Applications Now Being Accepted for ITC Grants
The U.S. Department of Treasury announced today that it has begun accepting applications for grants in lieu of tax credits pursuant to section 1603 of the American Recovery and Reinvestment Act of 2009 (ARRA). ARRA permits an applicant to receive a Treasury Department grant rather than claiming investment tax credits (ITCs) or production tax credits (PTCs) for certain renewable energy property.
To be eligible for a grant, the property must be placed in service in 2009 or 2010, or if construction starts in 2009 or 2010, must be placed in service by the end of 2012 (for wind), 2013 (for biomass, geothermal and other resources) or 2016 (for solar). The grant amount is typically equal to the amount of the ITC for which the project owner would otherwise have qualified (for example, generally 30% of the qualified cost of the project).
The Treasury Department has also provided a means by which applications may be submitted online, as well as a form for obtaining an accountant’s certification for projects with cost bases that exceed $500,000. For applicants who want to assign grant payments to another person, the Treasury Department provides a notice of assignment form and a link to register with the Central Contractor Registration, which is required to qualify for the grant.
To see the full client alert, visit http://www.stoel.com/showalert.aspx?Show=5779.
To see a description of ARRA and previously issued Treasury guidelines, see our previous alert at http://www.stoel.com/showalert.aspx?Show=5682.
Xcel Proposes Connectivity Fee for its Net-Metered Solar Customers
Just as the Bonneville Power Administration led the charge on the addition of a wind integration rate, Xcel Energy now seeks to impose a solar connectivity charge on its net-metered customers in Colorado. The proposed monthly fee is intended to pay Xcel for setting aside electricity capacity for solar customers, in case they need to draw energy from the grid. Because this is a capacity-based charge, it would apply even if the net-metered customers do not actually use any of the capacity in a given month. If the fee is approved by the Colorado Public Utilities Commission, Xcel will be the first utility in the U.S. to charge net-metered solar customers for the ability to access the grid when needed.
Tom Henley, a spokesman for Xcel, described the fee as necessary to prevent solar customers from getting a windfall, as they currently do not pay to use the grid as a backup. However, solar energy advocates countered that the proposed fee overlooks the benefits that the net-metered customers provide: namely, generating clean, renewable energy that can be fed into the grid. One net-metered Xcel customer noted that the solar panels on his roof generate enough electricity to power five or six houses around him.
The proposed fee would go into effect in April 2010 and apply to customers who purchase solar panels on or after the effective date. The 2.6 cent per kilowatt-hour fee would be based on the largest amount of electricity per month that a solar customer has extracted from the grid during the last year. Henley estimates that the fee would amount to an additional $1.90 per month for a person adding a 4.5 kilowatt solar array to his or her home.
The Colorado Public Utilities Commission is holding a public hearing on the proposed rate increase on August 5th.
Show me the Money: $11.8 Million Awarded for Solar Energy Grid Integration
Today, in recognition that solar energy is a critical factor in the President's clean energy agenda, the U.S. Department of Energy (DOE) announced that $11.8 million ($5 million from the American Recovery and Reinvestment Act) will be deployed to five projects related to the development of solar energy grid integration systems (SEGIS). This follows our earlier client alerts regarding funding opportunities for solar technologies.
SEGIS activity began in 2008 with a partnership between DOE, Sandia National Laboratories, industry, utilities, and universities interested in complete system development. Funded projects are related to the integration of solar technologies into the U.S. electrical grid while maintaining or improving power quality and reliability.
Continue Reading...Biofuels Still in the Spotlight: $6.3M for Biofuels Research
Last week, U.S. Department of Energy ("DOE") Secretary Steven Chu and U.S. Department of Agriculture ("USDA") Secretary Tom Vilsack announced the winning candidates for up to $6.3 million in awards for research leading to improved use of plant feedstocks for biofuel production. The seven projects announced follow the green jobs and renewable energy Rural Tour event hosted by the two cabinet Secretaries in Virginia on the weekend of July 18-19. These investments are intended to further the Obama Administration’s efforts to broaden the nation’s energy portfolio while decreasing our dependence on foreign oil.
These grants will be awarded under a joint DOE-USDA program begun in 2006 that is committed to fundamental research in biomass genomics, providing the scientific foundation to facilitate use of lignocellulosic materials for bioenergy and biofuels. Since lignocellulosic crop plants are less intensive to produce and can grow on poorer quality land, competition with crops grown for food production is avoided. For more information on these awards, go to DOE's site for the DOE-USDA biomass genomics research program.
DOE will provide $4 million in funding for four projects, while USDA will award $2.3 million to fund three projects. Initial funding will support research projects for up to three years.
Perhaps the most amazing fact from this announcement is that Secretary Chu is on facebook! How does he find the time? This attorney is impressed. Check out his video announcement on next generation biofuels here.
RFPs Galore.
The following RFPs for renewable energy and RECs came to my attention today.
1. Dayton Power and Light Company is seeking to acquire up to 313,000,000 kWh of eligible RECs by 2013 in order to meet Ohio's RPS requirements. Deadline for submissions is August 7, 2009. Click here for more information.
2. The Western Area Power Administration is seeking RECs on behalf of certain WAPA regional offices and federal agencies. Deadline for submissions is August 7, 2009. Click here for more information.
3. Southern California Edison seeks to acquire energy from eligible renewable resources. Click here for more information.
4. AEP Ohio is looking to acquire 30,000,000 kWh of eligible RECs to use toward compliance with Ohio's RPS requirements. Interested parties must submit a Notice of Intent to Bid by July 31, 2009. Click here for more information. AEP Ohio also has an active RFP for renewable energy, which you can learn about here.
5. Puget Sound Energy seeks to acquire 30,000,000 kWh of eligible RECs. Interested parties must submit a Notice of Intent to Bid by July 31, 2009.
6. Bryan Texas Utilities hopes to acquire up to 10 MW of utility-scale solar energy and the associated RECs generated within ERCOT. The deadline for submissions is August 24, 2009.
7. Seattle City Light is looking to acquire 50 MW of new renewable resources to meet Washington RPS requirements. Submission deadline is August 28, 2009. You can find more information here.
8. The US General Services Administration seeks to acquire 40,000,000 kWh per year of RECs for the Architect of the Capitol and other federal agencies. Submission deadline is September 1, 2009. You can find more information here.
