Amid the economic downturn ensuing from the pandemic, state utility regulators are faced with the challenging task of protecting customers from power shutoffs while also considering costs incurred by utilities. A growing number of state commissions are directing utilities to establish a regulatory asset account to capture and track COVID-19-related incremental costs.
The volatile situation created by the COVID-19 spread has prompted state utility commissions to respond with new directives and guidance on a number of proceedings. Regulators have responded with various measures, including suspending service disconnections, transitioning to virtual meetings, and delaying rate cases.
In just the last three months, almost a dozen states have advanced measures to ramp up support for electric vehicles (EVs), reflecting the important role of transportation electrification in achieving clean energy goals. However, transportation electrification, similar to other clean energy sectors, faces uncertainty due to the COVID-19 pandemic and the rollback of federal fuel economy standards.
Offshore wind energy, which is key to realize the clean energy transition in several East Coast states, is faced with tough challenges as the COVID-19 pandemic disrupts the global supply chain, affecting project timelines. Delays have the potential to threaten power purchase contracts and federal tax credits that are crucial for project economics.
The Regional Greenhouse Gas Initiative (RGGI) expanded from nine to ten member states with New Jersey’s re-entry after almost a decade. Virginia’s Clean Economy Act sets the state to link with the compact in 2021, and Pennsylvania is drafting regulations in accordance with a 2019 executive order that commits the state to join the compact.
Virginia has become the first state in the South to begin a clean energy transition with the passage of a sweeping energy bill that sets the state on the path to carbon-free power by 2050. The law replaces the voluntary renewable energy portfolio program with a mandatory standard, and paves the way for an enormous expansion of wind and solar power, energy storage, and energy efficiency.
A growing number of cities across the U.S. are moving toward electrifying their building sectors and banning natural gas use. The Northern California city of Berkeley passed the first such ban, initiating a wave of similar ordinances as a means to reduce carbon emissions. The movement prompted Arizona to enact the first state law preventing local bans on natural gas, and several other states to introduce bills with similar language.
Utility-scale solar is growing at a remarkable pace driven by declining costs, state clean energy commitments, retirement of fossil-fueled generation, and utility decarbonization goals. The industry is poised to add about 13.5 gigawatts of new projects this year, outpacing the previous annual record of 8 GW set in 2016, according to the U.S. Energy Information Administration.
Utility regulators are expanding resource planning requirements as a growing number of utilities are proposing early closure of coal plants, in addition to investing more in solar, wind and battery storage. Long-term resource plans are evolving to consider a host of emerging issues ranging from equity assessments and avoided costs, to reflecting the cost of carbon, as utilities seek to balance flexibility and reliability.
Electric utilities and regulators across the U.S are increasingly considering time-varying rates as a means to reduce peak energy demand, utilize smart meter investments, and balance the grid amid the proliferation of distributed energy resources, including electric vehicles. Rate design that works in concert with the innovations in clean energy technology is critical to modernize the distribution grid.
Retail electric choice has garnered increased attention as more states are weighing the prospects of opening their electricity markets to retail competition. In states with retail choice programs, regulators continue to strengthen oversight, in a bid to ensure customer protection and satisfactory service from competitive suppliers. Recent actions range from Arizona regulators’ efforts to implement customer choice, to New York’s strengthening oversight of energy marketers, and the Florida Supreme Court’s rejecting an energy choice ballot initiative.
Utilities across North America are investing billions of dollars to decarbonize their power fleets to comply with unprecedented greenhouse gas emission cuts and bold renewable energy targets. The pivot to cleaner and greener power sources is reflected in the integrated resource plans and RFPs that utilities file with state commissions. Keep on top of the…...