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Energy

Every two weeks Viohl & Associates publishes an Energy Update, which provides summaries of significant federal and state energy news.  

Energy Update, March 13

March 16, 2015

In the States

MI – In a recent speech near Detroit, Governor Rick Snyder called for a “reduction in the use of coal for Michigan’s energy” and an increase in the state’s renewable energy portfolio standard for utilities. Governor Snyder hopes Michigan will be able to lessen its dependence on coal-fired power plants in creating electricity and to focus on developing natural gas and wind power energy in the state. Though the Governor plans to eliminate  the state’s current 10% renewable energy mandate, his proposal would authorize the Michigan Public Service Commission to “push utilities more towards green energy and efficiency policies.” At the present time, Michigan generates at least 55% of its power from coal-fired plants, 31% from nuclear reactors, 7% from natural gas, and almost 6% from renewable sources. Governor Snyder is also proposing incentives for homeowners to replace old water heaters and furnaces, and to reduce  electricity rates during off-peak hours, which are largely overnightt, to encourage utilities and large companies to use more power then. “The most-affordable energy you can get is the energy you don’t use,” said Governor Snyder, highlighting his support for increased efficiency. Snyder urges dramatic drop in reliance on coal powerThe Detroit News

NY – In collaboration with the State Senate, Governor Andrew Cuomo, in his proposed budget, requests to transfer approximately $36 million dedicated to the Regional Greenhouse Gas Initiative (RGGI) back to the state’s general fund and the state’s Environmental Protection Fund (EPF). RGGI is a regional, northeastern states’ program that “generates money by selling air emissions credits to industrial polluters” while EPF seeks to support “farmland conservation and habitat restoration.” Of the $36 million, $23 million would be appropriated to the general fund and the remaining $13 to the EPF. “We put (it in the) budget,” said State Senator John DeFrancisco, “in order for the legislature to have more control over how that funding is used rather than sole control by the administration.” Cuomo proposed to draw from emissions programThe Capital

OH – The Office of the State Attorney General Mike DeWine announced that the State of Ohio has filed suit against BP, formerly known as British Petroleum, one of the world’s largest oil and gas companies. In its lawsuit, the state claims BP wrongfully collected more than $33 million in state reimbursement to clean up storage tank leaks. BP, the state asserts, said they had no insurance for the storage tank leaks, which led to Ohio state officials paying BP through a state fund – the Petroleum Financial Assurance Fund – to clean up the leaks. According to state officials, Ohio’s underground storage tank fundonly helps to pay for storage tank leaks if a company doesn’t have insurance coverage or  accepts money from other sources. BP Spokesman Jason Ryan said “the company acted at all times in good faith and believes its dealings with the Ohio state underground storage tank fund have been proper." Ohio sues BP for $33 million, says company made false claims to get cleanup moneyThe Cleveland Plain Dealer

PA – In his proposed budget, Governor Tom Wolf plans to fund several renewable energy initiatives by issuing more than $600 million in state bonds. Approximately $225 million would be directed towards general energy investments, $150 million for renewable energy grants, $50 million for a rebate program for solar energy projects, and another $100 million program for solar panel installations. The budget proposal also seeks another two $20 million requests in bond money for a wind energy generation project and for a program to utilize agricultural waste to produce electricity. As a part of the general energy investments, the state would help to fund the completion of natural gas distribution lines. “We must expand and develop new markets for Pennsylvania's energy technologies, services and fuels, and this budget makes historic investments to bolster and transform our energy economy,” said John Quigley, acting secretary of the state Department of Environmental Protection. Governor Wolf’s budge to boost green energy on back of fossil fuelsThe Pittsburgh Tribune-Review

Federal

A bipartisan group of Senators introduced legislation to allow federal agencies to sign long-term contracts with utilities for energy-saving services. Titled the Utility Energy Service Contracts Improvement Act of 2015, the bill also seeks to reduce energy use and is sponsored by Senators Lamar Alexander (R-TN), Dan Coats (R-IN), Chris Coons (D-DE), and Brian Schatz (D-HI). “As the largest consumer of energy in the country, the federal government needs to do everything it can to save energy and taxpayer dollars,” said Senator Schatz. “Our bipartisan legislation would expand opportunities to invest in energy efficiency and clean energy projects while saving money.” Senate legislation would expand federal clean energy projectsThe Honolulu Civil Beat

