Green Energy Good News Roundup

By Nick Lawton, Staff Attorney

Time for some good news on the renewable energy front! My blog posts often focus on complex issues around electricity regulation or updates on proposed legislation that threatens renewable energy progress. As an antidote to complexity and resistance to renewable progress, this post offers good news on the green energy front from around the globe.

Renewable Energy Does Not Drive Up Prices

An excellent report from DBL Investors, Renewables Are Driving Up Electricity Prices, WAIT, WHAT?, reveals that states with high levels of renewable energy have not seen electricity prices rise faster than states without renewables. Rather, “states with the greatest share of electricity generation from renewable sources have often experienced average retail electricity prices that are cheaper than both the national average and also states with the smallest share of electricity generation from renewable sources.” The following chart offers an illustration:

Source: DBL Investors, Renewables Are Driving Up Electricity Prices, WAIT, WHAT?

This research provides more evidence for a similar argument I made months ago and should help counteract the misinformation campaign against renewables currently underway in many states. As the article notes, “criticism of RPS states has been overblown.” This report offers exactly the type of empirical perspective on the economic influence of renewable energy that policy makers should heed.

Texas City to Go 100% Renewable—Based on Cost

Georgetown, Texas has plans to meet all its energy needs from renewables by 2017. The city has struck deals to buy 150 MW of solar power and 144 MW of wind, which will provide clean, cost-effective power for the city for the next decades. The city’s municipal utility, Georgetown Utility Services, chose renewable energy not because it had to, but because the deals “will save on electricity costs and decrease … water usage,” according to Georgetown’s utility manager Jim Briggs. Mr. Briggs added that the deals “also provide[] a hedge against future fuel and regulatory risks.” These deals will make Georgetown the first city in Texas to become 100% renewable and will hopefully show other cities how to do so as well.

Costa Rica Has Been 100% Renewable for All of 2015—And is Saving Money

Costa Rica, which has invested heavily in renewables, is now reaping the benefits. The state energy agency, Instituto Costarricense de Electricidad (ICE), credited heavy rainfall for the increased hydroelectric productivity. The remainder of the renewable energy comes from a mixture of wind, solar, biomass, and geothermal power. The nation has excellent renewable resources, with heavy seasonal rainfall, active volcanoes, and wind that whips across the continental divide. Having developed the technologies to take advantage of those resources, Costa Rica is now seeing the rewards. In addition to a 100% renewable power supply, the nation is also seeing falling energy prices. ICE reports that it is lowering electricity rates by a whopping 12%, and that it expects rates to continue to drop later in the year. Costa Rica is showing how nations can achieve a 100% renewable power grid and stimulate economic savings all at once.

France Will Require Solar or Green Roofs—And Likely See Falling Costs

France has just passed a law requiring all new buildings in commercial zones either to include solar panels or to be covered in plants. Both solar panels and green roofs reduce urban heat islands and reduce the energy needed to heat or cool a building. As my recent report for the Green Energy Institute discussed, this type of solar building standard will likely bring significant benefits to property owners and reduce overall costs. Until now, two cities in California were the only to require solar power on all new buildings of any type. Now, France has become by far the largest jurisdiction to enact such a requirement, which will very likely prove the economic and environmental benefits of treating solar power as a standard feature on new buildings.

Good News Shows Green Energy is a Good Solution

This is just the latest batch of good news in the renewable energy field. More generally, the last five years have seen dramatically decreased prices and increased deployment. As these trends continue, the good news is likely to keep rolling in. Stay tuned for more.

It is in Every State’s Best Interest to “Just Say Yes” to EPA’s Clean Power Plan

By Amelia Schlusser, Staff Attorney

The past few weeks have seen a flurry of debate over whether states will actually have to comply with the Environmental Protection Agency’s (EPA) Clean Power Plan. Some state regulators are starting to rally behind Senator Mitch McConnell’s call to “just say no” to implementing the Clean Power Plan, and some legal scholars are supporting this challenge by arguing that EPA cannot force states to implement its final rule. Although EPA cannot directly compel states to implement the rule, the U.S. Constitution compels states to comply with federal law, and states that refuse to implement the Clean Power Plan will subject their citizens to potentially significant penalties.

