Continuing last year’s worrisome trend, efforts to strip local communities of decision-making authority over the health impacts and cost of their future homes and buildings have been introduced in several state legislatures. If adopted, these bills could hamstring local government’s ability to lead in the fight against local air pollution and climate change.
Local governments are often clean air and climate leaders, taking action to reduce the carbon footprint of everything from the electricity that powers their economies to the buildings their residents live, work, and play in. The fossil fuel industry backed bills proposed thus far in Indiana, Kansas, Mississippi, Missouri, Texas, and Utah will prevent local decision-making over the fuels used to power homes and other buildings.
This concerted legal strategy to prevent local action—likely in direct response to the growing momentum for healthier, cleaner buildings across the nation—poses a serious threat to climate action. It also continues last year’s worrisome trend where four states—Arizona, Louisiana, Oklahoma, and Tennessee—quickly passed similar legislation backed by fossil fuel interests that stripped local governments of the authority to adopt popular zero-emission building energy codes—sometimes even before local government officials realized what was happening.
We Must Transition Buildings to Cleaner Energy
Buildings are fossil fuel guzzlers that are responsible for about one-third of the gas consumed in the United States each year. This fossil gas (also known as “natural gas”) is used mostly for space and water heating. To address the greenhouse gas (GHG) emissions from burning fossil gas in buildings, municipalities across the country have been using their authorities over building energy codes to incentivize new construction that uses more efficient, cleaner, and healthier electric technologies.
By encouraging that new buildings use efficient electric equipment, local governments ensure that the climate footprint of their communities will continue to shrink as laws and regulations already on the books guarantee an increasingly clean supply of electricity in virtually every state. All-electric buildings also help communities control future costs, by avoiding expensive new gas infrastructure that would otherwise need to be maintained and paid off by customers for decades to come. Eliminating emissions from burning fossil fuels inside homes and other buildings also provides major public health benefits: Occupants of efficient homes with electric appliances and their neighbors breathe healthier air by avoiding toxic gases from gas stoves, furnaces, and water heaters.
Building energy codes allow communities to control the health of their indoor spaces, housing and energy costs, and the quality of their future climate. Not surprisingly, these policies have become very popular. All-electric building codes have been adopted by 40 municipalities in California, two Massachusetts towns have recently requested formal authority from the state to adopt similar policies, and Seattle’s mayor recently announced electrification requirements for new commercial and multifamily buildings.
The Gas Industry Fights Back, Will the People Have a Say?
Because buildings are inherently a local issue, local governments have historically enjoyed broad discretion in determining how to permit their construction. For cities that have passed all-electric or electric-preferred building codes, the mechanism to do so is to allow permits only for buildings with all-electric construction plans, or to offer expedited permitting or other incentives to encourage all-electric construction plans. Most of these state bills, however, reach into this traditional area of local authority and prevent municipalities from passing ordinances that would prohibit—or have the effect of prohibiting—a utility service based upon the type or source of energy to be delivered. In essence, cities would no longer be allowed to shape permitting rules to require healthier, low emission all-electric buildings even if that is what the local community determines its best course of action.
Further, the language of “or have the effect of” prohibiting a utility service in buildings is incredibly broad and could have sweeping ramifications that have not been fully examined for cities and their residents. This language could make it even harder for local building officials to incentivize all-electric construction or tailor policies to the needs and preferences of their communities, and by doing so inadvertently lock communities into decades of paying for expensive fossil infrastructure they never wanted in the first place.
Local Governments Must be Able to Act
States are beginning to plan for a managed transition away from fossil gas. Cities need to have all options available when addressing climate impacts in their communities while continuing to be responsive to the will of their residents.
Rather than prioritizing the interests of the gas industry, states should prioritize the needs of their constituents. That means proactively planning for the evolution of the fossil gas system and supporting a just transition for the gas industry’s workforce. It also means ensuring that cities can act, in partnership with their residents, in a way that makes the most sense for their climate and economic goals–which are increasingly clean and healthy all-electric buildings.
As more states, cities, and individuals transition to all-electric buildings for cost, health, and environmental reasons, the expense of maintaining the gas system will rise for those still dependent on it. States that hamstring cities by disallowing a transition off gas will lock in higher costs for their residents as the rest of the nation moves away from gas infrastructure and the remaining gas customers will be left holding the bag for a costly and underused system.
The following is a contributed article by Cindy Schonhaut, director of the Colorado Office of Consumer Counsel.
In an Aug. 24 opinion piece titled Utilities response to the pandemic- heads- shareholders win; tails- consumers lose, a former Colorado Public Utilities Commissioner pointed out that the nation’s utility customers are under great stress, no less so in Colorado. But as we continue what is now a national conversation regarding how we continue to weather this economic environment, it’s necessary that we set the record straight on some of the piece’s other assertions.
Let’s start with where we agree: It is true that many customers across the country are experiencing great pain in paying their bills due to the pandemic, compounded by the economic downturn, job losses, political instability and the effects of a warming climate. It is also true that utilities are positioning themselves to mitigate the impacts of COVID-19 on their business and their shareholders. And yes, they will likely seek to benefit from changes to their business model, customer load shifts and regulators’ need to expediently address the consequences of the pandemic for utility consumers.
Concurrent with these efforts by utilities, consumer advocates — in Colorado and across the nation — have been leading the charge to protect utility consumers during this exceptional time, providing the necessary regulatory expertise and indispensable perspective to navigate unprecedented circumstances for customers, utilities and regulators. In Colorado, this is the Office of Consumer Counsel (OCC).