Energy Update, Feb. 27

March 2, 2015

In the States

VA – The Virginia House of Delegates and Senate voted to preserve a tax credit for electric utilities that burn coal mined in the Commonwealth. Governor Terry McAuliffe previously proposed a reduction in the tax credit to help offset a budget shortfall, but neither chamber agreed to the Governor’s proposal. The policy reversal creates a $5.2 million shortfall in each chamber’s proposed budget, and allows utility companies to claim no more than $7.5 million combined in any year. House, Senate preserve coal tax credit for utilitiesThe Richmond Times-Dispatch

WV – Governor Earl Ray Tomblin vetoed a bill, H.B. 2201, that would have required the state’s Public Service Commission to set new guidelines for net metering, a proposal which advocates decried as jeopardizing the future of solar power in the state. Net metering, which differs by state, is a billing mechanism that credits solar energy system owners for the electricity they generate and add to the electric power grid. In his veto message, Governor Tomblin said he disapproved of the bill for technical reasons, but did not further clarify his position on the legislation’s intent. “Due to a number of technical issues in the bill, I am unable to sign House Bill 2201 into law,” Governor Tomblin said. “I encourage the Legislature to re-examine this piece of legislation and correct the technical issues outlined in my veto message.” W.Va. governor vetoes net metering billFierceEnergy and Tomblin vetoes two technically flawed billsMetroNews West Virginia

Regional

The Governors of Massachusetts, Connecticut, and Rhode Island are forming a regional partnership to expand the use of renewable energy sources and natural gas. Under the Governors’ plan, electric utility companies in each state will work together with state agencies “to begin a competitive bidding process to seek proposals from supplies of clean energy resources.” The Governors, which discussed the regional partnership during the recent National Governors Association’s winter meeting, also released a draft request for proposals with a 30-day comment period. Governor Charlie Baker of Massachusetts said "this regional partnership will allow Massachusetts to acquire cost effective renewable resources for the commonwealth's energy supply.” Connecticut Governor Dan Malloy stated the joint venture may lead to larger collaborative energy projects. "By working together with neighboring states,” Governor Malloy said, “we can make the most efficient use of our resources to attract new clean energy projects at the lowest possible cost for ratepayers while advancing our interests in reducing emissions of greenhouse gases.” Governors looking to expand renewable energy, natural gasThe Boston Herald

The Outer Continental Shelf Governors Coalition (OCSGC) met during the recent National Governors Association’s winter meeting, agreed to lobby Congress for legislation “to set a multi-state strategy for revenue sharing from federal offshore energy development.” The OCSGC, which first organized in 2011, has seven members, including Alabama Governor Robert Bentley, Louisiana Governor Bobby Jindal, Maine Governor Paul LePage, Mississippi Governor Phil Bryant, North Carolina Governor and OCSGC Chair Pat McCrory, South Carolina Governor Nikki Haley, and Virginia Governor Terry McAuliffe. The Governors, however, have not yet reached a decision on a model for revenue sharing. “Right now we've got all these different bills on revenue sharing, and we would like to consolidate those into one bill,” Governor McCrory said, referring to separate bills in Congress for Virginia, North Carolina and South Carolina. State governments usually control offshore waters as far as three miles, while the federal government controls the outer continental shelf. Seven Governors set legislative strategy for revenue sharing from offshore energy -- Bloomberg

National and Federal

The American Energy Innovation Council, which is made up of six corporate executives, is urging Congress and the federal government “to make expanded energy research a strategic national priority.” Members of the Council include Microsoft co-founder Bill Gates and General Electric CEO Jeffrey Immelt. The Council contends the United States has fallen behind other governments in energy research, which may hamper efforts to reduce carbon emissions and develop new energy sources. The group recently released a report highlighting their advocacy work and research and recommendations for policymakers. “Growing and consistent appropriations for energy innovation should be a top U.S. priority over the next decade,” the business leaders recommended in their report. “The budget numbers over the last five years are a major failure in U.S. energy policy.” Bill Gates and other business leaders urge U.S. to increase energy researchThe New York Times

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