Minnesota clean energy and economic development officials say a Canadian solar manufacturer’s planned expansion in the state shows the impact of federal climate incentives for domestic production. 

Pete Wyckoff, assistant commissioner of federal and state initiatives for the Minnesota Department of Commerce, said Heliene’s announcement that it plans to onshore solar cell manufacturing in partnership with an Indian supplier shows the Inflation Reduction Act “is doing what it is designed to do, which is to provide incentives to encourage every step in the solar manufacturing process to occur domestically.” 

In late July, Heliene said it had reached a joint venture agreement with Premier Energies, India’s second-largest solar cell manufacturing company, to build a solar cell manufacturing facility somewhere in the Twin Cities. Heliene also has a plant in northern Minnesota, where it assembles solar panel modules using imported cells from Premier Energies.

Several U.S. factories assemble solar panel modules — think of the rectangular boxes you’d see installed on a rooftop. Almost all of these domestic manufacturers, though, depend on imported solar cells — the half-foot square slices of silicon that actually do the work of converting sunlight to electricity.  

The Inflation Reduction Act prompted a flurry of announcements related to domestic solar cell production, but its viability here remains unclear, Renewable Energy World recently reported. Multiple companies have already retracted plans for U.S. solar cell factories, citing market challenges.

Meeting installer demands

Heliene CEO Martin Pochtaruk said its planned solar cell plant is meant to meet clients’ demand for modules with higher levels of domestic content, which allow project developers to claim more lucrative incentives. After solar owners receive a standard 30% tax credit for projects, they can add another 10% by using modules with equipment made in the United States.

“Strong solar cell manufacturing offers solar developers a higher percentage of U.S.-made domestic content components for their projects, reduces reliance on imports, and releases stress on our supply chain,” Pochtaruk said.

He said working with Premier on establishing an American beachhead that could employ more than 200 workers makes sense because the Inflation Reduction Act rewards solar panels made primarily with parts made in the U.S. solar cells.

Solar developers must use panels with a domestic content of 40% or more for the bonus, and the threshold will increase to 55% in 2026. 

In August, Heliene agreed to a multi-year contract with NorSun to supply low-carbon wafers — one of the building blocks of solar cells — for all the company’s solar panels starting in 2026. 

Heliene has also announced a partnership with UGE, a community and commercial solar and battery storage developer, to provide panels that meet the requirements of the Domestic Content Investment Tax Credit (ITC) Bonus. 

Heliene said in a press release that it would manage construction, finances, supply chain logistics, regulatory oversight, and human resources. Premier will provide cell technology engineering, manufacturing expertise, supply-side agreements, and raw material vendor relationships.  

Pochtaruk said Heliene’s commitment to buy material from Premier Energies and NorSun was instrumental in their ability to finance the new factories. He asked both to try to open in 2026 when the content bonus requires more American-made content.

Jeremy Kalin, a Minneapolis attorney who works with several solar developers, said his clients are seeking panel suppliers with enough content to take the additional 10% tax credit. Manufacturers must provide a guarantee that the panels reach the threshold of having at least 55% of the panels’ components American-made. 

“Once they meet that requirement, they will see a flood of business,” Kalin said.  

Could Minnesota be a solar manufacturing center?

Minnesota Solar Energy Industries Association business development and communications director Abbi Morgan said the company’s presence “is huge and something we’re excited about because Minnesota is often overlooked when it comes to clean energy.”

So far, though, Heliene’s Minnesota operations have yet to attract other solar manufacturers. Morgan said one of the association’s members, a German firm, opened a factory in Arizona. At least among the association’s more than 170 members, plenty have expressed interest in buying panels from Heliene.

“There are a lot of members who ask about Heliene, but we’ve heard they have a long waiting list even though they expanded their factory in Mountain Iron,” Morgan said.

After securing a $3.5 million state loan package in 2018, Heliene began manufacturing and assembling panels in a once-shuttered solar module plant in Mountain Iron. The former plant, Silicon Energy, failed despite state investments of millions of dollars.

The plant is in a business park created to attract green energy companies across the street from a taconite mine. Two years ago, the company spent $21 million to triple the production space through an addition to the plant. Heliene spent $9.5 million to pay for the expansion and received most of the rest through state loans and a county grant.

Now, the company has shifted attention to adding capacity in central Minnesota, where it will begin developing two solar module manufacturing lines in an existing 227,000-square-foot warehouse in Rogers, a burgeoning exurb northwest of Minneapolis.

