Vol. 4: Issue 5 | December 2016
States continued to crack down on the use of drones near critical infrastructure. In September, Delaware became the fifth state this year to enact legislation (H.B. 195) restricting drone use near certain critical facilities, joining Arizona, Oklahoma, Oregon and Tennessee. Delaware’s new law restricts drone operation over any event with more than 1,500 attendees, as well as over critical infrastructure and areas where first responders are at work. Meanwhile, similar measures have come up in Pennsylvania (S.B. 1323) and Nevada (A.B. 11).
The New Jersey Senate has passed two bills that would support increased renewable energy development in the state. The first bill (S.B. 2276) would increase solar deployment by increasing the solar renewable energy portfolio standard to match the federal solar investment tax credit. The bill would also create a commission to study the solar energy industry and make recommendations to the governor and the legislature regarding the future changes in solar energy policy. The Senate passed a second bill (S.B. 1707) that would increase and extend the state’s renewable energy standard to 80 percent by 2050. If passed by the Assembly, New Jersey would join the handful of states that have recently strengthened their renewable portfolio standards.
The Illinois General Assembly passed an 11th-hour energy reform package during a veto session that includes financial support for two money-losing nuclear plants, along with changes to the state RPS, an ambitious energy efficiency program and $25 million per year in low-income energy incentives. While the Future Energy Jobs Bill (S.B. 2814) includes changes to the state’s energy law, much of the attention has centered around the $235 million in annual ratepayer subsidies to the Clinton and Quad Cities nuclear plants using a mechanism very similar to one that will be employed in New York. Exelon Corp., which owns all 11 nuclear reactors in the state, had said that it would shut down the two plants without such a policy change. In the end, the 400-page bill underwent around 30 changes before clearing the House by only three votes. One of the final changes included ratepayer protections, which capped rate increases for businesses and residential customers. The governor signed the bill within days of its passage. See NCSL’s resources on nuclear energy, including “State Action in Support of Nuclear Generation.”
The Pennsylvania Senate passed S.B. 805 before adjourning, which would have established an opt-out provision for large commercial and industrial users from the state’s energy efficiency programs. Supporters of the legislation contend that these entities can appropriately fund efficiency efforts independent of state mandates, while opponents highlight that large users are the biggest beneficiaries of efficiency measures. Customers in the state currently pay into a statewide system benefit fund, which provides efficiency upgrades for all entities. The bill was sent to the House Consumer Affairs Committee, which did not meet before adjourning. Other states with efficiency opt-out provisions for large customers include Arkansas and Illinois (gas only).
California Governor Jerry Brown signed legislation in September that establishes a statewide consumer protection framework for residential Property Assessed Clean Energy (PACE) financing, which allows property owners to install renewable and efficient energy projects on their properties through payments on their property taxes. The bill would establish that property owners could cancel their PACE contracts within three business days. Prior to signing any contractual paperwork, property owners would be provided a document with financing estimates, similar to federal mortgage lending practices. It would also restrict parties from declaring specific monetary or percentage estimates on property value changes.
On Nov. 8, voters in several states went to the polls to determine the outcome of energy-related ballot measures. Voters in Florida defeated Constitutional Amendment 1, which would have established a constitutional provision for state and local governments to protect consumer rights and ensure that non-solar energy customers are not subsidizing costs for solar customers. Notably, the campaign for this particular measure raised more than $28 million in contributions. Voters in Nevada approved Question 3 to establish an open, competitive retail electric energy market and prohibit a monopoly franchise for electricity generation. However, voters must re-approve this measure again in the next general election for it to become law. Lastly, voters in Washington defeated a carbon tax measure, Initiative 732. This measure would have placed an indexing tax of $15 per metric ton on the sale or use of fossil fuels and fossil fuel-generated electricity beginning in 2017 and reduced several tax rates to be revenue neutral.
The Pennsylvania Public Utilities Commission (PUC) finds itself in an unusual situation after an appellate court ruled that the PUC does not have jurisdiction over the interpretation of the state’s Alternative Energy Portfolio Standards Act, which governs net metering among other policies. In 2014, the PUC proposed an amendment to the act that would redefine “customer-generators” in the state’s net metering rules however, in October 2016, an appeals court ruled that the PUC does not have the jurisdiction over the interpretation of the act. The appeals court also stated that the PUC has a narrow authority to develop net metering rules. Since the ruling, the PUC has approved several net metering actions, however these changes may be at odds with the court’s decision.
The past year has been full of ups and downs for an industry that has thrived on its steady nature. But uncertainties in several markets have injected quite a bit of unwanted drama into the fold, as operators threaten to shut down unprofitable plants without state intervention. With that in mind, the fourth quarter was particularly volatile on an emotional level for nuclear advocates. October saw the first new nuclear reactor to reach commercial operation in nearly two decades begin feeding electricity into Tennessee’s electric grid. That was followed a week later by the closure of the Fort Calhoun nuclear plant in Nebraska—the nation’s smallest nuclear plant. Similarly, December witnessed the passage of a policy that will save two plants in Illinois, followed quickly by news that a reactor in Michigan will shut down.
