Powell’s ‘energy choice’ bill has hurdles to go through
February 14, 2014
In 2012, the State Legislature passed S.B. 12, allowing eBay to purchase its own renewable energy for its Salt Lake City facility while still having Rocky Mountain Power transmit the power via its lines. Now Rep. Kraig Powell (R-Heber City) is seeking to expand that model, allowing cities or counties to act as bulk purchasers of renewable energy for their citizens.
Powell’s bill, H.B. 110, would authorize a municipality or county to qualify as a contract customer of renewable energy and would require the Public Service Commission to determine the appropriate charges and credits for participating customers.
First approached about the idea by Park City Council member Andy Beerman, Powell talked with several of his constituents who are involved with renewable energy, such as Susan Soleil of Utah Interfaith Power and Light, in crafting the bill, which he said is an extension of 2012’s S.B. 12. The concept behind the bill is similar in nature to the already existing Community Choice Aggregation (CCA) model.
"Because CCA as a concept is going forward in other states, many people in Utah thought that what eBay did [in 2012] is similar to a CCA," Powell said. "Except it’s not one customer, it’s like 2,000 customers in Summit County. Technically, the city or the county is not the customer, they’re the gatekeeper or broker."
Summit County Council member Roger Armstrong has been pushing for the county to pursue a CCA model and said Powell’s bill is a good start. Armstrong is passionate about giving power users choice in what kind of energy they utilize.
"The CCA concept offers complete choice," Armstrong said. "You can not change your power, you can get a mix of power – both traditional and renewable – or you can order 100 percent renewable energy."
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Armstrong said a CCA also helps to boost renewable energy markets, eventually leading to a overall reductions in renewable energy prices for consumers. That’s what has happened in places where the CCA model has thrived, such as in Marin County, Calif.
If H.B. 110 ends up formulating a CCA-type system, Armstrong stressed that he would not support consumers’ ability to purchase any kind of energy from any supplier they choose. Since Rocky Mountain Power has a monopoly in Utah, he would be against allowing customers to purchase power from a retail market.
"Rocky Mountain Power is already in the renewable business," Armstrong said. "I don’t think [they] have to get hurt by this [bill]."
Beerman is also pleased to see Powell’s bill hit the Legislature.
"I’m excited to see Rep. Powell run a renewable energy bill and hope that it gets a favorable response from the Legislature," Beerman said in an e-mail. "The Park City Council has not taken a formal stance on H.B. 110 yet, but renewable energy projects are a high priority for the city. I thank Rep. Powell for his commitment to both consumer rights and a more sustainable future."
The biggest hurdle to Powell’s proposed concept, and the reason he said Rocky Mountain Power opposes the bill, is the complicated logistics of keeping track of how much renewable energy each customer uses, how much traditional energy each person uses and how to calculate fees for using the company’s lines to transmit the power.
"There’s a close balance between profits and cost – that’s what [Rocky Mountain Power’s] rates are based on," Powell said. "I’m respectful of the concerns that [the company] might have, but I think it’s a discussion worth having so we can confine our goals within some kind of framework."
Powell met with Rocky Mountain Power and other stakeholders involved to discuss H.B. 110 on Friday morning, and he said the meeting went very well.
In a statement provided by Rocky Mountain Power spokesperson Jeff Hymas, the company said it cannot support H.B. 110 "as currently written." It went on to say that allowing a municipality or county "to contract on behalf of its residents to purchase electricity without becoming its own utility" would be a "fundamental shift in Utah’s public utility code" and that implementation of the bill would be "incredibly complicated" and would require new, expensive metering on each customer’s home.
"The community renewable aggregation model this bill is based on doesn’t work in a state such as Utah where deregulation or open access for electricity providers doesn’t exist, and for good reason," the Rocky Mountain Power statement said. "There is a long track record showing that states with open access have higher electricity rates than states with regulated utilities — at least 3 cents per kilowatt-hour higher."
"I don’t think that these [issues] are necessarily insurmountable," Powell said. "If this bill is not ready to pass if all the answers have not been given as to how this will work in practice, then I want to take more time with it."
H.B. 110 is scheduled to be discussed by the House Political Subdivisions Committee on Tuesday, Feb. 18, at 2 p.m. in Room 450 of the State Capitol. For more information on the bill, visit le.utah.gov.
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