How Can Your State Get an “A” Community Power Score?

Date: 20 Feb 2020 | posted in: Energy, Energy Self Reliant States | 0 Facebooktwitterredditmail

ILSR’s Community Power Scorecard highlights which states, like Massachusetts, give communities the most power to advance clean energy and which, like Louisiana, are relentless barriers to local economic development through renewable power. What policies make Massachusetts a champion? The following sections walk through models of the best policies in each of the nine areas covered in the Community Power Scorecard.

Net Metering

Net metering establishes rules and compensation for individuals and businesses who produce their own electricity on-site. The best net metering rules can be found in the Interstate Renewable Energy Council’s (IREC’s) model net metering rules with two small modifications:

  • Add “reasonable” as a qualifier for any fixed charges that will not be able to be offset by on-site power generation
  • Require excess credits not used when a customer terminates service to be gifted to the state’s low-income assistance program

Interconnection Rules

The Interstate Renewable Energy Council releases model interconnection rules every few years. We link to their 2019 model procedures, which include updates on energy storage as well as detailed procedures for screening and project review.

Solar or Distributed Energy Resource Carve Out

Several states support more diverse ownership of renewable energy by carving out support for solar energy or distributed generation, or both. The policies allow a variety of individuals, businesses, and communities to reap the financial rewards of clean energy. Several state policies provide good models.

Minnesota’s solar energy standard requires investor-owned utilities to procure 1.5 percent of their electricity sales from solar resources by 2020, with a special incentive for projects 20 kilowatts and smaller. The policy is in addition to the state’s renewable energy standard requiring 25 percent renewable energy by 2025.

New Jersey’s renewable energy standard requires utilities to provide 50 percent renewable energy by 2030, with a carve out for solar energy. The solar carve out is unique among states because the percentage required from solar starts at 5.1 percent in 2021 but declines to 2.2 percent by 2030, even as the total amount of solar required rises along with the renewable energy standard.

Arizona’s renewable energy standard carves out 30 percent of the state’s renewable energy standard (15 percent by 2025) for distributed generation (almost entirely solar). The capacity requirement is split, with half to come from residential customers, half from non-residential customers. The policy also included bonuses to the utility’s compliance certificates if the projects were installed prior to 2005 or used in-state manufactured equipment.

The newest solar carve out policy comes from Maryland, where the 50 percent renewable energy standard requires about one-third of the energy procured (14.5 percent) to come from solar. In a useful twist, compliance payments for utilities missing the targets will specifically support solar projects that directly benefit or are owned by low-income residents.

Shared Renewables

New Mexico’s proposed community solar law has the best mix of policies to create a robust community solar market, and it’s largely based on Minnesota’s successful model. Key components include:

  • No cap on program capacity
  • Tangible financial benefits that should save participants money
  • Non-utility ownership options
  • Targeted incentives to low-income participants
  • Projects large enough to capture economies of scale

Community Choice Aggregation

California’s community choice aggregation law outstrips other states’ by a wide margin.

From LEANEnergyUS, here are some key provisions in three key bills:

  • AB 117 (2002) established Community Choice in California; key provisions:
    • Ability to take over energy efficiency programs from the utility: “may apply to become administrators for cost-effective energy efficiency and conservation programs”
    • Ability to aggregate multiple units of government: “Any group of cities, counties, or cities and counties whose governing boards have elected to combine the loads of their programs, through the formation of a joint powers agency”
    • Customers are enrolled automatically with the community choice program, but may opt out: “If no negative declaration is made by a customer, that customer shall be served through the community choice aggregation program”
  • SB 790 (2011) was passed in response to efforts by Pacific Gas & Electric, in particular 2010’s Proposition 16, to stop the growth of CCAs. It created a code of conduct that utilities must adhere to.  In essence, it prohibited utilities from marketing against CCAs except through a separate marketing division separated by a “firewall” from the other operations of the utility.  The first such marketing entity was established in late 2016 by Sempra Energy, the corporate parent of San Diego Gas and Electric.
  • AB 1110 (2016) established a framework for disclosing GHG emissions that will apply to CCAs.

Property Assessed Clean Energy

Vote Solar and Renewable Funding provide model components for PACE enabling legislation, courtesy of PACENation. For model bill language, check out California’s original AB 811 (2007) and most subsequent amendments. It’s performance is impressive: “To date the program has sponsored 220,000 home upgrades, 58 percent of which focused on energy efficiency and 37 percent of which involved renewable energy.” However, the most recent changes (2017, AB 1284) have resulted in a sharp drop-off in participation. Read more on the balance between consumer protection and program efficacy.

Residential Energy Building Code

Massachusetts has one of the most widely adopted “stretch” building energy codes. A stretch code is a second state-approved building energy code more stringent that the default baseline policy that cities can opt into. This is a plain English explainer of the Massachusetts stretch code; and a more thorough one from the state highlighting a key difference –– the standard building code is prescriptive, e.g. use 30 inches of insulation in an attic –– whereas the stretch code is based on actual energy performance of the building. In general, the stretch code results in lower overall costs of building ownership and operation. This website has more information on Massachusetts building codes; the state is also considering a net zero energy stretch code.

Utility Franchise Authority

The best state policy or code on utility franchise authority is one that that gives cities the power to negotiate their own utility franchise contracts AND asses franchise fees. Thanks to state policies in Minnesota and Colorado, Minneapolis and Denver have used their franchise negotiating power to create clean energy partnerships. Their resulting franchise fees, which are assessed on utility bills, fund a substantial portion of the cities’ climate and energy efforts.

Preemption of Local Gas Bans

Unlike the other policies in the scorecard, the best policy on the preemption of local gas bans is having no policy at all. States are passing these “bans on gas bans” to preempt local choice over connecting new buildings to gas infrastructure.

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Featured photo credit: National Renewable Energy Lab via Flickr (CC BY-NC-ND 2.0)

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John Farrell

John Farrell directs the Energy Democracy initiative at the Institute for Local Self-Reliance and he develops tools that allow communities to take charge of their energy future, and pursue the maximum economic benefits of the transition to 100% renewable power.