Vol. 2 Issue 6 | July 2014
A number of states have enacted legislation this session to explore and revise net metering policies. Four states enacted net metering legislation in June: Connecticut and Vermont revised property tax valuation for net metering systems; Hawaii required the Public Utility Commission to consider multiple factors related to net metering and distributed generation in their rulings, as they relate to the modernization of the electric grid; and South Carolina became the 44th state to authorize net metering.
The New Jersey legislature passed a bill in June, which prohibits companies from treating, discharging, disposing, and storing waste from hydraulic fracturing in the state. The bill has been sent to Gov. Chris Christie for signature although it is unclear whether the governor will approve the law—Gov. Christie vetoed a similar measure two years ago. New Jersey isn’t the only state to consider legislation to ban waste from hydraulic fracturing. Earlier this year, Connecticut passed a similar bill prohibiting the storage and disposal of hydraulic fracturing waste in the state and in 2012, Vermont became the first state to ban hydraulic fracturing and the collection, storage, or treatment of the wastewater it generates.
A New York bill, which would require the state to account for sea-level rise, storm surges and flooding due to climate change during the application and review process for state-funded projects, has been sent to the governor. If enacted, the Community Risk Reduction and Resiliency Act would make the state one of the first to consider climate change impacts in public projects through a legislative requirement. Additionally, Hawaii enacted legislation to develop a climate adaptation plan to carry through to 2050; Rhode Island passed a bill to create a Climate Change Coordinating Council and reduce greenhouse gas emission levels 80 percent (below 1990 levels) by 2050 and Vermont recently released a state-level climate assessment.
Massachusetts recently passed legislation establishing a three-tiered classification system for natural gas leaks and a priority system for repairs. The legislation requires monitoring of more than 5,000 miles of intrastate and gathering pipelines and over the next 20 years, companies are expected to repair roughly 25,000 identified leaks. The bill will also allow companies to charge customers a higher rate in order to help recover some of the repair costs. However, customers are expected to save over the long-term as they will no longer have to pay for gas lost to leaking pipelines. Several other similar bills were introduced in the state this session in an effort to address concerns from recent natural gas accidents caused by aging pipelines.
Illinois Governor Quinn signed House Bill 2427, establishing a competitive procurement process to purchase energy from existing solar installations and new solar projects. The state has been struggling to comply with their renewable portfolio standard (RPS) due to a technicality in state law, which the enacted legislation addresses. The Governor of Ohio signed a bill in late June that significantly alters the state’s wind siting provisions. In particular, the legislation amends turbine “setback” requirements, mandating that turbines now be a specified distance from a property line—rather than the nearest habitable structure. Utilities in Wisconsin have successfully met their RPS—requiring 10 percent of electricity sales to be generated from renewable energy sources by 2015—ahead of schedule. A report from the Public Service Commission found that utilities generated 10.17 percent of electricity from renewable sources in 2013. Sixty-five percent of renewable energy generation originated from wind power.
Nine states—Alabama, Alaska, Kentucky, Nebraska, Ohio, Oklahoma, South Carolina, West Virginia and Wyoming—have joined with Murray Energy to file a lawsuit against the Environmental Protection Agency’s (EPA) proposed regulations for emissions from existing power plants. In a brief, the states argue that EPA violated the Clean Air Act (CAA) by attempting to regulate existing power plants where it has already decided to regulate those same plants under a different section of the CAA.
The North Dakota Industrial Commission (NDIC) has unanimously approved a new flaring reduction policy that will require drilling operators to increase the volume of gas captured at well sites. The goal of the new regulation is to reduce the number of wells that burn off gas and the volume of gas flared in the state. The state will require oil and gas operators to capture 74 percent of the gas produced by Oct. 1, with the requirement increasing to 90 percent by the end of 2020. Operators who are not in compliance with the new regulations will be restricted to producing no more than 200 barrels per day if at least 60 percent of the monthly volume of associated gas produced from the well is captured. If less than 60 percent is captured, production will be limited to 100 barrels of oil per day.
The Environmental Protection Agency (EPA) published in the federal register its proposed rule to limit carbon dioxide emissions from existing power plants, officially opening the 120-day public comment period. The rule aims to reduce carbon emissions in the United States by 30 percent below 2005 levels by 2030. To do this, EPA is proposing formulaic state-specific emissions goals. The states will be given the flexibility on how they can comply with the reduction standards.
