CPUC Issues Scoping Memo in Energy Storage Proceeding; Workshop Set for June 28
On May 31, 2011, the California Public Utilities Commission (“CPUC”) issued a scoping memo (“Scoping Memo”) identifying issues to be considered and setting a procedural schedule for its energy storage proceeding. In December, 2010, the CPUC opened Rulemaking 10-12-007 to implement the provisions of Assembly Bill 2514, which directs the CPUC to determine appropriate energy storage procurement targets for load serving entities. To date, the CPUC has issued an Order Issuing Rulemaking, held an initial workshop and a prehearing conference, and received public comments from interested parties. After considering such background and input, the CPUC issued the Scoping Memo.
The Scoping Memo splits the proceeding into two phases: Phase 1 – Policies and Guidelines and Phase 2 – Cost Benefit Analysis and Allocation. The Scoping Memo provides that Phase 1 will consider the following topics:
- How are energy storage technologies currently being used? To what extent are these current uses indicative of how energy storage should be utilized on a going forward basis? As the Commission is developing a generalized view towards energy storage, what lessons learned should the Commission consider, both in terms of successes and failures?
- What policies are needed to encourage effective energy storage that will: reduce greenhouse gas emissions; reduce peak demand; defer and/or substitute for an investment in generation, transmission or distributions; and improve reliable grid operations?
- How can energy storage technologies be best integrated into the utilities’ existing portfolios?
- How could energy storage technologies be integrated with the Commission’s loading order, such as energy efficiency, demand response, renewable procurement, distributed generation and other items in the Commission’s loading order? What about other overarching policies like smart grid?
- Are there current state or federal policies that impede the ability of energy storage technologies from being utilized more widely or serve as barriers to the development of energy storage systems? What, if anything, can be done to remove these impediments and barriers?
- Is it possible to develop a single unifying policy for energy storage when storage has a wide variety of uses?
- Regardless of the technology used, are there certain energy storage applications/attributes that should be encouraged? To what extent do the costs and benefits associated with these different applications/attributes differ?
- How should ownership model of energy storage be considered? Do the current value streams favor one type of ownership model over another?
The Scoping Memo contemplates that Phase 1 will involve a series of workshops, the first of which is set for June 28, 2011 at the CPUC Golden Gate Room, 505 Van Ness Ave., San Francisco, CA.
The Scoping Memo notes that the outcome of Phase 1 will influence the scope of Phase 2. Accordingly, the Scoping Memo declines to set the scope of Phase 2, but states that Phase 2 shall consider at least the following topics:
- How should energy storage applications/attributes be valued?
- What are the costs for the various types of energy storage applications?
- What should be taken into consideration to determine whether energy storage technologies are cost effective? Should they be compared against the other types of resources currently being procured by the utilities? How should the benefits associated with energy storage technologies be taken into consideration when determining cost-effectiveness?
- How should the costs and benefits associated with energy storage technologies be allocated among retail end-use customers?
The CPUC will issue a future scoping memo to definitively set the scope of Phase 2.
Sustainable Aviation Fuels Northwest Releases Report
The Sustainable Aviation Fuels Northwest (SAFN) is the first stakeholder effort to review the challenges surrounding the production of sustainable aviation fuels and to develop a regional solution.
The initiative was launched in July 2010 by Boeing, Alaska Airlines, the Ports of Portland, Seattle and Spokane– and Washington State University. Climate Solutions, a Northwest clean-energy nonprofit, managed the stakeholder process that included a wide range of groups across aviation, biofuels production, environmental advocacy, agriculture, forestry, federal and state government agencies, academic research and technical consultancies. Stoel Rives was proud to be a participant in the process and to provide specific input regarding incentives, and the Renewable Fuel Standard.
We hope that you find the report useful and informative, see http://www.safnw.com/ for further information.
Stoel Rives' Mark Hanson and Loren Hulse to speak at Metabolic Design and Algae World Summit 2011
Stoel Rives Partners Mark Hanson and Loren Hulse will be at San Diego’s Biotech Beach on May 23 for Metabolic Design 2011. This event is co-located with the 3rd Annual Algae World Summit.
Metabolic Design 2011 brings together research leaders, technology developers and R&D directors to share strategic insights and management practices. Learn about the availability of potentially untapped opportunities in new markets, and open up new collaborative possibilities.
