy conservation program for low-income persons.
Early RPS Action
  • Several states have already introduced legislation regarding Renewable Portfolio Standards (RPS). Colorado Senate and House bills would repeal Senate Bill 252 (2013), which increased the state’s RPS for rural electric cooperatives. A Virginia resolution would generate a study and a report considering the impacts of a mandatory RPS (the state currently has a voluntary goal). Legislation to modify existing renewable energy standards or goals has also been introduced in Massachusetts (H.B. 2932, S.B. 1583), Missouri (S.B. 598), Virginia (H.B. 822, H.B. 881, H.B. 1061, S.B. 498, S.B. 580), West Virginia (H.B. 3080) and Wisconsin (H.B. 594, S.B. 474). These proposed bills would alter technology qualifying for renewable energy credits or eliminate compliance requirements.

STATE ENERGY NEWS

Pennsylvania Supreme Court Overturns Provisions of Oil & Gas Drilling Law
  • In Dec. 2013, the Pennsylvania Supreme Court declared unconstitutional key provisions of Pennsylvania’s Oil and Gas Act, more commonly known as Act 13. Seven municipalities and the Delaware Riverkeeper Network had challenged Act 13 in 2012, alleging the law violates the Pennsylvania’s constitution. The Court voted 4-2 to overturn certain provisions, including those that prohibited local zoning and those that banned local environmental ordinances related to oil and gas development. The Supreme Court also sent some provisions back down to the Commonwealth Court, including the question of whether the rest of Act 13 can stand without the portions that had been struck down. Pennsylvania Governor Tom Corbett’s administration has asked the Supreme Court to reconsider its decision.
Minnesota Judge Picks Solar Over Gas
  • A Minnesota state administrative law judge told the state’s largest electric utility, Xcel Energy, that a solar generating project would provide the greatest value to Minnesota over the construction of natural gas-fired power plants. In a 50-page opinion, the judge recommended the 100-MW Geronimo Solar plan—a $250 million project that would provide about 20 solar arrays across Xcel’s service area. The judge’s decision must be adopted by the state’s Public Utilities Commission to become binding.
More Storage Needed
  • Puerto Rico has established an energy storage mandate for new electricity projects. The Puerto Rico Electric Power Authority and the territory’s government-owned utility, Autoridad de Energía Eléctrica, will now require all new, grid-connected solar and wind projects to include energy storage for 30 percent of a project’s installed capacity. Additionally, developers must keep 45 percent of a project’s capacity in reserve for at least one minute to compensate for fluctuations in generated power from variable resources. Puerto Rico will be seeking to increase renewable capacity by 600 MW this year, increasing renewable energy’s share in the energy mix from 1 percent to 6 percent. California is the only state to establish an energy storage mandate; Puerto Rico is the only territory with a storage mandate.
North Dakota to Regulate 18,000 Miles of Pipeline
  • The North Dakota Industrial Commission has approved rules requiring that companies report the location of thousands of miles of gathering pipelines, which typically transport gas and liquids from the source such as rock formations to a processing facility. The U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) monitors pipelines that move crude oil to market, while large natural gas pipelines are overseen by the state’s Public Service Commission. Under the current regulatory system, however, PHMSA does not regulate most gathering pipelines in the U.S. based on their location. This change comes after the North Dakota Legislature passed H.B. 1333 in 2013 requiring pipeline owners to submit the location of gathering pipelines and to notify regulators when the lines are abandoned.
Value of Solar
  • By the end of January, the Minnesota Department of Commerce must submit a final “value of solar” methodology to the Minnesota Public Utilities Commission. This would be the first statewide utility tariff giving customers credit for energy generated by solar panels that is sold to the electric grid. This tariff would be an alternative to the debated net energy metering technology, which compensates solar panel owners who sell excess generated electricity onto the grid. Legislation in 2013 requires a value of solar tariff that incorporates the projected economic impact of damage due to climate change attributed to power plant carbon emissions. This legislation also created a 1.5 percent by 2020 solar carve-out to the state’s renewable energy standard. Austin, Tex. has already determined a value of solar tariff.
Carbon Markets Unite
  • California and the Canadian province of Quebec formally linked their carbon trading markets on Jan. 2, allowing California-based companies to purchase credits from Quebec in order to meet California’s emission targets, and vice-versa. The coordinated market is an attempt to reduce carbon emissions by placing a rising price on carbon. Critics expressed concern about damage to Quebec’s economy, as Californian carbon allowances may be cheaper. Both California and Quebec had previously regulated emissions from industrial sources.

