Energy policy in Utah

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Energy policy in Utah
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Quick facts
Energy department: Utah Office of Energy Development
State population: 2.9 million
Per capita income: $34,601
Energy consumption
Total energy consumption: 797 trillion BTU[1][2]
Per capita energy consumption: 283 million BTU
Energy spending
Total state energy spending: $10.43 million
Per capita energy spending: $3,706
Residential natural gas price: $8.90 per thousand cubic foot
Residential electricity price: 10.10 cents per kWh
See also
Energy on the ballot
Statewide fracking on the ballot
Local fracking on the ballot
Policypedia
Policypedia Energy logo.jpg
Energy Policy Project
Energy policy in the United States
Energy use in the United States
Energy terms and definitions
Energy policy in Utah
Fracking in Utah
Energy policy in Utah depends on geography, natural energy resources, how electricity is generated, how much energy consumers use, politics and the influence of groups such as environmental and industry organizations. Decisions by policymakers, such as state and local governments, utilities and regulatory agencies, affect all citizens economically and environmentally, and are generally geared toward providing reliable, affordable energy. The cost of energy affects not only home heating and electricity bills, and thus disposable income, but also economic growth, including jobs, investment and the cost of doing business in the state.

How energy is produced and consumed also has an impact on the environment and pollution. Energy policy in Utah focuses on increasing economic growth, making balanced use of fossil fuels and alternative sources of energy, promoting energy efficiency, as well as conserving Utah’s natural resources. As the infrastructure for producing and delivering renewable energy sources is not as advanced as it is for energy generation from traditional sources, policies incentivizing or requiring renewable energy sources often require subsidies to make the produced energy affordable, and their effects are difficult to measure.[3]

Energy policy involves tradeoffs between providing an affordable, consistent energy supply on the one hand, and limiting pollution and protecting the environment, on the other. How states attempt to balance these two differs between states, and often boils down to costs to consumers versus costs to the environment. This article provides general energy information about the state as the context within which energy policy is made, as well as information about major legislation and public and private groups that play a role in setting energy policy in the state.

See also: Energy policy in the United States for more information on energy policy.
See also: Fracking in Utah

Energy overview

State facts

Below are quick facts about Utah’s energy climate.

Utah

  • is a net electricity exporter.
  • has abundant traditional energy resources including coal, oil and natural gas.
  • set a goal of 20 percent of net electricity coming from cost-effective renewable energy sources by 2025.
  • produced almost 4 percent of electricity from renewable sources in 2011.
  • does not have any nuclear power plants.
  • has the only operating uranium ore mill in the United States.
  • is one of eight states with geothermal power facilities.
  • had the third lowest residential natural gas price in the country in 2011.[4]

In Utah

  • wind energy is supplying a growing amount of total electricity.
  • the largest consumer of energy is the transportation sector and the smallest consumer is the commercial sector.
  • the average price of electricity was the fifth lowest in the United States in 2011.
  • energy consumption per capita is in the lowest third nationally.
  • there is more CNG used for transportation than all other states except California and New York.
  • nearly two-thirds of the coal mined in Utah is consumed in the state.[4]

Available energy resources

Utah has abundant traditional energy resources, and the nation’s only uranium ore mining facility. Utah produces oil, natural gas and coal. The abundance of resources adds to Utah’s ability to supply electricity to other states. Utah has five oil drilling facilities that account for about one in every one-hundred barrels of crude oil produced in the United States.[4]

The state has no commercial solar plants, but there are three areas currently being readied by a federal program for the installation of large solar fields. The southern portion of the state receives a significant amount of sun, and is more apt to pursue solar options for energy. Utah has some commercial wind farms, but they make up a small portion of total electricity. Instead, Utah has pursued wind power developments out of state because it is more cost-effective. Utah produces natural gas, and six out of seven homes are heated by natural gas. About 2.5 percent of net electricity is generated by hydroelectric power plants. Utah is one of eight states with geothermal plants and one of seven with utility-scale geothermal generation.[5]

Consumption and prices

Energy consumption in Utah
UT energy consumption chart.png

Legend[6]
     Transportation       Residential     Industrial       Commercial
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As shown by the pie-chart to the right, the main consumer of energy in 2011 was the transportation sector, and the smallest amount was consumed by the commercial sector. The industrial sector was the second largest consumer. Most of the transportation sector’s consumption is made up of gasoline, which also includes fuel from ethanol. Almost half of the energy consumed by residents in homes is used in the form of natural gas.[7]

