Policies: Renewable Energy

President Obama's Climate Change Action Plan Brief Sheet

Published February 2014
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Published February 2014

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The essentials

  • In June, 2013 President Obama released his Climate Action Plan.
  • The Plan has three broad categories.
    • First, reducing U.S. carbon emissions.  The President’s plan sets goals to reduce emissions from existing power plants, modernize the U.S. transportation sector, increase the U.S. clean energy portfolio, and increase energy efficiency in American homes and businesses.
    • Second, preparing the U.S. for the impacts of climate change. This is done by supporting climate-resilient investments, responding to major weather events, creating sustainable and resilient hospitals, maintaining agriculture productivity, and providing the tools for climate resilience.
    • Finally, engaging the world’s major economies to advance key climate priorities and in galvanizing global action through international climate negotiations.
  • What does this mean for Arizona?
    • It is hard to predict the full ramifications of the President’s climate action plan for any given state.  Arizona’s utilities and energy regulators will have to plan based on new federal regulations, such as the EPA’s current proposed caps on carbon emissions for new power plants.  Additionally, Arizona could see more federal funds become available to support sustainable agriculture or solar power.  As of now, the exact cost-benefit may be impossible to gauge.

Community, virtual and aggregate net metering, oh my!

Published January 2014
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The essentials

  • Basic net metering requires an agreement between an electrical utility and an individual customer. That customer must have a single meter that is connected to a single, on-site renewable energy system.
  • Under current net metering rules, Arizona allows community net metering but not aggregated and virtual net metering.
  • Several states have revised their net metering policies to allow a broader swath of utility customers to participate in net metering. These customers include municipalities with multiple buildings, tenants in multi-family buildings and stores in shopping malls.

The era of small hydro? The Federal Hydropower Regulatory Efficiency Act of 2013

Published November 2013
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The essentials

  • On August 9, 2013, President Obama signed into law the Hydropower Regulatory Efficiency Act of 2013, which as the name indicates, seeks to reduce the regulatory burden associated with licensing certain small hydroelectric projects by:
    • exempting certain conduit hydropower facilities from the licensing requirements of the Federal Power Act (FPA);
    • amending subsection (d) of Section 405 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2705) to define “small hydroelectric power projects” as having an installed capacity that does not exceed 10,000 Kilowatts (prior to the amendment, “small hydroelectric power projects” were defined as having an installed capacity that does not exceed 5,000 Kilowatts);
    • authorizing the Federal Energy Regulatory Commission (FERC) to extend the term of preliminary permits once for not more than 2 additional years beyond the 3 years previously allowed under section 5 of the FPA; and
    • directing FERC to investigate the feasibility of a 2-year licensing process for hydro power development at non-powered dams and closed-loop pump storage projects.

APS's Proposal to Change Net-Metering

Published October 2013
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updated December 2013

The essentials

  • Rooftop solar installations have exponentially increased in recent years, in Arizona and nationally. With the continued increase penetration of distributed generation from rooftop solar installations, utilities have begun re-evaluating the price structures they use to compensate owners for the electricity their installations feed into the grid.
  • Currently, Arizona Public Service Company’s (APS) net-metering program compensates a solar rooftop owner at retail rates for the excess electricity the solar rooftop installation exports to the grid.
  • APS recently proposed to reduce compensation for electricity put onto the grid by solar rooftop installations, reducing the value that rooftop installations provide to their owners.
  • APS argues that the current net-metering rates effectively subsidize rooftop solar owners and unfairly shift costs from solar rooftop owners to non-solar rooftop owners. Rooftop solar installations also decrease residential electricity demand, thereby decreasing APS’s revenue.
  • The solar industry opposes the proposal because they argue the current plan fairly compensates for the value solar provides to the system, and will stall the development of the industry. Free market proponents also argue that the policy hurts competition and endorses the regulated monopoly utility model.
  • On October 1, 2013, the Arizona Corporation Commission (ACC) staff rejected both of APS’s suggestions for net-metering changes. Instead, they recommended addressing the distributed generation concerns during the next APS rate-case.
  • On November 14, 2013, the ACC voted to implement a $0.70/kW fee for customers with rooftop solar installations who participate in their net metering program. The fee equals roughly $5/month for a typical residential installation. The ACC agreed to review the net metering policy in more depth during the next APS rate case.

