The July-August issue looks at partisanship in legislatures, renovating capitols, pay for lawmakers, the challenging job of chief of staff, the costs of legislation and much more.
Vol. 2 Issue 5 | June 2014
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The Ohio bill that would suspend the state’s Alternative Energy Resource Standard and Energy Efficiency Resource Standard has passed both houses and is headed to the governor, who has said he will sign the legislation. The signing of this bill would mark the first instance that a state has enacted legislation reducing a state’s renewable energy requirements.
A South Carolina bill that would establish net metering and a distributed energy resource program has been sent to the governor. The legislation would also establish a renewable energy leasing program, helping to reduce up-front cost burdens for customers. Forty-three states, Washington, D.C., and four territories have authorized net metering, and an additional three states have voluntary utility programs for net metering.
The North Carolina General Assembly passed Senate Bill 786 in May, known as the Energy Modernization Act. The measure, which has been sent to the governor for signature, authorizes the state to begin issuing permits in 2015 for hydraulic fracturing in the state. North Carolina does not have a history of oil and gas development, but according to the U.S. Geologic Survey, as much as 1.7 trillion cubic feet of natural gas reserves may be located in several counties in the center of the state. Some opponents of the bill question the provision imposing criminal penalties on people who disclose the chemicals used in hydraulic fracturing. Similar to other states such as Colorado, Illinois, and Pennsylvania, North Carolina’s hydraulic fracturing legislation allows oil and gas companies to withhold chemical information that is deemed confidential, although all these states require access to this trade secret chemical information by emergency officials. However, North Carolina’s provision is stricter than most other states by enforcing a Class I misdemeanor for violating the confidentiality of trade secret protections.
Illinois adopted a resolution in May supporting the state’s nuclear fleet and urging state and federal agencies to adopt rules and policies that enhance the economic competitiveness of the Chicago-based Exelon Corporation’s nuclear plants. The resolution passed just days after Exelon announced that expected revenue from three of the Illinois plants will likely fall short of each plant’s cost of operation. The resolution specifically urges the Illinois Commerce Commission to prepare a report identifying the rate impacts of early closure of nuclear plants as well as examining the state’s ability to enhance the transmission of nuclear power. It also recommends that the Illinois Environmental Protection Agency develop a report outlining the effect that nuclear closures would have on greenhouse gas emissions in the state.
A number of states have passed efficiency legislation this spring. Highlights include a Kansas bill requiring the state corporation commission to permit public utilities to implement commission-approved demand-side programs and cost recovery mechanisms, as well as Maryland legislation establishing the Energy-Efficient Homes Construction Loan Program for low-energy homes and net-zero homes. Additionally, Minnesota established an on-bill repayment program for electric and natural gas utility customers for energy efficiency improvements or renewable energy installations while Mississippi authorized state agencies and public universities to enter into energy savings performance contracts up to 20 years in length.
Eight states released an action plan in May detailing an agreement originally announced last October to put 3.3 million zero-emission vehicles (ZEVs) on the road by 2025. That's more than 15 times as many ZEVs projected to be on the road in the entire U.S. by 2015. The plan—agreed to by California, Connecticut, Maryland, Massachusetts, New York, Oregon, Rhode Island and Vermont—calls for consumer incentives to promote ZEVs such as high-occupancy vehicle (HOV) lane access and building additional charging stations. The plan also requires establishing rates for charging vehicles that are competitive with gasoline and supporting the adoption of public and private ZEV fleets.
An energy efficiency program, Ameren, Missouri’s largest electric utility, exceeded its first-year target and yielded a reduction in energy use by 390,000 megawatt-hours. The utility offers seven residential programs and four commercial efficiency programs; upon evaluation the residential program yielded a cost-benefit ratio of $3.64 in savings for every dollar in expenses. The state paved the way for the program by enacting legislation in 2009 allowing the utility to recover the costs for energy efficiency investments at rates similar to what it receives for investments in new power plants or other infrastructure.
New Jersey’s acting attorney general has issued a letter stating that New Jersey will propose a repeal of administrative regulations associated with the Regional Greenhouse Gas Initiative (RGGI) in July, formally concluding the states withdraw from the regional cap-and-trade program. The state’s Superior Court ruled in March that Governor Chris Christie did not engage public opinion when ending the state’s participation in RGGI in 2011, violating administrative procedure and requiring the state to take additional action.
The U.S. Energy Information Administration (EIA) this month cut the estimate of technically recoverable oil in California’s Monterey shale formation by about 96 percent—from 13.7 billion barrels to 600 million barrels. The original estimate, released in 2011 by a Virginia-based engineering company assumed that the oil would be more easily recoverable. The EIA still estimates that the Monterey Shale—covering 1,750 square miles and running from Los Angeles to San Francisco—has more crude oil than anywhere else in the lower 48 states and nearly four times the amount of the Bakken shale in North Dakota. Hydraulic fracturing and horizontal drilling have allowed access to formations such as the Bakken and Pennsylvania’s Marcellus shale formation that were previously uneconomical to develop. However, California’s Monterey shale formation’s unique geology has made it more difficult to access the resource and hydraulic fracturing has not produced the same results.
In May, the CEO of Southern Company announced that the organization will consider allowing third party financing for solar energy installations. The announcement came at the organization’s annual meeting in response to the rapid increase in solar installations in the utility’s territory. Currently, Georgia Power, a Southern Company subsidiary, and municipal and cooperative utilities are the only authorized sellers of electricity in Georgia, prohibiting third-party financers from entering the market. Also in May, Georgia regulators unanimously approved Georgia Power’s power purchase agreement of 250 MW of the Blue Canyon Wind Phase II and VI wind farms in Oklahoma. This agreement will add wind energy to the state’s portfolio beginning in 2016.
