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Energy & Grid Management
Arushi Sharma Frank
Arushi Sharma Frank
 · Posted in Energy & Grid Management

Permit Streamlining so More Texans can have Battery Backup Power

  • This article delves into the "why and how" of municipal permitting reform for #distributedenergy #backuppower being a critical low-cost grid reliability policy objective for Texas.

  • Several states which are focused on boosting economic development and consumer welfare and security in the face of grid reliability challenges are actively working to reduce bureaucratic overreach, streamline permitting processes, and promote economic growth through such regulatory reform. Examples are provided below from Arizona, Florida, Georgia, Utah.

  • While some Texas cities have made improvements, there's still a significant gap between their performance and that of neighboring states with reformed laws. This gap is an opportunity for Texas policymakers to lead in removing red tape, encouraging consumer-friendly policies, supporting energy innovation, and boosting grid resilience by implementing similar reforms.

Texas will unequivocally benefit from more distributed residential scale batteries paired with solar, or not, providing dispatachable capacity to the bulk electric system through ancillary services in ERCOT. (Residential batteries without solar, can operate like a solar sponge - this is a concept already implemented in other markets - see Notes section below.)

In my role as a liaison to installers, utilities, and policymakers on the hardest questions facing us on Distributed Energy Resource (DER) policy, I have learned much about how the channel installer and direct installer community in major municipalities in Texas struggle with inconsistent, disparate standards for various permits needed from local authorities to execute a backup power installation - electric, building, fire safety, energy storage, zoning - in addition to the typical interconnection application with the utility.

With a little bit of irony, I have researched most of this with the same feeling of "woah what do we do" as I did when I contributed a subsantial data set to the federal Government Accountability Office report issued in 2013 on the same problem, but for natural gas distribution pipeline replacement - a process which utilities themselves struggle with on the same spectrum - disparate municipal, local, tribal, historic preservation permitting issues. I am quite certain I came up with the title used in the report too (a hunt for a GAO comment letter I wrote, may prove or disprove that!)

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Screenshot Accessed July 29, 2024 at

 

So, 11 years later, here I am, writing up the same issues, but this time, to make the case that battery-powered backup power solutions are limited in their adoption by local permitting challenges. This article sums up the ideas that need to be understood, connected, and can be turned into systemic reform. And yes, this is one of the real, meaningful blockers to ADER (Aggregated DERs) expansion in Texas/ERCOT.

Issue Summary

Permitting challenges block the widespread adoption of distributed energy solutions statewide which could otherwise be the fastest and cheapest way to resolve unexpected outages for Texas homeowners. While many grid reliability investments require billions in investment, rapid local permitting changes delivered to make it easier for consumers to purchase backup power solutions are a comparatively small-dollar proposition which yields scalable, limitless benefits for keeping the lights on. The more distributed energy solutions are integrated into the distribution system, the faster utilities will be able to return impacted customers from outages.  Customers with distributed energy solutions are an insurance policy for the rest of the neighborhood(s) when a large mass of customers experience utility outages.

State government oversight is the practical and jurisdictionally powerful solution, since municipal entities and authorities otherwise exercise complete regulatory oversight in small independent structures  - which, whether behind the times or ahead of them, are disparate instead of standardized and thus a quagmire to navigate for residents and their installers alike.

Many state governments applying free market thinking in policy leadership have identified and undertaken policy initiatives and legislative decrees to gain control over the situation to arrest bureaucratic overreach, regulatory quagmire, patchwork and subjective rules, and administrative balkanization. These features in any local permitting construct, not just consumer energy products, are all economic growth-killers and stymy consumer access and consumer choice.

Permit Streamlining is Politics-Neutral: No One Wants Red Tape, Everyone Wants Reliable Power

Major permit streamlining initiatives I worked on in my first energy advocacy role were enabled through President Obama's Executive Order on this topic. Those initiatives doubled down in focus and concentrated effort from the Executive Branch, when President Trump took office. Concurrently, the US Congress passed permit streamlining legislation like the FAST Act. And of course today, all eyes are on the federal authorities available to streamline reviews specifically for electric transmission. All of this federal activity, including elements invoking some local/municipal synethesis in process, is enabled by a concept called federal nexus: i.e., projects falling under this purview have at least one federal agency that is a lead due to the requirement for the project to apply for a permit under a federal statute. Inter-agency coordination efforts in these large federal multi-agency permitting processes, though difficult, are at least possible.

