CLEAN ENERGY POLICY GUIDE FOR STATE LEGISLATURES 2017 i INTRODUCTION The energy sector is undergoing a dramatic change – one that promises to rate-payers. The policies enacted by legislatures and regulators impact the transform it for generations to come. Energy generation and management, more than 3,500 utilities serving customers large and small throughout the customer expectations, technical innovations, and financing approaches are country. all changing at a rapid pace, but within a sector that was structured and In the 2013-2016 state legislative sessions, over 12,500 bills were organized in the 1930s. introduced around the country. Of these, over 2,000 have been enacted. In the US, energy policy is largely formed at the state level. State legislatures The impact of this legislation is not only significant at the state or national set the priorities and objectives of the state while also establishing the level, but on a global scale. If you were to take the combined population of mechanisms for achieving those objectives. Energy offices implement states that have enacted a renewable portfolio standard (a requirement that programs that promote new energy technologies and environmental offices a percentage of their electrical power come from renewable resources) it enforce regulations to protect land, air, and water. State utility regulators would be the world’s 5th most populous country (see figure i). evaluate the trillions of dollars of investment utilities make on behalf of their This ebook doesn’t cover all potential energy-related policies, but rather FIGURE i Population with Renewable Portfolio Standards focuses on those policies that have successfully moved states toward a modern, clean, and cost effective energy system. In our “New Policy Frontiers” sections, we discuss some of the emerging issues and policies that are developing in this changing energy landscape. The Center for the New Energy Economy will continue to update this e-book as new policies are developed and as technologies change. This e-book is one tool provided by the Center for the New Energy Economy. We offer a variety of other tools that can be used in concert with this e-book. CENTER FOR THE NEW ENERGY ECONOMY STATE LEGISLATIVE TOOLS: The Center for the New Energy Economy at Colorado State University has developed a series of tools to help state legislators, administrators, i Source: Data from CNEE i INTRODUCTION regulators, NGOs, staff, and others interested in developing policies to The Energy Policy facilitate the transition to an efficient, affordable and clean energy system. In Podcast is a podcast addition to this legislative e-book, the Center maintains multiple tools to developed by the Center promote best practices in energy policy, track state energy legislation, for the New Energy evaluate legislative trends, and identify policy opportunities in each state. Economy to discuss policy issues and events impacting state energy policy. Interested listeners can subscribe to the podcast for automatic updates here. The State Policy Opportunity Tracker (SPOT for Clean Energy) HOW TO USE THIS E-BOOK is a gap analysis that breaks 37 different state policies into their key components and looks state This e-book is another tool to assist those working on legislative policy to by state at what each state has and what they are missing. The website help make their states leaders in the New Energy Economy. Each chapter contains briefs on each policy as well as links to supporting resources. addresses a specific policy area and contains a description of policies that have effectively moved states forward in each area. Some chapters also include a “New Policy Frontiers” section to present The Advanced Energy some of the emerging issues and ideas being discussed around the country, Legislation Tracker but perhaps not yet implemented. These sections are included to help (AELTracker.org) policymakers consider a wide variety of policy options. continuously documents energy legislation All policy discussions include links to reports, resources, and embedded introduced throughout videos and graphics to help readers gain a greater understanding of the the country and tracks the legislation as it moves through the legislative issues underlying each policy, and the objectives and challenges the policy process. The database is searchable by year, state, category, and keywords. is designed to address. Bills are not limited only to those that pass, but to those that are introduced - recognizing that there are many good policy ideas that never see the light While one can certainly read through the book from start to finish, the book of day, but the work put into developing them can be valuable for other is designed to be used as a tool that will assist the reader in honing both legislators around the country. their understanding