Vol. 4 Issue 1 | January 2016
The Michigan legislature is contemplating several significant energy policy changes including revisions to state’s partially deregulated market, as well as energy efficiency and renewable energy standards. H.B. 4297 would transition the state’s renewable energy standard to a voluntary goal of 30 percent by 2025 that includes efficiency. The current renewable energy standard—10 percent of electricity sales—lapsed in 2015. The measure would modify eligible renewable resources to include sources such as fuel from municipal solid waste and non-sustainably harvested biomass but exclude sources such as coal waste and scrap tires. Also debated is Michigan’s partially deregulated energy market, where utilities must allow customers to purchase up to 10 percent of a utility’s capacity from out-of-state markets. Significant debate has ensued over whether to fully regulate or deregulate the market—or keep the status quo. The current bill (H.B. 4298) would keep the 10 percent provision but modify processes for customers switching to and from alternative energy suppliers, possibly with significant effects as to whether customer choice effectively remains an option.
A number of states enacted Property Assessed Clean Energy (PACE) legislation in the 2015 legislative session. PACE programs allow local governments to offer low interest financing for energy efficiency, renewable energy and water efficiency projects that building owners pay back through property tax assessments. Some states, including Alabama and Kentucky, authorized PACE. Rhode Island clarified that all residential PACE loans are subordinate to other liens on residential properties, addressing concerns by the Federal Housing Finance Authority about the supremacy of PACE loans over mortgages, and created a loan loss reserve fund in case of mortgage defaults. Additionally, Colorado launched a new statewide commercial PACE program while Virginia’s Department of Mines, Minerals and Energy published underwriting guidelines for PACE loans.
Colorado has started the 2016 legislative session with a bill (H.B. 1053) that would require the state Division of Oil and Public Safety to develop rules regarding hydrogen fuel systems for vehicles. This measure comes shortly after the U.S. Department of Energy’s recent report, “State of the States: Fuel Cell in America in 2015,” which highlights several states, including Colorado, where there is a growing interest in investments in hydrogen and fuel cells. At least 31 states and the District of Columbia have incentives that apply to hydrogen as a transportation fuel.
The Ohio Legislature introduced H.B. 422 this month, which would impose new regulations on injection wells used to dispose of hydraulic fracturing wastewater. The measure would require oil and gas companies to track the shipments of wastewater with telemetric sensors and give local governments an opportunity to comment on injection well applications before the state issues a permit. The bill would also impose a 2,000-foot setback between the disposal well and occupied buildings such as homes or schools as well as add a new 5-cent fee to each barrel of wastewater. The revenue from the fee would go to increased groundwater monitoring near injection sites. Ohio isn’t the only state to introduce a wastewater-related bill in 2016. New Jersey is considering S.B. 441, which would require an analysis of any waste or material generated from the hydraulic fracturing process before the waste is transported, stored, processed or disposed.
Several states have recently introduced measures to promote the use of nuclear power to meet the EPA’s Clean Power Plan rules. Senator Sharon Brown (WA) introduced S.B. 6217 this month, which would require the state to consider nuclear generation when developing a plan to reduce greenhouse gas emissions as outlined in the Clean Power Plan. Similarly, Wisconsin is considering two bills (S.B. 288 and A.B. 384) that would change the state’s energy priority policy by requiring regulators to consider the use of advanced nuclear energy options before nonrenewable combustible resources as a way to help the state comply with the new greenhouse gas emission rules. And in New York, the state Public Service Commission has ruled that non-carbon-emitting sources such as nuclear power plants must be included in the state’s Clean Energy Standard (CES). The goal of the standard is for the state to meet 50 percent of the state’s electricity needs with renewable sources by 2030.
Several Maryland lawmakers announced their intention to introduce legislation increasing the state’s renewable portfolio standard to 25 percent of electricity sales by 2020. The increase would be part of a larger $40 million economic development and job training proposal. Maryland currently requires 20 percent of electricity sales to be from renewable sources by 2022.
More than 150 million pounds of methane have leaked from a natural gas storage site in California since it was first discovered in October, and the leak isn’t expected to be plugged anytime soon. The Aliso Canyon storage facility—the largest natural gas storage site on the West Coast—is owned by Southern California Gas Co., and has released methane at rates of up to 110,000 pounds per hour. Around 2,500 homes and two schools have been evacuated in the area, about 20 miles north of Los Angeles. Officials have scrapped plans to trap and burn the gas over fears that it could trigger an explosion, and it now looks as if the leak could be plugged by late February.
Vermont’s largest utility, Green Mountain Power, is the first utility in the country to offer the Tesla Powerwall battery—a home battery that charges using electricity generated from solar panels—to residential customers. The utility is offering three payment options (including one with no up-front costs) and the first shipment is set to arrive this month. The first wave of installations will occur in Rutland, which was heavily impacted by Tropical Storm Irene and currently has the country’s first solely solar-powered energy storage microgrid.
