EPA Delays Regulation of GHGs as Stationary Source Emissions
From Stoel Rives partners Lee Smith and Krista McIntyre:
In response to a letter drafted by eight democratic senators and general industry adverse reactions, the EPA announced on February 22, 2010 that there would be delays to implementation of the regulation of green house gases as stationary source emissions under the Clean Air Act, and included additional conditions to the implementation. It is expected that the EPA will phase in permit requirements and regulation of GHG for large stationary sources beginning in calendar year 2011.
The additional conditions include only requiring facilities that are applying for air permits for non-greenhouse gas emissions to be permitted under the new GHG permitting system in the first half of 2011, and permitting at a level higher than the 25,000 ton level originally proposed, for the latter half of 2011 through 2013. The letter can be found here.
SHOW ME THE MONEY: $1.37 BILLION LOAN GUARANTEE FOR CSP
DOE announced a conditional commitment for more than $1.37 billion in loan guarantees to BrightSource Energy, Inc. in support of the construction and start-up of three utility-scale concentrated solar power plants (CSP) in the Mojave Desert of southeastern California. The loan guarantee is funded under the American Recovery and Reinvestment Act and is predicated on BrightSource meeting financial and environmental requirements before closing on the loan. The Bureau of Land Management is leading a federal review of the project with support from DOE. Pending local, state, and federal regulatory approval, the new plants will generate approximately 400 megawatts (MW) of electricity using the company's proprietary technology. This output would nearly double the existing generation capacity of CSP facilities in the United States.
The three-plant Ivanpah Solar Complex will be located on federally owned land near the Nevada border and will be the world's largest operational concentrated solar power complex. BrightSource will use solar power tower technology, which uses thousands of flat mirrors, or "heliostats" to concentrate the sun's heat onto a receiver mounted at the top of a tower. Water pumped to the receiver is boiled into steam, which drives a turbine to produce electricity. The first Ivanpah plant is expected to begin construction in the second half of 2010 and come on line in 2012. Commercial operation for the second plant is slated for mid-2013, with the third plant following later that year. Once operational, the project will supply power to approximately 140,000 California homes.
Brightsource says the project will create 1,000 temporary jobs and 86 permanent jobs.
For additional information: see the DOE press releaseand DOE's Loan Guarantee Program Web site.
Southern California Public Power Authority RFP
Here's a new opportunity for renewable energy developers. The Southern California Public Power Authority has issued a request for proposals seeking renewable energy generation "with supporting infrastructure(s) as structured projects through (i) facility ownership; or (ii) power purchase agreement with ownership option(s), in one or more facilities." SCPPA is a California joint powers authority that plans to purchase an undivided equity share in facilities, issue tax-exempt debt financing, and sell output at cost to its municipal utility members. SCPPA will also consider straight or pre-pay power purchase agreements that include a facility purchase option.
Responses are due May 28, 2010. Follow the link for the solicitation materials: www.scppa.org/Downloads/RFP/Renewable_Energy_Projects_052810.pdf
Register Now for Live Meeting/Teleconference: Perspectives on Current Issues Facing Midwest Wind Projects
RENEWABLE ENERGY & DEMAND-SIDE MANAGEMENT COMMITTEE
Live Meeting/Teleconference
Midwest Wind Development: Perspectives on Current Issues Facing Regional Wind Projects
February 23, 2010
12:00 noon - 1:30 p.m. (Eastern Time)
11:00 a.m. - 12:30 p.m. (Central Time)
9:00 a.m. - 10:30 a.m. (Pacific Time)
In this seminar, the expert panelists will discuss current issues for developing commercial wind projects in the Midwest. In particular, the panelists will address:
- State regulatory issues for regional wind projects;
- Current prospects for developing wind energy on the Great Lakes;
- Community wind projects: current prospects for small scale wind projects;
- MISO cost allocation and market/operational issues affecting regional wind projects.