Minnesota Think Tank Estimates 4,000 MW of More Wind Power Needed
In a recent report published by Minnesota 2020, a non-partisan think tank focused on public policy matters including economic development, health care, education and transportation, the group notes that Minnesota needs an additional 4,000 MW of wind power to meet its Renewable Energy Standard, set at 25% by 2025. The think tank also notes that achieving the RES would "create up to 2,200 new jobs during the 17-year construction phase and more than 900 sustained jobs during the wind farms lifetime operations," which numbers may increase as Minnesota reaches beyond its minimum 25% requirement. The report also includes several short- and long-term recommendations to encourage the presence of wind energy companies in Minnesota, and thus the market (including training) for jobs within the wind industry as well.
Show me the Money: $54 million in Funding for State Energy Programs
From our colleague Christina Asavareungchai:
Today, the Department of Energy announced more than $54 million in Recovery Act funding to four states under its State Energy Program ("SEP"). Here is how the funds will be used in Nevada, Rhode Island, Vermont, and Wisconsin:
Continue Reading...EPA Shows Positive Interest in Algae
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From InsideEPA.com (reproduced essentially verbatim with the permission of the publisher Inside Washington Publishers):
EPA will measure the greenhouse gas (GHG) impacts of algae-based biofuels in its final rule to implement the renewable fuels standard (RFS) in response to growing interest in the renewable feedstock, including recent announcements by Exxon-Mobil (as noted in an earlier article) and Dow Chemical that they are undertaking separate projects to help commercialize the technology. Algae is a particularly tempting feedstock choice because it can be engineered to sequester large amounts of carbon dioxide (CO2) and because algae-based biofuel has a similar molecular structure to gasoline, allowing it to be used in the existing transportation infrastructure. These qualities could help the fuel sidestep controversy associated with corn-based ethanol, which some say cannot meet the CO2 reduction goals of the RFS and which, due to its corrosivity, can impact engines, pipes and fuel pumps.
EPA fuels official Sarah Dunham said the agency considers algae “a promising feedstock” that will be included in the final RFS rule. EPA issued its RFS proposal earlier this year to expand biofuels use in line with congressional mandates, and is taking comment on the proposal through Sept. 25. Dunham was speaking to a July 16 meeting of a National Academy of Sciences panel on reducing greenhouse gas emissions from the transportation sector. Algae-based fuels could be considered under the advanced biofuel or bio-based diesel portion of the RFS, according to the proposed rule.
EPA's Region 10 Awards over $1.6M to Portland to Reduce Diesel Emissions
Similar to the July 21, 2009 U.S. Environmental Protection Agency's ("EPA") Region 5 award, EPA's Region 10 has awarded over $1.6 million to reduce emissions from Portland municipal fleet vehicles and construction contractor equipment. The funds are provided under the American Reinvestment and Recovery Act of 2009 ("ARRA") National Clean Diesel Funding Assistance Program. Under this funding competition, EPA Region 10 received over 49 grant applications requesting over $80 million to help fund clean diesel emission projects.
In addition to reducing diesel emissions from municipal fleet vehicles and construction contractor equipment, this project will fund installation of fuel operated heaters--and idle reduction technology--on 247 vehicles in Portland and Multnomah County diesel fleets as a strategy for reducing diesel emissions while also decreasing fuel costs and climate pollution.
EPA estimates that this award will create or sustain an estimated 34 manufacturing and local installation jobs and will help Oregon municipalities and their contractors decrease operating costs by achieving fuel savings.
Show me the Money: Green Jobs Grants
Recently, the U.S. Department of Labor has issued $500 million for green job training. This money is being released through a series of competitive grants.
If you are an organization within Washington State, the Governor's Office requests that you submit a brief information form to the Governor's Evergreen Jobs Leadership Team. The Team is compiling a list of potential applicants which will be posted on a public website. The information on this list will be available for stakeholders to find grant partners and leverage resources.
A copy of the form is available here: http://www.wtb.wa.gov/documents/clearinghousegrantform.doc
Six Years, Not Ten--New Time Limits Govern Certain Claims against Designers, Consultants and Contractors
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Owners and developers of commercial buildings in Oregon, "green" or otherwise, should be aware that, effective January 1, 2010, the Oregon Legislative Assembly has reduced the time period within which to assert claims against those who performed design, planning, surveying, architecture, engineering, construction, repair, or construction supervision or inspection of or for the building, from ten (10) years after substantial completion of construction to only six (6) years after substantial completion of construction.
In the context of green and high performance buildings, claims against designers, consultants and contractors for buildings’ failures to achieve LEED, energy efficiency or similar goals would be subject to the new six (6) year limit. However, performance monitoring itself takes several years, possibly in excess of six years in some cases, to determine whether energy savings are being realized at the levels expected. Also, with new green product entries and the integration of new with old technologies, defects may take longer to materialize and discover. Green buildings therefore pose special risks that, for the owner's perspective, may be particularly ill-matched with a shorter limitations period. Owners and developers will need to adapt their purchase and sale, lease and design, and construction documents to take into account the effects of the new law.
Here are the details:
On July 14, 2009, Oregon Governor Ted Kulongoski signed HB 2434 passed in June by the Oregon Legislative Assembly. Although a chapter number has not yet been assigned to the new act, the law will go into effect for building defect claims that arise on or after January 1, 2010.
As addressed in prior Legal Updates from Stoel Rives’ Development Law Group, HB 2434 reduces from ten years to six years after substantial completion the maximum time period during which an owner of a "large commercial building" can assert claims against those who performed design, planning, surveying, architecture, engineering, construction, repair, or construction supervision or inspection of or for the building.
As defined in the statute, the term "large commercial building" includes but is not limited to:
- rental residential structures of more than four stories
- mixed-use projects
- commercial structures that cost more than $250,000 to construct
- motels, hotels, nursing homes, hospitals and recreational facilities
- commercial structures with a ground area over 10,000 square feet or a height over 20 feet
- commercial rental units in a larger structure, if the unit has a ground area of over 12,000 square feet or a height over 20 feet
The term "large commercial buildings" does not include publicly-owned buildings or condominium buildings. One concern for affected building owners and developers is simply the shortening of the period from ten years to six years after substantial completion during which the owner or developer can pursue a defect claim of its own against the designer or contractor of the building.
