Plugged In, NCSL’s State and Federal Energy Newsletter

 

SPARKS OF NEWS

  • Sun Drops: An Oct. retrospective report from the Department of Energy projects photovoltaic (PV) system prices to continue dropping through 2014. The report found system prices of residential and commercial PV systems declined 6 to 7 percent per year from 1998-2013, and by 12-15 percent from 2012-2013, depending on system size. Additionally, DOE's National Renewable Energy Laboratory published a first-of-its kind analysis of residential and small commercial PV interconnection process time frames. Researchers found that state regulations reduce the length of time, and the cost, of connecting solar to the grid.    
  • Auctioned Off: The first joint auction between California’s and Quebec’s cap-and-trade markets sold out of greenhouse gas emission permits at a price of $12.10 per carbon ton for this year. The auction contained 23.07 million allowances with an $11.34 per carbon ton floor price.
  • New Generation in New England: ISO New England, the region’s grid operator, recently identified more than 8,000 megawatts of new generation capacity proposed by developers qualified to bid in ISO’s next auction scheduled for February. This could be good news for consumers in New England, who, according to the Energy Information Administration, have the highest retail electricity prices in the country.

STATE LEGISLATIVE UPDATES

Net Metering

In December, utilities and solar stakeholders in South Carolina reached a decision on statewide net metering policies. Earlier this year, the legislature enacted a bill that allowed utilities to voluntarily adopt net metering programs. This agreement—which makes South Carolina the 44th state to adopt net metering—determined that net metering customers will receive an incentive for their distributed generation resources at a one-to-one retail rate. Parties will not seek to establish new tariffs or revisit net metering policies until 2020. Utilities must file distributed resource plans in the next 60 days. Meanwhile in Wisconsin, the Public Service Commission approved We Energies proposal to establish a $3 monthly fees for net metering customers and charge of $3.80 per kilowatt hour. One source reports that this will result in $182 per year in fees to new solar net metering customers and some think this could effectively stop rooftop solar in the We Energies territory. Existing solar net metering customers will not pay the new fee for 10 years.

Promoting Coal Exports

The Wyoming Legislature is expected to consider a bill soon to expand the borrowing authority of the Wyoming Infrastructure Authority. This change would allow the state to help finance a coal export dock in the Pacific Northwest. Coal companies that mine in the state’s Powder River Basin support the construction of docks in the Pacific Northwest to help deliver Wyoming’s coal to Asia. According to the International Energy Administration, coal consumption will continue to grow globally, especially as countries in Asia and Africa increase coal-fired power generation to provide energy to a growing population in these regions. Opponents of these docks have cited environmental concerns and the impacts of climate change. Regulators in Oregon recently rejected a similar plan for a dock on the Columbia River and two projects in Washington State are still under review by state regulators.

Michigan Wind

Legislation introduced in the House in October would include wind turbines in the state’s Right to Farm Act, protecting turbine owners from “nuisance” lawsuits over noise, visual impacts and other objections. Legislation has also been introduced in the Senate (Senate Bill 1123 and Senate Bill 1124). Although the bills are not expected to pass before the end of session, legislators have alluded to continuing the debate in 2015.

California Action

The California Legislature enacted a bill in September to reduce the “soft costs” of residential solar photovoltaic and thermal installations, including permitting, inspection and interconnection. These costs make up nearly 65 percent of total system costs. The state’s Solar Permitting Task Force recently released a permitting guidebook for localities to help reduce installation costs by streamlining the permitting process. Also in September, the governor signed legislation to increase the use of demand response. The legislation directs the Public Utilities Commission to consider demand response in decisions to balance and ensure reliability for the state electric grid. Additionally, Senate President Pro Tem Kevin de Leon recently announced that he would introduce a bill in January requiring the state’s public pension funds to remove their investments in coal equities. It’s still unclear how the legislation will read, but de Leon told reporters that the bill will focus on the state divesting from coal and not other fossil fuels.

STATE ENERGY NEWS

New York Gets Griddy

The New York Public Service Commission voted on a number of measures last week in line with the Commission’s Reforming the Energy Vision (REV) distributed generation strategy. The measures include: increasing the state’s net metering cap from 3 percent to 6 percent; helping develop a community-based net metering program; and approving Consolidated Edison Inc.’s demand-management initiative for Queens and Brooklyn to avoid constructing a new substation and encouraging other utilities to adopt similar approaches. The commission also voted to encourage “community choice aggregation,” where public entities collaborate with other entities to contract energy supplies. For example, a school with solar photovoltaic panels could form an agreement with nearby apartment buildings to sell excess energy.

