Ohio regulators tell lawmakers not to interfere on carbon rule

©2015 E&E Publishing, LLC
Republished with permission

By Rod Kuckro

Despite Ohio’s antipathy toward U.S. EPA’s proposed Clean Power plan, under no circumstances do state regulators want the General Assembly to pass any law that would interfere with eventual compliance.

“We do not think that the plan is legal, and we have mounted a legal challenge,” said Asim Haque, vice chairman of the Public Utilities Commission of Ohio. “This is in fact an energy policy.”

The PUCO, Ohio Environmental Protection Agency, Gov. John Kasich and Attorney General Mike DeWine “are all on the same page,” he said.

“However, we want to be as constructive in shaping the final rule as possible,” he said in an interview yesterday in Washington, D.C.

Ohio towns play wait-and-see in wake of drilling ruling

©2015 E&E Publishing, LLC
Republished with permission

By Ellen M. Gilmer and Mike Lee

Almost three weeks after Ohio’s top court struck down a town’s restrictive drilling ordinances, lawyers and local officials are predicting another round of court cases to settle how much control local governments have over oil and gas development.

The state Supreme Court ruled that the Akron-area town of Munroe Falls could not require Beck Energy Corp. to get separate drilling permits, finding that only the state can issue drilling permits. But it left open whether cities can use zoning to control where drilling happens, and whether the outright drilling bans in some towns can continue to stand.

In the weeks following the highly anticipated decision, attorneys have rushed to interpret how and when that issue will be decided. Will Ohio follow in the footsteps of New York and Pennsylvania, which have preserved some local powers over drilling; follow Colorado and Texas, which have taken a harder line; or chart a new path?

Groups propose community solar program for Illinois

©2015 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

A national environmental advocate and a utility watchdog group are teaming up on energy policy in Illinois — this time proposing a community solar pilot program with an eye toward making it more widely available by the end of the decade.

The proposal to the Illinois Commerce Commission, filed Monday by the Citizens Utility Board and Environmental Defense Fund, would enable development of four to five community solar energy systems of up to 2 megawatts each.

Exelon seeks low-carbon standard to help Illinois plants

The Byron nuclear plant in Illinois (Photo by Michael Kappal via Creative Commons)

The Byron nuclear plant in Illinois (Photo by Michael Kappal via Creative Commons)

©2015 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

Illinois legislators within days are expected to propose a low-carbon energy standard aimed at helping prop up Exelon Corp.’s fleet of six nuclear plants, three of which have struggled to remain profitable in recent years.

The bill could be filed before the end of the week and would require 70 percent of electricity used in territories served by the state’s two large investor-owned utilities to come from low-carbon sources of generation, according to a summary of the legislation circulated at the state Capitol earlier this week.

The two-page fact sheet notes that a low-carbon portfolio standard was one of five policy options cited in a January report from state agencies examining the impact of the premature closure of one or more of the Exelon nuclear plants. The report was a fact-finding effort and made no recommendations (EnergyWire, Jan. 8).

The measure would represent the second major energy proposal put before the General Assembly so far this year and sets the stage for interesting debates and negotiations concerning how the state cuts greenhouse gas emissions.

Last week, a group of legislators filed a measure pushed by environmental and clean energy advocates that would expand the state’s renewable energy and energy efficiency standards and establish a carbon market to help the state comply with U.S. EPA’s proposed Clean Power Plan (EnergyWire, Feb. 20).

Exelon has signaled for more than a year that it would seek some type of legislation to aid its Illinois nuclear fleet. The company has warned that it may close as many as three of its six plants unless it sees a “path to sustainable profits.” The plants in jeopardy — Byron, Clinton and Quad Cities — have faced financial headwinds because of weak wholesale power prices brought on by competition from natural gas and wind.

Company officials have lobbied throughout the state and in Washington that closing plants prematurely would make it more difficult for the state to meet its carbon reduction goals under the Clean Power Plan.

As recently as last week, Exelon Senior Vice President Kathleen Barrón testified before the Federal Energy Regulatory Commission about flaws the company sees in EPA’s Clean Power Plan.