A second concern, however, is that building owners and developers may end up with legal obligations to a purchaser or tenant regarding building defects for a longer period than the six years after substantial completion during which the owner or developer can assert the claim against the building’s designer or contractor. In this way, a building owner or developer could have a multi-year exposure to getting "caught in a squeeze" by having a defect claim asserted against it by a buyer or tenant yet having no right to assert that claim against the parties that designed and constructed the building.
Owners and developers of "large commercial buildings" in Oregon should consider modifying the claims, warranty, correction of defects, and statute of limitations provisions in their purchase and sale agreements, leases, and construction and design contracts to respond to the changes in Oregon law made by HB 2434.
If you have any questions about the issues of this update, please contact:
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James A. Zehren |
Eric A. Grasberger |
Thomas R. Page (503) 294-9216 trpage@stoel.com |
Mark R. Feichtinger (360) 699-5900 mrfeichtinger@stoel.com |
Show me the Money: Webinar Explaining the Wind Turbine Drivetrain FOA
About a month ago we issued an alert regarding a $45 million funding opportunity announcement ("FOA") for the development of a wind turbine drivetrain testing facility (alert available here).
Today, the Department of Energy ("DOE") announced that they are hosting a webinar regarding this FOA. The webinar will be held July 30, 2009 at 11:00 a.m. Eastern. Through this webinar, DOE will provide a brief overview of the FOA and will participate in a question and answer period. However, all questions must be submitted in advance (by July 27, 2009 at 2:00 p.m. Eastern) to windDynamometer@go.doe.gov
To attend this webinar, register in advance by clicking here.
BPA Issues Decision on Wind Integration Charge in 2010 Rate Case
Today, the Bonneville Power Administration (“BPA”) issued its Final Record of Decision (“Final ROD”) in the 2010 Rate Case. The Final ROD is part of an early wave of efforts by transmission providers to charge wind generators for the costs of providing “integration” or “balancing” services. Transmission providers are responsible for maintaining reliability of the transmission system. To do so, they must balance both loads (the electrical power consumed by customers) and resources (generation from hydro, thermal, or wind power plants) on their systems. BPA reserves part of its hydro resources so that if a large wind “ramp” event occurs, in which the wind output increases or decreases in a short amount of time, BPA can deploy its hydro reserves to keep the grid in balance. Before 2009, BPA did not charge a wind integration rate for providing such balancing services.
Background
BPA first proposed a wind integration charge in the 2009 Wind Integration Rate Case. This case was settled, with BPA's wind generator customers agreeing to a rate that was approximately four times lower than what BPA initially proposed in the 2010 Rate Case in exchange for BPA working toward the implementation of operational advances that would bring down the cost of providing wind integration services.
In its 2010 Rate Case Initial Proposal, BPA sought to charge its wind generator customers a wind integration rate of approximately $12 per megawatt-hour (“MWh”). BPA's wind generator customers argued that this rate would deter renewable energy development in the Pacific Northwest and make it difficult for the region to meet the Obama Administration's clean energy goals. BPA maintained that this charge was necessary, in part because the wind fleet had increased to such an extent that BPA feared it would be unable to provide enough reserves while also preserving system reliability. BPA argued that the increased size of the wind fleet was compounded by the wind generators’ inability to accurately account for wind ramp events in their schedules, thereby requiring BPA to hold a significantly larger amount of reserves in order to provide balancing services.
BPA's Decision
Once the wind generators on BPA’s system were made aware of their scheduling inaccuracies, they began taking steps to improve their scheduling. As BPA acknowledged in its Final ROD, over the next several months, BPA’s wind generator customers made significant improvements. Due in part to the wind fleet’s improved scheduling accuracy, the Final ROD sets the wind integration rate at approximately $5.70/MWh—less than half the rate in the Initial Proposal. This rate is subject to Federal Energy Regulatory Commission approval and varies somewhat depending on a project’s capacity factor.
The rate ultimately set by BPA has been criticized as not being cost-based, partly as a result of the way in which BPA allocated its embedded costs and its decision to also charge wind generators for lost "surplus" sales as a result of holding generation in reserve. BPA's wind generator customers argued that BPA's cost allocation violates Federal Energy Regulatory Commission policy. The wind generators also pointed out that BPA has been slow to implement the operational advances that would significantly lower the cost of wind integration. Despite the disparate views of BPA and its wind generator customers, the Final ROD echoes some of the arguments made by the wind generators in bringing the rate down from the initial $12/MWh and demonstrates a willingness by BPA to continue to work with the wind industry on improving its wind integration services.
Stoel Rives represented the Northwest Wind Group, a coalition comprised of Renewable Northwest Project and five major wind energy developers—BP Alternative, Columbia Energy Partners, enXco, Horizon Wind Energy, and RES America Developments Inc.—in this proceeding. We will be sending out an Energy Law Alert discussing the Final ROD and its implications for the wind industry shortly. If you’d like to receive Stoel Rives Energy Law Alerts, click here and fill out the form.
EPA Awards More Than $5.7M to Reduce Diesel Emissions and Create Jobs
Today, the US. Environmental Protection Agency (the "EPA") Region 5 has awarded millions of American Recovery and Reinvestment Act of 2009 ("ARRA") dollars to the Wisconsin Department of Commerce and the American Lung Association of the Upper Midwest for the reduction of diesel emissions. The funds are provided under the ARRA National Clean Diesel Funding Assistance Program under which EPA Region 5 had received 81 grant applications requesting more than $211 million to help fund clean diesel emission projects.
To the American Lung Association, EPA Region 5 awarded $3.7 million for on-road and non-road diesel projects that will reduce diesel emissions for 502 vehicles in 22 public and private fleets, including school buses, long-haul trucks, short-haul trucks, construction vehicles and municipal vehicles. Technologies include repowers (engine replacement with cleaner engines), retrofits, and idle reduction. For information on the American Lung Association of the Upper Midwest, visit www.lungum.org.
To the Wisconsin Department of Commerce, EPA Region 5 awarded $2 million to help heavy-duty diesel truck owners reduce idling time. Using the Wisconsin Department of Commerce's Diesel Truck Idling Reduction Grant Program as a platform, this funding will help heavy-duty diesel truck owners purchase and install EPA-verified idle-reduction technologies. Technologies include auxiliary power units and generator sets, battery air conditioning systems, thermal storage systems, and fuel-operated heaters. At least 444 trucks will be impacted. For more information about the Wisconsin Department of Commerce program, visit commerce.wi.gov/bd/BD-CA-Diesel-Grant-Program.html.