A Call to Arms: Pro-Coal Conservatives Tell States to “Just Say No”

On March 3, Sen. Mitch McConnell (R– Ky.) wrote an op-ed in the Lexington Herald-Leader calling for states to fight back against the proposed federal regulations. Senator McConnell argues that “a respected group of economists” claim the rule will cost the U.S. “about a third of a trillion dollars.” These compliance costs and resulting electricity rate spikes, McConnell argues, will hurt lower-income families and seniors, in addition to putting thousands of Kentuckians out of work. Senator McConnell further asserts that EPA’s legal authority to issue the rule—which he refers to as “the administration’s attack on the middle class”—is questionable. The Senator’s proposed response to this so-called “political extremism”? “Just say No” and refuse to comply with the final rule. More specifically, McConnell calls for states to refuse to submit a state implementation plan as required by section 111(d) of the Clean Air Act. On March 19, Senator McConnell sent a letter to every state governor imploring him or her to adhere to his advice and forgo crafting a 111(d) implementation plan.

To support his argument against the legality of the Clean Power Plan, Senator McConnell’s op-ed quotes law professor Laurence Tribe’s assertion that EPA acted “far beyond its lawful authority.” Professor Tribe gained some notoriety in December when he submitted comments to EPA on behalf of the Peabody coal company. Professor Tribe recently spoke out against the proposed rule to a House Energy and Commerce subcommittee. According to Greenwire, Tribe argued that the proposed Clean Power Plan violates the Constitution and the federal Clean Air Act, stating, "[b]urning the Constitution should not become part of our national energy policy." According to Professor Tribe, EPA’s rule violates the separations of powers established by the U.S. Constitution, because it would “commandeer state governments” by directing states to issue state implementation plans.

Laurence Tribe isn’t the only law professor to speak out against the legality of the Clean Power Plan this week. On March 16, law professor Jonathan Adler wrote an op-ed in the Washington Post, asserting, “states may choose which federal laws to implement.” Professor Adler defended the legality of Senator McConnell’s recommendation that states refuse to implement EPA’s rule. He argued that the Clean Air Act gives EPA authority to adopt regulations, but doesn’t give the Agency authority to enforce these regulations against the states. Professor Adler accurately points out that Clean Air Act section 111(d) doesn’t require states to create implementation plans; if states choose not to adopt their own plans, the statute directs EPA to adopt a federal implementation plan in their stead. However, Adler argued, states still have no obligation to comply with this federal plan, because it is “well established that the federal government may not direct states to implement federal programs.”

Why States Should “Just Say Yes”

While the argument that the federal government cannot explicitly direct states to implement federal programs is accurate from a technical standpoint, it is in the states’ best interest to comply with EPA’s final Clean Power Plan and issue effective state implementation plans in a timely manner.

The Supremacy Clause in Article XI of the U.S. Constitution establishes federal law as "the supreme Law of the Land," and state courts are thus obligated to adhere to federal law. Article I, section 8 of the U.S. Constitution grants Congress authority to regulate interstate commerce. Congress exercises this authority by adopting legislation, such as the Clean Air Act. When Congress enacted the Clean Air Act, it delegated authority to EPA to adopt regulations implementing the statute’s provisions. Section 111(d) of the Clean Air Act specifically directs EPA to issue regulations establishing a procedure for states to submit plans for implementing standards of performance for air pollutant emissions from existing source categories. If a state fails to submit a satisfactory state implementation plan, section 111(d) gives EPA authority to issue a federal implementation plan for that state.

