It’s been a busy first few weeks of the new year for the clean energy sector.
Net energy metering has quickly emerged as a defining issue for 2016, with predictions that disagreements over the state-level policy will get worse now that solar incentives are locked in at the federal level. Nevada’s net metering battle has dominated headlines. Meanwhile, New Hampshire, Ohio, Maine and other states are also reassessing net metering compensation. (More on that in our roundup below.)
Renewable portfolio standards (RPS) are also up for debate in several states, such as Michigan and Oregon, while Vermont has just released a strategy document outlining its path to get to 90 percent renewable energy by 2050. A recent report found that the benefits of RPS targets far outweigh the costs.
Outside of renewables, a few states have already taken steps this year to promote electric-vehicle adoption. Most notably, California regulators approved Southern California Edison’s proposal to build 1,500 EV charging stations in its service territory, with the long-term goal of installing 30,000 stations.
On January 14, the California PUC approved a settlement agreement allowing Southern California Edison to incentivize the deployment of 1,500 electric-vehicle charging stations and build public awareness on electric transportation. SCE is authorized to spend $22 million on the first implementation phase of its Charge Ready and Market Education Programs. The programs are intended to support California’s goal of putting 1 million zero-emission vehicles on the road by 2020.
The new agreement has received widespread support, including from the Electric Vehicle Charging Association, the Sierra Club and the Environmental Defense Fund. EV charging companies recently took issue with a separate infrastructure proposal from Pacific Gas & Electric, which sought to build 7,500 charging stations at a cost of $29,600 per station. The SCE plan puts the cost of each station at $14,666. The SCE program also gives site owners more control over the equipment they choose to operate, which was a sticking point in the PG&E debate.
This is how the program economics break down, according to the CPUC: “The customer participant will own and operate the charging station and will be responsible for all related operating costs, including maintenance and electricity usage. Ratepayers will fund the cost of all paneling, conduits, and wiring, up to the charging station itself. Edison will also provide charging station rebates to site owners to cover a predetermined percentage of the charging system ‘base cost.’ Rebate levels will be 25 percent of the base cost for all non-residential market segments, 50 percent of the base cost for Multi-Unit Dwellings, and 100 percent of the base cost for any charging stations located within disadvantaged communities, regardless of market segment.”
Once the pilot phase of the program is complete, SCE will seek authority from the CPUC to deploy another 28,500 charging stations for a total estimated program cost of $355 million.
In other California news, the state’s three investor-owned utilities recently announced contracts with nine different companies under California’s Demand Response Auction Mechanism, or DRAM. The auction is the state’s first attempt to use distributed energy resources -- from EV chargers to smart thermostats to commercial load control -- to create grid-edge flexibility. Ohmconnect, EnergyHub, Green Charge Networks, EnerNOC, eMotorWerks and Stem were among the companies selected.
In addition, the California Energy Commission approved $9.6 million in funding from the Electric Program Investment Charge (EPIC) Program last week. The vast majority of the funding -- four grants totaling $6.2 million -- went toward testing energy storage systems. The four recipients are: Fuel Cell Energy, EOS Energy Storage, LightSail Energy, and Amber Kinetics.
California’s clean energy sector hit a major milestone in 2015 with solar energy surpassing both wind and hydropower as the number-one renewable energy source in the state, KQED reports. According to figures from the California Independent System Operator (CAISO), utility-scale solar made up 6.7 percent of the system’s total power generation. Wind made up 5.3 percent, and hydro, which suffered during a drought year, contributed 5.9 percent. Solar actually generated even more electricity for California than those figures suggest, because CAISO does not track generation from rooftop solar projects.
Meanwhile, the state continues to experience a months-long methane leak -- dubbed the worst environmental disaster since BP’s Deepwater Horizon oil spill in 2010.
Last week, the Nevada Public Utility Commission voted unanimously to deny a stay on new rates for rooftop solar customers. The decision upholds the PUC’s December ruling to eliminate retail-rate net metering over four years and increase fixed fees for both new and existing solar customers. The new policy took effect on January 1.
Solar companies and solar customers have pushed back against the new policy. Because the rule will apply retroactively to Nevada’s 17,000 existing solar customers, many of them will see their savings wiped out, and some may even see an increase in their monthly electricity bills. At the same time, by erasing most if not all of the savings from rooftop solar, the changes essentially kill the Nevada rooftop solar market. As a result, several solar companies have already pulled out of the state.
A group of solar customers are now pursuing a class action lawsuit against NV Energy for providing incentives to encourage customers to go solar, and then lobbying to change a key solar policy. Solar companies have filed another motion for reconsideration with the PUC and are starting to consider legal action in the event that the petition fails.
