Nevada grabbed a lot of headlines last year as regulators, solar advocates and utilities battled over the state's net metering policies. This week, the net metering issues resurfaced, with a significant legislative win for rooftop solar supporters. Nevada also advanced a bill, with bipartisan support, that would double the state's renewable portfolio standard. However, the bill appears to have an unexpected opponent.
So for this week's State Bulletin, we start with the latest news from the Silver State.
Nearly a year and a half after state regulators decided to eliminate retail-rate net metering for new and existing solar customers, state legislators have advanced a bill (AB 405) that would effectively restore the credit. On May 15, the Assembly’s Commerce and Labor Committee overwhelmingly approved the bill that reimburses new net-metered solar customers at 95 percent of the retail electricity rate, up to 6 percent of historic peak electricity load.
Over time, the credit declines to 90 percent of the retail rate between 6 percent to 8 percent of peak load, then drops to 85 percent for 8 percent to 10 percent of peak load, and to 80 percent of the retail rate at 10 percent of peak load and above, PV Magazine reports. This is a major win for solar advocates, who have been fighting back hard against the December 2015 ruling. Last fall, regulators approved an agreement between solar advocates and the state utility, NV Energy, that brought back retail-rate net metering for existing solar customers. This week's legislative vote, which still has a number of hurdles to overcome, could restore net metering to customers going forward -- and reboot the state's stagnant rooftop solar market.
Building on that victory, Nevada’s Assembly Commerce and Labor Committee passed a bill (AB 206) on May 17 that would increase the state’s renewable portfolio standard to 50 percent by 2030, up from 25 percent by 2025. Clean energy industry groups believe the bill, if approved, has the potential to create an additional $5 billion market opportunity.
Passing out of committee is just the first step for the bill, however. It must still pass in the full assembly and be approved by the Senate. But the bill’s bipartisan support is encouraging for clean energy advocates.
“Today is a very big victory,” Andy Maggi, executive director of the Nevada Conservation League, in an interview. “We’ve proven this is a bipartisan issue; we’ve proven this policy can pass in the legislature.”
Maggi pointed out that the Nevada Resort Association is opposed to the 50 percent RPS -- despite the fact that several Las Vegas resorts left NV Energy territory last year in order to procure more clean energy on their own, or so they said. The association’s position is confusing for environmental stakeholders who supported the casinos’ efforts to leave the utility, Maggi said.
Nevada Resort Association President Virginia Valentine told AP last month that hotel owners are concerned the state is making too many changes too quickly that could put the power grid at risk. The Nevada Resort Association said it is working on a reply to GTM's request for additional comment. We will be sure to report the story when we learn more.
Virginia creates it’s own Clean Power Plan
The state of Virginia is not going to sit idle on climate change in the absence of a federal policy. On May 16, Democratic Governor Terry McAuliffe ordered state air regulators to study and recommend methods to cap carbon emissions from power plants and build Virginia’s clean energy economy. McAuliffe asked to ensure Virginia’s regulation allow for market-based mechanisms and the trading of carbon dioxide allowances through a multi-state trading program, as well as asking that the rules match the stringency of states that have already imposed carbon limits.
Joining the Regional Greenhouse Gas Initiative (RGGI), a nine-state cap-and-trade system in the Northeast, is one of the most obvious steps Virginia could take to comply of the order, E&E News reports.
McAuliffe's directive noted that the technologies used to mitigate emissions are driving economic growth in Virginia. The number of solar jobs in the state grew by 65 percent in the last year alone, making Virginia the ninth fastest-growing solar jobs market in the country. At the same time, revenue from energy-efficiency businesses increased from $300 million in 2013 to $1.5 billion in 2016. The order also notes that “rising storm surges and flooding could impact as many as 420,000 properties along Virginia’s coast that would require $92 billion of reconstruction costs.”
"The threat of climate change is real, and we have a shared responsibility to confront it," McAuliffe said, in a statement. "As the federal government abdicates its role on this important issue, it is critical for states to fill the void."
The governor asked the Director of the Department of Environmental Quality and the Secretary of Natural Resources to present proposed regulation to the State Air Pollution Control Board by December 31, 2017. The policy move was cheered by climate change and clean energy groups, who viewed the order as a win following the Trump administration’s decision to throw out the Clean Power Plan.
“While the Trump administration demolishes environmental protections, Governor McAuliffe is prioritizing the health and prosperity of all Virginians,” said Tom Steyer, president of NextGen Climate. “With this announcement, Virginia is standing up to the Trump administration and sending a powerful message that it puts people first -- not corporate polluters.”