| Moderator: | David Gilles, Godfrey & Kahn, S.C. | |
| Presenters: | David Sapper, Customized Energy Solutions (Presenting from Madison Host Location)
William H. Holmes, Stoel Rives, LLP (Presenting from Minneapolis Host Location) Jeffery C. Paulson; Jeffery C. Paulson & Associates, Ltd. (Presenting from Minneapolis Host Location) |
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| Organizers: | David Gilles, Godfrey & Kahn, S.C. Jeff Dennis, Edison Electric Institute |
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| Host Locations: | Godfrey & Kahn, S.C. (beverages and light lunch provided)
Stoel Rives LLP (beverages and light lunch provided) McCarthy, Sweeney & Harkaway, P.C. (beverages provided) |
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| Questions for the Panelists: | Please send any questions for the panelists to David Gilles at dgilles@gklaw.com at any time prior to the Program. | |
REGISTRATION INFORMATION
To register for this Live Meeting/Teleconference, please complete and return the registration form.
Pre-registration is required and registration forms along with payment must be returned by no later than February 18, 2010. If you have questions, please contact Marlo Brown at marlo@eba-net.org.
Host Locations:
Godfrey & Kahn, S.C., One East Main Street, Suite 500, Madison, WI 53703
Stoel Rives LLP, Minneapolis City Center, 33 South Sixth Street, Suite 4200, Minneapolis, MN 55402
McCarthy, Sweeney & Harkaway, P.C., 1825 K Street N.W., Suite 700, Washington, DC 20006
SEC Adopts Interpretive Guidance on Disclosure Regarding Climate Change
As described in a previous alert, the Securities and Exchange Commission ("SEC") voted on Wednesday, January 27, 2010 to adopt an interpretive release to provide guidance on existing public company disclosure requirements as they apply to business or legal developments relating to climate change. The SEC has now distributed the interpretive release itself, which can be found here. The interpretive release indicates that its purpose is to provide guidance on how to interpret existing SEC disclosure rules and requirements as applied to business and legal developments associated with climate change. For our detailed alert on the subject, click here.
HB 3680 Passes Oregon House
On February 10, 2010, the Oregon House passed HB 3680, which if enacted would substantially curtail the BETC for certain renewable energy projects. HB 3680 would impose an overall statewide cap, on the amount of potential tax credits that the Department of Energy could certify. The statewide cap would be $300 million for the 2009-11 biennium, and $150 million for the year beginning July 1, 2011 and ending June 30, 2012. HB 3680 would also authorize the Department of Energy to write rules relating to the priority to be given if applications for preliminary certification exceed those caps. In addition to the overall cap discussed above, HB 3680 would also impose the following cutbacks for large wind facilities (more than 10 megawatts):
- For facilities that obtain preliminary certification between January 1, 2010 and January 1, 2011, the BETC would be limited to $3.5 million
- For facilities that obtain preliminary certification between January 1, 2011 and January 1, 2012, the BETC would be limited to $2.5 million
- For facilities that obtain preliminary certification after January 1, 2012, the BETC would be limited to $1.5 million
HB 3680 would adopt several criteria implemented by the Department of Energy in the Temporary Rules adopted in November 2009, and would modify the definition of a “transportation facility” to include efficient truck technology for commercial motor vehicles. These provisions would apply retroactively to July 1, 2009. HB 3680 would also allow the Department of Energy to suspend or revoke a final certificate if a facility is no longer operating. This provision would apply retroactively to January 1, 2009. Finally, HB 3680 would extend the sunset date to January 1, 2014, for renewable energy resource equipment manufacturing facilities, but would not extend the sunset date for other facilities.
Colorado Likely to Increase its RPS to 30% by 2010
From our colleague Adam Walters:
In January Colorado Governor Bill Ritter and State House Democrats announced the introduction of a bill that would increase Colorado’s Renewable Energy Standard (RES) from 20% to 30% by 2020. The Governor, who recently announced that he would not run for re-election, is putting the weight of his not insubstantial political capital behind the bill, HB-10 1001 as a cornerstone of his gubernatorial legacy. Consequently, the Bill was symbolically proposed as the first bill of the 2010 legislative session.