Some reading on the topic:

 

The same is not true at the municipal level. Municipal entities or "Authorities Having Jurisdiction" are not bound by any common nexus agency to which the local install/resident can apply for a streamlined approach to handle local permits across mutiple entities. The consumer, or the consumer's installer, is the nexus, and that... is not a lot of fun.

So, it is easy to find that in various fields consumer-facing industries, permit streamlining efforts over municipal processes have taken shape through state law, and that there is not a Great Divide in state leadership's politics on this topic. We all want the chance for the peaceful pursuit of life, liberty, and backup power. Here's a list of politically conservative states' laws promoting municipal permit streamlining:

i.      Texas: House Bill 3167 (2019)

·       Aimed at accelerating the land development permit approval process

·       Set strict timelines for local governments to approve or deny permits

·       Reduced regulatory uncertainty for developers

ii.      Texas: Senate Bill 2 (2019)

·      While primarily a property tax reform bill, it included provisions to increase transparency in local government operations

·      Required certain cities to obtain voter approval for significant tax rate increases, indirectly pressuring them to streamline operations

iii.      Texas: Senate Bill 1004 (2017)

·      The bill created uniform statewide rules for network node deployment in public rights of way, overring patchwork local regulation; it allowed telecom companies to deploy 5G infrastructure across Texas

·      Local authorities were required to process permit applications under specific timelines, limiting to 30 days for most applications.

·      The bill also capped fees charged by municipalities for small cell wireless facility installation.

iv.      Florida: House Bill 1339 (2020)

·       Streamlined approval processes for affordable housing developments

·       Reduced regulatory barriers at the local level to promote housing affordability

v.      Florida: Senate Bill 1024 (2022)

·       Standardized solar energy system permitting across the state

·       Required local governments to process residential solar installation permits within 30 days

vi.      Arizona: SB1222 (2022)

·       Required municipalities to issue permits for "qualifying" residential and commercial buildings within 7 and 14 business days respectively

·       Implemented penalties for cities that fail to meet these deadlines

vii. Georgia: Senate Bill 393 (2022)

·       Standardized building design element regulation across the state

·       Limited local governments' ability to impose subjective design standards on single-family homes

Why Municipal Permitting Reform Matters in Texas and on Other Grids Facing Transmission Challenges

 

  • In the case of distributed energy/backup power, solar and storage, partial home backup batteries (cheaper and easier to install for more homes or even apartment/multifamily), eliminating the bureaucratic morass of municipal permitting means the cheapest and most quickly scalable form of distribution grid capacity can be brought on at a time scale that outpaces the decade plus it will take to fix tranmission grid issues and build new power plants. DERs are truly the only fast track tool available for dispatachable grid reliability, outage protection, and economic stability.
  • When major storms and unpredictable force majeure events occur on the local grid (distribution level, not the large/bulk power grid), the fastest way back from an outage is to isolate the parts of the system that are resilient from those that need serious crew work to restore power to customers: more resilient, self-sufficient homes means more hours and resources can be devoted to others who are still without power. This principle is recognized in the recent CenterPoint Energy Efficiency Cost Recovery Filing on May 31, 2024 made with the Texas Public Utility Commission.

 

Texas v. Other States: Distributed Energy Permitting (Solar App + and Similar)

Examples of Municipal Permitting Reform Initiatives to Unblock Distributed Power for Consumers

i. Arizona

 

  • Implemented the SolarAPP+ program statewide in 2021
  • Streamlined solar and energy storage permitting processes
  • Reduced permit review times from weeks to days

 

ii. South Carolina

 

  • Passed the Energy Freedom Act in 2019
  • Standardized interconnection requirements for distributed energy resources
  • Implemented online permitting systems in major cities

 

iii. Florida

 

  • Enacted SB 1024 in 2022 to streamline solar permitting
  • Required municipalities to adopt an online, automated permitting system for rooftop solar installations

 

iv. Utah

 

  • Implemented the SolarAPP+ program in several municipalities
  • Salt Lake City launched an expedited solar permitting process

 

v. North Carolina

 

  • Passed HB 329 in 2021 to streamline solar permitting
  • Required local governments to offer an optional fast-track permitting process for residential rooftop solar energy systems

 

* Note: These figures are approximations based on available data and may vary depending on the specific project and jurisdiction. The costs do not include additional fees that may be required for inspections or grid interconnection.