More significantly, the statute gives EPA authority to enforce the provisions of both federal and state implementation plans. Contrary to the implications raised by Laurence Tribe’s arguments, however, this enforcement authority doesn’t attempt to authorize EPA to direct states to implement section 111(d). The statute does not explicitly give the Agency authority to bring enforcement actions against states that fail to implement the statutory requirements (although the EPA Administrator can bring suits against state regulators under the citizen suit provision in section 304). Instead, Clean Air Act section 113 gives EPA authority to enforce implementation plan requirements against individuals. This means that if an individual source fails to comply with the requirements imposed by a state or federal plan, EPA can order the source to comply, impose a penalty, or bring a civil action against the owner or operator of that source. The Agency can choose to impose an administrative penalty of up to $25,000 per day against any individual that fails to comply with an implementation plan. If the Agency decides to bring a civil action, they can seek a temporary or permanent injunction in addition to assessing a civil penalty of up to $25,000 a day against the individual violator.  

So the “just say no” advocates are technically correct—states are not obligated to issue state implementation plans under 111(d), and EPA cannot directly force states to implement a federal plan. However, this does not mean that states do not have to comply with federal law—EPA still has authority to enforce an implementation plan's requirements. The EPA Administrator can bring a suit against state air quality regulators for failing to comply with a state or federal implementation plan. In addition, Sections 110(m) and 179(b) of the Act give EPA authority to sanction states that fail to implement an approved plan by withholding federal highway funding. While this option refuses to confer a federal benefit on noncompliant states, it doesn’t equate to a “commandeering of state governments.” The Clean Air Act solicits state assistance in implementing the statute’s objectives, but ultimately imposes compliance obligations on individual regulated facilities. Under the Supremacy Clause of the Constitution, state courts must uphold the Clean Air Act's requirements. States that refuse to implement the final Clean Power Plan will therefore subject their citizens to federal enforcement, judicial oversight, and the risk of potentially significant economic penalties. Refusal to implement federal law is a short-sighted and irresponsible policy direction for states to follow, and regulators should think twice before jumping onto Mitch McConnell’s “just say no” bandwagon. 

RPS Reform Update

By Nick Lawton, Staff Attorney 

The debate about Renewable Portfolio Standards (RPSs) continues to rage throughout the United States. This post provides updates on legislative proposals to modify RPSs in several states and provides information on how fossil fuel interests have backed the efforts to weaken or repeal these policies.

Hawaii

Hawaii is poised to become the first state in the nation to have a goal of becoming 100% powered by renewable energy. A bill to ramp up the state’s RPS from 40% by 2030 to 100% by 2050 has recently cleared committees in both the state House and Senate. The bill enjoys Democratic sponsorship, and since Democrats control both chambers and the governor’s seat, it may stand a real chance at becoming law. A law targeting 100% renewable energy would make a great deal of sense in Hawaii. Currently, the state spends between $3 billion and $5 billion annually on importing fossil fuels, according to the bill’s sponsor, Senator Mike Gabbard. Spending so much on costly imported fossil fuels leads Hawaii to have the highest electricity rates in the nation. Renewable energy would very likely save Hawaii money and reduce energy bills. Moreover, the goal seems attainable. As Senator Gabbard put it, “[e]ven our utility is saying we can hit 65 percent by 2030, so 100 percent by 2050 is definitely doable.” Hopefully, Hawaii will make this bill into law and show other states how to achieve a 100% renewable power grid.

Michigan

I blogged last week about competing proposals in the Michigan legislature from Republicans, who hope to weaken or repeal that state’s RPS, and Democrats, who aim to double it. Those proposals came out shortly before Republican Governor Rick Snyder announced his own energy plan. Governor Snyder’s energy plan bucks the partisan trend of Republican opposition to renewable energy by proposing that renewables play an increasing role in meeting the state’s energy demands. In fact, Governor Snyder’s proposal is even stronger than the Democrats’, although it falls short of formally increasing the RPS itself.

Governor Snyder’s energy proposal lays out two options for renewables in the state. If renewables remain more costly than natural gas, the Governor envisions renewables and efficiency supplying a total of 30% of the state’s energy by 2025. On the other hand, if renewables beat natural gas on cost (a good bet, given the steadily declining price of wind and solar power and the volatility of gas prices), then the Governor’s plan would call for renewables and efficiency to supply 40% of the state’s energy by 2025. In contrast, the state’s Democrats merely proposed an RPS expansion to 20% by 2022.

