Avista Seeks Additional Renewable Energy
Avista announced earlier this week that it is seeking proposals from suppliers of renewable energy. Avista wants to acquire roughly 35 average megawatts (aMW) of long-term qualified renewable energy, to be supplied by the end of 2012 . The company is looking for proposals from wind, solar, geothermal, biomass, qualified hydroelectric and other renewable resources that meet Washington's RPS standard.
Avista plans to host a conference call for potential bidders on September 30. Responses to the request for proposals are due by October 23, 2009. The full RFP and instructions for bidders can be found here.
News from the 2009 Northern Plains Bioeconomy Conference
Below are some perspectives from the recent 2009 Northern Plains Bioeconomy Conference, as attended (and prepared by) my colleague, Joel Dahlgren.
According to Dr. Bruce Dale, a professor of chemical engineering at Michigan State University (MSU), in a carbon-constrained world, cellulosic biomass is the cheapest energy per dollar of gigajoule (GJ) of energy produced. At $60 per ton paid for biomass material, cellulosic ethanol costs $4 per GJ of energy produced, which compares to $6 per GJ for sugarcane purchased for $93 per ton, $9 per GJ for petroleum for $50 per barrel for crude oil, or $6.50 per GJ for coal purchased for $150 per ton (this price per ton includes the cost of carbon capture).
Until recently, I was under the impression that cellulosic ethanol was facing difficult obstacles. But that perception was challenged when I heard Dr. Dale’s presentation at the 2009 Northern Plains Bioeconomy Conference in Fargo, North Dakota, sponsored by North Dakota State University (NDSU). Now, I will not be surprised if within five years companies whose plans to produce cellulosic ethanol have been frustrated by the difficulty of breaking down cellulose will successfully produce cellulosic ethanol from switchgrass, corn stover, miscanthus, DDGs and other cellulosic material as well.
Dr. Dale is developing a biomass pretreatment process called AFEX (batch process) or FIBEX (continuous process) that may revolutionize the production of cellulosic ethanol. The ethanol yield from pretreated biomass is an estimated two-and-a-half times that of untreated biomass. Dr. Dale’s objective is to produce clean, fermentable sugars for an estimated six cents per pound. These pre-treatment processes are expected to be commercialized within five years if the Department of Energy (DOE) grant that these universities have applied for is approved.
AFEX/FIBEX employs a reactor to treat and explode biomass with hot liquid anhydrous ammonia for five to 10 minutes. One key advantage of the AFEX/FIBEX pre-treatment process is that it can be used to co-produce animal feed. Co-producing animal feed with cellulosic ethanol reduces the break-even point by up to 50% over a single-product approach.
Dr. Dale stressed that we are not faced with the choice of food or fuel; as a society, we can have both reasonably priced. Our society can also enjoy rural economic development, less expensive food, improved environmental conditions and a declining reliance on petroleum.
Dr. Dale is also working on a densification process that produces material that is three to five times as dense as untreated biomass and pelletizes the material for transportation and storage. A densification process allows for larger, centrally located biomass refineries with outlying pretreatment facilities. The densified biomass material is more economical to transport, and it stores more easily, much like corn or soybeans.
This project is a joint effort of NDSU, South Dakota State University (Brookings, SD) and MSU (Lansing, MI). MBI International is a member of this group as well. MBI is a 501(c)(3) that is owned by the MSU Foundation. These participants have applied for a DOE grant, and they intend to build a large biorefinery if the grant is approved by the DOE.
For additional information on this conference or on any topics discussed in this posting, please contact Joel or any of our other biofuels attorneys.
EPA Issues Final GHG Reporting Rule
On the topic of Greenhouse Gas reporting, my partner Tom Wood recently circulated this "heads up" about EPA's final rule:
On September 22, 2009, EPA issued its final rule on greenhouse gas (GHG) reporting. Fossil fuel and industrial GHG suppliers, motor vehicle and engine manufacturers, and facilities that emit 25,000 metric tons or more of CO2 equivalent per year will be required to report GHG emissions data to EPA annually.
Recordkeeping obligations commence on January 1, 2010 with the first report due in 2011 (for 2010 emissions). Relaxed requirements will apply for reporting year 2010 as EPA recognizes that not all monitoring can be implemented in the weeks remaining in this year.
In a blow to the consulting industry, third party verification is not being required; sources will be able to self-certify their emissions. EPA says that its program does not preempt state reporting programs, but our hope is that with a final rule the state and regional efforts will conform to EPA’s lead.
