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Goodbye, Coal: Oregon Passes Ambitious Renewables Mandate

The Oregon Legislature has passed a bill to significantly increase the renewable portfolio standard (RPS) for the state’s two largest utilities to 50% by 2040. S.B.1547-B, referred to as the Clean Electricity and Coal Transition plan, will also require the utilities to completely eliminate their use of coal power. At press time, the legislation has gone to Gov. Kate Brown, who is expected to sign the bill into law.

Investor-owned utilities Pacific Power and Portland General Electric (PGE), which together supply about 70% of the state’s electricity, collaborated with energy stakeholders, environmental groups and consumer advocates to help develop the legislation. S.B.1547-B includes language from H.B.4036, a bill the Oregon House of Representatives passed in February, and the final legislation aims to help address some lawmakers’ concerns.

The state’s RPS was established in 2007 and required Pacific Power and PGE to obtain 25% of their power from renewable resources by 2025. S.B.1547-B will hike their RPS requirements to 50% by 2040. (Notably, S.B.1547-B includes no changes to existing renewable standards for consumer-owned utilities, which have lower requirements.)

Jennifer Martin, partner at law firm Stoel Rives, says the new legislation is “one of the most aggressive RPS standards in the nation” and follows just behind the 50% by 2030 standards in New York and California, 75% by 2032 mandate in Vermont, and 100% by 2045 RPS in Hawaii.

Furthermore, S.B.1547-B will require Pacific Power and PGE to be coal-free by 2030. As with most comprehensive legislation, though, there is a minor catch: PGE is technically still allowed to keep its ownership in a small amount of coal-fired generation from a Montana facility until 2035.

According to a PGE-supplied overview of the legislation, S.B.1547-B maintains a measure to ensure that the new mandates will not lead to excessive increases in rates: “Customers of PGE and Pacific Power will continue to be protected by the state’s four percent incremental cost cap, which means that utilities are not required to add renewables to their portfolio if the incremental cost to customers is more than four percent higher than the cost of developing non-renewable resources.”

The summary adds that the legislation also includes a “safety valve” to allow the Oregon Public Utility Commission to suspend a utility’s RPS schedule if the mandate causes issues with grid reliability.

Jim Piro, PGE’s president and CEO, says the legislation takes “a sensible approach.”

“We were pleased to be part of a collaborative process that puts Oregon’s electricity sector on a path to achieve its state carbon reduction goals as we plan for Oregon’s energy future,” comments Piro in a press release.

“Maintaining the affordability and the reliability of the electric grid is very important to us,” adds Scott Bolton, Pacific Power’s vice president of external affairs. “Working through the legislative process with a diverse range of stakeholders, we have meaningfully advanced Oregon’s clean energy future in a way that is both workable and affordable.”

In a release, State Sen. Lee Beyer, D-Springfield, who carried the legislation, says the bill “strikes a good balance between phasing in clean energy sources for all of Oregon’s electricity supply while taking into account the needs of utilities and ratepayers.”

In a statement provided by her office, Gov. Brown says, “The legislature has passed a bill that equips Oregon with a bold and progressive path toward the energy resource mix of the future. I am committed to policies that increase the availability of renewable energy and appreciate the efforts of a broad range of interests to come together to address issues around Oregonians’ investment in electricity produced by coal.”

However, some Senate Republicans are not pleased with the outcome. State Sen. Alan Olsen, R-Canby, claims “utilities will see costs grow up to four percent per year, which will be passed on to consumers in Oregon.”

“As energy prices increase, we will see the cost of electricity, groceries, and other goods and services increase, too,” says Olsen in a release. “We should be limiting the cost to ratepayers and adding the renewable energy we already have - hydroelectric power from our rivers - instead of passing an expensive mandate that only benefits out-of-state green energy special interests.”

S.B.1547-B also establishes an in-state community solar program and features provisions related to renewable energy certificates, such as the inclusion of biomass resources, among other things.

 

What The American Recovery Act Did For Clean Energy

President Barack Obama’s American Recovery and Reinvestment Act of 2009 (ARRA), the largest single investment in clean energy in history, has provided more than $90 billion in strategic clean energy investments and tax incentives to promote job creation and the deployment of low-carbon technologies, as well as leveraged approximately $150 billion in private and other non-federal capital for clean energy investments, according to a report released by the White House Council of Economic Advisors (CEA).

The report says clean energy investments made up over one-eighth of total ARRA spending and provided a meaningful boost to economic output.

Specifically, CEA says, these investments transformed America’s clean energy economy by doing the following:

CEA says the act’s investments were a down payment toward a sustainable, 21st-century clean economy and helped the country take a large step forward in reducing fossil fuel consumption and reducing carbon pollution.

