A big focus for state policymakers in recent weeks has been the Supreme Court’s decision to stay implementation of the Clean Power Plan. Some states put preparations on hold in response to the vote, while others continue to press on -- including some states where a branch of government has joined in a lawsuit opposing the rule.
As the legality of the CPP continues to be debated, particularly in the wake of Justice Scalia’s passing, a group of 17 governors underscored their commitment to a clean energy transition by signing a pledge to adopt renewable energy, modernize the electricity grid, and promote clean transportation, among other things.
We chronicle several other clean energy policy developments, with a significant amount of activity taking place in the Western U.S., in our latest state roundup below. Click on a region to jump to news from the West, Northeast, Midwest or South. You can read our previous state bulletin here.
On February 12, Nevada regulators voted unanimously not to grandfather rooftop solar customers onto contentious new rates, but rather to transition them over 12 years instead of four. The PUC’s original ruling received strong backlash for not protecting existing rooftop solar customers from higher fixed charges and reduced net metering remuneration. NV Energy, solar companies and consumer groups advocated for keeping existing customers on the old rates for 20 years. The PUC dismissed those requests, and instead chose to lengthen the rate transition timeline for current solar customers, as well as for customers in the future.
Solar advocates and analysts say that phasing in the new rates over 12 years simply delays the inevitable and will do nothing to reboot Nevada’s solar market, which skidded to a halt last month when the rate change came into effect. Vegas Inc reports that solar applications have dropped dramatically: “In December, 1,311 residents in southern Nevada submitted applications with NV Energy to start the process of installing and connecting solar panels. According to NV Energy data, that number fell to 90 applications in January -- a decrease of 93 percent.”
A new group called the Bring Back Solar Alliance is now spearheading a ballot initiative to restore retail-rate net metering for all rooftop solar customers. Organizers say the referendum has already received the 55,000 signatures necessary to advance to the 2016 ballot. However, the initiative has been challenged by a new political action committee called Citizens for Solar and Energy Fairness, the backers of which have yet to be identified. A district court must hold a hearing to consider the challenge within the next 15 days.
Meanwhile, though Governor Brian Sandoval refused to get involved with the PUC proceeding, he stated after the Feb. 12 vote that the decision does not go far enough to protect consumer interests. “The PUC did not reach the outcome I had hoped for,” he said in a statement.
UniSource Energy Services (UNS), a small Arizona utility with 93,000 customers, is seeking permission from regulators to lower net metering compensation from the retail rate to the rate UNS pays for large-scale solar (roughly 5.8 cents per kilowatt). UNS, which is owned by the same parent company as Tucson Electric Power, is also seeking to increase fixed charges from $10 to $20 per month, as well as to add a demand charge based on a customer’s highest hour of power use in a month.
The utility also wants to make the demand charge optional for non-solar customers. By switching to the new rate, non-solar customers would pay a lower variable price for energy. The UNS rate case also proposes increasing fixed costs for all customers in order to cover recent investments in the electric system.
UNS says the rate changes are necessary to compensate for an 8 percent reduction in retail electricity sales between 2012 and 2014, which the utility said stems from the deployment of energy efficiency and distributed generation, as well as from the bankruptcy of UNS’ largest industrial customer.
The proceeding has attracted a lot of attention despite the utility’s small size, because it could set a precedent for the entire state, Arizona Central reports. Arizona Public Service and Tucson Electric Power have also sought to change rates for solar customers, though APS withdrew its request to increase a monthly fee last year amid backlash against the change. APS will instead participate in a full value of solar proceeding starting in April (E-00000J-14-0023).
Hearings on the UNS proposal are set to begin on March 1.
Meanwhile, in the Arizona state legislature, lawmakers are considering a bill (SB 1417) that expands disclosure requirements between distributed energy contractors and third-party owners. If passed by the House (the bill has already passed the Senate), contractors that do not comply with the requirements are subject to suspension or revocation of their licenses. EQ Research listed several of the provisions included in the bill:
- Requires PV panels to be covered by a warranty for the life of a lease or financing agreement, and other system components to be covered by a warranty for 10 years (replacing two-year and one-year warranty requirements, respectively)
- Requires the installer or contractor to be present when the system is energized, and requires an engineer or other knowledgeable person to be present when the system is installed and energized
- Opens sale, financing and lease agreements to inspection by the registrar of contractors
- Requires customer savings estimates to be provided for the entire life of an installation, financing or lease agreement, and requires that documents or sales presentations that cover potential savings have a substantiated methodology and include historical utility rates for a historic period equal in length to the life of the agreement
- Requires that lease payments cannot begin until the system is energized
- Requires interconnection applications to be submitted and approved prior to system installation, and that the utility be provided notice of any changes in system ownership
California regulators have opened a proceeding to assess peak electricity usage patterns and develop a framework for future time-of-use rates. According to Advanced Energy Economy’s regulation tracker, a pre-hearing conference will be held on February 26, 2016. Comments on the workshop are due by March 18, and reply comments are due by April 4, 2016.
