Plugged In | NCSL’s State and Federal Energy Newsletter

 

SPARKS OF NEWS

  • Historic Deals and Solar Power: Microsoft Corp. struck the biggest corporate solar deal in U.S. history, agreeing to purchase 315 megawatts of solar from two projects in Virginia. This purchase brought Microsoft’s renewable energy portfolio to 1.2 gigawatts globally and allowed the company to reach its target of powering 50 percent of its data centers worldwide with renewables. In other solar news, developers in China have created a solar panel that produces electricity in the rain. The panels include two transparent polymer layers—placed atop solar photovoltaic cells—that allow raindrops falling on the panels to create friction as they roll off, generating a static electric charge.
  • Eat Your Mac & Cheese: Annie’s, Inc., the popular manufacturer of organic macaroni and cheese, will start selling two products aimed at reducing carbon emissions. The new, boxed mac and cheese will be made using restorative farming practices, which helps sequester carbon dioxide in soil by rotating crops, such as wheat and golden peas.
  • ‘Hurricane Cora’ Made Landfall in Virginia: The U.S. Department of Energy's Clear Path VI simulation held on May 3 brought together government and industry participants to prepare for the 2018 hurricane season. DOE designed the simulation in partnership with the Federal Emergency Management Agency to build cross-sector relationships, highlight interdependencies between critical energy infrastructures and test the energy sector’s hurricane response plan.
  • Microgrids Heat Up in Hawaii: The Hawaii Electric Light Co. is considering installing solar and battery storage microgrids to provide backup energy generation for rural communities facing extended power outages caused by lava flow from the Kilauea eruption.
  • Solar Beats Biomass in 2017: According to U.S. Energy Information Administration data, in 2017, solar energy generation surpassed biomass energy generation for the first time. While biomass energy generation has remained constant over recent years, solar capacity continues to grow.

STATE LEGISLATIVE UPDATES

Increase, Decrease or Hold Steady?

Electric grid worker.The Maryland legislature rejected two bills to significantly increase the state’s renewable energy requirements. House Bill 878 would have increased the state’s renewable portfolio standard (RPS) to 100 percent by 2030, while House Bill 1453 would have increased Maryland’s RPS to 50 percent by 2030. In rejecting the measures, legislators cited concerns about increased costs to customers and a need for more information on the costs and benefits of the state’s current renewable energy requirement of 25 percent by 2020. Maryland’s Department of Natural Resources is conducting a study of the costs and benefits of the state’s renewable energy incentives and is expected to release the report in late 2019. Connecticut and New Jersey enacted legislation to update their RPS requirements. Senate Bill 9 increases Connecticut’s RPS to 40 percent by 2030, while New Jersey Assembly Bill 3723 increases the state’s renewable energy requirements to 50 percent by 2030 and updates the solar energy requirements. Additionally, at least a dozen states considered or are considering legislation this session to update their renewable energy requirements. While many of the bills introduced would increase state renewable energy commitments, at least two states—New Hampshire and North Carolina—introduced legislation to decrease their requirements. Pennsylvania introduced legislation to update the solar energy requirements within its RPS policy. Notably, at least two other states—Colorado and New York—introduced legislation to increase their renewable energy requirements to 100 percent. Although New York’s legislation is still pending, Colorado’s bill stalled.   

