As President Trump hit his 100-day milestone last week, political leaders in California gathered to discuss “building cleaner, greener communities” at the Los Angeles Business Council’s 11th Annual Sustainability Summit.
The agenda was stacked with several high-profile clean energy champions, including California Senate President Pro Tem Kevin de León and Attorney General Xavier Becerra. Trump -- who has made rolling back Obama-era environmental regulations and clean energy policies a major focus of his first few months in office -- was an impossible topic to ignore.
This week’s State Bulletin brings you highlights from the Sustainability Summit. But first we take a look at the evolving solar policy landscape across the country, plus a brief update on solar-related legislation in Florida, Indiana and Montana.
"States have moved on from the old battles"
The days of typical net metering debates may be behind us. Or, at least, the debates are taking on new dimensions.
“We’re continuing to see states take very different approaches to [distributed generation] compensation, with new designs emerging each quarter," said Autumn Proudlove, manager of policy research at the North Carolina Clean Energy Technology Center (NCCETC), and author of the center's latest 50 States of Solar report.
In the first quarter of 2017, the authors cataloged a total of 134 actions related to distributed solar policy and rate design in 40 states plus Washington, D.C. Of the actions recorded, residential fixed charge and minimum bill increases were the most common, followed by net metering and value-of-solar studies. These policy categories aren't anything new, but there are some interesting developments within them.
In Arizona, for instance -- which has seen some of the most intense distributed solar battles in the nation -- stakeholders reached a settlement agreement in Arizona Public Service's high-profile rate case earlier this year. The agreement includes several rate options for new residential solar customers, including a time-of-use rate without a demand charge. It also sets a new export rate, based on the Arizona Corporation Commission's resource proxy model, of 12.9 cents per kilowatt-hour. While the settlement is pending regulatory approval, it shows how solar and utility stakeholders are looking at a larger menu of policy options to resolve their differences.
The 50 States of Solar report also notes that Oncor and Eversource introduced two unique proposals for new solar customer charges earlier this year. Oncor's proposed charge in Texas takes the form of a demand-based minimum bill, while Eversource's proposed charge in Massachusetts is a hybrid of a fixed charge, demand charge and minimum bill. "The introduction of new fees that do not fit neatly within the traditional definitions of fixed charges, demand charges, and minimum bills is an area to watch," the report states.
“As distributed solar has become more widespread, the policy discussions in many states have moved on from the old battles about debates over whether and how to encourage solar market development,” said David Sarkisian, policy analyst at NCCETC. “Broader discussions are now taking place on the future of electricity generation and how to best incorporate solar energy's value alongside other resources and new and existing infrastructure.”
In a testament to the evolving solar policy landscape, here are three recent developments in emerging solar markets.
A Florida bill that implements Amendment 4 (which we covered last year) has passed in the Florida legislature. SB 90 extends a property tax exemption for renewable energy installations, including solar, wind and geothermal, on both commercial and residential properties. According to Advanced Energy Economy, 80 percent of the assessed value of a renewable energy source device, which is considered tangible personal property and is installed on real property on or after January 1, 2018, will be exempt from ad valorem taxation. Solar supporters are pretty excited about it.
“The Florida legislature took a historic step forward today to expand solar across the state while recognizing Floridians’ desire for more choice over their energy options. And, importantly, the bill includes strong protections and increased transparency for consumers, helping ensure they fully understand solar transactions,” said Tom Kimbis, executive vice president at the Solar Energy Industries Association (SEIA). “Consumer protection is both the right thing to do and critical to the success of the industry, and we congratulate the Florida legislature for advancing these protections without creating burdensome red tape for small businesses.”
In Indiana, Governor Eric Holcomb put an end to a solar policy debate this week by signing Senate Bill 309, which gradually reduces net metering payments over time. The Journal Gazette reports that under the final version of the bill, anyone who installs distributed solar or wind by the end of 2017 will receive retail-rate net metering for 30 years. Starting next year and for the next five years, anyone who installs wind or solar will receive the retail rate for 15 years. After 2022, anyone who installs distributed generation will be compensated for excess generation at utility's marginal cost, plus 25 percent.
While the bill won't have a major effect on the solar market for another few years, pro-solar groups say it dramatically curbs Indiana's solar potential. There are only about 100 distributed solar customers in Indianapolis Power & Light territory, and none of the state's utilities are close to reaching their 1.5 percent net metering cap.
To the north, Montana Governor Steve Bullock, a Democrat, recently vetoed a bill that stated customers using net metering systems cannot be subsidized by customers who do not use the policy. It also deleted existing language in the Montana Code related to promoting net metering in the state. Bullock said the bill should await a study on net metering, which could soon be authorized by a separate piece of legislation.
