Plugged In | NCSL’s State and Federal Energy Newsletter

10/23/2015

Vol. 3 Issue 5 | October 2015

 

SPARKS OF NEWS

  • Storing Up in Kentucky: A municipally owned utility in Kentucky, Glasgow Electric Plant Board, installed 165 energy storage devices in homes to supply power during peak demands and reduce customer costs. The devices are aggregated to serve as a virtual power plant and can also provide limited backup power during outages.
  • BLM Rule Shot Down: A federal judge in Wyoming has said the U.S. Department of the Interior lacks the authority to set stricter standards for hydraulic fracturing on public lands. The rules were issued by the Bureau of Land Management, and apply to oil and gas drilling on federal lands. The judge issued an injunction preventing the implementation of the rules.
  • 111(d) Hearings: At least nine states— Arkansas, California, Colorado, Georgia, Minnesota, Missouri, Montana, Pennsylvania and Virginia—have begun legislative hearings with stakeholders on the Clean Power Plan. The Clean Power Plan requires states to engage with low-income and vulnerable communities, and many states are gathering input as they determine what actions to take.
  • Microgrids Help Tribes: Several California tribes are looking to microgrids as a way to improve reliability and provide a backup power option in rural areas prone to fire, earthquakes and other natural disasters. Blue Lake Rancheria, for example, worked with the California Energy Commission to develop a power generation system that can operate independently for as long as a month.

STATE LEGISLATIVE UPDATES

New Nuclear Plant Construction

Wisconsin introduced two bills in October (S.B. 288 and A.B. 384) that would end the state’s 32-year-old ban on the construction of new nuclear power plants. The bills would eliminate a 1983 requirement preventing the Public Service Commission from approving the construction of a new nuclear plant unless there was a facility with adequate capacity to dispose of high-level nuclear waste from all nuclear power plants operating in the state. The bills also changed the state’s energy priority policy by requiring regulators to consider the use of advanced nuclear energy options before nonrenewable combustible resources. The Kewaunee nuclear power plant was the last plant approved for construction in the state in 1974. The Kewaunee plant closed in 2013, leaving the Point Beach plant as the only operational nuclear power plant in Wisconsin.

Net Action on Net Metering

rooftop solarHawaii utility regulators have reached an agreement on the future of the state’s net metering program, where customer demand has exceeded utilities' required installations. In mid-October, the Public Utilities Commission announced it will be replacing the state’s net metering program with two alternative rooftop photovoltaic programs for new customers. Customers will either participate in a solar and energy storage program or receive compensation for excess electricity sold to the grid at the wholesale rate. Additionally, all new customers with photovoltaic panels will have a minimum monthly bill. Elsewhere, legislators in Maine overrode the governor’s veto of House Paper 863, which states it is in the public’s interest to develop an alternative to the state’s net energy billing policy. Legislation requires the Public Utility Commission to convene stakeholders and develop an alternative policy to net energy billing.

Re-Freeze?

The Ohio Energy Mandates Study Committee and the governor disagree about the future of the state’s Alternative Energy Resource Standard and Energy Efficiency Resource Standard. A 2014 bill suspended both requirements while the committee studied the costs, benefits and grid impacts of the requirements, examples of evidence-based standards and potential opt-in systems. The committee’s final report recommends extending the freeze indefinitely, as study found the mandates to have an economic burden on customers. However, Governor John Kasich, who signed the 2014 bill, found the committee’s recommendations “unacceptable” and supports a diverse mix of reliable and affordable energy sources.

Which Wastewater?

Pennsylvania Governor Tom Wolf (D) signed a bill this month that would encourage the use of coal mine wastewater in the hydraulic fracturing process. S.B. 875 limits the liabilities for producers who use mine water. The legislation promotes the use of treated mine water, which typically sits in containment ponds, instead of using fresh water when hydraulic fracturing. Senator Camera Bartolotta (R), one of the bill’s co-sponsors said, “The use of treated mine water by natural gas companies is an innovative approach that will help preserve millions of gallons of fresh water, and I am thankful that more companies will have the freedom to explore this option.” However, some critics of the bill cite additional potential environmental issues and say that the bill may unintentionally allow liability protections to non-treated mine wastewater.

