Advanced Energy Perspectives

NEWS: Tesla’s State Battles Continue; Kansas Rejects RPS Rollback (Again); Indiana Stops Energizing

Posted by Lexie Briggs

Mar 28, 2014 10:49:56 AM


parkinglot2Surprise, surprise: Tesla was all over the news this week, with several states taking action, for or against, direct vehicle sales. Tesla’s sales model of boutique store fronts and direct purchases from the company is unique among automotive sales and cuts out the dealer as a middleman. Tesla has insisted that the direct sales model is necessary to introduce consumers to this new technology.“We strongly believe it is vital to introduce our own vehicles to the market because electric cars are still a relatively new technology,” says Tesla on its blog.


First up, New Jersey, where the state legislature is considering bills to reverse a ban on direct sales of Tesla electric vehicles that was put into place two weeks ago by the state’s Motor Vehicle Commission at the behest of car dealers.


Meanwhile, Arizona has moved to legalize direct sales for Tesla electric vehicles. House Bill 2123 would permit direct sales by automakers that only manufacture electric vehicles and have a service center within state borders. This follows the state being named as one of four finalists for Tesla’s $5 billlion “gigafactory” facility for lithium-ion cells and battery packs. Legislators are denying that the change in policy is a direct attempt to demonstrate to Tesla that Arizona is ready for its investment. “For me this is about economic freedom,” Rep. Warren Petersen, the bill's author, said on CNBC Friday. “It gives customers the ability to choose what cars they want to buy.”


Ohio is also reexamined its the direct sales model this week. An Ohio Senate Committee approved a bill banning the direct sale of Tesla electric vehicles to consumers in all but three storefronts. The decision represents a compromise between Tesla and the Ohio Automobile Dealers Association, which was against the direct sale of cars without a middleman. Under this new legislation, Tesla would be able to continue operations in its Columbus and Cincinnati stores and can add a third one as long as the company isn’t sold or acquired and does not extend its sales beyond electric vehicles.


More news from Ohio is expected this week, as Ohio Senator Troy Balderson is expected to introduce a bill today that would freeze Ohio’s renewable energy and energy efficiency requirements. If this sounds familiar, that’s because this is not the first time an Ohio legislator has attempted to roll back advanced energy progress in the state. We will continue to follow this story as it develops.


In Kansas, however, a push to repeal that state’s RPS was stopped in its tracks. Just one day after the Kansas Senate passed a bill doing away with the renewable energy requirement, the House rejected the bill on a 77-44 vote. Proponents of repeal cited expiration of the federal Production Tax Credit (PTC) as meaning renewable power would cost more in the future, but supporter’s of that state’s fast-growing wind power sector cited the industry’s economic benefits. “I extremely, extremely believe that this is the future of Kansas’ economy,” said Rep. Steven Becker. “Just like other states have the oil and other unique factors that drive their economies, we can have wind that drives ours.” The Kansas legislature rejected an RPS rollback last session as well.


In our 2014 market report, AEE documented the effect that inconsistent policies can have on the advanced energy industry. Over the period from 2011 to 2013, U.S. wind energy revenue saw a drastic boom and bust cycle due to uncertainty over the PTC, which even now needs to be revived in tax extenders legislation soon to be taken up in Congress. Download the full report to learn more.


Download Advanced Energy Now Market Report 2014  

Elsewhere in the world of wind power, Cape Wind announced that it has secured $400 million in additional financing for its offshore wind project in Nantucket Sound. This brings its total fundraising to $1.3 billion, approximately half of the project’s estimated $2.5 billion cost. Cape Wind announced in December that it had contract in place sufficient to qualify the project for the federal investment tax credit (an alternative to the PTC) before it expired, covering 30 percent of capital costs.

In its updated S-1 filing this week, AEE member company Opower has set its IPO price range at $17 to $19 and intends to sell 6.1 million shares during its upcoming IPO. Opower could raise $110 million at the mid-point of the price range.


Finally, there was good news and bad news out of Indiana this week. The good news is that 75 acres of unused land at the Fort Wayne International Airport set to be developed as a solar farm. This would be the second airport-based solar farm in the state, after an installation at Indianapolis airport last year.


The bad news is that Gov. Mike Pence allowed a bill to become law without his signature that will end the two-year-old Energizing Indiana efficiency program. “I could not sign this bill because it does away with a worthwhile energy efficiency program. I could not veto this bill because doing so would increase the cost of utilities for Hoosier ratepayers and make Indiana less competitive by denying relief to large electricity consumers,” said Pence in a written statement.


Pence also said he would direct the Indiana Utility Regulatory Authority to recommend a replacement program that would allow large industrial users to opt out, a proposal for which he will file with the legislature in 2015. Energy efficiency service companies and equipment manufacturers, along with consumer and environmental groups, had urged Pence to veto the bill.

Topics: News Update


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