Bill Text: DE SB264 | 2011-2012 | 146th General Assembly | Draft
Bill Title: An Act To Amend Title 26 Of The Delaware Code Relating To Energy Efficiency Resource Standards And Renewable Energy Portfolio Standards.
Spectrum: Partisan Bill (Democrat 5-0)
Status: (Introduced - Dead) 2012-06-19 - Assigned to Energy & Transit Committee in Senate [SB264 Detail]
Download: Delaware-2011-SB264-Draft.html
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SPONSOR: |
Sen. McDowell & Rep. Scott |
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Sen. Bunting; Reps. D.E. Williams & Heffernan |
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DELAWARE STATE SENATE 146th GENERAL ASSEMBLY |
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SENATE BILL NO. 264 |
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AN ACT TO AMEND TITLE 26 OF THE DELAWARE CODE RELATING TO ENERGY EFFICIENCY RESOURCE STANDARDS AND RENEWABLE ENERGY PORTFOLIO STANDARDS. |
Section 1. Amend §352 (6), Title 26 of the Delaware Code by making insertions as shown by underlining as follows:
(6) "Eligible energy resources" include the following energy sources located within or imported into the PJM region:
a. Solar photovoltaic or solar thermal energy technologies that employ solar radiation to produce electricity or to displace electricity use;
b. Electricity derived from wind energy;
c. Electricity derived from ocean energy including wave or tidal action, currents, or thermal differences;
d. Geothermal energy technologies that generate electricity with a steam turbine, driven by hot water or steam extracted from geothermal reservoirs in the earth's crust;
e. Electricity generated by a fuel cell powered by renewable fuels;
f. Electricity generated by the combustion of gas from the anaerobic digestion of organic material;
g. Electricity generated by a hydroelectric facility that has a maximum design capacity of 30 megawatts or less from all generating units combined that meet appropriate environmental standards as determined by DNREC;
h. Electricity generated from the combustion of biomass that has been cultivated and harvested in a sustainable manner as determined by DNREC, and is not combusted to produce energy in a waste to energy facility or in an incinerator, as that term is defined in Title 7;
i. Electricity generated by the combustion of methane gas captured from a landfill gas recovery system; provided however, that:
1. Increased production of landfill gas from production facilities in operation prior to January 1, 2004, demonstrates a net reduction in total air emissions compared to flaring and leakage;
2. Increased utilization of landfill gas at electric generating facilities in operation prior to January 1, 2004;
A. Is used to offset the consumption of coal, oil, or natural gas at those facilities;
B. Does not result in a reduction in the percentage of landfill gas in the facility's average annual fuel mix when calculated using fuel mix measurements for 12 out of any continuous 15-month period during which the electricity is generated; and
C. Causes no net increase in air emissions from the facility; and
3. Facilities installed on or after January 1, 2004, meet or exceed 2004 federal and state air emission standards, or the federal and state air emission standards in place on the day the facilities are first put into operation, whichever is higher.
j. Energy efficiency resulting in a reduction in energy consumption, as defined by §1504 of this Title, that is above and beyond 10% of the electricity provider's 2007 electric consumption only for the affected electricity providers that have met the 15% energy savings goal as required by §1502 (a) (1) and defined by §1504 of this Title.Such energy efficiency also shall be considered in the comparable plans of §363 of this Title.
Section 2.Amend §1502, Title 26 of the Delaware Code by making insertions as shown by underlining and deletions as shown by strike through as follows:
(a) It is the goal of this chapter that each affected energy provider shall achieve a minimum percentage of energy savings as follows:
(1) For each affected electric energy provider, energy savings, including equivalent energy savings from fuel switching that lowers overall energy consumption, that is equivalent to 2% of the provider's 2007 electricity consumption, and coincident peak demand reduction that is equivalent to 2% of the provider's 2007 peak demand by 2011, with both of the foregoing increasing from 2% to 15% by 2015;
(2) For each affected natural gas distribution company, energy savings, including equivalent energy savings from fuel switching that lowers overall energy consumption, that is equivalent to 1% of the company's 2007 natural gas consumption by 2011, increasing to 10% by 2015.
