On the heels of President Obama’s rousing speech at the United Nations climate talks in Paris, the Republican-controlled House of Representatives passed a set of bills this week to overturn historic regulations on the power sector at the core of the president’s climate plan.
On Tuesday, the House voted to repeal the EPA Clean Power Plan, which regulates greenhouse gas emissions from existing power plants, and to throw out an EPA rule governing new power plants. The Senate has already passed similar legislation.
The White House has vowed to veto both bills, and there aren’t enough votes in Congress for an override. Still, the votes send a signal to international parties in Paris that Obama’s efforts to fight climate change -- which include boosting support for clean energy technologies -- do not have backing from Congress.
According to environmentalists, a settlement deal announced this week between FirstEnergy and regulatory staff in Ohio is another blow to the climate movement. If approved, the proposal would provide guaranteed income for several of FirstEnergy’s merchant power plants. The utility says the plants are vital to system reliability.
More on the Ohio rate case and other business, regulatory and legislative changes at the state level below. Click to jump to updates from the Midwest, Northeast, West, or South. You can find our last state dispatches post here.
On Tuesday, FirstEnergy announced it had reached an agreement with staff at the Public Utility Commission of Ohio that would guarantee income over the next eight years for two of the Akron-based utility’s power plants, and a portion of two others.
Under the proposal, parties would enter into power-purchase agreements for FirstEnergy’s Davis-Besse Nuclear Power Station, the W.H. Sammis coal-fired plant and FirstEnergy’s share of the Ohio Valley Electric Corp. coal plants. The plan also includes a goal, but not a mandate, to reduce carbon emissions from FirstEnergy generating fleet by at least 90 percent below 2005 levels by 2045. The company also pledged $102 million for low-income customers and efficiency programs.
“The settlement filed by FirstEnergy’s Ohio utilities -- Ohio Edison, The Illuminating Company and Toledo Edison -- outlines ambitious steps to safeguard customers against retail price increases in future years, deploy new energy efficiency programs, and provide a clear path to a cleaner energy future by reducing carbon emissions,” according to a company statement.
FirstEnergy argues that the deal is necessary to maintain grid reliability, and estimates the proposal will save ratepayers about $560 million over time.
But opponents say the power-purchase contract amounts to a “bailout” for FirstEnergy’s bad investments that puts customers at risk. If the FirstEnergy plants lost money in the competitive power market, ratepayers are still required to compensate the utility. While FirstEnergy argues there will be long-term savings, the Consumers’ Counsel and the Northeast Ohio Public Energy Council estimate the settlement deal will ultimately cost consumers $3.9 billion.
In September, PUC staff rejected a longer, 15-year proposal to buy electricity from FirstEnergy’s Ohio plants (14-1297-EL-SSO). Dick Munson, Midwest director for the Environmental Defense Fund, said the new “backdoor” deal is even worse than the original. For instance, the plan includes a significant increase in fixed charges in the coming years, which reduces the benefit for customers who conserve energy. In addition, the pro-consumer and pro-environment goals have no teeth, he said.
“In Paris, world leaders are thinking about how to reduce carbon emissions, and in Columbus, Ohio, regulatory staff are saying we have to subsidize and keep operating pollution-spewing power plants,” said Munson. “Ohio shows there’s a potential for moving backwards.”
Sixteen parties signed the settlement agreement, including PUCO staff and an advocacy group representing low-income customers. However, the deal is still subject to commissioner approval.
American Electric Power has also filed a proposal (14-1693-EL-RDR) for an income guarantee to buy power from its own plants. The case is still before the commission. Commission staff have requested to extend the comment period until December 22, with reply briefs due on January 8, 2016.
Earlier this year, PUCO Chairman Andre Porter criticized AEP and FirstEnergy for overstating the potential threat to electricity reliability, RTO Insider reports. “Let’s stop attempting to scare Ohioans,” Porter said. “We’re going to continue to have reliable power” with or without income guarantees.
Lawmakers in Michigan say they will fail to pass reforms to the state’s energy policy before the end of year, which was a top priority for Gov. Rick Snyder, MLive reports.