Bans on Hydraulic Fracturing

oil drillingNew York Governor Andrew Cuomo has announced a ban on hydraulic fracturing, citing health risks associated with natural gas extraction. The decision comes after many delays as the state’s Department of Health reviewed the potential health impacts. Vermont is the only other state to adopt a ban on hydraulic fracturing. Vermont, however, lacks the shale resources found in New York’s Marcellus and Utica shale formations. With New York’s decision, some opponents are pushing for Maryland to take similar action. Outgoing Maryland Governor Martin O’Malley announced last month, however, that his administration will be proposing new regulations to begin hydraulic fracturing in the state. It is unclear exactly what the regulations will include, but administration officials have said that the proposal will include best practices from states where hydraulic fracturing is already taking place. The new rules will not go into effect until after O’Malley is succeeded by Governor-elect Larry Hogan.

Florida Efficiency Cut

In November, the Florida Public Service Commission authorized the state’s four investor-owned utilities to cut demand-side management programs, such as energy efficiency and solar pilot program rebates. Florida Power and Light—a large investor-owned utility—stated it will continue to offer certain energy efficiency programs. Florida does not have a decoupling policy, which disconnects utility’s profits from their level of sales, so utilities were losing money as energy sales decreased because of efficiency measures. Since efficiency investments are generally far cheaper than adding generation, this action could increase consumer bills. The commission also agreed to hold a workshop on solar energy, including a discussion of the costs and benefits.

States Propose Carbon Fees

Washington state’s Governor Jay Inslee released the state’s budget proposal this week, which includes a carbon fee system aimed at reducing greenhouse gas emissions from the state’s largest emitters. Revenue from the system would go toward several state programs, including rebuilding the state’s transportation infrastructure. These funds would be allocated to projects that reduce carbon emissions through new public transportation programs, new pedestrian and bike paths as well as incentives for low- or zero-emission vehicles. Washington isn’t the only state considering new carbon fee programs. A recently published analysis from Portland State University’s Northwest Economic Research Center found that a carbon tax in Oregon would have minimal effects on jobs and the economy. With the report completed, the Oregon legislature may establish a state carbon price in the 2015 legislative session.

FEDERAL ENERGY NEWS

Out of Fuel

The Environmental Protection Agency (EPA) announced it will not finalize the 2014 renewable fuel standards before the end of the year. The agency noted that it received a large number of public comments on the 2014 standards proposal, and would finalize the 2014 standards in 2015. Eventually the agency intends to “get back on the annual statutory timeline by addressing 2014, 2015, and 2016 standards in the next calendar year.”

NERC Weighs In

smoke stacksThe North American Electric Reliability Corporation (NERC) completed a preliminary report of the potential reliability impacts of the EPA’s new proposed rules to limit carbon dioxide emissions from existing power plants. NERC concluded that more analysis was needed to fully understand if the EPA’s targets can be reached in the time frame the agency outlined, without affecting the reliability of the bulk power system. However, the agency did report having initial reliability concerns with the standards. The agency also found that the EPA’s estimate—that more than 100 gigawatts in power capacity could be shut down because of the rules—may be too conservative.

Reducing Carbon Dioxide Emissions

EPA released two new ways states could convert their proposed reduction rates of carbon dioxide emissions—as would be required under the agency’s proposed rules for existing power plants—to mass-based goals. The agency proposed in its technical document that states can either base their mass-based emissions target conversions on historical generation, or on historical and projected generation from new sources. However, the agency noted that those two methods were not “an exhaustive list of the ways to make the translation.”

New Federal Reports

GAO released a report on factors influencing U.S. energy production and consumption from 2000 through 2013. Some of the factors outlined include: advancements in drilling technologies, which increased domestic production of natural gas and crude oil; declining prices for competing energy sources, such as natural gas, leading to a decrease in production of nuclear energy; and federal tax credits for renewable energy sources. Additionally, the Congressional Budget Office released a report this month concluding that the growth in oil and natural gas extraction from shale formations has boosted the economy. The report found that consumers and domestic oil producers would benefit from lifting crude export restrictions.