ARRA alloted the National Clean Diesel Campaign a total of $300 million, of which the National Clean Diesel Funding Assistance Program received $156 million to fund competitive grants across the nation. ARRA also included $20 million for the National Clean Diesel Emerging Technology Program grants and $30 million for the SmartWay Clean Diesel Finance Program grants. For information about EPA's clean diesel initiatives, visit www.epa.gov/cleandiesel
Show Me the Money: $47 Million for Smart Grid Projects
$47 million in grants has been awarded under the DOE's ARRA stimulus program towards existing projects that are advancing grid technologies.
The awardees include:
· Zenergy Power which will receive $8.1 million for its power surge technology.
· American Superconductor is to receive about $12.4 million for two separate projects to develop its power surge technology.
· Fort Collins, Colorado, was awarded $4.84 million for its peak load reduction technology.
· Consolidated Edison received $5.63 million award to develop and demonstratetrue interoperability between an energy delivery firmand retail electric consumers in New York.
· The Illinois Institute of Technology is to receive $5.4 million to develop and demoa flexible system geared to the needs of the end-user.
· The University of Hawaii, Manoa-Hawaii Natural Energy Institute was awarded$5.55 million to explore the management of distribution system resources.
· The University of Nevada, Las Vegas was awarded $5.7 million for distributed generation.
Virginia Polytechnic Institute & State University (Virginia Tech) also won a $1.3 million initiative to develop and maintain a website that will answer questions from the public and distribute information about smart grid.
Energy Storage Developers Call for National Storage Portfolio Standard
On July 13-14, 2009, I attended Infocast’s Storage Summit in La Jolla, California. The conference attracted over 200 attendees.
On day one, Jim Woolsey, Venture Partner and Senior Advisor for VantagePoint Venture Partners and Former Director of the CIA, delivered a keynote address that focused on the theme of the role of energy storage in achieving energy independence and security. Panel discussions included the following topics:
- Bringing Energy Storage to the Power Grid
- State Regulatory Policy
- Revising Regional Market Designs to Facilitate Storage: System Operators Views
- Utility Perspectives on Implementing Energy Storage
- Views of Storage Suppliers: What Policy and Market Change are Needed to Stimulate a Robust Storage Market?
On day two, Dr. Imre Gyuk, U.S. DOE Program Manager for Energy Storage Research, reported on ARRA stimulus funding initiatives and described research funding opportunities. With respect to the challenges facing DOE as it attempts to deploy massive amounts of funding, Gyuk stated, “It’s like trying to drink out of a fire hose.”
Many storage system developers reported that they are having problems “creating value” and monetizing their systems. These developers consistently called for a national storage portfolio standard similar to the RPS for renewable energy. This vibe created a lack of confidence in the attendees that were contemplating entering the market.
There was not much discussion of co-location of storage and renewable projects, but the wind and solar developers in attendance seemed open to the concept of co-location of storage if the price is right.
There was definitely a sense that the market is still in somewhat early stages. However, a few days later, on July 16, 2009, the Federal Energy Regulatory Commission issued a policy statement that identified energy storage as one of four grid functionalities that FERC views as key to the development of future standards that will apply to smart grid technologies. Hopefully, FERC's support of the energy storage industry will stimulate further development and deployment of energy storage systems.
Funds Available to Repower Biorefineries
USDA recently announced that it will deploy up to $20 million to encourage the use of renewable biomass as a replacement fuel source for fossil fuels as well as to provide process heat or power in the operation of eligible biorefineries. Eligible biorefineries are biorefineries that meet all of the following criteria:
- Convert renewable biomass into biofuels and biobased products and may produce electricity
- Located in rural areas
- In existence on or before June 18, 2009
- Primary production is liquid transportation biofuels
USDA may make payments under this program to any biorefinery that meets the program requirements for up to three years. USDA will determine the amount of payments to be made to a biorefinery based on the following factors:
- Quantity of fossil fuel a renewable biomass system is replacing
- Percentage reduction in fossil fuel used by the biorefinery
- Cost effectiveness of the renewable biomass system
- Economic benefit to the community
- Potential to improve the quality of life in rural America
The number of payments will vary and be based on the number of applicants and availability of funds but will not exceed $5 million or 50% of total eligible product costs. Applications are due by November 1, 2009.
Show me the Money: $162 million Deployed to Seven State Energy Programs
From our colleague Christina Asavareungchai:
Today, the Department of Energy announced more than $162 million in Recovery Act funding to seven states and territories under their State Energy Programs (“SEPs”). Here is how the funds will be used in Colorado, Delaware, Indiana, Louisiana, Massachusetts, Pennsylvania, and Puerto Rico:
Continue Reading...
Show me the Money: Recovery Act Finance Opportunities Conference
On July 17, 2009, the Puget Sound Regional Council hosted a Regional American Recovery and Reinvestment Act Coordination meeting. At this meeting, there was a presentation on Bond Financing, Loan Guarantees, and Tax Credits plus a discussion on monetizing energy efficiency savings.
In case you missed this meeting, I want you to be aware of a couple of resources.
First, on July 31, 2009, there is a workshop regarding Recovery Act Finance Opportunities in Washington. The workshop will be hosted by the Washington Department of Commerce (formerly the Department of Community Trade and Economic Development or CTED) and held in Bellevue, and you can register here.
Second, our tax group has issued an informative, yet concise, alert regarding the grant in lieu of the production tax credit (available here).
FERC Aims to Accelerate Smart Grid Deployment
On July 16, 2009, the Federal Energy Regulatory Commission (FERC) issued a Policy Statement on smart grid technologies, providing guidance on future smart grid interoperability standards and establishing an interim incentive rate policy that applies to near-term smart grid deployments (even those used in pilot or demonstration projects). Notably, FERC identified four technologies as being key to smart grid development: (1) digital devices and software that provide system operators with the near real-time ability to react to bulk power system conditions; (2) demand response; (3) electric storage devices, such as batteries and pumped storage, that will help integrate new resources into the grid; and (4) electric vehicles. FERC intends that these technologies will inform both the smart grid standards development process as well as the Department of Energy's release of stimulus funds available under the American Recovery and Reinvestment Act.