This fall, House lawmakers in Michigan introduced a package of bills designed to remove barriers to renewable energy production, including raising the state’s net-metering cap and introducing a community solar program. The package has been advancing, but not fast enough to meet the year-end deadline.
New York Gov. Andrew Cuomo has mandated a 50 percent renewable energy mix by 2030. New York previously had a goal to reach 50 percent renewables, but the Department of Public Service will now codify it.
Regulators will have to develop specific steps to reach the target by June 2016. Cuomo said the process should prevent the premature retirement of upstate nuclear plants during the transition to more renewables.
The Massachusetts clean energy sector now employs 98,895 workers at 6,439 institutions across the state -- marking the fourth consecutive year of double-digit growth -- according to the Massachusetts Clean Energy Center’s latest industry report.
The total number of clean energy jobs in Massachusetts has increased by 64 percent since MassCEC started tracking employment in 2010. Clean energy jobs now represent 3.3 percent of the overall workforce in the state, and clean energy is now an $11 billion industry, which represents 2.5 percent of the gross state product.
The report, prepared by BW Research Partnership, is primarily based on survey data gathered directly from clean energy employers in Massachusetts.
News of the industry’s success comes as growth in the commercial solar sector is expected to grind to a halt. Failure to pass legislation that would have lifted the state’s net metering cap could cause the Massachusetts solar industry to miss out on 100 megawatts of development. The solar industry employs nearly 15,000 people in the state.
Last month, Gov. Chris Christie’s administration released a draft update to New Jersey’s 2011 Energy Master Plan. The plan highlights the role of natural gas in lowering New Jersey’s electricity prices, which have fallen from fourth highest to tenth highest in the country over the past four years.
Critics say the plan focuses too much on fossil fuels. "This plan is full of hot air; it's still promoting natural gas and fossil fuels over renewable energy and energy efficiency,” said Jeff Tittel, director of the New Jersey Sierra Club.
The updated plan makes no changes to the state’s renewable energy portfolio standard of 22.5 percent of energy from renewable sources by 2021. Today, 15 percent of the state’s electricity is produced by renewable energy, with 3 percent from solar. There’s a bid in the state senate to increase New Jersey’s RPS to 80 percent by 2050.
Solar advocates are making a strong appeal to regulators in Nevada with less than a month left for the PUC to decide the future of the state’s net metering program. Representatives from SolarCity, grassroots activists and local residents submitted more than 31,000 petitions to the PUC this week asking commissioners not to increase fees or lower compensation for net-metered solar customers.
All parties have now filed testimony in the proceeding (15-07041). In its submission, NV Energy proposed reducing the net metering credit by roughly half -- to 5.5 cents per kilowatt-hour from the current 11.6 cents -- to better reflect the cost of serving solar customers. The utility has also proposed introducing a demand charge.
The Alliance for Solar Choice (TASC) staunchly opposes the NV Energy plan, and has suggested that solar customers pay a one-time fee for utility inspection and interconnection instead. The Consumer Protection Bureau has testified that it does not support a demand charge, and that major changes to the net metering tariff should wait until NV Energy’s next rate case.
Amid the net metering turmoil, SolarCity has opened a 13,000-square-foot training center in Las Vegas that will house large-scale models of different types of roofs. The facility will train employees from Nevada, Colorado, Texas and Arizona.
Meanwhile, the city of Las Vegas has signed an agreement with NV Energy to get 100 percent of its electricity from renewable resources, with a significant portion coming from large-scale solar projects, Platts reports. The deal is still subject to approval from Nevada PUC and the Las Vegas City Council.
At the same time, three major casino customers in Las Vegas have filed to exit NV Energy territory (15-05006, 15-05002, 15-05017). Las Vegas Sands Corporation, Wynn Las Vegas, and MGM Resorts plant to purchase their energy in wholesale markets instead, due to complaints that NV Energy’s rates are too high. In order to leave, the casino operators will have to pay a collective exit fee of $130 million.
