Plugged In | NCSL’s State and Federal Energy Newsletter


  • Natural Gas Now Emits More CO2 Than Coal: According to recent estimates by the Global Carbon Project, U.S. carbon dioxide (CO2) emissions from natural gas have surpassed those from coal. While coal and oil still emit more CO2 globally, gas is now the primary driver of emissions growth worldwide. In 2019, U.S. CO2 emissions from natural gas increased by 3.5%, whereas, CO2 emissions from coal were down 10.5%.
  • Pepsi Powered by 100% Renewables in the U.S: PepsiCo recently announced that its U.S. operations will be going 100% renewable in an effort to implement the company’s climate-friendly policies already in effect in Europe. Chairman and CEO Ramon Laguarta said the move was in response to the critical need to address “the severe threat that climate change poses to the world.” Pepsi’s U.S. operations are responsible for roughly half of the company’s global electricity use.  
  • Foam From Fossil Fuel: As coal use for electricity production continues to decline, the industry is looking to alternative uses for the fossil fuel and has recently landed on carbon foam. At the end of 2019, research and development company Battelle secured a $1 million grant from the U.S. Department of Energy to perfect the process of turning coal into commercial foam products. Also, in a move to diversify, Consol Energy kicked off 2020 by acquiring a 25% equity stake in CFOAM Corp, the owner of a carbon foam manufacturing plant.  
  • U.S. Repository Taking Waste Shipments: The Waste Isolation Pilot Plant (WIPP) in southeastern New Mexico—the nation’s only underground nuclear waste repository—took its first large cask shipment of nuclear waste in six years. According to officials, the larger containers accelerate the pace of cleanup at federal sites across the U.S. Department of Energy complex and reduce safety risks to workers.


On the Docket for California Lawmakers: A Green New Deal and More Oversight for PG&E

Green energy.California lawmakers kicked off 2020 by announcing that they’ll be pursuing their own “Green New Deal” legislation, which will likely involve accelerating already-established targets and furthering the state’s transition away from fossil fuels. Spearheaded by Assemblyman Rob Bonta (D-Alemeda), the bill would also aim to address quality of life issues in lower-income communities and reduce homelessness.

Also on the docket, this session are bills aimed at addressing the recent struggles of the state’s largest electric utility: Pacific Gas and Electric (PG&E). In particular, legislation will focus on instituting greater oversight over the utility as well as PG&E’s controversial new shut-off policy. Assemblymember Marc Levine (D) recently introduced a bill empowering the California Public Utilities Commission (CPUC) to require a public administrator to oversee utility decision-making related to infrastructure and safety if a utility fails to meet certain state requirements. Assemblymember Kansen Chu (D) is also introducing legislation targeting PG&E’s shut-off policy that would allow for greater CPUC oversight over shut-off events, including evaluating whether impacted customers should be compensated.  

Illinois Clean Energy Progress Could Be Overshadowed by Federal Investigation

Jobs sign.In Illinois, utility leaders, lawmakers and advocacy groups have been collectively working toward passage of the Clean Energy Jobs Act—a bill that would establish aggressive clean energy standards and modernize the state’s electric system. Those in support are committed to pushing the policy forward during the 2020 legislative session (the House version of the bill made some progress in 2019, but stalled in the Rules Committee), but face an unforeseen obstacle in the form of a federal investigation into the lobbying practices by Exelon’s Commonwealth Edison, the primary supplier of electricity to residents in Chicago and the northern part of Illinois. Despite these hurdles, the bill’s main sponsor, Representative Ann Williams (D), notes that while Exelon might be less involved moving forward, the coalition supporting the bill remains unwavering in its commitment to seeing the policy through.