Banking Green

When the Rhode Island General Assembly passed a 2015 state budget, lawmakers established the Rhode Island Infrastructure Bank, a new state “green” bank. The infrastructure bank was previously the quasi-public state Clean Water Finance Agency. State energy or "green" banks are in place in several states, including Connecticut, New Jersey and New York. These institutions are public-private partnerships that combine public funding with private capital and expertise to promote renewable and efficient energy technology. The bill also expanded programs managed by the bank, including a commercial Property Assessed Clean Energy financing program.

Investigating Volkswagen

trafficVolkswagen revealed last month that 11 million of its diesel vehicles worldwide (about 500,000 in the U.S.) were equipped with software programmed to skirt clean air rules by only turning on full pollution controls during emissions tests. The deception dates back to 2007, when the company began equipping its diesel models to pass emissions tests even though the vehicles were emitting up to 40 times the allowable amount of nitrogen oxide. At least 15 states and Washington, D.C., require diesel vehicles, like the Volkswagen Jetta and Golf, to pass an emissions test. Some require emissions tests only in select counties or highly populated areas, while others are statewide. Model years and vehicle weight limits also vary. In the remaining 35 states, either no requirement exists for emissions testing or diesel vehicles are specifically exempt. A formal recall is expected soon, but there is concern that owners will ignore it if the emissions fix compromises performance. Though the EPA and most states cannot force an owner to comply with an emissions-related recall, laws in California, Massachusetts, New Jersey and Washington, D.C., allow DMVs to deny registration renewal without proof of repairs.

Mass-ing Action

A Massachusetts Senate bill, which has been sent to the House, would require the state to develop a comprehensive climate adaptation management plan. The plan would contain provisions for a coastal buy-back and coastal land management program. The plan establishes a state grant program that would aid in the development of regional adaptation plans. Additionally, the bill would increase the statewide cap on net metering to 1600 megawatts and require the Department of Energy Resources to develop and implement a new solar incentive program to take effect after the new net metering cap is reached. Governor Charlie Baker (R), however, released his own version of net metering revisions that would reduce the calculation of net metering credits.

 

STATE ENERGY NEWS

Future of Coal

coal plantThe coal industry has found itself under pressure as states begin to conceptualize emissions reduction plans. In Michigan, 25 coal-fired power plants are expected to be shuttered by 2020 due to a combination of old age and new regulations. Idaho Power Co. has also announced that it plans to close two coal plants by the end of the decade. However, some states and organizations are fighting back. Wyoming Governor Matt Meade (R) has announced plans to invest $20 million in a test center to develop commercial uses for carbon dioxide from coal-fired plants. Currently, there are only 14 large-scale carbon capture and storage (CCS) projects operating worldwide with SaskPower’s Boundary Dam in Saskatchewan, Canada, being the world’s first carbon capture embedded power plant. The head of the World Coal Association has already called for carbon-capture technologies to compete for Green Fund aid, and fossil fuel firms have sponsored a $20 million prize for researchers who find a way to commercialize captured carbon dioxide.

Commission Update

The California Public Utility Commission has had a busy summer, announcing two significant rate decisions in July and August. First, the commission reached a decision on residential time-of-use rates that revises current rates to establish two time-of-use tiers, an additional charge for “super-users” and a minimal bill requirement. Time-of-use rates are intended to incentive energy efficiency and on-site renewable energy. Second, the commission released a proposed decision to streamline regulation for energy efficiency, renewable energy and distributed energy resources. The proposed decision coins a new phrase, “integrated demand-side resources” that encompasses these technologies and seeks to create a regulatory framework that appropriately values these technologies and allows customers to choose from an array of distributed resources.

Community Solar

Community renewable energy policies allow multiple consumers, such as renters or nonprofits, to have access to the benefits of a single moderately-sized renewable energy source. These policies have seen dramatic growth in recent years because of  interest from consumers and state policies that incentivize renewable energy. For example, the Colorado Energy Office announced a $1.2 million grant to create 12 community solar systems exclusively for “energy burdened” or “energy impoverished” households—the nation’s first of such investments. Additionally, one Hawaii utility has filed a proposal to create a long-term community solar pilot program for approximately 50 customers. In the 2015 legislative session, Hawaii enacted legislation that required the utility commission to develop a tariff for community-based renewable energy.

