How ALEC plans to reshape U.S. energy policy in 2014
Across the country, U.S. state legislatures are gearing up for new sessions where they will work on scores of bills that impact the power and utilities sector.
This week, Utility Dive is taking a closer look at an influential conservative business group and how its legislative agenda for 2014 could shape the future of the electric utility industry.
Who is ALEC?
The American Legislative Exchange Council (ALEC) is a corporate-funded conservative group that drafts model bills and policies for its legislative members to take back to their home states.
ALEC boasts nearly 2,000 state lawmakers as members, according to the group. Typically, ALEC lawmaker members introduce the group's model legislation and resolutions in their home legislatures. Identical ALEC bills sometimes pop up in different states around the country.
ALEC has turned its attention to electric utility issues in recent years. “The ever-increasing governmental control over energy supply, distribution, and use is threatening not only the nation’s prosperity but also individual liberty,” according to ALEC's 2014 Natural Resource Reserve, which lays out the group's model policies on energy, the environment and agriculture for this year.
Founded 40 years ago, the group has largely operated under the radar screen. A couple years ago, they became more widely known and environmental and other groups closely monitor their activities.
But ALEC's influence may be waning. The group opposes renewable portfolio standards (RPS), believing they interfere with free markets and drive up the price of power. In 2013, ALEC legislation aimed at rolling back RPS standards was introduced in 13 states. None of the bills passed.
ALEC's agenda for 2014
With that in mind, we've scoped out ALEC's agenda on energy policy for 2014.
The policies were developed by ALEC's Energy, Environment, and Agriculture Task Force, which is led by Wyoming Rep. Thomas Lockhart, a Republican who works on energy issues in the Wyoming Legislature, and Paul Loeffelman, director of corporate external affairs for American Electric Power.
The committee was set to vote on several new model bills in December, but they have not yet been approved by ALEC's board.
ALEC staff did not respond to phone calls or emails for comment.
Before jumping into the specifics, it's important to understand ALEC's views on climate change, which the group sees as “inevitable.”
Climate change will be a major focus this year as the Environmental Protection Agency is developing carbon dioxide emissions limits for new and existing power plants. The decisions made by states and the federal government on greenhouse gas emissions will affect many aspects of utility operations, including power plants, transmission lines, energy efficiency and grid hardening.
“Unilateral efforts by the United States or regions within the United States will not significantly decrease carbon emissions globally, and international efforts to decrease emissions have proven politically infeasible and unenforceable,” ALEC said. “ALEC discourages impractical visionary goals that ignore economic reality, and that will not be met without serious consequences for worldwide standard of living.”
ALEC has seven approved model resolutions and policies related to climate change. One resolution opposes EPA’s endangerment finding for carbon dioxide and any greenhouse gases regulation because of the economic burden they would cause. Another resolution urges a state's governor to withdraw from a regional climate initiative. And a third resolution opposes so-called carbon taxes.
ALEC also has a pending resolution opposing EPA carbon emissions standards for existing and new power plants.
ALEC has a model resolution for its members that calls on Congress to pass legislation “so that that the benefits of coal-fire-generated electricity to Americans and state economies are increased, not decreased; fuel diversity and grid reliability is improved, not restricted; and continuing emission reduction progress is made while minimizing capital costs, rate increases.”
ALEC is urging states to impose “a fixed grid charge or other rate mechanisms that recover grid costs from [distributed generation] systems to ensure that costs are transparent to the customer,” according to a draft resolution. ALEC contends, like some utilities, that the owners of distributed generation are avoiding paying their full share of the costs of having a centralized grid system.
ALEC opposes mandates requiring utilities to buy renewable energy, and has a model bill – the Electricity Freedom Act – that would eliminate a state's RPS.
ALEC has another bill – the Market-Power Renewables Act – designed for states that would be unlikely to repeal their RPS. Under the bill, a state’s RPS requirement is lowered by subtracting any voluntary “green” purchases that are made in the state. The remaining RPS would be eliminated by 2025.
Energy efficiency should be an option for utilities at the state level, but should not be dictated by the federal government, according to ALEC. “Utility planning must not be restricted to conservation but instead, must embrace the entire spectrum of demand and supply options,” ALEC's model resolution states.
Outlook for 2014
Looking ahead, expect to see bills based on ALEC's models appear in state legislatures. However, they won't necessarily gain traction.
Some traditionally conservative states like Iowa, Texas and Wyoming strongly support wind generation. Policies supporting energy efficiency, which is cheaper than building power plants, generally have been met with bipartisan support. Arizona, a solidly conservative state, has a strong RPS, aggressive energy efficiency targets and its utilities are moving away from coal-fired generation.
Even so, ALEC's model bills will continue to be debated and affect the discourse in state capitals in 2014.