As Utilities Embrace Clean Energy, Southeast Needs Smart Policies to Promote Local Renewables Growth

This guest post was written by Luis Martinez, Senior Attorney in the Natural Resources Defense Council’s Energy and Transportation Program. The original post appeared on NRDC’s Expert blog and can be viewed here

Here’s some really great news we in the Southeast have been watching:

Across the country, as consumers demand clean energy and public policies promote it, prices, consequently, plummet, and many utilities are significantly ramping up investments on wind and solar power. Witness MidAmerican Energy’s decision in April to build as many as 2,000 megawatts of pollution-free wind power in Iowa—a $3.6 billion investment that will help the company to get 85 percent of its electricity from wind power alone. That story is being repeated across the nation as the time for renewables is finally here.

Even utilities in our notoriously coal-dependent Southeast are getting in on the action. Duke Energy, one of the two biggest utilities in our region, in late April announced plans to increase its renewable energy capacity to 8,000 megawatts by 2020, up by one-third over previous targets. “We’re finding that it’s competitive” on a cost basis, Duke Energy company spokesman Randy Wheeless has said of renewables. “It makes good business sense.” The Atlanta-based Southern Company, parent company of Alabama Power, Georgia Power, Gulf Power, and Mississippi Power, intends to exceed its previously announced renewables totals for 2017 and 2018 and just bought a North Carolina company, PowerSecure, that focuses on distributed generation—smaller-scale local power often provided by renewable sources—along with energy efficiency. NextEra Energy, based in Juno, Florida and the parent of that state’s largest utility, Florida Power & Light (FPL), is a national leader in wind power development. “We continue to believe that the fundamentals for the North American renewables business have never been stronger,” NextEra Executive Vice President of Finance and CFO John Ketchum said on an April 28th earnings call.

But here’s an interesting fact: Even as feel-good stories circulate in the media about utilities developing solar projects in our very sunny region, most of these utilities’ clean energy projects are unfortunately located outside the Southeast. How do we make more of these projects happen here, like the 225 megawatts of utility-scale solar FPL is developing in Florida or the big solar arrays Southern Power is building on military bases across the Southeast? The simple answer is this: By creating good clean energy policies in Southeastern states where they are notoriously missing—in other words, virtually all of them—and supporting those few good policies that exist and are regularly under attack. (See: North Carolina.)

This map of Duke Energy Renewables’ U.S. Portfolio (below) serves as a case in point. Notice that the company, based in Charlotte, owns considerable clean energy generating capacity in several regions around the country: in California, the Southwest, the Midwest, and the Mid-Atlantic. Then notice that except for one project in super-sunny Florida, and more than two dozen large-scale solar projects in its own Tar Heel State, the Southeast’s cupboard is entirely bare, despite the fact that 76 percent of Duke’s electric sales take place in the Southeast.

Smart North Carolina clean energy policies have promoted renewables in the state, including these Duke solar projects. Better policies in other Southeastern states could bring even more local renewables development.

To what does North Carolina owe its good solar fortune? To the state’s Renewable Energy and Energy-Efficiency Portfolio Standard (REPS), which requires that 12.5 percent of the state’s electricity come from clean sources by 2021. And to state solar tax credits that were allowed to expire last year, even though they spurred hundreds of millions of dollars in solar investment, promoted development in struggling rural areas, and helped create almost 6,000 jobs in the state’s heretofore fast-growing solar industry. And finally, to the state’s avoided cost rates and rules, which were under attack last year, but which the NC Utilities Commission decided to leave in place.

North Carolina isn’t alone in having a renewable energy standard. Twenty-nine states and the District of Columbia have similar, binding targets; a growing number of them are even upping their goals to as high as 50 percent by 2030.  Yet, North Carolina is the only state in our 12-state region with a binding target. Dwell on this math for a moment: If you exclude the Southeast, almost three-quarters of the nation’s states have binding clean energy targets. In the Southeast, that number is a sad 8 percent. And in North Carolina, where the REPS has helped create more than 26,000 North Carolina jobs , the legislation is regularly under attack. This spring, legislators even introduced a bill that would essentially kill large-scale solar and wind development in North Carolina by requiring setbacks of 1.5 miles for wind or solar projects. (Compare that with 200 feet for hazardous waste dumps and 500 feet for hog-waste pits.)

Slowly, some regulators and legislators are starting to realize the incredible potential of renewable energy in the Southeast, including a whole host of benefits like jobs growth, clean air, and lower energy prices. South Carolina just improved its solar interconnection rules, which will make deploying solar easier, and Georgia regulators have encouraged more and more solar in the last few years. But too many decision makers are still stuck in the Dark Ages.

In Mississippi this winter, for instance, after the state Public Service Commission for the first time offered rules allowing net metering for solar owners—that practice enables solar owners to get a fair price for excess electricity they export to the grid—legislators introduced bills that would remove the PSC’s right to regulate 70 percent of the state’s electricity service, including creating net metering rules. (In the end, that legislation’s worst impacts were stripped out of the bill and most net metering is allowed to proceed in Mississippi, though there are reports that electric coops are using the interconnection process to limit solar deployment.)

It’s time decision makers in the Southeast move aggressively to maximize the growth of clean energy in our region by lining up the right policies, policies with great potential, so we can all benefit from what other regions have discovered: Promoting renewable energy creates good jobs, cleaner air, and lower electric costs. We all want that.

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