It may feel like 2017 is still just getting started, but if you're a lawmaker in Maryland, the busiest time of year has already come and gone. The state's General Assembly wrapped up its 2017 legislative session this week, with several significant wins for clean energy advocates.
In this edition of the State Bulletin, we give you the rundown on Maryland's new legislation. Plus, we'll take a look at one California commissioner's concern with the way retail choice is playing out in the state today.
A series of clean energy wins in Maryland
According to the Chesapeake Climate Action Network, Maryland's 2017 legislative session was the "best year ever" for climate and energy bills. The session officially ended on April 10, with clean energy advocates racking up several policy wins. Some bills have already been signed by Governor Larry Hogan; a few others are still on his desk. Here's a list of major bills:
HB 1106/SB 921, Clean Energy Jobs Act: Increases Maryland's renewable portfolio standard (RPS) to 25 percent by 2020, with a 2.5 percent solar carve-out, up from the previous goal of 20 percent by 2022, with a 2 percent solar carve-out. The measure is expected to reduce the carbon equivalent of taking 563,000 cars off the road each year. According to Maryland Climate Coalition, the more ambitious target will lead to about 1.3 gigawatts of clean energy and create more than 1,000 new solar jobs in the state. Governor Hogan vetoed a bill to increase Maryland’s RPS last year, which the General Assembly overturned. The state House passed a bill on April 7 to finalize the approval.
SB 758, Income Tax Credit -- Energy Storage Systems: The measure provides for a 30 percent tax credit for energy storage systems installed at homes and businesses from 2018 through 2022. Credits are capped at $5,000 for residential and $75,000 for commercial projects. The total credits awarded cannot exceed an annual cap of $750,000. The bill is currently awaiting the signature of Governor Hogan (more here).
HB 773, Clean Energy -- Energy Storage Technology Study: “Requiring the Power Plant Research Program to conduct a study of regulatory reforms and market incentives that may be necessary to increase the use of energy storage devices in the state,” according to the bill summary. The state’s Public Service Commission is also preparing to convene a working group on the valuation of distributed energy storage, according to the Energy Storage Association.
HB 1325/SB 740, Oil and Natural Gas -- Hydraulic Fracturing Prohibition: Enacts a permanent statewide ban on fracking in Maryland. This makes Maryland the third state in the nation to ban fracking, joining New York and Vermont, and the first state with gas reserves to pass a legislative ban. Hogan signed the bill, as promised, earlier this month.
SB 1158, Department of Natural Resources, Solar Generation Facilities -- Pollinator-Friendly Designation: Requires the Department of Natural Resources to designate ground-mounted solar facilities as “pollinator-friendly” by promoting native vegetation and habitat management practices that support birds, pollinators and other small wildlife.
HB 1350, Public Service Commission Application for Certificate of Public Convenience and Necessity -- Consistency With Comprehensive Plan: Requires the PSC to rule on large-scale energy projects to ensure they’re consistent with local planning and zoning rules. According to the Chesapeake Climate Action Network, the bill “reflects significant stakeholder input and compromise toward the goal of expanding renewable energy development in Maryland.”
HB 514/SB 184, Energy Efficiency Programs -- Calculation of Program Savings and Consideration of Cost-Effectiveness: Extends Maryland’s EmPOWER energy-efficiency program, which provides incentives for energy-efficiency projects, through 2023. The legislation also requires that the "societal cost test" will be used to evaluate the cost-effectiveness of programs. Supporters calculate that the bill will create 68,000 new jobs and $3.75 billion in new gross domestic product as a result of investments made over the next 10 years. The bill had bipartisan support and backing from the state's utilities.
Outside of the legislature, Maryland is advancing a community solar pilot program, which is now accepting applications through May 5. The program is capped at approximately 193 megawatts. Roughly 60 megawatts are reserved for projects aimed at low- and moderate-income customers.
The opportunities and "unforeseen risks" of retail choice in California
California Public Utilities Commission President Michael Picker has followed through on his plan to start exploring retail choice in the state. Picker announced his interest in liberalizing California’s retail electricity market on GTM’s The Interchange podcast, in which he described the potential benefits of a cohesive market structure that allows customers to more easily choose their energy retailer.