The Algae World Summit will provide a comprehensive strategic survey, analysis and showcasing of the critical innovations, and emerging solutions for each set of challenges along the length of the production cycle.
This event will provide the essential platform for algae developers, vendors, scientists, investors, distributors and end-users to share the most cutting edge research results and breakthrough strategies, in search of the creative synergy that will advance the algae products industry into the future.
Click here for a detailed agenda an exclusive Stoel Rives registration discount!
Stoel Rives' Mark Hanson and Greg Jenner to speak at Renewable Energy in the Midwest
Join Stoel Rives Partners Mark Hanson and Greg Jenner in Minneapolis, for Renewable Energy in the Midwest States: New Policy, Business and Legal Developments. Here they will meet with leading renewable energy professionals, innovators and regulators to address opportunities and challenges for developers and entrepreneurs in the Midwest renewable market and the developing Smart Grid sector.
Both Mark and Greg will present on Friday, August 26, and will discuss environmental issues and updates of federal and state programs, as well as ways to move renewable projects forward with less government support.
For full conference details, click here.
California Cap & Trade Challenge Final Order Issued
On Friday, May 20, 2011, Judge Goldsmith of San Francisco Supreme Court issued a final order (PDF) with respect to a lawsuit challenging the environmental review of the Cap and Trade regulations created under California’s AB 32 Greenhouse Gas statute and the associated Scoping Plan. In its order, the Court enjoined the Cap and Trade portion of the Scoping Plan.
This revised final order is narrower than the draft order previously circulated in March. The order applies only to the Board Regulation O8-47 and Executive Order G-09-001 (approving the climate change scoping plan) as they relate to Cap and Trade; and the Cap and Trade regulations themselves Regulation 10-42. The Executive order enjoins the California Air Resources Board (CARB) from:
“[e]ngaging in any cap and trade-related Project activity that could result in an adverse change to the physical environment until ARB has comes into complete compliance with ARB’s obligations under its certified regulatory program and CEQA, consistent with the Court’s Order. This includes any further rulemaking and implementation of cap and trade especially but not limited to any action in furtherance of California Cap and Trade Program Resolution 10-42.”
Keep in mind, this lawsuit was filed challenging a CEQA type document which is procedural in nature. Thus, once CARB revises the environmental document in the manner required by the court and it is determined to be sufficient at the time the writ is returned, the project may go forward. Additionally, in the interim, those portions of AB 32 that are not related to Cap and Trade, such as mandatory reporting, are still in effect pursuant to the Implementation Schedule.
In the interim, it will be interesting to see whether various interests will attempt to make changes to the Cap and Trade program. The Sierra Club has already come out in favor of changes related to emissions levels and environmental justice issues.
Southern California Edison Begins Process to Reform CREST Power Purchase Agreement
Citing changes in market conditions, Southern California Edison (SCE) announced last week that it is beginning the process of reforming the standard Power Purchase Agreement (PPA) it uses for its California Renewable Energy Small Tariff (CREST) program. CREST is SCE’s feed-in tariff program for eligible renewable energy projects under 1.5 MW. The PPA for each of these projects is a standard, non-negotiable PPA under either a full buy/sell or excess power purchase program for a term of 10, 15, or 20 years. Of the 247.7 MW allocated to SCE by the California Public Utilities Commission (CPUC) for CREST, SCE states that it has 214.1 MW either under contract or in the queue.
In its press release, SCE states that it will publish the proposed pro forma PPA on its website on June 2. It also states that the proposed “CREST PPA is based on SCE’s pro forma Solar Photovoltaic Program PPA for projects less than 5 MWs, and has been modified to make it applicable to all technology types and to be in compliance with the requirements of the CREST Tariff and CPUC Decision (‘D.’) 07-07-27.” Comments on the proposed PPA will be due by June 22, with the submission of the new PPA to the CPUC planned for August 2011.
Stoel Rives Energy Regulation Report
FERC Clarifies Qualifying Facility Restrictions in Sale/Resale Transactions
On May 19, the Federal Energy Regulatory Commission ("FERC") issued an order in Idaho Wind Partners I, LLC, a docket in which wind farm owners in Idaho petitioned FERC for approval of a unique transaction that would both provide eligible Renewable Energy Credits ("RECs") to a utility in California and leave the wind farm owners in a position to make a Qualifying Facility ("QF") "put" sale at avoided cost rates on the interconnecting utility.
