This past week marked the one-year anniversary of the Obama administration’s Clean Power Plan -- an ambitious plan to cut carbon pollution from new and existing power plants by 30 percent by 2030.
The plan has been stayed by the courts as 27 states sue to block it. Nonetheless, many states are making arrangements to comply, including some of the states participating in the lawsuit. The New York Times reports that state officials are making a political calculation: “If Hillary Clinton is elected president and appoints a new Supreme Court justice, Mr. Obama’s climate plan will probably survive.”
In the meantime, state legislators and regulators across the country continue to take action on clean energy on their own accord.
Below we chronicle some of the most significant state-level policy developments from recent weeks on the topics of renewable portfolio standards, net metering, community solar, tax incentives, grid modernization, energy storage, resource planning, rate design and electric vehicles.
Read our previous state news roundup here.
RENEWABLE PORTFOLIO STANDARDS
New York
On August 1, Governor Andrew Cuomo announced New York’s Public Service Commission’s formal approval of New York’s Clean Energy Standard (CES), which will require 50 percent of the state’s electricity to come from renewable energy sources like wind and solar by 2030. The CES will be enforced by requiring utilities and other energy suppliers to obtain a targeted number of Renewable Energy Credits from renewable energy developers each year, which will help to finance new, clean resources added to the grid.
In addition, the CES also supports New York’s nuclear power plants, which currently provide more than 30 percent of the state’s electricity. Starting in April 2017, the CES requires all investor-owned utilities and other energy suppliers in New York state to pay for the intrinsic value of carbon-free emissions from nuclear power plants by purchasing zero-emission credits. Output from the nuclear plants will not count toward the 50 percent renewables mandate.
“This will allow financially-struggling upstate nuclear power plants to remain in operation during New York’s transition to 50 percent renewables by 2030,” according to a statement from the governor’s office. “A growing number of climate scientists have warned that if these nuclear plants were to abruptly close, carbon emissions in New York will increase by more than 31 million metric tons during the next two years, resulting in public health and other societal costs of at least $1.4 billion.”
Exelon, which operates two nuclear facilities in upstate New York, said the CES will save “thousands of high-paying jobs and spur hundreds of millions of dollars in short-term investments in energy infrastructure in upstate New York,” according to a press release.
New York PSC estimates indicate that the CES would offer Exelon $7 billion in zero-emissions credits over the lifetime of the arrangement. Cuomo’s office said the CES is expected to add less than $2 per month to the average residential customer’s bill overall and will help meet the state’s goal of reducing greenhouse gas emissions 40 percent by 2030 and 80 percent by 2050.
Notably, New York is taking a different approach than California, where Pacific Gas & Electric recently set a timeframe for retiring the Diablo Canyon nuclear plant. New York’s solution could inform decision-making in other states with struggling nuclear assets, including Connecticut, Illinois and New Jersey.
Several other directives were also included in the CES:
- The Public Service Commission will work with New York State Energy Research and Development Authority and stakeholders to develop the content and standards that could be used to create a New York-certified clean electric product. This product will be clearly labeled and identified as New York-based clean power, giving consumers the ability to buy 100 percent clean power, should they want that option.
- The Public Service Commission will promote and support maximum expansion of energy efficiency wherever possible and evaluate the creation of renewable heating and cooling technologies such as geothermal heat pumps.
- The New York State Energy Research and Development Authority will develop a blueprint to advance offshore wind energy, a report already in progress by the Authority.
- Public Service Commission staff will work with the NYISO and other stakeholders to ensure that necessary investments are made in storage, transmission and other technologies to secure a reliable electric system.
- The Public Service Commission will requires triennial reviews of the Clean Energy Standard by the Public Service Commission to ensure economic and clean energy goals are being achieved.
Rhode Island
Lawmakers in Rhode Island have been busy. In recent weeks, the general assembly passed a slew of energy-related bills intended to enhance the state's renewable energy policies, create green jobs, and move the state toward a low-carbon future. Lawmakers also passed a number of environmental and health bills on issues such lead water testing, compost and ocean acidification.
