The new year is already off to a busy start. Here are the latest clean energy policy developments from the first few weeks of 2017.
Read our 2016 state news roundup here. Click below to jump to a section.
- Renewable Portfolio Standards
- Net Metering
- Grid Modernization
- Resource Planning
- Wholesale Markets
- Community Solar
- Rate Design
Both chambers of the Democratic-controlled legislature in Maryland voted this week to override Republican Governor Larry Hogan’s veto of the Clean Energy Jobs Act. The bill will increase and accelerate the state’s renewable portfolio standard (RPS) requirement from 20 percent by 2022 to 25 percent by 2020.
“Not only will this legislation create thousands of good-paying green jobs, it will put the state on the road to meeting our renewable energy goals -- a vision shared by both Democrats and Republicans across Maryland," Sen. Brian Feldman, one of the bill's sponsors, said in a statement. A 2016 poll found that 70 percent of Maryland voters support the RPS increase.
Hogan vetoed the bill last May, citing concerns over rising electricity prices. According to the governor, the Clean Energy Jobs Act would result in a $49 million to $196 million “sunshine and wind tax,” although the bill does not impose a specific tax or fee. Hogan’s office criticized the state legislature this week for overturning his decision.
"Unfortunately, our hardworking citizens will now be forced to foot the bill for an unnecessary addition to a program that already exists and one that subsidizes out-of-state companies,” Amelia Chasse, a spokesperson for the governor's office, said in a statement. Following the vote, Hogan posted the names of senators who voted for the override on his Facebook page and warned that the increased RPS will "place yet another burden on ratepayers and taxpayers."
Climate and environmental groups, meanwhile, were quick to celebrate the veto override. The Maryland Climate Coalition calculates the RPS increase will result in an additional 250 megawatts of solar energy in the state and more than 1,000 megawatts of additional renewable energy in the region. That new capacity is expected to create new good-paying jobs.
“In the current face of fear, uncertainty, and at times outright denial of environmental problems at the federal level, the Clean Energy Jobs Act proves that states like Maryland will not remain quiet on our country's toughest challenges like climate change,” said David Smedick, Maryland Beyond Coal Campaign and Policy Representative for the Sierra Club, in a statement.
Legislation has been introduced in Connecticut (HB 6307) that would increase the Class I RPS target from 20 percent by 2020 to 50 percent by 2030. "Class I" refers to most traditionally identified renewables, including wind and solar.
Democratic lawmakers in New Mexico have introduced legislation to boost the state's RPS from 20 percent renewable energy penetration by 2020, to 80 percent renewable energy penetration by 2040. Under the proposed legislation, electric co-ops would ramp up to a slightly lower threshold of 70 percent by 2040, while municipal utilities continue to be exempt, the Las Cruces Sun-News reports. Republican New Mexico Gov. Susana Martinez told reporters this week that she had not yet read the proposal, but generally supports efforts to make New Mexico fully energy independent using all possible resources.
The Massachusetts Department of Energy Resources (DOER) announced its final program design for the SREC-II program last month. The plans extend the program for projects above 25 kilowatts further into 2017 (at SREC factors of 0.5 to 0.7) until a new program is put in place. Projects below 25 kilowatts were previously approved to continue under SREC-II at a 0.8 SREC factor.
With respect to the new program, PV Magazine reports “it will be a declining block grant incentive program, per the initial draft revealed in September. The program will pay an ‘adder’ to the cost of energy declined to bring the all-in compensation rate to a set and declining level on a per kilowatt-hour basis.” Incentives will be paid out over 20 years for projects above 25 kilowatts, and over 10 years for smaller projects. DOER is still in the process of finalizing program details.
Legislation has been introduced in Hawaii (SB 365) that would establish an energy-storage tax credit against a taxpayer's net income tax liability. Multiple owners of a single storage system may take a tax credit in proportion with their contribution to the cost of the property. The credits are structured as follows:
- 30 percent for systems place in service after June 30, 2017, through December 31, 2019
- 26 percent through December 31, 2020
- 22 percent through December 31, 2021
- 10 percent after December 31, 2021
In addition to energy storage tax credit, West Hawaii Today reports that Sen. Lorraine Inouye plans to introduce a bill to reduce state tax credits for installing solar panels, and a bill to enhance state control over geothermal development.
