Indiana Lt. Gov. Sue Ellspermann co-sponsors NLGA resolution asking for delay in EPA Clean Power Plan

Posted by Laura Arnold  /   July 28, 2014  /   Posted in Uncategorized  /   No Comments

Lt. Governor Sue Ellspermann

Ellspermann, other lt govs push back on EPA energy rule

By Allie Nash
TheStatehouseFile.com

INDIANAPOLIS – Lt. Gov. Sue Ellspermann has cosponsored a resolution adopted by the National Association of Lieutenant Governors aimed at protecting Indiana’s ability to use coal as a major source of power.

Officials from Missouri, West Virginia, Alabama, South Dakota and Hawaii have also sponsored the resolution, which calls for federal officials to let states “determine the appropriate mix of energy sources to meet it electricity needs.”

The letter is a reaction to the U.S. Environmental Protection Agency plan that calls for state to reduce carbon emissions from existing power plans by a total of 30 percent from 2005 levels by 2030. Indiana’s share of that reduction is somewhat less.

“Gov. Pence and I are concerned about the impact on both individual Hoosiers and our state’s overall economy with the projected increases in energy costs driven by the restrictions on coal fired power plants,” Ellspermann said in a statement.

Indiana has one of the nation’s least diverse power supplies, with 80 percent of its electricity the product of coal-fired plants.

“We in Indiana see these regulations as a continuation of President Obama’s ‘attack on coal’ that will ultimately cause jobs losses in the mining industry and in Indiana’s strong manufacturing economic base that is dependent on low-cost and reliable electricity supplies,” Ellspermann said.

Indiana is the most carbon intensive state in the Midwest and top five in the U.S., federal officials said.​

The resolution seeks a delay of the implementation of the Clean Power Plan so that states can do additional planning without limiting access to affordable electricity.

Federal officials say the EPA rule could save up to $93 billion in climate and public health benefits by avoiding 6,600 premature deaths, 150,000 asthma attacks in children, and 490,000 missed days of work and school.

A statement from the White House said that 9.1 percent of Indiana’s adult population currently suffers from asthma.

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Editor’s Note: The Resolution was offered at the recent Annual Conference of the National Lieutenant Governors Association. All Resolutions were submitted on or before Friday, June 27, 2014.

To read the resolution click HERE: A Resolution Concerning U.S. EPA’s Proposed Greenhouse Gas Emission Guidelines for Existing Fossil-Fueled Power Plants

Michigan PSC has no authority regarding decoupling for electric utilities; Is utility revenue decoupling good or bad?

Posted by Laura Arnold  /   July 26, 2014  /   Posted in Uncategorized  /   No Comments

Michigan decoupling ends with 2 settlement deals

July 11, 2014

Experts explain why killing decoupling is a mistake

The Michigan PSC approved two settlement deals Tuesday, reconciling Upper Peninsula Power’s (UPP) 2013 revenue decoupling mechanism (RDM). These will be the final defrayals to the electric utility serving most of the state’s Upper Peninsula under its defunct decoupling mechanism, Judy Palnau, a spokesperson for the Michigan PSC in Lansing, told us this week.

“The Michigan Court of Appeals in April 2012 found that the [PSC] has no authority regarding decoupling for electric utilities,” Palnau said.

“In light of the court’s decision, the [PSC] has dismissed all pending cases involving electric revenue decoupling. However, because the Upper Peninsula Power case was a settlement, it still involved decoupling through December of last year,” (SGT, 2012-Sept-6).

UPP and the PSC staff took part in the settlement cases that were decided as follows:

• Under the terms of the settlement in Case U-17555, Upper Peninsula Power experienced a gross revenue RDM under-recovery of $619,580 in 2013 and a revenue shortfall of $71,247 in connection with the 2010 RDM reconciliation approved in Case U-16568. Effective Jan 1-Dec 31, 2015, the utility is authorized to implement a surcharge. As a result, a residential customer using 500 KWHs/month will see an increase of 56¢ on the monthly bill. UPP and the PSC staff took part in the settlement, the PSC said.

• Under the terms of the settlement in Case No U-17605, a residential customer using 500 KWHs/month will see a 5¢ increase on the monthly bill, for service rendered on and after Aug 1.

While over 20 US states have opted for some form of electric utility decoupling, Michigan may be the only one that since backed out of it. These states gave it a try: Arizona, Arkansas, California, Colorado, Connecticut, Georgia, Hawaii, Idaho, Illinois, Indiana, Maryland, Massachusetts, Minnesota, New Jersey, New York, Ohio, Oregon, Tennessee, Utah, Virginia, Washington, Wisconsin and Wyoming.