Utah’s gasoline price mainly tracks the U.S average, but it often tracks lower than the U.S. average during price declines. According to the EIA’s February 2014 report the federal excise tax is 18.40 cents per gallon of gasoline and 24.40 cents per gallon of diesel fuel. In addition, Utah collects a total tax of 25 cents on every gallon of gasoline, diesel and gasohol fuel. There are only four public E85 gas stations in Utah, all clustered in central Utah, but there are over thirteen thousand alternative fuel vehicles in Utah.[8][9][10][11]

Comparisons tables

See also: State Energy Rankings to compare all 50 states

The table below compares Utah’s consumption and spending for energy, as well as prices for natural gas and electricity and carbon emissions to those of Colorado, which has similar population, resources and consumption needs because of climate and geography. Also given are the U.S. averages and the state rankings. All rankings are from highest to lowest, so, for example:

  • Utah’s rank of 34th in carbon emissions means that carbon emissions are lower than Colorado with a ranking of 22nd.
  • Utah’s rank of 45th for per capita energy spending means that it spends slightly less per capita on energy than Colorado with a ranking of 43rd.
  • Utah's natural gas price ranks slightly higher than Colorado's, 41st versus 43rd.[4][12]
Consumption and Expenditures Comparisons Summary
Type UtahColoradoU.S. Figures
FigureU.S. Rank*FigureU.S. Rank*Totals
Population2.9 million335.2 million22313.9 million
Per Capita Income Average$34,06147$45,13514$42,693
Total Consumption797 trillion BTU341,481 trillion BTU2597,301 quadrillion BTU
Per Capita Energy Consumption283 million BTU36289 million BTU34312 million BTU
Total Spending on Energy$10.341 million34$19.333 million27$1,394,088 million
Per Capita Spending on Energy$3,70645$3,77943$4,474
Price of Residential Natural Gas, dollar per thousand cubic feet$8.9041$8.7243$12.48
Price of Electricity, cents per kWh$10.1043$11.692712.31
Total Carbon Dioxide Emissions, million metric tons (2010)64.23496.5225,631
*Rank is from highest to lowest.

Natural gas is the overwhelming leader in home heating in Utah. Electricity is a distance second, accounting for almost 10 percent of homes.[4]

Consumption of energy for heating homes in Utah
Source Utah 2011 U.S. average 2011
Natural gas 86.2% 49.5%
Fuel oil .2% 6.5%
Electricity 9.5% 35.4%
Liquid Petroleum Gases (LPG) 2.3% 5%
Other/none 1.9% 3.6%

Production and transmission

Utah produced 1,128.7 trillion BTU of energy in 2011. More than 84 percent of that energy came from natural gas and coal. Utah also produced 24.4 BTU from what the U.S. Energy Information Administration classifies as 'other,' which is "assumed to equal consumption of all renewable energies except biofuels."[13]

Energy production by type in Utah, 2011
Type Amount Generated
(trillion BTU)
% of State % of USA
Crude oil 152.4 13.5% 1.27%
Natural gas 498 44.12% 1.88%
Coal 453.9 40.21% 2.06%
Nuclear 0 0% 0%
Biofuels 0 0% 0%
Other 24.4 2.16% 0.34%

More than four-fifths of Utah’s electricity is generated from coal, and almost all of the coal used is mined from Utah with the rest coming primarily from Colorado. The next largest source of electricity in Utah is natural gas. Utah is a net generator of electricity, and thus exports electricity. Utah’s largest power generating station is owned by the Los Angeles Department of Water and Power. Recently the demand from other states for Utah’s excess electricity has decreased, probably due to the recession, but in-state demand continued to grow.[4]

There are only two natural gas utilities in Utah. There are 15 electricity utilities in Utah. Two are investor owned, nine are retail cooperatives, one is a wholesale cooperative, and the remaining three don’t fall into a specific definition. Rocky Mountain Power serves about 85 percent of the energy demand in Utah and is owned by PacifiCorp. PacifiCorp is the main manager of energy transmission in Utah and other western states.[14][15][16][17]

Where electricity comes from in Utah[18]
Type Amount generated (MWh) % of state** % of U.S.**
Petroleum-fired 2 0.05% 0%
Natural gas-fired 576 15.1% 0%
Coal-fired 3,094 81.1% 0%
Nuclear 0 0% 0%
Hydroelectric 45 1.18% 0%
Other renewables 80 2.1% 0%
Total net electricity generation 3,815 100% 0%
**Note: Because the U.S. Energy Information Administration (EIA) does not include all of a state's energy production in these figures, the EIA totals do not equal 100 percent. Instead, we have generated our own percentages.