(b) Not
later than April 1 of the calendar year immediately following each reporting
period:
(1) Each
affected electric energy provider shall submit to the State Energy Coordinator
a report, in accordance with regulations promulgated by the Secretary,
demonstrating that the affected electric energy provider, in cooperation with
the Sustainable Energy Utility and the Weatherization Assistance Program, has
achieved cumulative energy savings (adjusted to account for any attrition of
energy savings measures implemented in prior years) in the previous calendar
year that are at least equal to the energy savings required by regulations
adopted by the Secretary pursuant to §1504(a) of this title.
(2) Each
affected natural gas provider shall submit to the State Energy Coordinator a
report, in accordance with regulations promulgated by the Secretary,
demonstrating that the affected natural gas provider, in cooperation with the
Sustainable Energy Utility and the Weatherization Assistance Program, has
achieved cumulative energy savings (adjusted to account for any attrition of
energy savings measures implemented in prior years) in the previous calendar
year that are at least equal to the energy savings contained in regulations
adopted by the Secretary pursuant to §1504(a) of this title.
(b) An advisory council shall be established by the Director of DEDO and the Secretary of DNREC and will include representatives of the manufacturing, agriculture, commercial, residential, and low-income sectors.The advisory council will oversee a voluntary alternative compliance pathway for affected energy providers to meet the requirements of §1502 (a) of this Title.For participating affected energy providers, the alternative compliance pathway will be in effect at least for the time necessary to meet the percentage goals from §1502 (a) of this Title.The advisory council will only approve energy efficiency and coincident peak demand reduction programs that are cost-effective, reliable, and feasible to ensure that the average customer bill is reduced.The advisory council will only approve fuel switching programs that are cost-effective, reliable and feasible to ensure that the participating customer bill is reduced.
(1) The advisory council, in collaboration with affected energy providers, the Sustainable Energy Utility, the Commission or Commission staff, and the Public Advocate, shall research all energy efficiency, coincident peak demand reduction, and fuel-switching programs that are cost-effective, reliable, and feasible, including consideration of financing mechanisms.Efficiency gains from fuel switching shall be quantified by measuring the improvements in energy output per unit and the reduction in carbon emissions.For each affected energy provider, the advisory council shall identify three-year program portfolios and define associated savings goals that are designed to achieve all cost-effective, reliable, and feasible energy efficiency and demand reduction.The advisory council shall utilize the services of an independent technical advisor in conducting its research and identification of program portfolios and associated savings goals.
(2) The affected energy providers shall prepare and submit to the advisory council three-year program plans and budgets designed to meet the defined program portfolios, including the defined energy savings goals.The advisory council shall approve cost-effective, feasible, and reliable energy efficiency and coincident peak demand response program plans on a three-year cycle for each affected energy provider pursuant to regulations required by §1504 (a) (4) of this Title.
(3) Costs incurred by the advisory council shall be included as costs in the cost-effectiveness test for the program portfolios.Advisory council costs shall be allocated to affected energy providers on the basis of total annual sales of energy and reimbursed to the advisory council by affected energy providers as part of energy efficiency and coincident peak demand response program operation costs.
(4) The Commission shall allow the recovery of appropriate costs incurred by Commission-regulated affected energy providers for energy efficiency, coincident peak demand reduction, and fuel-switching programs approved by the advisory council on at least an annual basis, in the same manner as other supply resources, including allocated costs per §1502 (b) (3) of this Title.Recovery of such costs shall be through a rate-recovery mechanism that are consistent with the goals and objectives of this statute and recommended by the advisory council, filed by the affected energy providers, and approved by the Commission.
a. The Commission shall utilize a process that achieves the efficient and timely recovery on at least an annual basis by Commission-regulated affected energy providers of appropriate costs and associated rates of return related to implementing activities and programs approved by the advisory council.
b. For Commission-regulated affected energy providers, appropriate costs incurred arising out of activities and programs approved by the advisory council that are not subject to contemporaneous recovery shall be subject to deferred accounting treatment, including a reasonable rate of return of and on the unrecovered balance that is at a minimum the same as the overall rate of return approved by the Commission.
c. Coincident peak demand reduction programs of Commission-regulated affected energy providers that are currently under review or already have been approved by the Commission, including dynamic pricing and direct load control, shall not be subject to review and approval by the advisory council.The Commission may exercise its discretion to transfer its approval of such programs to the advisory council as outlined in § 1502 (b) (1) and (2) of this Title.
