There’s something happening here…

While still early days, I want to flag a few signals that renewable energy is making inroads in states and markets where it once seemed impossible. Renewable energy developers may want to keep an eye on states such as Kentucky, Alabama, Tennessee, and Mississippi.

In 2013, Duke Energy proposed a green energy rider to their standard commercial electricity rate in North Carolina.  The utility was responding to significant pressure from outside companies – namely tech companies like Apple and Google – to provide a significantly higher percentage of electricity from renewable energy than the state’s 12% RPS required.  With the addition of the rider, significant renewables development by technology companies on-site, and meeting the RPS, by 2015 North Carolina was one of the fastest growing solar states in the country.

This was not the first major utility in a state to request to add a green rider or green tariff to their rate book nor were they the last.  In each case, the request reflected significant customer pressure for a cleaner generation portfolio and served as a major market trigger for significant renewables growth in the following few years. The most recent request? Kentucky.

Though known as a coal state, it seems Kentucky utilities, businesses, and regulators are starting to see the cost savings and economic benefits of renewable power.  Louisville Gas and Electric Company (LG&E) and Kentucky Utilities Company (KU) said recently that they will propose a Green Tariff to promote renewable energy growth and economic development in a rate review filing on Sept. 28.  As is often the case, it was actually the municipal utilities that led the charge. In early August, the KY Municipal Energy Authority signed an agreement for the development of a new 86 MW solar plant on 800 acres in the western Kentucky – 10 times larger than any other solar installation in the state thus far.

One other item to keep an eye on if you are watching Appalachia – a lawsuit filed against the Tennessee Valley Authority (TVA) in the northern district of Alabama.  The suit, brought by five environmental groups, claims a new TVA rate structure severely undermines the economics of distributed energy resources like rooftop solar and energy efficiency investments. The lawsuit itself is not particularly revolutionary, but the unique nature of the TVA makes its potential impact all the more interesting.  Because the TVA is a government agency with a board appointed by the President of the United States, it’s not subject to any state-level utilities commission (similar to SRP in Arizona).  It also means that any lawsuit that finds the rate structures unjust or discriminatory are applicable for the entire TVA territory – potentially opening up not just northern Alabama but also all of Tennessee and parts of Kentucky, Georgia, North Carolina, and Mississippi.

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