Energy policy

Policy Issues
Utah has imposed a non-mandatory goal of 20 percent renewable energy by 2025. The state has further limited that goal by only pursuing renewable energy as long as it is “cost-effective”. This policy however may mean that energy costs remain relatively low for residents.
See also: Fracking in Utah

Energy policy is made, executed and influenced by many organizations, both public and private, and is codified in the laws and regulations of the state. Each state’s energy policy involves tradeoffs in which energy production and prices are weighed against environmental concerns and efficiency. Energy policy in Utah focuses on efficiency, cutting emissions and promoting responsible energy resource development. In 2013, Utah was ranked 24th by the American Council for an Energy-Efficient Economy (ACEEE), down three spots from 2012. Utah had the third lowest residential natural gas price in the country, and its electricity prices were among the lowest in the country.[19][20] There are differing estimates about the economic impact of these mandates in terms of costs that may affect prices and jobs, as well as the impact on the environment and pollution. Thus, for example, there are many new studies of what is called the "rebound effect" which refers to the fact that "some of the theoretically estimated gains in energy efficiency will be eroded as consumers consume additional goods and services."[21][22]

The lower price of electricity in Utah may result from the fact that a majority of electricity used in Utah comes from coal, (a low-cost source of energy), even though coal energy generation is heavily regulated because of its carbon emissions. Utah has a Renewable Portfolio Standards (RPS), but the RPS requirements are not mandatory. That means Utah does not mandate a minimum amount of renewable energy (which is usually more expensive than coal or natural gas) be used for generating electricity each year. Utah, instead, has a self-imposed goal of 20 percent renewable sources by 2025. Utah’s energy policy requires renewable energy only to the extent that it is “cost-effective.” The lack of a mandatory RPS, and the greater focus on cost than in other states, means that there are fewer requirements on the type of electricity being generated. Despite the lack of a mandate, renewable energies are growing, specifically Utah’s solar capacity. In 2012, solar energy grew by over 127 percent. Other renewable energies that qualify under Utah’s RPS goals are wind, biomass, and hydropower, but only hydroelectric makes up a sizable portion of total electricity generation.[23][24][25][26][27][28]

Major legislation

  • The Energy Resource and Carbon Emission Reduction Initiative (2008) established the voluntary RPS goal of 20 percent of electricity being generated by renewable sources by 2025. Unlike other states, Utah has no interim goals before the 2025 goal.[29][30]
  • Renewable Energy Certificate (2009) grants authority to the Utah Public Service Commission to develop a tracking system for an already existing program where utilities may buy renewable energy certificates (RECs) in order to meet Utah’s renewable energy goals. As of March 2013, this program had not been implemented.[31]
  • House Bill 80 (2006) mandates that state agencies buy energy efficient products and appliances whenever practical, and requires that residential and commercial buildings meet the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) Standard 90.1. The 90.1 standard sets requirements for cost effective use of commercial buildings, though smaller buildings are often exempted from the rules.[32][33]
  • House Bill 202 was passed in April of 2013. The bill updated much of the building code from the International Energy Code Council’s (IECC) 2006 rules to the IECC 2012 rules. The IECC rules require field inspections, detail how to examine building plans, and also mandate some building specifications to be met. The goal of the regulations is to ensure that new buildings take advantage of new and more efficient energy technologies, and guarantee lower carbon dioxide emission standards are met.[34][35]
  • House Bill 430 provides incentives to renewable energy manufacturers and producers that base their operations in Utah. The Alternative Energy Development Incentive (AEDI) provides for a 75 percent, non-refundable, corporate tax credit to some eligible renewable projects such as solar, wind and geothermal. The bill was altered 2012 to remove some of the requirements to qualify for the tax credit. A similar program exists, but it allows for personal tax credits for individuals installing personal renewable energy systems. This program is also run through AEDI.[36]
  • Utah Code 59-10-1106 provides refundable renewable energy tax credit for both residential systems and commercial systems. It provides a 25 percent individual income tax credit for residential systems that employ alternative energy systems in their homes. Eligible systems include both active and passive solar thermal systems, wind turbines, and geothermal heat pumps.[37]
Policypedia
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State energy policy

State fracking policy

Energy policy terms

Fracking in the U.S.

