Oct. 24 2018 — Legislation, whether enacted or failed, is key to understanding the direction that a given state is heading in regarding energy policy. Legislative activity affecting the energy sector has been robust in recent years, and 2018 has been no exception.
A majority of both one-year and two-year legislative sessions have concluded for the year, with roughly five times more energy-related measures left on the discussion tables than enacted. Sessions are ongoing in six jurisdictions — the District of Columbia, Massachusetts, Michigan, New Jersey, Ohio and Pennsylvania. Four states — Montana, Nevada, North Dakota and Texas — did not convene during 2018.
In all, Regulatory Research Associates, an offering of S&P Global Market Intelligence, observed that 71 energy-related bills were effectively signed into law during 2018, with an additional two measures enacted through overrides gubernatorial vetoes. The new laws address a variety of issues, ranging from modifications to current state renewable portfolio standards, or RPS, to ratemaking provisions.
More than 380 individual measures failed to gain traction through the legislative process. In a few states, several measures were bundled together to create omnibus energy bills that were later enacted. Other measures dealt with topics that had been repeatedly introduced in previous sessions but had failed to get the necessary votes to make it to the governor’s desk.
Many of the measures that failed to advance during the 2018 sessions may be reintroduced during the 2019 legislative sessions and could see better success at that time. Other measures may be reintroduced for the sole purpose of beginning discussions on the issues even though the bills are unlikely to be enacted.
Renewable energy was a main topic of legislation enacted in 2018, as has been the case in most legislative sessions in recent years. Measures included topics such as addressing RPS requirements, carbon-free emissions, climate change and energy efficiency
Several democratic-led states enacted measures to continue the advancement of their renewable energy agendas and maintain initiatives that where put into place to comply with the U.S. Environmental Protection Agency’s President Obama-era Clean Power Plan. Below is a discussion of several select measures that were enacted during 2018.
In California, Gov. Jerry Brown signed Senate Bill 100 on Sept. 10, 2018. The enacted measure sets a statewide target that all electricity in the state is to be generated with 100% zero-carbon energy by 2045, doubling the state’s 50% renewable portfolio standard, or RPS. The 2045 energy goal would consist of a mix of both RPS-eligible and zero-carbon resources.
The new law requires all California’s electricity providers to source 60% of their energy from renewables by 2030 as an interim target. The law offers some flexibility and establishes a new policy for the remaining 40% to include large hydropower sources, energy storage and energy efficiency that do not currently qualify under RPS requirements until the 2030 goal is met.
The law calls for the California Public Utilities Commission to ensure that the new standard does not unreasonably impact customer rates and bills. Additionally, the California PUC, in conjunction with the California Energy Commission and the California Air Resources Board, must submit a report to the state legislature by Jan. 1, 2021, and every four years thereafter, reviewing the 100% clean energy policy. The report is to address forecasts, costs, resources, barriers and impacts on reliability related to achieving the goal and alternative scenarios to achieve the goal.
The newly enacted RPS requirement is second in the country in terms of how ambitious the target is, with Hawaii currently ranking number one with a mandatory target that 100% of each utility’s net electricity sales be met by renewable energy by Dec. 31, 2045.
New Jersey Gov. Phil Murphy signed Assembly Bill 3723 on May 23, which calls for 21% of the state’s energy needs to be met from Class 1 renewable resources by 2020, rising to 35% by 2025 and to 50% by 2030. The New Jersey Board of Public Utilities, or BPU, is required to ensure that the related costs do not cause rates to rise by more than 9% for energy years 2019 through 2021 and by no more than 7% in any year thereafter.
In addition, the law accelerates the solar requirement in 2019 through 2021 such that the solar carve-out is to reach 5.1% by 2021, up from 4.1%, and then is to decline each year beginning in 2024 to reach 1.1% in 2033. The BPU is required within six months of enactment to adopt rules to close the solar renewable energy credit program to new applicants after the state achieves the 5.1% solar target. The solar renewable energy credit program is required to close no later than June 1, 2021.
In Connecticut, Gov. Dannel Malloy signed several measures that relate to renewable energy and emissions. House Bill 5348 modifies the state's definition of Class I renewable energy sources to include thermal energy generated from biodiesel facilities and to create a homeowner-generated thermal energy program. Senate Bill 9 increases the state's Class I RPS to 40% by 2030 and replaces the state's net metering system with new tariff-based renewable energy programs.
Massachusetts Gov. Charles Baker signed House Bill 4857, which requires the state's RPS mandate to increase by an additional 2% annually beginning in 2020 through 2029, after which it is to increase by an additional 1% annually indefinitely. The new law also requires the Massachusetts Department of Energy Resources to explore to the addition of 1,600 MW of offshore wind via competitive solicitation by Dec. 31, 2035. Additionally, the statute establishes an energy storage target of 1,000 MWh by Dec. 31, 2025.
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