Before preparing the warehouse for solar production, Heliene is waiting to hear whether the project will receive money from the Minnesota Investment Fund (MIF) and Job Creation Fund (JCF). State officials were expected to make an announcement in September.

Rogers Community Development Director Brett Angell said Heliene will fit into the city’s growing reputation as a hub for sustainable enterprises. The company plans to employ at least 180 people and spend $16 million on building improvements and equipment.

“Additionally, (Heliene) would continue to add to the growing segment of sustainable manufacturers within the community as the city currently is home to multiple plastic recycling companies,” Angell said.

Heliene has not selected a site for the solar cell manufacturing plant or provided details on how much investment and employment it will create. Pochtaruk said the building will be significantly larger than the solar module plant.

Federal incentives spur solar panel company to try onshoring its supply chain in Minnesota is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

This monthly newsletter provides updates on Ohio’s ongoing utility corruption scandal. Was this forwarded to you? Click here to subscribe.

FirstEnergy’s utility customers took heavy hits from severe thunderstorms and tornadoes last month. Nearly half a million of its Ohio utility customers lost power, with extended outages causing many to lose food and incur other expenses in addition to property damage due to the extreme weather. 

All of the company’s utility customers can also expect hits from higher energy bills next year after FirstEnergy’s pending rate case ends. On July 31, the company asked Ohio regulators to let it double the increased charges sought — from roughly $94 million per year to $190.3 million annually.

Yet state regulators still have not resolved multiple FirstEnergy cases involving millions of dollars and issues related to House Bill 6, the 2019 nuclear and coal bailout law at the heart of Ohio’s ongoing corruption scandal. And none of those cases will be decided before voters cast their ballots this fall.

Other recent developments include: 

• The State of Ohio settled potential criminal charges against FirstEnergy for $20 million, without stating how the figure was arrived at or making any provision for restitution to Ohio ratepayers.
• Federal prosecutors urged the Sixth Circuit Court of Appeals to uphold former Ohio House Speaker Larry Householder’s criminal conviction and 20-year sentence.
• Ohio regulators approved more than $100 million in challenged expenses for two 1950s-era coal plants for which subsidies are mandated by HB 6.

In the dark

Grid reliability is back in the spotlight after tornadoes and severe thunderstorms knocked out power to approximately 495,000 of FirstEnergy’s Ohio utility customers on August 6.

FirstEnergy Ohio President Torrence Hinton and other company executives provided a briefing on the company’s response to the Public Utilities Commission of Ohio after its September 4 meeting. “We haven’t had this amount of customers out for about 30 years,” Hinton said.

Restoring power took roughly a week, with outages lasting more than three days for more than 100,000 of those customers, data from the company show. 

The outages likely won’t count against the utilities’ reliability requirements for this year because of the extreme nature of the storms. 

Some Ohio lawmakers like House Rep. Dick Stein, R-Norwalk, have already expressed concern about reliability, although they have framed it as a consequence of retiring coal-fired power plants and have called for more electricity from fossil fuels or nuclear energy. 

However, the vast majority of electric grid reliability problems stem from bad weather and distribution issues. Those problems are likely to worsen as infrastructure ages and fossil fuel-driven climate change makes extreme weather more common.

“Without immediate and meaningful action, climate change will continue to cause extreme weather and drive up costs for all Ohioans,” 14 Democratic Ohio House representatives wrote in an August 14 letter, calling for regulators to address the effectiveness and reliability of the state’s current energy strategies, which are heavily depending on fossil fuels and nuclear power.

Read more:

Despite millions spent on service upgrades, Ohio utilities still miss reliability marks (Energy News Network)

About 1,000 power outages linger 7 days after storms (FOX 8 News)

Doubling increased charges

FirstEnergy asked the PUCO this summer to let it double its proposed increase for rates and riders for its three Ohio utilities to $190.3 million per year, compared with the $94 million sought just two months earlier.

The requested increase is “primarily due to lower current revenues, higher operating expenses and higher rate base balances” than estimated, said Santino Fanelli, FirstEnergy’s director for Ohio rates and regulatory affairs, in testimony filed with the PUCO on July 31.

Fanelli also said the requested increase reflects the use of actual cost and revenue data instead of estimates for the first five months of the rate case’s test year. A pending bill would give utilities more leeway in using estimates, and some advocates worry companies might pad them on the high side.

