States power ahead on policy to create advanced energy markets
States are working diligently on the legislative and regulatory fronts to establish markets for advanced energy, according to state policy experts at Advanced Energy Economy (AEE).
In the Silver State, for instance, several bills now head to the Nevada General Assembly, which starts its session June 5. These bills “send a clear market signal to investors that the advanced energy industry is here to stay,” said J.R. Tolbert, vice president of state policy for AEE, during an April webinar that also highlighted the latest legislative developments in California and Virginia.
Passed by the Nevada Senate April 25, three bills aim to support development of advanced energy technologies and grow the state’s economy.
Senate Bill (S.B.) 204 would instruct the Public Utilities Commission of Nevada (PUCN) to study the possibility of requiring utilities to purchase energy storage by Oct. 1, 2018. If found to be a cost-effective endeavor, then PUCN would institute requirements for energy storage.
S.B. 65 would revise the loading order—which currently prioritizes resources that reduce energy cost and demand—in the state’s integrated resource plan to consider economic and environmental benefits, among other provisions.
S.B. 150 would establish annual energy efficiency goals for the state through 2025; the current bill sunsets in 2020. It would also set performance-based mechanisms to reward utilities for meeting or exceeding annual metrics.
Corporate purchasers are taking the lead on renewable energy in Nevada and are looking to transform the market, “with the gaming industry leading the charge on energy choice and pushing for more access to these advanced technologies,” Ray Fakhoury, associate of state policy for AEE, said during the webinar.
S.B. 204, S.B. 150 and another bill—Assembly Bill (A.B.) 206, which would increase the renewable portfolio standard (RPS) to 60 percent by 2030 and then 80 percent by 2040—could catapult Nevada toward being an energy leader, he added.
“Lawmakers embrace renewables and their economic benefits,” Fakhoury said, adding that AEE estimates that expanding the RPS, studying storage deployment and reducing waste through efficiency “could be worth $5 billion in market opportunity by 2030” in the state.
California
Amisha Rai, senior director of California policy for AEE, said the Golden State’s legislature is seeing a lot of activity in committee around cap and trade, transportation and energy storage and renewables.
For example, there’s a California RPS proposal that’s similar to Nevada’s plan—but which goes even further. S.B. 584 would reset the goal of the program to achieve 50 percent by Dec. 31, 2025 and for all electricity sold at retail to be generated by eligible renewable energy resources by Dec. 31, 2045.
Another active bill is A.B. 920, which would maintain a place in the energy market for renewable resources such as geothermal, biomass and biogas—all of which provide high-paying jobs across the state, improve air-quality and help ensure a reliable electricity supply, according to bill author Assemblywoman Cecilia Aguiar-Curry, D-Solano.
Rai said A.B. 920 has made some movement already through committee despite opposition from the utilities.
There are also three active bills on energy storage to watch:
A.B. 1030 would establish four energy policy goals of the state regarding energy storage for electrical companies enforced by the PUC, among other provisions. The goals would be to: 1.) make energy storage a mainstream technology; 2) create a marketplace for energy services that harnesses innovation; 3) achieve market transformation for energy storage systems, and; 4) use customer-sited energy storage as a primary strategy.
A.B. 546 would promote and encourage the installation of advanced energy storage and limit obstacles to its use; and note best practices in the safe permitting of advanced energy storage, among other provisions.
A.B. 1405 would define ‘clean peak resources’ as eligible renewable energy resources or energy storage systems. It would also require each local publicly owned electric utility to procure a minimum percentage of kilowatt hours delivered during the peak load time period from clean peak resources on at least 15 days during each month in accordance to a specified schedule, among other provisions.
“Many of these bills are now in concept form with language and details being hammered out,” Rai said during the webinar.
Virginia
The market in Virginia has the chance to take off in the next few years with the right policies in place, said Dylan Reed, associate of federal and state policy for AEE.
“The national trend of large companies pushing the demand for advanced energies rings true in the great Commonwealth of Virginia, too,” he said during the webinar.
Amazon and Microsoft, for instance, have signed agreements to bring over 250 MW of energy to the state, Reed said, followed by 18 other major companies that late last year called for more renewable energy options in Virginia.
Currently, existing options don’t work for most companies seeking access to advanced energies, Reed said. Several options are currently under consideration by the State Corporation Commission (SCC) in various cases, including power purchase agreements (PPAs), community solar programs and renewable energy tariffs.
One recent and controversial SCC ruling allowed Direct Energy to market 100 percent renewable electricity to the Virginia customers of Dominion Virginia Power, the state’s largest electric utility, and Appalachian Power (ApCo)—as long as the utilities aren’t offering it themselves.
Neither Dominion nor ApCo now offer a tariff for renewable energy, so under Virginia Code, sellers of 100 percent renewable energy may enter into the monopoly utilities’ territories to offer customers renewable energy.
However, once Dominion and ApCo do start offering renewable energy, then Direct Energy may continue to serve existing customers, but may not sign up new ones. So the ruling makes it more difficult for Direct Energy, a Delaware company, to enter Virginia’s residential market.
But in another case SCC approved last fall, Dominion collaborated with Amazon Web Services (AWS) to create an alternative to their existing green tariff and proposed a market-based electricity rate known as Schedule MBR, which provides a link between production and consumption.
The intent was to provide AWS with more access to renewables; it did and AWS entered five new solar farm agreements that are expected to generate some 180 MW-hours of new solar power—which will supply energy to more than 36,000 homes a year. Dominion, meanwhile, kept a huge customer with its market-based product.
All of the market demand, Reed said, has forced the state’s legislature to take notice and it “has sparked numerous discussions” about how to start planning legislatively for better ways companies can access these advanced energies.
And with a gubernatorial election this year, expanding access and renewable development are seen as an economic tool that the next administration could use to retain and attract new businesses, Reed said.
“If Virginia could convert these options into policies, it would see a boon to this market,” he said. “Meeting just 15 percent of the large energy user energy need, could lead to 2,000 MW of renewable energy capacity and $3.6 billion in new energy investment. So there’s really a lot of opportunity here.”
