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The Future of Energy Leaning Towards Decentralization

Elon_Musk.jpgThe announcement by Tesla CEO Elon Musk of the launch of its latest product, the Tesla Powerwall battery, has many people in the renewable energy community cheering.  The arc of energy generation and distribution has gone through phases over time starting from localized systems and moving towards larger but less resilient centralized systems.  The centralized system and the sources that power it has brought billions of people out of poverty thanks to economies of scale.  They have not been without their hurdles however; not only are these systems heavily reliant on fuels that cause climate change, but they have failed to deliver for the nearly 1.6 billion people for whom the grid is still a distant dream (or at best, an erratic one).  For example, the politics of playing with grid infrastructure and energy prices has left the distribution systems in one of the largest economies in the world, India, with a grid network that is overburdened and inadequate to meet the growth needs of the country.  

Innovations in technologies that produce energy (such as solar and wind) have over time brought new mixes of energy into existing networks for distribution.  What has lacked is a breakthrough that can deal with intermittency of renewables in that system or the ability to store it when it is generated.  Off-grid energy solutions, particularly for the developing world, have for decades been too small and not been able to genuinely get people up the energy ladder as their livelihoods improve.  While business models and the technology, particularly solar, have matured, the Holy Grail for the scaling of low-carbon technologies is the battery.  Perhaps Tesla’s new innovation is the breakthrough that allows the energy system to break from the existing framework for distribution.  At long last, the arc of energy generation and consumption may be headed towards a decentralized model, at least for household energy. 

The Exelon-Pepco Merger & Exelon's History of Anti-Clean Energy Lobbying

Exelon has a long history of using political influence to oppose the deployment of renewable energy. Exelon’s political operations may impact the company’s ability to show that a merger with Pepco would provide a tangible benefit to customers on the criteria of conserving natural resources and preserving environmental quality - two factors that must be considered in the District of Columbia. According to the Office of the People’s Counsel, “the [Exelon-Pepco] merger is not in the public interest…as a result of Exelon’s longstanding resistance to policies promoting renewable energy.” 

Exelon-Pepco-Merger.jpgIf approved, the Exelon-Pepco merger would empower the company to continue its anti-renewable campaign in Washington, D.C. and Maryland, negatively impact ratepayers, and hinder the growth of the renewable energy industry.

Lobbying Against the Renewable Portfolio Standard in Illinois

Exelon has routinely worked against renewable energy policies and used its financial resources and political influence to benefit the company at the expense of environmental quality and renewables. Most recently, Exelon has proposed a bill in Illinois, the Low Carbon Portfolio Standard (LCPS), that would subsidize nuclear plants that are struggling to compete with the cheap cost of electricity from natural gas plants and wind turbines. As written, the LCPS would increase rates for ratepayers, and Exelon’s nuclear plants would earn an estimated $300 million per year from low carbon credits while renewables would get almost nothing. Crain’s Chicago Business Journal documented that “Exelon long has complained that profits at its six nuclear power plants in Illinois are under pressure in part due to competition from tax-subsidized wind farms. Exelon is backing state legislation that would create a new surcharge on most electric bills throughout the state that would funnel as much as $300 million a year to the company's Illinois nukes.”

In the past, Exelon opposed fixing the Illinois’ renewable energy law (RPS) despite the fact that the fix could save ratepayers up to $280 million between 2014 and 2017. Flaws in the RPS have plagued the law and resulted in millions of dollars, intended to incentivize clean energy projects, remaining stuck at the Illinois Power Agency. Yet, an Exelon spokesperson claimed, “The law is working as intended…”

North Carolina Renewable Energy Standard Attacked Again

Update: Americans for Prosperity revealed it is operating an online petition and a phone-banking operation aimed at state legislators to support House Bill 681.

After using last year’s legislative session to deal with Duke Energy’s Dan River coal ash spill, Republicans on the House Public Utilities Committee are bringing back their 2013 attempt to freeze the state’s Renewable Energy and Energy Efficiency Portfolio Standard (REPS). Representatives Millis, Hager, Collins, and Warren introduced House Bill 681 yesterday. 

