PLUGGED IN | NCSL’S STATE AND FEDERAL ENERGY NEWSLETTER

10/3/2016

Vol. 4 Issue 4 |  October 2016

 
 

SPARKS OF NEWS

  • Apple Doesn’t Fall Far from the Electrici-tree: Apple Inc. is the latest company to venture into the world of wholesale electricity generation after the Federal Energy Regulatory Commission (FERC) granted the tech giant approval to sell excess electricity into the grid. According to its filings, Apple owns nearly 150 megawatts (MW) of generation, along with a contract for to purchase 130 MW of power from a California solar farm. Google received similar approval in 2010, while other companies with generating assets—mostly renewables—have also explored this option.
  • Corporations Out-Wind Utilities: Corporations surpassed utilities as buyers of wind power in 2015, according to Rocky Mountain Institute, with up to 75 percent of quarterly wind power purchase agreements going to corporations.
  • Show Me the Light: A fire at Puerto Rico’s largest power plant left 1.5 million homes—a majority of the country—without power for several days. The blackout comes as the island struggles through a decade-long economic crisis and economists are estimating that the outage caused millions of dollars in losses.
  • Anchors Away for Solar: Along with a handful of other countries, the U.S. is beginning to install floating solar photovoltaic arrays, or “floatovoltaics.” In addition to producing renewable energy, these floating solar panels reduce algae blooms and prevent evaporation by shielding bodies of water from the sun.
  • Planes, Trains and Automobiles: According to the U.S. Energy Information Administration, transportation has eclipsed power plants in carbon dioxide emissions for the first time since 1979, emitting nearly 2,000 million metric tons of carbon dioxide per year. The government agency also reported that U.S. gasoline consumption hit an all time record in August, surpassing the previous record set in July 2007.  

STATE LEGISLATIVE UPDATES

Biomass for the Masses

Biomass—which provided 5 percent of energy in the U.S. in 2015—is a baseload energy resource that has struggled to compete in certain markets due to high overhead costs, plant efficiency requirements or low electricity prices. California and Maine have recently taken action to address this. California enacted legislation in September (S.B. 859) that requires electric utilities to enter into five-year contracts for 125 megawatts of biomass capacity from high hazard zones, such as fire-threatened areas near critical and utility infrastructure. The bill also establishes a working group to expand woody biomass markets and make recommendations to the legislature on further action. In May, Maine enacted legislation (S.P. 689) that directs the Public Utility Commission to initiate a competitive solicitation for utilities to enter into two-year contracts for up to 80 MW of in-state biomass. The legislation appropriates funds for contracts at above-market prices and sets parameters for eligible facilities. Contracts are meant to benefit ratepayers, provide in-state benefits—including capital investments, jobs and services—use in-state fuel, reduce emissions and promote fuel diversity and reliability.

Nuclear Balancing Act

Nuclear power plant control room.The prospect of further nuclear plant losses has caused some states to search for policy solutions to retain the carbon-free, baseload power resource. Solutions, however, have been hard to come by as states with competitive electricity markets must walk a tightwire of providing support without tripping over FERC jurisdiction. In August, New York became the first state to implement such a policy after the Public Service Commission approved a program to offer Zero Emissions Credits (ZECs) to nuclear plants—a payment for every megawatt-hour of carbon-free electricity produced. A bill in the Illinois General Assembly (S.B. 1585) would rely on a similar ZECs mechanism, while the Connecticut General Assembly considered legislation (S.B. 344) that would have permitted the state’s lone nuclear plant to bypass daily auctions on the regional wholesale market for up to half of its generation. And that’s not to mention a number of other initiatives. While New York’s ZECs program may have saved one nuclear plant, the list of upcoming nuclear closures has continued to grow. For more information, visit “The News Reactor: NCSL’s Nuclear Newsletter.”

