Several clean energy debates from 2016 have come back into the limelight as the first quarter of 2017 comes to an end.
In this edition of State Bulletin we take a look at policy proposals in Ohio and Nevada that could dramatically change the outlook for clean energy in each market. And we briefly revisit an efficiency bill supporters are attempting to pass in Congress for the fourth time.
Ohio’s “revolving door” on clean energy
It was a big win for clean energy when Ohio Governor John Kasich vetoed a bill in December that would have effectively extended a freeze on the state’s renewable energy and energy efficiency targets. Environmental groups and major Ohio employers, including Whirlpool, Nestlé and Clif Bar, praised the decision, stating that they rely on the standards “to cut costs, avoid energy price volatility and stay competitive.”
This week, the Ohio House of Representatives passed House Bill 114, in another attempt to make the state’s clean energy targets voluntary, with no penalties for noncompliance. Both the Ohio House and Senate passed a similar bill last year, but did not have enough votes to override Kasich’s veto at the time.
Kasich has indicated that he will veto the bill again, and the two chambers still may not have veto-proof majorities. If the bill is signed into law, business group Advanced Energy Economy (AEE) says the measure will cost Ohio $10 billion in market opportunities. (Side note: Did you know Ohio leads the nation with 62 of the 500 wind factories in the country?)
“The Ohio House’s attempt to slam a revolving door on the advanced energy industry by passing a job-killer like HB 114 is discouraging. Businesses are depending on a clear signal from the legislature, and unfortunately all they keep hearing is that Ohio is closed for business,” said Ray Fakhoury, state policy associate at AEE, in a statement. “Now it’s up to the Senate to take a stand and do what’s right for Ohio’s consumers by rejecting HB 114.”
The legislation that passed this week does come with one upside for clean energy compared to an earlier version. The House-approved bill removes a provision that would have made it harder for American Electric Power to pay for the 900 megawatts of wind and solar generation the utility pledged in a deal with the Sierra Club. The deal was struck as part of AEP’s effort to receive income guarantees for some of its Ohio coal plants, which were approved last year. The removed provision would have exempted AEP customers who shop for electricity (more than half a million people) from paying for AEP’s clean energy investment.
While Ohio’s standards debate has returned, what’s new is that the Public Utilities Commission of Ohio has launched a grid modernization proceeding. “PowerForward is the PUCO’s review of the latest in technological and regulatory innovation that could serve to enhance the consumer electricity experience. Through this series, we intend to chart a clear path forward for future grid modernization projects, innovative regulations and forward-thinking policies,” the commission said in a statement.
PUCO Chairman Asim Haque has said the proceeding is designed to “enhance the customer experience” through new technologies such as distributed generation and demand response. PowerForward will begin with a three-day conference April 18-20. The event will be live-streamed on the commission website.
Solar bill to put Nevadans "back to work"
Nevada was a rooftop solar market to watch in 2016. After the PUC voted to eliminate net metering (NEM) for both new and existing solar customers in 2015, regulators and legislators spent a good part of last year rolling back that controversial decision.
In February, the PUC extended the timeline for phasing out NEM from four to 12 years. In May, a task force established by Governor Brian Sandoval passed a motion to grandfather existing rooftop solar customers on their previous NEM rate, a concept Sandoval planned to advanced in the legislature this year. Then in September, the PUC decided to reverse course and restore retail-rate NEM for the state’s 32,000 existing solar customers, although the decision did nothing to improve the policy outlook for new solar customers.
Now, Nevada lawmakers are taking up the issue. Democrat Assemblyman Justin Watkins introduced legislation this week (AB 270) that directs the PUC to revise provisions governing solar customer compensation with a base rate of 11 cents per kilowatt-hour. It's worth noting that Arizona regulators recently approved a valuation methodology that also puts rooftop solar compensation at around 11 cents per kilowatt-hour.
In Nevada, 9 of the 11 cents would represent benefits such as avoided new generation capacity and avoided transmission and distribution costs, and at least 2 cents would represent the environmental benefits associated with rooftop solar. Watkins’ bill also removes any limits on how many customers can participate in NEM in Nevada.
The Las Vegas Sun reports that NV Energy is proposing an amendment that would allow for competitive bidding of customer-owned energy storage located in areas of need. Tesla also plans to propose an amendment related to variable rates for energy storage.
Supporters of the bill say that bringing back NEM will not only save consumers money, but also boost employment. “It will get people back to work. It will make it abundantly clear to voters and ratepayers that they can do solar in a manner that they thought that they were going to be able to do it a couple of years ago,” Democratic Assemblyman Chris Brooks, a co-sponsor of the bill, told The Nevada Independent.
As the value-of-solar debate continues, Nevada saw its solar capacity more than double last year from 1,033 megawatts in 2015 to 2,191 megawatts in 2016, according to GTM Research. Growth came largely from the utility-scale sector, as the residential market slowed to a halt amid policy changes. Nevada’s residential solar sector saw the number of jobs drop by 32 percent in 2016, but only 400 solar jobs were lost overall due to growth in the large-scale solar sector.
The state legislature is expected to vote on AB 270 on Wednesday, April 5. Solar companies and environmental groups back the bill and will be delivering a petition to lawmakers with more than 2,000 Nevadans’ signatures supporting strong net metering rules.
Nevada lawmakers are also considering a companion bill (AB 405) that addresses concerns related to solar customer protections. The bill, sponsored by Rep. Brooks, establishes a standard solar contract and a minimum warranty, as well as certain protections for solar companies.
Fourth time’s the charm?
The Senate Energy and Natural Resources Committee passed several pieces of energy efficiency legislation this week, including the Portman (R-OH) and Shaheen (D-NH) Energy Efficiency and Industrial Competitiveness Act (S.385). The vote marks the fourth time the committee has passed a version of the "Portman-Shaheen" bill.
The bill includes a variety of measures designed to enhance efficiency and productivity, including improving home and business building codes, boosting public-private partnerships to increase efficiency in U.S. manufacturing, and improving efficiency across the federal government. The legislation has strong bipartisan support and the backing of many business and environmental groups, including the U.S. Chamber of Commerce and the National Association of Manufacturers. However, it has garnered opposition from conservatives who generally oppose additional rules for businesses.
Having stalled and failed several times in the past, the odds of S.385 becoming law in a Republican Congress and administration seem mediocre at best.
The Senate Energy and Natural Resources Committee also approved two other bills this week: The Power and Security Systems Act (S. 190), which exempts certain security alarms and surveillance systems from efficiency standards, and the Energy Savings Through Public-Private Partnerships Act of 2017 (S. 239), which is designed to “encourage the increased use of performance contracting in federal facilities, and for other purposes.”
“These bills have one thing in common, which is that they advance common-sense energy-efficiency policies in a way that saves consumers money, improves our environment, and creates a leaner, more productive American economy,” said Kateri Callahan, president of the Alliance to Save Energy. “Congress should follow the committee’s lead and finally push these bills across the finish line.”