Congress and the ‘Cromnibus’

More than 75 days into the fiscal year, Congress passed a budget that funds a majority of the federal government for the reminder of the fiscal year until the end of September 2015. Overall, the bill—nicknamed the Cromnibus—provides $10.2 billion for energy programs within the Department of Energy (DOE), a $22 million increase above the FY 2014 enacted level. For the Department of Energy, one of the most notable programs for states saw a sizeable increase. Funding for Weatherization Assistance Grants increased 10.9 percent to $193 million compared to FY 2014.  However, funding for the State Energy Program was held steady at $50 million. The bill also provides $1.9 billion for Energy Efficiency and Renewable Energy, $25 million above the FY 2014 level along with $571 million for research on advanced coal, natural gas, oil and other fossil energy technologies, a 1.5 percent increase from FY 2014. Funding for two other notable DOE offices include Advanced Research Projects Agency and the Office of Science, which received $280 million and $5.01 billion respectively, the same as in FY 2014. Additionally, the bill does not include any new funding for activities related to storing high level nuclear waste. This follows a report from the Nuclear Regulatory Commission in October that material in the repository would be "safe" for humans and the environment once closed. Additional reports on the site are expected to be published in January.

NEW NCSL ENERGY RESOURCES & UPCOMING EVENTS

NCSL Forum

2014 fall forumThank you to all who attended the 2014 NCSL Forum. All Forum resources are now available online, including presentation slides from each session. NCSL’s Task Force on Energy Supply met on Dec. 9 the Natural Resources and Infrastructure Committee met on Dec. 11. Sessions included a discussion of EPA’s proposed greenhouse gas emission regulations, transporting crude oil by rail, critical infrastructure resiliency, hydraulic fracturing, and more.

Risk and Resiliency Webinar Resources Available

Hurricanes, attacks on energy substations, severe cold, drought and cyber attacks continue to demonstrate the importance of creating resilient energy infrastructure. View a recording of the webinar and presentation slides from this December webinar to hear how states can better assess risks; make more informed policies, programs and investments that improve resiliency; and protect energy infrastructure in the face of a growing number of natural and man-made threats.

Integrating Renewables Report

Renewable energy is fast becoming a major source of electricity in the U.S. and now generates 13 percent of the nation’s electricity. However, the variable nature of renewables poses challenges for grid operators. This NCSL publication explores how utilities and legislatures are working to address renewable energy integration challenges and highlights recently enacted legislation.

State Efforts Promote Hybrid and Electric Vehicles

Approximately 93 percent of the nation's transportation sector depends on oil, making the U.S. transportation system far from diverse. However, electricity may play an important role to change the transportation energy mix. This October 2014 web brief highlights state, local and utility incentives to promote hybrid and electric vehicle adoption. The web brief also addresses state concerns regarding the effect that the growing use of electric vehicles may have on funding for transportation infrastructure.

State Energy Banks

States are exploring energy banks as a way to promote energy efficiency, renewable energy and resiliency. Energy banks combine public sector funds with private sector financing to lower the cost of renewable or energy efficient technology investments. Five states have established energy banks or bank-like structures and one state enacted study legislation for an energy bank in 2014. View the document

Renewable Energy Legislative Update: 2014

In the 2014 legislative session, states considered nearly 1,350 bills related to renewable energy. Legislatures in at least 37 states, Washington D.C., Puerto Rico and the U.S. Virgin Islands enacted more than 150 bills related to net metering; renewable portfolio standards and renewable energy credits; financing; siting, permitting and land use; and additional policy areas. View the document for summaries of enacted legislation.

PACE Financing

solar installationProperty Assessed Clean Energy (PACE) financing programs allows local governments to provide financing for energy efficiency, renewable energy and water efficiency projects that building owners pay back through property tax assessments. PACE legislation has been authorized in 31 states and Washington, D.C. and 12 states and Washington, D.C. have active PACE programs. View the document for more information.

Compulsory Pooling Laws

Most major oil and gas producing states—with the exceptions of California and Kansas—have adopted mandatory or compulsory pooling laws to govern circumstances in which neighboring landowners disagree about whether or not to extract mineral resources from common pools underneath their land. This web brief highlights the ways states are addressing compulsory pooling in order to protect the conflicting rights of landowners.

Utility Submetering

Utility submetering allows multi-unit property owners or managers to bill each unit for individual utility usage through the installation of additional meters behind a utility meter. This NCSL web brief that provides an overview of utility submetering policies, including a chart of existing state laws, statutes, regulations and rulings concerning metering.

Energy Efficient Lighting

Many states have enacted legislation offering incentives to residential, government, commercial and agricultural consumers who choose energy efficient lighting technologies. States are interested in promoting efficiency to promote economic development, since the less businesses and consumers spend on energy bills, the more they can invest in the economy. Efficient lighting investments also provide a very quick return. View the document for a 50-state overview of existing and proposed policies.