Vol. 1, Issue 4, December 2013
NCSL offers a range of services to legislators and legislative staff. We are here to provide state-by-state analysis of energy issues, offer technical assistance, respond to policy questions and research energy issues of importance in your state. Additionally, the NCSL Energy Program publishes Plugged In, a monthly newsletter highlighting key state and federal legislation and developments impacting energy policy. The newsletter provides updates on the latest state energy news, trends, recent publications, upcoming meetings and more.
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This month, the Colorado Oil and Gas Conservation Commission (COGCC) approved a new rule to improve the state’s response to oil and gas spills. The rule requires oil and gas operators to report spills of five or more barrels of production waste within 24 hours. The previous rule required reporting of spills or releases between five to 20 barrels within 10 days. The Michigan Department of Environmental Quality (DEQ) has also proposed additional regulations on the oil and gas industry. The proposed regulations would require companies to test water quality in wells within a quarter-mile of each hydraulic fracturing site, provide at least 48 hours notice to nearby residents before drilling and require additional water withdrawal reporting. The DEQ will hold public hearings on the proposed regulations before issuing a final draft and adopting the rules next year. Additionally, the Minnesota Environmental Quality Board (EQB) has issued a draft set of standards for silica sand mining in the state. The standards cover potential environmental and public health risks posed by the sand industry to addressing light pollution from mining sites. The EQB’s recommendations are voluntary and the public comment period ends in January. Read the Minnesota standards
Discussions continue with the Public Utility Commission (PUC) in Austin over whether to make slight changes to the state’s deregulated market or to introduce a new “capacity market” model—a system that is more common in the Northeast. In capacity markets, the government requires payments to energy generators not only for the amount of power that is consumed, but also for the volumes of generation that could be introduced into the market. These markets ensure enough reserve generation is available for emergency situations, but can also raise the price for consumers. The PUC has yet to make a decision and the debate will likely continue as stakeholders wait for additional information to support their arguments for or against the capacity market model. Read about the discussions
Fifteen states—including the nine Regional Greenhouse Gas Initiative participants—sent a letter urging the Environmental Protection Agency to allow states to continue the emissions programs they already have in place. The states argue that more reductions are possible if state policies are allowed to move forward unimpeded by new federal rules. According to the letter, the 15 states cut greenhouse gas emissions by 20 percent from 2005 to 2011. The letter comes in response to a series of rules expected from the EPA. In September, the EPA released proposed rules for carbon dioxide emissions for all new coal and gas-fired power plants. The EPA continues to take comments ahead of proposing guidance to states for existing power plants, expected in 2014. Read the letter
MidAmerican Energy Co. placed the largest single order for onshore turbines to date, following an announcement of a $1.9 billion, 1,050 MW expansion of wind projects across the state. This came as an end of the year bonus for more than 1,000 Siemens AG manufacturing employees in Iowa and Kansas, who will supply MidAmerican with 448 wind turbines. This project is the largest economic development project in Iowa history and is estimated to power approximately 260,000 homes. Iowa currently generates 25 percent of its electricity from wind, according to the American Wind Energy Association, and this will increase the state’s wind production by approximately 20 percent.
Visit the American Wind Energy Association
The six New England governors issued a joint statement in mid-December agreeing to coordinate efforts through the New England States Committee on Electricity (NESCOE) to lower electricity and heating costs in the region, while expanding state energy portfolios. Recent reports from the American Council on Renewable Energy (ACORE) note that the Northeast—despite a prevalence of policies for renewable energy—has the lowest renewable energy capacity of any comparable region, such as the South, Midwest or West. In addition, all nine states in the Regional Greenhouse Gas Initiative (RGGI) have adopted revisions to RGGI regulations that further decrease emission levels. Read the joint statement
Earlier this month SolarCity and Tesla signed a deal to bring energy storage technology to solar customers. SolarCity, a solar leasing company, plans to include battery storage as a feature in rooftop solar leases in California, Connecticut and Massachusetts. This move may have a large impact on demand-side energy management as businesses and larger customers can use stored electricity during peak periods in the day, when electricity may be more expensive. This reduced need for peak electricity could also assist utilities, as they would not have to be responsible for supplying this energy.
