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Plugged In | NCSL’s State and Federal Energy Newsletter

SPARKS OF NEWS

  • Tesla defies COVID stay-at-home order. Despite a county health order requiring the electric carmaker’s Fremont, Calif., factory to remain closed beyond basic minimum operations, Tesla reopened on May 11, drawing criticism from some local leaders and praise from the president.
  • Renewables to outpace coal generation in 2020. Driven in part by declining energy demand as a result of COVID-19, the U.S. Energy Information Administration (EIA) predicts that renewables will surpass coal generation by roughly 36 billion kilowatt-hours in 2020.
  • Summer energy demand rises. Although the EIA reported that energy demand around much of the country has fallen, the Electric Reliability Council of Texas (ERCOT) is anticipating record electricity demand this summer as temperatures rise. In response to this forecasted demand, the new owners of a retired 420-megawatt (MW) coal-fired plant have announced that the plant may be restarted.
  • Will oil demand return? The last few months have been difficult for the oil industry as sinking demand and global oversupply have resulted in low to negative oil prices. It is still unclear what the long-term impacts will be on the oil industry and whether oil demand will return to the all-time high experienced in 2019. According to a report by the research firm IHS Markit, much will depend on COVID-19 and how long travel restrictions remain in place. 
  • World record solar efficiency achieved. Scientists at the National Renewable Energy Laboratory (NREL) have set the record for solar cell efficiency using multilayered solar cells. Researchers reached 47% efficiency using magnified solar energy and nearly 40% efficiency with no magnification. This means nearly half the solar energy that reached the solar cells was turned into electricity. Today’s most efficient commercially available solar panels can reach an efficiency of 22.8%.

STATE LEGISLATIVE UPDATES

Cybersecurity Regs Prompt Debate Over Texas Lawmakers’ Intent

Monitoring electric grid.The impact of any law often comes down to how it is implemented. In Texas, lawmakers are observing just that as state regulators consider how to implement two innovative cybersecurity bills passed by the Texas Legislature last year. The two bills—SB 475 and SB 936—were intended to bolster the state electric grid’s cyber-preparedness by establishing a robust cybersecurity monitoring program, along with a state coordinating council to share best practices and develop training and educational programs to prepare for threats. The monitoring program, in particular, is an area of contention. Utilities would like the monitor—and any information provided to the monitor—to be voluntary. However, security advocates have called for mandatory sharing of information and oversight of utility security plans. The crux of the issue revolves around what legislators intended when they passed the measures last year—whether the monitor was intended to share information around best practices or to serve as an oversight and enforcement entity. The decision reached by Texas regulators could affect how other states approach cybersecurity for the electric grid.

Major Energy Efficiency Bill Progresses in Minnesota

Minnesota State CapitolIn addition to focusing on passing bipartisan legislation in response to COVID-19, the Minnesota Legislature continued its pursuit of energy efficiency legislation designed to same customers money. The Energy Conservation and Optimization Act of 2020 (House File 4502), which expands on the state’s existing Conservation Improvement Program and is broadly supported by the state’s utilities, made its way to the Senate after passing in the House. In addition to requiring utilities to spend more on energy conservation programs, the bill would support utility investments in clean technologies and require that a certain percentage of utility energy efficiency spending be dedicated to supporting low-income families. While the legislature has adjourned, it is unclear whether Governor Tim Walz will schedule a special session, providing a potential opportunity for the bill’s full consideration in the Senate.

Don’t Tread on My Infrastructure—or My Right to Protest!

There is a clear distinction between what constitutes civil protest and when that constitutional right devolves into destruction of property. The distinction becomes much fuzzier when actions that impede the development or function of infrastructure are lumped in with vandalism and other criminal offenses. This is the issue at the heart of the debate around new infrastructure protection laws that have been passed in nearly a dozen states over the past two years. Kentucky (HB 44), South Dakota (SB 151) and West Virginia (HB 4615) are the latest states to pass new laws that either create new crimes related to unlawful entry on critical infrastructure facilities or enhance the penalties associated with those offenses. Most often these aim to protect critical infrastructure from trespass, vandalism and unlawful entry that might compromise operations or damage facilities. At least 10 states have passed similar measures over the past two years, with another eight states seeing similar legislation introduced. However, civil liberties groups have claimed the laws are intended to limit civil demonstrations, even if that is not their intent, by creating a chilling effect on the ability of groups to organize in opposition to new projects.