“I’ve got your back”
California Attorney General Xavier Becerra said people around the state keep asking him, “What are you going to do?” about Trump’s early actions, from the threat of immigration raids to rolling back the Clean Power Plan. “I say, ‘This is California. […] We’re moving forward. We didn’t become the sixth largest economy in the world by sitting back,’” he said, at the Los Angeles Business Council’s 11th Annual Sustainability Summit.
“My job is to have your back as you move forward,” he added. “Don’t turn around, just keep going, because I’ve got your back.”
Becerra said the California AG office has already taken several steps to block the Trump administration’s agenda, including the following actions related to clean energy:
- Intervened in a lawsuit to defend energy efficiency standards (“Light bulbs, we have to defend light bulbs,” Becerra said)
- Issued a statement pledging to “vigorously oppose” oil drilling off the coast of California, in response to Trump’s directive to expand offshore drilling
- Pledged to defend the Clean Power Plan
- Issued a letter to the EPA objecting to Pruitt’s withdrawal of an information collection request for the oil and gas industry
- Delivered a FOIA request to the EPA seeking information on Administrator Pruitt’s alleged conflicts of interest
- The state of California has hired Eric Holder as outside legal counsel to aid in protecting the state’s environmental and climate policies
Several of these legal threats have yet to turn into lawsuits, but it shows that the state isn't messing around. Becerra also promised to defend California’s ambitious targets for fuel efficiency vehicles as well as the work of scientists. All of this costs money, though, which prompted Becerra to say this week that he needs more money in order to fight Trump’s proposals.
Senate President Pro Tem Kevin de León had a very similar message to Becerra’s. “We believe in science, we don’t ban it, wall it off and deport it,” he said, at the Business Council event last week. “It’s not what we do in California.”
There is no legal reason for the EPA to withhold California’s waiver to regulate vehicle emissions, de León said, who threatened legal action if the waiver does come up for debate. Meanwhile, the market continues to drive the transition to clean energy faster than any policy could, he said.
“I’m still very, very bullish, still very, very optimistic about the future,” de León said. He reiterated his position at a conference on community choice aggregation this week. “California is still moving forward and will not allow Washington to hold us back in any form, way or shape," he said, and was greeted by a standing ovation.
To preserve the state's environmental values, de León recently introduced “Preserve California,” a legislative package that “ensures no matter what the Trump administration or Congress does, we won’t lose protection from landmark environmental laws like the Clean Air Act, the Safe Drinking Water Act and the Endangered Species Act,” said de León. “We now have a president and an EPA administrator who deny the reality of climate science, so we have to move quickly to make sure we’re enshrining federal protections into California state law.” He added that he hopes this series of bills will provide a model for other states to replicate.
De León also recently introduced a bill to push California to 100 percent renewable energy, and State Senator Hannah-Beth Jackson has proposed new legislation “to prevent new leases in state waters for construction of new pipelines or other infrastructure needed for expansion of oil and gas development,” the Sacramento Bee reports. The latter bill came in response to President Trump’s recent executive order that seeks to boost offshore oil and gas energy production.
Meanwhile, California Governor Jerry Brown, along with a dozen other governors, sent a letter to Trump urging him not to exit the Paris Climate Agreement. While symbolic, such a letter seems unlikely to sway the administration, which is battling an internal divide on the Paris issue.
CPUC President Michael Picker also pushed back against the Trump administration in his own way last week. Picker responded to comments Perry made recently that the federal government may need to pre-empt state policies to shore up baseload energy resources for the sake of national security (more on this here). Picker didn’t deny that renewables are making baseload power plants irrelevant in California, but he did emphasize that managing a renewables-heavy grid is very doable.
“I don’t think that renewables are a challenge,” he said. “The policy challenge that we face here in California is reducing greenhouse gas emissions.”
Ron Nichols, president of Southern California Edison, echoed that statement. “This isn’t an issue of, ‘Are we going to be doing renewable energy?’” he said. “The question is, what type?”
Picker said that successfully managing the upcoming solar eclipse, which will knock out about 6,000 megawatts of solar generation for an hour or so, will "send a message to Rick Perry telling him not to worry about California.”
Bonus: Here are three other pieces of clean energy legislation recently introduced in California, as tracked by AEE’s PowerSuite:
- SB 801 -- Would require the Los Angeles Department of Water and Power and Southern California Edison to procure additional energy storage (100 megawatts and 20 megawatts, respectively) to meet reliability needs for Aliso Canyon.
- AB 271 -- Would authorize county tax collectors and auditors to remove delinquent PACE assessments from the tax roll and to collect late penalties and interest.
- AB 920 -- Would require baseload renewables such as geothermal to make up 20 percent of the generation used to meet the state’s RPS goals.