Energizing Discussion at Minneapolis/St. Paul Business Journal Offices

MSP-BIZ-Journal-EnergyI had the honor this morning to feature on a panel of experts convened by the Minneapolis/St. Paul Business Journal to discuss the topic of ”The Future of Energy.”

Moderated by John Kearney of the Minnesota Solar Energy Industries Association, the panel included Kenneth Smith, President and CEO of Ever-Green Energy, Ken Bradley, Director of Business Development for SunShare, and myself.  Our panel had a lively exchange that covered a smorgasbord of topics, including the future of utility regulation, increased reliance on renewable resources, and increased customer involvement. The MSP Business Journal plans to publish an article in December summarizing the discussion. We will be sure to share it with our blog readers when it comes out.

Minnesota Can Reliably Integrate 40% Renewables According to DOC Transmission Study

Yesterday, the Minnesota Department of Commerce issued its highly anticipated Minnesota Renewable Energy Integration and Transmission Study, which indicated that the “capacity for adding additional wind and solar up to 40% by 2030 can be reliably accommodated by the electric power system” (DOC press release here). The study stated that with relatively modest upgrades to existing transmission, the power system can be successfully operated for all hours of the year with the increases in wind and solar. For increases above 40%, additional analysis would need to be done. The study was conducted by Minnesota utilities and transmission companies in coordination with MISO and directed by the Minnesota Department of Commerce. It is the result of 2013 legislation requiring the analysis of increasing Minnesota’s renewable energy standard to 40% (and higher proportions thereafter) while maintaining system reliability.

We’ve made a copy of the DOC study available for download (PDF format).

Regulate vs. Replace: Hg Ct in MN Affirms State Commission’s Application of Mercury Emissions Reduction Statute

Last year, the Minnesota Public Utilities Commission approved investor owned utility Minnesota Power’s mercury emissions reduction plan for the 585 MW Boswell Unit 4, its largest coal-fired power plant.  Minnesota’s Mercury Emissions Reduction Act (MERA) requires utilities to prepare plans to reduce mercury emissions for the state’s six largest coal power plants.  See Minn. Stat. §§ 216B.68-.688.  For Boswell 4, which is located in Cohasset, MN, Minnesota Power submitted a plan to retrofit the unit to reduce the plant’s mercury emissions by 90% (the statutory goal under MERA) as well as reduce emissions of multiple other pollutants.

A group of environmental intervenors challenged the approval, arguing that the Commission had not adequately considered the option for replacing Boswell 4 with a natural gas plant instead of retrofitting it to reduce emissions.   Specifically, they contended that the Minnesota Pollution Control Agency (MPCA)  should have produced a full evaluation of the natural gas alternative as it had for the retrofit plan for the Commission’s consideration.  The Minnesota Court of Appeals issued a decision yesterday denying the environmental intervenors’ appeal.   The Court found that the question at issue was the statutory interpretation of MERA.  In its analysis, the Court found that upon examination of the statute as a whole, it is clear that the legislature’s intention with MERA is to regulate rather than replace coal plants.  And, as a result, MPCA was not obligated to substantively assess the prospect of retiring and replacing Boswell 4 with a natural gas facility.   Further, the Court found that, even if MPCA should have evaluated the natural gas alternative, the Commission was required by statute to approve a plan meeting the criteria set forth under MERA.  Since Minnesota Power’s retrofit plan met those criteria, the Commission was required to approve it.

The Boswell 4 retrofit project is already under construction and projected to be completed in 2016.  Decisions about investing in mercury reduction retrofits for coal plants are among the many significant resource planning decisions that Minnesota utilities will be facing in the next several years, with the Commission investigating updating the costs assigned to pollutants in the resource planning process and Minnesota regulators exploring implementation options for EPA’s Clean Power Plan.

Chile Announces New Public Land Concessions for Non-Conventional Renewable Energy Projects

On October 1, 2014, Víctor Osorio, Chile’s Minister of Natural Resources, announced that 200 public land concessions were being made available, through a cooperation agreement with the Ministry of Energy, to Non-Conventional Renewable Energy (NCRE) projects.  The goal of the program is to use the public lands concessions to facilitate the growth of NCRE’s, all with a view to achieving Chile’s national policy of having NCREs constitute 20% of total national generation resources by 2020.