Rooftop Rate Debate Continues

Electric grid substation.Connecticut, Kentucky, Michigan and New Hampshire have joined the growing lists of states discussing the future of net metering policies. Connecticut enacted legislation to end the state’s net metering program, among other provisions. Senate Bill 9 ends net metering and replaces it with two options that customers can choose between. The first is a buy-all, sell-all structure that requires net metering customers to sell all generation back to the utility at a price that will be determined by the Public Utilities Regulatory Authority (PURA). The second option is a tariff structure with rates that will also be determined by PURA. Existing net metering customers will be grandfathered through 2039. A Kentucky bill, House Bill 227, that would have significantly altered the state’s net metering policies, died in the Senate in the last days of Kentucky’s legislative session. The contentious bill made a turbulent journey through the legislature, undergoing several amendments and incorporating many compromises, which resulted in much confusion over the bill’s effect on net metering. The latest version of the bill would have required the Kentucky Public Service Commission to set compensation rates for net metering customers, established requirements for how regulators determine compensation rates and provided for grandfathering of existing net metering customers for 25 years. In response to a decision made by the Michigan Public Service Commission to replace retail rate net metering, a bipartisan group of Michigan legislators have introduced a package of five bills to restore “fair-value pricing” for renewable energy exported to the grid and remove the state net metering cap. Finally, the New Hampshire Legislature approved Senate Bill 446 that would increase the capacity limits for systems eligible to participate in the state’s net metering program. The bill would increase system capacity limits from 1 megawatt (MW) to 5 MW. The bill also directs the New Hampshire Public Utilities Commission (PUC) to begin developing interim rates for larger generators—between 1 MW and 5 MW. All projects under this interim rate will be grandfathered in for 12 years. According to the bill, the PUC must also determine a final compensation rate for these systems within three years, which considers the costs and benefits of the net metered projects. The bill is now on Governor Chris Sununu’s desk. 

Energy Efficiency Optional

Worker installing solar panels.The Iowa legislature enacted a bill that will make significant changes to the state’s energy efficiency program. Senate File 2311 encompasses three major efficiency provisions. First, the bill removes any requirements for energy efficiency programs for municipal utilities and electric cooperatives, which together serve roughly one-third of homes in Iowa. Second, the bill establishes a utility spending cap for efficiency programs of two percent of the utility’s expected annual revenue. Iowa’s largest utility, MidAmerican Energy Co., spends roughly 7.7 percent of revenue on energy efficiency measures—an amount well over the new spending cap. Third, the bill allows utility customers to opt out of paying for any utility efficiency or demand response programs offered if the utility’s package of programs doesn’t pass the Ratepayer Impact Measurement test (a measurement of program cost-effectiveness), a policy that is nationally unprecedented. The bill passed the Senate and was then signed by Governor Kim Reynolds.

 

Carbon Policies Victims of Short Sessions 

Oregon State house.Carbon policies were a priority for the state legislators and governors in Oregon and Washington this year. However, these efforts appear to be victims of the states’ short legislative sessions. Oregon fell short of passing House Bill 4001, which would have paved the way for the state to join California’s cap-and-trade program. Washington legislators were unsuccessful in passing Senate Bill 6203, one of the many bills introduced this session to establish a carbon tax. Despite this defeat, Washington is not giving up: just days after the legislative session ended, a coalition of environmental groups filed a ballot initiative with Washington’s secretary of state to establish a carbon tax. Additionally, Virginia is grappling with its own carbon policy challenges. Before leaving office, former Governor Terry McAuliffe signed Executive Directive 11 that requires the Department of Environmental Quality to draft regulations to cap carbon emissions and formally join the Regional Greenhouse Gas Initiative (RGGI)—a nine-state carbon cap-and-trade program. However, without approval by the Legislature the state cannot spend the revenues from RGGI auctions. Legislators introduced House Bills 1365 and 1344 that would have enabled Virginia to directly auction the allowances and invest the revenues in programs that benefit the public; however, these bills were defeated. Instead, legislators passed House Bill 1270 that prohibits the governor or any state agency from establishing a cap-and-trade program or adopting a regulation that leads to participation in RGGI. The bill was subsequently vetoed by Governor Ralph Northam.