On February 11, HB-10 1001 passed the House on its second reading. The Bill, which is broadly supported by Democrats, conservation organizations (see, e.g. the Sierra Club, Environment Colorado and Colorado Conservation Voters) the renewable energy industry and organized labor (the Bill has been endorsed by the AFL-CIO), is widely expected to pass in time for Governor Ritter to sign it into law before the conclusion of his term. Opposition to the Bill (and to increasing Colorado’s RES generally) includes the State Republican Party (which sees the Bill as boon to labor unions because it requires certain distributed generation facilities to be installed by licensed and certified contractors) and the oil and natural gas industry, for obvious reasons. (See, e.g. the Colorado Mining Association).
The major Colorado utilities, such as Xcel Energy, appear to be taking a wait-and-see approach to the Bill, having neither endorsed nor opposed it. According to a spokesman for the Governor’s office, Xcel, Colorado’s largest utility, is expected to meet the current RES five years ahead of schedule. However, according to a recent editorial in the Denver Post, Xcel supports passage of the Bill provided that it enables Xcel to meet the RES requirement without exceeding the two percent surcharge billed to ratepayers for renewable energy development.
In addition to increasing the RES standard overall, the Bill places greater emphasis on distributed generation resources as a means of fulfilling the RES. For a decent summary of the bill, as well as updates on its progress, check out Colorado Capital Watch.
POSSIBLE RESTRUCTURING OF 1603 GRANTS
Congress is considering a complete rewrite of the 1603 grant program. Some of the changes being considered are very helpful while others would be extremely troubling. Please continue reading to get the full story ...
Continue Reading...
Michigan Announces $1.3M in Grants for Offshore Wind Research
On February 8, 2010, the Michigan Public Service Commission issued an order approving $1.6 million in Michigan Energy Efficiency grants, $1.3 million of which will go to Grand Valley State University, Michigan Alternative and Renewable Energy Center, in partnership with the University of Michigan Memorial Phoenix Energy Institute to conduct and/or perform studies to explore the feasibility of deployment of offshore wind technologies in Michigan.
The grants are part of the Low‑Income and Energy Efficiency Fund, which provides energy bill assistance for low‑income customers and promotes the efficient use of energy by all customer classes.
APS Announces Wind and Solar RFPs
On January 27, Arizona Public Service (APS) announced two requests for proposals (RFPs), one for new sources of photovoltaic (PV) solar energy and the other for Arizona-based wind.
The RFP for solar PV seeks proposals for projects that are between 15 and 50 megawatts and that employ commercially proven technology. APS's goal is to procure approximately 220,000 megawatt hours per year from this PV solicitation. Respondents are required to provide proposals for long-term power purchase agreements and/or "turn-key" agreements. The latter are sometimes called BTAs (Build-Transfer Agreements) or DBS (Design-Build-Sell) agreements--however named, APS anticipates that the agreement would require the developer to build the project and transfer it to APS when the project is completed. (As an aside, turn-key agreements that do not transfer the asset until commercial operation require very careful attention to "notice to proceed" clauses and conditions, lest defects in title, permits or some other matter thwart the closing and leave the developer's asset unsold or, worse, stranded.)
In its press release, APS encouraged parties to participate in the photovoltaic RFP bidder's conference on March 12, 2010. Additional information about the conference and the RFP is available online at www.aps.com/rfp. RFP submissions are due April 7, 2010.
On the wind side, APS is looking for wind projects between 15 and 100 megawatts located entirely within Arizona. Respondents are required to provide proposals for long-term power purchase and/or "turn-key" agreements. Interested parties are encouraged to participate in the Arizona-based wind RFP bidder's teleconference on March 17, 2010. Additional information about the conference and the RFP is available online at www.aps.com/rfp. RFP submissions are due April 14, 2010.
FERC Determines That Battery Storage Devices Qualify as Transmission Facilities. Is the Door Open for Other Energy Storage Devices?