In addition, FERC established an interim rate policy that, once certain showings are made, will provide public utilities with the ability to recover the costs of FERC-jurisdictional smart grid technologies and the legacy systems being replaced. The interim rate policy also allows public utilities to apply accelerated depreciation to smart grid deployments and recover the full cost of smart grid technologies that are later abandoned or made obsolete. Public utilities seeking incentive rate treatment must file an appropriate application with FERC before it adopts smart grid interoperability standards.
For more information on FERC's Policy Statement, click here for our recently-released client alert.
If you would like to read the Policy Statement itself, click here.
$22 Million for Community Renewable Energy
The Department of Energy (DOE) announced this week that up to $22 million from the Recovery Act would be allotted to up to 4 eligible communities nationwide in order to encourage utility-scale renewable energy systems that provide clean, reliable, and affordable energy supplies for their communities, while creating jobs and new economic development opportunities. The projects will demonstrate how multiple renewable energy technologies, including solar, wind, biomass, and geothermal systems, can be deployed at scale to supply clean energy to communities. Eligible applicants are local and state governments, Indian Tribes and Tribal Energy Resource Development Organizations or Groups.
Successful applicants will be awarded financial assistance to support the implementation of an integrated renewable energy deployment plan for a community, and the construction of renewable energy systems. DOE expects each project to also have substantial private sector investment in addition to the funds from DOE. Completed applications are due September 3, 2009 and the DOE will select awardees by the end of November 2009.
SHOW ME THE MONEY:Funding of $85 million for Algal and Advanced Biofuels
The U.S. Department of Energy (“DOE”) today announced Recovery Act funding of up to $85 million over a three year period for the development of algae-based biofuels and advanced, infrastructure-compatible biofuels. DOE wants leading scientists and engineers from universities, private industry, and government to collaborate in developing advanced biofuels and a thriving domestic bio-industry. Examples of advanced biofuels include green aviation fuels, green gasoline, and green diesel‪ from a variety of biomass feedstocks.
The DOE will award between $25 million and $50 million to one or two teams that develop cost-effective algae-based biofuels. The remaining $35 million will be awarded to one team that can use the existing infrastructure to produce, distribute and transport algae-based biofuels.
Only teams may apply and applications are due September 14, 2009. No letters of intent are required.
U.S. Wind Industry Breaks Records in 2008, Gets a Boost From Secretary Chu
Today, U.S. Department of Energy Secretary Steven Chu announced that 28 new wind energy projects will receive up to $13.8 million in funding for wind turbine research and testing and transmission analysis, planning, and assessments. Most of the $13.8 million comes from Recovery Act funds. Recognizing the struggles that Americans are facing in the current economic climate, Secretary Chu noted that the Recovery Act funds are intended to rebuild the fundamentals of the economy, in part by “spur[ring] a revolution in clean energy technologies.” Chu added that wind energy is a “critical factor” in achieving President Obama’s clean energy and job growth goals.
Secretary Chu’s funding announcement was coupled with the release of the Department of Energy’s 2008 Wind Technologies Market Report. As detailed in the report, the U.S. wind industry continues to reach impressive milestones. For the fourth year in a row, the U.S. boasted the fastest-growing wind power market. Also for the fourth consecutive year, wind power was the second largest new resource added to the electrical grid, contributing 42 percent of all new U.S. electrical generating capacity in 2008. As a result of increased demand for wind, the share of domestically manufactured wind turbine components increased dramatically in the last three years, with about 50 percent of these components now being manufactured in the U.S. In 2008, approximately 8,400 new domestic manufacturing jobs were added in the wind sector. Given these statistics, it is no wonder that cultivating a strong domestic wind industry is one of the keys to meeting the Obama Administration’s clean energy and economic recovery goals.
Algal Fuels Developments
The recent blog posting (available here) regarding Exxon's $600 million investment in biofuels served as a reminder to me that comments are due soon (August 3, 2009) on the Department of Energy's draft "National Algal Biofuels Technology Roadmap" (the "Roadmap").
The Roadmap was prepared by a working group commissioned by DOE. The working group was commissioned to assess the current state of algae technology and to determine the next steps toward commercialization. For more information, see my earlier blog.
To submit comments, complete the "Algal Road-Mapping: Request for Information (RFI) Response Form" and submit it as an attachment to an e-mail message addressed to algaeRFI@go.doe.gov
Further, Gary Hunt has reported (available here) that Prize Capital, LLC has issued a $10 million algae fuel prize to encourage the development of advanced algal fuels. For more information about this contest, click here.
$52.5 Million for Concentrating Solar Power Research and Development
The U.S. Department of Energy (‘DOE”) today announced plans to provide up to $52.5 million to research, develop, and demonstrate Concentrating Solar Power systems capable of providing electrical power both day and night at low cost. This is a competitive funding opportunity which focuses on:
1. Research and development of concepts and components for a CSP system that enables a plant to produce low-cost electricity at least 18 hours of the day; and
2. Evaluation of the feasibility and development of a prototype complete CSP system capable of operating at least 18 hours per day while generating low-cost power.
The DOE will award money for research and development of solar systems that produce power at least 18 hours a day.Funding depends on continuing annual appropriations. DOE anticipates making up to 13 project awards totaling up to $52.5 million.
Show me the Money: Applications Available for the Washington State Energy Program
Washington previously received $60.9 million in Recovery Act funding for its State Energy Program (“SEP”). The Washington Legislature later provided $38.5 million to the Washington State Community, Trade and Economic Development (“CTED”) agency to administer a loan and grant program for eligible projects in the areas of energy efficiency, renewable energy and clean energy innovation (see our earlier blog entry here for more details). The deadline for submitting a notice of intent to apply is July 27, 2009 at 5:00 p.m. Pacific time, and the application is due August 17, 2009 at 5:00 p.m. Pacific time.
I attended an informational meeting held by CTED on July 13, 2009. The meeting provided an overview of the loan and grant program, as well as funding details, eligibility guidelines and evaluation criteria. Eligible projects can receive between $500,000 to $2 million in loans and grants in the first round, with the requirement that applicants provide other sources of funding at least equal to the amount of the loan or grant request. The non-SEP funding may include amounts spent or committed to the project since January 1, 2009. Projects will be evaluated based on the feasibility and quality of the project plan, the experience and qualifications of the project team, the ratio of matching funds to SEP funds, job creation, and energy savings/production. CTED intends to announce award decisions in September 2009.
