Clean and diverse energy has been an increasingly important issue in many state legislatures in the past few years. The policies detailed below, which set renewable energy goals, provide incentives and streamline permitting procedures, are expected to move the region closer to the Governors’ target of 30,000 megawatts.

Renewable Energy Goals
Nine Western states now have renewable energy standards (RES) or renewable energy portfolio standards (RPS). In 2007, North Dakota created a statewide renewable and recycled energy objective. In addition, Gov. Kulongoski led an effort to set a 25 percent renewable standard for the state, which the state legislature recently approved. Washington voters enacted an RPS by ballot measure in 2006, while five other states in the region have strengthened or amended existing RPS requirements. Below is a list of actions taken by Western states by year.

2005
Texas enacted legislation that requires that about 5 percent of the state’s energy come from renewable sources by 2015 and sets a goal of 10 percent by 2025. The bill further helps diversify the state’s sources of energy by requiring that 500 megawatts be produced by renewable sources other than wind, such as biomass and solar power.

2006
Arizona Corporation Commission voted to expand the state's renewable portfolio standard to 15 percent by 2025, with 30 percent of that to come from distributed generation technologies -- potentially resulting in up to 2,000 megawatts of solar.

Hawaii strengthened its RPS law by adding penalties if the utilities do not achieve the targets. Hawaii’s law requires 10 percent renewable electricity and/or electricity savings by 2010, 15 percent by 2015, and 20 percent by December 31, 2020.

Washington voters passed the Clean Energy Initiative (I-937), which created a renewable electricity standard. The new RES requires the state's largest utilities to reach 15 percent renewable energy use by 2015. It also requires electric utilities to pursue low-cost energy conservation opportunities with their customers and in their communities.

2007
California passed legislation to speed up implementation of the 20 percent renewable electricity standard for California’s largest utilities and also require all utilities to take carbon emissions into account when developing their long term plans.

Colorado amended its previous RPS to require that investor owned utilities (IOUs) and cooperatives to produce 20% and 10%, respectively, of electricity sales from renewable sources.

Kansas Governor Kathleen Sebelius announced a goal in her State-of-the-State address, of 10 percent wind energy by 2010 and 20 percent by 2020.

New Mexico Governor Bill Richardson signed legislation (Senate Bill 418) doubling New Mexico’s RPS for investor-owned utilities and creating a separate standard for rural electric cooperatives in March 2007. The new law directs investor-owned utilities to generate 20percent of total retail sales to New Mexico customers from renewable energy resources by 2020, with interim standards of 10 percent by 2011 and 15 percent by 2015.

North Dakota enacted legislation that establishes a state renewable and recycled energy objective that 10 percent of all electricity sold at retail within the state by the year 2015 be obtained from renewable energy and recycled energy sources.

Oregon legislators passed the Oregon Renewable Energy Act (Senate Bill 838), which set a statewide renewable portfolio standard of 25 percent by 2025. The bill is to be reviewed by the Senate for concurrence before being presented to Gov. Kulongoski.

Oregon: On July 25th the Oregon PUC issued the final rules for the state's net metering program. These rules require the utilities to file tariffs to comply with the rule within 60 days. As previously expected, Oregon is on track to have interconnection and net metering agreements by September 2007. The adoption of these rules places Oregon in the top 5 states in the US for favorable net metering laws.

Market Incentives
Eighteen Western states provide some type of tax incentive for clean energy. Between 2005 and 2007, nine states enacted additional tax incentives or amended existing incentives.

2006
Arizona established a tax credit for solar and wind installations in commercial and industrial applications in June 2006. The tax credit is equal to 10 percent of the installed cost of qualified “solar energy devices”

Hawaii increased the tax credit ceiling for certain solar and wind installations.

2007
Colorado approved legislation that allows cities, towns and counties to offer tax credits or rebates to property owners who install renewable-energy-producing fixtures on their property, such as solar panels and wind turbines. House Bill 1087 established a "Wind for Schools" grant program. And, in separate action, municipal electric utilities serving more than 40,000 customers in Colorado must now offer an optional green-power program that allows retail customers the choice of supporting emerging renewable technologies.

Idaho enacted House Bill 189 restructuring the method of personal property taxation to ease the burden on Idaho wind farms in the early years of operation.

Kansas HB 2038 provides various tax incentives for renewable electric cogeneration facilities and certain waste heat utilization systems. The Kansas Development Finance Authority is also authorized to issue tax-exempt revenue bonds to finance construction of cogeneration facilities and waste heat utilization systems at electric generation facilities in the state. Additionally, this legislation creates an income tax credit for tax years 2007 through 2011 for investments in the construction of cogeneration facilities and in real and tangible personal property used in the facility, as well as providing for an income tax deduction based on accelerated depreciation of a cogeneration facility.