The energy bills include:
- H7413A, S2185A -- Extends Rhode Island’s renewable portfolio standard from 14.5 percent by 2019 to 40 percent by 2035
- H8354A, S2450B -- Extends the Renewable Energy Fund, enhances the Renewable Energy Growth (REG) program, allows for virtual net metering, allows third-party financing for homeowners and businesses, and expands property tax incentives and treatment of solar PV and other renewables
- S2087 -- The Low Income Home Energy Assistance Program Enhancement Plan will be expanded throughout the year for certain groups
- H7890, S2328 -- Incorporates clean energy into the areas of focus of the Governor’s Workforce Board
- H8180, S2174 -- Prepares for the development of a statewide solar permit process
Gov. Gina Raimondo held a bill-signing event in July with SolarCity, announcing that the solar installer would also be expanding operations in the state. SolarCity facilities typically employ about 100 people. “We look forward to increasing our solar product offerings in the Ocean State,” said SolarCity CEO Lyndon Rive.
Massachusetts
On August 1, the Massachusetts legislature passed a comprehensive energy bill (H.4568) that requires local utilities to solicit long-term contracts to procure 1,600 megawatts of offshore wind power by June 2027. The bill also requires the state to solicit long-term contracts for 1,200 megawatts of hydropower and other renewable resources, such as solar and land-based wind. Furthermore, the bill created a property-assessed clean energy (PACE) program to help finance energy-efficiency upgrades and clean energy projects for commercial buildings.
There are currently are about 1,800 megawatts of renewable energy installed in Massachusetts. According to the Union of Concerned Scientists, the new clean energy bill will result in up to 40 percent of the state’s electricity coming from hydropower, wind, and other sources by 2030. The bill will also contribute to the state’s goal to reduce greenhouse gas emissions by 80 percent by 2050.
Despite these wins, the legislation is considered a compromise for clean energy advocates, MassLive reports. The Senate version of the bill sought to deploy even more offshore wind. Senate lawmakers were also disappointed that the final bill failed to increase the renewable portfolio standard, which House lawmakers said would result in increasing payments made by ratepayers.
The energy bill now heads to the governor’s desk. If signed (which is expected), the legislation would also instruct the Massachusetts Department of Energy Resources to set an energy storage target for 2020 if it is deemed to be necessary. If established, Massachusetts will become the third state in the U.S. to create an energy storage mandate, following California and Oregon.
Washington, D.C.
The District of Columbia Council has unanimously approved legislation (B21-650) to boost D.C.'s renewable energy target from 20 percent by 2020 to 50 percent by 2032, with a 5 percent carve-out for solar. The bill is expected to quadruple the number of jobs in D.C.'s solar industry, which currently employs about 1,000 people. The bill also establishes a new "Solar for All" program that seeks to cut the electric bills of 100,000 low-income households in half by 2032, primarily through clean energy and energy conservation.
Minnesota
Last year, Minnesota Power met its 25 percent Renewable Energy Standard for 2025 a decade early, but that hasn’t put an end to its clean energy pursuits. Last month, the utility announced it intends to add another 600 megawatts of wind and solar power capacity to its fleet following a request by state regulators, SeeNews Renewables reports. In the coming weeks, Minnesota Power plans to issue a request for proposals for 300 megawatts of wind and 300 megawatts of solar. The utility said it will also consider optimizing its power portfolio with customer-owned and utility-scale demand response, as well as onsite generation resources.
NET METERING
Nevada
On July 27, NV Energy filed a request for regulators to keep rooftop solar customers who installed their system prior to December 31, 2015 on the previously approved net-metering rates for 20 years. The utility asked for the grandfathering rule to also apply to customers with active or pending applications as of December 31, 2015.
In February, state regulators issued a final order to triple the monthly fixed charge solar customers pay and reduce the credit solar customers receive for net excess generation by three-quarters over the next 12 years. The first rate change went into effect on January 1, 2016 and effectively shut down the Nevada rooftop solar market. In a controversial move, regulators also applied the decision to Nevada’s estimated 18,000 existing solar rooftop solar customers. While NV Energy originally requested the net metering change in July 2015, it requested no changes for existing customers.