Energy use in the U.S.

Energy policy in the U.S.


See also
Local fracking on the ballot

Statewide fracking on the ballot

Government agencies and committees

  • The Utah legislature has both a House and Senate standing committee called the Natural Resources, Agriculture, and Environment Committee. The Utah Senate also has a committee on Transportation and Public Utilities and Technology, while the House has a committee on Public Utilities and Technology. These committees manage bills relating to energy policy, utilities and environmental policy.[38]
  • The Utah Office of Energy Development (OED), formed in spring 2011, creates and implements policies and provides leadership towards using Utah’s abundant energy resources to promote economic prosperity, energy independence and affordable energy.[39]
  • The Utah Division of Public Utilities, run through the Utah Department of Commerce, promotes the public interest in utility regulation and works to assure that all customers have access to safe and reliable service. The division regulates natural gas utilities, and electric utilities.[40]
  • The Utah Public Service Commission serves many of the same goals as the Division of Public Utilities. The Public Service Commission also produces publications each year on the state of utilities in Utah. The commission has been delegated legislative power, and has some regulatory responsibilities.[41]
  • The Department of Natural Resources is responsible for protecting the state's natural resources. The director managed this office. The office oversees state lands, oil and gas and mining activities, water rights and resources, the Utah Geological Survey and wildlife resources.[42]

Major organizations

  • The Utah Solar Energy Association promotes the use of renewable energy with a focus on solar energy. The association works through educating the public and policy development.[43]
  • The Healthy Environment Alliance of Utah (HEAL) lobbies to keep the environment safe for Utah’s residents. HEAL works on educating the public about the problems Utah currently faces as well as the upcoming problems the organization states could be easily prevented, but will become difficult to deal with if nothing is done. HEAL focuses on leveraging the democratic process in order to get the government action it sees as best. HEAL teaches people the civic skills necessary to create reform through the political system. HEAL focuses on drawing connections between public health and environmental problems that are not always obviously linked. For example, HEAL has organized grassroots movements that pressured local corporations to place extra precautions on emissions of dangerous chemicals.[44][45]
  • Utah Clean Energy is a non-profit, nonpartisan, public interest organization partnering to build the new clean energy economy through policy. The organization focuses on reducing electricity and natural gas consumption in order to assist Utah in meeting the RPS goal it has voluntarily set.[46]
  • The Southwest Energy Efficiency Project (SWEEP) is a non-profit organization promoting greater energy efficiency in: Arizona, Colorado, Nevada, New Mexico, Utah and Wyoming. SWEEP believes that these six states cover an area with high growth rates but had lagging energy efficiency standards as well as growing air pollution and environmental concerns. SWEEP writes fact sheets, case studies and other publications in order to educate the public and encourage energy efficiency.[47][48]