In late June the PUCO selected Blue Ridge Consulting Services to help it review financial data, management policies and other information. The commission’s staff will then likely prepare a report with recommendations. Ratepayers will also have a chance to comment at local public hearings, which have not yet been scheduled but will likely include a virtual session.

Read more:

FirstEnergy companies asking Ohio regulators for rate increases (WUXU)

Ohio ratemaking reform bill would give more favors to utilities, critics say (Energy News Network)

Slap on the wrist?

FirstEnergy agreed to pay $20 million to settle its state criminal liability related to HB 6, but it’s unclear how lawyers for the utility, the Ohio Attorney General’s office and the Summit County prosecutor’s office arrived at the number. 

The amount is just under one-third of the bribes the company admitted to paying when it settled federal criminal charges against it in July 2021. The law’s nuclear bailouts would have been $1.3 billion if they hadn’t been stayed and then repealed.

The agreement with the state acknowledges the company’s cooperation but does not require any compensation to ratepayers, said Ashley Brown, a former PUCO commissioner.

Spokesperson Steve Irwin at the Ohio Attorney General’s office framed the settlement as “an important step in bringing the disgraced corporate leaders who used their positions of power to betray FirstEnergy’s ratepayers and employees and the people of Ohio to account for their crimes.” Irwin noted that the company is required to provide evidence, access to witnesses and testimony in the pending cases against former FirstEnergy executives Chuck Jones and Michael Dowling and in a civil proceeding relating to HB 6. “FirstEnergy today is not the company it was five years ago,” he added, noting steps taken to reform the company’s internal ethics program.

FirstEnergy President and CEO Brian Tierney echoed the theme in a press release, saying the company is “a stronger organization today.” 

Others are more critical.

“It is really disappointing to see the Ohio Attorney General’s office let FirstEnergy off the hook for its crimes with what amounted to more of a wink-wink than a slap on the wrist,” said Dave Anderson, policy and communications manager for the Energy and Policy Institute. He contrasted the August settlement with the potential remedies spelled out in the Ohio Attorney General’s initial civil complaint in a 2020 case, where potential punishments included corporate dissolution of FirstEnergy and penalties of triple the damages caused by allegedly wrongful actions.

Read more:

FirstEnergy to pay $20M, avoid criminal charges in state pay-to-play investigation (Akron Beacon Journal)

Ohio Attorney General Dave Yost settles with FirstEnergy for $20 million (Ohio Capital Journal)

Regulatory cases continue

Ohio voters can’t expect a resolution to any of FirstEnergy’s four HB 6-related regulatory cases before casting their votes this fall. Nineteen candidates on the ballot for Ohio’s General Assembly are among those who voted for HB 6 in 2019.

An audit in one case isn’t due before the end of September, and no date for an evidentiary hearing has been set. Two other cases about how FirstEnergy spent money from two bill riders won’t get an evidentiary hearing until next February.

A fourth regulatory case about corporate separation is set to start its hearing on October 9, when early voting will be underway. That date may move, however, because several depositions won’t take place until November and December. Depositions are sessions where witnesses answer lawyers’ questions under oath before a hearing or trial.

Questions in some of those depositions will likely follow up on information from recently produced documents. Possible topics also include why FirstEnergy fired various individuals besides former executives Jones and Dowling in the wake of Householder and others’ arrests in 2020.

Read more: 

FirstEnergy exec was fired amid bribery probe after his daughter pitched a $44k/month contract, records show (Cleveland.com)

FirstEnergy’s chief ethics officer knew about $4.3 million payment the company said was a bribe (Cleveland.com)

Rubber stamping?

Ohio regulators have approved more than $100 million in challenged 2020 expenses for two 1950s-era coal plants. HB 6 lets the plants’ Ohio utility owners pass costs on to ratepayers through 2030. By then the total subsidies could be around $1 billion, according to RunnerStone, a consultant for the Ohio Manufacturers’ Association.

“Consumers once again got stuck with the bill,” said Ohio Consumers’ Counsel Maureen Willis when the August 21 ruling came out.

The PUCO found that while the auditor, London Economics International, made several recommendations and conclusions critical of the coal plants’ practices and spending, the firm hadn’t come straight out and said any amount should be disallowed.

Paul Arbaje, an energy analyst for the Union of Concerned Scientists, said the ruling “sets a disturbing precedent. Coal-fired electricity is not only terribly destructive to our climate and public health, but it’s also completely uneconomical and has been for a long time.”

