Association of Corporate Council

Transcription

1 Parker Poe Adams & Bernstein LLP Attorneys and Counselors at Law Association of Corporate Council Midyear Meeting 2016 Discussion of Energy Trends Presented by: Ashley Cooper, Parker Poe Partner Chad Burgess, SCANA Director & Deputy General Counsel Parker Poe Adams & Bernstein LLP NATIONAL TRENDS: LEGISLATIVE ACTION source: inrefco.com 1

2 LOOKING AHEAD: ISSUES RELATING TO DELIVERY OF ENERGY Resource diversification Fossil fuel Nuclear energy Renewable energy Private generation (rooftop solar) Storage Electric Transmission Grid Reliability Security Cyber Physical Smart grid Federal v. State Jurisdiction 3 HR8: NORTH AMERICAN ENERGY SECURITY AND INFRASTRUCTURE ACT OF 2015 Goal: To modernize energy infrastructure, build a 21st century energy and manufacturing workforce, bolster America s energy security and diplomacy, and promote energy efficiency and government accountability, and for other purposes Status: Passed in House, Received in Senate-- referred to the Committee on Energy and Natural Resources Expedited Interstate Energy Project Review Natural Gas Export Authorization Rights-of-Ways (ROWs) for Natural Gas Pipelines Energy Reliability Energy Emergency Preparedness Strategic Transformer Reserve Energy and Manufacturing Workforce Development Energy Security Federal Agency Energy Efficiency Federal Energy Efficiency Programs Coordination of Energy Retrofitting Assistance for Schools Strategic Petroleum Reserve Hydroelectric Power Provisions 2

3 S.2012: ENERGY POLICY MODERNIZATION ACT OF 2016 Goal: To save energy, expand domestic supplies, facilitate investment into critical infrastructure, protect the grid, boost energy trade, improve performance of federal agencies, and renew programs that have proven effective in a fiscally responsible manner Status: Passed by Congress on May 25, 2016; Presidential approval pending FERC Process Coordination EMERGENCY Preparedness For Energy Supply Disruptions Critical Electric Infrastructure Security Cyber Sense Reliability Analysis For Certain Rules That Affect Electric Generating Facilities Statement of Policy on Grid Modernization Hydropower Licensing and Process Improvements Energy Security Valuation Authorization to Export Natural Gas Energy-Efficient and Energy-Saving Information Technologies Greater Efficiency in Building Codes Smart Energy and Water Efficiency Pilot Program FERC Office of Compliance Assistance and Public Participation Clarification of Facility Merger Authorization Promoting Renewable Energy with Shared Solar 5 PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978 (PURPA) PURPA was implemented in response to the oil crisis to encourage: The conservation of electric energy Increased efficiency in the use of facilities and resources by electric utilities Equitable retail rates for electric consumers Expeditious development of hydroelectric potential at existing small dams Conservation of natural gas, while ensuring that rates to natural consumers are equitable FERC and state commissions responsible for enforcing PURPA source: makeitmissoula.com, 06/03/16 3

4 PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978 (PURPA) Establishment of a new class of generating facilities, Qualifying Facilities ( QFs ) 1. Small power production facilities Generating facility whose primary energy source is renewable (hydro, wind or solar), biomas, waste or geothermal resources Limited in size to not more than 80 MW Some exceptions: facilities certified prior to 1995 and designated under section 3(17)(E) of the Federal Power Act ( FPA ) (16 U.S.C. 796(17)(E)), which have no size limitation In order to be considered a qualifying small power production facility, a facility must meet all of the requirements of 18 C.F.R (a), (c) and for size and fuel use, and be certified as a QF pursuant to 18 C.F.R Cogeneration Facilities Generating facility that sequentially produces electricity and another form of useful thermal energy (such as heat or steam) in a way that is more efficient than the separate production of both forms of energy Must meet all of the requirements of 18 C.F.R (b) and for operation, efficiency and use of energy output, and be certified as a QF pursuant to 18 C.F.R No size limitation 8 4