The price at the pump is low, recently registering a national average of $1.97 per gallon. That’s around 40 percent lower than the previous year, and states which tax gasoline based on its price are feeling the pinch. Virginia officials say the low gas prices could deplete the state’s transportation funding package by $530 million through 2019, and Kentucky and North Carolina are in similar positions. Most industry analyst are projecting more of the same for 2016, with the price of Brent hitting a 12-year low of $27.10 on Jan. 20. As a result, some of these states are considering changes to the structure of their gasoline taxes by establishing a minimum baseline, regardless of the market. Other states tax on the volume of gas sold.
It's been busy in Nevada. A pair of solar companies, SolarCity Corp. and Sunrun Inc., have announced they will halt operations in Nevada after the state’s Public Utility Commission voted to approve a new solar tariff structure for all solar customers in December. The decision, which took effect Jan. 1, will ramp down compensation for excess generation to the wholesale rate over four years and institute fixed service charges. According to GTM research, this is the first net metering decision to affect all solar customers equally, without grandfathering in customers who purchased solar panels before the new tariff. Since the commission's ruling, NV Energy has announced it will grandfather in existing customers in the new rate case it will file on Feb. 1. and solar advocates have developed a proposed ballot measure. Additionally, Governor Sandoval announced the return of the state's renewable energy tax abatement program.
Craft3 and Self-Help, two South Carolina community development financial institutions, have successfully sold portions of their on-bill repayment loan portfolio to Self-Help Credit Union. The $6.4 million loan portfolio includes single-family residential energy-efficiency improvement loans and follows another successful sale in 2013. Proceeds from the sale can be funneled into additional energy efficiency investments. On-bill financing and repayment allows customers to overcome cost barriers by providing financing for these upgrades, which are then paid over time via charges on their utility bill.
A Texas utility, TXU, is offering free electricity to customers between 7 to 10 a.m. and 7 to 10 p.m., when wholesale electricity prices are lowest and wind energy generation is at its highest. The plan comes with slightly higher daytime rates for customers. The intent of the program is to shift a portion of electricity use from expensive, daytime peak periods and potentially avoid the need to build new generation, all while utilizing the state’s strong wind energy supply.
Along with passing a $1.15 trillion spending measure and averting a government shutdown, Congress took action on two important pieces of energy policy in mid-December. Perhaps most significant was the end to the 40-year ban on exporting crude oil. Additionally, solar and wind tax credits were extended through 2019, after which they will drop gradually through 2022. Through the omnibus package, the Department of Energy will receive a nearly 8 percent increase over 2015 funding levels. Additionally, the Land and Water Conservation Fund, which expired in September, was reauthorized for the next three years. As for oil exports, ConocoPhillips and NuStar Energy wasted no time and have already shipped off the first U.S.-sourced crude to foreign buyers. The ship is bound for a Swiss-based international trading company, Vitol Group, which will likely send the oil to Europe.
The Bureau of Land Management released a draft rule to reduce the flaring, venting and leaking of methane from federally managed oil and gas wells. Methane is the primary component of natural gas and it is one of the most powerful greenhouse gases—with 25 times more heat-trapping capacity than carbon dioxide over a 100-year period. The rule, which has been in development for more than five years, would reduce the number of wells that burn off gas as well as require operators to perform periodic inspections and replace outdated equipment that could cause leaks.
After two weeks in Paris, 196 countries agreed to a highly anticipated global climate accord to reduce greenhouse gas emissions and address the effects of climate change. The primary goal of the accord is to reduce greenhouse gas (GHG) emission levels by 2100 so that the rise in global temperatures is limited to no more than 3.6 degrees Fahrenheit above preindustrial averages. How will the signees attempt to accomplish this? The countries that signed the accord pledged to “reach global peaking of greenhouse gas emissions as soon as possible” although no date is specified. Additionally, every five years, beginning in 2020, the signee countries will have to deliver a new national pledge on how they will further reduce GHG emissions. Such pledges should represent a “progression” from the previous pledge and be as ambitious as the “best science” will allow. The agreement also states that countries should aim to achieve net zero emissions by the second half of the century, though again, no specific timeline is offered. Representatives from several states also attended the talks in Paris, including California, New York, Oregon, Vermont and Washington. Read more about the accord on NCSL’s blog, here.
NCSL signed on to a U.S. Supreme Court amicus brief filed by the State and Local Legal Center (SLLC) in a federal energy pre-emption case involving the state of Maryland. In the brief, SLLC argued that Maryland directing its local utilities to enter into a long-term contract providing stable revenue to the successful power plant bidder is not field or conflict pre-empted. Therefore, SLLC argues that the lower court misapplied the pre-emption doctrine.