Higher capacity prices in the PJM grid region will take effect next June and could offset some of next year’s coal subsidies under HB 6. However, critics say the old plants will still be a bad deal for Ohioans. And higher capacity prices will affect wholesale electricity prices across the regional grid footprint, likely raising energy expenses overall.

Read more:

Ohio coal plant subsidies still a bad deal for ratepayers despite growing generation demand, experts say (Energy News Network)

HB 6 coal plant charges mount up again in Ohio (Energy News Network)

Coal company got big payback from HB 6 (Energy News Network)

Federal court filings

Briefing has been completed in lobbyist Matt Borges’ appeal from his federal criminal conviction alongside former Ohio House speaker Larry Householder last year. The court has not yet scheduled oral argument.

Federal prosecutors filed their brief in the Householder case on August 26, arguing that the trial court got both Householder’s conviction and his 20-year sentence right. Three groups also filed a friend-of-the-court brief on August 30, countering Householder’s argument that bribes were campaign donations and a form of speech protected under the Constitution.

“The First Amendment provides no protection for the corrupt and knowing exchange of campaign contributions for official acts,” wrote lawyers for the Campaign Legal Center, the Environmental Law & Policy Center and the Brennan Center for Justice at New York University School of Law.

A July court filing in FirstEnergy’s deferred prosecution agreement case acknowledged the company has performed its obligations under that 2021 settlement, which resulted in a $230 million penalty. FirstEnergy must continue to cooperate in any other criminal cases the federal government brings relating to facts stated in that HB 6 case. However, the federal government has yet to bring criminal charges against any current or former FirstEnergy executives who allegedly made the bribes.

A separate case at the Sixth Circuit Court of Appeals involves FirstEnergy’s challenge to Judge Algenon Marbley’s May 6 ruling that the company must produce its internal investigation to lawyers in shareholder litigation. The appeals court docket includes friend-of-the-court briefs filed by several law firms and a malpractice insurance carrier, expressing concern about whether the ruling could erode attorney-client privilege.

Read more:

On appeal, DOJ affirms ex-Ohio House Speaker Householder took FirstEnergy’s $60 million ‘secret deal’ (Cleveland.com)

Scandal-tainted FirstEnergy demands appeal of ‘shockwave’ privilege ruling (Reuters)

FirstEnergy backed by dozens of law firms in ‘shockwave’ privilege appeal (Reuters)

HB 6 Updates: More bill charges on the way while cases continue is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

As low-income households face the dual burden of weather extremes and high energy costs, energy efficiency is an increasingly important strategy for both climate mitigation and lower utility bills.

Passive House standards — which create a building envelope so tight that central heating and cooling systems may not be needed at all — promise to dramatically slash energy costs, and are starting to appear in “stretch codes” for buildings, including in Massachusetts, Illinois, Washington and New York.

And while some builders are balking at the initial up-front cost, other developers are embracing passive house metrics as a solution for affordable multifamily housing.

“We’re trying to make zero energy, high performing buildings that are healthy and low energy mainstream everywhere,” said Katrin Klingenberg, co-founder and executive director of Passive House Institute-U.S., or Phius. 

Klingenberg says the additional work needed to meet an aggressive efficiency standard, is, in the long run, not that expensive. Constructing a building to passive standards is initially only about 3%-5% more expensive than building a conventional single family home, or 0%-3% more for multifamily construction, according to Phius.

“This is not rocket science… We’re just beefing up the envelope. We’re doing all the good building science, we’re doing all the healthy stuff. We’re downsizing the [heating and cooling] system, and now we need someone to optimize that process,” Klingenberg said. 

Phius in practice and action

A Phius-certified building does not employ a conventional central heating and cooling system. Instead, it depends on an air-tight building envelope, highly efficient ventilation and strategically positioned, high-performance windows to exploit solar gain during both winter and summer and maximize indoor comfort. 

The tight envelope for Phius buildings regulates indoor air temperature, which can be a literal lifesaver when power outages occur during extreme heat waves or cold snaps, said Doug Farr, founder and principal of architecture firm Farr Associates.

Farr pointed to the example of the Academy for Global Citizenship in Chicago, which was built to Phius standards. 

“There was a really cold snap in January. Somehow the power went out [and the building] was without electricity for two or three days. And the internal temperature in the building dropped two degrees over three days.”

