From Supreme Court reviews to new rate designs, the amount of political and regulatory activity around clean energy in the states is staggering. In our first state dispatches post, we look at the most important developments for energy businesses in every region of the country.
The Sunshine State has made big strides in recent months toward the legalization of third-party-owned rooftop solar. The grassroots group Floridians for Solar Choice recently announced that its ballot initiative to expand ownership models has officially achieved the 72,000 petition signatures necessary to advance the campaign.
Florida’s Division of Elections will now send the ballot petition to the Attorney General, who will request a review by the Florida Supreme Court. If the ballot’s wording is approved, the initiative will need to collect and have the Division of Elections verify another 600,000 signatures by February 1, 2016 in order for the proposed constitutional amendment to make it onto the November 2016 ballot.
Currently, Florida law prevents consumers from buying solar from any entity other than a monopoly or government-owned utility. A broad group of stakeholders has rallied behind the campaign to expand solar choice, including the Tea Party, businesses, faith groups and environmental organizations.
In other Florida news, the Federal Energy Regulatory Commission approved the proposed $4.3 billion merger between NextEra Energy and Hawaiian Electric Industries this week, moving the process another step forward.
The Georgia Senate passed legislation last week that would allow for third-party solar financing on residential projects up to 10 kilowatts. The bill also allows for third-party ownership of commercial projects limited to generating 125 percent of the customer’s overall energy usage. The bill now rests in the hands of Gov. Nathan Deal (R).
“The passage of this legislation is an important move by the Georgia Legislature, setting the stage for the state to be a national leader in solar where it had been a follower,” said Lee Peterson, senior manager of renewable energy at the tax and advisory firm CohnReznick, based in Atlanta.
“Supporting this type of smart solar policy in Georgia is common sense,” he added. “It’s fiscally responsible and enables us to compete globally in the 21st century on energy. This legislation will create new jobs, boost Georgia’s small businesses, and attract new companies and investment from around the world to Georgia once signed into law by the governor.”
Notably, Southern Company subsidiary Georgia Power backed the legislation, which allows the utility to require the ratepayer or the solar financing agent to cover all equipment expenses for grid connection, as well as any additional requirements “to protect public safety, power quality and system reliability.” It’s unclear at this point what those expenses might be and how they would be administered.
A draft report recently released by the Louisiana Public Service Commission estimated that solar net metering is shifting $2 million in grid costs to non-solar customers. That figure could grow to $31.4 million by 2020. If the state's net metering caps were removed, and net metered projects continued to be installed at the current pace, the study estimates it would cost ratepayers $809 million by 2020.
The study sparked controversy, with solar advocates claiming the report does not factor in any of the benefits of solar, including job growth, consumer savings and the potential for utilities to avoid new power plant investments.
"This study is a distortion of the truth, an assault on consumer energy choice and property rights by the monopoly utilities and certain allies on the Commission," said Jeff Cantin, president of the Gulf States Renewable Energy Industries Association.
The Alliance for Solar Choice (TASC) has called on the Louisiana PSC to denounce the study. TASC said that both the author and the consulting firm hired to do the net metering study, David Dismukes and Acadian Consulting Group, have several utility and oil and gas company clients and therefore likely harbor a biased view against renewable energy.
The Partnership for Affordable Clean Energy (PACE) challenged solar advocates in Louisiana, writing in a blog post that the solar industry doesn’t need incentives -- “It just likes them.”
West Virginia, the first state in the U.S. to repeal its renewable portfolio standard, recently signed into law a controversial net metering bill (HB 2201). Gov. Earl Ray Tomblin vetoed an earlier version of the bill in February.
HB 2201 limits net metering from solar power generation to 3 percent of a utility’s aggregate customer peak demand, with 0.5 percent coming from residential customers. It also calls for a review of net metering studies across the region and requires the Public Service Commission to ensure that net metering does not create a “cross-subsidization” between different groups of ratepayers.
House representatives in North Carolina recently filed legislation that would legalize third-party ownership of renewable energy resources. The law is backed by several big businesses, including Wal-Mart, Lowe’s and Target.
Under the legislation (HB 245), third-party-owned facilities would be allowed to participate in net metering. The Utilities Commission may also approve new fees or credits for distributed energy customers, based on an investigation of the costs and benefits of customer-sited generation.