The New Mexico legislature is considering a bill (SB104) that would add geothermal energy to a list of renewable energy projects that qualify for the state tax credit. It also phases out tax credits for solar, wind, biomass and geothermal through 2020.
The Clean Energy and Coal Transition Act (HB 4036) recently passed the Oregon House of Representatives on a 39-20 bipartisan vote, and is now working its way through the Senate. If approved, the bill would require the state's two largest utilities, Portland General Electric and Pacific Power, to stop purchasing electricity from out-of-state coal-fired power plants by 2030. It would also mandate that utilities serve half their customers' demand with renewable energy by 2040.
While the bill is moving quickly through the legislature during the short 35-day session, there are strong voices of opposition. Emails obtained by Oregon Live show that the Oregon PUC was largely left out of discussions around the legislation, and that the commissioners believe the bill is “a sweet deal for utilities, bad for consumers and ineffective for the environment.” The commissioners say they have not received enough information to vet the utilities’ cost estimates, which underpin the text. As a result, they say the bill could put unnecessary pressure on consumers.
Utilities helped to craft HB 4036 in partnership with lawmakers and environmental groups, which cheered the bill passing out of the House. The Natural Resources Defense Council recently wrote a blog post challenging critics of the bill, stating that the legislation ensures “Oregonians aren't stuck paying for aging, dirty coal plants indefinitely.”
On February 22, the bill will be debated by Oregon’s Senate Business and Transportation Committee.
Washington legislators overcame a three-year deadlock earlier this month as the House passed HB 2346, legislation that streamlines the state’s solar incentive structure while increasing access to local solar energy. The bill will help build at least 117 megawatts of new solar capacity in the state.
In January, Montana’s Energy and Telecommunication Interim Committee issued its mandated report on net metering that lists an array of ratemaking tools for NEM, including full retail rate compensation, avoided cost for excess, demand charges, high fixed charges, time-of-use rates, value of solar tariffs, feed-in tariffs, minimum bills, and decoupling. The report does not suggest a recommended policy, but it is designed to help inform ongoing discussions on the state’s net metering policy. The ETIC’s next meeting is on March 11.
Separately, Montana is among a handful of states that ceased preparing for the Clean Power Plan following the Supreme Court’s approval of a stay. Montana is required to make the steepest emissions cuts of any U.S. state under the regulation.
Xcel Energy has filed a revised application for Solar*Connect, a voluntary, subscription-based community solar program that Colorado regulators previously rejected. The program would allow customers to subscribe in kilowatt blocks for up to 100 percent of their energy consumption on a month-to-month basis, or for five- or 10-year terms. According to EQ Research, a typical residential customer with a 3-kilowatt subscription (roughly 60 percent of electricity usage) would pay an additional $16.00 per month to subscribe to the program.
Legislation (SB 1172/HB 2511) has been introduced in Hawaii to offer tax credits for energy storage projects that supply the grid or specific customer sites with ancillary services.
As in many other states, policymakers in Maine are considering reforms to the state’s net metering program. Last summer, the Maine Office of the Public Advocate put forward a compromise solution entitled “A Ratepayer-Focused Strategy for Distributed Solar in Maine.” The proposal would establish a “standard buyer” to purchase all distributed solar power for a specified price under a long-term contract, and sell it in various markets to offset costs. A stakeholder group is considering the plan and is expected to issue a report that could underpin legislation introduced this year, Central Maine reports.
All utilities in New Hampshire have met the state’s net metering cap, save for Unitil, which is very near the limit. In response, the lawmakers are considering legislation (SB 333 and HB 1116) to lift the cap. However, solar advocates say the 25-megawatt increase, from 50 megawatts to 75 megawatts, is insufficient to keep the solar market and solar jobs secure. The bill also requires regulators to initiate a proceeding to develop alternative net-metering tariffs.