Farr said that example shows a clear benefit to high efficiency that justifies the cost.

“You talk about the ultimate resilience where you’re not going to die in a power outage either in the summer or the winter. You know, that’s pretty valuable.” 

There is also a business case to be made for implementing Phius and other sustainability metrics into residential construction, such as lowered bills that can appeal to market-rate buyers and renters, and reduced long-term maintenance costs for building owners. 

AJ Patton, founder and CEO of 548 Enterprise in Chicago, says in response to questions about how to convince developers to consider factors beyond the bottom line, simply, “they shouldn’t.”

Instead, he touts lower operating costs for energy-efficiency metrics rather than climate mitigation when he pitches his projects to his colleagues. 

“I can’t sell people on climate change anymore,” he said. “If you don’t believe by now, the good Lord will catch you when He catch you.

“But if I can sell you on lowering your operating expenses, if I can sell you on the marketability, on the fact that your tenants will have 30%, 40% lower individual expenses, that’s a marketing angle from a developer owner, that’s what I push on my contemporaries,” Patton said. “And then that’s when they say, ‘if you’re telling the truth, and if your construction costs are not more significant than mine, then I’m sold.’”

Phius principles can require specialized materials and building practices, Klingenberg said. But practitioners are working toward finding ways to manage costs by sourcing domestically available materials rather than relying on imports.

“The more experienced an architect [or developer] gets, they understand that they can replace these specialized components with more generic materials and you can get the same effect,” Klingenberg said.

Patton is presently incorporating Phius principles as the lead developer for 3831 W Chicago Avenue, a mixed use development located on Chicago’s West Side. The project, billed as the largest passive house design project in the city to date, will cover an entire city block, incorporating approximately 60 mixed-income residential units and 9,000 sq ft of commercial and community space.

Another project, Sendero Verde, located in the East Harlem neighborhood of New York City, is the largest certified passive-house building in the United States with 709 units. Completed in April, Sendero Verde is designed to provide cool conditions in the summer and warmth during the winter — a vast improvement for the low-income and formerly unhoused individuals and families who live there.

Barriers and potential solutions

Even without large upfront building cost premiums and with the increased impact of economies of scale, improved technology and materials, many developers still feel constrained to cut costs, Farr said.

“There’s entire segments of the development spectrum in housing, even in multifamily housing in Chicago, where if you’re a developer of rental housing time and again …  they feel like they have no choice but to keep things as the construction as cheap as possible because their competitors all do. And then, some architecture firms only work with those ‘powerless’ developers and they get code-compliant buildings.”

But subsidies, such as federal low income housing credits, IRS tax breaks and resources from the Department of Energy also provide a means for developers to square the circle, especially for projects aimed toward very low-income residents. 

Nonetheless, making the numbers work often requires taking a long-term view of development, according to Brian Nowak, principal at Sweetgrass Design Studio in Minnesota. Nowak was the designer for Hillcrest Village, an affordable housing development in Northfield that does not utilize Phius building metrics, but does incorporate net-zero energy usage standards.

“It’s an investment over time, to build resilient, energy-efficient housing,” he told the Energy News Network in June 2023.

“That should be everyone’s goal. And if we don’t, for example, it affects our school system. It affects the employers at Northfield having people that are readily available to come in and fill the jobs that are needed.

“That’s a significant long-term benefit of a project like this. And that is not just your monthly rents on the building; it’s the cost of the utilities as well. When those utilities include your electricity and your heating and cooling that’s a really big deal.”

Developers like Patton are determined to incorporate sustainability metrics into affordable housing and commercial developments both because it’s good business and because it’s the right thing to do.

“I’m not going to solve every issue. I’m going to focus on clean air, clean water, and lowering people’s utility bills. That’s my focus. I’m not going to design the greatest architectural building. I’m not even interested in hiring those type of architects. 

“I had a lived experience of having my heat cut off in the middle of winter. I don’t want that to ever happen to anybody I know ever again,” Patton said. “So if I can lower somebody’s cost of living, that’s my sole focus. And there’s been a boatload of buy-in from that, because those are historically [not] things [present] in the communities I invest in.”

No longer a niche, Passive House standards becoming a solution for highly efficient affordable housing is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

A year and a half since Massachusetts introduced an optional new building code aimed at lowering fossil fuel use, climate activists are heartened by how quickly cities and towns are adopting the new guidelines. 