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Chart Summary

 

  • TX municipalities generally have longer timelines and higher costs compared to states with reformed processes
  • States using SolarAPP+ or similar automated systems show significantly reduced timelines and costs
  • Standardized, statewide processes like in South Carolina, Florida result in faster timelines, which are generally seen in jurisdictions with online, instant permitting for standard installations

Texas-Specific Challenges and Resolution Pathways

Three main challenges are identified as gating blockers in Texas to more customers having reliable backup power from whole-home solar + batteries or partial-load backup batteries.

1.     Lack of standardization in permitting across cities

2.     Inconsistent enforcement of Texas state codes by municipalities

3.     Slow, often non-digital processing of permit documentation

Resolution pathways

 

  1. Legislative or policy mandated solutions from state government could include: a standardized, automated permit flow program (software) that checks permit submissions against Texas state codes (e.g., electric permitting tool that checks local code against the National Electric Code).
  2. To the extent that municipalities cite the need for additional reviews that are not covered by an all-inclusive software, the permit program would nevertheless require these entities to state all requirements ahead of time, transparently and in writing in their system application interface, eliminating surprise and regulatory capture of unwitting Texans who purchase backup power equipment only to realize that they cannot install it as intended without a sudden increase in installation cost or other restrictions.
  3. Permitting councils and oversight entities can create accountability and reporting metrics to focus improvements on jurisdictions with the hardest challenges for market entry and market access to backup power distributed generation and storage. Texas could benefit from a cost-benefit analysis that digs into how much money, time, and investment opportunity impact couldbe created through a statewide permitting software solution that eliminates barriers to backup power distributed energy installation in Texas homes.

 

Reference Document Author: Arushi Sharma Frank, Principal, Luminary Strategies

June 24, 2024

[1] NREL's SolarApp is cited as an example of such a system adopted in other states. See also, U.S. Department of Energy. (2021). "Solar Energy Technologies Office Soft Costs Fact Sheet."  (Highlighting that non-hardware "soft costs" of installations, including permitting and inspection, can account for up to 64% of the total cost of a residential solar energy system), available at https://www.energy.gov/eere/solar/solar-soft-costs-basics.

[2] A Solar Sponge Tariff, also sometimes referred to as a "solar soak" tariff, is a type of electricity pricing structure designed to encourage electricity consumption during times of peak solar generation.

 

  1. Purpose: To incentivize energy consumption during daylight hours when solar energy production is at its highest, helping to balance the grid and make use of excess solar energy.
  2. Structure: These tariffs typically offer lower electricity rates during the middle of the day, usually between 10 AM and 3 PM, when solar output is highest.
  3. Battery integration: In the context of battery storage, these tariffs can be used to encourage battery charging during peak solar production hours to (i) helps absorb excess solar energy that might otherwise be curtailed, and (ii) allow for the stored energy to be used later during peak demand periods, helping to smooth out the "duck curve" often associated with high solar penetration.
  4. AEMO context: In the Australian National Electricity Market (NEM), operated by AEMO, these tariffs are part of a broader strategy to manage the increasing penetration of rooftop solar and large-scale solar farms.
  5. Network benefits: By shifting energy consumption to times of high solar production, these tariffs can help reduce strain on the distribution network during evening peak hours.
  6. Consumer benefits: Consumers can potentially save money by shifting their energy-intensive activities (like running washing machines or charging electric vehicles) to the middle of the day when rates are lower or periods of time when their battery systems are filled up and supplying their home activity needs (overlapping with evening peaks).