Apr
23
2015

Whitfield Introduces Ratepayer Protection Act

In recent days, U.S. Representative Ed Whitfield (R-KY), Chairman of the House Energy and Power Subcommittee, introduced the Ratepayer Protection Act, legislation that would protect consumers from the potential negative consequences of the EPA’s new carbon dioxide mandate. The Act appear to have gained traction, with the Subcommittee yesterday approving the measure by a vote of 17 to 12. The Act works by allowing for judicial review of any final rule before requiring states to comply with the new mandate. A backgrounder on the Act is available here.

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“EPA’s proposed rule is riddled with problems and faces an uphill battle in the courts. Just last week we heard powerful testimony on the legal and implementation challenges, and it is clear this unprecedented power grab cannot stand,” explained Rep. Whitfield. “My commonsense legislation will protect states and their citizens from EPA’s damaging overreach, and I look forward to working with my colleagues in advancing it.”

See the Bill Here

This past July, PACE gave testimony to EPA regarding its carbon dioxide, arguing that reducing the emission of carbon dioxide from the power sector by 30% by 2030 would place undue burdens on families and businesses. A full copy of PACE’s testimony is available here.

“When asked if EPA’s regulation of carbon dioxide would cause any measurable change in the agency’s 26 indicators of climate change, Administrator McCarthy said they would not. Rather, she explained, a carbon rule only works if other nations adopt the same policies,” PACE’s testimony explained. “She rationalized that the administration’s carbon dioxide regulation ‘positions the U.S. for leadership’. In short, this rule is only leverage.”

EPA’s carbon dioxide mandate still faces many legal challenges and could ultimately be struck down by the courts. Despite the specter of a legal challenge, EPA still plans to compel states to move forward with compliance and submit costly implementation plans, or become subject to a federal plan, before the litigation is resolved. The Ratepayer Protection Act would resolve that by allowing for judicial review prior to requiring state compliance.

Full committee Chairman Fred Upton (R-MI) adds, “This bill is about protecting families and jobs. It gives states the time they need before this expensive and legally shaky new rule puts affordable, reliable power at risk. I thank Rep. Whitfield for putting forward this legislation as we continue our work to keep the lights on and electric bills affordable.”

Learn more about the Ratepayer Protection Act in this flyer from the Partnership for a Better Energy Future.

Apr
20
2015

Important for Mississippi to Get Net Metering Right

Today, Mississippi is one of a few states that has no official policy on net metering. That could change soon, however, as the state’s Public Service Commission considers a plan to adopt net metering rules for Mississippi utilities. Net metering is the policy of compensating owners of solar rooftops for excess power they return to the grid.

Solar Panel

“I think this is a good signal that the commission is active and alert in seeking opportunities to try to help Mississippians generate their own electricity and give them the ability to do so, be it at their business or at their home or their small commercial operation,” Northern District PSC Commissioner Brandon Presley said. “My hope is we’ll get this done. This has been a long time coming and it’s way overdue to try to get this measure in place in Mississippi. We want to get it right and we want to do something that is progressive and that is effectual and that makes sense for the customer in Mississippi.”

Commissioner Presley is correct that getting it right is key. PACE has written consistently about the perils of net metering when it comes to ensuring fairness for all customers. In California and Hawaii, and most recently in Louisiana, data has shown that compensating solar owners at the retail rate for power ends up shifting costs to non-solar customers. In Louisiana, for example, a recent study commissioned by the Louisiana Public Service Commission shows that non-solar customers could end up paying as much as $809 million more if the state leaves its net metering policy unchecked.

The economics are simple. The value of a kilowatt-hour produced by a utility is derived, in part, by the fact that such power is guaranteed to be available. The current residential rate for electricity in Mississippi today is about 11¢ per kilowatt-hour. That figure includes all of the costs of producing power, including the fixed costs of the system, as well as the value of knowing that power will be available when customers need it. On the other hand, customers who produce solar power from their rooftops don’t offer a product of equal value. Those customers contribute only a token amount of power to the grid, providing none of the infrastructure and none of the guarantee that utilities do. Power that is not guaranteed to be available doesn’t have the same market value as power that is, but retail net metering treats them equally. That is a market distortion that has real dollars-and-cents consequences.

“The fact is that paying solar customers full retail for the power they produce is just another form of subsidy,” explains PACE Executive Director Lance Brown. “When some utilities are paying as little as 6¢ per kilowatt-hour for solar contracts that include guarantees, why should a utility be forced to pay a customer nearly double that? It makes little sense from a business standpoint.”

Hopefully, Mississippi’s regulators will take such realities into consideration. Consider that Entergy, the largest power provider in the state, also faces a similar net metering debate farther south in Louisiana. How Mississippi lands on net metering is bound to send a strong signal to regulators in other states. Customers should be watching, too. Net metering policy affects far more than just solar customers. If not done in a thoughtful way with an eye toward equity, a policy that sounds good could end up being a rotten deal that costs most customers more money.

Apr
13
2015

Governors Weigh In On Oil and Gas Leasing

In a March 30th letter to Department of Interior Secretary Sally Jewell, eight governors of coastal states expressed their hope that federal authorities would expand offshore oil and gas leases. The comments were submitted in a letter in relation to the 2017-2022 Draft Proposed Outer Continental Shelf Oil & Gas Leasing Program.

Oil Leasing

The eight governors belong to a group called the Outer Continental Shelf Governors Coalition. They are Governors Pat McCrory of North Carolina (chair); Robert Bentley of Alabama; Bill Walker of Alaska; Bobby Jindal of Louisiana; Paul LePage of Maine; Phil Bryant of Mississippi; Nikki Haley of South Carolina; and Terry McAuliffe of Virginia.

“We believe that opening up new [Outer Continental Shelf] areas for responsible energy development and expanding revenue sharing to all participating coastal states and communities will lead to a more prosperous and secure future for our citizens,” the governors state in their join letter.

Read the Full Letter Here

As part of the letter, the coastal governors also expressed their support for a new revenue-sharing plan among coastal states for oil and gas leases. According to the governors, such a plan would help address various issues that states face during the process of offshore energy development. The letter argues that a new revenue-sharing plan “would help state governments expand coastal management and conservation; build new roads, docks, ports and other necessary infrastructure; fund emergency preparation and response; and expand public service to support the influx of new industry and workforce. Improving the coastal infrastructure and management will add to the overall economic wellbeing of coastal communities adjacent to offshore development.”

In its own letter submitted on February 16th, PACE also encouraged federal authorities to consider lease expansion, stating, “As an organization consisting of those who use and pay for energy, the Partnership for Affordable Clean Energy believes that the continued supply of oil and gas from the Gulf region helps to place downward pressure on prices, benefitting consumers and strengthening America’s energy security.”