On Dec. 18, the U.S. Senate approved a two-year budget agreement, 64-36, that was crafted by Representative Paul Ryan (R- Wisc.) and Senator Patty Murray (D-Wash.), the respective budget chairmen for each chamber. The agreement passed the U.S. House of Representatives, 332-95, on Dec. 13 and now heads to President Obama for his signature. Within the budget agreement are a few provisions that would affect the energy sector. One change would be to make permanent a state administrative cost of 2 percent of the royalties received by the states through the Mineral Leasing Act in order to pay for the costs associated with the program. Estimates contend this will save around $415 million over ten years. Additionally, the agreement would approve the U.S. Mexico Transboundary Hydrocarbon Agreement that would facilitate increased drilling in the Gulf of Mexico and would rescind the ability of the oil industry to pay oil into the Strategic Petroleum Reserve account in lieu of royalty payments. Read the NCSL summary of the Bipartisan Budget Act of 2013.
The White House released its Fall 2013 Unified Agenda, a comprehensive overview of all regulations currently underway at each executive agency. Some highlights include: the Environmental Protection Agency’s (EPA) regulations on existing and future power plants are listed as ongoing; the Bureau of Land Management lists its final rules for hydraulic fracturing on federal lands to be expected in May 2014; regulations for oil and gas activities in the Arctic will be proposed in February; and the Department of Energy is working on a number of energy efficiency standards for various household items. Read the Fall 2013 Unified Agenda
On Dec. 12, DOE announced the availability of $8 billion in loan guarantees for advanced fossil energy projects that would reduce, avoid or sequester greenhouse gases. The department is accepting applications through its Loan Programs Office and expects to receive the first round of applications by Feb. 2014.
Read the DOE announcement
President Obama released a memorandum to the federal government on Dec. 5 directing the departments and agencies to consume 20 percent of their electricity from renewable energy sources by 2020. The memo is part of the president’s comprehensive Climate Action Plan that was released over the summer. Simultaneously, the federal government released their fourth annual Sustainability Plans, which outline new actions the agencies will take to improve their energy efficiency. Read the Obama memorandum
EPA issued its annual report tracking the average fuel economy of vehicles sold in the United States. According to the report, 2012 showed record highs in fuel economy of 23.6 miles per gallon (mpg). This is a 1.2 mpg increase over 2011 and the second largest annual increase in the past 30 years. Read the EPA report
The Department of Interior announced that it has collected and disbursed more than $14.2 billion in revenue generated from energy production on public lands for fiscal year 2013. This is a $2 billion increase over the revenue generated in 2012. The revenues have been distributed to state, local and federal accounts to support conservation, reclamation and recreation efforts on the country’s public lands.
Interior Department announcement
DOE released a report to the Senate Energy and Natural Resources Committee detailing the benefits of grid energy storage and the challenges that need to be addressed in order to optimize storage usage. The Grid Storage Report lists four key challenges: cost-effective energy storage technology development; reliability and safety issues; the need for an equitable regulatory environment; and industry acceptance. In response, Senate Energy and Natural Resources Chairman Ron Wyden (D-Ore.) tapped one of his top staffers to work with DOE on implementing the key aspects of the report. Read the DOE report
The Energy Information Administration (EIA) provided an early release of its Annual Energy Outlook for 2014, highlighting trends in the future of the domestic energy market in the United States. The outlook found that the growing domestic production of natural gas and crude oil will continue to mold the U.S. energy market, and that crude oil production is at an historical high. The full version of the energy outlook will be released in spring 2014. Read the Annual Energy Outlook
The 2013 NCSL Fall Forum brought legislators and staff together to develop solutions to critical issues and advocate for the states on Capitol Hill. As part of the Fall Forum, the Natural Resources and Infrastructure Committee held a number of informative sessions ranging from topics of electronics recycling, to metals theft, to surface transportation legislation and more. Members were also invited to participate in a behind the scenes tour of Reagan National Airport. Access the full agenda and additional resources for the NRI Committee here.
The NCSL Task Force on Energy Supply also met in Washington, D.C., on Dec. 3-4. The meeting examined a range of energy issues impacting states, including natural gas infrastructure needs, water concerns related to shale gas development, federal greenhouse gas reduction requirements, state energy assurance plans and more. View the full agenda and presentations here.