In early November, Tucson Electric Power filed its next rate case (E-01933A-15-0322). The utility has proposed doubling the fixed charges for residential customers form $10 to $20, instating a demand charge on solar customers and reducing the net metering credit from the retail rate (11 cents per kilowatt-hour) to the utility’s avoided cost for energy (6 cents per kilowatt-hour). Motions to intervene must be filed by April 29, 2016. Testimony submissions continue through the summer, with a pre-hearing conference scheduled for August 25, 2016 and a hearing scheduled for August 31, 2016.
On December 29, the Utah Public Service Commission rejected a request from pro-solar groups for a rehearing on the state’s new methodology for determining the costs and benefits of net metering (14-035-114). The framework released in November relies heavily on PacifiCorp’s cost-of-service study, and did not adopt a specific set of costs and benefits to be considered.
Lawmakers in Oregon are considering new legislation that would require electricity provided by the state’s largest utilities (Pacific Power and Portland General Electric) to be coal-free by 2030. The bill would also boost the state’s RPS from 25 percent renewable energy by 2025 to 50 percent renewable energy by 2040. Both major utilities support the bill, which includes a safety valve that allows the Oregon PUC to pause the RPS if it threatens service reliability. The House Committee on Energy and Environment will hold a hearing on the proposal in early February, the Statesman Journal reports.
In early January, a Hawaii court shot down a lawsuit solar advocates brought against the state PUC, after the commission ended Hawaii’s net metering program. Hawaii Circuit Court Judge Gary Chang determined there was “no abuse of discretion in the PUC’s decision,” the Honolulu Star-Advertiser reports. The Alliance for Solar Choice said it plans to appeal the decision.
Five years ago, Vermont set a goal to have renewable energy generation make up 90 percent of the state’s electricity mix by 2050. This week, Gov. Peter Shumlin and the Department of Public Service released an update to the state’s Comprehensive Energy Plan that lays out steps for meeting that goal.
“When we set the goal in 2011 of achieving 90 percent renewable energy by 2050, it was ambitious,” Gov. Shumlin said. “Today, after years of work together to chart a new energy future, we see a path to achieve that ambitious goal. But to do so, we must continue to make the necessary and sound investments in our energy future that will save Vermonters money, put Vermonters to work, and help combat climate change.”
The CEP includes the following new and more detailed goals:
- Reduce total energy consumption per capita by 15 percent by 2025, and by more than one-third by 2050
- Meet 25 percent of the remaining energy need from renewable sources by 2025, 40 percent by 2035, and 90 percent by 2050
- Three end-use sector goals for 2025: 10 percent renewable transportation, 30 percent renewable buildings, and 67 percent renewable electric power
- Greenhouse-gas reduction goals include: 40 percent reduction below 1990 levels by 2030, and 80 percent to 95 percent reduction below 1990 levels by 2050
- To get there, the plan calls for more distributed energy, including solar PV and wood energy. It also calls for the adoption of more efficient heat pumps, electric vehicles, smart grid technology and energy storage
Vermont’s clean energy sector has already seen rapid growth. There is 10 times more solar in the state today than in 2010, and 20 times as much wind energy. State leaders also want to attract innovative, low-carbon solutions. “This CEP embraces the idea of Vermont as a starting point, and as a test bed for new technologies,” the report states.
On the regulatory side, the Vermont Public Service Board has opened a docket to consider a request from Green Mountain Power to offer customers net metering above the statutory cap. GMP informed regulators in November that it had met the cap, which is defined as 15 percent of a utility’s peak load. Under the proposal, GMP will continue to accept net-metering applications for systems that are 15 kilowatts and under, and would allow for 7.5 megawatts of community solar projects. This would be a short-term solution while the PSB considers a new net-metering program to begin in 2017.
Finally, to boost Vermont’s use of wind and hydro, the PSB recently approved the 1,000-megawatt Clean Power Link Transmission Line to carry renewables from Canada to the Northeast. The high-voltage direct-current transmission line will travel 150 miles under Lake Champlain.
Legislators in New Hampshire have started holding hearings on a controversial bill to raise the state’s solar net metering cap, the Union Leader reports. Under current state law, the cap is set at 50 megawatts (for reference, New Hampshire consumes more than 4,000 megawatts on a hot summer day). SB 333 would raise the cap from 50 megawatts to 75 megawatts in the interim, while the Public Utilities Commission conducts a series of hearings to develop a more permanent solution. It’s anticipated that a long-term solution from the PUC would lower net-metering compensation overall.
Stakeholders are sharply divided on the issue. Utilities say the current net metering program amounts to a $3 million to $4 million annual subsidy for solar customers at the expense of non-solar customers. At the same time, solar advocates argue that solar is a boon to state’s economy. Gov. Maggie Hassan (D) wrote a letter to lawmakers earlier this month warning that failure to lift the cap could damage a promising new industry in New Hampshire.