The U.S. Department of Justice has officially sued Volkswagen, Audi and Porsche over the emissions scandal which has rocked the automaker. The complaint was filed on behalf of the EPA, which alleges that the company equipped nearly 600,000 diesel-engine vehicles with software meant to misrepresent emissions levels, in violation of the Clean Air Act. The company could be liable for up to $116,250 for each vehicle found to be in violation—a potential hit of more than $80 billion. The software is alleged to have falsified emissions levels during testing, while emitting nitrogen oxide levels up to 40 times the EPA standards during day-to-day use.
The U.S. Court of Appeals for the D.C. Circuit denied a consolidated motion from a number of states and industry groups to stay implementation of the U.S. Environmental Protection Agency’s (EPA) Clean Power Plan (CPP) until litigation of the rule was completed. To have received a stay, the petitioners would have had to satisfy stringent requirements proving they would experience irreparable harm. Under the Court of Appeal’s ruling, the requirement for states to file plans or request an extension by early September remains in place even as the legality of the rule continues to be challenged in the courts. Along with the denial of a stay, the court expedited the groups’ case, calling for the parties to file all briefs by April 15, 2016. Oral arguments will be held June 2, 2016 before three judges.
As states push to reach even higher levels of renewable energy, they are working to address the challenges created by the variable nature of wind and solar energy. Do high amounts of renewables threaten reliability? How are states addressing the rapid rise of renewable energy on the grid? Are there ways in which renewables can improve reliability? Experts from Xcel Energy, ISO New England and NREL will answer these and other important questions at this informative webinar scheduled for Feb. 4 at 3 p.m. ET. Visit our webinar registration page for more details.
In the 2015 legislative session, states responded to the EPA's Clean Power Plan 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 90 bills on the Clean Power Plan were considered in 32 states. View this updated web page for more information.
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 January LegisBrief for more information.
Legislatures in 37 states and Washington, D.C. enacted efficiency-related legislation this year, but do you know which two states significantly overhauled their state energy efficiency policies this year? What about which state created a net-zero energy goal for its university system? Or how many states modified or enacted their statutes on Property Assessed Clean Energy (PACE) Programs? Read NCSL’s 2015 Energy Efficiency Legislative Update to find out!
NCSL held this workshop in mid-November, which was designed to help state legislative leaders in energy policy understand this major revision to the nation’s air regulations and what states need to know as they weigh the costs, risks and benefits of the many available approaches to the new regulations. The meeting explored a number of important topics, including: requirements of the final regulations; legal challenges; state legislative role and authority; planning and creating enforceable goals; policies and technologies that can achieve least cost solutions and regional policy approaches for multi-state collaboration. View our web page for meeting resources and presentations.
NCSL’s Task Force on Energy Supply met in early December as part of the annual NCSL Capitol Forum in Washington, D.C. The meeting examined a range of issues including EPA’s Clean Power Plan, the impact of recent nuclear plant closures, physical and cyber security topics, innovative energy efficiency policies, and more. The agenda and all meeting resources are available online.
The U.S. Department of Energy’s Lawrence Berkeley National Laboratory (LBNL) released a report in December after surveying buyers, sellers and realtors that were parties to transactions of San Diego homes with third-party owned solar systems that sold between 2010 and 2013. Their findings? That most solar leases have minimal effect on home values and time on the market. Read more here. Additionally, LNBL released a report on the benefits, costs and impacts of all state RPS programs, in aggregate, for the year 2013. Read more on the report to find out the environmental and health impacts, water use, wholesale electric price, economic development and natural gas impacts.
The American Gas Association recently released a report outlining opportunities for emissions reductions in buildings through the increased use of natural gas. The report focuses on natural gas direct use—used for space conditioning, water heating, cooking and clothes drying—as a tool states can use to reduce emissions.
The U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) provides direct technical assistance to state and local governments on matters that require solar market expertise to either answer a time-sensitive question or to provide expert testimony on policy best practices. The Solar Technical Assistance Team (STAT) Network is designed to answer questions that require approximately one to two weeks of a subject matter expert's time. NREL also offers solar technical assistance at no cost to utilities.
Last fall the American Council for an Energy-Efficient Economy released their state energy efficiency scorecards, with Massachusetts edging out California as the most energy-efficient state and Maryland earning most improved. Find out how your state ranks.
In December, the University of Michigan’s Gerald R. Ford School of Public Policy and the Institute of Public Opinion at Muhlenberg College in Allentown, PA released a new report examining public opinion of EPA’s Clean Power Plan. The report surveyed over 900 Americans regarding views of the Clean Power Plan and policies for compliance.