Exxon Sinks $600M Into Algae-Based Biofuels in Major Strategy Shift
Oil giant Exxon Mobil Corp., the world’s largest and richest publicly traded oil company, is making a major jump into renewable energy with a $600 million investment in algae-based biofuels. Exxon is joining Synthetic Genomics Inc., a biotechnology company founded by the genomics pioneer J. Craig Venter, to research and develop next-generation biofuels from sunlight, water and waste carbon dioxide by photosynthetic pond scum.
The partnership will last five to six years and will involve the creation of a new test facility in San Diego to study algae-growing method and oil extraction techniques. Exxon’s investment includes $300 million for in-house studies and potentially more than $300 million to Synthetic Genomics to scale up the technology for commercial production if research and development milestones are successfully met.
The partnership admits that it faces many obstacles, such as type of algae to use, the algae-growing environment, and the scale required for commercial use, to achieve this commercial production goal. Even in light of these challenges, algae holds many potential advantages over other sources of biofuels. One advantage is that algae grows in areas not suited for food crops, using pools of brackish water or even farming them in seawater. Additionally, algae needs carbon dioxide to grow, a benefit that could be used to help cut greenhouse gas emissions that cause global warming.
Show Me the Money:$300 Million Rebate for Purchases of Energy Efficient Appliances
U.S. Department of Energy (DOE) Secretary Steven Chu today announced the availability of nearly $300 million in funding from the American Recovery and Reinvestment Act for state-run rebate programs for consumer purchases of new ENERGY STAR® qualified home appliances.
The new funding will be awarded according to a formula to states and territories that submit a plan specifying which ENERGY STAR appliance categories will be included in the program, the amount of the rebate level and other information. States and territories must first file an initial application expressing their intent to participate by August 15, 2009, followed by a full application by October 15, 2009. States and territories will receive 10% of the funds after submitting the initial application with the balance awarded after their program plans are approved. DOE anticipates that a vast majority of funding will be awarded by November 30, 2009. The complete Funding Opportunity Announcement, under number DE-FOA-000011.
Show Me the Money: $141 Million Awarded Under State Energy Program
From our colleague Christina Asavareungchai:
Today, the Department of Energy announced more than $141 million in Recovery Act funding to six states and territories under its State Energy Program (“SEP”). Here is how the funds will be used in Hawaii, Maine, Nebraska, New Mexico, the Northern Mariana Islands, and Texas:
Continue Reading...USDA Small Wind Grants Cover 25% of Costs
Farmers, ranchers and rural business owners have until July 31, 2009 to apply for a Rural Energy for America Program ("REAP") grant from the USDA for the purchase and installation of small wind turbines. The grants provide up to 25% of the total installed cost of a small wind turbine system, and together with the Federal Investment Tax Credit ("ITC"), can cover up to 50% of the costs of the system for an eligible candidate. Additional funds may also be available from local utility cooperatives or rural electric associations which give rebates to their members.
Applications must be submitted to local USDA Rural Development offices by July 31, 2009. However, the application itself takes time to complete, and applicants should give themselves 2 weeks to fill it out.
Treasury Issues Guidance on Applications for Grants in Lieu of the ITC and the PTC
The American Recovery and Reinvestment Act of 2009 (ARRA), which was enacted in February, permits an applicant to receive a grant from Treasury in lieu of claiming investment tax credits (ITCs) or production tax credits (PTCs).
Today the U.S. Treasury Department issued much-anticipated guidance concerning applications to receive cash grants in lieu of claiming income tax credits for certain renewable energy projects. Although the guidance includes a sample application form, the U.S. Treasury has stated that it will not accept applications until August 1.
If you have questions about today's Treasury Department guidance and grants in lieu of ITCs or PTCs, contact:
Chris Heuer at ckheuer@stoel.com
Greg Jenner at gfjenner@stoel.com
Carl Lewis at cslewis@stoel.com
Kevin Pearson at ktpearson@stoel.com
Adam Kobos at ackobos@stoel.com
Show Me the RMBs: Analysis of Foreign Investment Opportunities in China's Stimulus Package
Stoel Rives attorneys Geoff Revelle and Jerry Chiang have written a detailed analysis of how foreign investors and companies can take advantage of China’s $4 trillion RMB stimulus package. Enacted in November 2008, the package focuses on 10 sectors of the Chinese economy, including rural infrastructure and health care, with the goals of creating jobs and increasing China’s GDP.
Revelle and Chiang note that while the main beneficiaries of the stimulus funding are government-owned or privately-owned Chinese companies, opportunities for foreign companies will still emerge in areas such as high-tech products and value-added services that Chinese firms cannot provide. In his analysis, Revelle provides an overview of investing in China, a review of the major sectors of the Chinese economy targeted by the stimulus package, and best practices recommendations for foreign companies interested in China's stimulus funding.
Revelle has also prepared a PowerPoint on the topic, which can be found at http://www.stoel.com/showarticle.aspx?Show=5678.
Show me the Money: Up to $31 Million for the Building America Partnerhsip
On June 29, 2009 the Department of Energy ("DO") issued a Funding Opportunity Announcement to provide up to $31 million in grants to implement the Building America ("BA") program. The BA program is part of DOE's Building Technologies Program, and its long-term goal is to develop cost-effective, production-ready systems in five major climate zones that will result in zero energy homes, which produce as much energy as they use, by 2020. The BA program does not pay for home improvements; rather, it pays for showing the home building industry how to minimize the cost of building or retrofitting with significantly improved energy efficiency.
Today, in response to a question that I submitted, DOE has clarified that multi-family homes could qualify as homes under the BA program.
Our full client alert is available by clicking here.
Show me the Money: Washington Regional Recovery Act Meetings
For those of you interested in Stimulus Funding for your Renewable Energy or Clean Tech projects, I will be attending most of the following Prosperity Partnership’s Regional ARRA Coordination meetings.
The meetings are located at the Puget Sound Regional Council's meeting rooms at 1011 Western, Suite 500 in Seattle, WA.