Governor Snyder was unusually candid about his goal of weaning Michigan off its reliance on coal. Michigan has “a big problem,” he stated, “and to be blunt, it’s coal.” Noting that Michigan is among the states most reliant on coal power, he noted that “[t]he long-term future will be moving away from coal.”

Governor Snyder’s energy plan is a good step forward for Michigan. Not only would it improve the state’s renewable energy target of 10% by 2015 (which is among the  weakest of any state with an RPS policy), but it would also improve the state’s environment and economy, allowing Michigan to continue attracting good, green-collar jobs. Michigan’s legislature should act quickly to make Governor Snyder’s plan into law.

New Mexico

The New Mexico House of Representatives recently passed a bill that would freeze the RPS in that state at 15%, if passed into law. The current RPS rate is 15%, but it is scheduled to increase to 20% by 2020. The bill would eliminate that increase, freezing the RPS. However, on March 17, the measure stalled in the New Mexico Senate Conservation Committee by a 6 to 2 vote. Thus, New Mexico’s RPS appears safe, for the moment.

Kansas

Kansas, however, is considering a similar bill that would repeal upcoming increases in that state’s RPS. Currently, Kansas’s RPS requires 10% renewable energy for 2011-2015, 15% for 2016-2019, and 20% from 2020 onward. The bill currently under consideration would eliminate the latter two requirements, effectively freezing the requirement at the current level of 10%. The bill is currently in committee.

Koch Brothers Funding for RPS Reductions

Much of the backing for the efforts to weaken or repeal RPSs seems to come from the Koch Brothers, whose $50 billion net worth derives largely from investments in fossil fuels. For example, the Koch Brothers funded the successful effort to freeze Ohio’s Renewable Portfolio Standard, a law that will likely prove costly to the state. Similarly, the Koch-backed American Legislative Exchange Council funded the unsuccessful recent effort to roll back Colorado’s RPS.

The Koch brothers’ influence is especially stark in Kansas, which makes sense given the fact that Koch Industries has its headquarters in Wichita. An editorial in the Garden City Telegram discusses how the Koch brothers have funded the RPS repeal effort in that state, noting that “Koch involvement in the run on the RPS has been significant, and a matter of contention.” For example, the Koch brothers funded a study from Utah State Professors Ryan Yonk and Randy Simmons (the “Charles G. Koch Professor of Political Economy”), which concluded that the RPS has harmed the state’s economy. However, when a Democratic lawmaker asked about the funding for the study, Republican Senator Rob Olson cut off the question, ending that line of inquiry. (Koch Industries is among the largest contributors to Senator Olson’s candidacy.)

That pattern of funding studies and advocacy against renewables and for fossil fuels is typical of the Koch brothers. In fact, the Koch brothers have used their $50 billion net worth to fund a network of advocacy organizations so complex that its critics have dubbed it “the Kochtopus.” That network has its tentacles in many states and works through many shell organizations, such as Americans for Prosperity and the American Legislative Exchange Council (recently lampooned by John Oliver).

But neither citizens nor states should be fooled by the Koch brothers’ relentless advocacy for fossil fuels and against renewables. In truth, Renewable Portfolio Standards are sound policies. They have succeeded in dramatically expanding the share of renewable energy in many states and have done so without significant costs to ratepayers. Most states with RPSs are well on their way to meeting targets, and rate impacts have so far been generally under 3%. States should follow the lead of Hawaii and California, which are seeing positive returns from their investments in renewable energy. RPSs work. They do not break the bank. They are sound policy, and states should continue to expand them.

The Clean Power Plan and Grid Reliability: Fostering the Transition to a Modernized Transmission System

By Amelia Schlusser, Staff Attorney

The debate over the potential impacts of EPA’s proposed Clean Power Plan on grid reliability is gaining steam. Critics contend that the proposed rule calls for hasty and drastic changes to the nation’s electricity resource mix, which will result in widespread retirements of coal-fired power plants and increased deployment of renewable resources. The reliability debate centers around the fact that baseload resources, such as coal plants, provide stable and predictable electricity, while renewable resources, such as wind and solar power, provide variable and intermittent power. Therefore, the argument goes, replacing coal plants with variable renewable resources may jeopardize the reliability of the electrical grid.

