California
Proposals Submitted on Renewables Policy
The PUC's December 1995 decision on electric utility restructuring called
for the establishment of a market structure for electricity which offers
retail customers "choice and flexibility" and reforms the manner in which
monopoly services are regulated. The decision also provides for the establishment
of an enforceable "minimum renewables purchase requirement (MRPR)" within
the overall resource mix to maintain California's resource diversity for
existing resources and encourage the development of new renewable resources
(SREN, Winter 1996).
A Renewables Working Group formed early this year to address the major issues involved in implementing the Commission's renewables policy. The group has received six comprehensive program proposals from participating parties. Five of the six proposals present strategies for implementing the MRPR; the sixth is for a surcharge-funded program. The group also received two adjunct proposals that seek to support specific types of technologies within the context of whatever overall renewables program is adopted.
The eight proposals offer a wide range of options regarding the structure and design of an effective renewables program. However, there is broad consensus that renewable energy is important for California's future, and that the best way to accomplish this goal is through the use of market competition to the maximum extent possible, with a system that is flexible enough to facilitate compliance with regulatory obligations. Also, the program should be applied uniformly across the state, with compliance imposed on electric service providers. The working group will prepare a report for submission to the PUC.
PUC Approves PV Pilot
The PUC has approved an 18-month pilot program by Southern California Edison
(SCE) to provide a grid-connected photovoltaics (PV) service to its residential
customers. SCE is offering the program as a pilot for entering the market
for on-grid PV systems. Commission policy requires the state's utilities
to provide notice of intent to pursue a solar energy development program
and demonstrate that the program will not restrict competition in the market
and will accelerate the development of solar energy systems. The program
is capped at 5 MW of total installations and will not use ratepayer funds.
SCE will not own the systems but will finance their purchase by customers.
SCE will serve as an "integrator" by managing competitive procurement processes,
overseeing installation, ensuring quality of construction, providing
customer-connected PV service agreements as necessary, and ensuring quality
maintenance of the system. The PV systems will be interconnected under single
net metering, permitting surplus generation to be credited against customer
consumption at other times. SCE is using a $200,000 grant from the Technology
Experience to Accelerate Markets in Utility Photovoltaics (TEAM-UP) program
to help offset the cost of the systems.
CPUC Contact:
Jay Morse, (415) 703-1587
Colorado
Renewables Task Force Formed
Noting that "Coloradans want to use more renewables,"Governor Roy Romer issued
an executive order creating a task force "to develop strategies for how Colorado
can better use renewable energy resources." The order sets a preliminary
target of 250 MW equivalent of new renewables production during the next
decade.
The 25-member task force, which includes representatives of the electric
utility and conventional energy industries, renewable energy industries,
state and local government organizations, energy users, and environmental
groups, is to report back to the governor in a year's time.
Office of Energy Conservation Contact:
Jennifer Harrison, (303) 620-4292
Hawaii
PUC Delivers Renewables Report
The PUC has delivered its renewables report, entitled Strategies to
Facilitate the Development and Use of Renewable Energy Resources in the State
of Hawaii, to the state legislature. The report presents the findings
of an informational proceeding to study current renewable energy utilization
and identify strategies to overcome barriers to greater renewables use in
the state (SREN, Winter 1995).
The legislature held an informational briefing on renewables and emerging
policies in utility regulation in March. The Senate will be convening a number
of study sessions to review the implementation of policies identi-fied in
the PUC report and other utility issues.
PUC Contact:
Candice Onishi, (808) 586-2045
Illinois
Waste Preference Law Repealed
Stating that "every dollar diverted to an incinerator . . . is a dollar lost
to education and other priority programs," Governor Jim Edgar signed into
law a bill repealing a state preference for waste-to-energy (WTE) projects.
Titled "An Act to Abolish Incinerator Subsidies Under the Retail Rate Law,"
the law removes solid waste burning facilities from eligibility for retail
rate payment.
The retail rate law requires utilities to purchase electricity generated
from eligible facilities at the local government's retail rate. Utilities
receive a state tax credit equal to the difference between the retail power
purchase rate and the utility's actual avoided cost rate. With the exclusion
of WTE projects, only landfill methane generators remain eligible for the
incentive.