 

Washington Reps Approve Solar Incentive Bill

In a 77-20 vote, the Washington House of Representatives passed a bill to reauthorize the state’s solar production tax credit program, which is currently poised to sunset. The legislation, H.B.2346, has gone to the state Senate for consideration.

According to bill sponsor Rep. Jeff Morris, D-Mount Vernon, the state incentive was established back in 2005 and provides tax credits on a kilowatt-hour basis to eligible homeowners and businesses that own a solar installation. The rate varies depending on the project and technology type, and it can be increased if system components are manufactured within the state.

Morris says that although the program will continue for current participants over the next several years, it is set to stop accepting new applications on July 1. Therefore, H.B.2346 would extend the program and allow new applicants until 2021.

The representative says he has been fighting for the program reauthorization since 2013, when he introduced a similar bill. Morris claims utilities opposed that effort and came forward with attacks on net metering and wanted fixed charges for solar customers who attach to the electric grid.

Morris says H.B.2346 represents a deal he brokered among various energy interest groups: “I know some fear exists among our utilities about the change customers want in the utility business. We will address those issues going into [the next legislative] session.”

If enacted, Morris believes the reauthorized program, which he has dubbed Solar Version 2.0, will “easily double” how much solar the existing program has helped subsidize.

“The bottom line is that encouraging local consumers to use solar energy is not just good for the environment - doing so provides local, family-wage jobs in an emerging industry,” he concludes.

 

U.S. Wins Solar Trade Dispute Against India

A World Trade Organization (WTO) dispute settlement panel has found in favor of the U.S. in the country’s challenge to India’s “localization” rules regarding imported solar cells and modules under India’s National Solar Mission.

According to U.S. Trade Rep. Michael Froman, the panel agreed with the U.S. that India’s domestic-content requirements (DCRs) discriminate against U.S. solar cells and modules by requiring solar power developers to use Indian-manufactured cells and modules rather than U.S. or other imported solar technology and that the requirements are in breach of international trade rules. Froman says the DCRs have effectively blocked U.S. companies from competing for an important share of India’s solar power equipment market. Since India enacted these requirements in 2011, U.S. solar exports to India have fallen by over 90%, he notes.

“The United States and India are strong supporters of the multilateral, rules-based trading system and take our WTO obligations seriously,” states Froman. “This is an important outcome, not just as it applies to this case, but for the message it sends to other countries considering discriminatory ‘localization’ policies.”

The U.S. initiated this dispute in February 2013, and Froman says the country has consistently made the case that India can achieve its clean energy goals faster and more cost-effectively by allowing solar technologies to be imported from the U.S. and other solar producers.

According to Froman, the WTO panel rejected India’s defensive arguments that the DCRs were justified, finding the Indian government had failed to establish that solar cells and modules were “in short supply” in India and had failed to demonstrate that the DCRs are, in fact, “measures to secure compliance with laws or regulations which are not inconsistent with the provisions of [the General Agreement on Tariffs and Trade 1994].”

“The United States strongly supports the rapid deployment of solar energy around the world - including in India. But discriminatory policies in the clean energy space in fact undermine our efforts to promote clean energy by requiring the use of more expensive and less efficient equipment, raising the cost of generating clean energy and making it more difficult for clean energy sources to be competitive,” explains Froman.

He adds that under President Barack Obama’s direction, the U.S. has mounted the most ambitious upgrade of trade enforcement in the history of modern U.S. trade policy. This solar energy case was one of 20 enforcement actions taken by the Obama administration at the WTO, and the U.S. has prevailed in every single one of those disputes that has been decided by the WTO so far.

Dan Whitten, vice president of communications for the Solar Energy Industries Association, calls the WTO’s ruling a “step in the right direction” that will hopefully “remove any obstacles to a constructive U.S. presence in India’s solar market.”

“The WTO dispute settlement panel’s decision will clear the way for significant and rapid deployment of solar energy in India and can create jobs at home,” says Whitten in a statement. “This decision helps us bring clean energy to the people of India as that nation’s demand for electricity rapidly grows. We look forward to working with our solar industry colleagues in India to help grow the solar supply in both our markets and around the world.

“While we support today’s decision, we continue to believe that a mutually satisfactory resolution of this dispute, consistent with WTO rules, is the preferred solution,” he adds.

 

Maine Solar Firms, Utilities Agree On NEM Alternative

Maine legislators have announced a comprehensive bill to replace the state’s net-metering policy with a market-based program aimed at increasing the current amount of solar installed more than 10-fold by 2022.

