Vol. 2 Issue 7 | September 2014 (August/September)
The North Carolina General Assembly recently approved the Coal Ash Management Act before adjourning its 2014 session. Governor Pat McCrory said he would allow the bill to become law, although without signing it. His key objection to the bill relates to a provision allowing legislative leaders to appoint a majority of the members to a new oversight commission. The compromise bill requires the clean-up of coal ash from power plants at four of 14 Duke Energy Corp sites. The remaining 10 coal ash sites must be closed or capped over the next 15 years. The bill also places a moratorium on rate increases to help pay for the cleanup until January 2015. The legislation stems from a February 2014 accident where a pipe running under one of the Duke Energy ponds ruptured, spilling ash into the Dan River, which flows into Virginia.
California enacted S.B. 1275, the Charge Ahead California Initiative this month, which supports zero-emission vehicles (ZEV), including both electric and hydrogen fuel cells. The bill seeks to increase ZEV sales—with a goal of 1 million ZEVs on the road by 2023—as well as promotes polices to help lower-income residents qualify for loans to purchase zero-emission vehicles. Plug-in electric vehicles in California now represent about 40 percent of the nationwide total.
The Montana Interim Committee on Energy and Telecommunications published a draft report after evaluating the economic and environmental impact of the state’s renewable portfolio standard (RPS). The legislature enacted a joint resolution in 2013 requiring an interim committee to conduct the study; the committee could recommend revisions or clarifications to the standard. The draft study does not alter the current standard, which requires 15 percent of electricity sales to be generated from renewable sources by 2015.
California launched its residential Property Assessed Clean Energy (PACE) Program, under the name of CaliforniaFirst. While the state has an active commercial PACE program, federal officials suspended residential programs across the country in 2010 with concerns that foreclosures of homes with PACE financing threatened mortgage lenders. California enacted legislation in the 2013 session establishing a new state insurance fund to cover losses from defaulted mortgages. Two additional bills concerning PACE have been submitted for approval by the governor (A.B. 1883; A.B. 2597). Nationally, Connecticut, Delaware, Maryland, Massachusetts, Michigan, Oregon and Pennsylvania have enacted or pending PACE-related legislation.
Rhode Island enacted multiple bills this summer related to net metering and distributed generation. H.B. 7727 and S.B. 2960 establishes a tariff-based renewable energy distributed generation financing program, which will finance the development, construction and operation of renewable energy distributed generation projects over five years. Two other bills, H.B. 8010 and S.B. 2915 revised definitions of municipal and public entities to incorporate additional state facilities as eligible net metering participants. Net metering continues to be an active topic in recent months, with legal and regulatory action in Georgia, Iowa and Wisconsin.
Recent seismic activity has prompted studies examining whether there is a direct link between earthquakes and the wells used to dispose of waste water from the hydraulic fracturing process. State legislators and regulators are taking a variety of actions to address concerns surrounding induced seismicity. Illinois enacted S.B. 1715 in 2013, which requires the Department on Natural Resources to adopt rules “establishing a protocol for controlling operational activity of Class II injection wells in an instance of induced seismicity.” The Department recently issued revised rules in August. The rules were submitted to the Illinois Legislature’s Joint Committee on Administrative Rules (JCAR), which has up to 90 days to consider them. According the S.B. 1715, Illinois must adopt new hydraulic fracturing rules by Nov. 15. Additionally, the Oklahoma Corporation Commission approved rules in April that would require oil and gas operators to report daily injection pressure and volume measurements. The new rules went into effect Sept. 12. Oklahoma Governor Mary Fallon also announced the creation of a Coordinating Council on Seismic Activity in Sept. 2014. The new council is designed to connect legislators with researchers to examine the relationship between seismicity and hydraulic fracturing.
While many legislatures have adjourned for the year, Massachusetts is just ramping up legislative discussions on a number of topics. In August, Governor Deval Patrick signed S.B. 2214, which allows renewable thermal technologies to qualify for alternative energy credits under the state Alternative Portfolio Standard. Renewable thermal technologies—including solar heating and cooling, biofuels, wood pellets, wood chips, renewable natural gas, and geothermal and air source heat pumps—account for 54 percent of building energy use in the state, according to the Solar Energy Industries Association. Additional legislation being debated includes a bill that would require utilities to acquire additional renewable generation, potentially through larger hydroelectric projects under 30 megawatts (MW).
