Vol. 3 Issue 3 | April 2015
In late March, two states enacted legislation concerning the U.S. Environmental Protection Agency’s (EPA) proposed regulations for power plant carbon dioxide emissions. Arizona Senate Bill 1007 establishes a joint legislative review committee to develop factors that may be considered when reviewing a state plan. The bill also requires legislative approval of a state plan before its submission to EPA and provides the Department of Environmental Quality with the authority to develop and enforce the plan. North Dakota enacted Senate Bill 2372, which authorizes an interim study on the impacts and costs of EPA regulations. For more information on state reactions to EPA’s proposed greenhouse gas regulations, please visit NCSL’s updated Web brief.
Georgia’s General Assembly recently passed a transportation funding bill, House Bill 170, which has been sent to the governor for signature. The bill repeals a state tax credit of $5,000 aimed at promoting electric vehicle adoption. Georgia’s monetary incentives for electric vehicles have been credited for the boost in electric vehicle sales over the past few years with the state leading the U.S. in electric vehicle sales in 2014. Several states are also addressing concerns regarding the effect that the growing use of electric vehicles may have on funding for transportation infrastructure, which relies heavily on gasoline taxes. Georgia’s bill also imposes a $200 annual fee—the highest in the country— on all non-commercial electric vehicles. Additionally, Idaho approved House Bill 312, levying a $140 annual fee on all-electric vehicles and $75 on certain hybrid vehicles. These measures follow five other states—Colorado, Nebraska, North Carolina, Virginia and Washington—that already have additional fees in place.
Maryland lawmakers have sent a bill this month to the governor that would prohibit hydraulic fracturing in the state for the next two years. House Bill 449 bars the state Department of Environment from issuing any permits for natural gas drilling and requires the state to enact regulations for the hydraulic fracturing process by 2016. It is still unclear whether Maryland Governor Larry Hogan will sign the measure. The legislation comes after former Maryland Governor Martin O’Malley announced last year that his administration would propose new rules to begin hydraulic fracturing in state.
The Kentucky legislature enacted House Bill 100 in March, authorizing local governments to establish energy project assessment districts for energy and water efficiency and renewable energy, providing building owners with access to low cost financing for energy improvements. The legislation authorizes financing for projects by placing a senior-status lien on commercial properties and allowing local governments to issue bonds to finance projects. Assessment districts are required for Property Assessed Clean Energy (PACE) financing.
Montana is considering legislation that would require a review of net metering policies. Senate Joint Resolution 12 would require an interim study of net metering’s costs and benefits to public utilities, rural electric cooperatives and customers who do not use net-metering systems. The study must also examine cost-effectiveness of net metering policies, utility bill impacts and solar energy’s fixed and operating costs. Results from the study will be presented to the Legislature. The resolution has been sent to the House floor after a favorable review by a House committee. Currently, Montana authorizes net metering for systems with a 50 kilowatt capacity.
Legislation introduced in Washington and Montana regarding the future of a Montana-based coal-fired power plant are sparking debate across state lines. Washington’s Senate Bill 5874 (pending) would require a study of the impacts on closing the plant in Colstrip, Mont. Additionally, House Bill 2002 (pending) would establish a coal generation retirement program designed to give utilities regulatory and financial mechanisms to begin divesting from coal power plants. In response, Montana state Senator Duane Ankney sponsored Senate Bill 402, which would have placed an impact fee on any public utility trying to retire a Montana coal-fired power plant. Supporters of the legislation focus on the jobs tied to the plant as well as the economic revenue to the state. Opponents have questioned whether the bill violates interstate commerce laws and whether it might send a negative message to investors and business owners. The legislation failed to pass the House this month.
Virginia enacted House Bill 2267 establishing the Virginia Solar Energy Development Authority in March. The authority will coordinate the growth of the solar industry in the state by developing financing programs, serving as a clearinghouse for projects, and promoting the solar industry and solar generation on private and public facilities. Virginia Governor Terry McAuliffe has also issued an executive order to develop a minimum of 400 MW of solar energy by 2020.
Alaska’s Governor Bill Walker and members of the Legislature are in a heated debate over commercializing the state’s North Slope natural gas reserves. Both the governor and House legislative leaders have expressed support for the state’s partnership with several oil and gas companies to build the North Slope gas treatment plant—an 800 mile pipeline, liquefaction plant and export facility along the state’s southern shores. However, the governor has expressed concerns that the project could hurt the state if the oil and gas companies decide not to move forward with the project. Walker supports expanding an existing state-owned pipeline, known as the Alaska Stand Alone Pipeline (ASAP), which critics see as a competing project. This month, the governor vetoed legislation (House Bill 132) introduced by Speaker Mike Chenault that would have prohibited the governor from expanding the ASAP project. It is unclear what agreement may be reached among state officials regarding future natural gas pipeline projects.
The Georgia legislature has sent House Bill 57 to the governor for approval that would authorize third-party financing for small-scale solar energy projects. Currently, Georgia residents cannot lease solar equipment from a company that sells the power back to a utility. However, residents who own solar panels can sell excess electricity to utilities. Legislation had been introduced in previous sessions to authorize third-party financing but was not enacted.