ICC Contact:
Bob Lane, (217) 785-2449
Massachusetts
DPU Holds Restructuring Hearings
The DPU has scheduled a series of public meetings this summer to receive
comments on its proposal for restructuring the state's electricity industry
to achieve a fully competitive generation market by January 1, 1998. The
overall goal for restructuring "is to develop an efficient industry structure
and regulatory framework that minimize costs to consumers while maintaining
safe and reliable service with minimum impact on the environment." The DPU
believes that "long-term cost reductions would most effectively be achieved
by allowing customer choice and full and fair competition in the generation
of electricity."
Stating that it "favors market-based approaches that remove barriers to competition and offer incentives for market participants to explore the viability of renewables rather than approaches that require regulatory intervention to maintain a particular level of renewables in the market," the DPU proposes three renewables options:
1. Giving customers a choice to pay a small premium for those renewables that "cost only slightly more than the market price of electricity"
2. Establishing a non-bypassable charge on distribution services for a renewables fund to pay the incremental cost of more expensive renewables that "with greater market penetration and experience . . . have the potential to become more competitive"
3. Providing for distribution companies to continue net billing practices
for small renewable generators of 30 kW or less.
DPU Contact:
Theo MacGregor, (617) 727-9748
New Hampshire
Retail Pilot Begins
Following legislative authorization, the PUC has established a Retail Competition
Pilot Program "to create a limited experimental program to examine the
implications of retail competition in the electric utility industry." Under
the two-year pilot, alternative electricity suppliers compete for approximately
3% of each electric utility's peak load, or a total of about 50 MW statewide,
which has been allocated proportionately among all customer classes.
The pilot, which officially began on May 28, has elicited participation from
more than 30 power suppliers, some of which are differentiating their power
product as "cleaner" than their competitors. For example, Working Assets,
the company that pioneered socially responsible credit cards and long distance
phone service, is marketing its power portfolio as "coal-free, nuke-free,
and Hydro-Quebec-free," while Green Mountain Energy Partners is touting a
"98.5 percent greenhouse gas free" electricity product. Information is not
yet available on customer response to the pilot offerings.
PUC Contact:
Sarah Voll, (603) 271-2431
New York
Net Metering Law Pending
Following on the heels of California (SREN, Fall 1995), the
legislature has forwarded net metering legislation for small, customer-owned
solar electric generators to the Governor for signature. Similar to California,
the legislation allows net metering for solar facilities up to 10 kW in size
and caps total eligible installations at 0.1% of a utility's peak load.
Generation in excess of the customer's annual electricity requirements is
reimbursed at the utility's avoided cost.
However, unlike California, the bill contains explicit prohibitions gainst
burdensome utility requirements. For example, the bill prohibits utilities
from imposing special fees, such as backup charges and demand charges, on
net metering customers, as well as additional controls, tests, or liability
insurance, as long as the systems meet all relevant national safety and power
quality standards.
Legislative Contact:
David Ehrlich, (518) 455-4804
Pennsylvania
PUC Completes Competition Study
On July 3, the PUC adopted its Report and Recommendations to the Governor
and General Assembly on Electric Competition, culminating a two-year
investigation into retail competition in the state. In the report, the Commission
recommends that "it is in the public interest for Pennsylvania to begin a
careful transition that will ultimately provide all retail customers the
opportunity to choose their electric generation provider."
The Commission rejects regulatory intervention to promote energy efficiency and renewables, stating that these options are "widely available on a competitive basis." However, the Commission "should ensure that customers have ready access to information which objectively assesses these approaches." In addition, distribution utilities must not be prevented from pursuing cost-effective investments in energy efficiency and renewables, especially where there is customer demand. The Commission does recommend that a universal service funding mechanism be established to support low-income customer assistance, including the Low Income Usage Reduction Program.
In an accompanying statement to the report, Commissioner John Hanger wrote
that while "currently, consumers must support whatever source of generation
the local utility has decided to provide," a restructured electric industry
"will permit consumers to choose a preferred type of generation or fuel supply.
. . such as renewables." Further, "since renewables and other environmentally
friendly technologies currently now have virtually no market share in
Pennsylvania, customer choice will generate significant new opportunities
for these technologies to gain a market niche."