NV Energy’s new proposal comes after the Governor's New Energy Industry Task Force passed a motion in May to grandfather existing solar customers for 25 years. Task Force recommendations will underpin legislation introduced by Governor Sandoval next year. The Bring Back Solar Alliance, a political action committee supported by SolarCity, is also attempting to overturn the solar rate hike. However, the group’s ballot initiative was thrown out by the Nevada Supreme Court last week.
Supreme Court justices raised concerns over the referendum at a hearing last month, the Las Vegas Review-Journal reports. The court ultimately ruled on Thursday that the motion is not a referendum, but rather an “initiative petition,” which means solar advocates would have to launch a new petition asking lawmakers to pass a bill undoing the net metering changes. Only if legislators fail to approve the measure during the 2017 session will it go to voters in 2018.
While the ballot initiative may have hit a roadblock, it seems likely that existing solar customers could see some form of grandfathering approved within the next year based on the task force recommendations. But even if the old rates are restored for customers who installed their systems before December 31, 2015, the change does little, if anything, to reboot the stalled Nevada rooftop solar market.
In another twist, PUCN commissioner David Noble, who wrote the order to increase solar fees and not allow grandfathering, will not be reappointed by the governor.
Maine
After vetoing a net metering compromise deal in April, Maine Governor Paul LePage filed a proposal with the state PUC last month to end retail rate net metering altogether, giving existing solar customers a three-year grandfathering period. After the three-year phase-down, solar customer would be compensated at a price closer to the real-time value of electricity in the region, Maine Public Broadcasting reports.
Steve Hinchman, the chief financial officer at Portland-based solar contractor ReVision energy, said the proposal is based on “a crock of lies and misperceptions and misinformation,” and that it’s “really disheartening.”
Iowa
Last month, as part of a broader debate on distributed generation, the Iowa Utilities Board ordered that the state's two major utilities -- MidAmerican and Alliant Energy -- must increase their net metering cap from 500 kilowatts to 1 megawatt, Midwest Energy News reports. The order also makes net metering available to all classes of customers, including commercial, industrial and general service customers, such as wastewater treatment plants.
In addition, the new tariff comes with a new set of rules. Under existing policy, net-metered customers can roll over excess credits to be applied against future bills indefinitely. Under the new policy, there will be an annual true-up. At the beginning of each year, excess credits will be removed from the books and compensated at the avoided-cost rate, the proceeds from which will be divided in two: half will be returned to the customer as a cash payment and half will go to a utility aid fund for low-income customers.
The new net metering rules will be adopted for three years, after which point the board will assess the plan and decide whether or not to make the changes permanent. All new solar customers must go on the new rate. Existing solar customers have the option to switch onto the new rate, but cannot switch back.
COMMUNITY SOLAR
Minnesota
In July, Minnesota became the first state in the nation to adopt a value-of-solar methodology -- currently optional for utilities in the state -- for compensating community solar customers, Midwest Energy News reports. Xcel Energy, the state’s largest utility, is currently managing one of the largest community garden programs in the country, and has been criticized for delays. The value-of-solar approach includes external factors such as avoided transmission investments, health and environmental benefits of clean energy, and the ability to support the grid on sunny days. The improved transparency of the compensation plan may help to attract solar project financing and put to rest concerns that utility customers are subsidizing community solar buyers.
Idaho
Idaho Power is seeking approval of a pilot program to offer community solar subscriptions to a 500-kilowatt system, according to EQ Research. The utility would charge a one-time upfront subscription fee based on the costs of constructing and operating the facility, equal to about $740 for a 320-watt panel. Subscriptions would be limited to 100 percent of a customer’s annual usage and could last up to 25 years. Customers would receive a bill credit for fuel costs in riders and base rates, attributable to their subscription level.
Mississippi
Entergy recently filed a report with the Mississippi Public Service Commission on the potential to develop community solar. The report cites the need for more centralized, utility-scale solar installations between 5 and 10 megawatts. Entergy outlined its program structure as pay-as-you-go, with a monetary bill credit, and no signup fee. The program would also require a time commitment of at least 12 months, customers would be limited to subscribing to 100 percent of their average annual energy use, and no less than 2 kilowatts.
