ALEC drafting model resolutions that target carbon rules, solar

Source: Hannah Northey and Jean Chemnick, E&E reporters • Posted: Thursday, December 5, 2013

A right-leaning group of state legislators is targeting U.S. EPA’s forthcoming rules for power plants’ carbon dioxide emissions and backing utilities’ call for users of rooftop solar panels to pay for using the electric grid, during a three-day summit in Washington, D.C.

The American Legislative Exchange Council’s (ALEC) gathering started yesterday with a closed-door discussion of a draft resolution the group hopes to put before legislatures, aimed at decrying EPA emission curbs for new and existing power plants.

ALEC’s Energy and Environment Subcommittee also weighed a second resolution with which states would urge EPA to revise its future power plant proposal to allow new coal-fired power plants to be built without carbon capture and storage technology, according to a copy of the language obtained by E&E Daily.

John Eick, an ALEC policy analyst, called it “a discussion-based meeting to generate ideas for how states can engage with EPA on the issue of greenhouse gas regulation.”

“We heard from legislators, private-sector members, a utility regulator and a representative from a state natural resources department,” he said.

The group will vote on the model policies tomorrow morning.

While EPA would play the leading role in setting restrictions on new power plant emissions, Section 111(d) of the Clean Air Act gives states a hefty say in how rules for existing plants are written and implemented. Due to propose a guidance on the rule by June, EPA is still collecting comments on it.

ALEC’s draft resolution — which is meant to be adopted by state legislatures — calls on EPA to base the guidance on a state’s current fuel mix, “cost effective emission reductions using the best system of emission reduction adequately demonstrated for the affected facility,” and other criteria.

It also proposes that federal agencies fund a smaller sampling of CCS technologies in the hope of improving the odds that the investment will help reduce costs.

The resolutions would lack the force of law but are intended to put political pressure on EPA as it promulgates the rules, emphasizing that carbon restrictions would increase electricity costs and harm consumers.

Aliya Haq of the Natural Resources Defense Council expressed concern about ALEC’s work being done behind closed doors with no disclosure of who is writing the resolutions or what lawmakers are being approached about it.

“There really is a lack of transparency in how they’re operating, and that allows various corporate polluters to get their language past state legislatures,” she said.

While environmental groups write legislative proposals with the hope of influencing policy, they take credit for their work, she said. She pointed to NRDC’s staff-written proposal released last year to provide guidance for EPA in crafting its existing power plant rule.


ALEC is also backing utilities’ call for owners of rooftop solar panels and other “distributed generation” systems to pay for using the electric grid — an effort that has drawn the ire of the solar industry in Sun Belt states

Specifically, the group is calling for updates of net metering policies to require entities that use the grid to pay maintenance fees, according to a draft resolution obtained by E&E Daily.

The draft proposes the creation of a “fixed grid charge” or other rate mechanisms to recover grid-maintenance costs, while ensuring that rates are fair and affordable for all customers.

In October, the Institute of the Edison Foundation released a report showing that when rooftop solar owners use less electricity from power companies — and therefore pay lower utility bills — other power customers are forced to pay higher fixed costs to ensure system reliability (Greenwire, Oct. 2).

Utilities are spreading the message that customers using solar panels should be forced to pay for services provided by grid operators and power companies, such as balancing supply and demand, reselling excess power and repairing equipment.

But advocates of solar power and distributed generation have accused EEI of oversimplifying a complex issue and say utilities are afraid of losing money in a shifting energy marketplace. They also say the utility sector should consider more tailored options and new business models that are attractive to customers using distributed generation instead of simply charging more.

Just how successful ALEC will be at shopping its legislative language around is unclear.

Arizona Public Service, the Grand Canyon State’s largest and longest-serving electric company, recently renewed its membership with ALEC after leaving the group last year.

The utility was at the center of the Arizona Corporation Commission’s decision last month to raise the amount that rooftop solar customers pay in a case that could have nationwide implications for grid-tied distributed energy. The Edison Electric Institute, of which APS is also a member, spent $520,000 in the state on ads attacking net metering (ClimateWire, Nov. 15).

Company spokesman Jim McDonald said the Phoenix-based utility made the move because ALEC is a pro-business group, but the relationship is not overly influencing the utility’s stance on net metering or solar power.

“ALEC isn’t at the core of how we’re proceeding,” he said. “We’re in a number of pro-business groups.”

Carrie Cullen Hitt, the Solar Energy Industries Association’s senior vice president of state affairs, said ALEC has had limited success on rolling back state renewable portfolio standards and may not understand net metering.

“Unfortunately, they don’t fully understand the issue and they’re not engaged full-time on what this means,” Hitt said. “They’re outsiders looking in on an issue and taking advantage of an issue for political gain.”

Another solar advocate noted that previous battles, as in Arizona, have largely taken place at the regulatory level.

“I think that, as a practical matter, these are not typically legislative fights; these are regulatory fights, so it’s a little bit strange,” said Bryan Miller, vice president of public policy and power markets for solar leasing company SunRun. “I guess they don’t like the results they’re getting from the regulators, and they want to go the legislative route.”