December 11, 2018

DC Gave Initial Approval to Weakened Clean Energy Legislation

The DC Council gave preliminary approval to landmark clean energy legislation Tuesday that would make DC a leader in the fight against climate change.

Though it would be one of the strongest clean energy laws in the nation if passed, substantial changes were made late in the process, at least one of which significantly weakens the bill.

When Councilmember Mary Cheh introduced the bill in July, it included a provision requiring that DC’s electric utility, Pepco, buy renewable energy through long-term contracts. That would reduce DC’s greenhouse gas emissions by 710,000 tons of a year, or 8.1% of DC’s total emissions, according analysis of the bill from the DC Department of Energy and Environment.

But when Cheh’s Committee on Transportation and Environment and Councilmember Kenyan McDuffie’s Committee on Business and Economic Development (which has jurisdiction over utilities) approved the bill, the provision was eliminated.

Long-term contracts provide long-term revenue for renewable energy companies, allowing them to use that long-term revenue stream to borrow money to build new wind and solar farms to supply the clean energy those contracts require. That means more wind and solar farms providing electricity and less electricity from dirty sources like coal and gas.

Pepco doesn’t like long-term contracts for renewable energy, even running misleading ads on Facebook claiming that removing the measure would be good for the climate. Pepco is owned by the Chicago-based nuclear conglomerate Exelon, whose fleet of aging nuclear plants sells electricity that competes with renewable energy.

McDuffie told WAMU the long-term contracts for clean energy could raise costs for ratepayers who buy electricity. Exelon executives made similar claims when testifying before the DC Council about the Clean Energy DC bill.

States that have actually instituted long-term renewable energy contracts found the opposite is true – the contracts reduce exposure to volatility in energy markets and lower prices. Though long-term contracts (also called power purchase agreements) have not yet been tried in the Mid-Atlantic, in New England they’ve resulted in significant savings for electricity consumers.

A study from the New Hampshire Public Utility Commission found: “Long-term wind contract prices are known with certainty. While energy market costs could be cheaper in the future, they are much more likely to be higher than wind contract costs.”

In Massachusetts, state Attorney General Maura Healey, whose office advocates on behalf of electricity ratepayers, told CommonWealth magazine that long-term renewable energy contracts will save $682 million over 15 years.

DC is smaller than Massachusetts and New Hampshire, so it may not see as much savings from long-term renewable energy contracts as those states. But when DC signed a long-term agreement in 2015 for wind energy to meet a third of the DC government's electricity needs, it saved taxpayers $45 million over 20 years.

Councilmember Mary Cheh’s clean energy bill originally included long-term contracts to bring renewable energy to DC. Image by Chris Weiss used with permission.

The bill Cheh introduced over the summer would offer similar savings not just to the DC government, but to all Pepco customers in DC. The legislation given preliminary approval Tuesday excluded the long-term contracts provision. Environmental advocates are pushing to bring it back to life when the DC Council takes its final vote on the clean energy bill on December 18.

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