Consumer advocate impacts
Since the state of emergency was declared, the OCC worked hard to drive efforts to stop disconnections, helped write language framing shut-off moratoriums, supported the effort to set conditions for reconnection, pushed for a moratorium on late fees, reconnection fee, and deposit requirements, helped ensure that utilities extend repayment plans, and aided in defining what will be treated as utility bad debt in these circumstances.
Without the efforts of consumer advocates across the country, there is no doubt that hundreds of thousands — if not millions of customers — would have had their electricity or natural gas shut off. This has been the frontline for consumer protection in Colorado and, as a result, consumers in every part of the state are able to rest easy knowing that if they are unable to pay their utility bills due to COVID, they will not face financial ruin.
The former commissioner claims that consumer advocates “treat as a foregone conclusion” the idea that consumers will be on the hook for the consequences of the pandemic, however, this is not the case.
In Colorado, the investor-owned utilities (electric and natural gas) jointly filed a petition in early April seeking Commission approval for special treatment of costs they incurred due to the pandemic, including past due bills that have not been paid in recent months. Through negotiations with the OCC and others, this request was narrowed significantly and resulted in a settlement by all parties that is the subject of the Aug. 24 opinion piece. The OCC stands behind this settlement and the protections it provides for consumers in light of all the circumstances.
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The editorial mischaracterizes both the intent and the impact of efforts by consumer advocates, and mistakenly infers that we are kowtowing to the wants of utilities and their shareholders. Nothing could be further from the truth. The OCC takes pride in our work representing residential, small business and agricultural consumers, and we have never been, and will never be, beholden to the utilities.
An aggressive approach
The OCC took an extremely aggressive approach to reviewing and analyzing the utilities’ requests for accounting orders and other assurances. As a direct result of this work, the following provisions of the settlement serve to protect consumers during this extraordinary time.
- Limit the range and scope of what can be considered “bad debt” in this context. The OCC insisted that the utilities’ original requests be greatly scaled back and narrowed down to covering just incremental bad debt from March 2020 through June 2021. As a result, only bad debt related to unpaid customer bills as a result of COVID can be included. All other costs and savings will be addressed in future cost recovery proceedings and will not be considered “extraordinary,” but instead will be reviewed on their merits similarly to all other utility costs and savings. Only costs related to incremental unpaid customer bills due to COVID will receive special treatment. In addition, the OCC required the utilities to agree that no carrying cost, interest or other return will be applied to this incremental bad debt.
- Ensure that all other utility costs and savings during the pandemic will be considered in future cost recovery proceedings. As rate cases are the bread and butter of utility regulation, addressing these costs and savings in those proceedings is the right way to deal with this issue. As is always the case in Colorado, when costs are deemed prudent by the Commission, they will be recoverable; when deemed not prudent by the Commission, they will be disallowed. Further, the OCC will continue to work to ensure that any cost savings due to the pandemic will pass to ratepayers and not to utility shareholders.
- Set data collection requirements and limit the time periods for which incremental bad debt expenses can be tracked. The OCC and other parties required that the settlement include strict timelines for when bad debt incurred will be considered for appropriate special treatment.
The OCC and other parties demanded that the settlement include a benchmarking process under which only the incremental bad debt of unpaid bills, measured in comparison to historical levels of unpaid bills, will be considered for special treatment. The utilities will report the accrual of these bad debt expenses to the settling parties and, should these expenses grow beyond specified levels, the settlement agreement provides protections.
These steps, while significant, are not the end of this process. Costs and savings related to COVID broadly will be considered in future cost recovery proceedings. Advocates will continue to do the necessary work to ensure that utilities do not garner windfalls during these unprecedented times. We are far from finished.
Even more importantly, it is time to begin a conversation about shared sacrifice. These bad debt costs, and any other costs due to COVID that the Commission deems prudent, must be shared by utility shareholders, not placed solely on the backs of ratepayers. This pandemic has impacted all areas of society and the economy, and ratepayers, regulators, utilities and advocates are all working to navigate an extraordinary situation as best we can. We assure the public that the OCC will continue to advocate for solutions that place consumers first and ensure that the public interest is served.
Hawaiian Electric takes an ‘install first, approve later’ approach to residential solar
The utility has launched a new program, Quick Connect, aimed at accelerating the process for turning on new residential solar systems.JANUARY 21, 2021 TIM SYLVIA
- CONSUMER PROTECTION
- COST AND PRICES
- MARKETS & POLICY
- RESIDENTIAL PV
Hawaiian Electric Co. has introduced a new program, dubbed Quick Connect, that will accelerate the process for turning on new residential solar systems.
For the next 12 months, utility customers on Oahu, Maui, and Hawaii islands installing new systems on circuits where the new program is available will not need the standard approvals before activating their systems.
Instead, the approval process, one which typically takes several weeks or months for each step to be completed, can now be handled after the system is built and turned on, substantially reducing the wait for many new solar customers.
Customers looking to install new systems still must start by applying for a county building permit, make sure their proposed system conforms to the PUC’s Rule 14H, and ensure their planned installation is no larger than 25 kW in capacity, with other technical requirements.
According to Hawaiian Electric, the program has been enacted in order to support customers and the state’s solar industry during the economic downturn that has come with the Covid-19 pandemic.
“We are committed to help our customers save money and help invigorate Hawaii’s economy as we get through the pandemic and move aggressively to 100 percent renewable electricity,” said Lani Shinsato, customer energy resources co-director at Hawaiian Electric.
Hawaiian Electric noted that if Quick Connect proves to be successful, the program could be extended beyond just one year.
Customers and contractors can find detailed specifications for eligibility at hawaiianelectric.com/quickconnect.
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