STATE ENERGY NEWS

Nuclear Closures Resume

Nuclear stacks.After a year in which the nuclear power industry seemed to stabilize, with several states passing and implementing new policies aimed at supporting at-risk nuclear plant finances, 2018 has brought with it a return to news of nuclear plant closures. While the closure of the Oyster Creek plant in New Jersey has been scheduled for around a decade after a deal struck with the state that allowed the plant to avoid building costly cooling towers, officials announced that the plant would close one year ahead of schedule. In January, California regulators approved the early closure of the state’s last operating nuclear plant, Diablo Canyon, by 2025. That same year may also be the last for the Duane Arnold plant in Iowa, according to its owner, who said the plant would likely be forced to close after its current power purchase contract expires. And after several failed attempts to push nuclear support policies in Ohio, FirstEnergy Corp. officially announced what it had long suggested was coming: the company will close its three nuclear plants in Ohio and Pennsylvania—a total of around 4,000 megawatts (MW). In its announcement, FirstEnergy asked the federal government to intervene and the Trump administration appears poised to deliver, with Energy Secretary Rick Perry considering another proposal to keep struggling nuclear and coal plants running. The New Jersey legislature also took action, passing a new law to provide financial support to struggling nuclear plants, making it the fourth state to pass such a measure. For more information on the issue of premature nuclear plant closures, the factors driving this trend and what states are doing in response, please read NCSL’s report, “State Options to Keep Nuclear in the Energy Mix.”

Gas on the Back Burner

Natural gas pipelines.Natural gas may be the new fuel of choice in many regions, but several states have taken steps to block new gas-fired electric generation. With the Shale Revolution, natural gas has grown to become the largest source of electric generation in the U.S., at 32 percent in 2017. It jumped nearly 10 percent over a decade—replacing much of coal and nuclear’s lost capacity. At the same time, the industry may face new headwinds as states push renewables, efficiency and storage. Arizona regulators recently rejected the integrated resource plans from two utilities, saying they rely too much on gas. Regulators placed a temporary freeze on new gas plants and told the utilities to come back with plans that feature more renewable development. The clean energy push in California has resulted in one company suspending its proposal for a new gas plant, while another announced the closure of three gas plants in the state. Meanwhile, plans to build gas plants in Massachusetts and Michigan have also faced opposition from environmental groups. Still, in some cases, it’s utilities that are seeking other options, including an Oregon-based utility opting to contract for surplus hydropower rather than building a new gas plant. The dropping costs of renewables, which have reached price parity with gas in some markets, along with renewable mandates, have further strained gas’ decade-long growth in the electric sector. 

New Jersey Gears up for Offshore Wind

Wind turbines against a blue sky.Utility regulators in New Jersey approved an order to begin the process of soliciting 1.1 gigawatts (GW) of offshore wind capacity. This order was filed in response to Governor Phil Murphy’s executive order that calls for the full implementation of the Offshore Wind Economic Development Act. The Board of Public Utilities’ order directs agency staff to establish an interagency Offshore Wind Task Force that will develop a strategic plan for implementing the governor’s executive order, and to prepare a Regional Offshore Wind Energy Roundtable that will facilitate discussion on offshore wind among other states in the Northeast and Mid-Atlantic region. The order also directs the staff to begin the rulemaking process to establish the funding mechanism for offshore renewable energy credits, to prepare a solicitation for the initial 1,100 MW of offshore wind capacity and to work with offshore wind developers and stakeholders to establish project requirements. New Jersey has a goal of developing 3.5 GW of offshore wind capacity by 2030. 

Record-Breaking Investments in Electric Vehicle Infrastructure

Electric car with plug.On June 1, California, New York, and New Jersey announced some of the largest-ever investments in electric vehicle charging infrastructure. The California Public Utilities Commission (CPUC) approved $738 billion in new projects. The projects include $22 million to build fast-charging stations across the state and $343 million and $236 million from Southern California Edison and the Pacific Gas and Electric Company, respectively, to build charging infrastructure supporting medium and heavy-duty vehicles. CPUC requires a significant portion of the funding to be spent in low-income neighborhoods, many of which have some of the worst air pollution in the state. New York Governor Andrew Cuomo pledged $250 million in funding through 2025 to support the state’s electric vehicle expansion initiative, EVolve NY. New York Power Authority trustees have already approved $40 million of funding to install fast-charging stations along major highways and to establish “model communities” to test innovative infrastructure and technologies. In New Jersey, the Public Service Enterprise Group, the state’s largest utility owner, pledged $300 million towards charging stations across the state. Meanwhile, Nevada plans to invest a portion of the funds they receive from the Volkswagen “Dieselgate” settlements in electric vehicle charging stations as the state reports growth in usage of existing charging stations.

