PLUGGED IN | NCSL’S STATE AND FEDERAL ENERGY NEWSLETTER

6/7/2016

Vol. 4 Issue 3 | April 2016

 
 

SPARKS OF NEWS

  • Decoupling Emissions and Growth: While the global economy grew more than 3 percent between 2014 and the end of 2015, the world’s energy-related carbon emissions remained relatively consistent across this time period according to the International Energy Agency.
  • Rig Count Declines: According to the firm, Baker Hughes, the current total of active oil and gas rigs in the U.S. is 443. Compared with the same time last year, the number of active rigs has fallen by 545. Low natural gas and oil prices have dramatically decreased the incentives to expand drilling.
  • Changing Behavior with Smart Meters: Illinois Utility Commonwealth Edison (ComEd) will test whether customers with smart electricity meters use less power and shift electricity use away from peak hours of the day, thus reducing pollutant emissions more than consumers with conventional meters.
  • Solar Passes Gas, and Wind: The Energy Information Administration projects that, for the first time, solar energy installations will outpace both wind and natural gas this year. The US solar market is expected to more than double this year, growing close to 120 percent, according to GTM Research.  

STATE LEGISLATIVE UPDATES

Adaptation Fund

A New York bill that has been sent to the governor would create a climate change mitigation and adaptation account within the state Environmental Protection Fund. The account would fund municipal participation in climate smart community projects, which include flood mitigation, coastal and riparian resiliency, greenhouse gas reductions outside the power sector, adaptation planning and clean vehicle projects.

Eminent Domain

PipelinesThe Georgia General Assembly has sent a bill (H.B. 1036) to the governor that, if signed, will set a temporary moratorium on the ability of petroleum companies to use eminent domain. The moratorium would last until June 30, 2017 and give the legislature time to study existing laws related to petroleum pipelines. The bill comes in response to opposition to Kinder Morgan’s proposed Palmetto Pipeline, which would move gasoline, diesel and ethanol through Florida, Georgia and South Carolina. Following the Georgia General Assembly’s action, Kinder Morgan announced that it would suspend further work on the pipeline. South Carolina is considering similar legislation (S.B. 868), which would ban the use of eminent domain by a “private, for-profit pipeline company, including a publicly-traded for-profit company that is not a public utility.

Efficiency Revisions

Wisconsin enacted legislation last month that, among other provisions, revised the state’s energy efficiency program, called Focus on Energy. The legislation alters the quantity of funds utilities contribute to the ratepayer-supported program, by collecting a percentage of utilities’ retail sales rather than annual operating revenues. The legislation is projected to reduce funding by approximately $7 million according to Midwest Energy News. Proponents support the effort to lower customer bills while opponents say the move will increase bills by reducing customer access to efficiency services. The independent December report supported the opponents’ contention, finding that every dollar invested in Focus on Energy yielded $3 in direct benefits, and that number rose to $6 when indirect benefits were included.

Net Metering Update

Solar panels.A Maine bill to expand solar energy by establishing new procurement targets and replacing the state’s existing net metering policy with a market-based program advanced out of committee. The legislation allows investor-owned utilities to purchase and aggregate solar generation under long-term contracts that can be bid into regional electricity markets. Current net metering customers can maintain their current rates for a period of time or opt into the new policy. Meanwhile in Mississippi, two bills (H.B. 1138 and H.B. 1139) that modify Public Service Commission (PSC) oversight of electrical cooperatives in the states have been sent to the governor.  While the PSC does not oversee the electric rates of cooperatives, they do have oversight of other regulatory matters. A dispute arose between cooperatives and the PSC regarding net metering rates and legislation would prohibit the PSC from setting or establishing the level of expenditures, compensation or credits associated with a corporation's energy efficiency, net metering or other programs. Additionally, the Massachusetts legislature sent a bill to the governor that would increase the state’s net metering cap and authorize minimum bills for net metering customers; the bill is a revision of legislation that had been sent to a conference committee last year.