LNG on track

After receiving a positive federal review, the fate of a deepwater natural gas import facility rests in the hands of the governors of New York and New Jersey. The $300 million liquefied natural gas (LNG) facility would consist of underwater processing buoys, regasification vessels and pipelines that would deliver up to 400 million cubic feet of natural gas to the New York region per day. On the export side, a new proposal has emerged to build an $11 billion export facility along the Louisiana coast to ship up to 14 million tons of LNG per year to markets in China, India and Europe. This would make it one of the largest such plants in the U.S. Finally, the U.S. Department of Transportation has granted permission to transport LNG by rail for the first time. Alaska Railroad Corp. has been given permission to carry a limited number of LNG tanks by rail over the next two years, as the company seeks to move the product from southern Alaska to consumers in Fairbanks and North Pole.

Planning Energy

Two states—Missouri and New Mexico—have recently released comprehensive energy plans. A comprehensive energy plan serves as the state roadmap for meeting changing energy needs, promoting eco­nomic growth and ensuring access to affordable, diverse and reliable energy. Missouri Governor Jay Nixon (D) ordered an energy strategic plan in 2014 and the Department of Economic Development released a plan in mid-October. The plan recommends an expansion of the state’s renewable energy standard, increased energy efficiency and the development of a statewide energy code. New Mexico’s energy plan emphasizes increased oil and gas infrastructure development, streamlined regulations for the oil and gas industry and supports increased use of nuclear energy, renewable energy testing and natural gas vehicles.

Nuclear Reckoning

Entergy Corp. announced plans to close its Pilgrim Nuclear Power Station by 2019. The plant has provided power to more than a half-million homes and businesses in Massachusetts for four decades, but operators said the plant is no longer financially viable and blamed government policies for creating difficult economic conditions. Entergy has said those same market conditions are affecting the company’s James A. FitzPatrick nuclear plant in New York. The administration of New York Governor Andrew Cuomo (D) is in discussion with the company over the fate of the plant, and a decision is expected by the end of October. Meanwhile, Cuomo appears less enthusiastic about a 20-year license renewal being sought by the Indian Point nuclear plant, 35 miles from New York City. The governor has backed a citizens-led legal battle over safety concerns. This comes as the NRC weighs a dozen similar renewal applications from the nation’s aging nuclear plants. In Pennsylvania, Exelon is weighing its options after the Three Mile Island nuclear power plant in Pennsylvania failed to secure a contract to sell a year’s worth of electricity on the regional power grid. And finally, the Tennessee Valley Authority (TVA) received an operating license for its Watts Bar Unit 2 nuclear reactor. The Nuclear Regulatory Commission issued the license, allowing TVA to begin operation of the nation’s first nuclear reactor in nearly two decades.

The Answer is Blowin’ in the Wind

Construction on the nation’s first offshore wind farm has begun in the waters off Rhode Island. Deepwater Wind is building a five-turbine wind farm off Block Island, enough to power 17,000 homes by the end of next year. Construction hasn’t been without issue, however, as regulators identified a number of safety and welding problems in recent weeks. At the same time, the U.S. Energy Department recently released a report showing strong progress for the offshore wind market. The report notes that the Block Island project is one of 21 projects totaling 15,650 megawatts (MW) currently in the planning and development process. Of these, 13 projects in eight other states with a combined capacity of 6,000 MW—enough to power 1.8 million homes—are in advanced stages of development.

FEDERAL ENERGY NEWS

Stay Where You Are

The 6th U.S. District Court of Appeals ordered a nationwide stay of the Environmental Protection Agency’s (EPA) recently finalized “Waters of the U.S.” rule. A stay means the rule will not go into effect until further judicial action is taken by the court, and no state will have to comply with the rule at this time. The newly completed rule updates which waterways in the U.S. are subject to the Clean Water Act permitting requirements for protection from pollutants. For more details see NCSL's Info Alert.