PUC Contact:
John Rohrbach, (717) 787-1031
Rhode Island
Restructuring Plan Submitted
The Division of Public Utilities and Carriers has submitted its plan for
a restructured electric industry to the PUC. The objective of the "Division
Plan" is "to create a more efficient electric industry, with lower rates
and more innovative services for all classes of customers . . . (through)
a market in which a large number of independent generators, marketers, brokers
and other intermediaries will compete to provide generation service to retail
customers." Under the plan, all retail customers would have the right to
choose their electric suppliers and to require their local distribution utility
to deliver electricity to them, commencing on January 1, 1998.
The plan views several reforms as "crucial to the development and commercialization of cleaner and renewable resources." These reforms include "fully subjecting existing generation to market discipline; direct access by all suppliers to all classes of customers; fair and comparable tariffs for transmission access; operation of the wholesale market by an entity independent from generators and purchasers; and a transition that does not unfairly favor incumbent utilities."
Although the Division "continues to believe that (a systems benefit) access charge . . . would be necessary to ensure development of cleaner technologies," the plan does not call for a charge Plan because the PUC previously rejected this approach (SREN, Fall 1995).
Separately, the state House has passed utility restructuring legislation
calling for a five-year, non-bypassable distribution system charge of 2.5
mills/kWh to fund energy efficiency and renewables. Although this is increased
from 2.0 mills/kWh initially, it is still below the 3.0 mills/kWh estimate
of current utility spending on DSM alone (SREN, Winter 1996)
The bill is expected to pass the Senate as well.
PUC Contact:
Mary Kilmarx, (401) 277-3500
Wisconsin
PSC Approves Green Pricing Pilot
The PSC accepted for filing an experimental "green" tariff offered by Wisconsin
Electric Power Company (WEPCO), which the utility maintains will give
"environmentally conscious customers" a choice to purchase power generated
from renewable resources. The renewables to be acquired consist of
waste-wood-fired power from Minnesota and Canadian hydropower.
In its filing, the utility noted that the purpose of the experimental rate is to "test the market, educate customers, and help the market to develop." The utility believes that "a market needs to be developed before investors will finance new renewable generation facilities in Wisconsin."
Participation in the program, which is limited to residential, farm and small commercial customers, will cost customers an additional 2.0¢/kWh, on top of the existing rate of 6.7¢/kWh, for each green kWh subscribed. Customers may choose to receive 25%, 50%, or 100% of their electricity needs from the renewables offered. Recovery of promotional and administrative expenses is limited to 20% of the purchase power cost.
The PSC indicated that it will examine WEPCO's promotional materials "to
ensure that the public is provided with accurate information about the renewable
resources WEPCO is acquiring for the program." The Commission also directed
WEPCO to submit a plan for program evaluation within 60 days.
PSC Contact
Paul Helgeson, (608) 266-2072
Electricity Consumers' Power to Choose Act of 1996
Citing the potential for consumer gains of up to $107.6 billion annually
and the creation of one to three million new jobs, Congressman Dan Schaefer
(R-CO), Chair of the House Energy and Power Subcommittee, introduced legislation
that calls for all retail consumers of electricity-no matter their size,
location, or the type of utility they are served by-to have choice of electricity
suppliers no later than December 15, 2000.
Under the bill, states are given a great deal of authority in implementing retail choice programs, but they would have no choice as to whether or not to offer retail choice. States are given six months to decide whether they wish to allow retail choice, although they can take up to two years if they need additional legislative authority. If retail choice is not adopted by a state, then the Federal Energy Regulatory Commission (FERC) "shall exercise the authorities that would otherwise be exercised by the state regulatory authority." FERC's actions would preempt any state law that is inconsistent or may conflict with FERC's authority to adopt retail choice. Nonregulated utilities are also given six months to adopt retail choice, but if they do not act, then either FERC or a state regulatory authority can act in their stead.
On renewables, Schaefer's bill would repeal the mandatory purchase provisions of the Public Utility Regulatory Policies Act (PURPA) once all customers of a utility have the right to choose their own supplier of electricity. In its place, the bill establishes a national "minimum renewable energy requirement," including a system of tradeable credits.
The renewables requirement calls for all generators selling power in a state
to have renewable energy credits equal to 2% of their generation through
2004; 3% from 2005 through 2010; and 4% thereafter. States maintain their
existing authority to require additional amounts of renewable energy generation.