(5) Affected energy providers that are not regulated by the Commission shall retain all decision-making sovereignty and shall recover costs for energy efficiency and coincident peak demand reduction programs approved by the advisory council in the same manner as other supply resources after approval by the Board of Directors for rural electric cooperatives or the pertinent local regulatory authorities for municipal electric companies.
(6) The affected energy providers and the Sustainable Energy Utility shall collaborate to promote all available energy efficiency and coincident peak demand reduction programs through a unified, statewide platform, which shall serve as a resource for all citizens of Delaware seeking to save money through energy efficiency.
Section 3.Amend §§1503 through 1506 of Title 26 of the Delaware Code by making insertions as shown by underlining and deletions as shown by strike through as follows:
§1503. Energy use reporting.
(a) The DEO
shall annually publish a report on statewide electricity and natural gas
consumption, and electricity peak energy demand, and
program activities by the affected energy providers related to meeting the
goals established in §1502.The DEO
shall submit this annual report to the Secretary, and make
the report available to the general public by December 31 of each calendar
year commencing in 2011 commencing in 2013.
(b) All
affected energy providers shall provide electric and natural gas consumption
and peak usage data to the State Energy Coordinator annually by April 1 as
required in §1502(b) of this title.
§1504. Regulations; jurisdiction; administration.
(a)
Not later than July 29, 2010 December 31, 2012, the Secretary,
with the cooperation of affected energy providers, shall, by regulation,
establish the requirements of this subsection, including, but not limited to:
(1) Measurement and verification procedures and standards;
(2) Requirements and timelines under which affected energy providers shall demonstrate, document, and report compliance with the energy savings goals established under §1502 (a) and §1502 (b) of this Title and report consumption and peak demand data;
(3) Procedures and standards for defining and measuring electricity savings and natural gas savings that can be counted towards the energy savings targets established under §1502 (a) and §1502 (b) of this Title, which shall, at a minimum:
a. Specify the types of energy efficiency and energy conservation measures that can be counted;
b.
Enable that energy consumption and peak demand estimates in the
applicable base and current years be adjusted, as appropriate, to account for
changes in weather, population, previously enacted and deployed coincident
peak demand reduction side management and energy efficient
efficiency programs by an affected energy provider since the 2007 base
year, or other variables;
c. Account for the estimated useful life of measures;
d. Include deemed savings values for specific, commonly used measures;
e. Allow for savings from a program to be estimated based on extrapolation from a representative sample of participating customers;
f.
Include procedures for counting combined heat and power savings and,
recycled energy savings, savings from fuel switching, and equivalent energy
efficiency savings for different fossil fuels from programs that lower overall
energy consumption;
g. Establish methods for calculating codes and standards savings, including the use of verified compliance rates;
h. Provide for standardized determination of baselines for energy efficiency projects; and
i. Procedures and standards for third-party verification of reported electricity savings or natural gas savings.
(4) Procedures for complying with the alternative compliance pathway and operation of the advisory council established under §1502 (b) of this Title, including but not limited to, the identification and definition of programs to be included in the portfolio of the affected energy provider and the associated defined savings goals, the timelines of program plan submission and approval, reporting requirements, cost-effectiveness test(s), financing mechanisms, cost allocation, feasibility definition, reliability definition, and any other appropriate and reasonably thorough evaluation, measurement, and verification necessary to ensure that programs are designed and implemented in a cost-effective manner, and to verify that customers are indeed receiving cost-effective energy efficiency and coincident peak demand reduction programs that reduce the average customer bill.The advisory council will apply all standards, estimates, and procedures established in §1504 (a) (1)-(3) of this Title.
(b) Regulations promulgated pursuant to this chapter and case decisions issued under the auspices of this chapter by the Secretary of DNREC shall be subject to direct appeal to the Superior Court pursuant to the provisions of the Administrative Procedures Act, Chapter 101 of Title 29. The Environmental Appeals Board shall not have jurisdiction over any such appeal.