According to the NARUC, “decoupling” or “revenue decoupling” refers to a rate adjustment mechanism that separates an electric or gas utility’s fixed cost recovery from the amount of power or gas it sells. Under decoupling, utilities collect revenues based on the determined revenue requirement, most often on a per-customer basis. Periodically, revenues are “trued-up” to the predetermined revenue requirement using an automatic rate change.

This type of rate mechanism encourages utilities to take part in energy efficiency programs and other initiatives that cut power bills, but would represent gains for the environment.

Indeed, the commissioners said in a 2007 study, “Since utilities will be protected, if their sales were to decline because of efficiency, proponents of decoupling contend that they are more likely to invest in this resource, or may be less likely to resist deployment of otherwise economically beneficial efficiency initiatives.”

A step backwards

In light of the perceived and proven benefits, Michigan’s move to deter decoupling was definitely counterproductive, American Council for an Energy Efficient Economy (ACEEE) Senior Fellow Martin Kushler told us. He has been with ACEEE since 1998 and right before that was supervisor of evaluation at the Michigan PSC for nearly 10 years, he added.

Not only does decoupling “offer protection to utilities from the under-collection of fixed costs,” but it “has great advantages for consumers because it’s symmetrical,” Kushler said. “So, if either the ratepayer or the utility is over-collecting or under-collecting, the amount will be reconciled and everyone will be made whole.”

Kushler characterized the court’s decision on the measure, “Enrolled Senate Bill No. 213,” as “problematic. The 2008 finding was a real judiciary over-reach. The court looked at the plain language of a statute relating to decoupling that said the [PSC] ‘shall authorize’ natural gas providers to grant decoupling and from that, determined one, that there was no mention of electricity providers and two, that there was no mandate that the [PSC] ‘must’ provide decoupling.”

NRDC surprised by it

Rebecca Stanfield, deputy director for policy, Midwest program, Natural Resources Defense Council (NRDC), agreed with Kushler. “That decision came after two years of talks with the [PSC], during which the [state] legislature thought decoupling was a good idea.

“It was a surprising verdict – made for a really unusual legal reason, based on the imprecise wording of a statute. This was unheard of prior to the court’s finding. It is certainly well within the authority of a typical public service commission to regulate programs such as decoupling,” she added.

Looking at the other side of the meter, “The finding absolutely is not in the interest of ratepayers,” Stanfield said. “Decoupling enables the utility to provide the best, most reliable service to its customers, as opposed to increasing revenues by escalating sales every year. Decoupling enables utilities to boost energy efficiency without risking their own financial health,” she added.

Legislature is next hope

As of now, Michigan’s advocates of decoupling may be down, but they are not out. “I think that the folks at the commission feel that it would not be productive to lodge a legal appeal,” said Kushler. “However, the legislature still may step in. It would be fairly simple to add a few words to that paragraph of the statute.

“This is just an unnecessary obstacle that has to be rectified.”

Stanfield would like to see the ruling reversed. “I honestly don’t know what will happen,” she said, “but I am hoping that, after the election, we will see some forward movement.”

 

 

What Impact will WTO Ruling have on Solar PV Panel Pricing?

Posted by Laura Arnold  /   July 26, 2014  /   Posted in solar  /   No Comments

What Happens to Solar Panel Pricing after the WTO Ruling?

Thomas Larson, Sol Systems July 25, 2014

The World Trade Organization (WTO) Dispute Settlement Body (DSB) issued a panel report to its members on a dispute between China and the United States involving solar panels and sixteen other products. Recent reports delcared the U.S. countervailing duties “illegal” as a result of the ruling, which may be a misleading summary of what actually occurred. Deeper analysis shows that this case only addresses a small piece of the U.S.’s procedures behind calculating the duties, not the duties themselves, and does not demand immediate response from the U.S.

Although the case may have broader implications for U.S. trade policy as it seeks to fight anti-competitive behavior from China’s state-owned enterprises, it is unlikely to change much in the U.S. module market. Here are three important clarifications on the panel report for solar industry folks who want to know how it will affect panel pricing in the next twelve months.

1. What exactly is the WTO and how serious are its rulings?

The WTO is the largest international forum for negotiating multilateral trade agreements and settling disputes over trade-related issues. If one country feels it is harmed by another country’s failure to comply with its obligations under various trade agreements, the parties may enter the iterative dispute settlement process through the DSB. Depending on the issue, disputes can be settled quickly through consultations, or take years to reach a ruling (through what is called a panel), address appeals, and drive the adoption of a compliance measure.