“This important policy comes on the same day as the announcement of the 253rd coal plant retirement since the beginning of the Sierra Club’s Beyond Coal campaign and on the heels of Hanover, New Hampshire becoming the 29th city to commit to 100% clean energy as part of our Ready for 100 campaign,” said Sierra Club Executive Director Michael Brune. “Forget his rhetoric: Trump cannot stop this momentum for clean energy and climate action that is being driven by citizen activism in states and communities across the country.”
“With mixed signals coming from the other side of the Potomac, it is critical that Virginia develop its own long-term energy strategy that reduces energy waste, deploys innovative technologies, and modernizes our electricity system,” said J.R. Tolbert, vice president of state policy for business group Advanced Energy Economy. He added that the governor’s order follows a year-long stakeholder effort in the state.
While widely praised by environmental stakeholders, some expressed concern that the order is coming so late. McAuliffe's term is up in 2018, and he hopes to have the regulations finalized before then, because it's possible that an incoming Republican governor decide to reverse course. Dominion Energy, Virginia’s largest utility, could also push back against the carbon cap. The utility supported the Obama administration’s Clean Power Plan, because it could pursue plans to build natural-gas plants and still meet the targets. A state-level regulation may not have that flexibility.
The World Resources Institute put together a fact sheet in 2015 on how Virginia could meet its targets under the Clean Power Plan using existing policies and infrastructure. This and other existing research could prove useful as the state seeks to craft a Clean Power Plan of its own.
California DG solar update
My panel at GTM’s Solar Summit this week took a close look at California’s distributed solar marketplace and how it’s being shaped by ongoing policy developments. The formation of time-of-use (TOU) rates was one of the topics tackled by Brandon Smithwood, director of California state affairs at the Solar Energy Industries Association (SEIA). The California Public Utilities Commission issued a decision in January that set a framework for TOU rates, but the conversation didn’t end there. The actual rates are now being set through each California utility’s rate case.
Going into the TOU rate discussions in California, SEIA established three principles that the industry group would advocate for, Smithwood said. First, the rates have to protect customers. Customers who signed up for 30-year solar agreements before TOU was introduced “need to be left whole,” he said. And in general, the California Public Service Commission has agreed to build in some protections -- like 10 year grandfathering on existing rates for commercial customers.
Second, the commission has to get the TOU times right. In January, the commission agreed with SEIA’s argument that TOU periods shouldn’t be based on generation costs alone, and that they have to include everything downstream, which pulls the period earlier into the day when the sun is still shining. “But there’s still more work to be done” on TOU periods in each rate case, Smithwood said. Third, there has to be an array of options. SEIA put forward a suite of solar-plus-storage rate proposals and suggested “discount days,” he said.
The discussion on these three points will continue throughout the year. The January decision established a TOU period methodology, but did not establish the time periods for TOU rates or the rates themselves. That will play out through each utility’s rate case.
Jim Baak, program director of grid integration at Vote Solar, described his organization’s work on grid modernization and enabling distributed resources to provide benefits to the grid. This discussion is playing out in several ways, including utility rate cases and the CPUC's Distribution Resources Planning proceeding, Baak said. One of the issues Vote Solar sees (and detailed in a blog post) relates to Southern California Edison’s $2.1 billion grid modernization rate request. The idea is to create a “plug and play” grid system that distributed energy resources can easily plug into. The problem is that it’s very expensive.
While SCE has carved out $2.1 billion for grid modernization, the entire request is for $14.1 billion. Of the total request, Vote Solar says it has identified up to $4 million of investments related to enabling distributed resources, $2.7 billion of which it deemed to be excessive and unnecessary.
“The problem is that if you over-invest in the grid, you end up with a lot of fixed capital costs in the rate base, and the only way to cover that is through fixed charges. That really affects distributed energy resources,” said Baak. “So you could end up with a lot of stranded assets as you have more distributed energy, sales go down, fixed costs go up, and the economics of distributed resources really start to erode in that scenario. So it’s a really tricky balance, and I think it’s a dangerous situation we have to watch closely.”
In other California clean energy news, the state set a new all-time solar peak record of 9,870 megawatts on May 11. A few days later, on May 16, the state hit an all-time wind peak of 4,985 megawatts. The same day, California ISO announced wind, solar, hydropower and other renewables served roughly 42 percent of electricity demand in the state. At peak production, renewables supplied a record 72 percent of the ISO’s electricity on May 16, just a few days after renewables served a record 67.2 percent of demand on May 13.
Finally, Trump's draft budget
The Trump administration wants to slash the budget for the Department of Energy’s Office of Energy Efficiency and Renewable Energy by 70 percent, according to a draft budget for fiscal year 2017 obtained by Axios. An official version of the budget is expected to be released on Tuesday.