“The [low-carbon portfolio standard] in Illinois would act, at a minimum, as a bridge solution that would facilitate further policy actions that may be required for compliance with the EPA,” the Illinois legislative summary said.

Paul Elsberg, an Exelon spokesman, wouldn’t confirm the details or timing of the company’s legislative proposal. “We expect that legislation will be introduced in coming weeks, and we will have more to say when that occurs,” he said in an emailed statement.

It is also not yet known which Illinois legislators would sponsor the bill. William Von Hoene Jr., Exelon’s chief strategy officer, told analysts and investors earlier this month that the measure would have broad bipartisan support (EnergyWire, Feb. 17).

Von Hoene and other officials at Chicago-based Exelon have repeatedly insisted that they are not seeking a “bailout” of the Illinois nuclear fleet and want only a “market-based” solution that recognizes existing nuclear plants as a reliable, low-carbon generation source and a major employer in the state.

Those who had viewed the brief summary of the Exelon bill said they are withholding judgment until more specifics are available.

“The devil is most certainly going to be in the details,” said Nick Magrisso, a policy advocate for the Natural Resources Defense Council, a member of the recently formed Clean Jobs Coalition (EnergyWire, Feb. 6).

How it would work

The Exelon proposal would work similarly to how the state’s existing renewable energy standard is supposed to work.

The state’s two large investor-owned utilities, Commonwealth Edison and Ameren Corp., would be required to buy a percentage of their energy from a low-carbon source and collect a charge through retail distribution bills to pay for the low-carbon energy credits.

Similar to Illinois’ renewable portfolio standard, electric cooperatives and municipal utilities wouldn’t be subject to the requirement.

The Illinois Power Agency, a state office formed to procure electricity for ComEd and Ameren in the state’s restructured retail electric market, would conduct a competitive procurement for low-carbon energy credits each year in the same way it purchases renewable energy resources. Like a renewable energy credit, a low-carbon credit would be a traceable credit that represents the environmental attributes of 1 megawatt of energy from a low-carbon source.

The legislative summary said low-carbon energy sources such as nuclear, renewables and coal-fueled plants that capture and sequester greenhouse gas emissions would “compete against each other on a best price basis to supply the low carbon energy credits.”

Beside the 2 percent rate cap, the legislation would have a rebate provision that would provide a bill credit to consumers in the event that wholesale prices exceeded a specified level.

The measure will also include a sunset provision effective Dec. 31, 2021, or the effective date of a market-based plan to cut carbon emissions under the Clean Power Plan.

NRDC’s Magrisso said the energy legislation introduced last week, by contrast, would set in motion a long-term transformation of the state’s electricity market and provide a statewide economic stimulus.

“The bill that we’re introducing is a comprehensive long-term solution that’s going to offer thousands of clean energy jobs across the state,” he said.

Bill to support Illinois nuclear plants expected by March

©2015 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

Illinois legislators will file a widely anticipated bill within the next month aimed at giving a financial lift to Exelon Corp.’s fleet of six nuclear reactors in the state, the nuclear giant said Friday.

William A. Von Hoene Jr., Exelon’s chief strategy officer, told analysts and investors during the company’s fourth-quarter conference call that company officials are working with legislators to draft the measure, which should have broad support.

“We anticipate Republican and Democratic sponsors in significant numbers,” Von Hoene said.

In Kansas City, utility bets big on EV charging network

(Photo via Kansas City Power & Light)

(Photo via Kansas City Power & Light)

©2015 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

A Midwestern utility is jumping headlong into the electric-vehicle charging business with plans to build and operate more than 1,000 public charging stations in the Kansas City metro area by midsummer. That’s more than currently exist in the states of New York, Massachusetts or Illinois.

Kansas City Power and Light Co., a unit of Great Plains Energy Inc. with more than 800,000 customers in western Missouri and eastern Kansas, unveiled its plan Monday afternoon — easily the most ambitious effort yet by an investor-owned utility to tap a transportation market dominated for decades by the petroleum industry.

KCP&L began constructing its Clean Charge Network late last year and by midsummer will have a system able to support a market with 10,000 plug-in vehicles, said Terry Bassham, CEO of the utility and its parent company.