The new code, known as the specialized stretch code, became law in 2023. Since then, 45 municipalities representing about 30% of the state’s population have voted to adopt its guidelines. The code is already active in 33 of these communities and scheduled to take effect over the next year in another 12.

“That is just an astounding statistic to me,” said climate advocate Lisa Cunningham, one of the founders of decarbonization nonprofit ZeroCarbonMA. “The rollout has been, quite frankly, amazing.”

Massachusetts has long been a leader in using opt-in building codes to push for decarbonization of the built environment. In 2009, the state introduced the country’s first stretch code, an alternative version of the building code that includes more stringent energy efficiency requirements. Municipalities must vote to adopt the stretch code, and the vast majority have done so: As of June, just 8.5% of residents lived in the 50 towns and cities without a stretch code. 

The specialized stretch code takes this approach a step farther. The goal is to create a code that will help achieve target emissions reductions from 2025 to 2050, when the state aims to be carbon-neutral. In 2021, the legislature called on the state to create an additional opt-in code that would get close to requiring net-zero carbon emissions from new construction. 

“We want to work towards decarbonizing those buildings, right from the start, as we look to a future in 2050 while we are net-zero in greenhouse gas emissions,” said Elizabeth Mahony, commissioner of the Massachusetts Department of Energy Resources.

At the same time, electrified, energy-efficient homes will mean lower energy costs for residents over time, more comfortable and healthier indoor air, and more stable indoor temperatures when power outages occur, she said. 

The construction industry, meanwhile, has concerns about the measure’s impact on upfront costs. 

Getting to net-zero buildings

The resulting code doesn’t require buildings to achieve net-zero emissions right away, but attempts to ensure any new construction will be ready to go carbon-neutral before 2050.

There are a few pathways for compliance. A newly built home can use fossil fuels for space heating, water heating, cooking, or drying or be built fully electrified. If the new home uses any fossil fuels, however, it must be built to a higher energy efficiency standard, be wired to ready the house for future electrification, and include solar panels onsite where feasible. In all cases, homes must be wired for at least one electric vehicle charging station.

Larger, multifamily buildings must be built to Passive House standards, a certification that requires the dramatic reduction of energy use as compared to similar buildings of the same size and type. Single-family homes can also choose to pursue Passive House certification. 

Decarbonization advocates are pleased with the rollout so far. The state’s major cities, including Boston, Worcester, and Cambridge, were all quick to adopt the code. In most municipalities the vote to adopt the specialized code has been near-unanimous, said Cunningham.

And more communities are considering the specialized code.

“We’re talking to a lot of communities that are contemplating it for their town meetings this fall,” Mahony said. “We know there is a growing sense out there of wanting to do this.” 

 The key to convincing cities and towns that the code is a good idea is for municipal governments to understand and frame the code as a consumer protection measure, rather than an added burden, Cunningham said. The requirements of the specialized code along with state and federal incentives can save on construction costs upfront, and will ensure buildings cost less to operate during their lifetime, offering significant benefits to residents, she said. 

“At the point of construction this is an incremental expense – it’s barely even a blip,” she said. “Then it directly reduces your future electricity bills.”

A troublesome transition?

Many in the construction industry, however, disagree with Cunningham’s take. Emerson Clauss III, a director with the Home Builders and Remodelers Association of Massachusetts, has found the equipment needed to reach the high standards in the code is more expensive than its authors counted on, and supply chain issues are causing even higher prices.  

“It’s had quite a rough start to it,” Clauss said. “It’s adding considerable cost to new housing.” 

He also worries that the high cost of electricity now — Massachusetts electricity prices are the third highest in the country — spells near-term financial trouble for homeowners that feel forced to go all-electric. 

“The idea that it’s going to cost less 20 years from now — what does that do for people who need to get into a house now?” he asked.

Furthermore, the creation of a new optional code, he said, adds another variable for builders already jumping between the basic code and the previous stretch code, as well as learning the new rules in ten communities banning fossil fuels as part of a state pilot program. Even municipal building directors aren’t able to keep up, Clauss said, recalling a confused call with a suburban building inspector who needed 20 minutes to confirm it was OK to install a natural gas line in a new home. 

In Cambridge, one of the first cities to adopt the specialized code, Assistant Commissioner of Inspectional Services Jacob Lazzara noted there was some confusion at the outset, but time and proactive communication from the city helped ease the transition. The city has held trainings, created materials to hand out to builders and design professionals, and fine-tuned internal communications to make sure the staff is all well informed. 