FEDERAL ENERGY NEWS

FY 2014 Omnibus Budget – Energy Programs
  • On Jan. 18, President Obama signed into law the Consolidated Appropriations Act of 2014, a bill that will fund the federal government for Fiscal Year 2014 at an overall level of $1.012 trillion, an increase of $45 billion in comparison to FY 2013 levels, post sequestration (FY 2013). The bill includes all 12 of the spending bills that fund various programs throughout the government. Overall, the omnibus bill provides $34 billion in total for Energy and Water programs. Within the appropriations, the Department of Energy (DOE) will receive $26.5 billion, an increase of $1.3 billion above FY 2013. The Weatherization Assistance Program (WAP) received $174 million, an increase of $109 million from FY 2013, which will go to states to be used in the improvement of energy performance in homes of low-income families. DOE’s State Energy Program received $50 million, a $3 million decrease from FY 2013, to provide financial and technical assistance to states to address energy priorities. For more information on funds for energy programs in the FY 2014 budget, see the NRI Committee Budget Report.
New White House Review to Focus on Energy
  • The White House’s Council on Environmental Quality (CEQ) announced on Jan. 9 the administration has launched a Quadrennial Energy Review (QER) as part of the president’s Climate Action Plan. The first QER will focus specifically on the nation’s infrastructure for transporting, transmitting and delivering energy. NCSL staff spoke with CEQ staff on a call launching the QER, in which they mentioned the administration and federal agencies will be seeking state and local input for the review.
The Future of Carbon Capture and Sequestration (CCS)
  • The Department of Energy formally approved $1 billion from the 2009 American Recovery and Reinvestment Act for the FutureGen Alliance to build FutureGen 2.0. The public-private alliance aims to retrofit a coal power generating unit in lllinois to capture 90 percent of its greenhouse gas emissions.  A pipeline would then take the gas to wells for injection approximately 4,000 feet underground. The project is designed to capture 1.2 million tons of CO2 annually and more than 20 million tons over two decades. Additionally, the Environmental Protection Agency (EPA) published its final rule on easing the implementation of Carbon Capture and Sequestration (CCS) in coal plants. The rule creates a “consistent national framework” to facilitate CCS technology and would exempt carbon stored underground from hazardous waste regulations set forth under the Resource Conservation and Recovery Act (RCRA).
Generation Next
  • The administration launched the first of three public-private manufacturing innovation institutes for next generation power electronics that will be led out of North Carolina State University. The Department of Energy has invested $70 million in the Next Generation Power Electronics Institute. This particular institute will bring together companies, universities and state and federal organizations to invent and manufacture semi-conductor based power electronics that will be more energy efficient.
Safety Alert
  • The Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a safety alert regarding crude oil being transported from the gas-rich Bakken region of North Dakota. Due to an increase in derailments of trains carrying the oil and resulting in fires, PHMSA indicated that oil from the Bakken region may be more flammable than traditional heavy crude oil. PHMSA and the Federal Rail Administration (FRA) have begun unannounced inspections and testing of crude oil samples to verify that materials have been properly classified. PHMSA could announce mitigating measures in order to ensure the continued safe transportation of these materials. In related news, on Jan. 17 the American Petroleum Institute (API) and the railroad industry announced they had reached an agreement on new voluntary rail safety standards, in response to the recent explosions on oil-carrying trains.
Congress Acts – Permits Expedited
  • On Dec. 19, the U.S. Senate passed H.R. 767, a bill to expedite permitting of wells on federal lands in the oil-rich Bakken region of North Dakota. The bill passed the House in May and now heads to the president’s desk to be signed into law.

NEW NCSL RESOURCES

Transforming Transportation with Electricity
  • Read this 2-page Legisbrief to find out how states are working to increase the use of alternative fuels to diversify the fuel mix, reduce dependency on imported oil, promote economic growth and decrease emissions.
Renewable Energy Mandates on Front Burner:
  • Renewable energy continues to be a hot topic in legislatures. Read the latest issue of NCSL’s State Legislatures magazine to learn more about state action on Renewable Portfolio Standards in 2013. Additionally, this chart shows state activity in adopting or increasing renewable electricity standards and voluntary goals that require utilities, municipalities and electric cooperatives to sell a specified percentage or amount of renewable electricity.

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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