TAX INCENTIVES
Florida
Florida lawmakers from both political parties are sponsoring a ballot initiative that would authorize the state legislature to exempt solar projects on commercial and industrial properties from Florida’s real property tax and the tangible personal property tax for leased equipment. Amendment 4 builds upon existing law that exempts residential customers from paying property taxes on renewable energy devices, including solar PV, wind turbines, solar water heaters and geothermal heat pumps.
Republican State Senator Jeff Brandes said he believes passing this amendment will serve as a catalyst for the broader solar market in the state, which has seen relatively little solar development despite Florida’s vast solar resources. “When this policy passes, and we have more commercial solar available, then I think you'll start seeing a wider adoption and a more robust discussion inside the legislature about distributed generation,” said Brandes, in a recent interview.
According to EQ Research, recently published Public Service Commission data reveals that only 11,626 customer-owned DG systems are operating in Florida, which boasts a population of 20 million. Florida Power & Light, which serves 4.8 million customer accounts, has 4,257 customer-owned solar and other DG facilities on its system, with a combined capacity of 43.9 megawatts.
Louisiana
Roughly a year ago, Louisiana lawmakers decided to cap the state’s solar tax credit program in the face of worsening budget struggles. Not only did they apply the cap to new solar customers, they applied it to anyone who purchased solar prior in 2015, before the incentive change was even proposed. The Times-Picayune reports that solar customers are now having to dig into their retirement savings and take out loans in order to cover the higher, unexpected costs of their solar systems.
The program currently has a sunset in 2017 at a cap of $25 million, with a $10 million cap set for 2015 and 2016, and a $5 million cap in 2017. Credits are offered on a first-come, first-served basis, which has caused some customers to lose out on the incentive. The Times-Picayune writes that taxpayers who are denied a credit will be able to appeal the decision before the Louisiana Board of Tax Appeal.
California (non-tax incentive)
In June, the CPUC authorized $111.8 million in additional funding for the New Solar Homes Partnership program. The program will be funded via a non-bypassable charge on customers’ bills and administrated by the California Energy Commission. The CEC has also been directed to explore potential changes to the program structure.
Utah
The residential solar market in Utah is booming. About 7,700 customers signed up for Rocky Mountain Power's net metering program between January and June of this year, The Salt Lake Tribune reports. The utility had 3,200 net metering customers in Utah at the end of 2015. The governor’s office expects to process a total of 12,000 residential solar applications this year, which are eligible for a tax credit of up to 40 percent of installation costs. The governor’s office now expects to spend $42 million on the program, much more than in previous years, because of solar’s growing popularity. As a result, lawmakers could decide to reevaluate the program next session.
GRID MODERNIZATION
New Mexico
Regulators have cast doubt on Public Service Co. of New Mexico’s $87 million smart meter plan, Albuquerque Business First reports. On July 15, two regulatory staff members filed testimony expressing doubt over the benefits PNM claims will stem from replacing 531,000 electricity meters. Rather than saving consumers $21 million, staff found the initiative could cost consumers $12 million.
”PNM's projected AMI project costs are uncertain and indicate that the AMI project would not produce sustained savings, compared to the existing metering system, until 2024,” wrote Charles Gunter, accounting bureau chief for the utility division of the Public Regulation Commission. PNM maintains that the cost/benefits ratio is strong and that the smart meters will save customers money through improved efficiency and reliability. Another hearing on the utility’s plan is scheduled for mid-August.
Maryland
The Maryland Public Service Commission has rejected Baltimore Gas & Electric's proposal to construct, operate and recover costs associated with two "public purpose" microgrids. The proposal was refused for a variety of reasons, including lack of cost-effectiveness and ratepayer impacts.
ENERGY STORAGE
Nevada
Two committees in Nevada Governor Brian Sandoval’s New Energy Industry Task Force have issued a policy proposal for energy-storage procurement. The Joint Grid Modernization and Distributed Generation & Storage Technical Advisory Committees both identified significant barriers to deploying energy storage in the state’s legacy grid procedures and tariffs.