In Indiana, utilities ‘rewriting the rules’ on efficiency, solar

The Indiana State Capitol in Indianapolis. (Photo by MarkStuff via Creative Commons)

The Indiana State Capitol in Indianapolis. (Photo by MarkStuff via Creative Commons)

©2015 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

Indiana’s legislative session is scarcely a week old, but a pair of bills has already re-established a wedge between utilities and clean energy advocates.

One of the measures would allow utilities to propose their own energy efficiency goals and programs. The other would alter terms and impose demand charges for utility customers who choose to generate a share of their electricity with solar energy systems.

The bills dive into two of the thorniest energy policy issues facing states today — how to encourage reductions in energy use and give consumers the ability to generate energy with rooftop solar arrays while keeping utilities financially strong and able to reinvest in the grid.

In Wisconsin, clean-energy advocates take on underdog role

©2015 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

MADISON — Speakers at an all-day conference on energy policy in Wisconsin evoked two images of the state’s renewables sector. And neither is encouraging for clean energy advocates.

The first was “Rudy,” the inspiring 1993 film about a student’s quest to make the University of Notre Dame’s storied football program as a walk-on. The other reference was Sisyphus, the king in Greek mythology who was sentenced to push a large boulder uphill for eternity.

Whatever the metaphor, renewable energy advocates in Wisconsin are being forced to embrace the role of underdog with Republican Scott Walker staying put as governor, the state legislature awash in red and Walker appointees holding a majority on the three-member Public Service Commission.

Renew Wisconsin, the host of Friday’s meeting, sees the exponential growth in rooftop solar happening elsewhere across the nation, from neighboring Minnesota to red states such as Georgia. But the same is “just not happening in Wisconsin, and the major reason is policy,” said Tyler Huebner, the group’s executive director.

Wind energy development has largely been on hold in Wisconsin for a few years, Huebner said. And whatever momentum was building for adoption of more distributed solar generation was halted two months ago when the Public Service Commission approved a series of controversial proposals by We Energies, the state’s largest electric utility.

In a case that drew national attention, the PSC ultimately approved a reduction in net metering rates (the rates at which customers are credited for excess energy put on the grid) for We Energies customers, imposed a demand charge for recovery of fixed costs from customer generators and raised fixed charges for all customers (EnergyWire, Nov. 17). The commission also slightly reduced variable energy rates. But in sum, solar advocates say, the commission’s order effectively doubles the payback period on a residential solar energy system.

A poll last summer commissioned by an environmental advocacy group reflected strong support for energy efficiency and renewables. But without the ability to push through broad changes like an expansion of the state’s 10 percent renewable energy standard, furthering clean energy development must rely on more nuanced, targeted strategies, speakers said.

Those strategies include getting more large Wisconsin businesses on board and involved in policy discussions. Frequently cited was Milwaukee-based Johnson Controls Inc., a global supplier to the building and automotive industries with $43 billion in sales last year. The company intervened in the We Energies rate case to oppose the utility’s proposal to increase fixed customer charges, arguing that the changes discouraged energy efficiency.

Brad Klein, an attorney for the Chicago-based Environmental Law and Policy Center, emphasized the need for clean energy advocates to work with investor-owned utilities to redesign an outdated business model focused on a centralized power grid. That business model too often pits utility shareholder interests with consumer interests and serves as a barrier to reduce energy use and deploy new technology.

Klein cited the Utility 2.0 reforms pursued by the state of New York. And there’s a similar but less developed effort underway in Minnesota, where Xcel Energy Inc., a participant, just proposed significant new additions of wind and solar energy over the next decade and a half.

“I think the key is figuring out some of these business model challenges,” Klein said.

Battling the ‘steamroller’

While some utilities are trying hard to reinvent themselves, “others are doubling down on the status quo” and flexing their political muscle by challenging changes in statehouses and utility commissions, he said.

Renewable advocates say We Energies and two other Wisconsin utilities that pushed through large fixed-charge increases last month didn’t provide sufficient proof to support the commission orders. A decision is coming soon on whether to seek judicial review, and if so on what grounds.