The House approved the Reliable Home Heating Act, a bill that would give governors more authority to extend “state of emergency orders” so they have advanced warning if the state may experience a shortage of home heating fuels. Having passed the Senate unanimously in May, the bill will now be sent to the president for signature into law.
The National Renewable Energy Laboratory (NREL) and Lawrence Berkeley National Laboratory (LBNL) released a report in late May exploring the cost of state renewable portfolio standards (RPS) on electricity rates in 29 states. The report demonstrated that RPS in 24 states had average compliance costs of about 1 percent of retail electricity rates, and average rate increases remained below many states’ RPS cost caps. The report’s authors noted that although the data demonstrates that states are meeting their RPS goals without significantly increasing electricity rates, many states have still-increasing RPS targets. View an NCSL webinar on this topic. Additionally, this month EPA announced a three-month extension on the compliance deadline for its 2013 renewable fuel standards (RFS). The June 30 deadline has now been extended to Sept. 30.
The Bureau of Ocean Energy Management (BOEM) launched its official three-year process for determining which areas in the outer continental shelf should be leased for oil and gas drilling from 2017-2022. BOEM is seeking public comment and information from state and local governments and interested parties until July 31 on which lands should be explored.
The Department of Energy (DOE) announced a $150 million loan guarantee for a wind generating project offshore of Cape Cod, Mass. The Cape Wind project would be the first commercial-scale offshore wind facility in the United States. The loan guarantee is conditional on the ability for Cape Wind Associates, LLC to secure additional financing.
The U.S. Supreme Court ruled 5-4 in Utility Air Regulatory Group v. EPA that the Environmental Protection Agency (EPA) cannot require stationary sources to obtain Clean Air Act permits only because they emit greenhouse gases. However, the Court ruled 7-2 that EPA may require stationary sources that are already being regulated based on their emissions of other pollutants, to comply with best available emission standards for greenhouse gases.
The cost of the right to emit a ton of carbon reached a record high in the latest quarterly auction of the Regional Greenhouse Gas Initiative (RGGI). The increase of cost is likely due to speculation that more states could join RGGI following the recent proposal by the EPA to limit carbon dioxide emissions from existing power plants. Prices for a ton of CO2 came out at $5.02, up from $4 in the last auction.
Small Modular Reactors (SMRs) may expand opportunities for nuclear power development. Although SMRs are still in the design phase, it is expected that a 300 megawatt reactor could generate enough electricity to power approximately 230,000 homes a year. Check out NCSL’s resources on SMRs including a June 2014 Legisbrief highlighting federal, state and private investment and a web brief detailing the benefits and challenges of commercializing these designs.
As states and localities increase the number of siting and construction permits for utility-scale renewable energy, and associated electric power transmission projects, the potential for conflict with Department of Defense (DoD) activities increases. Renewable energy and electrical transmission projects can interfere with nearby military installations and airspace. However,, a number of states have included the DoD in the project planning or review phase with the goal to expedite the permitting process and mitigate potential impacts to DoD operations. Join us for this free webinar to discuss best practices from legislators and state and federal executive offices.
State net metering policies have facilitated the expansion of renewable energy through on-site generation, allowing customers to sell excess electricity to a utility and receive credit on their utility bill. This web brief provides an overview of state net metering policies, including recent regulatory and legislative action exploring the costs and benefits of net metering policies.
Recordings and presentation slides from the Natural Resources and Infrastructure (NRI) Committee webinar series are now available online, including resources from June webinars on Increasing Natural Gas Pipeline Safety and Small Modular Reactors.
Register today for NCSL’s annual Legislative Summit taking place in Minneapolis, Minn. NCSL’s Task Force on Energy Supply meeting will meet on Monday, Aug. 18 followed by the Energy Policy Summit pre-conference on Aug. 19. Sessions will explore how this year’s polar vortex impacted the energy utility sector, how the nation’s abundant supply of crude oil and natural gas is driving industrial growth and influencing state energy planning, and how new technologies are driving dramatic changes in the electric system, among others.