Academic journal article Energy Law Journal

Report of the State Commission Practice Committee

Academic journal article Energy Law Journal

Report of the State Commission Practice Committee

Article excerpt

This report summarizes significant state developments in the utility industry from July 2018 through June 2019.·

I.California

A.The 100 Percent Clean Energy Act of 2018

On September 10, 2018, California Governor, Jerry Brown, signed into law The 100 Percent Clean Energy Act of 2018, which "declares that the Public Utilities Commission, State Energy Resources Conservation and Development Commission, and State Air Resources Board should plan for 100 percent of total retail sales of electricity in California to come from eligible renewable energy resources and zero-carbon resources by December 31, 2045."1 In addition to adopting a statewide policy of planning for 100% of California's retail sales "to come from eligible renewable energy resources and zero-carbon resources by December 31, 2045," the 100 Percent Clean Energy Act also amends the state's prior Renewables Energy Standard (RPS).2

California's prior RPS set a target of 50% renewable electricity by 2030.3 As amended by The 100 Percent Clean Energy Act, the state's RPS sets more aggressive targets that must be achieved on a shorter timeline.4 Specifically, The 100 Percent Clean Energy Plan accelerates the previously applicable 50% renewable electricity target from 2030 to December 31, 2026, and also sets an additional interim target of 60% renewable electricity by December 31, 2030.5

Unlike the RPS targets that must be reached using "eligible renewable resources" (i.e., power derived from wind, solar, small hydroelectric, and geothermal resources), California drafted the 100% by 2045 portion of its new legislation to be "technology neutral-if an energy generation resource does not produce greenhouse gas emissions, it would be eligible to meet the 100% renewable and zero-carbon target."6

II.Connecticut

A.Zero Carbon Resources

On December 5, 2018, the Connecticut Public Utilities Regulatory Authority (PURA) issued an Interim Decision that found Dominion Energy Nuclear Connecticut, Inc.'s (Dominion), Millstone Nuclear Power Station (Millstone) is "at risk of retirement" as early as 2023.7 To avoid a premature retirement of Millstone, the Interim Decision authorized the facility to compete in Connecticut's "zero emission" state energy auctions for long-term power purchase agreements that are otherwise reserved for renewable energy sources like wind and so lar.8 Subsequently, the Connecticut Department of Energy and Environmental Protection (DEEP) selected the bid submitted by Millstone to supply a portion of the state's capacity requirements under the terms of a ten-year power purchase agreement.9 The long-term power purchase agreement for Millstone should provide sufficient revenue to avoid premature shutdown of the nuclear facility at least through 2023.10 The Millstone power purchase contract remains subject to review and approval by PURA.11

B. Effects of the 2017 Tax Cuts and Jobs Act

On January 23, 2019, PURA issued a Decision determining "the appropriate accounting and rate treatments for" the reductions in "federal corporate income tax" expense of regulated utilities resulting from the Tax Cuts and Jobs Act of 2017 (Tax Act).12 Specifically, PURA concluded that Connecticut's regulated utilities-electric distribution companies, local gas distribution companies, and regulated water companies-would "address the effects of the Tax Act in their rates effective [] January 1, 2018."13 PURA tailored the specific method of "addressing the Tax Act to each" regulated utility based on factors particular to each utility.14 For example, utilities operating under formula rates are generally not required to file adjustments to their cost of service as a result of changes in tax rates, because the formula that produces their rates automatically adjusts to incorporate the applicable tax rate at any given date.15

C. Offshore Wind Procurement

On June 7, 2019, the Governor of Connecticut approved Public Act No. 1971, "An Act Concerning the Procurement of Energy Derived from Offshore Wind. …

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