- July 17 from 2-4 pm - Presentations regarding Recovery Act Bond Financing, Loan Guarantee & Tax Credits
- August 7, 2-4 pm – Presentations by Departments of Labor and Agriculture
- August 14, 2-4 pm – Presentations by Department of Education, & Onvia
- September 11, 2-4pm – Accountability, Transparency and Reporting Workshop
- September 25, 2-4 pm – “Share Your Project Session,” Part 2
The Prosperity Partnership also has a nice Regional ARRA Coordination website available here: http://prosperitypartnership.org/recovery.htm The Prosperity Partnership has also published a helpful guide: “Basic Introduction to Energy-Related ARRA Funding Opportunities”
Show me the Money: Applications Available now for Washington's State Energy Program
On July 1, 2009, Washington State’s Department of Community, Trade and Economic Development (“CTED”) issued application guidelines and forms for its State Energy Program (“SEP”) (available by clicking here). The American Recovery and Reinvestment Act of 2009 (the “Recovery Act”) provided $60.9 million in new funding for Washington’s SEP. Subsequently, the Washington Legislature allocated $38.5 million to CTED to administer a loan and grant program for energy efficiency and renewable energy program (see our client alert, available here, regarding the legislative action).
Continue Reading...Advanced Biofuel Producer Payments - FY 2009 Deadline Approaching!
Advanced biofuels producers must enroll by August 11, 2009 to be eligible to receive payments from the USDA for FY 2009 production under Section 9005 of the 2008 Farm Bill. Eligible producers of advanced biofuels may receive payments for advanced biofuels produced from October 1, 2008 through September 30, 2009 (FY 2009). $30 million is available for distribution under this program for advanced biofuels producers in FY 2009.
The amount of payments made to individual producers will depend on the number of program participants and the volume of advanced biofuels being produced. Payments will be made in one lump sum to eligible producers after FY 2009. Contact your local USDA Rural Development State Office for application materials or to learn more.
Treasury, Energy Announce More than $3 Billion in Recovery Act Funds for Renewable Energy Projects
Today, the U.S. Department of the Treasury (the "Treasury") and the U.S. Department of Energy (the "DOE") announced an estimated $3 billion for the development of renewable energy projects around the country. Funded through the American Recovery and Reinvestment Act ("ARRA"), the program will provide direct payments in lieu of tax credits in support of an estimated 5,000 bio-mass, solar, wind, and other types of renewable energy production facilities.
ARRA authorized the Treasury to make direct payments to companies that create and place in service renewable energy facilities beginning January 1, 2009. A company can only apply for payment after the renewable energy property has been placed in service. Previously these companies could file for a tax credit to cover a portion of the renewable energy project's costs; under the new program, applicants would agree to forgo tax credits down the line in favor of an immediate reimbursement of a portion of the property expense. This direct payment program allows for an immediate stimulus in local economies.
In recent years, the tax credit has been widely used. As an example, in 2006, approximately $550 million in tax credits were provided to 450 businesses. However, the rate of new renewable energy installations has fallen since the economic downturn, as projects have had a harder time obtaining financing. The Treasury and DOE expect a fast acceleration of businesses applying for the announced energy funds in lieu of the tax credit.
To expedite implementation of the program, the DOE and Treasury have made the terms, conditions, guidance, and sample application available at www.treas.gov/recovery/1603.shtml. The Treasury and DOE are not accepting applications yet, but these available forms will allow companies to prepare applications and expedite the implementation of the program when the government is ready for submissions on August 1, 2009. The DOE and Treasury have 60 days to process the application once submitted.
TREASURY GUIDANCE -- GRANT IN LIEU OF ITC
UPDATE!!!!!
Just informed by Treasury that guidance will "go live" at noon EDT.
Nuclear Theory Research Funding Opportunity Announcement
On June 29, 2009, the Office of Nuclear Physics, Office of Science, and Department of Energy (“DOE”) announced a Funding Opportunity Announcement (“FOA”) providing for $6 million for collaborative research projects between universities, non-profit organizations, and Federally Funded Research and Development Centers, including the DOE National Laboratories, to focus on theoretical research topics of nuclear physics.
DOE intends on awarding two to three topical collaborations starting in Fiscal Year 2010. These topical collaborations will typically be supported at $300,000 to $500,000 per year, although applications with smaller funding requirements will be considered. Each application should specifically address the following:
· The opportunity afforded by the proposed research, its relevance to the Nuclear Science Advisory Committee (“NSAC”) Performance Measures, and opportunities identified in the NSAC long range plan;
· The specific goals of the collaboration, as well as a timeline and milestones for reaching those goals;
· The relevance and impact of this opportunity on experimental nuclear physics; and
· The opportunities for training and placing permanent researchers in nuclear theory.
Applicants interested in this FOA must submit a formal application by September 1, 2009. For more information on applying, go to http://www.science.doe.gov/grants/Colab.html.
DOE Extends Application Deadline for FOA on Combined Heat and Power Technologies
Today, the U.S. Department of Energy (“DOE”) issued a revised Funding Opportunity Announcement (“FOA”) of up to $40 million to speed up the development and implementation of combined heat and power (“CHP”) technologies. The FOA covers large, medium, and small CHP systems and aims to finance research, development, and demonstration of stationary CHP systems that focus on increasing efficiency and reducing greenhouse gas emissions. The FOA intends to facilitate development of technologies that are highly efficient, capable of meeting future emissions requirements, and able to substitute for or reduce natural gas usage. The deadline for applications has been extended to July 21, 2009. For more information on this FOA, go to Grants.gov.
DOE Announces $59 million in Conditional Loan Guarantees
On July 2, 2009, the Department of Energy ("DOE") announced $59 million in conditional loan guarantees in the form of $16 million for a wind turbine assembly plant and $43 million for a 20 megawatt flywheel energy storage plant.
Nordic Windpower, USA has been conditionally offered a $16 million loan to support the tooling and commercial-scale set up of its assembly plant in Pocatello, Idaho. This assembly plant produces one megawatt two blade turbines which are 10% less costly to manufacture, install, operate, and maintain than competing systems.
Beacon Power was conditionally offered a $43 million loan to support the construction of a 20 megawatt flywheel energy storage plant in Stephentown, New York. The flywheel system is utilizing a newly developed technology to provide frequency regulation services by absorbing and discharging energy to maintain the consistency of power on the electric grid.