California’s historic drought has made headlines across the country and dwindling water sources have had an impact on the state’s hydropower generation. According to one report, utilities have spent $1.4 billion to replace electricity traditionally supplied by hydropower dams between 2012 and 2014. Hydropower generation served as 18 percent of electrical generation between 1983 and 2013 and fell to 12 percent in 2013. Two time zones east, Costa Rica has had a very different experience: The small Caribbean nation used 100 percent renewable energy for 75 days straight becauseof heavy rainfall that powered hydroelectric facilities. The country typically generates 80 percent of electricity from hydropower sources and 10 percent from geothermal sources.
Nebraska Public Power District (NPPD)—the state’s largest utility—is switching from coal to hydrogen at one of its power plants outside of Lincoln, Neb. According to the NPPD, using the new fuel source is expected to cut the plant’s overall carbon footprint by 10 percent. The Sheldon Station power plant was originally designed as a nuclear facility, converted to burn coal, and now expected to burn hydrogen in a first of its kind coal-to-hydrogen conversion. The hydrogen that powers the plant’s turbine will come from a carbon black production plant near Sheldon Station. Carbon black is a fine powder used in tires, plastic, newspaper ink and batteries. The process uses electricity to separate carbon and hydrogen from natural gas. The project is expected to come online in 2019.
Pennsylvania Governor Tom Wolf released his 2015-2016 budget last month, including several energy efficiency investments for the state. The proposed budget includes $50 million in grants for energy efficiency improvements in small businesses, local governments, schools and non-profits. The governor’s budget also includes funds for a combined heat and power competitive grant program, energy efficiency and renewable energy projects in the agriculture sector and clean energy market development. Also last month, the Maine Public Utility Commission voted to reduce funding to Efficiency Maine from $60 million to $22 million. Efficiency Maine helps residents and business increase energy efficiency. According to the Natural Resources Council of Maine, every $1 spent on Efficiency Maine programs yields $7 in savings.
Senators Lisa Murkowski (R-Alaska), Dianne Feinstein (D-Calif.), Lamar Alexander (R-Tenn.), and Maria Cantwell (D-Wash.) introduced legislation directing the federal government to establish both temporary and permanent storage sites for nuclear weapon and energy production waste. On the same day, the White House unveiled its own strategy for disposing of defense and commercial nuclear waste. The strategy, authorized in a presidential memo, reverses the government’s past policy of combining nuclear waste produced from defense activities with spent nuclear reactor fuel into the same repository. For more information see the NCSL Blog.
The Department of Interior (DOI) released a final rule regulating hydraulic fracturing on public lands. The rule states that oil and gas companies employing hydraulic fracturing processes on public lands will be required to disclose the chemicals they use and to halt wastewater storage techniques that could contaminate groundwater. Hours after the release of the rule, a coalition of western energy groups filed a lawsuit against DOI stating the rules are redundant to state regulations already underway.
The White House’s domestic climate strategy, which formalizes targets and plans announced by the administration throughout the year, has been submitted to the United Nations. One such announcement central to the U.N. plan is the 26-28 percent reduction of greenhouse gas emissions from the power sector by 2025. The U.S. plan and the plans promised by almost 200 other nations will form the foundation for an international climate deal, to be proposed by the U.N.
Senator Maria Cantwell (D-Wash.) introduced the Crude-By-Rail Safety Act, a bill that would attempt to make shipping crude oil by rail safer through requiring the Pipeline and Hazardous Materials Safety Administration (PHMSA) to draft new regulations. Specifically, the bill would require PHSMA to set new standards for crude oil volatility, immediately remove unsafe tanks cars from commission, and increase fines for violations, amongst other changes. The bill is co-sponsored by Senators Dianne Feinstein (D-Calif.), Patty Murray (D-Wash.) and Tammy Baldwin (D-Wisc.).
Speaking at a power association conference, the head of the North American Electric Reliability Corp (NERC) said the EPA’s proposed regulations to reduce greenhouse gas emissions from the power sector are likely to create electric generation shortages in various regions of the U.S. NERC plans to release a report in mid-April with official findings of generation capacity that will need to be retired if the rules are finalized, and where this could create shortages. Speaking of reliability, the Federal Energy Regulatory Commission (FERC) held its third and final regional conference in Washington, D.C., to explore potential reliability issues with EPA’s proposed greenhouse gas emission reduction rules. The all-day conference hosted a number of panels consisting of the EPA, state regulators, utilities, co-ops, grid operators and environmental groups.
The EPA will release a final rule by the end of April that will prevent companies from discharging wastewater from shale drilling into publicly owned water treatment plants. EPA first proposed the rules in 2011, and on March 30 the Office of Management and Budget completed its review of the rule, the last hurdle before the final rule is published.
In the 2015 legislative session, states are responding to the EPA's proposed regulations for greenhouse gas emissions from future and existing power plants through legislation and public comments to establish legislatures' roles in responding to these regulations. More than 70 bills have been introduced in 28 states concerning these regulations. View this updated web page for more information.
NCSL’s Natural Resources and Infrastructure Committee will be hosting a Spring Webinar Series that features a number of energy-themed webinars, including state options and responses to greenhouse gas emissions regulations, the impact of falling oil prices on state budgets, natural gas pipeline safety and more. Visit our Web page to view more information and to register for these upcoming webinars.
Regulatory models in many states discourage utility efficiency investments. The results are an increase in the amount that consumers spend on energy and slower economic growth. Many states have changed the regulatory structure so that utilities will benefit if they pursue cost-effective energy efficiency. This April LegisBrief explores state policies that encourage utilities to invest in energy efficiency.