Master Limited Partnerships

Published August 2013
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The essentials

  • A Master Limited Partnership (MLP) is a business structure that is taxed as a partnership but has the ability to issue stock ownership interests much like a corporation.
  • Federal legislation has boosted market capitalization investments in MLPs from $2 billion in 1994 to ~$480 billion in 2013.
  • The MLP Parity Act (introduced to the House and Senate on April 24, 2013) proposes to expand MLP eligibility to the renewable energy.

Renewable Energy Credits in Arizona

Published July 2013
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The essentials

  • In the U.S., when electricity is generated by a renewable energy source, two products are created: electricity and a Renewable Energy Credit (REC).
  • In Arizona, a Renewable Energy Credit (REC) represents the non-power attributes of a kilowatt hour of electricity from renewable energy. These attributes include renewable benefits (such as hedging against fossil fuel price increases) and environmental benefits (such as avoided pollutants).
  • The Arizona Corporation Commission requires regulated utilities to demonstrate their compliance with the Renewable Energy Standard and Tariff (REST) by obtaining RECs.
  • RECs can be bundled or unbundled, and traded, bought or sold in markets such as the Western Renewable Energy Generation Information System (WREGIS).

 

 

 

Arizona's Solar Rights Law

Published July 2013
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The essentials

  • Arizona law bars Homeowners’ Associations (HOAs) from “effectively prohibiting” the installation or use of a solar energy device (SED) within their jurisdiction.
  • Some “reasonable” restrictions on the placement of solar energy devices are allowed, but they must not “adversely affect” cost and efficiency. Whether a restriction or reasonable or adversely affects cost and efficiency is decided on a case-by-case in the courts.
  • Arizona is one of 22 states with solar rights laws. Arizona has a relatively stringent policy supporting homeowner’s solar rights, although some states are more stringent and much more explicit about the types of restrictions HOAs can impose on homeowners.

The Federal Wind Energy Production Tax Credit: How will it affect the wind industry's development in the coming years?

Published June 2013
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The essentials

  • In January of 2013, U.S. Congress approved a one year extension of the Production Tax Credit (PTC) for Wind Power in the American Taxpayer Relief Act, as a part of the “fiscal cliff” budget negotiations. The Wind Power PTC currently expires on January 1, 2014.
  • The PTC provides temporary support for the development of wind power by providing a 2.2cents/kWh subsidy for wind power produced over the wind farm’s first 10 years of operation, starting when construction begins.
  • Wind facility construction must begin before January 1, 2014 in order to qualify. Residential wind power production is exempt from the tax credit.
  • Of all new generating capacity installed from 2007-2011, 35% was wind power.  In 2012, the percentage grew to 44%. (AWEA).

The SunZia Project and Rapid Response Team for Transmission brief

Published June 2013
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The essentials

  • The SunZia high-voltage transmission line project will span 500 miles over a portion of public land managed by the Bureau of Land Management (BLM), originating in NM and terminating in AZ.
  • It is proposed by the SunZia Transmission LLC that the 500 kV line will provide increased transmission capacity for renewable energy projects.
  • The Bureau of Land Management (BLM) identified a preferred route for the SunZia line that partly passes close to the U.S. military’s White Sands Missile Range (WSMR).
  • U.S. military officials oppose this preferred route and consider it a threat to national security.
  • In October 2011, the Obama Administration designated the SunZia Project for accelerated permitting and construction through the Rapid Response Team for Transmission (RRTT) to encourage greater coordination between federal agencies.

Solar Phoenix 1 & 2: Solar Rooftop Financing

Published May 2013
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The essentials

  • Solar Phoenix 1 & 2 are a series of city-sponsored residential solar financing programs.
  • The Solar Phoenix program is a federally-recognized public-private partnership that allows Phoenix home owners to finance solar panels through leasing at low or no upfront costs.
  • The National Bank of Arizona funded both Solar Phoenix 1 & 2 with $25 million to initiate the program. The City of Phoenix partnered with Solar City for the first iteration and currently partners with Paramount Solar to provide panels, installation services, and maintenance.
  • The leased solar panels are expected to generate sixty to eighty percent of a residence’s power demand.