Earlier this week, the CPUC and the California Energy Commission announced they will hold a joint en banc hearing to discuss the changing state of retail electric choice in California on Friday, May 19. The commissions noted that up to 40 percent of California’s investor-owned electric utility customers are expected to receive their power from an alternative provider by the end of the year, such as a rooftop solar system, a community-choice aggregator, or a direct-access provider. Projections suggest that this number could surpass 80 percent by the middle of the next decade.
This isn’t the first time California has looked into formalizing retail choice. As deregulation swept the nation in the 1990s and early 2000s, California explored deregulating generating assets, so they would no longer be solely owned by utilities, and deregulating retail electricity, so customers could select a supplier other than their incumbent utility. But the retail choice conversation stopped dead in 2001 with the Enron scandal.
This new look at restructuring the retail market is different because it isn’t coming from the top down; it's a transition that's already happening on its own, according to the CPUC.
“Unlike electricity restructuring efforts of the past, when policymakers made a set of conscious decisions to move to open market competition, this transition is being driven by a range of economic and technological trends,” the en banc press release states. “Rapidly declining prices for solar PV, wind and battery technologies are upending the nature of electricity service. The implications of this migration away from ‘bundled’ utility service were not fully contemplated when the current regulatory rules were developed. These changes present tremendous opportunities to achieve the deep decarbonization pathway that California has set for itself, but they also create unforeseen risks.”
In a recent interview, new CPUC Commissioner Martha Guzman Aceves said she's concerned about the risk of over-generation the way retail choice is playing out today. All projections show a significant shift toward alternative electricity suppliers, but the CPUC is looking at procurement plans that don't necessarily take that into account.
"So we need a more coordinated planning process for that," she said. "I think it's totally possible to do it. But it's going take some really transparent assumptions and planning, and possibly even some staggering so we can forecast better and account better for who has these customers for the next 10 to 20 years."
The CPUC plans to release a white paper on the latest retail electricity trends in the state ahead of the hearing. The paper will also propose a set of principles to consider as stakeholders contemplate changing the regulatory and statutory frameworks surrounding retail electricity.
The en banc hearing was capped at 250 people and is already full. However, there will be a webcast available here.
Quick news hits
Nevada: State legislators are currently considering legislation (AB 270) that would restore retail-rate net metering in the state. The Committee on Commerce and Labor exempted the bill from deadlines this week and pushed voting on the bill to the week of April 17, according to solar advocates.
Solar companies, future solar customers and solar workers are eager to see the favorable policy restored after rate changes effectively killed Nevada’s rooftop solar industry in late 2015. Connie Berry, who was laid off from a local solar company when retail-rate net metering came to an end, recently told me that she and many other Nevadans are hopeful that lawmakers bring the policy back.
“I was laid off the day before New Year’s Eve in the middle of a job,” she said. “Quite a few people got laid off. Needless to say, it wasn’t a happy new year.”
Vermont: A recently released study found that it’s feasible for Vermont to meet 20 percent of its electricity needs with solar by 2025. That will require deploying 1 gigawatt of solar, which is more than five times the amount of solar currently deployed in the state. The report finds that Vermont’s grid can handle the additional capacity, but that it will require thoughtful siting to avoid expensive grid upgrades. The Vermont Solar Pathways study was funded by the U.S. Department of Energy’s SunShot Initiative and led by Vermont Energy Investment Corp. in partnership with the Vermont Department of Public Service and the Regulatory Assistance Project. Vermont has set a goal to meet 90 percent of the state’s total energy needs with renewable resources by 2050.
New York: Governor Andrew Cuomo launched a $70 million electric-car rebate and outreach initiative last month that will provide up to $2,000 for purchase of a new plug-in hybrid electric car, all-electric car or hydrogen fuel-cell car.
At the same time, work continues on the state's Reforming the Energy Vision initiative. Last month, regulators released three milestone orders on the Value of Distributed Energy Resources (which you can read more about here), Distributed System Implementation Plans, and the Interconnection Earnings Adjustment Mechanisms (the latter two of which you can read more about here). In the value of DER proceeding, utilities are ordered to file detailed plans to develop locational DER pricing by April 23 and an implementation proposal by May 1, 2017.
