Posts From February, 2018

Energy Outlook Conference Presentations Available

Presentations from the 2018 NASEO Energy Policy Outlook Conference are available. The conference was held February 6-9, 2018, in Washington DC and included remarks from Congressman Fred Upton (R-MI) and Undersecretary Mark Menezes, representatives of Tesla, Citi, Freddie Mac, and EEI, as well as dozens of State Energy Officials and NASEO Affiliate Members.

The Future Is Now: Electric Vehicles and Infrastructure Considerations

In 2017 more than 200,000 electric vehicles (EV) were sold in the United States. As EVs cruise past 1% total market share in the US, stakeholders continue to examine and anticipate how increased vehicle deployment and infrastructure needs will impact grid development and planning processes. During the NASEO 2018 Energy Policy Outlook Conference, Patrick Bean of Tesla Motors spoke to State Energy Officials on the national outlook for EVs and the significant role state policy and decision makers can play to enable charging infrastructure. 

With three large advanced manufacturing facilities and more than 500 charging sites located in the US, Tesla Motors has been working with technical schools to support training around robotics, computer science, software development, sales, and other key areas to facilitate the next generation of the EV workforce. Mr. Bean reported that by the end of 2018, Tesla plans to expand its national charging infrastructure into urban centers to reach a total of 800 stations. Such an ambitious goal would rely heavily on policies such as EV ready codes, modifications to existing building codes, and a regulatory environment that incentivizes the expansion of charging infrastructure. As the market for EVs continues to expand, industry leaders are recognizing the vital role of state policy and decision makers in facilitating this transformation, and are seizing the opportunity to engage and partner with states and localities throughout the process.

Natural Gas Access: Policies and Actions

Although the U.S. natural gas industry has experienced unprecedented growth over the past decade, natural gas distribution remains limited in many areas of the country, particularly in rural areas where competition from alternative heating sources undercuts the economic case for pipeline expansion. A panel of experts from the South Carolina Energy Office, the Massachusetts Department of Regulatory Utilities, and Atmos Energy Corporation addressed State Energy Officials during the NASEO 2018 Energy Policy Outlook Conference to discuss the policy issues around valuing the expanded delivery of natural gas and explore considerations for engaging both utility commissions and communities. 

Andreas Thanos of the Massachusetts Department of Public Utilities reported that while most states do have natural gas expansion policies in place, projects typically are not permitted if they are expected to increase costs to existing customers. This adds to an already growing dilemma for states across the nation. In South Carolina, for example, the in-state provider is largely at capacity despite several areas of the state having little to no access to the resource. Maeve Mason of the South Carolina Energy Office remarked that the state’s 2016 State Energy Plan identified several additional factors that were further elevating the importance of increased natural gas access, including proposed legislation, the abandoned VC Summer Nuclear project, and a proposed merger between Dominion Energy and the South Carolina Electric and Gas Company (SCE&G). 

Citing a November 2017 report from the National Association of Regulatory Commissioners (NARUC) on Natural Gas Access and Expansion, Mr. Thanos identified several recommendations for public service commissions to promote expansion to underserved areas, including increased transparency and vigor for stakeholder input processes, new financing and payment options to incentivize pipeline extension and connection, and adjustments to Contribution in Aid of Construction (CIAC) payments to reflect market expectations. Likewise, William Senter of Atmos Energy Corporation provided examples of three key initiatives his organization was engaged in to support expansion into rural areas, including a supplemental growth rider to attract large industrial users, an infrastructure advancement initiative that authorized 5 million annually for rural build-outs, and the SmartChoice Energy Efficiency incentive. While several obstacles exist to expanding natural gas infrastructure into rural and underserved areas, several states have implemented policies specifically designed to address rural expansion. By engaging with public and private stakeholders, State Energy Directors have the unique opportunity to advance policy considerations and facilitate economic development opportunities around access to natural gas.

Building Resilience with Regional Cooperation and Planning

A panel of experts from the Washington State Energy Office, the offices of Senator Jeanne Shaheen (NH) and Congressman David McKinley, PE (WV-1), the U.S. Army, ICF International, and the National Association of Regional Councils spoke on resilience challenges, opportunities and strategies during a dynamic discussion at the NASEO 2018 Energy Policy Outlook Conference. The discussion covered the physical security and cybersecurity of energy systems and emphasized the critical need for advance planning and exercises to ensure coordinated and effective responses. Ariel Marshall, Ph.D., of Sen. Shaheen’s office said of resilience “National security and resilience are connected.” 

“For the U.S. Army,” noted Michael McGhee, Executive Director of the Army’s Office of Energy Initiatives, “we define resilience as ‘the plan B.’” Key questions factored into resilience planning include: what are the key threats and tolerable levels of risk? How long will the event that causes an outage last? How many days of supply should be on hand, and where should those supplies be located? How can you work with your neighboring states and regional neighbors to bounce back or support each other? Judsen Bruzgul, Ph.D., of ICF International added that “as we plan, we have to make sure not to create additional vulnerability” (for instance, will data collection and event monitoring technology introduce unintended cyber risks)? For the members of the National Association of Regional Councils, the biggest issues are the vulnerability of the transportation system and cyber threats. 

In addition to pre-planning, rebuilding and recovery offer opportunities for increased resilience. Lou Hrkman of Congressman McKinley’s office described energy efficiency as the “unsung hero of resilience” because it offers a particularly compelling post-disaster strategy due to its ability to help structures stay warm or cool longer when the power goes out and reduce grid impacts. 

Panelists identified expansion of Property Assessed Clean Energy (PACE), energy efficiency, and regional exercises and coordination as opportunities to that State Energy Offices can leverage to improve resilience.

Congressman Fred Upton Shares Insights on Congressional Actions and the Legislative Outlook

Yesterday, Congressman Fred Upton (MI-6) shared insights on Congressional actions and the legislative outlook for 2018. As Chairman of the U.S. House of Representatives Committee on Energy and Commerce and the sponsor of House bill 3050 (H.R. 3050), the “Enhancing State Energy Security Planning and Emergency Preparedness Act of 2017” which passed the House last summer, Congressman Upton has championed the critical role of State Energy Offices in designing and implementing energy security planning. Chairman Upton noted his visits to states and territories affected by Hurricanes Irma and Harvey, underscoring the importance of reliable and affordable energy sources in disaster resiliency. Key features of H.R. 3050 include the reauthorization of the State Energy Program and strategies to enable states to create stronger, more resilient energy systems. State representatives thanked Chairman Upton for his dedication to energy resiliency and the work he has done advancing its cause in Congress.