New LPDD Model Laws
Since the last monthly update, the LPDD team has published a new model law provision on local employment and a legal memorandum regarding the statutory definitions of public utilities. They are described below:
- LPDD Model State Provision to Promote Local Employment in Decarbonization Policies: This Model Provision provides a regulatory framework to use decarbonization policy to promote local employment without resorting to protectionist measures that run afoul of international trade rules. A key goal of the Model Provision is to help secure public support and private investment in a “just transition” to a zero-carbon economy through evidence-based policies that facilitate a virtuous circle of cost reduction, economic growth, and the creation of local, decent jobs. Protectionist measures known as Local Content Rules (LCRs) have been prohibited under World Trade Organization Rules. Alternatives to prohibited LCRs, however, include government policies to create a long-term, competitive, market-driven local industry through research and development support programs, training programs, infrastructure investment, and demand-side instruments (such as feed-in-tariffs, auctions, and tax incentives) to increase domestic demand. The Model Provision seeks to advance these strategies. It is adapted from New York’s Climate Leadership and Community Protection Act of 2019.
- LPDD Memorandum on State Statutory Definitions of Public Utilities: This memorandum sets forth the statutory definitions of “public utility” currently in use in the 50 states and the District of Columbia. The document is designed to assist legislators and others as they seek to incorporate grid edge projects utilizing renewable sources of energy within their state policy. Today, the electricity market is undergoing profound changes in how power is generated, transmitted, and sold, and how each state defines “public utilities” is an important factor impacting how customers and third party suppliers are regulated. This factor is often a determinant of which resources at the grid’s edge can, and cannot, sell power to end users. This memorandum addresses how the term “public utility” (or its equivalent) is currently defined in each of the 50 states and the District of Columbia and will hopefully provide a ”first cut” for those seeking to develop grid edge projects. It comprises the first step in a broader effort to draft model legislation and regulations that particular states could adopt to best adjust their existing regulatory structure to further their decarbonization efforts, all while helping them achieve energy rights — including energy justice — for all their citizens and the communities in which they reside.
New External Resources
LPDD.org is being continually updated with new, external legal resources. Below is a selection of recently added resources of special interest, notably featuring a number of high profile laws passed in Colorado in the last month.
- Nevada’s Transportation Electrification and Transmission Legislation: In June, Nevada Legislature passed SB448 to invest $100 million in transportation electrification and direct transmission providers to join a Regional Transmission Organization (RTO) by 2030. On the resource planning front, the legislation requires utilities to prepare resource plans that facilitate the state meeting its renewable portfolio standard and GHG reduction goals, and support the development of regional transmission interconnections in anticipation of the requirement that utilities join a Regional Transmission Organization by 2030. On transportation electrification, the bill creates a long-term transportation electrification planning process and specifies near term investment of $100 million into 5 programs: 1) An Interstate Corridor Charging Depot Program; 2) An Urban Charging Depot Program; 3) A Public Agency Electric Vehicle Charging Program; 4) A Transit, School Bus, and Transportation Electrification Custom Program; and 5) An Outdoor Recreation and Tourism Program. This plan must include proposed rate changes, and requires that not less than 40% of the total program expenditures must be dedicated to investments made in, or for the benefit of, historically underserved communities …. On a related note, in June, Nevada’s Governor signed AB 383, which requires the Director of the Office of Energy to adopt regulations establishing minimum standards of energy efficiency for certain appliances — including electric vehicle supply equipment.
- Colorado’s Transmission Planning Legislation: In June, Colorado’s SB 72 passed both houses of the state legislature. The bill focuses on regional transmission planning, which can contribute to successfully developing the transmission network required to support increasing densities of utility scale renewables on the grid. Colorado SB72 creates the Colorado Electric Transmission Authority (CETA) and also requires state utilities to join an RTO by 2030, unless the PUC finds it is not in the public interest or a utility cannot find one to join. CETA has the authority to: issue revenue bonds, identify and establish intrastate electric transmission corridors, coordinate with other entities to establish interstate electric transmission corridors, exercise the power of eminent domain to acquire eligible facilities, and collect payments of reasonable rates, fees, interest, or other charges from persons using eligible facilities. Further, the bill directs the Colorado PUC to approve utilities’ applications for constructing or expanding transmission facilities within 240 days, or the application will be automatically approved.