“There was a little bit of shock for everyone at first, but I think we’re in a good place right now,” Lazzara said.

Massachusetts cities are quickly embracing new emission-slashing building code option is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

A bill introduced in the California legislature proposes to slash hundreds of millions of dollars from programs that help schools replace worn-out HVAC systems, low-income households install batteries, and affordable housing projects deploy solar panels — all for what would amount to a one-time rebate of no more than $50 for customers of the state’s three major utilities.

Lawmakers and Governor Gavin Newsom’s office have crafted the legislation, which they are calling the ​“affordability project,” in response to fast-rising utility rates at the state’s three large investor-owned utilities: Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric.

But community groups, environmental advocates, and clean energy industry groups say the cuts will cause immediate and severe harms to those relying on them while doing next to nothing to fulfill their purported goal of reining in the state’s sky-high electricity rates.

“It’s not a way to solve the problem, and you’re hurting programs that are working,” said 

Merrian Borgeson, policy director for California climate and energy at the nonprofit environmental group Natural Resources Defense Council, told Canary Media in an interview.

AB 3121 emerged late Wednesday evening after weeks of backroom negotiations over how best to control rate increases for customers. But the reforms proposed by the bill do little to address the primary drivers of those increases, which come down to the investments utilities are making in their power grids to meet rapidly rising electricity demand, and also to harden them against the risk of sparking deadly wildfires.

Another bill introduced late Wednesday, SB 1003, would call on state agencies to increase oversight over utilities’ wildfire-mitigation spending, which could lead to cost reductions. And another bill, AB 3264, would require the California Public Utilities Commission (CPUC) to assess and analyze total annual energy costs for residential customers, with the goal of finding ways to shift some costs from ratepayers.

“California’s high electricity prices are a decade in the making,” Borgeson said in a Thursday statement. ​“We need an overhaul that targets the root causes of this surge: wildfire spending, capacity constraints, insufficient regulatory oversight, and the need for funding sources beyond consumer-paid utility rates to address the climate crisis. This policy proposal will move the needle on some of these challenges, but it also includes damaging cuts to important programs that benefit vulnerable communities.”

NRDC has estimated that the cuts being proposed would yield only about a $50 one-time rebate for the average residential customer of the state’s three major investor-owned utilities. A report from Politico this week cited an unnamed California lawmaker who estimated the cuts would provide customers as little as $30 each in one-time rebates.

A Wednesday letter signed by NRDC and more than two dozen other groups warned Newsom, California Senate President Pro Tempore Mike McGuire, and Speaker of the Assembly Robert Rivas against cuts to ​“critical programs that advance energy affordability, reliability, and climate resilience for vulnerable communities.”

“Focusing on short-term tactics will not resolve California’s affordability crisis,” the groups wrote. ​“Instead, it will exacerbate it, making our energy system more expensive, polluted, and dangerous — especially for our most vulnerable communities.”

The pushback comes as lawmakers are scrambling to address unfinished business before this year’s legislative session ends at midnight on Saturday — including a June pledge from California Assembly Utilities and Energy Chair Cottie Petrie-Norris, sponsor of AB 3121, to cut the bills of customers of the state’s three big utilities by $10 per month. (Petrie-Norris’s office did not immediately respond to a request for comment on Thursday.)

The high cost of electricity has become a pressing problem for low-income Californians struggling to pay their utility bills, and is threatening to derail the state’s broader electrification efforts by dramatically increasing the costs to consumers of switching from fossil fuels to electricity to power their cars and provide household heating.

In the past 10 years, average electrical rates have risen by 110 percent for residential customers of PG&E, 90 percent for those served by Southern California Edison, and 82 percent for customers of SDG&E, according to data compiled by state regulators. The past three years alone have seen average residential rates jump by 51 percent for PG&E and SCE and 20 percent for SDG&E.

And more rate hikes are looming at PG&E, the state’s biggest utility, which serves about 16 million people in Northern and Central California. In November, the California Public Utilities Commission approved a rate case adding about $32.50 per month to customers’ bills, followed by a further rate hike in March of about $5 to $6 per month starting this spring.

In a July report, the CPUC forecasted average annual electric rate increases of 10.8 percent for PG&E, 6.8 percent for SCE, and 5.6 percent for SDG&E, compared with an assumed inflation rate of 2.6 percent.