Look for more details as Tom gives the rule a more thorough review.
Show Me the Money: $100 million for Smart Grid Workforce Training
On September 21, 2009, the DOE issued a Funding Opportunity Announcement (“FOA”) for $100 million in funding from the American Reinvestment and Recovery Act to support workforce training for the smart grid and electricity transmission sectors. The FOA supports two primary workforce training strategies:
· $35 -$40 million to develop training programs to achieve a national, clean energy smart grid. This funding will be open to a range of applicants, including utilities, colleges and universities, trade schools, and labor organizations.
· $60-$65 million to conduct workforce training programs for new hires and retraining programs for electric utility workers and electrical equipment manufacturers to educate them in smart grid technologies.
Federal Appeals Court Reinstates Carbon Dioxide Nuisance Suit Against Utilities
My partner Tom Wood recently composed and circulated this email alert about the return of the "Global Warming" case against several electric utilities:
Five years ago eight states and New York City made headlines when they sued several electric utilities alleging that their carbon dioxide emissions constituted a federal common law nuisance. The plaintiffs wanted to force the companies to cap and reduce their carbon dioxide emissions. The federal trial court dismissed the case, holding that the issue was a political question that had to be addressed through the political branches of government and not through the courts. Earlier today the Second Circuit Court of Appeals reversed the trial court. This enables the plaintiffs to resume their nuisance lawsuit against the generating companies, but does not guarantee them victory as they will have significant evidentiary challenges to address. In reinstating the suit, the Second Circuit touted the judiciary’s ability to handle complex cases of this type and said that doing so would not interfere with the business of the other branches of government. However, the court noted in several places that the judiciary would be preempted in the future from addressing carbon dioxide through nuisance law if either Congress (i.e., the legislative branch) amends the Clean Air Act to regulate carbon dioxide or the executive branch, through EPA, moves to regulate carbon dioxide under existing authority.
Today’s decision will potentially have significant impacts on future climate change litigation. One of the areas heavily debated in the case was who has the ability to bring a federal nuisance claim such as that alleged here. The defendant companies recognized that states have the ability to bring federal common law nuisance claims, but argued that the potential contribution of carbon dioxide emissions to climate change was not the sort of issue for which a federal nuisance suit is available because, among other reasons, the impacts could not be traced to particular emission sources. The Second Circuit rejected this argument, setting the stage for the state suits to continue. The court also rejected arguments that private parties cannot bring federal nuisance suits related to climate change. The court recognized that the Supreme Court had never addressed this question, but concluded that private parties should be able to proceed with federal nuisance claims related to climate change when they invoke an overriding federal interest or federalism concerns. By holding that private parties can bring federal nuisance suits and by recognizing that climate change is of overriding federal interest, the court potentially cleared the way for federal lawsuits against all types of companies that emit material levels of greenhouse gases.
The decision will create significant new pressure on EPA and Congress to regulate greenhouse gas emissions. The court noted that it was reasonable to assume that EPA has the authority to regulate greenhouse gas emissions if it first determines that they “cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare” (referred to as an “endangerment finding”). However, as the court noted, EPA has only proposed to make such a finding and only in relation to mobile sources—not stationary sources such as factories and power plants. When/if EPA makes such findings, it must then develop a regulatory program. Until such time that a program is developed, the court held that the field is left open for federal common law nuisance suits. This holding will undoubtedly create increased support for taking the regulation of greenhouse gases out of the courts and back into the legislative or executive branches.
EPA is poised to issue several rules that will commence the regulation of greenhouse gases for mobile and stationary sources. These rules were not considered by the court as they had not been finalized. As these rules become finalized in the weeks and months ahead, the plaintiff’s victory may prove short-lived. However, there is no question that the decision is likely to have a tremendous impact on the debate regarding whether to proceed with greenhouse gas regulations.
Obama Administration Officials Release Report on Ocean Policy
Last week, Obama Administration officials released the Interagency Ocean Policy Task Force Interim Report (the “Interim Report”), which lays out a comprehensive national policy for protecting and managing the use of our oceans, coasts, and the Great Lakes. Created by President Obama via a June 12, 2009 Presidential Memorandum, the Interagency Ocean Policy Task Force (the “Task Force”), is led by the Council on Environmental Quality’s Chair, Nancy Sutley and is composed of twenty-four senior-level officials from government agencies, departments, and offices. In preparing the Interim Report, the Task Force sought input from within the federal government, and from local officials, tribal representatives, scientists, legal and policy experts, and other stakeholders. The Task Force also solicited public input via a 90-day public engagement process.