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In 2013, American Legislative Exchange Council (ALEC) member Hager was the chief sponsor of the REPS repeal bill. He was joined by at least seven other ALEC members in sponsoring the bill. Hager’s bill started out as a full repeal, but amendments turned it into a bill that would freeze the renewable energy targets at the current rates. Ultimately, Hager could not get the bill through his committee. It was defeated 18-13

This year, Hager and his colleagues on the committee are pushing to freeze the state at the 6% renewable energy target (which is the 2015 target) for public utilities, municipalities, and cooperatives, likely inspired by the Ohio RPS freeze bill that was passed last year

Mississippi Net Metering Rules Advance

Mississippi, one of the last states that have not created a net metering policy, might soon have a rule created. On Tuesday, the state Public Service Commission (PSC) voted unanimously to issue rules that will create a framework allowing customers to install rooftop solar and sell excess electricity to their utility company. Public comments are due by July 1, 2015, a hearing will be held, followed by the issuing of final guidelines.

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This is the latest development in Mississippi that spans back to 2010 after the PSC opened a docket to explore the policy. In 2014, Commissioner Lynn Posey ordered an investigation study on the economic impact of net metering. Synapse Energy Economics, a research and consulting firm, assisted the PSC and completed the investigation in October. The Synapse study found that the benefits of implementing net metering for solar in the state outweigh the costs in all but scenario. Here are other highlights from the report: 

  • “Distributed solar has the potential to result in a downward pressure on rates.”
  • “Generating from rooftop solar panels in Mississippi will most likely displace generation from the state’s peaking resources – oil and natural gas combustion turbines.”
  • “Distributed solar is expected to avoid costs associated with energy generation costs, future capacity investments, line losses over the transmission and distribution system, future investments in the transmission and distribution system, environmental compliance costs, and costs associated with risk.”

These findings are similar to what other independent reports have recently concluded. Another cost-benefit study of net metering in Missouri released in 2015 found net metering is a net benefit for utility customers. Independent studies in Vermont, New York, Texas, and Nevada have all come to the same conclusion. 

However, as Utility Dive points out, the report warns that the utilities in the state, including the two investor-owned utilities Entergy Mississippi and Southern Company’s Mississippi Power, distributed solar would decrease revenue and therefore, the value of solar in Mississippi should be calculated. Earlier this month, the Maine Public Utilities Commission released a study that gives a quantitative value of solar produced in the state. The report found that the value of solar power generated is 33 cents/kWh; this is a significant difference from the 13 cents/kWh customers in Maine who have solar panels receive as a credit today.

Entergy Mississippi filed comments against a net metering policy that would credit ratepayers at the retail rate, and not the avoided cost amount. However, the Southern Company subsidiary, Mississippi Power, is unopposed because it reached a settlement with the state chapter of the Sierra Club to diversify its power generation. In the agreement, the Sierra Club would cease its legal opposition to the Kemper coal gasification power plant, and Mississippi Power would remain unopposed to solar net metering.

ALEC Climate Change Denial: Attacks on Climate Regulations and Clean Energy Solutions

The American Legislative Exchange Council is trying to silence critics for exposing their history of climate change denial, according to the Washington Post. ALEC sent cease-and-desist letters to the League of Conservation Voters (LCV) and Common Cause, demanding that the two organizations “cease making false statements” and to “remove all false or misleading material” that suggest ALEC does not believe in global warming. Common Cause and LCV have been vocal critics of ALEC’s anti-climate solutions work over the past few years.  

Ironically, the facts show that ALEC supports the view that climate change is not an urgent problem, based on a review of ALEC’s model legislation, agenda, and speakers. A newly launched website (in which Energy & Policy Institute is a partner), www.ALECclimatechangedenial.org, documents how ALEC events promote a climate denial agenda, including inviting prominent climate deniers to their events in an effort to provide “motivation” for legislators to promote the ALEC agenda back in the state capitols. Below are a few of the highlights:

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