Capping Emissions 

The California Legislature enacted S.B. 32 in September, which extends the states greenhouse gas emissions requirements to a 40 percent reduction from 1990 levels through 2030. Governor Brown had announced this requirement in an executive order previously. A companion bill, A.B. 197, grants the legislature more authority in drafting regulations to achieve this reduction. Notably, these bills do not name a specific methodology for these reductions—such as the state’s existing cap and trade program. Any measure that raises taxes or fees requires a two-thirds majority vote and legislation passed on a simple majority. Further north, the Washington Department of Ecology adopted a rule to reduce carbon emissions from companies that emit more than 100,000 metric tons annually. The rule establishes individual caps that decline 5 percent every three years and includes specific provisions for energy-intensive, trade-exposed industries. Businesses subject to the rule can comply through emissions reductions, offset projects or purchasing credis from specific carbon markets. In 2015, Governor Jay Inslee directed the department to develop emission reduction regulations.

Looking Offshore

Wind turbines.Massachusetts enacted legislation (H.B. 4568) last month that, among other provisions, requires distribution companies to seek 1.6 gigawatts (GW) of offshore wind power and 1.2 GW of hydropower or other renewables. Meanwhile, the Bureau of Ocean Energy Management announced a proposed lease sale of more than 122,000 acres offshore of North Carolina for commercial wind energy leasing. Additionally, following the completion of the first U.S. offshore wind farm off Rhode Island’s Block Island, the Department of Energy (DOE) and the Department of the Interior (DOI) announced a collaborative strategic plan to accelerate the development of offshore wind energy. The report is designed to help reach a goal of 86 GW of offshore wind in the U.S. by 2050 and identifies key challenges and specific actions that DOE and DOI can take to address those challenges.  

STATE ENERGY NEWS

Setting New Precedents

Nevada became the first state in the nation to not grandfather in existing customers when the state’s Public Utility Commission (PUC) revised net metering provisions last year. Now, the state has revised that precedent by restoring retail net metering for the more than 30,000 residential customers who applied for systems before 2016. The decision does not affect applications completed after the Dec. 31, 2015 deadline. In the same week, a state district court ruled against the PUC’s 2015 decision, stating that customers were not given adequate notice of the change in rates and sent the case back to the PUC. The 2015 PUC decision reduced compensation from the retail rate to the wholesale rate and tripled fees for net metering customers. Reaction to these changes extended beyond the PUC: Governor Brian Sandoval convened a task force to address this topic, he announced new appointments to the PUC and a ballot measure was submitted on this topic.

Prohibiting Pipelines

Natural gas pipeline.In September, the federal government temporarily halted the construction of a section of the Dakota Access Pipeline, which is supposed to span more than 1,000 miles and carry 570,000 barrels of crude oil a day from the Dakotas to Illinois. The Justice Department and several other agencies acknowledged complaints from the Standing Rock Sioux Tribe and other tribal nations that their concerns had not been fully heard before the pipeline was approved. The tribe has said that the pipeline could damage water supplies and ancestral cultural sites. Debate over pipelines is also playing out in other parts of the country. The Massachusetts Supreme Judicial Court ruled against the state’s Department of Public Utilities’ requirement that electricity customers help subsidize the construction of private gas pipelines. The court said that private companies should bear all the financial risks. The decision comes in response to one of the proposed expansions to the Alqonquin pipeline, which delivers natural gas to New England.ncluding solar, hydroelectric and nuclear energy. Lastly, Constellation Energy announced a partnership with Sunrun to offer rooftop solar energy to retail residential customers in four east coast states. 

Low-Income Customer Dilemma

New York state has several initiatives intended to increase customer access to and participation in energy efficiency and renewable energy projects that have encountered barriers recently. First, Governor Mario Cuomo and the Public Service Commission (PSC) halted energy service companies from offering utility services to low-income customer based on higher-than-average customer charges for service. Last month, the Department of Public Service suspended efforts to address low-income customer participation in the state’s Shared Renewables community distributed generation initiative after no workable solutions were identified for decreasing barriers for increasing low-income customer participation. Barriers previously identified include credit scores and debt-to-income ratios required for leases and power purchase agreements, and up-front costs for loans and ownership of distributed generation resources. According to the governor’s website, approximately 25 percent of all electric customers in the state are considered low-income. The state’s Reforming the Energy Vision (REV) policy seeks to limit energy costs for low-income customers to no more than six percent of household incomes.