Separately, the New Hampshire PUC has opened a proceeding to establish an Energy Efficiency Resource Standard.
Legislation (A 1672) recently introduced in New Jersey would establish a community solar program that allows residential and non-residential customers to receive net-metering credits based on their share of generation from the system. Participating customers must be located in the same utility’s service territory as the PV project, and a participating customer’s credit from a shared PV system may not exceed the customer’s annual electric usage during the previous year.
Governor Gina Raimondo has put forward a set of proposals that would expand Rhode Island’s net metering program, extend the state’s $2.5 million per year Renewable Energy Fund for another five years, and impose a blanket exemption from municipal property taxes for renewable energy projects. “The three provisions send a signal to clean energy companies that Rhode Island is a good place to invest their dollars,” Marion Gold, commissioner of the state Office of Energy Resources, told the Providence Journal.
On February 25 and 26, New York regulators will hold a technical conference on Governor Cuomo's Clean Energy Standard mandate of 50 percent renewable energy by 2030. Staff released a white paper on the plan in January. Initial written comments on the white paper are due by March 14, 2016, and reply comments are due by March 28, 2016.
The South Dakota state legislature is currently considering a bill (HB 1216) that would bring more transparency to solar compensation. South Dakota does not have net metering; instead, customers are paid for excess generation they send to the grid at the “avoided-cost” rate. According to Midwest Energy News, HB 1216 seeks to establish a uniform set of values for calculating avoided cost, including unused energy, avoided line losses and unneeded generation.
Several bills have been introduced in the Missouri General Assembly aimed at scaling up solar power, Midwest Energy News reports. One bill (SB 629) would increase the net metering size cap from 100 kilowatts to 1 megawatt. Another bill (SB 631) would bar homeowners associations from prohibiting the construction of solar arrays within their territories -- a growing issue in recent years. Other bills (SB 630, HB 1548) have been introduced to encourage the development of community solar gardens.
UPDATE: HB 1286 and several other clean energy-related bills introduced in Virginia have been "carried over to 2017," Energy Collective reports.
Several renewable-energy and efficiency-related bills are working their way through the Virginia legislature.
HB 1286 “clarifies that renewable energy companies that provide power under PPAs are not public utilities, and so do not need to meet statutory definitions or requirements of public utilities,” according to Advanced Energy Economy’s legislation tracker. A similar bill (SB 148) has been introduced in the Senate, but is less preferred by solar advocates than the House bill because it gives regulators authority over non-utility sales.
HB 1286 also removes Virginia’s net metering cap of 1 percent of total utility sales, and requires the State Corporation Commission to establish community solar net metering programs. A separate bill, HB 1285, authorizes, but does not require, co-ops to create community net metering programs.
In the Senate, SB 761 would replace Virginia’s current voluntary renewables target of 15 percent renewables by 2017 with a mandatory standard that rises from 10 percent for 2017-2021 to 25 percent in 2025, according to EQ Research. It also requires that half of the standard be met with in-state resources.
HB 1137 directs the State Corporation Commission to establish a program for eligible “energy-balancing customers,” defined as customers that own an electric vehicle or battery system that provides value to the grid in the form of spinning reserve, frequency regulation, distribution system support, reactive power, demand response, or other electric grid services.
HB 1305 “provides a sales and use tax exemption for machinery, tools, and equipment of a public service corporation used to generate energy derived from solar or wind,” according to AEE. The bill also reduces the maximum size for solar PV projects to qualify for real and personal property tax exemptions on PV equipment and facilities from 20 megawatts to 1 megawatt, and exempts from such property taxes 80 percent of the assessed value of such equipment and facilities (under current law, the exemption is based on the total value of the equipment and facilities).
Virginia is also considering two bills related to efficiency. HB 1053/SB 395 allows utilities to recover a performance incentive for offering energy efficiency programs. HB 352 clarifies how state regulators determine if an efficiency program is in the public interest.
A final decision in the contentious Exelon/Pepco merger is expected on March 4, the Washington Business Journal reports. Regulators are currently considering a revised proposal introduced last fall after the initial deal was rejected. Chicago-based Exelon has spent about $259 million in pursuit of the acquisition, according to Securities and Exchange Commission filings.
Legislators in Florida are considering a set of bills in the Senate (SB 0170, SB 0172) that will exempt renewable energy sources including leased solar arrays, transmission, energy storage and geothermal, from tangible personal property taxes. Similar legislation is being considered in the House (HB 195).
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.