By Twisha Balasubramanian*
Following suite with California and Hawaii’s increased Renewable Portfolio Standards (RPS), the Nation’s capital— the District of Colombia, proposed an increase in RPS from 50% to a 100% by year 2032. This legislation was introduced on July 10, 2018. Less than a year later, on January 18th Mayor Muriel Bowser signed the Clean Energy D.C. Omnibus Amendment Act of 2018. This Bill has since been enacted and transmitted to Congress. The “projected law date” is March 28 of this year. With about two weeks away from this historic projection, it is important to revisit the efficacy of this law.
Mayor Bowser’s Office has projected that this historic legislation will further support her “Clean Energy DC plan”. They project that this will bolster the following goals:
1) 100% of electricity sold in D.C. come from renewables.
2) Multiplying the “required amount of solar energy deployed in D.C.” by two-fold.
3) Increasing the energy efficiency of existing buildings.
4) Energy-bill assistance to support low and middle-income residents.
5) Mandating all public transport as well as private fleet vehicles to be emissions free by 2045.
6) Increase private investment in clean energy by funding the “DC Green Bank”.
Mayor Bower commends the passing of the Clean Energy D.C. Omnibus Amendment Act of 2018 (hereon, “Act”), by stating that—
“D.C. has now solidified its space as a national leader in the fight against climate change and proudly communicate to the world that we are still in.”
She also mentioned in her speech after signing the historic bill, that effective actions against climate change are now in the hands of cities and states. She is also optimistic that with the passing of this historic Bill into Law in the Nation’s capital will only encourage other states across the Nation to follow suite.
How Effective is it?—
This optimism aside, it begs the question of how effective is the Act? There are a multitude of components to the Act and most of them will be outside of the scope of this blog. This blog will focus on the utility-level renewable energy requirements of the Act. As Section 4 of the D.C. Official Code now stands, the new amendments to §34-1432 requires the District to obtain “no less than 17.5% of its energy from tier one renewable sources and 1.5% from solar this year in 2019. This requirement is leapfrogged to—
“no less than 95% of its energy from tier one renewable sources, and 5% from solar by the year 2032.”
This by far is the most stringent requirement governed by any law in all 40 states and territories of the U.S. Great propositions come with a great deal of accountability and transparency. For this Act to reach its full potential Utility companies and customers will have to revamp their approach to the archaic grid. This will inevitability require a plethora of smart grid technology on the utilities end as well as the adoption of smart products on the consumer end.
As anticipated, energy analysts, environmental groups as well as some D.C. Council members are weary of major utility companies such as Pepco who allegedly have ulterior motives regarding the Act. Environmental activists suggest that Pepco is capitalizing on the added provision in the Amended Act, allowing utility companies to—
“charge residents twice for their electric usage.”
This allegation comes from the co-mingling of interests on behalf of Pepco as well as the Sustainability Energy Utility (SEU). The SEU administers efforts like, building energy-efficiency programs such as solar installations and building efficiency retrofitting. The SEU is directly funded by what the industry calls a “flat tax” on utility bills, the administration of this tax in turn is overseen by the D.C. Council.
On the flip-side of the coin, Council members like Kenyan McDuffie from Ward 5 have tried to absolve these claims by stating that the concern of “double charging” is explicitly clarified by the 2018 Amendments to the Act, stating that—
“the electric and gas company programs will not duplicate programs by the SEU.”
The Pepco region president Donna Cooper, further contended that “it’s not double dipping”, instead it “removes the disincentive as it relates to the electric utility to really invest and move forward with energy-efficiency programs.” Albeit, a few council members such as Mary Cheh from Ward 3, have voiced further discomfort with the high stakes utility companies have in this new Act. She said in order to avoid residents getting exploited by utility companies, she will introduce legislation that will require these companies to—
“offer renewable energy to D.C. customers, and require the utility to enter into 10-year contracts with clean energy companies.”
Measures like this were originally engraved in the Clean Energy Act but were taken out to incentivize/ as a “concession to” Pepco. Cheh further highlights the fact that “while the SEU’s four percent profit margins are confined by benchmarks”; Pepco’s profit margins are skyrocketing regardless. In other words they are investing “risk-free” regardless.
Nevertheless, it is no doubt that with increase in forward-thinking legislation like the D.C. Clean Energy Act, all stakeholders will try their luck at making a profit. It is exceeding important for legislators and consumers to be aware that drastic shifts 100% renewable energy markets might placing a huge price tag on the consumer end. Legislators must put a stop to any and such racketeering of increased costs that reduce the efficacy and good faith of State efforts to implement incentives for greener technology and utility services.
*Twisha Balasubramanian is a third-year JD candidate and a Master of Science in Environmental Policy candidate at the Bard Center for Environmental Policy. She has an interest in international and domestic energy law, regulation and policy. She advocates for the formulation of effective international and domestic communications in both policy-making and legislation. She has a developed understanding and knowledge of energy law and policy, environmental law and policy, as well as international environmental law and policy. She is also familiar with United States policy outreach, renewable energy research and partnerships through her graduate studies, law school experience, externships, and graduate-level research assistantships. Currently, Twisha is an Environmental Spring Extern at a D.C.-, Maryland- and Virginia-based real estate law firm.