- Colorado’s Clean Building Legislation: In May and June, Colorado’s legislature passed a suite of bills targeting clean buildings. In June, SB 264 passed both houses of Colorado’s legislature. The bill requires gas distribution companies to promote clean heat resources to meet the following targets: a 4% reduction below 2015 GHG emission levels by 2025 and 22% below 2015 GHG emission levels by 2030. Plans must be submitted to the Public Utility Commission, which may approve up to a 2.5% of sales cost cap to achieve them …. Also in June, Colorado’s legislature approved SB 246, which directs the PUC to establish energy savings targets and approve plans under which investor-owned electric utilities will promote the use of energy-efficient electric equipment in place of less efficient fossil-fuel-based systems — that is, beneficial electrification. This directive would substantially follow the model of existing demand-side management policies already established at the Colorado PUC …. HB 1238 incentivizes further reductions in natural gas use by requiring that the calculation of future Demand Side Management benefits reflects the avoided costs to ratepayers resulting from reduced consumption of natural gas …. And finally, Colorado becomes one of the first jurisdictions in the country (and the second state, following Washington) to establish Building Energy Performance Standards. HB 1286 establishes Building Energy Performance Standards for certain large buildings in Colorado, administrative and reporting requirements, and imposes penalties for violations.
- Minnesota’s HF 164: In May, Minnesota adopted this legislation heightening the efficiency standards required of state utilities, from 1.5% to 2.5% of annual retail energy sales of electricity and natural gas, bringing the state into line with some of the more ambitious targets in the country. The legislation also encourages utilities to offer customer load management programs, and establishes efficiency planning and reporting requirements.
- Hawaii’s Performance-Based Ratemaking Proceeding Advances: Performance-Based Ratemaking is a process by which utilities are incentivized not by dollars of sales, but by financial incentives for hitting certain efficiency, energy, market, or social metrics. Following a proceeding established in 2018, and in direct response to a December 2020 Order, in May the Hawaii Public Utilities Commission established a suite of Performance-Based Ratemaking mechanisms for the state’s utilities. These include an Interconnection Approval performance incentive mechanism (PIM), which incentivizes faster interconnection timelines for small-scale solar and storage systems, and an Low- and Moderate-Income (LMI) Energy Efficiency PIM, which incentivizes increased collaboration between the utility and the energy efficiency program administrator to provide LMI customers with opportunities to better manage their energy consumption. The Commission also approved an Advanced Metering Infrastructure Utilization PIM, which incentivizes the utility to harness the opportunities offered by advanced meters to begin providing immediate customer benefits. Hawaii remains one of the states at the vanguard of the national movement towards Performance-Based Ratemaking.
- Proposed California EV Charger Deployment Rules: Facing a potential gap in the number of installed electric vehicle chargers needed to meet the state’s clean transportation goals, the California Public Utilities Commission recently released proposed rules to guide near-term priorities for utilities investing in charging infrastructure. The proposed decision offers state utilities more flexibility in what infrastructure they can deploy before 2025 and provides for a streamlined application process. The PUC also laid out principles the utilities should follow to ensure equity in their EV infrastructure rollout, including a requirement that utilities target at least 50% of their infrastructure or expenditure for customers in underserved communities.
- North Carolina EO on Offshore Wind: A June 2021 Executive Order from North Carolina’s Governor set the state’s first-ever offshore wind target, calling for as much as 8 gigawatts of wind to be built off the coast of the State by 2040. The executive order highlights the economic and environmental benefits of offshore wind and directs actions to help North Carolina secure jobs and economic development over the next 15 years.
- Maine’s Divestment Legislation: While New York and Minnesota have adopted divestment policies by other means, Maine recently became the first state in the nation to order state divestment from fossil fuel companies via legislation, with a directive to complete the divestment process by January 1, 2026.
- Connecticut Public Act 21-53: In June, Connecticut passed legislation establishing a goal of deploying 1,000 MW of energy storage by the end of 2030, making Connecticut the eighth state to set such an energy storage target.
- A Program for Economic Recovery and Clean Energy Transition in California: This June study from the Political Economy Research Institute presents a recovery program for California that targets economic growth and ecological sustainability. The study incorporates emissions targets that have been already established for the state through Executive Orders, and projects an increase of over 1 million jobs in the state through investment programs in energy efficiency, clean renewable energy, public infrastructure, land restoration and agriculture. The report also develops a just transition program for workers and communities in California that are currently dependent on the state’s fossil fuel industries for their livelihoods. We add it to the list of LPDD resources tracking green recovery and just transition proposals.
- Report, Seeding Capital: This June report from Berkeley Law, UCLA Law, and Bank of America proposes policies to drive investment in negative emissions from land-use, improvement of natural carbon sinks, and agricultural sector emissions reductions, among other nature-based solutions.
On July 22 at 10 AM EST, we’ll be excited to join the Atlanta Regional Commission in a webinar for local governments looking to cut carbon emissions. We’ll be discussing the LPDD project with an eye towards the many resources that LPDD.org offers for local and regional governments. Join us to learn more!
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