In late January, FERC issued an order in response to a filing by Western Grid Development LLC that asked FERC to declare that Western Grid's proposed battery storage devices are transmission facilities eligible for certain rate incentives. Western Grid described its battery technology as 10 to 50 MW sodium sulfur batteries that would be installed at strategic places on the California ISO transmission grid in order to provide voltage support and protect against transmission overloads. In a description that seemed significant to FERC, Western Grid stated that its batteries would only enhance transmission reliability at the California ISO's direction, and that the batteries would not operate or participate in energy markets or provide electricity for commercial sale.
FERC examines energy storage devices on a case-by-case basis because storage devices don't fit squarely within the traditional transmission, distribution, or generation categories of assets. In this case, FERC gravitated to the notion that the battery devices would not provide capacity or energy to be sold in the energy market, and that Western Grid would not retain any revenues outside of the transmission access charge (unlike generators). For these and other reasons, FERC distinguished Western Grid from similar filings (see Nevada Hydro II--pumped storage), and determined that Western Grid's technology will act enough like transmission assets to warrant eligibility for transmission rate incentives. FERC's approval of rate incentives, however, was conditional upon the California ISO approving Western Grid's projects in the transmission planning process.
Although FERC repeated numerous times that its decision was based on the "specific circumstances and characteristics" of Western Grid's projects, the order shows potential for energy storage devices. If such devices can show that they act sufficiently like traditional transmission assets (like capacitors), they may be able to obtain very valuable transmission rate incentives. Whether this opens the door for compressed air energy storage and pumped hydro (but see Nevada Hydro II) is still up in the air, but rest assured that these questions will be at FERC before too long.
SEC Posts Climate Change Interpretive Release
Earlier today, the Securities Exchange Commission (SEC) posted its climate change interpretive release, which can be found at http://www.sec.gov/rules/interp/2010/33-9106.pdf. Our prior Blog on the subject is here, and our alert on the topic can be found here. Stoel Rives corporate securities partners Ron McFall and CJ Voss will be posting a follow up alert shortly.
If you'd like to sign up for our Energy Law Alerts, click here.
Stoel Rives LLP assists with first juwi-developed U.S. wind farm
The first wind farm developed by juwi in the U.S. will soon generate clean and safe electricity. Construction works at the Flat Water Wind Farm in Richardson County, Neb., have already started. By the beginning of 2011, 40 turbines will be up and running, thereby producing roughly 220 million kilowatt hours of carbon-dioxide-free power per year. The project will be constructed by Gallop Power LLC, a U.S.- based company established to develop, own, and operate clean energy projects. Gallop has acquired Flat Water Wind Farm from juwi's J.W. Prairie Wind Power LLC. Stoel Rives LLP represented juwi in the transaction.
"We were very pleased to have assisted juwi in accomplishing the transaction that will result in the construction and operation of their first wind farm in the United States. juwi, as an international player in the wind and solar energy with operating generation facilities in Europe and elsewhere, is the kind of company that we need active in the U.S. markets to help move our renewable energy sector forward," said Ed Einowski, Stoel Rives LLP partner who represented juwi in the transaction.
Continue Reading...Growing America's Fuel - President Obama Announces Strategies to Achieve U.S. Biofuels Goals
President Obama met today with a bipartisan group of governors from around the country and announced a series of steps the administration is taking to boost biofuels production in the United States. The President’s Biofuels Interagency Working Group released a report spelling out ways to promote the development of the biofuels industry in the United States in connection with the long-term renewable fuels standard of 36 billion gallons per year by 2022. The report, Growing America’s Fuel, focuses on government strategies to achieve the renewable fuels standard and the target for 100 million gallons of cellulosic biofuels in 2010. The strategies include supporting the development of first and second generation biofuels with the additional focus on accelerating third generation biofuels development and supporting feedstock research and demonstration. The report addresses the use of regional supply chain systems to ensure all fuels produced are compatible with the U.S. transportation fuel infrastructure.
President Obama also announced the creation of an Interagency Task Force on Carbon Capture and Storage. Representatives from the DOE and the EPA will co-chair the task force which will develop a plan for affordable carbon capture and storage technology in the next ten years, with a goal of bringing five to ten commercial demonstration projects on line by 2016.