Pacific Gas & Electric has successfully integrated two battery energy storage systems into California’s electric market, CASIO. The 2-megawatt and 4-megawatt systems are participating in the market and ancillary services, with PG&E arguing that frequency regulation is the most economic deployment under the current regulations. The utility has developed an “automated dispatch system” that serves as a platform for market participation.
The U.S. Department of Agriculture announced an investment of over $300 million through the Rural Energy for America Program (REAP), a program that helps small rural businesses install renewable energy and energy efficiency projects and benefit from resulting energy savings. Additionally, the USDA announced it will provide $3.6 billion in loans through the Electric Program of the Rural Utilities Service. The loans will support rural electric utilities and cooperatives and will fund 82 electric projects in 31 states. While the majority of spending will go toward building or improving transmission lines, the USDA investment also includes funds for energy efficiency, smart grid technologies, renewable energy and environmental improvements.
Several federal agencies are winding down the year with a number of recent regulatory actions—the impacts of which will remain uncertain following an administration change. First, the U.S. Department of Energy announced the release of a final rule for the Integrated Interagency Pre-Application Process (IIP) on Electric Grid Transmission. The IIP Process is intended to increase federal, state, local and tribal coordination prior to submitting a formal permit application as means to expedite transmission development. The U.S. Department of the Interior finalized rules for solar and wind energy leasing on federal lands and for reducing methane emissions on federal and tribal lands. Finally, the U.S. Environmental Protection Agency proposed requirements that would apply to state, local and tribal air agencies for implementing the 2015 National Ambient Air Quality Standards (NAAQS) for ground-level ozone. As a final note, a federal judge in the Northern District of West Virginia ruled that EPA did not adequately account for coal sector job impacts when developing air regulations under the Clean Air Act.
The White House issued an executive order to enhance protections to the electric grid and other infrastructure in the event of “space weather” and electromagnetic pulse (EMP) threats in October. The order directs the U.S. Department of Energy and other federal agencies to conduct new tests and develop plans for the protection of the grid, which could include suspending certain critical infrastructure and grid operations before, during and after such an event. There has been some concern over the threat that a strong solar flare could have on the power grid, which could result in cascading failures. Federal agencies are directed to act on the order within 120 days.
The White House recently released a new strategy to work with Canada in order to secure the electric grid. The initiative with the Canadian Government will work to strengthen the security and resilience of the North American electric grid by establishing partnership and collaboration against the growing threat from cyberattacks and extreme weather events. The “Joint United States-Canada Electric Grid Security and Resilience Strategy” aims to enhance preparedness, manage and coordinate recovery efforts, and to build a more a secure and resilient grid of the future.
NCSL’s Energy Program hosted its first Energy Policy Forum on Tuesday, Dec. 6 in Washington, DC. The meeting helped kick off the annual Capitol Forum and brought together top national experts to discuss a number of important policy topics of interest to state legislators, including possible solutions for the storage and/or permanent disposal of high-level radioactive waste; the renewed interest and concerns regarding electricity deregulation and options for states; the rapid advancements in energy storage and what it means for the energy sector; and state solutions to address the growing risk of cyber threats to the nation’s energy infrastructure. Check out the agenda and presentations on the NCSL website.
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 retail credit on their utility bill. Forty-one states, Washington, D.C. and four territories offer net metering, and utilities in two additional sates have adopted voluntary net metering programs. View this newly updated brief for an overview of state policies and recent legislative action.
Low- and moderate-income (LMI) customers face unique barriers in accessing energy efficiency and renewable energy. Policymakers are seeking to remove or reduce barriers through financing programs and specific policies or programs designed for LMI customers. This webpage provides state-specific case studies that directly address LMI customer access to renewable and efficient technology. Click here to view the webpage.
NCSL’s State Legislatures magazine includes a brief article in the December issue that examines the most recent state legislative action to retain U.S. commercial nuclear plants. The article highlights bills in Illinois and New York to support nuclear plants in both states.
The American Council for an Energy-Efficient Economy (ACEEE) has released its annual state scorecard and three “M”s won the most improved: Maine, Michigan and Missouri. California and Massachusetts tied for first place this year. View the scorecard to see where your state lands.
PACENation will be hosting it’s annual conference in Denver this February—the only national conference focused completely on PACE. The event will feature three days of content, more than two dozen interactive sessions, expert speakers, and unique networking opportunities. The conference intends to bring together legislators, program administrators, financiers, contractors, building owners, government and nonprofit organizations to help grow the PACENation marketplace in a way that benefits all stakeholders.
Two organizations have recently released reports on navigating consumer resources on distributed solar. The Clean Energy States Alliance (CESA) has produced Solar Information for Consumers: A Guide for States, explaining why states should provide consumer information on solar, describing the types of information that can be useful, and pointing out existing educational efforts by states and other entities that provide models and useful information. Synapse Energy has prepared a report for Consumers Union that provides a framework for helping decision-makers analyze distributed solar policy options comprehensively, to balance the protection of customers with the promotion of cost-effective distributed solar resources.