of specific issues as well as finding policy solutions to specific challenges. In this way, the e-book may be seen as a resource to be used in addition to the tools on the left. For example, one may see a series ii i INTRODUCTION of bills introduced on a topic in AELTracker and will go to the specific information chapter to learn more about the issue. Or, one may see policy gaps on the issue. Movie i Introduction from Governor Bill Ritter identified for their state in SPOT for Clean Energy and want to investigate This e-book FIGURE ii How to Use this e-book Governor Bill Ritter was the 41st Governor of the state of Colorado, serving from 2007-1011 and is well known for ushering in a “New Energy Economy” through the passage of over 50 bills related to clean energy. He started the Center for the New Energy Economy in 2011. should be seen as a resource to be used in all of these ways. iii ways in which they may be able to address those gaps. Finally, a legislator i ACKNOWLEDGEMENTS This book would not have been possible without the work and collaboration of many. This e-book was created by staff at the Center for the New Energy Economy, Senior Policy Advisors Tom Plant and Jeff Lyng and Research Associates Katherine Heriot Hoffer, Chris Edmonds and Jane Culkin under the direction of former Colorado Governor and CNEE Director, Bill Ritter. This project would not have been possible without the assistance of student interns from Colorado State University and the University of Colorado at Boulder. They included Alison Smith, Jessica Hertzog, Bridgit Kodenkandath, and Marina Witt. Thanks also to the team of internal and external policy experts who reviewed and vetted these policy briefs. They Included Sarah Booth, Booth Clean Energy; Matthew Brown, Harcourt Brown & Carey; Jeffrey J. Cook, CNEE and NREL; Liz Doris, NREL; Angie Fyfe, ICLEI; Annie Gilleo, ACEEE; Jenny Heeter, NREL; Will Toor, SWEEP. iv 1 ENERGY EFFICIENCY The most cost effective and clean energy is the energy you don’t use. This chapter looks at policies to advance energy efficiency. When some of us think of energy efficiency, we think of sacrifice – put on a sweater and turn down the thermostat – that’s actually not what energy efficiency is about at all. Instead, energy efficiency is about using energy in the most cost effective and efficient manner while delivering the same – or improved – energy services. ENERGY EFFICIENCY 1 INTRODUCTION When you turn on an incandescent light bulb it offers useful light, but also a Estimates of the inefficiency of our energy systems are as high as 86%, great deal of heat. This heat represents the inefficiency of the light bulb. In meaning 86% of our energy potential is lost in the process of producing the comparison, an LED bulb offers light without heat. Because of this, the LED service the energy provides. The laws of physics won’t allow us to get to bulb uses less energy. This represents a technology improvement that 100%, but we can do much better than 14%. illustrates how we can use energy more efficiently and cost effectively without sacrificing the benefits of technology. FIGURE 1.1 Impact of Energy Efficiency Improvements Technology is constantly improving to allow us to use energy more efficiently while powering our daily lives. This chapter looks at policies that are designed to maximize energy efficiency. In ACEEE’s report, ”The Greatest Energy Story You Haven’t Heard”, the authors estimate that “from 1980 to 2014, our GDP increased by 149% while energy use in the United States increased by just 26%, from 78 quads (or a quadrillion Btus) to 98 quads.” That is energy efficiency at work. Improving energy efficiency doesn’t just represent an advantage to the user or homeowner. As population grows, energy efficiency must improve or we will need to pay for additional, costly generation. Because the cost of this additional generation is shared by all citizens, the advantages of a more energy efficient system accrue to society as a whole. For example, building codes are generally set by government. If there aren’t Source: Data sourced from Clean Energy Resource Teams minimum efficiency requirements, houses could be built with very little insulation and windows that don’t seal the building. These houses might be Energy supply and demand is a closed loop. If you use less energy, you cheaper to build, and probably cheaper to buy. However, the financial don’t need as much supply. If you use more energy, you need more supply. burden will fall to the occupant of the building as they pay for the higher Energy efficiency is much less expensive than building new energy energy costs of the building every month. The general population at large generation. For this reason, energy efficiency is often referred to as the “first will also see increased costs as the inefficient building drives more demand fuel”.