Clean Energy to the Max

Oregon Governor Kate Brown signed House Bill 4037 in March, enacting new solar energy incentives intended to pair with the state’s expanded renewable portfolio standard (which establishes a 50 percent mandate by 2040). Legislation creates a $0.005 per kilowatt-hour incentive for utility-scale solar generation between 2 and 10 megawatts (MW) in capacity. Applications to receive the five-year incentive are eligible through early January 2017 or until 150 MW is approved. Projects must be put into service within the first year of receiving the incentive to earn full credit. Legislation established a Solar Incentive Fund to house funding for the credit. The new renewable portfolio standard was established in a bill (S.B. 1547) that also requires the state’s investor owned utilities to halt all generation and importation of coal-produced electricity by 2035, though municipal utilities and electric cooperatives are exempted.

Keep Those Permits Moving

Oil rig at sunset.The Idaho Legislature passed a bill that will expedite the state’s permitting process for oil and gas wells. The bill (S.B. 1339) moved quickly through both chambers and was signed into law by Governor C.L. “Butch” Otter a month after its introduction in the Senate. It will limit the public comment period for oil and gas developments to 10 days, and will require the state Department of Lands to issue a permit decision within 15 days. The law was introduced after industry complained of the slow permitting process in the state. However, it drew opposition from environmentalists and others who claimed it creates rushed timelines.

Repairing PREPA

Puerto Rico’s ongoing debt crisis has only been exacerbated by the island’s public utility, the Puerto Rico Electric Power Authority (PREPA), which holds around $9 billion in debt. In order to address the issue, the P.R. Legislative Assembly passed the PREPA Revitalization Act, which—now that it is signed by the governor—allows the utility to restructure its debt and modernize its electrical system. The restructuring—agreed to by a majority of debtholders—will allow PREPA to swap out its existing debt for new securitization at 85 percent of its current value. Many hope that it will also allow the U.S. territory to diversify its energy mix and move away from its reliance on petroleum for electricity.

STATE ENERGY NEWS

California Ponders the Utility's Future

The Chairman of the California Public Utility Commission recently released a proposal seeking comment on an open docket to explore consistent evaluation of the role of distributed energy resources (DER) and the utility business model. Considerations noted in the document include utility incentives to adopt DER, utility business models and shareholder value, and the role of incentives. Included in the proposal is a pilot program for regulatory incentives for cost-effective DER deployment. The New York Public Service Commission is also continuing to evaluate similar concepts.

Utility Solar 

GTM Research identified that 2016 will be the first year that new installed capacity of utility-scale solar energy will be driven predominantly by obligations outside of a renewable portfolio standard (RPS). According to the analysis, 80 percent of utility-scale solar to date has been to fulfill RPS obligations. Recent solar energy announcements include approval by the Nevada Public Utility Commission for the city of Las Vegas to use electricity from an under-construction solar plant to power its municipal buildings. The utility Pacific Gas and Electric announced in February that nearly 30 percent of the electricity it delivers is powered by renewable energy, including 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. 

Who Can Compete with Gas?

GTM Research recently released findings that residential solar energy has reached grid parity—when the lifetime costs of a solar system are equal to or lower than electricity rates—in 20 states and is expected to reach parity in 42 states by 2016. Factors for grid parity include hardware, installation and permitting costs, as well as incentives and policies like net metering and tax credits. Additionally, Hawaiian Electric Co. Inc. and the U.S. Department of Energy announced a $4.8 million project to test photovoltaic and energy storage integration in a high renewable environment. Hawaii’s Renewable Portfolio Standard requires 100 percent of electricity to be from renewable sources by 2045

Largest. Utility. EVER!

The $6.8-billion acquisition of Pepco Holdings by Exelon Corp. has resulted in the creation of the nation’s new largest utility. The merger was the product of nearly two years of legal and regulatory back-and-forth, which finally concluded on March 23 in Washington, D.C. After several rejections and revisions to the settlement agreement, the D.C. Public Service Commission (PSC) approved the deal on a 2-1 vote. Exelon serves around 6.7 million customers in three states, while Pepco serves nearly 2 million customers in three states and the District of Columbia. Duke Energy Corp.—formerly the largest utility, with over 7 million customers in six states—moves into second place. 