The Maine Public Utilities Commission has approved a measure to roll back retail-rate net metering and move to a buy-all, sell-all arrangement beginning on January 1, 2018.
Under the new rate plan, customers who install solar starting in 2018 will see the credit they receive on the transmission and distribution portion of their electric bill decrease by 10 percent each year over 10 years. Based on today’s electricity prices, solar advocates say the change would reduce the value proposition of rooftop solar from a credit of 14 cents per kilowatt-hour today, to a credit of 6 cents per kilowatt-hour at the end of the decade.
Existing solar customers will be allowed to stay on the current net metering rate for up to 15 years. Customers that install solar between now and January 1, 2018 will also be grandfathered in on the current credit rate.
Distributed solar advocates are now looking to the state legislature to undo the PUC decision. State Rep. Seth Berry has already proposed a bill that would preserve net metering in statute, reduce barriers to community solar projects, and re-establish a solar rebate program in Maine.
Legislation has been introduced in New Hampshire (HB 518) that would eliminate the aggregate cap on net metering, but provides that all net metering tariffs "shall be the average monthly wholesale energy rate as determined by ISO-New England.” The bill allows utilities to charge customer-generators for grid interconnection, and repeals provisions relating to the "alternative tariff" currently under development at the PUC.
A May 2016 law required the New Hampshire commission to initiate a proceeding to develop an alternative to the current net metering tariff. On December 21, 2016, the commission approved an interim alternative -- which effectively leaves net metering in place -- applicable from March 2, 2017 until a final decision is reached.
In late December, New Hampshire PUC staff proposed leaving net metering in place as the commission gathers more information on the policy’s impact. Staff wrote in a recent testimony that new solar customers should continue to qualify for retail-rate net metering with the exception that they must also pay certain non-bypassable charges “such as the systems benefits charge, stranded cost recovery charge, storm recovery surcharges, and state electricity consumption tax.” Barring any legislative changes, the New Hampshire net metering docket is expected to be settled in June.
Indiana State Senator Brandt Hershman has introduced a bill (SB 309) that would eliminate solar net metering in 2027 with the transition to a “buy-all, sell-all” arrangement. The bill also allows utilities to stop providing net metering incentives as soon as net metered customers make up 1 percent of a utility’s peak summer load, which could happen well before 2027, PV Magazine reports. At the same time, SB 309 makes it easier to build utility-scale solar projects by removing the requirement to obtain a “certificate of public convenience and necessity.”
Arizona regulators issued an amendment to the Arizona Corporation Commission’s recent value-of-solar order by allowing customers to be grandfathered in under retail-rate net metering starting from the time they file an interconnection request, instead of when their system comes online. The original order determined that compensation for distributed solar exports would be based on a five-year average of utility-scale solar PPA pricing, known as the Resource Comparison Proxy (RCP). The Arizona Corporation Commission is in the process of collecting utility data to determine the value of the RCP based on large-scale solar pricing in each utility territory, and will apply the results to each Arizona utility’s rate case, likely by mid-2017.
On January 4, Hawaiian utility regulators rejected HECO’s grid modernization plan, citing several concerns, including cost. HECO must now file a new plan by June 30.
The National Governors Association (NGA) has selected four states to participate in a new electric grid modernization effort: Rhode Island, Kentucky, Oregon and Washington. In Rhode Island, the initiative will be led by the Office of Governor Gina Raimondo, in partnership with the Rhode Island Division of Public Utilities and Carriers, the Office of Energy Resources and the Public Utilities Commission. These and other stakeholders will work with utility National Grid to develop draft regulatory recommendations in four areas:
- The future utility business model
- The potential for advanced meter and communications technologies to add customer value
- Electrification of heating and transportation
- More transparent distribution system planning
The NJ Board of Public Utilities opened the first 60-day application window for the Town Center Distributed Energy Resources Microgrid Feasibility Study Incentive Program last month by inviting qualified state or local government entities to apply for incentives of up to $200,000 to cover the expense of a feasibility study.
The Christie administration has made energy resiliency a priority in response to the damage caused by Superstorm Sandy. Town Center Distributed Energy Resources (TCDER) microgrids are capable of providing on-site power to connected critical facilities within a local area or town center setting during electric grid outages.