“New Hampshire’s families and businesses have invested millions of dollars in our local economy by installing solar arrays and other renewable generation facilities that make us more independent and keep our money closer to home,” Hassan wrote. “This consumer-driven progress must continue, and I support efforts to lift the cap on net metering as soon as is possible.”
Some solar advocates are pushing for lawmakers to remove the cap altogether.
Work continues in Maine on a new distributed solar policy, guided by Office of the Public Advocate's white paper, "A Ratepayer-Focused Strategy for Distributed Solar in Maine.” The solution hinges on entering into a long-term contract with a “Standard Buyer” that will aggregate and monetize the benefits of distributed solar. Regulators must submit a final proposal to the state legislature by January 30.
Separately, the Maine legislature is scheduled to take up a bill this week (LD 1413) that calls for suspending the state's renewable energy portfolio requirements if suppliers cannot provide electricity at a 10-cents-per-kWh rate, while still meeting the portfolio requirements, the Sun Journal reports. The author of the bill, Senate President Michael Thibodeau (R), said the law would serve as a “safety valve” to ensure customers don’t overpay for clean energy. Standard electricity rates in Maine are currently below 7 cents per kilowatt-hour.
Maine stakeholders are also starting to review the state’s net metering policy as solar approaches the state’s cap at 1 percent of peak load. A spokesperson for Central Maine Power told local NPR affiliate MPBN that continued growth in the rooftop solar sector could put investor profits at risk.
On January 21, Governor Andrew Cuomo announced a 10-year, $5 billion Clean Energy Fund to accelerate the growth of solar, wind, energy efficiency and other clean tech industries in New York State. The investment is expected to leverage more than $29 billion in private sector funding, and result in more than $39 billion in customer bill savings over the next 10 years.
In his recent State of the State address, Cuomo underscored his commitment to a 50 percent renewable energy mix in the state by 2030. He said he will also “eliminate all use of coal in New York state by 2020.” A policy handbook released along with the speech explains that the governor plans to close the state’s three remaining coal plants and help the coal industry employees transition to jobs in the clean energy sector.
In order to meet the state’s renewable energy goals, PSEG has issued an RFP that seeks to procure a total of 210 megawatts of new renewables capacity. The proposal includes an RFP for renewable projects larger than 1 megawatt, and a feed-in tariff for rooftop and carport PV projects greater than 200 kilowatts but less than 1 megawatt.
Meanwhile, the New York State Energy Research and Development Authority (NYSERDA) announced the Competitive Greenhouse Gas Reduction Program, which offers $13.5 million for projects that reduce greenhouse gas emissions from the state’s power sector “beyond reductions expected from compliance with existing regulations.” The deadline for proposals is March 31, 2016. NYSERDA also recently announced $6 million in incentives for solar projects in certain NY-Sun Solar Megawatt Block programs.
Last week, the Department of Energy Resources announced $2 million in new funding for the Massachusetts Offers Rebates for Electric Vehicles (MOR-EV) program, which grants purchasers and lessees of an electric vehicle a rebate of up to $2,500. The new commitment brings the total allocation for the program to $5.72 million, with 1,606 rebates already issued. Massachusetts has a goal to register 300,000 electric vehicles in the state by 2025.
Massachusetts has taken several other steps in recent weeks to boost clean energy deployment in the state. At the end of December, the Department of Energy Resources awarded six western Massachusetts communities $3.1 million in state grants for energy efficiency and clean energy projects. Earlier this month, the Massachusetts Clean Energy Center (MassCEC) announced plans to provide $650,000 in funding for critical service community microgrids -- the Massachusetts version of the NY Prize. The funding commitment is intended to attract private investors to finance later-stage project development. The MassCEC also announced $530,000 in grants this month for four small business incubators in an effort to accelerate the development of cleantech startups in the state.
According to the 2015 Massachusetts Clean Energy Industry Report, there are nearly 100,000 employees in the clean energy sector, at more than 6,400 companies across the state. Clean energy jobs rose by 11.9 percent from 2014 to 2015. Overall, clean energy employment in the state has grown by 64 percent since 2010.
Opposition continues to mount against “bailout” proposals from Ohio-based investor-owned utilities, Midwest Energy News reports. Last week, the independent power producer Dynegy offered to beat the costs in both FirstEnergy’s (14-1297-EL-SSO) and American Electric Power’s (14-1693-EL-RDR) pending cases by $2.5 billion each over the proposed eight-year agreement term. Two weeks earlier, Exelon Corporation said it could provide the same amount of energy for $2 billion less with 100 percent carbon-free resources.
FirstEnergy and AEP are both seeking special deals that would guarantee revenues for their aging coal plants. The utilities claim the agreements are needed to maintain resource diversity and electricity reliability in the state. Both utilities have dismissed Dynegy’s proposal, Cleveland.com reports.