Accelerating Electric Vehicle Sales

Electric vehicle charging.nt.State electric vehicle policies are off to a big start in 2020. Ninety bills have already been introduced this year, providing new or amending existing incentives for electric vehicles, requiring alternative fuels for fleets, or promoting increased electric vehicle infrastructure. New Jersey has sent a bill to the governor that establishes goals and incentives for the increased adoption of plug-in electric vehicles. SB 2252 provides a rebate for plug-in electric vehicle purchases of $25 for each mile of electric-only range on a vehicle (up to $5,000), and up to $500 toward the installation of a residential charging station. The bill also establishes a new fund where at least $30 million per year will be set aside, funded through a societal benefits charge collected from ratepayers. The Board of Public Utilities is tasked with determining where the funding comes from and whether an increase or reallocation of existing funds will be needed.


Reducing Flared Gas

Natural Gas well.A Colorado company has announced it will build a new 70-mile gathering pipeline in North Dakota, leading to a proposed natural gas processing plant. The plant is the sixth facility of its kind proposed in the state. The new plant will use cryogenic processing to strip liquid natural gasses such as ethane, butane and propane and send them to other markets. According to the latest data available, North Dakota flared about 18% of all gas in October 2019, well above the 12% target imposed by the state. North Dakota, the nation's second-largest oil producer behind Texas, flared about 546 million cubic feet of natural gas daily so the planned gas processing expansion will increase the processing capacity in the state by an additional 1 billion cubic feet daily by the end of 2021, and curb gas flaring.

Cap-and-Invest Program Targeting Transportation Emissions Starts to Take Shape

City traffic.Toward the end of 2019, the Transportation and Climate Initiative released a draft plan for its cap-and-invest program designed to limit transportation sector emissions in participating jurisdictions. Although 12 eastern states and Washington, D.C., initially signed on to the plan, a governor in at least one participating state, New Hampshire, has announced it will pull out of the agreement. The draft policy would set a regional emissions cap on motor vehicles fueled by gasoline and diesel with auction proceeds going to clean transportation programs. New Hampshire isn’t the only state grappling with whether to continue its participation in the program: Massachusetts Governor Charlie Baker (R) recently voiced support for the draft policy. But some lawmakers in the state argue the program amounts to a gas tax, and want to have a say in the process—introducing a bill that would require legislative approval before Massachusetts signs on to the program.

California’s Storage Solutions

Energy storage facility.Energy storage has perhaps benefitted from an assumption that it’s an inherently clean resource—that, because it theoretically compliments renewables, it’s as clean as renewables in practice and should receive similar incentives. However, the truth is that energy storage is only as clean as the resources it’s storing—and several studies have revealed that energy storage projects are causing an increase in greenhouse gas emissions.

The causes are complex—a combination of what energy is stored and displaced and what’s making up for the 20% that’s lost in the round-trip efficiency of batteries—but the effect is clear, especially in California, which is an early adopter of the new technology. But California isn’t giving up on storage—it’s still viewed as an important technology for reaching the state’s ambitious climate goals, along with providing important resiliency measures as policymakers consider how to plan for future wildfires.

Rather, the California Public Utilities Commission (CPUC) will implement a policy fix that could prove useful for other states to ensure that energy storage systems that benefit from state incentives are actually doing their part to reduce emissions. The CPUC ruled that storage projects can receive up to half of the existing state incentive up-front, but the other half will be paid out over five years, during which time the project must prove that its net-effect is reducing emissions. The state has also given storage developers the data and tools to help them operate in a way that is both financially and environmentally beneficial. As if that weren’t enough, the state is also trying to help diversify the storage technologies available. At the moment, over 90% of energy storage projects are lithium-ion batteries, which can run for around four hours at a time. To drive commercialization of technologies that could be better suited to long-duration discharge and other grid-scale applications, the state has set aside $11 million for non-lithium-ion projects.

The Coal Conundrum

Coal plant.

As coal’s decline continues, the effects on coal communities has deepened. Over the past two years, more than 20 gigawatts (GW) of coal capacity has been shut down or converted to run on natural gas, and the closure announcements don’t show any sign of slowing in the new year. Tri-State Generation and Transmission, a large Western power provider under pressure from its members, recently announced plans to shut down two large coal plants in Colorado and New Mexico, while another two plants in Arizona and Louisiana also joined the list for 2020.