United States Joins the International Renewable Energy Agency
The United States officially joined the International Renewable Energy Agency (“IRENA”) last week, increasing the number of countries participating in the organization to 136, including several African countries, the Middle East, Europe, Australia, Greenland, India, Japan, and parts of South America. The new agency will engage governments in making a rapid transition toward using renewable energy in their respective countries.
The United States is also expanding its international efforts north of the border. Last week, DOE hosted the first U.S.-Canada Clean Energy Dialogue Roundtable, with clean energy leaders from private industry and from the U.S. and Canadian governments present, to discuss how the two nations can work together to develop clean energy technologies and combat climate change. Specific areas for further bilateral cooperation under the Clean Energy Dialogue include renewable and energy efficiency technologies, carbon capture and sequestration, and smart grid technologies.
Treasury Guidance -- Grant in Lieu of ITC
UPDATE!!!!!!
We have just been informed that the release of the Treasury guidance for the grant in lieu of ITC has been postponed until tomorrow -- Thursday, July 9. This is being done in order to all ow Treasury to first brief Members of Congress and their staffs on the details of the guidance.
Stay tuned for further updates.
Show me the Money: $10.5 Million for Solar America Cities
Today, the U.S. Department of Energy (“DOE”) announced new funds of up to $10.5 million to inform and educate local governments nationwide about solar energy. As part of the Solar America Cities program, a joint effort with 25 cities dedicated to increasing their use of solar energy, the DOE has assembled educational materials about the benefits and value of solar energy. The DOE will now work with outreach organizations to share these materials and tools with local government officials, with the aim of speeding up the implementation of solar energy. The application deadline is October 15, 2009, with selections expected to be announced no later than December 15, 2009.
For more information, click here for our recent Energy Alert.
Treasury Guidance -- Grant in Lieu of ITC
We have just been informed by the Treasury Department that they plan to release their first set of guidance on the new grant in lieu of the ITC (section 1603 of ARRA) tomorrow afternoon (Wednesday, July 8). We are not certain yet of the time, although we're told it will be in the afternoon at a press event..
We will publish updates as more information becomes available.
Show me the Money: $7.5 Million Available to Develop Commercial Energy Efficiency Training Programs
On June 26, 2009, the Department of Energy ("DOE") released a funding opportunity announcement ("FOA") to deploy $7.5 million in Recovery Act funds to further its goals of reducing energy consumption and achieving net zero-energy buildings (defined as buildings that produce as much energy as they consume). In order to reach these goals, DOE recognizes that a workforce must be created to help existing buildings reach, and new buildings keep, their full energy efficiency potential.
This specific FOA provides ten to thirty individual awards from $250,000, to $750,000 to develop training programs for three specific sets of commercial building specialists:
- Equipment technicians,
- Operators, and
- Energy commissioning agents/auditors
Entities involved with energy efficiency, professional development associations, trade training/development associations, universities, community colleges, technical trade schools, and apprenticeship programs are encouraged to apply.
Applications must be submitted by September 1, 2009 at 8:00 p.m. Eastern Time
Prosperity Partnership Issues a Guide to Recovery Funds
The Prosperity Partnership, a coalition of over 300 government, business, labor and community organizations from King, Kitsap, Pierce, and Snohomish counties in the state of Washington, has developed a beginner’s guide to the Recovery Act entitled: “A Basic Introduction to Energy-Related ARRA Funding Opportunities.” The goal of the guide is to help local (i.e. Washington state) entities identify and apply for ARRA funding opportunities, especially competitive grants or contracts. The focus of the guide is on energy-related funding opportunities, and contains useful information describing the process for submitting applications for federal and Washington state funds.
You can download the guide at http://prosperitypartnership.org/recovery/PP-ARRAGuide.ppt.
EPA Extends RFS 2 Comment Period
Last week, the US EPA extended the rulemaking period on RFS 2 until September 25, 2009. This extends the period by 60 days. While this rulemaking is highly complicated and contentious, it is unclear that extending the comment period will improve this situation. In addition, the effective date of the regulations continues to be delayed. This could undermine Congress' intentions in passing the Energy Independence and Security Act that established RFS 2. Let's hope EPA is able to move quickly and efficiently in finalizing and implementing the regulations.
Show Me the Money: $153 Million for Seven States
U.S. Department of Energy Secretary Steven Chu today announced more than $153 million in Recovery Act funding to support energy efficiency and renewable energy projects in Arkansas, Georgia, Kentucky, Mississippi, Montana, New York, and the U.S. Virgin Islands. With today's announcement, these states and territories will now have received 50% of their total Recovery Act State Energy Program (“SEP”) funding. The initial 10% of total funding was previously available to states to support planning activities; the remaining 50% of funds will be released once states meet reporting, oversight, and accountability milestones required by the Recovery Act. Transparency and accountability are important priorities for SEP and all Recovery Act projects. Throughout the program's implementation, DOE will provide strong oversight at the local, state, and national level, while emphasizing with states the need to quickly award funds to help create new jobs and stimulate local economies. For more information, see http://apps1.eere.energy.gov/news/progress_alerts.cfm/pa_id=196
North Dakota Legislature Addresses Wind Leases, Easements and Options
In its final days of session, the North Dakota legislature passed a bill creating certain requirements for leases or easements for wind energy development that are entered into in the state.
The bill's requirements for wind leases and easements include: placement of a cover page on every wind lease encouraging the landowner to review the agreement with his or her attorney; negotiations may not be maintained as confidential (although the terms of the final agreement may be kept confidential under a mutual confidentiality provision); the lease may not be signed until at least ten days after it has been delivered to the landowner; and the landowner may terminate the lease if the wind energy facility has not operated for a period of at least three years (unless certain payments are made to the landowner under the lease).
Interior Department Expedites Solar Energy Development in the West
The U.S. Interior Department has instigated initiatives to accelerate the development of solar energy on Western lands. About 670,000 acres currently administered by the Bureau of Land Management (“BLM”) in Arizona, California, Colorado, Nevada, New Mexico, and Utah will be evaluated for the development of large-scale solar energy production. These areas of land will be reserved for solar projects producing 10 megawatts or more of electricity and the goal is to fast-track the permit applications.
Each piece of land is at least 2,000 acres and has been selected for its solar resources, slope, proximity to roads and transmission lines or designated corridors. The evaluation will be funded with Stimulus monies under an ongoing federally-funded evaluation of solar energy development on public lands in six Western States. The evaluation should be completed in late 2010.