This chart from the CPUC’s July report breaks out the proportion of the state’s three big utilities’ ​“revenue requirement,” or how much money they must bring in from ratepayers to cover their costs. The biggest increases are coming from distribution-grid investments, primarily driven by PG&E’s program aimed at burying power lines, clearing vegetation, and installing technology to reduce wildfire risks.

According to reporting from The Sacramento Bee citing anonymous sources familiar with the negotiations, earlier versions of the affordability package included proposals to reduce broader grid expansion costs via ​“securitization” — financing some portion of utility spending through debt, rather than by passing them on to ratepayers.

But those components, which could reduce the profits that utilities earn for investments in their capital infrastructure, were dropped from the bill, the Bee reported last week.

With the potential savings from the wildfire-mitigation cost controls and broader energy cost analysis as yet unclear, the only immediate savings from the legislative package would come from cuts to programs that serve ​“people who don’t have political power,” said Beckie Menten, senior regulatory and policy specialist at the nonprofit Building Decarbonization Coalition.

“We’re really supportive of solutions that address affordability,” she said. But ​“what we’re seeing on the table for the most part are pretty reactive and not very comprehensive of our systemic solutions.”

On the chopping block: School HVAC retrofits and solar and batteries for low-income residents 

AB 3121 proposes to provide utility customers with rebates by clawing back unspent and ​“unencumbered” funds from three programs: California Schools Healthy Air, Plumbing, and Efficiency (CalSHAPE); the Self-Generation Incentive Program (SGIP); and Solar on Multifamily Affordable Housing (SOMAH).

The CalSHAPE program, administered by the California Energy Commission, was created by a law passed during the Covid pandemic to help schools repair HVAC systems to improve health, and it has disbursed 646 grants totaling $421 million in funding for the ventilation upgrades.

Roughly $250 million remains in the program, and many schools were in the process of applying for funding, said Stephanie Seidmon, program director of nonprofit advocacy group Undaunted K12. But AB 3121 would retroactively set the deadline for those applications at July 1, 2024, and return any funds not disbursed to utility ratepayers.

But the one-time rebates per customer that would result aren’t worth the loss of funding for schools that need the money to improve air-conditioning and ventilation systems, Seidmon contended. ​“It’s really important for low-income schools that can’t raise a bond measure to upgrade their HVAC systems, or schools facing these wildfire and heat risks,” she said.

Much of CalSHAPE’s remaining $250 million in funding ​“is for schools that are replacing their HVAC as we’re going to be facing wildfires this fall,” said NRDC’s Bergeson. ​“It’s crazy to me we’d be taking away that money, especially when many of these schools are in disadvantaged communities and were depending on this.”

The SGIP program provides incentives for low-income customers to purchase batteries to provide backup power during power outages. In a March decision, the CPUC allocated $280 million to the program’s current grant cycle, and lawmakers pledged in a 2022 budget and climate law, AB 209, to provide $350 million to the program over the next several years.

Returning unspent portions of those funds to utilities would provide a minimal one-off rebate to individual customers at the cost of undermining a program that ​“helps both rural and disadvantaged communities” obtain batteries that are increasingly valuable in a state experiencing heat- and wildfire-driven grid emergencies, said Edson Perez, California policy lead for clean energy industry trade group Advanced Energy United.

The batteries installed through the program also help store solar power for use in evenings, when grid power tends to be dirtier and more expensive, which ​“helps the grid as a whole,” he said. A May report to the CPUC found that batteries installed through SGIP have reduced utility costs by roughly $27 million, primarily during a September 2022 heat wave that threatened to overwhelm California’s grid.

The SOMAH program has a budget of $100 million and a legislatively mandated goal of installing 300 megawatts of solar by 2032, and is ​“California’s landmark program for multifamily affordable housing access to affordable solar and affordable storage,” said Steve Campbell, western regulatory director for nonprofit Vote Solar.

AB 3121 doesn’t call for reclaiming the entirety of that funding stream. But it would require the CPUC to credit ​“no more than 1/2 of the program funds that are unencumbered as of January 1, 2025,” back to utilities to return to customers as rebates.

SOMAH was created in 2019 and saw a significant slowdown during the Covid pandemic, Campbell said. In the past year, however, applications and projects have picked up steam. 

“When a low-income program starts to work again is the worst time to pull the rug out from underneath it,” he said. 

California electric bill relief plan would gut low-income energy programs is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.