Mars, Inc. announced a new agreement on a 200 MW wind farm in northwestern Texas that will meet all of the domestic electricity needs of the organization. The energy created from the wind farm will meet 24 percent of the organization’s global factory and office carbon footprint. This action represents the largest renewable energy commitment of any food manufacturing business in the U.S.
The U.S. Environmental Protection Agency (EPA) released long-anticipated carbon dioxide emission standards for existing power plants. The proposed Clean Power Plan requires the power sector in each state to cut carbon dioxide emissions 30 percent below 2005 levels by 2030. To do this, EPA is proposing state-specific emissions goals. The states will be given the flexibility on how they can comply with the reduction standards. The proposed rules will soon be open for public comment for 120 days. See NCSL’s Info Alert and updated web brief for more details.
The U.S. Department of Energy (DOE) officially stopped collecting fees from rate-payers that would go to the Nuclear Waste Fund for the purpose of paying for a national storage site for spent nuclear fuel. The cessation of collection was mandated last year by a federal appeals court because DOE could not “accurately determine the adequacy” of the annual fees to cover disposal costs, but officially went into effect May 16. There is no word on whether development of the Yucca Mountain storage site, originally planned to be a repository for spent nuclear fuel, will go forward.
The U.S. Court of Appeals for the District of Columbia upheld EPA’s update to the national ambient air quality standard for fine particulate matter. The court found that EPA offered reasonable explanations in how it came to the findings that the standard should be tightened, and that scientific evidence supported the revisions. On May 6 the same court upheld EPA’s 2013 renewable fuel standards, finding that the agency had “wide latitude” to consider the appropriate fuel mandates.
The Bureau of Ocean Energy Management (BOEM) filed a status update on the new environmental assessment for oil and gas leases in the in the Chukchi Sea off the coast of Alaska, as mandated by the courts. The update contends that the agency will finish the draft environmental assessment by October and will release the final assessment in February 2015. If the timeline stays, leases in the Arctic Ocean for oil and gas development could be open by summer 2015.
The White House held its 2014 Energy Datapalooza event on May 28, which used massive quantities of data showing how energy is consumed to highlight public-private efforts to drive clean energy innovation. Among the innovations showcased at the event was new software that could help state and local air quality officials measure carbon emission reductions associated with efficiency and new renewable generation.
EPA announced they are seeking public comment on what type of information can be reported and disclosed for hydraulic fracturing chemicals and suggestions on approaches for obtaining this information.
The National Association of Regulatory Utility Commissioners (NARUC), the National Association of State Energy Officers (NASEO) and the National Association of Clean Air Agencies released joint principles to encourage EPA to take into account energy efficiency measures when it proposes its new rules on limiting carbon emissions from existing power plants. The principles are general and urge EPA to look at what states are already doing to reduce emissions and more efficiently use electricity, when drafting its compliance requirements for the new rules.
While it is widely acknowledged, even by those in the industry, that pipeline infrastructure in certain parts of the country is decades past its “replace by” date, there are often multiple interwoven factors, including cost, overlapping jurisdiction and public impacts that slow down this process. Please join us on June 18 for a webinar that will explore how natural gas utilities are planning to overcome these obstacles to bring the nation’s system of natural gas pipelines into the 21st century. Registration is available here.
Today, large commercial nuclear reactors generate approximately 20 percent of the nation’s electricity and contribute 60 percent of the nation’s carbon-free electricity. However, an aging reactor fleet, rising costs, safety concerns, and increasing pressure from low-cost natural gas pose challenges for the industry. Small Modular Reactors (SMRs) offer the potential to mitigate some of these challenges. Please join us on June 19 for a webinar exploring the unique characteristics of SMRs and their potential role in the nuclear energy industry as well as discuss state and federal efforts to support development of SMR technologies. Registration is available here.
Please join us in Minnesota in August for NCSL’s annual Legislative Summit. NCSL’s Energy Policy Summit pre-conference will take place on Aug. 19 and includes sessions on the future of domestic energy sources, the benefits and challenges of U.S. natural gas exports, and how innovative technologies are driving change in the electric industry. Additional sessions will explore how this year’s polar vortex impacted the energy utility sector, how the nation’s abundant supply of crude oil and natural gas is driving industrial growth and influencing state energy planning, and how new technologies are driving dramatic changes in the electric system. Register today—early bird rates are available through June 11.
As states reach higher levels of renewable energy, challenges can arise because of larger amounts of wind and solar energy on the electric grid. Although power systems have been designed to incorporate the variable and uncertain nature of energy demand, renewable energy can add to this variability. This webinar explores the variety of solutions are available to reduce these impacts, and how states can cost-effectively integrate renewables into the power system. View the recording and presentation slides from this May 29 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. View a recording and presentations from this March 20 webinar to hear the latest on how different state RPS implementation costs and benefits compare, and the reasons for variations.
Energy efficiency on-bill financing policies help eliminate cost barriers by allowing consumers to finance efficient furnaces, air conditioners, lighting and other efficiency upgrades and pay finance costs on their energy bill. View NCSL’s newest resource on this topic, which provides an overview of the financing mechanism and a detailed listing of 50-state legislative and utility activity on this topic.
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