(c) Regulations promulgated by the Secretary shall not differ significantly among affected natural gas distribution companies or among affected electric energy providers.
(d) All regulations promulgated under this chapter shall be adopted under the Administrative Procedures Act [Chapter 101 of Title 29].
(e)
Any costs incurred by the Secretary and DEO in developing and implementing the
programs under this chapter shall be funded through a charge placed by the
Public Service Commission on entities under its jurisdiction that have an
obligation to comply with the provisions of this chapter and through compliance
payments submitted by entities not regulated by the Public Service Commission.
Any remaining funds shall be distributed as authorized in §1505 of this Title.
(f)
If an energy efficiency charge greater than zero is established pursuant to §
1505 of this Title, then subsection (e) of this section will no longer apply.
§1505.
Energy efficiency charge.
(a) There
is hereby established the Sustainable Energy Trust Fund.
(b) Each
individual affected energy provider may determine how best to fund activities
necessary to achieve the energy savings goals within its service territory and
implement programs as it sees fit. Should an affected energy provider determine
that a charge is unnecessary, a plan shall be submitted that demonstrates how
the goals will be achieved. Should an affected energy provider determine that
an energy efficiency charge is necessary to achieve the goals, it may make such
a recommendation in the Workgroup study that is consistent with this section.
(c) Based
upon the recommendation or recommendations of the Workgroup, the Secretary may
implement a charge to be collected from each energy customer by its affected
energy provider ("energy efficiency charge"), which may not vary by
customer class and is consistent with this section.
(d) Any
energy efficiency charge for energy customers of affected electric energy
providers shall be imposed on a per kilowatt-hour basis and may not exceed a
level that would result in an average charge in excess of $0.58 per month per
residential electric customer.
(e) Any
energy efficiency charge for energy customers of affected natural gas energy
providers shall be imposed on a therm basis and may not exceed a level that
would result in an average charge in excess of $0.41 per month per residential
natural gas customer.
(f) Each
affected energy provider shall remit any energy efficiency charges collected
pursuant to this chapter to the DEO to be deposited in the Sustainable Energy
Trust Fund on a monthly basis. Funds shall be deposited in the Sustainable
Energy Trust Fund by the DEO in separate accounts for each affected energy
provider and shall, to the extent feasible, and except as otherwise provided in
paragraph (j)(3) of this section below, be earmarked for use on behalf of
energy customers of the affected energy provider from which they are collected
in collaboration with the affected energy providers. Funds deposited in the
Sustainable Energy Trust Fund shall not be funds of the State, shall not be
available to meet the general obligations of the government, and shall not be
included in the financial reports of the State. The DEO shall submit to the
General Assembly and the Governor by May 30 of each year a written accounting
of monies received from the fund during the previous year and how those moneys
were used or disbursed during that year.
(g) Costs
associated with achieving the energy savings goals are not recoverable through
Public Service Commission proceedings.
(h) All
revenue credited to the Sustainable Energy Trust Fund shall be used solely to
fund the programs mandated by this chapter.
(i) All
interest earned on moneys deposited in the Sustainable Energy Trust Fund shall
be credited to the Sustainable Energy Trust Fund and shall be used solely for
the purposes designated in this chapter.
(j) All
moneys deposited into the Sustainable Energy Trust Fund shall be transferred in
their entirety on July 1 of each year to the DEO to fund the programs mandated
by this chapter. The DEO shall distribute the funds in each separate account
established pursuant to subsection (f) of this section to the following uses:
(1)
Seventy-five percent of the assessment is provided to the SEU and shall be used
to further the goals and activities of the SEU including, but not limited to,
the promotion of energy conservation, energy efficiency, renewable energy, and
energy financing pursuant to §8059(j)(3) of Title 29.
(2) Twenty
percent of the assessment is provided to the Weatherization Assistance Program.
(3) Five
percent of the assessment is provided to the Secretary and DEO to cover costs
incurred in developing and implementing the EERS.
§1506.
Verified savings.