FEDERAL ENERGY NEWS

LNG Takes to the Sea

The transformation of the U.S. gas industry from a domestic disruptor to a global game-changer took another step forward in March. The Cove Point liquefied natural gas (LNG) export terminal in Maryland shipped its first cargo, becoming the second LNG export facility in operation within the lower 48 states. The first, Sabine Pass in Louisiana, has been in operation for two years. It is expected that Cove Point will focus on shipments to Europe, in addition to having lined up long-term contracts with Japanese and Indian buyers. Sabine Pass has seen buyers predominantly from Asia and Latin America—with Mexico and South Korean being the largest importers. There are four additional LNG export terminals under construction and U.S. exports are expected to increase three-fold in the next two years as the facilities become operational. Already, the impacts have reverberated within the global market as the diversity of suppliers increases contracting options and brings the market closer to a dynamic global market, similar to other commodities. 

What’s Up With the Waste?

DOE nuclear outdoor storage.For an issue that’s been frozen in policy gridlock for ages, there is quite a lot to talk about when it comes to nuclear waste. For starters, the U.S. Department of Energy has tasked a group with studying the potential for storing plutonium at the Waste Isolation Pilot Plant (WIPP) in New Mexico. WIPP is the only permanent repository for nuclear waste in operation in the U.S.—it currently houses waste from the nuclear weapons complex—and the group of 15 scientists will try to determine whether the site could also house plutonium. An estimated 34 metric tons of surplus plutonium exist around the world, most of which is in the U.S. and Russia. Meanwhile, companies proposing to build and operate consolidated interim storage facilities in Texas and New Mexico have continued to push the concept as a viable temporary solution to the commercial nuclear waste question. While spent nuclear fuel is supposed to be stored in a national repository, Nevada has remained steadfastly opposed to the construction of a repository at Yucca Mountain. It won another round in the fight with the federal government recently when representatives blocked funding for Yucca in recent Congressional budget negotiations.

Future of Baseload Power

Nuclear power station.Facing the closure of nuclear and coal power plants, the Department of Energy outlined a plan to establish a “strategic electric generation reserve” and to require utilities to purchase electricity from plants at risk of closure. Coal and nuclear power facilities operate independently from pipelines, wind and sun, and have struggled in recent years to compete with lower-cost natural gas and renewable energy facilities. The federal government and proponents of the DOE plan to shore up the finances of floundering plants argue the reliability of coal and nuclear energy generation is critical to meeting energy demands and, therefore, to national security. In fact, that appears to be the likely argument that the Trump administration plans to use in a new directive that could force grid operators to purchase higher-cost electricity from struggling coal and nuclear plants. Opponents of the plan believe alternative solutions to back up the grid could avoid unprecedented government interference. And some grid operators worry government intervention in energy markets will lead to market deterioration and higher energy costs for consumers. Environmentalist organizations view the proposal as a poor investment in dirty and risky energy resources and have vowed to fight the proposal in court. Federal Energy Regulatory Commission officials, who may be critical to the plan’s success, have not signaled support for the move and could stand in the way of its implementation.