STATE ENERGY NEWS

California Deals with Wildfires, Past and Future

Forest fire.As if 2020 hasn’t had enough bad news, the National Interagency Fire Center has predicted an above-average potential for large wildfires this year, especially in the West. The news comes as California continues to manage the damage from several years ago—both in terms of wrapping up enforcement actions and mitigation planning for future disasters. In the first category, the California Public Utilities Commission (CPUC) announced the largest ever penalty against the state’s largest utility, Pacific Gas & Electric (PG&E), which was found responsible for wildfires in 2017 and 2018. In closing its investigation, the CPUC imposed a $1.93 billion penalty on PG&E. Not only is PG&E facing increased oversight from the CPUC, but a federal judge recently required the utility to hire vegetation management inspectors to oversee its tree-trimming work. The judge called PG&E’s vegetation management work “sloppy and unreliable.” In the second category, the CPUC has indicated its intent to require utilities to quickly deploy microgrids and other resiliency projects that could help customers during “de-energization” events—when utilities shut off power to portions of the grid during periods of elevated fire risk to avoid sparking a fire. The CPUC’s proposal would require the state’s three investor-owned utilities to prioritize, streamline and expedite microgrids and resiliency projects through the fall of this year, with a particular emphasis on supplying local power to critical facilities and customers. Finally, the U.S. Department of the Interior’s Bureau of Land Management announced the approval of a plan to construct and maintain 11,000 miles of fuel breaks

Colorado Community Votes Against Municipalization  

In Pueblo, Colo.—a community with 25% of people living at or below the poverty level—residents pay roughly 42% more for electricity than the state’s average. After failed attempts to work with the community’s investor-owned utility, Black Hills, to lower rates, local leaders began efforts to form a municipal utility. Under a state law that provides the opportunity for municipalities to exit their utility franchise agreements early, the city recently held a vote on whether to leave its agreement with Black Hills 10 years in and form a municipal utility, with Pueblo voters overwhelmingly rejecting the measure.

Move Over Gas, Here Comes Energy Storage 

One of the largest procurements of energy storage ever is being undertaken by Southern California Edison, which plans on commissioning 770 MW of grid battery projects. This amount surpasses the entire 2019 storage market by 200 MW. The utility hopes to have projects up and running by August 2021, a record-fast turnaround for an effort of this magnitude. The storage projects will help meet the CPUC's order for 3.3 gigawatts of carbon-free resources to meet grid reliability needs in the state.  Most of the storage projects will be located on existing solar farms to help integrate solar power and meet peak demand in the late afternoons and evenings. This peaking capacity is needed to replace four seawater-cooled natural gas power plants that must close due to their environmental impact. 

FEDERAL ENERGY NEWS

Supply-Side Security

Electric companies will no longer be allowed to install equipment supplied by companies based in certain countries—most directly, Russia and China. The change in policy comes after the Trump administration issued an executive order prohibiting the installation of equipment on the bulk power grid that was “designed, developed, manufactured, or supplied, by persons owned by, controlled by, or subject to the jurisdiction or direction of a foreign adversary.” The order stems out of growing concern over cybersecurity of utility vendors—whether the supply chain has the proper safeguards in place to prevent a backdoor attack in which third-party equipment is encrypted or infected with malware prior to installation. The order directs the U.S. Department of Energy to create a list of equipment and vendors that are pre-qualified for U.S. utilities to work with. The cybersecurity of the supply chain has been a growing issue of concern among cybersecurity experts. However, some have questioned the efficacy, given that there is already a great deal of foreign-supplied equipment operating on the bulk power grid, and worry that the order will instead slow smart grid investments. As if to highlight the issue of vendor security, news broke that hackers stole two decades’ worth of files from an energy equipment supplier, including diagrams of two U.S. power plants. The vendor, LTI Power Systems, is not foreign—it’s headquartered in Ohio.

PHMSA Preempts State Crude-By-Rail Requirements 

Transport crude oil by rail.The federal agency responsible for regulating the transportation of oil and other hazardous materials has determined that federal law preempts Washington’s attempts to regulate the crude-by-rail industry in the state. In response to several high-profile accidents, a number of states, including Washington, have sought to impose greater safety and planning requirements on the movement of crude oil by rail. However, the U.S. Department of Transportation’s Pipelines and Hazardous Materials Safety Administration (PHMSA) determined that Washington took that regulation too far by imposing vapor pressure limits on crude-by-rail operators. PHMSA said the state’s vapor pressure requirement is preempted by the Federal Hazardous Materials Transportation Law, and that it doesn’t conform to U.S. Hazardous Materials Regulations.

CARES Act Delivers Supplemental Funding for LIHEAP

As part of the CARES Act, Congress appropriated $900 million in supplemental funding for the Low Income Home Energy Assistance Program (LIHEAP) for the 2020 fiscal year, through the U.S. Office of Community Services within the U.S Department of Health and Human Services Administration for Children and Families. The agency announced that all 50 states, five U.S. territories, the District of Columbia and a number of Native American tribes that currently receive LIHEAP grants also received supplemental funding to go toward state initiatives such as weatherization services and home energy burden reduction, among others.   