Peace on the Net Metering Front

solar panels.While several states around the country are locked in heated debates over net metering and the valuation of solar energy, Colorado’s largest utility signed onto an unprecedented settlement along with 26 other parties. In August, Xcel Energy struck a compromise with stakeholders and the Colorado Energy Office on a utility rate case that would have added fixed grid-use charges to customer bills and reduced volumetric charges for solar customers. Instead, the settlement will institute two voluntary pilot programs: a time-of-use rate trial that would charge customers more for the power they use during hours of peak demand, and a time-differentiated rate demand charge program that would base bills on customers’ single highest use of power. Additionally, the plan requires Xcel to add 225 MW of solar to its voluntary clean energy program between 2017 and 2019, and also to add 105 MW of new capacity to community solar gardens. Finally, the agreement approves Xcel’s Renewables*Connect proposal, allowing Xcel to build a 50 MW solar facility and sell shares of the installation statewide to the public.

Methane Leak Sends Storage Efforts Sky-High

While energy storage has been growing steadily, nothing appears to have done as much to prompt rapid storage development as the Aliso Canyon methane leak in California. The natural gas storage facility sits at around 20 percent of capacity. To address reliability concerns, the California Public Utilities Commission (CPUC) has directed utilities to deploy demand response and energy storage—some of which is expected to be operational by the year’s end. Utilities in the region are developing 160 MW of storage, along with 50 MW of load reduction through utility-connected smart meters. In addition, the California Legislature passed four bills to further the deployment of storage. On the East Coast, Massachusetts released an energy storage report calling for policies that support energy storage, along with the procurement of 600 MW of storage capacity. The Massachusetts legislature recently passed H.B. 4568, which creates a storage mandate—the third of its kind in the U.S., after California and Oregon. And finally, Congress will consider an investment tax credit (ITC) for energy storage, similar to the ITC for solar. According to GTM Research, the storage industry is expected to grow ninefold between 2015 and 2021, from 226 MW to 2.1 GW.

FEDERAL ENERGY NEWS

Privatizing SPR

The House Natural Resources Committee approved H.R. 5259 that would end the administration’s pause in federal coal leasing. The bill would require the administration to finalize its programmatic environmental impact statement on the coal-leasing program.

Coal-Leasing Back on the Table

The House Natural Resources Committee approved H.R. 5259 that would end the administration’s pause in federal coal leasing. The bill would require the administration to finalize its programmatic environmental impact statement on the coal-leasing program.

Transmission Lines

The U.S. Department of Energy (DOE) released a final rule to accelerate permitting for interstate power lines on federal land, giving the developer a “simplified integrated inter-agency permitting process.”

NEW NCSL ENERGY RESOURCES AND UPCOMING EVENTS

State Actions in Support of Nuclear Generation

Nuclear power plant.Nuclear power faces a number of issues in today’s wholesale electricity markets—from low natural gas prices to competition from other generation resources. NCSL recently published “State Actions in Support of Nuclear Generation,” which tracks the actions being taken by some states to counter these forces and prevent premature nuclear plant closures. This legislative update outlines a number of policies being pursued in various states across the nation, along with a brief overview of what’s causing early retirements in the nuclear power industry. 

2015 Renewable Energy Update

Renewable energy showing wind turbines and solar panels.Renewable energy production grew rapidly in 2015. The U.S. Energy Information Administration reported that renewable energy sources generated approximately 13 percent of U.S. electricity. In the 2015 session, legislatures considered nearly 1,250 bills on renewable energy with approximately 42 states, Washington, D.C. and Puerto Rico enacting at least 185 bills. NCSL has compiled an an overview of 2015 renewable energy legislation

Drones and Critical Infrastructure

Drone.State policymakers are attempting to strike a balance between public safety and commercial use of drones near critical infrastructure. The issue is increasingly relevant as energy companies explore using drones to survey far-flung equipment. However, concerns exist over how drones could be used in attacks against these and other critical facilities. A new NCSL document, “Drones and Critical Infrastructure,” offers background and information on federal and state initiatives to address this developing issue.