It is estimated that from March to late October 2014 the national government will have awarded or authorized 88 new concessions (i.e., 74 more than were issued by the previous government). The new concessions involve 24,868 hectares, which are projected to produce new electric capacity from solar and wind resources equal to more than 3,600 MW.  The investments in such new resources are expected to produce annual revenue for the Chilean treasury of over U.S. $ 9 million.

Regarding the government’s previously announced plans to use the land for housing, Minister Osorio said that NCRE development is not incompatible with a public-private partnership aimed at improving the quality of life.  He also said that that public housing needs are key issues that may be addressed in an upcoming meeting with the Chilean Chamber of Construction.

If you’d like more information on Minister Osorio’s announcement, please feel free to contact me.

California PUC Comissioner Michael Peevy to Step Down

Last Thursday, longtime California Public Utilities Comissioner and President Michael Peevy announced he would not seek reappointment at the end of this year, when his second six-year term with the CPUC expires. In making his announcement, Peevy issued the following statement:

I originally planned to make the following announcement at the CPUC’s regularly-scheduled Voting Meeting on October 16th, but instead I am moving the announcement to today to state that I will not seek reappointment to the CPUC when my term expires at the end of this year. Twelve years as President is enough. The Governor, of course, will make a decision as to my successor in due time.”

As Peevy notes, California Governor Jerry Brown will appoint his successor.

California’s New Streamlined #Solar Permitting Law Goes into Effect

Over the weekend, California Governor Jerry Brown signed AB 2188, which is designed to streamline the permitting process for small rooftop solar systems. The new law seeks to give California’s Million Solar Roofs target a boost by establishing a state wide “modernized and standardized permitting process.” The new law amends Section 714 of the California Civil Code and Section 65850.5 of the California Government Code to provide for the following:

  • On or before September 30, 2015, every city and county is required to adopt an ordinances that “creates an expedited, streamlined permitting process for small residential rooftop solar energy systems.” Cal. Gov. Code § 65850.5(g)(1).
  • In connection with this process, every city and county must adopt “a checklist of all requirements with which small rooftop solar energy systems shall comply to be eligible for expedited review.” Id.
  • If the city or county determines that an application satisfies the information requirements of the checklist, then the application is deemed complete. Id.
  • Once the city or county confirms that an application is complete and meets the requirements of the checklist and the ordinance, the city or county must approve the application and issue all required permits. Id.
  • If a city or county deems an application incomplete, it must notify the applicant of any deficiencies. Id.
  • Every city and county must publish the checklist and required permitting documentation on the internet and allow for electronic submittal of applications and documentation, as well as electronic signatures. Cal. Gov. Code § 65850.5(g)(2).
  • For small residential rooftop systems (10 kW or less), “only one inspection shall be required, which shall be done in a timely manner and may include a consolidated inspection,” except a separate fire safety inspection may be allowed under certain circumstances.

These reforms are designed to eliminate inefficiencies in the permitting process and drive down soft costs of solar installations. Time will tell whether these soft cost savings will be realized and – if so – whether the savings will be passed on to solar customers.

 

Minnesota Community Solar Garden Program Approved, Set to Open

The Minnesota Public Utilities Commission today issued its long-awaited Order approving (with modifications) Xcel Energy’s Community Solar Garden (CSG) Program - Solar Rewards*Community.  The Order starts the clock for the program to open no later than 90 days from issuance of the Order (mid-December) and officially plows the furrow for community solar projects in Minnesota.  It is not, however, clear that Xcel Energy will have the luxury of using the full 90 days for opening its CSG program- the Minnesota CSG Statute requires Xcel Energy to begin crediting subscriber accounts for each CSG within 180 days of the CSG plan’s approval. Stay tuned for additional details.

Our prior blogs provide more details on the program. We review the details of the Order below.