GAO Report on Pipeline Safety Programs

Workers on pipelineThe transformation of the U.S. gas industry from a domestic disruptor to a global game-changer took another step forward in March. The Cove Point liquefied natural gas (LNG) export terminal in Maryland shipped its first cargo, becoming the second LNG export facility in operation within the lower 48 states. The first, Sabine Pass in Louisiana, has been in operation for two years. It is expected that Cove Point will focus on shipments to Europe, in addition to having lined up long-term contracts with Japanese and Indian buyers. Sabine Pass has seen buyers predominantly from Asia and Latin America—with Mexico and South Korean being the largest importers. There are four additional LNG export terminals under construction and U.S. exports are expected to increase three-fold in the next two years as the facilities become operational. Already, the impacts have reverberated within the global market as the diversity of suppliers increases contracting options and brings the market closer to a dynamic global market, similar to other commodities.

NEW NCSL ENERGY RESOURCES AND UPCOMING EVENTS

Register for NCSL’s Legislative Summit

NCSL Legislative Summit Los Angeles logo.Registration is open for NCSL's 2018 Legislative Summit, which will take place July 30-Aug. 2 in Los Angeles. Additionally, the NCSL Task Force on Energy Supply will meet on Sunday, July 29 and explore a range of topics including carbon capture, energy solutions for rural communities, whether 100 percent renewable power is a feasible state policy, the prospects for renewable natural gas and much more. The half-day annual Energy Policy Summit on Monday, July 30 will examine the adoption of alternative fuel vehicles, the push towards electrification and the benefits and challenges, as well as recent developments to support smart communities. These events are free and open to the public, but registration is recommended. Please contact Kristy Hartman with any questions.

Powering Into the Future

State Legislature magazine May 2018 cover.The century-old energy supply model, where utilities produce electricity in large, faraway power plants and deliver it over long distances, is being transformed. New industry players, new technologies and an increasing number of customers who want to produce their own electricity are driving the change. Read this feature magazine article in NCSL’s State Legislatures magazine to learn more about these new technologies, and how they will require a modernized power grid and new regulatory approach in order to function.

Hardening the Grid: State Trends for Energy Security

Report cover for Hardening the Grid.Questions surrounding energy security are back in the spotlight after an eventful 2017. The most devastating hurricane season of the modern era was complemented by persistent wildfires, flooding and other natural disasters that wreaked havoc on electric infrastructure. Read the latest report highlighting state legislative trends surrounding a variety of energy security measures.

Plugged into Solar

Shared solar provides access to commercial and residential customers who have old or shaded roofs, rent their home or business, or have limited access to capital and financing. A growing number of stateNCSl webinar logo. policymakers and utilities are creating these programs since they can offer solar to a broader array of income levels, while allowing the siting of solar generation in places where it can stabilize the grid and lower distribution costs. View the resources from this webinar, which explored the emerging sector, outlined the opportunities and challenges it presents, and discussed state policy options for creating effective shared solar programs.

Gas Taxes Down, EV Fees Up

Graphic image showing cars on the road.Current electric vehicle sales only represent about 1 percent of all light-duty car sales in the U.S., but as sales continue to climb, there are concerns that this may lower gasoline tax revenues. In 2017, state legislators considered more measures implementing new electric vehicle fees than any other action related to electric vehicles. Read this trend piece in NCSL’s State Legislatures magazine, which highlights recent state legislative trends related to special fees for certain hybrid and electric vehicles.

EXTERNAL ENERGY RESOURCES AND PUBLICATIONS

National Solar Jobs Census 2017

Solar panels, wind turbine and sunflowers against bright blue sky.The Solar Foundation released the 2017 edition of the annual National Solar Jobs Census that summarizes solar employment trends. The census found that more than 250,000 Americans worked in solar last year, which represents a 3.8 percent decline since 2016. The full report includes 2017 solar job trends, summarizes solar jobs by state and includes other key findings such as workforce demographics.

U.S. Energy and Employment Report                             

Photo collage of wind pylons and solar panels.A study released by the National Association of State Energy Officials and Energy Futures Initiative found that last year the energy sector employed 6.5 million people and added 7 percent of all new jobs. The report details energy jobs data by state and breaks employment within the sector into four areas: transmission, distribution and storage; energy efficiency; electric power generation and fuels; and motor vehicles.