New Jersey and Vermont have taken recent measures to increase resiliency from severe weather. New Jersey announced an energy resilience bank for microgrids and distributed generation. Similar to the “Green Banks” in neighboring Connecticut and New York, the New Jersey Energy Resilience Bank will leverage public funds for state projects. The bank will use $200 million from the state’s Community Development Block Grant-Disaster Recovery allocation to support distributed energy resources at critical facilities, with a focus on water and wastewater treatment plants. In Vermont, Green Mountain Power announced construction of the nation’s first solely solar-powered energy storage microgrid last month. The microgrid is located on a landfill in Rutland, Vt, a town strongly affected by both Hurricane Irene and Superstorm Sandy. The microgrid connects 2 megawatts (MW) of solar energy with 4 MW of battery storage that is capable of powering 365 homes year round, as well as a public emergency shelter.
A new study published this month finds that water contamination related to oil and gas drilling comes from poor well construction and not the process of hydraulic fracturing. Reports of well water contaminated with methane have increased in recent years as extraction of natural gas grows. Researchers at Duke University took samples from 130 drinking water wells over a two-year period where contamination had been suspected in Pennsylvania and Texas. They found that methane was neither naturally occurring nor the result of hydraulic fracturing. "These results appear to rule out the possibility that methane has migrated up into drinking water aquifers because of horizontal drilling or hydraulic fracturing, as some people feared," says Avner Vengosh, Duke professor of geochemistry and water quality.
The Iowa Supreme Court determined this summer that a third-party solar developer did not qualify as a utility for installing a photovoltaic system on a city-owned building; the court used a framework determined several decades ago in Arizona. The Rhode Island Commerce Corporation, the state Office of Energy Resources and a local non-profit announced the launch of a new municipal-based program to lower solar panel installation costs, Solarize Rhode Island. The Utah Public Service Commission rejected Rocky Mountain Power’s proposed monthly fee for distributed generation customers. Legislation enacted in Utah this session requires the Commission and electric cooperatives to seek feedback on the costs and benefits of net metering programs and authorizes utilities to impose a charge, credit or ratemaking structure based on these findings. Additionally, Duke Energy—a North Carolina-based utility—announced a major expansion of solar power including 128 MW of new, utility-owned capacity and 150 MW of energy through five new power-purchase agreements. Georgia Power, a subsidiary of Southern Company, proposed a new methodology for purchasing solar energy from small and medium sized installations.
The Arkansas Energy Office announced the launch of a Residential Energy Efficiency Loan Loss Reserve Program this summer. The program will offer $475,000 in funds to utilities who offer on-bill financing or on-bill repayment for energy efficiency improvements, including HVAC and insulation projects. Utilities in Arkansas can offer on-bill financing, however there is currently no legislation in place authorizing pilot programs or requiring utilities to develop programs. At least one electric cooperative offers on-bill financing to Arkansas residential customers.
The Solar Technical Assistance Team at the National Renewable Energy Laboratory (NREL) provides technical assistance to states on a variety of solar-related policy and technology issues. NREL’s solar technology and deployment experts can provide unbiased information on solar policies and issues for state and local government decision makers. They most often testify before legislative committees, convene meetings and work directly with policy and program implementation staff in state energy offices.
Construction recently began on a $19.5 million carbon-capture pilot project in Kentucky, primarily funded through a grant from the U.S. Department of Energy (DOE). This five year project will be the first megawatt-scale carbon capture unit in the Commonwealth. Once construction is completed, the facility will capture and separate carbon dioxide from the emission stream after the coal is burned. Carbon capture has remained in the development phase due to high upfront investment costs. However, technology advancements that will be used at the Kentucky plant may appeal to power plant operators because the system will reduce carbon dioxide as well as make the plant more efficient. Experts hope this new technology will prove carbon capture can be cost efficient.
Maine’s two largest utilities, Central Maine Power and Emera Maine, have signed an agreement to jointly develop potential transmission projects in order to move proposed wind power development from the northern portion of the state to markets in New England. Shortly after this agreement, the Maine Public Utility Commission approved the construction of joint wind project between First Wind and Emera Maine (and Emera-owned utilities Bangor Hydro and Maine Public Service). Further west, Texas recently completed 3,600 miles of high-voltage transmission lines connecting wind farms in the Panhandle to the state’s major population centers. The transmission lines are capable of handling 18,000 MW of electricity. Even further west, the Wyoming Industrial Siting Council approved the proposed Chokecherry and Sierra Madre wind project, which would become the largest wind farm in North America. The proposed project would have the capacity to produce 3,000 MW of electricity through 1,000 turbines located on federal and private lands connected by a new transmission line. The Bureau of Land Management has issued a preliminary environmental assessment and a finding of no significant impact for the project.
