More US States Cooking Up Renewable Energy Incentives

Wisconsin Governor Jim Doyle’s Task Force on Global Warming has called for implementation of Advanced Renewable Tariffs to encourage the development of the state’s renewable energy resources.

The recommendation is contained in a massive new report on how Wisconsin can reduce its emissions of global warming gases. The call for Advanced Renewable Tariffs, or renewable energy payments, is but one of many measures recommended.

However, the recommendation is the first time that an advisory committee to a U.S. governor has formally endorsed the policy common in continental Europe. It follows on the California Energy Commission’s proposal of feed-in tariffs (FITs) as a remedy for the failures of the state’s Renewable Portfolio Standard (RPS), and premier Gordon Campbell’s call for feed-in tariffs in the Canadian province of British Columbia.

The action is another sign of growing acceptance of the policy mechanism that has fueled the rapid growth of Germany and Spain’s renewable energy industry.

Implicit in the task force’s recommendation is that Wisconsin’s Public Service Commission (PSC WI) has the authority to establish feed-in tariffs without specific enabling legislation. The PSC WI has already initiated a proceeding that may explore how to design the program.

Support for inclusion of the recommendation in the Task Force’s report came from RENEW Wisconsin and Clean Wisconsin. RENEW Wisconsin was the first non-governmental organization in the U.S. to propose a policy of Advanced Renewable Tariffs when it filed testimony with the Wisconsin PSC in the fall of 2006. At the time, RENEW Wisconsin’s Michael Vickerman argued that renewable tariffs should be based on the cost of generation. His filing was a significant departure from the position of most American NGOs involved in renewable energy rate cases, putting RENEW in line with its Canadian and continental European colleagues.

Governor Doyle’s task force accepted this reasoning and specifically recommends “that these advanced renewable tariffs should be based upon the specific production costs of each particular generation technology, include a return comparable to the utilities’ allowed returns, and be fixed over a period of time that allows for full recovery of capital costs.”

Projects developed under Wisconsin’s proposed renewable tariff program will be limited to 15 megawatts (MW).

The task force “recognized that Advanced Renewable Tariffs would likely result in increased costs per unit of electrical output compared to utility-scale renewable projects, but that these costs are justified by the economic and environmental advantages from encouraging distributed small-scale generation.”

South Carolina Enacts Net Metering

In related news, last month a decision by the South Carolina Public Service Commission (PSC SC) came to fruition as net metering for solar energy began in the state. The ruling came after the commission began hearings on subject in 2005. This new PSC SC ruling applies to all investor-owned utilities including Duke Energy, Progress Energy and South Carolina Electric and Gas, it also makes South Carolina the 43rd state to have a net-metering policy.

“This is significant for South Carolina. With rising energy costs, net metering can further reduce solar customers’ energy bills by up to 30 percent because those systems can feed more energy into the grid than they could keep in batteries,” said Bruce Wood, founder and CEO of South Carolina-based Sunstore Solar, a solar installation company.

“I see this giving customers much more of a choice. Previously you had to get into systems that were pretty complex. Using net metering you can put up a system that is pretty straightforward and simple.”

Opponents of the South Carolina PSC’s decision voiced concerns about increased rates and safety issues as a result of net metering, however according to Freeing the Grid, a report by the Network for New Energy Choices, there is no evidence that net metering has ever increased utility rates in any state or that an accident has occurred as a result of net-metered renewable energy systems.

“Obviously we’re very pleased that there are more renewable energy options available in South Carolina. It is still in its early stages but we’re encouraged by the response from the utilities and from the public,” said Elwood Hamilton, public information coordinator for the South Carolina Energy Office.

“In short, while we recognize that we cannot devise a net-metering plan that will satisfy everyone, we believe that it is time to implement net metering, with an eye toward a further evaluation of the efficacy of its use once it has been in place for a period of time,” the South Carolina PSC wrote in its directive to utilities.

The decision was also made that, for a 12-month trial period, the state will allow different utilities to enact their own versions of net metering. Some of these versions include net billing, dual metering and smart metering.

Currently in South Carolina each utility has proposed its own form of net metering. All plans set a system cap of 20 kW for residential systems and 100 kW for non-residential systems. The state-owned utility, Santee Cooper is using the net billing model. Net billing is very similar to traditional net metering, but the kilowatt-hour (kWh) value is based on the time of day the customer-produced electricity is sold to the grid thereby giving a value to the time the energy is produced.

Duke Energy, Progress Energy and SCE&G are currently offering a time-of-use and a small customer generator option for customers. Under the time of use plan electricity that is produced by a customer’s system serves their electric loads first with any excess electricity that is produced automatically delivered to the grid. The electricity delivered to the grid is “banked” against the customer’s bill and any excess is carried over to the next month. Under the small customer generator plan the customer’s bill is credited for the energy sold into the grid rather than having the money “banked.”

According to Patricia Freshwater, public affairs coordinator for SCE&G, the public has shown a fair amount of interest in the company’s net metering program in the first month.

“During our first month of the program we had 60 inquiries, two customers have signed up and four or five more are in the process. It takes time to establish a program like this, but we’re very optimistic about the future of the program,” Freshwater said. 

New York Expands Net Metering and Green Building Legislation

Also in the news last week, New York Governor David Paterson signed a legislative package on August 5 that could encourage people throughout the state to install grid-connected solar and wind power systems, systems that generate power from farm wastes and “green” roofs. Most of the bills relate to net metering. Senate Bill 7171 expands net metering to include non-residential solar power systems up to 2 megawatts (MW) in capacity, or equal in size to the customer’s peak load, whichever is less, and increases the maximum solar power system size for residential customers to 25 kilowatts (kW), up from 10 kW.

The bill also attempted to increase the limit for farm-based anaerobic digesters from 400 kW to 1 MW, but a separate bill, S. 8415, knocked the limit down to 500 kW. S. 7171 also requires each utility to develop a model contract and reasonable rates, terms and conditions for net metering of non-residential customers, and to develop safety standards for interconnecting these customers. It also includes a requirement for an external disconnect switch, which is rarely needed for modern grid connection equipment.

Senate Bill 8481 applies similar changes to net-metered wind power generators, allowing farms to net meter wind turbines as large as 500 kW, up from 25 kW, and expanding net metering of wind turbines to include non-residential customers, who can net meter wind turbines as large as 2 MW or the customer’s peak load, whichever is less.

Two additional bills relate to tax abatements for buildings in New York City with solar power systems and green roofs. S. 8145 creates a four-year real property tax abatement of up to US $62,500 per year for buildings owners that install solar power systems, with a greater tax abatement available for systems installed before 2011, and a lesser tax abatement for systems installed in 2011 or 2012. S. 7553 creates a similar tax abatement for buildings that install green roofs, which are rooftops covered with vegetation. The one-year tax abatement applies to buildings that cover at least half of their rooftop space with vegetation and is equal to US $4.50 per square foot of green roof, up to the tax liability on the building or US $100,000, whichever is less. The green roof tax abatement is in effect from 2009 through 2013. Both laws apply only to properties located in cities with populations of one million or more, which limits them to New York City.


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