The Interim Report identifies three key components to its comprehensive ocean and coastal strategy: (1) a national policy, (2) a robust governance structure, and (3) categories for action. The Interim Report’s national policy proposal is premised on the stewardship of the ocean, coasts, and Great Lakes as being “intrinsically and intimately linked” to human health, environmental sustainability, economic prosperity, security, foreign policy, social justice, and adaptation to climate change. With respect to the robust governance structure, the Interim Report calls for increased coordination among government agencies. To this end, the Interim Report proposes an interagency National Ocean Council to facilitate interagency coordination on ocean-related issues and implement the National Ocean Policy. The Interim Report also prioritizes nine categories for action in order to address the main challenges currently confronting our oceans, coasts and Great Lakes, including ecosystem-based management, improved observing systems and data collection, coastal and marine spatial planning, and regional ecosystem protection and restoration.
There is a 30-day window for submitting written comments on the Interim Report. The Task Force is also holding several regional public meetings to brief the public and accept comments on the Interim Report, and to obtain input on developing a framework for coastal and marine spatial planning. The Task Force has until December 9, 2009 to submit its proposed coastal and marine spatial planning framework to President Obama. The final Task Force report will also be issued later this year.
Wisconsin Bill Addresses State Wind Siting Standards
Wisconsin Governor Jim Doyle has signed a bill into law that will require the state Public Service Commission (PSC) to promulgate rules establishing common standards for political subdivisions to regulate the construction and operation of wind energy systems. The legislation seeks to address the patchwork regulatory framework created by local jurisdictions' development of their own siting regulations, and to address the concerns of developers who have been hesitant to develop wind energy systems in the state.
Previously, a municipality was prohibited from placing any restriction on the installation of a wind energy system unless the restriction satisfies certain conditions, including protection of public health or safety. The new law allows limited and generally uniform regulation of wind energy systems, and specifies that a municipality (i) may not regulate wind energy systems unless it adopts an ordinance that is no more restrictive that the PSC rules, and (ii) may not impose any restriction on a wind energy system that is more restrictive than the PSC rules.
Maryland Jumps Into Offshore Wind
The Maryland Energy Administration has issued a Request for Expression of Information and Interest to gather information from industry representatives on the potential for offshore wind development in the state. The MEA is also simultaneously initiating a study to evaluate opportunities for offshore wind energy on the Maryland coast (state waters) and the Outer Continental Shelf (federal waters). This study will "assess the viability of offshore wind energy generation and build on important marine spatial planning work being currently developed by the Maryland Department of Natural Resources and The Nature Conservancy."
Under Maryland's Renewable Portfolio Standard, at least 20 percent of the retail sales of electricity in the state must come from renewable resources by 2022. Responses to the REII are due by January 31, 2010. Prospective developers interested in participating in the strategy process must submit a response to the MEA by February 28, 2010.
$13 Million Awarded from the Rural Energy for America Program
In an earlier blog, my colleagues, Debra Frimerman and Janet Jacobs reported about the Rural Energy for America Program (“REAP”), in general and specifically in regards to small wind projects. REAP is a Department of Agriculture (“USDA”) program that provides grants and loan guarantees to agricultural producers and rural small businesses to purchase renewable energy systems, make energy efficiency improvements and conduct feasibility studies for renewable energy systems. Eligible renewable energy systems include those that generate heat, electricity or fuels from wind, solar, biomass, geothermal, hydro power, and hydrogen based feed stocks.
The USDA has announced that it has awarded more than $13 million in REAP funds for 233 renewable energy projects in 38 states. Examples of the awards include a $1.8 million guaranteed loan and $500,000 grant for Milford Wind Energy, LLC; a $435,271 guaranteed loan and $435,271 grant for Unaka Forest Products, Inc.; and a $15,000 grant to Pacifica Marine, Inc.
Continue Reading...
NEW: the Central Washington Resource Energy Collaborative
Kittitas County, Central Washington University, the Economic Development Group of Kittitas County, Puget Sound Energy and enXco are forming a coalition to create a broad public- private partnership focused on renewable power research and job growth. This group has committed $1.2 million in financial support and in-kind services over the next three years.
The group is called the “Central Washington Resource Energy Collaborative” and has applied for state designation as an Innovation Partnership Zone ("IPZ"). Designation as an IPZ would allow future state support of the Collaborative. (IPZs are designated by the state Department of Commerce. Their purpose is to stimulate industry in a specific geographic area. There are 11 in the state of Washington.)