Tucson Electric Power filed a general rate case last month that includes a 7 percent rate increase for residential customers ($12 on average). TEP has also proposed to double its fixed charge from $10 to $20, add a demand charge for solar customers, and lower the net-metering rate to the utility’s avoided cost (from 11 cents per kilowatt-hour to 6 cents per kilowatt-hour).
The Arizona Community Action Association, The Sierra Club, Physicians for Social Responsibility and other groups have criticized the proposal. The Arizona utility has asked regulators to approve the new rates by January 2017 (E-01933A-15-0322).
California regulators will miss a year-end deadline to reform California’s net-metering tariff, CPUC president Michael Picker told Bloomberg. The commission may make an initial decision in the NEM 2.0 proceeding (R1407002), but Picker said a final ruling will likely come in the new year due to the litigious nature of the case.
“I wish we could do it [by the end of this year]...but how do you get the lawyers to shut up?” Picker said. “We all learned in high school that if you want to build a crowd, start a fight.”
The CPUC has received a large number of comments on the case. The solar industry would like to see the program largely unchanged, while California’s three investor-owned utilities have proposed, among other things, to lower net-metering compensation from the retail rate for electricity to the wholesale rate.
A group of clean energy investors, led by DBL Partners’ Nancy Pfund, wrote a letter to Picker this week, urging him to “establish a successor tariff that continues the successful NEM policy and provide policy certainty through 2020.”
Meanwhile, regulators are expected to rule on California’s distribution resource plan proceeding (R1408013) any day.
Entergy Louisiana, the state’s largest utility, announced last week that it will lower compensation for net-metered solar projects upon reaching the state’s newly approved net-metering cap, PV Tech reports. Entergy told state regulators there are 8,203 PV systems under net metering in its service area, with a total capacity of 47.4 megawatts, or 0.57 percent of peak electricity demand as of October 2014.
Louisiana regulators recently voted 2-3 to keep a low 0.5 percent cap on net-metered solar systems. The commission accepted the results of a draft report by the Louisiana PSC that found the cap would increase ratepayer bills by $809 million. Critics complain that the report did not fairly account for the benefits that rooftop solar provides.
Clean energy advocates say the net metering decision stands to effectively kill Louisiana’s nascent solar industry. As a result of the cap, most other utilities in the state are expected to lower compensation or close their net-metering programs in the coming weeks.
“Entergy Louisiana is using this vote to do what many consumers and solar businesses have feared: slam the doors on years of progress in developing solar choices for homeowners, and the hundreds or thousands of jobs that came with a new clean energy industry,” said Jeff Cantin, president of the Gulf States Renewable Energy Industries Association.
The D.C. Public Service Commission kicked off a new round of hearings on the $6 billion Exelon-Pepco merger case (FC 1119) this week. The commission voted to reopen the case on October 28, after rejecting the merger in August. The PSC will consider a revised proposal reached between Exelon and the D.C. Mayor’s Office.
Opponents of the merger have called for an ethics investigation of Mayor Muriel E. Bowser for reversing her position on the case, the Washington Post reports. Consumer and environmental groups have specifically called attention to the $25 million Pepco recently donated to the D.C. government to build a new major league soccer stadium. Bowser denies there’s any connection between the stadium and the Pepco merger.
Duke Energy and advocacy group NC Warn continue to clash in North Carolina. This week, regulators shot down NC Warn’s request to participate in Duke Energy’s 15-year Integrated Resource Plans. The group expressed several concerns with respect to the utility’s plans, including insufficient use of renewable energy and energy-efficiency measures.
The commission rejected NC Warn’s participation because the filing “simply restate(s) the very same meritless opinions and allegations that they have filed...in previous [planning dockets], and which have consistently been rejected by the commission.”
NC Warn Executive Director Jim Warren told the Charlotte Business Journal the ruling surprised him -- it’s the first time the PUC has prevented the group from commenting on long-range planning. NC Warn is still involved in a separate regulatory proceeding (SP-100 Sub 31) that seeks regulatory approval for third-party electricity sales in North Carolina.
Policy developments are tracked in partnership with EQ Research, which offers in-depth subscription services covering regulatory developments, legislation and general rate cases in all 50 U.S. states.