Solar Energy Bootcamp Resources 

Solar panels.NCSL and NASEO Solar Energy Boot Camp: The Solar Energy Boot Camp provided attendees with tools to evaluate the state solar energy landscapes and the opportunity to gain an understanding of emerging policy developments. In collaboration with the National Association of State Energy Officials, NCSL brought together legislators, legislative staff and state energy officials for this two-day meeting that explored a number of important topics including: solar technology and recent growth, solar market potential, tools for valuing solar energy, community and shared solar models, solar integration and energy storage. View speaker presentations here

Webinar: The Next Wave of Energy Efficiency

webinar globe logo.The rapidly modernizing electric grid provides a wealth of opportunities for improving efficiency and lowering costs. Speakers discussed approaches for tapping a larger quantity of cost-effective energy efficiency opportunities and discussed research findings that states can cost-effectively meet 30 percent of their electricity needs with efficiency over the next 10 years. View slides and see presentation recording here.  

Webinar: The Future of Distributed Energy

webinar globe logo.The rapid growth of distributed solar in many states is challenging traditional utility models, rate design and customer relationships. Policymakers, regulators and utilities are debating the role of solar energy as more consumers adopt the role of energy producer. States have a large array of approaches they can consider to equitably value distributed solar resources. This webinar explored the debate and potential solutions, including community solar, utility and third-party ownership, net metering, fixed charges and fees and the value of solar. View slides and see a recording of the presentation here.

State Wind Energy Siting

Wind turbines out in field.States are recognizing the benefits of wind energy as a renewable resource that can diversify energy portfolios, meet renewable portfolio standards and reduce greenhouse gas emissions. As wind continues to expand, turbines are getting closer to property owners, leading to contentious debates in some communities. Many states have investigated statewide wind siting requirements or guidelines to bring clarity and uniformity to the siting process. View this NCSL web page for more information.

State Efforts to Protect the Electric Grid

Power grids.Recent events have highlighted weaknesses in the nation's aging electric grid and state lawmakers have been working diligently to address these issues through a variety of measures. This report offers background on many of these issues and highlights recent bills from state legislatures across the U.S. that seek to reinforce the nation's electric grid against extreme weather, cyberthreats and terrorism. In addition, the report addresses reliability issues and microgrids. You can find out more about the report, and access it by visiting this web page.

Ever-Ready Energy

SL magzine cover May 2016.Read the May cover story for State Legislatures Magazine, "Ever-Ready Energy," which discusses how states are using microgrids, distributed generation, demand response, and other technologies to build increased resiliency and reliability into electric infrastructure. 

EXTERNAL ENERGY RESOURCES AND PUBLICATIONS


LBNL Distributed Solar Report

Lawrence Berkeley National Laboratory (LBNL) released a report in August discussing innovative approaches that utilities are using to incorporate distributed solar into utility planning. The report features a comparative analysis of approximately 30 recent utility integrated resources plans or other generation planning studies, transmission planning studies and distribution system plans.

NASEO and Ceres Report, and NGA Paper

The National Association of State Energy Officials (NASEO) and Ceres released a report in September examining how improved public-private coordination on state energy policies and programs can significantly drive clean energy investment. Additionally, a paper released by the National Governors Association (NGA) discusses how states can combine efforts at demand response and energy efficiency, and explores strategies that states can use to lower energy costs and increase reliability.

New Reports from the Department of Energy 

DOE released a draft report summarizing the major themes that emerged from the regional meeting surrounding the process of developing a consent-based approach to siting nuclear waste facilities. In addition, the Department of the Interior and DOE released the publication of a joint strategic plan to continue accelerating the development of offshore wind energy in the U.S., “The National Offshore Wind Strategy: Facilitating the Development of the Offshore Wind Industry in the United States.”