The Collaborative brings together both public and private sector partners, including PSE which is the second-largest utility owner and operator of wind power facilities in the US.
Show Me the Money: $454 Million in Energy Efficiency Retrofits
The Department of Energy (“DOE”) announced a new $390 million energy upgrade program under the Energy Efficiency and Conservation Block Grant (“EECBG”) Program that could save $100 million annually in utility bills. DOE is looking for community-scale retrofit projects that will have a significant, long-lasting impact on energy consumption and which can be replicated in communities nationwide.
DOE is also making $64 million available under the EECBG to local governments that were not eligible to receive the formula grants announced earlier this year under the population-based formula.
These programs were announced through a Request for Information (“RFI”) issued today under the competitive portion of the EECBG Program. DOE is seeking public comment until Sept. 28, 2009.
A link to the Request for Information is below. This is not a funding opportunity announcement so no applications can be made at this point. The FOA is expected to be released in early October, following the public comment period.
DOE to release eagerly awaited commercial solicitation
On a webinar yesterday, Michael Fraser, Senior Program Manager at the DOE, advised that the DOE plans to release a commercial solicitation for the loan guarantee program later this month or in early October. The current solicitation that is active for renewable energy projects requires that projects satisfy the innovative requirement. A project is defined as innovative only if it has not been employed in three or more similar applications in the US of five years duration. Thus many established renewable energy projects such as those utilizing wind or geothermal technology that is tested and proven, cannot apply under the current solicitation. The release of a commercial soliciation has been eagerly awaited by renewable energy project developers. These loans will be backed by private banks as well with DOE typically only guaranteeing 80-90% of the loan. DOE hopes that this structure will motivate private lenders to perform much of the due diligence necessary and only bring shovel-ready and bankable projects to the table. Interest rates on the loan are anticipated to run at Treasury plus 25 to 75 basis points. This is a very attractive interest rate but there are substantial fees associated with the program that will offset a portion of this value. The other key factor for projects to consider is whether they will be able to meet American Reinvestment and Recovery Act requirements and thus be eligible to have their credit subsidy costs covered by government funding. I am cautiously optimistic that DOE will be successful with these efforts and we will see a flurry of good projects moving forward Q1-Q2 2010 with the assistance of this program.
Animal Rights Group Seeks Injunction to Halt Wind Project on ESA Grounds
From our colleague Ryan Steen:
On July 10, 2009, the Animal Welfare Institute and others (”Plaintiffs”) filed a motion for a preliminary injunction to halt construction of the Beech Ridge wind project in Greenbrier County, West Virginia (the “Project”). The Plaintiffs seek the injunction to prevent unavoidable harms that they allege the Project will cause to the Indiana bat, a species listed as endangered under the Endangered Species Act (“ESA”). The Plaintiffs’ injunction request follows closely on the heels of the complaint the Plaintiffs filed in the Federal District Court for the District of Maryland (Civ. No. 09-1519), which alleges that the Project will unlawfully “take” Indiana bats in violation of Section 9 of the ESA. In their complaint and request for an injunction, the Plaintiffs assert that the Project cannot lawfully move forward without an incidental take permit (“ITP”) issued under Section 10 of the ESA. Judge Titus recently ordered that the hearing on the Plaintiffs’ motion for a preliminary injunction will be addressed in conjunction with the trial on the merits of the case, currently scheduled for October 2009.
Continue Reading...November 17: Energy, Economics and Environment (E3) Conference
The University of Minnesota’s annual conference on Energy, Economics and the Environment – E3 – will be held in St. Paul on November 17. Hosted annually by the University of Minnesota’s Initiative for Renewable Energy and the Environment (IREE), this year’s conference will explore current technologies, environmental benefits and market opportunities in renewable energy.
Stoel Rives will be a sponsor of the E3 conference and will, as usual, host a booth at the event. Minneapolis tax partner Greg Jenner will join a panel to discuss “What’s the most efficient and effective strategy for financing renewable energy projects?” To review the agenda and register for the conference, click here.
Free Webinar on Loan Guarantee Program Hosted by DOE
The U.S. Department of Energy is hosting a free webinar on "How to Build a Strong Application" for the DOE Loan Guarantee Program on Tuesday, September 8, 2009 from 1:00 PM - 2:00 PM EST. The webinar is intended to explain the loan guarantee program and help lenders and applicants navigate the application process. DOE will also be providing suggestions on how to create a strong loan guarantee application.