5 Source: State Renewable Portfolio Standards and Goals, NCSL, SOUTH CAROLINA DISTRIBUTED ENERGY RESOURCES ACT ACT NO

6 SOUTH CAROLINA S RENEWABLES ACT 236 Landmark legislation for the citizens of South Carolina produced by a coalition of Utilities, Cooperatives, Business and Governmental Organizations, Environmentalists, Local Solar Installers, Energy User Groups, Non-Profit Advisors, and the Office of Regulatory Staff. Goal: To promote the establishment of a reliable, efficient, and diversified portfolio of distributed energy resources for the State. Three Key Sections: 1. Setting a Value to generation in Net Energy Metering (NEM) 2. Establishing Distributed Energy Resource (DER) programs to promote/incentivize Renewables - 42 MW Customer-scale goal (systems under 1 MW) -- 25% of which must be systems less than 20 kw - 42 MW Utility-scale goal (systems between 1 MW and 10 MW) 3. Providing consumer protections through Leasing Certification 11 NET ENERGY METERING METHODOLOGY December 2014 NEM Settlement Agreement achieved with: Office of Regulatory Staff -- Southern Alliance for Clean Energy Duke Energy Carolinas -- SC Solar Business Alliance Duke Energy Progress -- The Alliance for Solar Choice Electric Cooperatives of SC -- The Coastal Conservation League Central Electric Power Coop. -- Nucor Steel Solbridge Energy -- Sustainable Energy Solutions 1-for-1 retail net metering for current and new customers through December 31, Customers are then grandfathered to December 31, DER Program Recovery exists between Retail and VOS, therefore company is made whole during this period. After settlement period ends on December 31, 2025, customers will be netted only at value of solar rate and not retail. Will also determine corresponding charges for grid-parity/access. 12 6

7 NET ENERGY METERING METHODOLOGY Value of solar (VOS) rate set through eleven (11) cost/benefit subcomponents. Commission Approved Methodology on March 20, Commission Approved Valuation on August 12, SCE&G DER PROGRAM SUMMARY Act 236 calls for renewable generation goals by December 31, 2020, equaling 2% of five-year average retail peak demand, or a total of 84 MW. 1% from customer-scale systems up to 1 MW 25% of which needs to be small systems < 20 kw 1% from utility-scale systems between 1 MW 10 MW SCE&G focused on simple, customer centric offerings with a variety of customer choices. Law allows full rate recovery for incentives by SCE&G. Customer scale Net Energy Metering Plus; Bill Credit Agreement; and Community Solar. Commission Approved programs on July 15, Incentives will be modified to meet capacity goals over time. 14 7

8 DISTRIBUTED ENERGY CUSTOMER PROGRAMS Net Energy Metering Plus Residential only offering Incentive is performance based ($/kwh) for all solar output Incentive is in addition to traditional Net Metering Requires a second meter for recording generation Rate fixed for 10 years First come first serve basis, with reservation based upon SCE&G approval of application Incorporates capacity-based stepdown approach for total of 9 MW NET ENERGY METERING PLUS RESIDENTIAL PERFORMANCE BASED INCENTIVES 9 MW FULLY RESERVED/CLOSED 16 8

9 BILL CREDIT AGREEMENT (BCA) Commercial and Industrial customers Incentive based on system production Incentive tiered to system size Incentive fixed for 10 years Incentive can be reserved with interconnection agreement Separate incentives for Municipalities (tariff 3), Churches (tariff 12), Schools (tariff 22) 17 BILL CREDIT AGREEMENT TIERS 9

10 Community Solar - Late 2016 ST JOSEPH S LEXINGTON MUNICIPALITY CHURCH SMITH RESIDENCE JONES RESIDENCE RIVERBEND H.S. Eligible participants Residential Customers Qualifying Tax Exempts o Churches o Schools o Municipalities Utility-managed solar farms Customers buy individual panels Receive pro-rata share of the total system s output SCE&G bill 10 cents / kwh for 20 years Leads to optimal siting, lower pricing and improved maintenance Makes solar available to those that don t have the rooftop potential or interest in rooftop solar 10

11 Comparison Charts 22 11

12 Otarre Solar 1.5 MW 23 Practitioner Points 1. Review SCE&G s Tariffs. 2. Make your client aware of the interconnection standard. 3. Don t redline tariffs or the interconnection agreement. 4. If your client is interested in leasing, follow ORS s standards and policies. 5. Counsel your client to find a reputable solar installer. 6. Give us a call. 12

13 TELL YOUR CLIENTS TO BE CAREFUL QUESTIONS 13