Montana legislation created up to 75 percent property tax incentive on transmission lines that move clean and green power such as wind, new hydro, clean biomass or integrated gas combined cycle (IGCC) power with carbon sequestration; a 75 percent property tax incentive for sequestration pipelines and equipment; a 50 percent incentive for the first 10 years for renewable energy manufacturing (wind power, solar power, electrical or hybrid vehicles and fuel cell plants); and a 50 percent incentive for clean and green research and development. House Bill 3 included a tax break, which provided for a rate of 1.5 percent, for clean-technology power plants.

New Mexico SB 463 approved several tax incentives, including a sustainable building tax credit, an advanced energy product tax credit, and a solar energy system gross receipts tax incentive. In addition the bill amended the existing renewable energy production tax credit.

North Dakota HB 1233 created $3 million of tradable income tax credits for installation of geothermal, solar and wind energy devices. HB1317 extended a property tax deduction for wind generation units from 3 to 1.5 percent.

Utah SB 223 reauthorizes the investment credit for residential and small commercial projects and created a new production credit of .35 cents for each kilowatt-hour produced for large commercial projects. The credit was expanded to include geothermal sources.

California approved a bill to create a $250 million annual subsidy for solar hot water heaters.

The Oregon Business Energy Tax Credit was increased from 35% to 50% of eligible renewable project costs (up to $20 million); a tax exemption for solar net metered systems passed along with a statewide public buildings solar provision requiring 1.5% of the construction budget to fund onsite solar technologies.

Texas Governor Rick Perry signed into law a bill (HB 1090) that provides grants for the use of waste agricultural and forest materials to generate electricity. Consumer savings achieved from the electricity production of the power plant exceed the cost of the incentive program, meaning there is a net financial benefit to electric customers. Nacogdoches Power, LLC will be available to receive waste material that qualifies under the grant program, as it has completed the permitting for its 100-megawatt (MW) biomass-fired power plant under development in Nacogdoches County, Texas. Nacogdoches Power's facility will be the first major biomass-fired electric generating plant in Texas and the largest biomass plant in the U.S.

Carbon Capture and Sequestration
Carbon capture and sequestration (CCS) is viewed as having technology hurdles that must be resolved to construct advanced coal facilities. Several states are trying to lower those hurdles.

2006
California passed AB1925 which requires the Energy Commission to prepare a report to the Legislature by November 1, 2007 on “recommendations for how the state can develop parameters to accelerate the adoption of cost-effective geologic sequestration strategies for the long-term management of industrial carbon dioxide”.

California passed SB 1368, which sets greenhouse gas emission standards for long-term investments in electricity generation to be at least as low as greenhouse gas emissions from new, combined-cycle natural gas power plants.

2007
Kansas bill HB 2419, the “Carbon Dioxide Reduction Act,” requires the Kansas Corporation Commission to establish CO2 injection rules and regulations by July 1, 2008. It also exempts CCS property and any electric generation unit utilizing CCS from all property taxes for 5 years following completion of construction or installation of the property and allows for accelerated depreciation of CCS equipment.

New Mexico created the first tax credit in the nation to cover carbon capture technology and include specific capture goals at coal-fired power plants.

North Dakota created a fund to accelerate development of environmentally friendly production of electricity, natural gas and alternative fuels including coal-to-liquid, coal gasification and carbon sequestration technologies.

Montana adopted a carbon dioxide emissions performance standard for electric generating units constructed after January 1, 2007. The state PUC is directed not to approve an application to generate electricity that is primarily fueled by coal unless it captures and sequesters a minimum of 50 percent of the carbon dioxide produced by the facility. Carbon dioxide captured by a facility or equipment may be sequestered offsite from the facility or equipment. HB3 also decreased taxes by 75 percent for pipelines that carry carbon emissions captured at clean energy facilities.

Washington passed SB 6001, which sets goals for a reduction in air emissions and sets an emissions performance standard for new power plants.

Arizona Public Service, the Salt River Project and Tucson Electric Power formed a coalition to test the viability of storing carbon dioxide underground as a way to manage greenhouse gas emissions.

Washington Legislature passed a law year mandating that plants selling power in the state must either be as clean as modern natural gas facilities or sequester the extra carbon they produce.

Permitting

2006
Washington passed HB 2402 which streamlines permitting for renewable resources in Washington.

2007
Nevada Governor Jim Gibbons signed an executive order which focuses on streamlining the permitting process for renewable energy projects in Nevada. Furthermore, the executive order tasked the State Office of Energy to serve as a central informational resource for all renewable energy-related permitting issues.

Integrated Resource and Procurement Planning Rules

2006
Idaho passed House Concurrent Resolution No. 62, which directed the Legislative Council Interim Committee on Energy, Environment and Technology to develop an integrated state energy plan that addresses the state’s power generation needs.

Washington passed HB 1010 that requires all large utilities to conduct some form of integrated resource planning starting in 2007.