(a)
Subject to the other provisions of this subsection, affected energy providers
will use EERUs obtained from the Sustainable Energy Utility or the
Weatherization Assistance Program and approved by the State Energy Coordinator
or created by an affected energy provider under a demand response program to
meet the applicable energy savings requirements defined pursuant to §1502(a)
of this Title.
(b) Energy
savings achieved and used for compliance pursuant to this subsection shall be:
(1)
Measured and verified in accordance with the procedures specified by
regulations developed under §1504(c) of this Title;
(2)
Reported in accordance with §1502(b) of this Title; and
(3)
Located in the State.
Section 4.Amend §1007 (c)(1), Title 26 of the Delaware Code by making insertions as shown by underlining and deletions as shown by strike through as follows:
(c)(1) DP&L is required to conduct integrated resource planning. On
December 1, 2006, and on the anniversary date of the first filing date of every
other year thereafter (i.e., 2008, 2010 et seq.), DP&L shall file with
the Commission, the Controller General, the Director of the Office of
Management and Budget and the Energy Office an integrated resource plan
("IRP") on a three-year cycle established in regulations to be
synchronized with the energy efficiency planning cycles from §1502 (b) of this Title.In its IRP, DP&L shall systematically
evaluate all available supply options during a 10-year planning period in order
to acquire sufficient, efficient and reliable resources over time to meet its
customers' needs at a minimal cost. The IRP shall set forth DP&L's supply
and demand forecast for the next 10-year period, and shall set forth the
resource mix with which DP&L proposes to meet its supply obligations for
that 10-year period (i.e., demand-side management programs, long-term purchased
power contracts, short-term purchased power contracts, self generation,
procurement through wholesale market by RFP, spot market purchases, etc.).
SYNOPSIS
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The Bill will reduce the average customer energy bill and will create local construction jobs by driving investments in energy efficiency that displace more expensive energy supply purchases.Energy efficiency investments create in-state jobs, lower energy bills for Delaware consumers and businesses, prevent dollars from being sent across borders, encourage the development of skilled energy professionals and labor force in Delaware, stimulate innovation, and cause a reinvestment of Delaware dollars in Delaware.Efficiency investments lead to substantial environmental and health benefits from reduced air pollution, make homes healthier and more comfortable, increase grid reliability, decrease vulnerability to energy price spikes, increase energy security, and boost the economy. The Bill permits electricity providers to utilize electric energy efficiency savings achieved above and beyond the existing electric energy efficiency goals (15% by 2015) toward achieving their renewable energy portfolio standard requirements.Reducing electricity consumption has the same positive attributes as renewable energy resources and through the process set forth in this Bill, will result in actual reductions in overall customer bills.Adding another option for complying with Delaware's renewable portfolio standards gives energy utilities greater flexibility in how they meet this renewable requirement while still providing the many positive benefits to Delaware citizens as previously defined in the statute.Additionally, the increased flexibility in complying with the renewable portfolio standards could also result in a lower cost to achieve those requirements. In response to the Energy Efficiency Resource Standards (EERS) Workgroup's report, the Bill clarifies and simplifies the EERS Act.This Bill establishes an alternative compliance pathway for affected energy providers to meet the energy efficiency goals of the EERS Act.The alternative compliance pathway enables the achievement of the targets through the identification of all cost-effective, reliable, and feasible energy efficiency and coincident peak demand reduction programs that reduce the average customer's energy bill.The new alternative compliance pathway complements the Act's existing efficiency goals by ensuring energy efficiency and coincident peak demand reduction investments are cost effective, reliable, feasible, and are the least expensive ways to meet the growing energy demands of the state.The Bill also eliminates the authority to impose an energy efficiency surcharge.Energy efficiency is instead treated as an energy resource and is paid for in the same manner as other supply resources, with an assurance that only programs designed to reduce the average customer's bills will be implemented.A rigorous financial oversight structure is established to ensure that only programs that reduce customer bills are approved.The Bill would reduce energy costs while increasing reliability and energy security for the state.A final component of the Bill synchronizes the Integrated Resource Planning process for regulated utilities with the energy efficiency planning process. |
Author: Sen. McDowell