While the WTO has a fairly rigid body of law, it relies on its members to police one another. WTO rulings are binding, but not exactly compulsory—the WTO cannot force the U.S. to change a discriminatory trade policy. However, the WTO can inflict pain by allowing complainants to raise tariffs on what are usually politically sensitive exports (think of products grown in Florida to draw a response from the U.S.) if a respondent refuses to comply with a ruling.

2. Which U.S. Solar Tariffs are at stake?

Of the four recent actions taken by the U.S. against China on solar products, the WTO only ruled on one—the 2012 countervailing measures against solar cells from China. A countervailing duty is an additional tariff set by an importing country to reduce the effects of a foreign government’s subsidy that harms the importer’s domestic producers.

In October 2012, the DOC announced final rulings on countervailing and anti-dumping measures against Chinese solar cells. After Chinese manufacturers began exploiting a loophole by using solar cells from elsewhere (Taiwan), the DOC initiated two more investigations in 2014, which have resulted in a preliminary countervailing tariff against all Chinese modules at much more painful rates than the 2012 ruling, as well as anti-dump measures (to be announced shortly). China brought this case to the DSB in May 2012—the panel only reviewed the U.S.’s justifications for enacting the 2012 countervailing duties on solar cells; anti-dump measures and the 2014 tariffs were not addressed.

Of the seven issues China raised with U.S. countervailing measures on solar cells, the panel determined that China met its burden of proof on only two, both of which centered around a U.S. practice of presuming that government-owned companies are considered “public bodies” capable of providing a subsidy. The U.S.’s control-based standard for deeming those companies to be “public bodies” was rejected by the panel, which followed a previous decision by the Appellate Body on the issue. However, the panel did not rule that the provision of inputs by state-owned enterprises for downstream products for less than adequate remuneration could not amount to “countervailable” subsidies. In other words, the U.S. could potentially employ a different, acceptable test in order to classify state-owned enterprises as public bodies to maintain WTO-consistent countervailing duties.

3. What does this mean for solar module prices in the U.S. in the short-medium term?

This ruling is unlikely to have any major impacts on the fundamentals of the U.S. module market in the coming months. The case will affect U.S. solar tariffs in one of two ways—the U.S. could 1) use the negative parts of the ruling to back away from the harmful tariffs while saving face or 2) continue to disputing the details in order to maintain the tariffs. The U.S. is far more likely to take the second option based on historical trade practices (see cases on U.S.-zeroing) and its commitment to limiting the competitiveness of Chinese solar modules. Since there are no retroactive damages at the WTO, the U.S. can use delay tactics while keeping the countervailing duties in place without paying damages in the meantime.

The changes we’ve seen in module prices recently have been reactions to the 2014 countervailing duty announced by the DOC. The market should settle as Chinese manufacturers opt for the lower 2012 rates by classifying nearly complete solar modules as solar cells and finishing the panels behind U.S. borders. Even though the WTO case does address issues with the 2012 countervails, the U.S. appears to have minimal motivation to lower them quickly in response.

It will be interesting to see whether the DOC’s final report on the 2014 countervailing duties reflects the WTO panel ruling, since the WTO ruling was released to the U.S. prior to the DOC’s completion of their second investigation on Chinese solar module subsidies. A slight adjustment to the ownership-based test for identifying public bodies or an entirely new method of tracing subsidies should provide some insight into the Administration’s attachment to the solar tariffs.

WSJ: Tariffs Boost Solar-Panel Makers in U.S.; What will be the long-term impact on installed solar PV prices?

Posted by Laura Arnold  /   July 26, 2014  /   Posted in Uncategorized  /   No Comments

Tariffs Boost Solar-Panel Makers in U.S.

Duties on Chinese Products Amid Subsidy Accusations Prompt Expansion

By  CASSANDRA SWEET  CONNECT
July 25, 2014 7:02 p.m. ET

Employees working on a solar-panel production line at Shenzhou New Energy Co. in Lianyungang, China. The U.S. has accused Chinese manufacturers of selling at unfairly low prices. Getty Images

New tariffs on Chinese solar panels, including widely anticipated duties imposed by Washington on Friday, are spurring companies to manufacture more solar-power equipment in the U.S.

Two U.S. companies— SolarCity Corp. SCTY +0.57% and Suniva Inc.—have recently announced plans to build solar-panel factories in America, and at least one Chinese manufacturer says it is considering joining them.

Panels from China have been far cheaper than those produced in other countries, driving down overall prices in the U.S. by about two-thirds since 2010. Chinese panels are now going for about 68 to 73 cents a watt, compared with an average of 83 cents for panels made in Europe, Japan and the U.S., according to a study by GTM Research in Boston (the average household solar-power system is about 5,000 watts).