Those closures, while celebrated by environmental advocacy groups, can be sources of deep tension within the immediate communities, as questions arise over lost jobs and economic activity. This shift is affecting the Navajo Nation acutely; its coal resources have been at the heart of the tribe’s economy since the 1960s, sending electricity to booming Western towns like Las Vegas, Los Angeles and Phoenix. But now those communities are faced with sudden unemployment and cleanup requirements, and state and federal policymakers are left considering what can be done to ease the transition. The Colorado and New Mexico legislatures have each passed measures in recent sessions to address the issue, and it seems likely that more will follow. In terms of cleanup, coal can have serious environmental impacts. Duke Energy ended years of fighting over its cleanup obligations in agreeing to excavate 80 million tons of remaining coal ash—thought to be the largest cleanup of its kind in the country. The total costs of the project are estimated to be around $9 billion.

Many Utilities Aren’t Smart When it Comes to Using Smart Meters 

New research by the American Council for an Energy-Efficient Economy (ACEEE) finds that most utilities vastly underuse smart meter technology when it comes to helping customers save energy. Smart meters can measure electricity use in short intervals of 15 to 60 minutes, creating granular data that can help manage grid operations. The data can also help utilities offer better programs and encourage customers to save energy. The report found that just one of the 52 largest U.S. electric utilities that were surveyed is leveraging smart meters to deliver greater customer energy savings.

Minnesota PUC Required to Consider Environmental Impact of Proposed Wisconsin Power Plant

The Minnesota Public Utilities Commission (PUC) approved a 500 MW gas plant without conducting an environmental review, citing the plant’s location in another state (Wisconsin) as precluding such a review under the state’s Environmental Policy Act (MEPA). An appeals court disagreed, ruling that MEPA applies to the PUC's approval of affiliate agreements related to projects located in another state. The court reversed the PUC's approval of the project and directed regulators to assess environmental impacts before reevaluating the project for approval.  

Energy Imbalance Markets

Global energy image.Four Colorado utilities, including Xcel Energy, announced they are joining the California Western Energy Imbalance Market (WEIM), operated by the California Independent System Operator, beginning in 2021. The imbalance market has operated for the past five years and allows energy from multiple providers to be dispatched at the lowest cost and serve customer demand in the region. The market also incorporates more renewables onto the grid. The four Colorado utilities also considered joining the newly formed Southwest Power Pool’s Western Energy Imbalance Service, but a study from the Brattle Group concluded that California’s larger market offered more savings.


Federal Officials Set to Approve Largest Solar Project in the U.S. 

Solar panels in open field area.The Bureau of Land Management (BLM) recently released its final environmental review of NV Energy’s Gemini project, putting the solar-plus-storage facility on course to become the largest solar farm in the United States. Covering more than 7,000 acres of federal land, the massive solar facility will have a capacity of 690 MW accompanied by 380 MW of four-hour storage. While BLM officials praised the project for its potential to deliver increased renewable energy capacity for the West, opponents have argued that these benefits don’t outweigh the environmental impacts on sensitive species and habitat. The final comment period for the project closed on Jan. 27.

DOE Issues Rules on Efficiency, State Policies Fill Gaps 

Light bulb in the grass.

The U.S. Department of Energy (DOE) kicked off 2020 by publishing regulations setting new efficiency standards for certain industrial and commercial products that had been previously finalized by the Obama administration. The 9th Circuit Court of Appeals ruled last October that the DOE had a non-discretionary duty to publish the regulations. Publishing the new efficiency standards for air conditions, power suppliers, commercial boilers and industrial air compressors also comes after a series of DOE decisions to rollback efficiency standards for lightbulbs.

In December 2019, the DOE finalized a rule blocking the phase-out of incandescent lightbulbs that was set to take place in 2020. In support of the decision, DOE Secretary Dan Brouillette said the planned standards would have cost consumers money, impeded choice and imposed unnecessary regulations in a market that is already moving toward increased efficiency. The standards would have required that all light bulbs use 65% less energy than their incandescent counterparts. Those opposed to the rule, including consumer advocates and environmental groups, argue this anti-regulatory approach costs consumers money while wasting energy and increasing carbon emissions. The DOE also withdrew a regulation expanding energy efficiency standards to apply to different-shaped bulbs.