The Nuclear Regulatory Commission (NRC) recently approved the first new nuclear reactor design in three years. The new design includes passive cooling features, which help cool the reactors in the event of an emergency, making the design safer. The GE-Hitachi Nuclear Energy’s Economic Simplified Boiling-Water Reactor (ESBWR) is expected to be used in Michigan and Virginia. According to the NRC, developers in both states will need to comply with environmental and safety reviews before construction can begin.
The Department of Energy’s SEE Action Network recently released a new report called Greater Energy Savings through Building Energy Performance Policy. The report provides recommendations for state and local governments to design policies and programs to achieve measurable improvements in efficiency in commercial buildings through outcome-based building policies; performance incentives; property valuation and appraisal policies; and utility program policies and partnerships.
On July 29, U.S. Secretary of Energy Ernest Moniz announced the department was taking initial steps to attempt to combat methane leaks from pipelines. The agency is exploring potential energy efficiency standards for natural gas compressors, which use up to 7 percent of the gas consumed in the country. Moniz also stated the department will suggest to FERC that it explore funding mechanisms to afford replacing older, leaky pipelines with new ones.
Thirteen states filed suit against the U.S. Environmental Protection Agency over EPA’s recently proposed regulations limiting the emissions of carbon dioxide from existing power plants. The states contend that “EPA may not employ section 111(d) [of the Clean Air Act] if existing stationary sources of the pollution in question are already regulated.”
Sept. 3 marked the grand opening of the nation’s first commercial scale cellulosic ethanol plant in Iowa. The feedstock for the plant, dubbed “Project Liberty” by its owners, will be corn residue such as cobs, leaves, husks and some stalks. U.S. Department of Agriculture Secretary Tom Vilsack was on hand to provide a keynote address supporting the new plant.
The Bureau of Land Management (BLM) netted over $11 million in leasing receipts during its quarterly oil and gas auction in Wyoming; 41,600 acres of federal land in Wyoming (97 percent of the acres offered for auction) were leased. The next Wyoming sale will be Nov. 4, better known as Election Day.
The U.S. Senate confirmed Cheryl LaFluer and Norman Bay to serve on the Federal Energy Regulatory Commission (FERC). FERC is responsible for interstate electricity sales, wholesale electric rates and other energy pricing, as well as regulating and monitoring interstate terminals and pipelines. Meanwhile, President Obama nominated Colette Honorable, chairwoman of the Arkansas Public Commission and president of the National Association of Regulatory Utility Commissioners, to fill the final commissioner vacancy at FERC. Chairwoman Honorable recently spoke at NCSL’s Legislative Summit on the proposed EPA rules limiting greenhouse gas emissions from power plants.
The Governors from California, Oregon and Washington sent a letter to the U.S. Secretary of Interior expressing their strong opposition to inclusion of any new proposed oil and gas leases off their states’ coasts in the 2017-2022 Outer Continental Shelf leasing program, currently being crafted.
Thank you to all who attended the 2014 NCSL Legislative Summit in Minneapolis, Minn. We hope you found the range of energy sessions interesting and informative. Legislative Summit session resources are available here, including all presentations from the Task Force on Energy Supply and Energy Policy Summit. Additionally, please check out these short video Q&As with General Wesley Clark, FERC Commissioner Tony Clark, and Russell Gold from The Wall Street Journal.
Crude oil producers are increasingly relying on rail to carry oil to domestic markets. The rapid growth in rail transportation, however, has focused attention on safety issues, especially after several recent accidents. This web brief highlights the increase in crude oil rail transportation and how state and federal officials are addressing safety concerns.
As state policymakers, planners and utilities confront a rapidly changing energy landscape, a state energy roadmap can provide a coordinated vision for meeting changing energy needs; promoting economic development; and ensuring access to affordable, diverse and reliable energy. State legislatures play a critical role in creating a successful energy plan by defining the planning process, the scope of the plan and the stakeholder engagement process. This guide introduces policymakers to state energy planning and explores legislative approaches to developing an effective plan.
Utility-scale renewable energy and related electrical transmission projects may interfere with military installations, test and training ranges, and airspace. By including the DoD and representatives from nearby military installations in stakeholder discussions, energy-related compatibility challenges often can be overcome in the initial planning process, saving states and localities from unplanned mitigation expenses and permitting obstacles. View a September LegisBrief on this topic.