Duke Energy, one of North Carolina’s two major utilities, told Greentech Media it does not support the bill, and is instead advocating for a more comprehensive piece of legislation that also addresses net metering and renewable energy tax credits.
The South Carolina PSC approved a settlement agreement between utilities and clean energy groups last month, which ensures that net-metered solar customers will be compensated at the full retail value for any electricity they send to the grid.
The deal, supported by Duke Energy Carolinas and South Carolina Electric & Gas, is a critical step toward implementing South Carolina’s landmark renewable energy law (A 236), which calls for a diversified portfolio of distributed energy resources in the state. South Carolina recently became the 44th state to adopt net metering in the U.S.
In the Midwest
Lawmakers in Illinois have been busy in recent weeks working on several pieces of clean-energy-related legislation.
Last month, the Illinois General Assembly introduced legislation (SB 1879), with bipartisan support, that would allow ComEd to invest more than $400 million in community solar, microgrids and electric-vehicle charging infrastructure. The bill would also move residential customers to demand-based rates, which are made up of a fixed fee and a kilowatt-hour rate based on peak demand instead of overall consumption. The bill recently made it out of the Senate Energy and Public Utilities Committee.
Also, the Illinois Senate Energy and Public Utilities Committee recently passed legislation (SB 1585) requiring the Illinois Commerce Commission to update its response to the premature closure of nuclear plants in the state. The bill would also establish a Low Carbon Portfolio Standard, requiring ComEd and Ameren to purchase low carbon energy credits equal to 70 percent of each utility’s annual sales of electricity on the distribution system.
In another significant move, Illinois lawmakers recently introduced legislation (HB 2607) that would increase energy efficiency standards to 20 percent by 2025 and renewable energy standards to 35 percent by 2030. The current standard calls for 13 percent energy efficiency improvement and 25 percent renewable energy generation by 2025. The bill is expected to generate an additional 32,000 jobs.
“As strong as the clean energy economy is today, with 100,000 clean energy jobs throughout the state, Illinois is at a tipping point. There is no time to waste,” said Illinois Senator Don Harmon (D), who introduced the bill.
Michigan Gov. Rick Snyder (R) laid out a broad energy strategy last month calling for a significant increase in renewable energy generation and energy efficiency, ahead of expected capacity shortfalls.
Michigan currently has a target of 10 percent renewable energy generation by 2022. In public statements, Snyder said he wants the state to get 30 percent to 40 percent of its energy from renewables by 2025, reducing Illinois’ reliance on coal. More than half of Michigan’s electricity will come from coal this year.
Meanwhile, an energy plan proposed in the Michigan House Energy Policy Committee aims to turn the state back into a fully regulated market, MLive.com reports.
In a rate case before the Kansas Corporation Commission, Westar Energy has sought to increase fixed charges on customers that generate their own energy.
“Redesigned rates that more closely match fixed and variable costs with fixed and variable charges will reduce this inequity so that all customers will pay their fair share of the costs associated with the generation of electricity, its delivery through utility’s transmission and distribution system, and providing customer service,” according to the utility.
In the state legislature, some policymakers moved to eliminate Kansas’ renewable energy standards, which require utilities to get 20 percent of their gross generation capacity from renewable sources by 2020. However, the law (HB 2373) died this week in committee.
A recent Missouri study determined that net metering produces a net benefit for utility customers, a conclusion drawn by similar studies in other states around the country. The study was conducted by the Missouri Energy Initiative, a nonprofit group with a board that includes representatives from utilities, universities and government.
The study comes ahead of the May 31 deadline for Missouri’s first comprehensive energy plan, mandated by Gov. Jay Nixon (D).
Following the lead of progressive states like California, New York and Hawaii, the Colorado state legislature is looking to modify utility regulations to better serve for a more distributed, customer-empowered energy future.
The bill (HB 15-1250) would require the Colorado Public Utilities Commission to open an “investigatory proceeding to explore alternative utility revenue models” and report its findings by October 1, 2016.
In Arizona, Tucson Electric Power (TEP) has proposed a new net metering plan that would reduce the credit solar customers receive for sending electricity to the grid, lowering the credit to the wholesale rate for electricity, which is roughly half of the current retail rate credit. TEP says customers would still save roughly $80 on their average electricity bill -- about $22 less than under the current policy.