The reliability debate first made headlines following the release of the National Energy Reliability Corporation’s (NERC) Initial Reliability Review of the Clean Power Plan, which voiced concerns that the rule could compromise the reliability of the power grid. NERC’s report recently made headlines for a different reason. According to Greenwire, the Energy and Policy Institute recently criticized NERC for failing to disclose that Energy Ventures Analysis, a contractor that worked on the NERC report, had ties to a coal technology company. However, there is little evidence that this potential conflict of interest actually influenced NERC’s findings regarding reliability impacts.

Meanwhile, politicians, regulators, and industry representatives are becoming increasingly vocal on the potential reliability impacts of the Clean Power Plan. On March 11, regulators from Wisconsin, Wyoming, and Indiana told the U.S. Senate Environment and Public Works Committee that the proposed rule would threaten grid reliability in their states. According to Greenwire’s coverage of the committee meeting, the commissioner of the Indiana Department of Environmental Management, Thomas Easterly, noted that he was very concerned “that we will see some catastrophic results somewhere in the implementation of this plan.” Senator Jim Inhofe (R-Okla.) also argued that the rule would threaten the reliability of the grid. Jeff Burleson, Vice President of System Planning at Southern Company, recently issued a statement asserting that the Clean Power Plan will jeopardize grid reliability.  Burleson claimed that the rule would “potentially put serious reliability and operational pressures on the grid,” and that “it does so under the guise of ‘environmental compliance’.”

NRDC’s John Moore argues that the reliability argument is a bluff intended to reduce utility compliance obligations under the Clean Power Plan. Moore’s blog specifically focuses on Southern Company’s claim that the rule will jeopardize grid reliability, which is not the first time the utility has made this argument in response to new environmental regulations. Moore points out that in 2011 Southern Company argued that EPA’s mercury and air toxics standards would cause “numerous rolling blackouts” starting in 2015. In 2014, however, the company stated that it was 98% in compliance with the standards, and as of 2015, the rolling blackouts have failed to materialize. 

It’s unclear whether the Clean Power Plan’s critics are intentionally crying wolf by asserting that the rule is incompatible with the reliable delivery of electricity. However, it is clear that these reliability challengers are failing to fully consider available technologies and strategies that utilities and grid operators have successfully implemented to maintain reliability under high penetrations of renewable generation.

The reliability challengers are also overlooking the energy sector’s ability to develop innovative solutions to respond to grid reliability constraints. Utilities are investing in smart grid improvements and other technologies to facilitate integrating renewable energy onto their systems. For example, one of my previous posts discussed how Idaho Power Company developed and implemented a new forecasting tool that has improved the utility’s ability to integrate wind energy onto the grid at a cost savings of approximately $100,000 a month.

Grid operators throughout the nation are also developing strategies to integrate increasing amounts of renewable energy onto the grid without impacting reliability. For example, Columbia Grid and Northern Tier Transmission Group initiated a Wind Integration Study Team, which in turn created a Dynamic Transfer Capability Task Force to assess the potential impacts of increasing dynamic transfers of electricity between balancing areas to integrate variable renewables and maintain grid reliability. And a recent report by Navigant Research estimated that utilities would spend $107 billion through 2023 on “synchophasors and wider-area situational awareness systems” which enable grid operators to collect and transmit data and rapidly identify grid disturbances before outages occur. These innovative grid improvements help maintain reliability and functionality, and according to the North American Synchophasor Initiative, these technologies provide significant benefits for integrating intermittent renewable resources.

These examples describe only a few of the countless efforts to improve and modernize our national grid systems to accommodate the evolving U.S. energy mix. These efforts help to demonstrate the electricity sector’s ability to proactively address emerging system constraints and develop innovative strategies to maintain grid reliability. Once finalized, the Clean Power Plan will shift the composition of the electricity generating mix in the country. However, this shift will be supported by the deployment of advanced grid technologies and innovative operational strategies that will ultimately improve the functionality of the grid and help facilitate the transition to a clean, sustainable energy system.