Stoel Rives - Renewable + Law

State legislatures across the country have been active this spring debating ambitious new targets and renewable energy market reforms, following the successful passage of multiple renewable energy mandates in certain states. Last year California passed SB 100, which sets the target of 100% carbon-free electricity by 2045.  At least other three states—Hawaii, New Mexico, and Washington—have also adopted 100% renewable energy targets and, according to Inside Climate News, several other states debated 100% renewable energy legislation this spring including Minnesota, Illinois, Nevada, Maine, and Massachusetts.

Like other states adopting renewable energy mandates, the Washington legislature specifically concluded “that Washington must address the impacts of climate change by leading the transition to a clean energy economy … by transforming its energy supply.”  To support this goal, the Act mandates 100% renewable electricity generation by 2045.  To help achieve this, section six of the Washington law mandates that utilities must file a “four-year clean energy implementation plan” by 2022 and every four years after that.  Each action plan must include “specific actions to be taken by investor-owned utility[ies] over the next four years … that demonstrate progress toward meeting the standards … of [the] act.”  By requiring the utilities to provide relatively frequent updates, the Washington legislature appears to indicate a desire for strong oversight of the transition to 100% renewable electricity generation.

In other states, such as Minnesota, 100% carbon-free targets were the subject of substantial attention and debate but were not ultimately adopted.  The Minnesota legislature ultimately passed a jobs and energy omnibus bill in a special session this year with more limited ambition—including provisions for energy storage pilot programs, which will allow public utilities to pursue and recover costs for such programs.  The pilot program petitions, at a minimum, must provide: (1) the storage technology utilized; (2) the energy storage capacity and the duration of the output at the capacity; (3) the proposed location; (4) the cost of purchase and installation; (5) the interplay between the storage facility and existing distributed generation resources; and (6) the overall goals of the project. 

Other states focused less on ambitious new mandates, but nonetheless took legislative steps this year to support integration of additional renewable energy.  During the recent legislative session, South Carolina passed H.3659 (the “Energy Freedom Act” or the “Act”), which should promote increased solar development in the state.  The Act easily made its way through the legislature with bipartisan support, and it was quickly signed by South Carolina’s governor, Henry McMaster (R).  According to the Solar Energy Industries Association (“SEIA”), the Act was a response to declining solar installation in the state in 2018 and a desire to combat increasing electric rates while simultaneously adding new employment opportunities.

The legislation makes several meaningful reforms.  First, the Act requires the South Carolina Public Service Commission (the “Commission”) to initiate a new proceeding to review and approve rates and terms provided to qualifying power production facilities, ensuring contract terms are reasonable for such projects.  The Commission is expected to initiate these proceedings within six months of the effective date of the Act, and at least once every two years after the initial proceeding.  Second, the Act allows large consumers to work directly with renewable suppliers to take advantage of solar cost savings.  This is permitted through the use of participating customer agreements allowing eligible customers to bundle their demand under a single agreement.  Third, the Act significantly reforms net metering by extending the existing residential solar rates for two years, at which point the Commission will create a successor program.  The program will specifically work to develop a methodology to compensate customer-generators for the benefits provided by their generation to the power system.  Fourth, the Act creates more transparency and competition for long-term utility resource and generation planning by specifically requiring forecasts analyzing the adoption of renewable energy as well as demand-side resources.  Finally, the Act grants the Commission authority to establish a new community solar program to potentially expand access to solar to multiple consumer groups.  With the passage of the Energy Freedom Act, South Carolina appears to be open for expanded solar development with a range of new options for both developers and consumers.

While each state is moving at its own pace, there was clear momentum across the country this year toward expanded renewable energy policy.

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