Chinese companies supplied about a third of the panels installed in the U.S. in 2013, GTM says. U.S. developers installed about 4,800 megawatts of solar panels in 2013 and are expected to install about 6,600 megawatts this year, according to GTM.

The Commerce Department on Friday slapped provisional duties of between 26% and 42% on equipment made by several Chinese solar-panel makers, over accusations that the companies dumped their products into the U.S. at unfairly low prices. The department assigned tariffs of 165% to Chinese firms that it said didn’t respond to its inquiries.

Last month, the Commerce Department levied temporary tariffs ranging from 19% to 35% on the same group of Chinese solar-panel companies, which it accused of receiving unfair government subsidies. Both sets of tariffs won’t become permanent until they receive final approval from the Commerce Department, which is expected to rule by December, and then the U.S. International Trade Commission, which is expected to rule on the tariffs by January.

The duties are part of a two-year battle sparked by complaints from the U.S. division of SolarWorld AG SWVK.XE -7.84% , a German panel maker with a factory in Oregon.

“We want a level playing field,” said Mukesh Dulani, president of SolarWorld’s U.S. subsidiary.

The duties would affect most Chinese solar-panel makers. China-based Trina Solar Ltd.TSL +0.71% and Yingli Green Energy Holding Co. YGE +0.57% Ltd. deny their operations are heavily underwritten by the Chinese government and say they haven’t dumped products in the U.S.

“It’s unfair,” said Zhiguo Zhu, senior vice president of Trina. “The government didn’t give us huge subsidies.”

The company has been considering opening a factory outside China, possibly in the U.S., Mr. Zhu said, adding that the duties “speed up our plans to manufacture outside China.”

Suniva Inc., which is based in Norcross, Ga., employs about 250 people at its panel factory there and also outsources some manufacturing to China. The tariffs have helped make its American products more price-competitive, said Matt Card, vice president of global sales. The company started construction this week on a new factory in Saginaw Township, Mich., which will employ about 350 people.

SolarCity, of San Mateo, Calif., plans to build a factory in New York State within the next two years to build panels developed by Silevo Inc., which SolarCity bought in June for $200 million in stock, debt and cash.

“The tariffs were not a major factor in our decision, but they do make domestic manufacturing even more attractive,” SolarCity spokesman Jonathan Bass said.

Even if the Chinese companies pass on the added costs of the tariffs, the duties aren’t likely to dent demand from homeowners, analysts said. Companies that install residential systems compete with each other to offer the lowest-priced electricity, not the lowest-priced panels.

“I don’t really see a huge impact on customers in the residential sector,” said Shyam Meta, an analyst at GTM. “It’s more in the utility-scale sector where the economics become more challenging.”

Some companies that install commercial systems, often called solar farms, have relied on cheap Chinese panels.

Strata Solar, a small solar-farm developer in Chapel Hill, N.C., used to buy low-price Chinese panels, but those prices have increased by 15% to 20% because of the new duties, said John Morrison, a senior vice president at the company.

“This is the wrong way to go,” he said. The company has switched to buying thin-film panels made by Arizona-based First Solar Inc. FSLR +1.18% and by Chinese manufacturers. Chinese thin-film panels aren’t subject to the tariffs, as they use a different technology than the more mainstream silicon panels that are at the center of the trade case.

Write to Cassandra Sweet at cassandra.sweet@wsj.com

IURC Nominating Committee to Interview Candidates to Replace Atterholt on 7/30/14 at State House

Posted by Laura Arnold  /   July 25, 2014  /   Posted in Indiana Utility Regulatory Commission (IURC), Uncategorized  /   No Comments

Nominating group narrows list to eight candidates for IURC top spot

Staff report
TheStatehouseFile.com

INDIANAPOLIS – A nominating committee has announced the names of eight people who will be interviewed as candidates for the position of commissioner at the Indiana Utility Regulatory Commission.

The candidates to be interviewed are:

  • James L. Adams
  • Marline R. Breece
  • Karen E. Caswelch
  • Carole Sparks Drake
  • Eric M. Hand
  • Robert L. Hartley
  • James F. Huston
  • David R. Johnston

The Indiana Utility Regulatory Commission Nominating Committee is evaluating candidates to fill one current vacancy at the agency. Gov. Mike Pence created that opening when he made Commissioner James Atterholt his chief of staff.

Eventually, the nominating committee will present Pence with a list of three qualified candidates from which he will select one to fill the remainder of Atterholt’s term, which expires in 2017.

The group will interview the eight candidates on July 30 at the Statehouse.

 

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