"There is no basis for Dynegy's claims of cost savings. They are suggesting that they can provide generation at a lower cost based on inflated assumptions that do not reflect current market realities,” said AEP spokesperson Melissa McHenry.
Meanwhile, PJM Interconnection has also filed testimony opposing FirstEnergy’s plan to the extent that a settlement could involve the PUC in PJM’s affairs. An independent market monitor for grid operator PJM filed a claim stating that FirstEnergy’s proposal is inconsistent with competition in PJM wholesale power markets.
Like many other states, Ohio is also reassessing its net energy metering policy, with reply comments filed with the PUC earlier this month. One point of contention is how much power will be net-metered under the new policy. The commission’s draft rule proposed limiting production from a net-metered generator to 120 percent of the customer's three-year average consumption at the time of the installation, Smart Grid Today reports. Investor-owned utilities are pushing for a 100 percent limit.
Wisconsin’s state assembly has passed a bill that would do away with the state’s moratorium on nuclear power plants, despite opposition from Democrats that warned of dangerous meltdowns and radioactive waste. The measure now heads to the state senate, the AP reports.
In late December, Valerie Brader, executive director of the Michigan Agency for Energy, and Dan Wyant, director of the Michigan Department of Environmental Quality, announced modeling results that show Michigan is well positioned to comply with the U.S. Environmental Protection Agency’s Clean Power Plan (CPP). Even without taking action, Michigan would remain in compliance until 2025-2028. The state will launch a dedicated carbon rule website this month.
Meanwhile, the Michigan legislature will soon restart its work in updating the state’s 2008 energy laws. Republican majorities in both the House and Senate are pushing to repeal Michigan’s renewable energy and energy efficiency standards in exchange for more detailed planning requirements for utilities, Midwest Energy News reports. Clean energy advocates argue that the standards have been a boon for the state and will help meet Michigan’s CPP requirements. Under the carbon rule, Michigan is required to reduce its emissions 31 percent by 2030.
Duke Energy has filed a $1.83 billion, seven-year electrical system upgrade plan in Indiana that includes self-healing system technology, the installation of smart meters, and time-of-use rates. Duke has asked to set a hearing schedule by January 21.
Floridians for Solar Choice, a grassroots group championing a ballot initiative to allow for third-party-owned solar in the state, filed briefs with the Florida Supreme Court earlier this month opposing a utility-supported ballot initiative that would maintain the regulatory status quo on solar. Solar supporters say the utility-backed amendment was launched with the sole purpose of confusing voters and countering the successful grassroots campaign to expand solar financing options in Florida.
The opposing campaign, led by a group called Consumers for Smart Solar, has raised $5.9 million since last summer -- half of which came from utilities. Floridians for Solar Choice claims the multimillion-dollar “misinformation” initiative has succeeded in preventing Solar Choice from gaining a slot on the 2016 ballot. The pro-solar coalition is now examining options to qualify for the 2018 ballot.
“The Floridians for Solar Choice coalition is stronger today than ever before, and we remain unwavering in our focus to open the solar market in the Sunshine State,” said Stephen A. Smith, executive director of the Southern Alliance for Clean Energy, in a statement. “Yes, the utilities have more money, but their positions are on the wrong side of this issue. Deception and unethical manipulation of Florida’s voters will not win in the end. We trust the Supreme Court will see through the monopoly utilities’ chicanery and deny the false petition from ballot access.”
As solar advocates reassess their strategy, the Consumers for Smart Solar’s constitutional amendment looks poised to make the 2016 ballot.
Separately, the Florida state legislature is considering a bill that would exempt electric and hydrogen vehicles from tolls, certain parking violations, and sales and use tax.
On December 20, wind provided 45 percent of Texas’ total electricity needs -- setting a new record for the state -- Scientific American reports. At its peak, wind produced 13.9 gigawatts of power. High output was also sustained for several hours, with energy production above 10 gigawatts for almost the entire day.
In other Texas news, on January 19 and 20 the PUC will hold the last two of its four public hearings on Hunt Consolidated’s request to acquire Oncor, the largest T&D utility in Texas. If approved, there are plans to convert Oncor (valued at $17.6 billion) into a real estate investment trust (REIT). Commissioners have raised concerns over the REIT structure, however.
On December 23, the public comment period closed in the Pepco/Exelon merger proceeding before the Public Service Commission of the District of Columbia. While many residents continue to oppose the deal, a new package of benefits has won more support for the merger. Ahead of the comment deadline, the two utilities underscored the benefits of the deal, which includes $25.6 million to offset distribution rate increases for residential customers through March 2019, $14 million for a direct bill credit, and $16.15 million for low-income customer energy assistance, among other items. The PSC is expected to rule on the merger in the first quarter of 2016.
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