Standing on Shaky Ground

The Oklahoma Corporation Commission (OCC) has introduced restrictions on wastewater disposal wells in a large section of the state in an effort to reduce the frequency of earthquakes. The OCC wants companies to inject 40 percent less wastewater in a 5,000 square-mile region in the north-central Oklahoma, where more than 400 disposal wells are located. The volume reductions are voluntary, but the OCC has said that it will take action to make the cuts mandatory if necessary. Oklahoma had 905 earthquakes of magnitude 3 or greater in 2015. Prior to 2009, the state averaged around two such earthquakes a year. In addition, the U.S. Geological Survey for the first time released a seismic map which included areas of the country most at-risk for “induced” earthquakes, like the ones in Oklahoma, alongside naturally occurring earthquakes.

FEDERAL ENERGY NEWS

Clean Line Wind

wind energy fans with sunflowersThe U.S. Department of Energy (DOE) announced in March that it will participate in the Plains and Eastern Clean Line project that seeks to construct a direct current transmission line to transmit 4,000 MW of wind energy from the Oklahoma and Texas panhandle region to the southeast. The transmission line would power 1.5 million homes and aims to be in service by 2020. This announcement marks the first use of authority granted to DOE in the Energy Policy Act of 2005 to promote transmission siting and construction. Supporters are encouraged by the possibility of low-cost renewable energy entering the southeast while opponents are concerned about the federal government’s use of eminent domain. The project has secured eminent domain powers in Oklahoma, Tennessee and Texas; Arkansas has not granted this authority to developers.

Hands Off the Atlantic

The Department of Interior (DOI) announced its proposed five-year offshore oil and gas leasing plan for 2017- 2022. Notably, the plan excludes offshore drilling in the mid and south Atlantic Ocean, following objections from the Pentagon as well as from environmental groups in those states. The offshore plan does include 13 potential lease sales, including 10 in the Gulf of Mexico and three off the coast of Alaska.

Air Quality For All

DOI’s Bureau of Ocean Energy Management (BOEM) released proposed updates to air quality regulations for offshore oil and gas operators. The proposal would update the standards for measuring emissions and would make BOEM’s air quality regulations consistent with the U.S. Environmental Protection Agency’s (EPA) air pollution regulations.

Coal Communities Get Recognized 

The Obama Administration announced the availability of $65.8 million in funding opportunities to support economic development in coal-reliant communities. These communities have seen negative economic impacts in the past few years as coal use has declined. Any community that has coal-related manufacturing or operations can apply for the funds.. 

The Cost of Cutting Corners 

A settlement was approved for the 2010 BP Deepwater Horizon oil spill in which BP will pay around $20 billion. This amount includes $5.5 billion in civil penalties—the largest ever imposed—and $7.1 billion for natural resource damages. Most of the money will be distributed among the Gulf Coast states that were affected by the spill. 

Plugging Leaks 

Workers in South Dakota reported a possible leak in the Keystone Pipeline, operated by TransCanada. TransCanada has since shut down parts of the pipeline operations in the state while they investigate the leak. The company is excavating soil around the site of where the leak was spotted but so far has not reported any environmental impacts. 

Yucca It Up 

Thirteen U.S. House members sent a letter to the House Appropriations Energy and Water Chairs urging them to ensure no language in the appropriations bills would make the Yucca Mountain nuclear waste repository unusable in the future. 

NEW NCSL ENERGY RESOURCES AND UPCOMING EVENTS

Register for NCSL’s Legislative Summit

NCSL Legislative Summit logoRegistration is now open for NCSL's 2016 Legislative Summit, which will take place Aug. 8-11 in Chicago. Register before May 23 to get the early bird special rate. Additionally, NCSL’s Task Force on Energy Supply will meet on Aug. 7 followed by NCSL’s annual Energy Policy Summit the afternoon of Aug. 7 and the morning of Aug. 8. These events are free and open to the public, but registration is recommended. Please contact Kristy Hartman with any questions.