Some states are taking a different approach to lightbulb efficiency. California’s Energy Commission voted to ban incandescent lightbulbs in the state. In response, industry groups filed suit in federal district court to block the state’s implementation of the ban, arguing that the new regulations were preempted by federal law. This month, the federal judge reviewing the case upheld the state’s new regulations.

Iran Conflict Escalates Cyber Concerns

Image depicting the electric grid.The energy sector is on high alert over concerns that Iran may launch a series of cyberattacks on the electric grid and other critical infrastructure in the aftermath of the Trump administration’s killing of Iran’s Maj. Gen. Qasem Soleimani. The rising tensions between the U.S. and Iran have put domestic infrastructure—and electric utilities, in particular—in the crosshairs of the conflict. The concern is founded on the idea that Iran will likely avoid a traditional conflict and opt instead to deploy its cyber forces, which the country has worked to develop in recent years. The issue is particularly concerning, because Iran has been probing the cyber defenses in the electric and oil and gas sectors, among several others. The issue has come to a head just as cybersecurity firm Dragos Inc. released a report indicating that hackers are showing a renewed interest in the electricity sector as foreign governments view it as a key lever that can be used to their advantage.

FERC Takes on State Programs

Man pointing to different types of energy.It’s been described as a bailout for fossil fuel generators, a necessary correction to address price suppression, and an affront to state rights. Suffice it to say, the Federal Energy Regulatory Commission’s (FERC) new capacity market rule for the nation’s largest organized electricity market has spurred a lot of heated discussions. The order, approved on a contentious 2-1 party-line vote in mid-December, is intended to address state supports for certain resources—most often, “clean resources” like nuclear and renewables.

The ruling requires resources that receive state supports to enter bids into the PJM Interconnection’s capacity market at higher, predetermined prices, which opens the door for resources that don’t receive state support—primarily coal and natural gas plants—to enter bids that they’re more likely to win. The decision follows a complaint filed in 2016 by many of the fossil fuel generators that stand to benefit from the recent decision.

The group says the new MOPR decision—named after the Minimum Offer Price Rule that FERC has expanded upon—re-aligns the market rules to support competitive generators, rather than state-supported generators. However, opponents argue that the rule runs directly in the face of those very state initiatives, which often seek to support less carbon-intensive generators through policies such as renewable portfolio  and zero emissions standards. In addition, the rule threatens the business models for public power and electric cooperatives, as trade groups representing both types of utilities have argued in recent weeks.

The issue is unlikely to be resolved soon, as FERC hears from stakeholders for a set period before the issue can be contested in federal courts. In the meantime, it’s unclear when PJM will be able to run the next capacity auction. The MOPR proceedings forced PJM to postpone last year’s auction for the 2022-2023 planning year and this year’s auction (for the 2023-2024 planning year) is similarly delayed. In fact, a PJM official recently said the auctions could be delayed for the next four years as a result.


Modernizing the Electric Grid: State Role and Policy Options  

Much of the nation’s network of electricity generation, transmission and distribution resources are aging and major upgrades are needed for new technologies, changing market dynamics and shifting consumer preferences. A new NCSL report, “Modernizing the Electric Grid: State Role and Policy Options,” explores innovative policies for creating and regulating a modern grid. 

The News Reactor 

Did you know NCSL’s Energy Program also publishes a quarterly newsletter called The News Reactor? It highlights trends and technologies impacting nuclear generation, the transportation, storage and disposal of radioactive waste, and the cleanup of the nuclear weapons complex. Read the December 2019 issue to find out the latest state and federal policy developments on these topics.


2020 Renewable Energy Outlook

S&P Global Market Intelligence released a 2020 renewable energy outlook. The report includes trends in markets, technologies and regulations impacting the renewable sector. Download the full report to read more on federal policy and state legislative trends and what’s anticipated in 2020.