The program has a budget of $1 million to conduct feasibility studies. Applicants will then be selected to move to a detailed engineering and design phase. The program is exclusively intended for projects that include multiple critical facility customers in a single municipality
The Minnesota PUC has issued an order regarding Xcel Energy’s 2016-2030 integrated resource plan (IRP), originally filed in January 2015 and revised in January 2016. The PUC verbally approved the IRP, with modifications, at an October 2016 meeting. In its January 11 order, the PUC approved the acquisition of at least 1,000 megawatts of wind generation by 2019 and at least 650 megawatts of solar generation by 2021, to include community solar projects. Additional acquisitions of wind and solar may be approved upon submission of evidence supporting any such proposal.
The PUC also approved the retirement of coal power plants Sherco 2 in 2023 and Sherco 1 in 2026. In addition, regulators approved an average annual energy savings level of 444 gigawatt-hours for all planning years.
The Hawaii PUC is advancing a proceeding on HECO Companies' Power Supply Improvement Plans (PSIPs). According to Advanced Energy Economy’s PowerSuite, HECO filed the third iteration of its PSIP in December, which outlines a plan from 2017 to 2021 to reach the state's 100 percent renewable energy mandate by 2045. Key parts of the plan include: achieving 52 percent renewables by 2021, adding 321 megawatts of rooftop solar, 31 megawatts of feed-in-tariff solar, 115 megawatts of demand response, 360 megawatts of large-scale solar, and 157 megawatts of large-scale wind. Initial statements on the revised PSIPs are due by February 6, 2017.
The New York Independent System Operator (NYISO) released its Distributed Energy Resource Roadmap this week that’s intended to guide how consumers and emerging technologies are used to support optimized grid utilization. The roadmap is designed to “more fully open New York’s wholesale markets to DERs and support the NYISO’s overarching goals to improve market animation, increase system-wide efficiency, and enhance system reliability and resiliency,” according to a press release. Key objectives include:
- Integrate DERs into NYISO’s Energy, Ancillary Services, and Capacity markets
- Align with the goals of New York state’s REV initiative
- Enhance measurement and verification methodologies
- Align compensation with wholesale service performance
- Focus on wholesale market transactions (i.e., how DERs impact the bulk power system)
FERC issued a policy statement in January clarifying that energy storage resources can recover their costs through both cost-based and market-based rates concurrently -- a win for energy storage owners and developers. FERC also recognized the need to clarify its policy to maximize the efficiency and value of storage resources to the system and to consumers. Chair Cheryl LaFleur, who was recently promoted to FERC Chair, issued a dissent noting the policy statement’s “sweeping conclusions” about the potential impacts of multiple payment streams on pricing in wholesale electric markets, Law 360 reports.
Last month, the New York Public Service Commission (PSC) adopted changes to the state’s Standardized Interconnection Requirements (SIR) that dictate how renewable energy and distributed generation systems sized up to 5 megawatts are connected to the distribution grid, according to the Coalition for Community Solar Access. The latest change “requires applicants in the queue to demonstrate proof of property owner consent within 30 days so that highly speculative projects are not taking up valuable space in the queue. Additionally, it requires developers to abide by binding decision-making and payment timelines to ensure that projects move along at a reasonable pace and that non-viable projects do not forestall projects that follow in the queue from moving forward in the most efficient manner possible.”
There’s enormous potential for community solar growth in New York, but interconnection delays stand to prevent many projects from seeing the light of day.
Along with the approval of Consolidated Edison’s three-year rate plan (16-E-0060), the New York PSC also passed a related order to advance the state’s Reforming the Energy Vision proceeding (15-E-0229). The latest orders specify the incentives utilities receive for non-wires alternative (NWA) projects that replace or defer the need for traditional grid infrastructure investments through customer-side distributed energy resources or load reductions, RTO Insider reports. The incentive provides 30 percent of the net benefits to shareholders and 70 percent to ratepayers.
“The 30 percent sharing adopted here represents a financially meaningful incentive opportunity that should encourage Con Edison to pursue the innovative portfolio-level approach to implementing NWA projects, while producing significant net benefits to customers and reflecting the financial risk required of Con Edison shareholders,” the order states.
The new rate plan is expected to boost clean energy in New York state following the adoption of a $200 million settlement deal last fall, which includes expanded efficiency spending and performance incentives for electricity savings. The settlement also includes a requirement to minimize methane leaks across Con Ed’s gas pipeline system.
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.