According to EQ Research, the proposal includes the following provisions:
- Storage procurement targets for utilities should be set for each point of the grid -- transmission, distribution and customer-located -- to ensure that utility processes impacting each point of the grid are updated to include storage.
- Procurement targets should increase over time to allow for lessons learned to inform future procurement. For example, a small amount of storage procurement should occur by 2019, a larger amount by 2021, and a substantial amount by 2023.
- The PUC should oversee the utilities’ storage procurement activities, including reviewing biannual compliance reports to be filed by utilities on their progress toward achieving their storage procurement targets.
The proposal states that no additional costs are to be incurred by Nevadans as a result of the state adopting storage procurement targets.
RESOURCE PLANNING
Georgia
The Georgia Public Service Commission has approved Georgia Power's long-term integrated resource plan that includes the procurement of 1,600 megawatts of renewables by 2021. The plan includes an increase in Georgia Power’s Renewable Energy Development Initiative directing the company to procure 1,200 megawatts of renewables made up of 150 megawatts of distributed energy resources and 1,050 megawatts of utility-scale resources (with a maximum of 300 megawatts for wind). The procurement of utility-scale resources will take place through two separate requests for proposals, one in 2017 and one in 2019.
The plan also includes the following:
- Approval of an additional 100 megawatts of distributed generation with an RFP to be issued in 2017 and a commercial operation date of 2018 or 2019. Individual projects are allowed up to 3 megawatts in size, procured under buy-all-sell-all contracts.
- Approval of 50 megawatts of customer-sited distributed generation, up to 3 megawatts in size but not more than 125 percent of a customer’s peak demand, procured under buy-all-sell-all contracts and paid an avoided cost rate to be calculated by Georgia Power. Projects are to begin operating in 2018 or 2019.
- Approval of an additional 200 megawatts of self-build renewable capacity to develop renewable projects, including potential projects at Robins Air Force Base and Fort Benning. The projects must be at or below the Georgia Power’s avoided costs. No more than 75 megawatts of this capacity may be used for non-military projects.
- Approval of 1 megawatt for a pilot solar demonstration project by “The Ray” along the Interstate 85 corridor near LaGrange, Georgia to be completed by 2019. This is included in the 75 megawatts of non-military self-build.
- Approval of up to 200 megawatts of solar or other renewables for a new “Commercial and Industrial Program” to serve large customers, with details to be determined and approved later by the PSC.
- Approval to include 3 megawatts of self-build community solar by Georgia Power. This is included in the 75 megawatts of non-military self-build.
- Approval of the Company’s closed ash pond solar demonstration project.
- Approval of a new “Simple Solar” program that allows all customers, residential as well as commercial and industrial, to purchase renewable energy credits from solar resources owned or purchased by Georgia Power at a price of 1 cent/kilowatt-hour. This replaces Georgia Power’s previous premium pricing tariff known as the “Green Energy” program.
During the proceeding, Commissioner Lauren “Bubba” McDonald put forward a motion to expand Georgia Power’s solar programs into new markets, including rooftop solar and community solar, but the proposal was ultimately defeated.
“The strongest solar markets are the ones that enable diverse participation and diverse ownership,” said Scott Thomasson, program director of new markets for Vote Solar, in a statement. “While Commissioner McDonald’s motion to foster that diverse participation didn’t get the support it needed, the addition of a community solar program and the overall outcome of today’s vote are strong measures to keep Georgia’s solar market growing.”
RATE DESIGN
California
The California Public Utilities Commission released a ruling on July 22 on requirements for bill comparisons and engaging new customers. The ruling, written by Administrative Law Judge Jeanne McKinney, requires California’s investor-owned utilities to educate customers about their rate options when they take up service. It also outlines rules as utilities transition to default time-of-use rates.
ELECTRIC VEHICLES
Hawaii
Hawaii’s electric utilities have proposed to extend a five-year pilot program for public EV-charging facilities by another 10 years, according to EQ Research. The current program -- set to expire on June 30, 2018 -- includes a tariff prescribing the rates and parameters of the utilities’ sale of electricity to third-party operators of public charging facilities. The utilities are also pursuing strategic host site locations to install DC fast chargers.