Lawmakers say the bill is the result of a six-month stakeholder process, and the legislation is a compromise backed by a coalition of solar businesses, workers, municipalities, community leaders, utilities and other stakeholders. The bill comes as solar stakeholders and utilities in some other states continue to battle over net-metering policies.

According to a bill summary, the legislation would require Maine’s regulated electric utilities to enter into long-term contracts for 248 MW of solar by 2022; that compares with the state’s current installed solar capacity of about 20 MW.

The new program would be divided among four market segments: residential and small business, grid scale, community solar, and large commercial and industrial. The summary says that the program would use market-based mechanisms (or a proxy) to obtain the lowest-price, long-term contracts for ratepayers for each market.

The majority of the new solar procurements under the program would come from the residential and small business segment, totaling 118 MW of new solar by 2022.

Under this market, new customers would receive a 20-year contract at a set price for net exports (measured hourly) for solar PV projects less than 250 kW. They would have the option of installing separate meters and selling the entire output of their facilities or using their generation to offset their own loads and selling the excess.

Bill supporters suggest the new program would offer more certainty for solar customers. The summary says that unlike net-metering programs, under which the price may change depending on fluctuations in electricity prices or rate design, the contract price would be set by the Maine Public Utilities Commission (PUC) at a level high enough to meet the installation targets, subject to an overall cap on program cost. Customers would receive that price for 20 years, the summary says, adding that the contract price would step down over time as the level of installations grows and the cost of solar installations continues to decline.

Interestingly, the summary says existing net-metering customers would be able to choose between opting into the new program or staying under the current net-metering rules for 12 years after the new program takes effect.

From the grid-scale segment (projects up to 5 MW), utilities would be required to buy a total of 60 MW of new solar by 2022 under 20-year power purchase agreements. In addition, the bill calls for a total program procurement of 25 MW from the large commercial and industrial segment through reverse auctions, as well as a total procurement of 45 MW from the community solar market, also through reverse auctions.

Several Maine solar installers and state utilities have voiced their support for the bill.

“ReVision’s top priority is to ensure that residential and small business customers in Maine continue to have a fair opportunity to invest in solar and take control of their own energy future,” says Fortunat Mueller, partner and co-founder of solar installer ReVision Energy. “We think this legislation does that.”

John Carroll, spokesperson for utility Central Maine Power, says the bill “moves the debate into the next generation of clean energy production.”

“This proposal creates an opportunity for our customers to benefit from solar energy and help our environment,” adds Alan Richardson, president and chief operating officer of utility Emera Maine. “The proposal is the result of meaningful collaboration amongst stakeholders with different perspectives. We believe it represents a fair balance, and we are glad to support it.”

“Over the past six months, this group of stakeholders came together, bringing diverse perspectives to the common goal of developing a modern solar policy for Maine,” states Maine Public Advocate Tim Schneider. “Their hard work developed a solution that maximizes the value of distributed generation and will save ratepayers money.”

“It’s time that we update Maine’s approach to solar and other distributed generation resources,” says State Rep. Nathan Wadsworth, R-Hiram, the ranking Republican on the Energy, Utilities and Technology Committee. “We’re looking at savings of close to $100 million for ratepayers and job creation for our own Maine-based business.”

The bill summary says there would be a program review after 18 months, or 21 MW of capacity is installed, whichever is sooner. At that time, the PUC would conduct an evaluation to determine whether the residential and small business market segment is likely to meet its installation targets and reduce costs to all ratepayers. If not, and if the program cannot be revised to meet those goals, the summary says the commission would report to the state legislature. If the legislature does not otherwise take action, the summary adds, net metering would be reinstated.

 

Michigan Exceeds State Renewable Energy Target

The Michigan Public Service Commission’s (MPSC) sixth-annual report on the implementation of the state’s 10% by 2015 renewable portfolio standard (RPS) shows that 9.1% of Michigan’s electricity was generated from renewable sources in 2014. Furthermore, the MPSC estimates the total renewable energy percentage for 2015 exceeded the 10% requirement.

“Michigan’s steady progress toward reaching - and exceeding - the 10-percent-by-2015 renewable portfolio standard shows the state’s commitment to a diversified resource base,” says MPSC Chairman Sally Talberg. “Even more encouraging is the continued downward price trend of renewable energy contracts, the last few of which are less than any new electric generation.”

Highlights of the report include the following:

For 2016 and each year thereafter, state law requires electric providers to maintain the same amount of renewable energy credits that were needed to meet the standard in 2015.

Policy Watch

Goodbye, Coal: Oregon Passes Ambitious Renewables Mandate

 

 

 

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