U.S. DOE Announces Awards for Energy Projects on Tribal Lands 

The U.S. DOE’s Office of Indian Energy Policy and Programs will provide $5 million in funding for tribal energy infrastructure, with tribal communities providing an additional $5 million to support the projects. Among the selected projects are a series of solar photovoltaic systems installed on tribal facilities on the Pine Ridge Reservation, home to the Oglala Sioux. Also selected was a solar plus storage system to improve resiliency at Grand Canyon West—a primary source of income for the Hualapai Tribe—that currently runs on diesel generation.

The Future for Nuclear 

In April, the White House’s Nuclear Fuel Working Group released a report outlining a strategy that seeks to strengthen the U.S. nuclear fuel cycle, promote advanced nuclear technologies, and increase the nation’s global competitiveness within the nuclear sector. The report focuses on the importance of a long-term competitive domestic nuclear industry, but it doesn’t provide specifics about how the U.S. will achieve it. In other nuclear news, the U.S. Department of Energy has announced a $230 million program to support advanced nuclear technologies. The program will initially invest $160 million to build two reactors that can be operating within the next five to seven years.

NEW NCSL ENERGY RESOURCES AND UPCOMING EVENTS

Natural Resources and Infrastructure Committee Webinar Series 

As part of the NCSL Natural Resources and Infrastructure Committee’s spring webinar series, NCSL recently hosted a webinar exploring how agriculture, solar and pollinators can coexist in a way that benefits all three. Presenters discussed policy approaches and highlighted state efforts to implement environmentally friendly solar siting policies on agricultural lands. The webinar is recorded and will be available online. You can also check out the energy program’s prerecorded webinar focusing on who controls the state’s energy mix and hear national experts discuss how regional markets should interact with state policy. Presenters explored the Federal Energy Regulatory Commission’s recent Minimum Offer Price Rule and how it may impact the ability of a state to determine its own energy mix.

Blog Series on COVID-19 Energy Sector Impacts 

NCSL’s energy program is releasing a series of blogs focused on how states are responding as COVID-19 continues to disrupt the energy sector. From state action to prevent utility shutoffs and mounting job losses in the clean energy sector to issues surrounding essential energy worker designations, NCSL’s blog features these and other emerging policy issues related to COVID-19.

COVID-19: Essential Workers in the States Webpage

There has been a lot of discussion during the COVID-19 response around essential worker classifications. In order to track the issue, NCSL has developed a comprehensive resource, “COVID-19: Essential Workers in the States,” to provide up-to-date information on this issue across the states. So far, each of the 43 states that have defined the essential workforce during the COVID-19 response—mostly through governors’ orders—has included the energy sector. However, the initial uncertainty surrounding these designations has also prompted a level of debate over whether states should consider a more streamlined solution for future emergencies. Read more about this issue on NCSL’s blog, “COVID-19: Energy’s ‘Essential’ Role Isn’t Backed By Law.”

New Building Efficiency Webpage 

Building a house.NCSL recently published a web brief focused on state action to increase building efficiency, including updating building energy efficiency codes and enacting new building energy consumption disclosure and benchmarking requirements.

 

 

Video Roundtable: COVID-19 and the Energy Sector 

NCSL, in collaboration with Public Utilities Fortnightly (PUF), hosted a video roundtable on the impacts of the coronavirus pandemic and how state legislatures are responding. Check out the full video, which also includes Retired Kansas State Representative Tom Sloan! If you’re a state legislator or legislative staff and you’re interested in receiving a free subscription to PUF’s monthly magazine, please send an email to kristy.hartman@ncsl.org.

EXTERNAL ENERGY RESOURCES AND PUBLICATIONS

  • The U.S. Department of Energy is hosting virtual workshops for its Energy Storage Grand Challenge (ESGC), a comprehensive program designed to accelerate development, commercialization and utilization of next-generation energy storage technologies. 
  • A new report, “Energy Infrastructure: Sources of Inequities and Policy Solutions for Improving Community Health and Wellbeing” by the Regulatory Assistance Project, Synapse Energy Economics and Community Action Partnership identifies disparities in energy access and burdens and offers tools for policymakers in transitioning toward a more just and equitable clean energy future. 
  • The Alliance for Transportation Electrification has released a new white paper that explores how best to capture revenue from alternative fueled vehicles. The paper examines the growing interest in electric vehicle fees as one mechanism to address transportation funding shortfalls and highlights various considerations as more of these policies are implemented.