Application: Once applicants file their applications and deposits, Xcel has 30 days to confirm the application is complete and then another 60 days to accept or reject the application. Applicants initially need to include:

  • Contact information,
  • Garden information including system location and specifications,
  • Application fee ($1,200) and deposit ($100/kW)
  • Engineering documents, including one-line diagrams, site plan, and Interconnection Application

Applicants will have a full 24 months from Xcel’s completeness determination to complete the project and comply with several additional requirements including: proof of site control, adequate insurance, projection of subscriptions, and signed interconnection and CSG agreements. Continue Reading

SDG&E Issues Max 800 MW All-Source RFO, with caveat

We recently learned that San Diego Gas and Electric has issued a 2014 All Source Request for Offers (RFO).

The RFO requests offers for up to 800 MW from the following resources:

  1. Energy Efficiency (EE)
  2. Demand Response (DR)
  3. Renewables
  4. Combined Heat and Power (CHP)
  5. Energy Storage
  6. Conventional
  7. Distributed Generation (DG)

SGGE-Procurement-2014

The RFO is authorized by CPUC Decision 14-03-004. The decision authorizes minimum and maximum procurement from each resource area.

There is an important caveat to note in the RFO. SDG&E mentions it has entered into a 600 MW bilateral contract with the Carlsbad Energy Center. If approved, 600 MWs of the RFO will be filled by that contract, leaving 200 MW for preferred resources, including at least 25 MW from energy storage.

Prebid conferences will take place on September 26, October 24 and November 10, 2014. Offers are due on January 5, 2015.

The official RFO page is here: http://www.sdge.com/all-source-2014-rfo

Good luck to all bidders. Let us know if you require assistance.

 

Breaking: EPA Extends Clean Power Plan Public Comment Period

Janet McCabe, acting assistant administrator for EPA’s Office of Air and Radiation, announced today that EPA’s comment period for its proposed Clean Power Plan will be extended 45 days from the mid-October deadline to December 1, 2014. EPA’s announcement comes a week after a group of bipartisan U.S. senators asked for additional time to weigh in on the plan. EPA claims the delay will not affect the rule’s anticipated June 2015 finalization date, but we expect the extension and extent of comments will slow EPA’s momentum.

MN PUC Affirms Path of Contentious Litigation for Externalities Value Determination

The MN PUC held a hearing on September 4, 2014, to address the impending investigation of social costs of pollutants under Minn. Stat. § 216B.2422 subd. 3 (known as externalities values).  First established in the late 1990s, the MN PUC re-opened the investigation in a February 2014 Order, focusing exclusively on PM2.5, SO2, NOx, and CO2.  But the MN PUC refrained from issuing a formal referral to the Office of Administrative Hearings (OAH) for contested case treatment in front of an Administrative Law Judge.  Instead, the MN PUC’s February 2014 Order directed the Minnesota Department of Commerce and Minnesota Pollution Control Agency to convene a stakeholder meeting to discuss scope.  The Minnesota government agencies organized this meeting, which was held in April, and then reported their efforts and recommendation to the MN PUC in a comment filed in June.

One of the recommendations from the Minnesota government agencies in their June Comment was to forego a full contested case review of CO2.  The Minnesota government agencies believed the MN PUC could avoid this lengthy analysis by simply adopting the Federal Social Cost of Carbon (SCC).  A number of parties, including utilities, customers, and suppliers, objected to this recommendation.

Ultimately, the MN PUC affirmed its February 2014 Order, with a slight twist.  The MN PUC referred the appropriate calculation of the externality value for CO2 to the OAH for contested case treatment for the purpose of determining whether the SCC is a reasonable and best available measure for the CO2 externality cost and, if not, what measure is better supported by the evidence.  Other terms and details will be clearly set forth in the MN PUC’s written order reflecting its September 4 decision.

The Commission’s decision on CO2, as well as the values for PM2.5, SO2, and NOx, will be the subject of intense debate over the next 12-18 months.  The final result will undoubtedly impact future MN PUC decisions on utility integrated resource plans and other resource acquisition dockets.  Stay tuned.

LexBlog