Electric generators must provide proof of their renewable energy credits
to FERC, and FERC must establish rules creating the credit and trading system.
The renewable energy requirement would be ended if FERC certifies that the
market value of the credits or the number of credits traded, or both, have
declined to the point at which the cost to administer the trading program
is no longer justified.
NREL Contact:
Kevin Porter, (202) 651-7530
MECO Unveils Retail Pilot
Up to 10,000 residential and small business customers from four cities will
have the opportunity to choose their electricity supplier through the
Massachusetts Electric (MECO) Choice: New England retail access
pilot program. The pilot will test the potential for customers to lower their
electricity bills and/or receive value-added services through choice of electric
supplier.
The utility has issued a Request for Proposals (RFP) seeking suppliers that can offer eligible participants a variety of choices, including (1) lowest price options, (2) environmentally sensitive "green" options, and (3) options that will package electricity along with value-added services, such as conservation programs.
Environmental Futures, Inc., has been selected by MECO to administer the
pilot and will prequalify a list of electricity suppliers to serve eligible
customers. Although a "green" product standard has not been established,
respondents are encouraged to consider the broadest range of environmentally
sensitive proposals, such as (1) including renewable power in their fuel
portfolio, (2) allocating a portion of anticipated revenue from the pilot
to environmental or community projects, or (3) demonstrating a reduction
in net emissions. Price will remain an important determinant in the selection
of green service providers.
Environmental Futures Contact:
Steven Rothstein, (617) 443-1300
WAPA Solicits Comments on Renewables
Noting that "the competitive forces brought on by electric utility deregulation
have reduced immediate market opportunities for renewables," and that "with
its significant transmission resources, customer base, and interconnections
with electric utilities throughout the West, Western is in a position to
facilitate market opportunities for non-hydropower renewable resources,"
the Western Area Power Administration (WAPA) solicited public comments on
a proposed policy whereby it would purchase a portion of its expected purchase
power requirements from renewables. Comments were due to WAPA on May 31.
Using assumptions of a 5 percent renewables purchase (approximately 30 MW)
and a 55 mills/kWh average cost for the renewable power, WAPA calculates
that the policy would result in additional costs of 0.2% to 1.7%, depending
on customer location, compared to alternative non-firm energy costs of from
10 to 23 mills/kWh. WAPA received more than 150 comment letters and intends
to publish a summary of the comments and Western's response.
WAPA Contact:
Mike Cowan, (303) 275-1630
Green Power Network On-Line
NREL, with support from the U.S. Department of Energy, is developing an internet
site which will serve as a clearinghouse for information on green power
marketing. The Green Power Network will contain up-to-date information
on green marketing programs, relevant literature on green marketing issues
and market research, links to other information sources, and a discussion
forum through which interested parties can share information and perspectives
on green marketing and related policy topics. The site will be accessible
via DOE's Energy Efficiency and Renewable Energy Network:
(http://www.eren.doe.gov/greenpower)
NREL Contact:
Ashley Houston, (303) 384-7412
DOE Starts Sustainable Development Pilot
The U.S. Department of Energy has established the Center of Excellence for
Sustainable Development, a pilot program to help communities protect the
environment while promoting economic development. The center will provide
communities a "tool kit" of workbooks, computer programs, and data for guidance
on sustainable development projects. Experienced personnel are also available
to consult with local officials.
The center is an outgrowth of DOE's involvement with the President's Council on Sustainable Development and DOE's work with Midwest communities devastated by the 1993 floods. DOE helped the communities rebuild using sustainable development strategies.
Interested communities can contact the center toll-free at
(800)357-7732 or via the center's Internet home page:
(http://www.sustainable.doe.gov)
State Renewable Energy News is prepared under the auspices of the NARUC Subcommittee on Renewable Energy to promote information sharing on state-level renewable energy activities. It is issued three times annually to coincide with the NARUC committee meetings.
The preparation and printing of this newsletter is sponsored by the Office of Power Technologies of the U.S. Department of Energy.
Comments can be directed to:
Blair Swezey
NREL
1617 Cole Blvd.
Golden, CO 80401
(303) 384-7455.
The newsletter is also available on NREL's home page:
(http://www.nrel.gov)
The Subcommittee Chairman is the Honorable Renz D. Jennings, Chairman, Arizona Corporation Commission - (602) 542-3935.