AZ Central reports that Arizona Public Service Co. is prepared to file for increased fees on solar customers. APS asked for a rate change in 2013 that received a significant amount of pushback. Rumors of a new filing come shortly after the neighboring electric company Salt River Project approved a pricing plan that would add an estimated $50 per month fee to all leased and owned solar systems. SolarCity is challenging the SRP decision.
NV Energy announced last month that it’s seeking proposals for 54 megawatts of planning capacity resources. The solicitation is part of NV Energy’s 2015 Emissions Reduction Capacity Replacement Plan, which will retire 812 megawatts of coal-fired generation by 2019.
The utility is now seeking proposals for gas-fired power plants, as well as a build-transfer option for a 140-megawatt single-axis tracking solar photovoltaic facility and alternative proposals to construct renewable energy resources. Bids are due May 29.
The Washington State Senate approved a bill last month (SB 5735) that would give large utilities alternative ways to comply with the state’s renewable energy mandate. Current law requires utilities to get 15 percent of their power from wind, solar, geothermal and certain woody biomass by 2020. The new law would allow any resource that reduces carbon to qualify, including electric-vehicle chargers, hydropower and battery storage technologies.
Bill sponsor Sen. Doug Ericksen (R) says SB 5735 would give utilities more flexibility in meeting the state’s carbon reduction goals. The bill is currently working its way through state House committees.
“We’re not going to tear out any of the windmills,” Ericksen said, according to the Washington State Wire. “What we’re trying to do is keep energy costs low in Washington state, create manufacturing jobs, and help low-income families.”
A separate bill being considered by the Washington State House (HB 2045) looks to change the state’s net metering policy, once the generating capacity from net metered systems equals 0.5 percent of the utility's 1996 peak demand.
According to Bryan Miller of the Alliance for Solar Choice, the bill eliminates net metering without studying the costs and benefits of solar and prevents customers from using the solar they produce at their own homes. "It's a terrible bill that would set Washington back," he said.
A New Hampshire bill (SB 117) initially designed to expand net energy metering has been modified to remove barriers preventing utilities from owning rooftop solar. The amended version of the bill, which has already passed in the New Hampshire Senate, no longer increases the cap on net metering, and allows utilities to seek rate recovery for their investments in distributed energy resources.
Supporters say the bill will expand access to renewable energy in the state. Solar advocates have pushed back. “Instead of facilitating the growth of a competitive market, the bill would let utilities commandeer the market and force local, private companies out of business,” according to Barry Goldwater Jr.'s conservative solar organization Tell Utilities Solar Won't Be Killed (TUSK).
The bill now rests with the House Science, Technology & Energy Committee.
The Vermont House of Representatives voted 121-24 to pass a bill (H 40) last month that requires utilities to get 50 percent of their electricity from renewables by 2017 and 75 percent by 2032, Utility Dive reports. The bill now sits with the Senate Natural Resources & Energy Committee.
The Maine Public Utilities Commission released a study last month that gives a quantitative value for distributed solar power produced in the state. The study finds that the 25-year levelized value of solar power produced in Maine is 33 cents per kilowatt-hour. Net metered solar customers are currently compensated about 13 cents per kilowatt-hour.
“This study confirms what our 4,500 solar customers already know -- solar electric systems deliver a powerful economic and environmental return on investment that is currently under-valued by Maine’s solar policies,” said Phil Coupe, co-owner of solar developer ReVision Energy.
The net metering cap for privately-owned solar projects was hit this week in National Grid territory, CapeCod.com reports. The cap is expected to signifcantly slow solar deployment.
“Anybody who is looking to build medium or large scale project in Massachusetts in National Grid territory would find it very difficult or even impossible to make the financial situation of the project work,” said Ben Hellerstein of Environmental Massachusetts.
In February, Gov. Dannel Malloy announced a new residential solar incentive model he claims will attract more than $1 billion in private investment in solar PV in the state. The bill (HB 6838) has been referred to the Office of Legislative Research and Office of Fiscal Analysis.
New York state is moving ahead with its ambitious Reforming the Energy Vision initiative. Last month, the New York Public Service Commission released a policy framework that largely bars utilities from owning distributed energy resources.
“We’re a little bit disappointed that we’re not participating behind the meter as we thought we would,” said Robert Schimmenti, senior vice president of electric operations at Consolidated Edison, at a recent Edison Foundation event.