State Rep. Chris Taylor, who drafted a measure last year to expressly authorize third-party solar financing in Wisconsin, said the commission’s decision “made our state one of if not the most hostile to solar.”

Taylor, a Democrat who said she belongs to the American Legislative Exchange Council and attended ALEC’s annual meeting last spring just to stay up to date on what her political opponents are doing, implored environmental groups, businesses and others to work more closely. Otherwise, they cannot overcome a galvanized conservative movement.

“We need to get organized,” she said. “We cannot come to the battle with a fly swatter when they have a steamroller.”

Matt Neumann, an owner of Sunvest Solar, which has installed 10 megawatts of solar and does business in five states, said there’s no disputing that utilities see solar developers like his company as a competitive threat and the two industries will continue to butt heads.

“We’re diametrically opposed to each other, and there’s really no other way to say it,” he said.

Politically, though, the battle isn’t one defined by party lines. There’s strong support for solar expansion among some conservatives, he said. For instance, Georgia tea party activist Debbie Dooley as well as a solar advocacy group led by former Rep. Barry Goldwater Jr. both opposed the We Energies proposal.

Neumann, the son of former Republican Rep. Mark Neumann, said distributed energy offers benefits that mesh with widely held conservative principles such as consumer choice and free markets, property rights, national security, and job growth (ClimateWire, Aug. 14).

“Those are just fun things to get Republicans thinking,” he said.

There are also subjects not to bring up.

“Do not talk about climate change, please,” Neumann said. “It’s a lightning rod topic, it’s not going to get you anywhere.”

Legislative prospects

Neumann said he’s met with Republican legislators and thinks that a measure to allow third-party financing for solar projects would be possible this session if framed as a consumer choice bill.

“A narrowly defined solar bill for financing I think has legs and can work,” he said. “Republicans would have to violate their own principles to deny it.”

Longer term, Wisconsin will have little choice but to transition to more renewable resources, especially if U.S. EPA’s Clean Power Plan is finalized, said Gary Radloff, director of Midwest energy policy analysis at the Wisconsin Energy Institute.

“The genie is out of the bottle,” Radloff said. “Our energy system is going to change, and you’re going to like it. But I have no idea how fast it’s going to happen.”

While embracing natural-gas-fired generation may help the state comply with greenhouse regulations and meet EPA’s 2030 target, the fuel would require significant upgrades in infrastructure, and history would suggest that prices for the commodity won’t stay cheap forever.

“We might have a couple of decades of reasonably priced natural gas,” Radloff said.

Ultimately, the most cost-effective strategy is to rely much more heavily on renewable energy and efficiency — a strategy that would require the scale of development underway in Minnesota.

“I don’t want to candy-coat this. It will cost us money,” Radloff said. “But it is achievable if you have the political will.”

Clean Line pursues key approvals for transmission projects

Clean Line transmission projects aim to carry energy from wind farms in rural areas like western Kansas to supply loads to the east. (Photo by Joseph Novak via Creative Commons)

Clean Line transmission projects aim to carry energy from wind farms in rural areas like western Kansas to supply loads to the east. (Photo by Joseph Novak via Creative Commons)

©2014 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

A $2.2 billion project that would connect yet-to-be-developed wind farms in southwest Kansas to the nation’s largest power market is on trial in Missouri this week.

Just to the east, Illinois regulators are poised to decide whether to allow a $2 billion sister project that would link wind-rich northeast Iowa to the same power grid.

Wisconsin fixed-charge decision a sign of more to come

©2014 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

State regulators last week voted to nearly double fixed charges for Wisconsin Public Service Co. electric customers in a decision that opponents say will penalize seniors and other low-use customers and discourage energy efficiency and investment in rooftop solar.

Thursday’s 2-1 decision was the first of three similar cases in the state to be decided in the coming weeks. These normally routine electric rate cases have drawn national attention because of a broader ongoing debate over utilities’ response to the increasing popularity of distributed solar.

In northeast Wisconsin, only 340 of Wisconsin Public Service’s 400,000-plus electric customers have solar energy systems — one of few facts in the contentious case that was not in dispute.

But Wisconsin Public Service Commission Chairman Phil Montgomery said now is the appropriate time for regulators to enact reforms that address the issue.