NRI Spring Webinar Series

NCSL’s Natural Resources and Infrastructure (NRI) Committee is pleased to announce that its Spring Webinar Series will begin April 14 and run every other Thursday through June 23. Topics of the webinars will include: rural broadband, P3s, GMO labeling, Traffic Safety, water infrastructure, and distributed solar energy. Register for the free webinars 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 will discuss approaches for tapping a larger quantity of cost-effective energy efficiency opportunities and discuss research findings that states can cost-effectively meet 30 percent of their electricity needs with efficiency over the next 10 years.  Register for this May 5 webinar here.

State Forest Carbon Incentives and Policies

Forest of trees with sunlight coming through.State and federal policies can help maximize forest carbon storage, promote sustainable forest practices, benefit the environment and support forest product industries. Forests sequester and store carbon dioxide from the atmosphere, helping reduce greenhouse gas emissions. View this NCSL web brief for more information

Webinar Resources: State Forestry Policies for Carbon Benefits

FORESTThe nation’s forests are vital for humans and the ecosystem, providing rural jobs and a multitude of useful forest products, as well as flood protection and water, soil and air quality improvements. Covering more than one-third of the country’s total land area, forests annually remove and store almost 15 percent of the total U.S. carbon dioxide emissions. A number of states have developed policies to promote forest health, protect forestland and increase carbon sequestration. View a recording of this webinar, which explored the current landscape of forests, the role of forests in sequestering carbon and highlight policy opportunities and state action. 

EXTERNAL ENERGY RESOURCES AND PUBLICATIONS

Community Solar Reports

Several organizations have recently released reports on increasing community solar generation or access. The Interstate Renewable Energy Council released Shared Renewable Energy for Low- to Moderate-Income Customers: Policy Guidelines and Model Provisions, offering guidance on successful models for reaching and providing benefits to lower income individuals and households. Additionally, the Rocky Mountain Institute has released a brief highlighting the benefits for developers and utilities in reaching high-potential community solar market segments and opportunities to reduce costs.

GridEx III Public Report

The North American Electric Reliability Corp. (NERC), the electric grid’s security monitor, has released its public report on a closed-door training event called GridEx III. The event tests industry and government participants to find out how ready they are for a variety of simulated physical and cyber-threats to the electric grid. While this past year’s exercise exposed some weaknesses in communications, it also showed improvements from previous years.

Rooftop Solar Potential 

Researchers at the National Renewable Energy Laboratory used various methodologies to determine the technical potential of rooftop solar photovoltaic in the country, releasing findings last month that 40 percent of electricity—or 1,432 terawatt-hours of annual energy from 1,118 GW in capacity—could be generated from rooftop solar. 

Consumer Views on Electric Vehicles 

Electric carLawrence Berkeley National Laboratory released an analysis of the characteristics of low-priced solar photovoltaic systems in January, finding higher concentration of low-priced system in Delaware, The National Renewable Energy Laboratory has released a new report highlighting consumer opinions on plug-in and hybrid electric vehicles. The report titled Consumer Views on Plug-In Electric Vehicles-National Benchmark Report presents the findings of a study on the public's sentiments regarding PEVs, with a focus on vehicle purchasing behaviors, awareness, and barriers to acceptance. 

Corporate Clean Energy

The organization Clean Edge, Inc. released a ranking of private-sector corporate participation in the renewable energy and clean-tech fields. The top ranking companies include Walmart, Apple, Autodesk, Equinix, and Alphabet/Google. Criteria the organization used to evaluate corporations includes investments, renewable energy commitments, current quantity of electricity generated from renewable sources and emissions reductions commitments. 

Energy Employment Reports

The U.S. Department of Energy released its first analysis on energy industry jobs across all sectors of the economy. The report examined four sectors: electric power generation and fuels, transmission, distribution and storage, energy efficiency, and motor vehicles. One finding is that nearly three quarters of employers across these sectors reported difficulty in hiring qualified workers in the past year. Another report, released by the Clean Energy Trust and Environmental Entrepreneurs, estimated that approximately 569,000 people are employed in the energy efficiency and renewable energy sectors in the Midwest. Energy efficiency was found to be the largest employment sector and Illinois was the state with the largest workforce.