In the news

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See also

External links

References

  1. These figures come from the U.S. Energy Information Administration's State Profiles and Energy Estimates, Utah Overview. Statistics for population and per capita income are for the year 2012; consumption and spending estimates are for 2011; and prices are for October 2013. Updated pricing information is available on the state's EIA profile. Prices will be updated on this page biannually.
  2. U.S. Energy Information Administration, “Utah Overview,” accessed February 15, 2014
  3. Office of Energy Development, “10 Year Energy Plan,” March 2, 2011
  4. 4.0 4.1 4.2 4.3 4.4 4.5 U.S. Energy Information Administration, "Utah Profile Analysis," December 18, 2013
  5. U.S. Energy Information Administration, "Utah Profile Analysis," December 18, 2013
  6. This chart depicts the state's energy consumption as reported by the EIA for 2011. Click the image to enlarge.
  7. U.S. Energy Information Administration, “Residential Sector Energy Consumption Estimates, 2011,” January 16, 2014
  8. To compare current gasoline prices in Utah to the U.S averages, go to Average&city2=Utah&city3=&crude=n&tme=60&units=us GasBuddy.com
  9. U.S. Energy Information Administration, “Petroleum Marketing Monthly,” February 2014
  10. U.S. Energy Information Administration, “Alternative Fuel Vehicle Data,” April 8, 2013
  11. U.S. Department of Energy, “Utah Information,” accessed February 15, 2014
  12. U.S. Energy Information Administration, "Colorado Profile Analysis," December 18, 2013
  13. U.S. Energy Information Administration, “State Energy Data System, Production,” accessed February 18, 2014
  14. Utah Department of Commerce Division of Public Utilities, “Natural Gas Utilities,” accessed February 15, 2014
  15. Office of Energy Development, “10 Year Energy Plan,” March 2, 2011
  16. Utah Department of Commerce Division of Public Utilities, “Natural Gas Utilities,” accessed February 15, 2014
  17. Rocky Mountain Power, “Transmission”, May 19, 2008
  18. These figures come from the U.S. Energy Information Administration's State Profiles and Energy Estimates U.S. Energy Information Administration, "Utah Overview," accessed February 15, 2014
  19. State of Utah, “Priorities: Energy,” accessed February 16, 2014
  20. Office of Energy Development, Energy Overview, accessed February 16, 2014
  21. International Risk Governance Council, "The Rebound Effect: Implications of Consumer Behavior for Robust Energy Policies," accessed March 3, 2014
  22. Scientific American, "How Bad Is the Rebound from Energy Efficiency Efforts?," May 21, 2013, accessed March 3, 2014
  23. American Council on Renewable Energy, “Renewable Energy In Utah,” updated September 2013
  24. Montana State Government, “Renewable Energy Requirements and Goals in the Rocky Mountain Region,” accessed February 18, 2014
  25. The Economic Impact of Wisconsin's Renewable Portfolio Standard, WPRI Reports, March 2013
  26. According to a report called "The Status of Renewable Electricity Mandates in the States," by the free-market Institute for Energy Research, the cost of electricity in states with RPS were on average 38 percent higher in 2010 than in states without a RPS.
  27. Institute for Energy Research, "The Status of Renewable Electricity Mandates in the States," accessed March 24, 2014
  28. Manhattan Institute, "The High Cost of Renewable-Energy Mandates," February 2012
  29. Utah State Legislature, “S.B. 202 Substitute Energy Resource and Carbon Emission Reduction Initiative -- Bramble C.”, accessed February 23, 2014
  30. Institute for Energy Research, "Final Report," accessed February 18, 2014
  31. Database of State Incentives for Renewables and Efficiency, Utah Incentives/Policies for Renewables and Efficiency, updated March 5, 2013, accessed Feb. 18, 2014
  32. Institute for Energy Research, “Utah Regulations,” accessed February 18, 2014
  33. Energy Codes, “Impacts of Standard 90.1-2007 for Commercial Buildings at State Level”, September 2009
  34. Online Code Environment and Advocacy Network, “Utah,” accessed February 23, 2014
  35. Database of State Incentives for Renewable and Efficiency, “Building Energy Code,” April 2, 2013
  36. Database of State Incentives for Renewables and Efficiency, “Alternative Energy Development Incentive (Corporate),” March 5, 2013
  37. Database of State Incentives for Renewables and Efficiency, “Renewable Energy Systems Tax Credit (Personal),” July 16, 2013
  38. State of Utah, "Standing Committees," accessed February 18, 2014
  39. Utah Office of Energy Development, "Advancing Utah's Energy Future," accessed February 18, 2014
  40. Division of Public Utilities, “About Us,” accessed February 18, 2014
  41. Utah Public Service Commission, “2013 Annual Report,” accessed February 18, 2014
  42. Utah Department of Natural Resources, "About the Department of Natural Resources," accessed December 28, 2012
  43. Utah Solar Energy Association, "About Us," accessed February 18, 2014
  44. Healthy Environment Alliance of Utah, “About Us,” accessed February 18, 2014
  45. Healthy Environment Alliance of Utah, “Accomplishments,” accessed February 23, 2014
  46. Utah Clean Energy, “About Us,” accessed February 24, 2014
  47. Southwest Energy Efficiency Project, “About Us”, accessed February 23, 2014
  48. Southwest Energy Efficiency Project, “Programs”, accessed February 23, 2014