DOE recently released two solicitations under the program for innovative energy efficiency, renewable energy and advanced transmission and distribution technologies and transmission infrastructure investment projects. DOE is particularly interested in wind, closed-loop biomass, open-loop biomass, geothermal, landfill gas, trash-to-energy, hydropower and solar projects that are able to commence construction before September 30, 2011.
DOE will be hosting a series of free webinars on the application process over the next few months.
FERC Issues MISO Letter of Deficiency on RECB Cost Allocation Issue
On September 2, 2009, the Federal Energy Regulatory Commission issued a letter of deficiency to the Midwest Independent Transmission System Operator in MISO's RECB Phase I generator interconnect cost allocation tariff amendment proceedings (Docket No. ER09-1431). See my previous blog entry on AWEA's protest to the MISO filing for additional background.
The letter instructs MISO to provide certain supplemental information within fifteen days. Specifically, MISO is instructed to provide a list of all of the interconnection projects that will be affected by the tariff amendment, an explanation of MISO's position on the relevant date for determining which cost allocation method methodology will apply, and additional support for certain statements made in its filing regarding attrition rates and elimination of certain requirements of interconnecting generators resulting from the filing. Finally, MISO is instructed to provide a timeline and description of the anticipated RECB Phase II methodology stakeholder process that will be followed to permit MISO to meet its commitment to file a succeeding tariff proposal by July 15, 2010.
Michigan's Great Lakes Wind Council Finalizes Offshore Report
On September 1, 2009, the Great Lakes Wind Council, created by Michigan Governor Jennifer Granholm in February 2009, issued its final report to the Governor. The intended purpose of the report is to identify criteria that can be used to review applications for offshore wind development in the Great Lakes, and to identify criteria for identifying and mapping areas that should be categorically excluded from offshore wind development as well as those areas that are most favorable to such development.
Recommendations contained in the report include a set of criteria (broken out into most favorable areas, conditional areas, and categorical exclusion areas) to identify and map prudent siting for offshore wind, legislative and rule changes to establish a bottomland leasing process, the state ask the U.S. Army Corps of Engineers prepare a Programmatic Environmental Impact Statement, and the Public Service Commission convene a forum to work with stakeholders on the economic analysis of different policy scenarios.
The report further recommends exclusion of offshore wind permits and leases from Part 325 of Michigan’s Natural Resources and Environmental Protection Act, clarification of state law to provide for offshore waters to be included in the public trust, and creation of a new statute governing offshore wind that would outline application requirements, permit review criteria, site assessment requirements, construction and operation plans requirements, decommissioning plans, and uses of funds by the state.
Show me the Money: Washington State Issues Final Guidance for Competitive Energy Efficiency and Conservation Block Grant Program
The American Recovery and Reinvestment Act provides $3.2 billion for energy efficiency and conservation block grants. Most of this money has been allocated directly to various local governments. Washington has an additional $6.4 million available through a competitive grant program.
Washington’s competitive grant program is administered through its Department of Commerce. Today, the Department of Commerce has announced the issuance of final guidelines for applications by smaller cities and counties for funds from the Energy Efficiency and Conservation Block Grant Program. Cities with populations lower than 35,000 and counties with populations lower than 200,000 are eligible to apply. Eligible cities and counties may choose to sub-grant their funds to other local governments, non-profits, or the private sector consistent with the guidelines.
The application guidelines, form, and frequently asked questions are available at www.commerce.wa.gov/recovery. The Department of Commerce will host a webinar on September 10, 2009, 9:00-11:00a.m., to review the final guidelines and answer questions. You can register for the webinar at https://www2.gotomeeting.com/register/352879171. For more information contact Heather Ballash at energy_policy@commerce.wa.gov.
First Treasury Grants in Lieu of ITC Awarded
Treasury Secretary Tim Geithner and Energy Secretary Steven Chu announced the first awards of cash grants in lieu of the investment tax credit (ITC) today. The total award value was over $502 million. Recipients include projects in Colorado, Connecticut, Maine, Minnesota, New York, Oregon, Pennsylvania and Texas. Click here for a detailed list of the awards announced today. Additional awards will be announced in the coming weeks.
For more information on this program and the application process, please see the Stoel Rives Energy Law Alert: Treasury Issues Guidance on Applications for Grants in Lieu of the ITC and PTC.