In The Zone

On Oct. 1, the U.S. Environmental Protection Agency (EPA) announced new federal air pollution limits on ground-level ozone, also known as smog. EPA has set the final standard for allowable ozone in the air at 70 parts per billion (ppb), down from the current standard of 75 ppb. EPA anticipates making attainment designations for areas by late 2017, based on air quality data from 2014-2016. Depending on the severity of the problem, areas will have between 2020 and 2037 to meet the new standards. Business groups, including the U.S. Chamber of Commerce, feel the new standard is unnecessary and could jeopardize jobs while environmental groups say the standard does not go far enough to protect public health. See NCSL’s Info Alert for more details.

Endangered is my Middle Name

The Department of Interior announced it will NOT list the sage grouse, a flightless bird found mostly in the western United States, as endangered. The endangerment listing would carry with it a host of mandatory protections for any area in which the species’ habitat lies, including robust federal oversight into land management and energy development of the areas. Along with the announcement, DOI also finalized its federal land management plans for the 10 states with public lands that are home to sage grouse habitats. See NCSL’s Info Alert for more details.

Oh Boy-a FOIA!

A 14-state coalition, led by the West Virginia attorney general, filed a Freedom of Information Act request with the EPA for more information on why the agency had not published its Clean Power Plan rule in the Federal Register, even though the regulation was released on Aug. 3. The final rule for new and modified power plants has since been published, effective Oct. 23. The coalition of states plan to sue the agency on the validity of the rule, but, as it was told earlier in the year by the courts, could not do so until the rule was officially published in the Federal Register.   

Don’t Be Crude, Or Do?

Oil rigThe U.S. House of Representatives passed H.R. 702, a bill that would lift the 40-year ban on exporting domestic crude oil. The vote was mostly along party lines and the White House has since released a veto threat. The White House stated that “legislation to remove crude export restrictions is not needed at this time.” And that instead Congress should be focusing on transitioning the country to a low-carbon economy.

Federal Reporting

The State and Local Energy Efficiency Action Network (SEE Action), a state- and local-led effort facilitated by the U.S. Department of Energy and the U.S. Environmental Protection Agency, has released two new publications, including one that provides four detailed case studies of industrial companies that benefited from participation in their utility's energy efficiency program offerings. The second, A Policymaker's Guide to Scaling Home Energy Upgrades, provides state and local policymakers with information on policies that can support the growth of a home energy upgrade industry. Additionally, the U.S. Department of Energy’s Office of Electricity Delivery and Energy Reliability released an analysis of the regional fuel and electricity sectors during the last two winter seasons. The events, trends and market stressors provide insight into the actions taken by state, local and federal officials in response to severe weather.

NEW NCSL ENERGY RESOURCES and UPCOMING EVENTS

Webinar: Alternative Fuel Tools and Resources for State Decision-Makers

webinarView the recording of the Sept. 23 webinar, hosted by Clean Cities and in cooperation with the National Renewable Energy Laboratory (NREL), the National Association of State Energy Officials (NASEO), the National Governors Association (NGA) and NCSL. This webinar featured valuable tools and resources on alternative fuels and advanced vehicles available for state policymakers through the Alternative Fuel Data Center’s revamped State Information pages. The webinar also highlighted the state resources on alternative fuels, including information about laws, incentives, fueling stations, fuel prices and more.

NCSL’s Natural Gas Policy Institute

Natural Gas RigThe Natural Gas Policy Institute brought together almost 20 legislators for a two-and-a-half day meeting exploring the economic and regulatory issues related to the production, distribution and resulting end use of natural gas resources. Additionally, legislators toured a facility that develops widely used thermoplastic resins derived from oil and natural gas as well as a combined heat and power facility located on the campus of Duquesne University. The agenda and all available presentations are posted on NCSL’s website.

NCSL’s Capitol Forum

Capitol ForumJoin us in Washington, D.C., for the annual NCSL Capitol Forum taking place Dec. 9-11. This year’s forum will include visits for all state legislators to meet with their congressional delegations to discuss important state-federal issues. Additionally, NCSL’s Task Force on Energy Supply will be meeting on Dec. 8-9. The meeting will explore 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. If you would like to attend the Task Force meeting, please contact Kristy Hartman for more information.