FERC confirmed that so long as the third party is a QF, the size, affiliation, or relative physical location of the third party has no effect on the QF status of the power being sold and repurchased. Consequently, any power that the Idaho wind farms sell to a QF and then buy back may subsequently be sold to an electric utility at avoided cost rates.
Read more on the Qualifying Facility Restrictions
SunZia Transmission Obtains Approval of Ownership Structure, Anchor Tenant Proposal
On May 20, FERC granted SunZia Transmission's ("SunZia") petition for FERC's approval of the ownership structure and transmission service plans for the SunZia Southwest Transmission Project (the "Project"). SunZia had requested that each of its investor-owners be allocated ownership rights representing 100 percent of its respective pro rata investment in the Project, and that certain of the investor-owners be able to allocate up to 50 percent of their pro rata shares of transmission capacity to anchor tenants through long-term negotiated transmission contracts. In May 2010, FERC rejected SunZia's request to allocate 100 percent of the Project's transmission capacity (as opposed to ownership rights) among the owners according to their pro rata investment in the Project's capacity and ruled that the owners do not have exclusive rights to the Project's capacity equal to their share of investment in the Project.
Read more on the Approval of SunZia Ownership Structure and Anchor Tenant Proposal
Midwest ISO Releases Group 5 Re-Study System Impact Study
On May 19, the Midwest ISO released the long-anticipated Minnesota Group 5 Re-Study Generator Interconnection System Impact Study, which Re-Study was ordered by FERC as the result of a cost allocation dispute between a wind developer (Community Wind) and the Midwest ISO with respect to the Brookings County-Twin Cities transmission line.
Read more on Midwest ISO's Group 5 Re-Study Generator Interconnection System Impact Study
A Big Day for Transmission Rate Incentives: Multiple Applications Approved, and FERC Seeks Comments on Its Policies
FERC's May 19 open meeting turned out to be positive for transmission developers, as FERC approved transmission rate incentives (or related settlements) for five transmission projects located from the Atlantic coast to the desert Southwest. FERC also issued a Notice of Inquiry on its implementation of Section 219 of the Federal Power Act, and is seeking comments on how it should modify its policies and regulations to promote increased transmission investment.
Read more on each of FERC's Approved Transmission Rate Incentives
New Greenhouse Gas Reduction Targets - from the U.K. to Bank of America
This week, the United Kingdom proposed cutting its greenhouse gas (GHG) emissions 50% below 1990 levels, in its recently released proposed carbon budget for 2023 to 2027. This would put it on track to cut emissions by 80% by 2050, as required under the U.K. Climate Change Act of 2008. Moreover, this target would go beyond the European Union goal of cutting emissions to 20% below 1990 levels by 2020. The U.K. has given itself an escape hatch, however, in that its target is tied to the E.U. following suit. Sources reporting the story invariably note that the U.S. has no mandatory GHG emissions reduction targets in place. Being in California, though, I’ll make a mention of our state’s mandate to reduce GHG emissions to 1990 levels by 2020 under A.B. 32. That said, as a side note, Bank of America committed this week to reduce its GHG emissions by 15% by 2015. I’ve heard many a pundit declare that the heyday of the nation-state is over, and that the world is increasingly controlled by multinational corporations. If that’s the case, maybe the new trend will be corporations like Bank of America committing to, and actually achieving, GHG reductions where countries don’t.
Unused ARRA Grant Funds Related to Electric Vehicles, Alternative Fuel Vehicles and Infrastructure Projects
Puget Sound Clean Cities Coalition has announced that it has roughly $400,000 in unused ARRA grant funds available for alternative fuel vehicle and infrastructure projects.
Examples of eligible vehicles include:
- Vehicles using alternative fuels recognized by the Energy Policy Act (complete list here: http://www1.eere.energy.gov/vehiclesandfuels/epact/about/epact_fuels.html);
- Fuel Cell Electric Vehicles;
- Electric Hybrid Vehicles (including certain Plug-in Hybrid Vehicles);
- Hydraulic Hybrid Vehicles;
- Neighborhood Electric Vehicles; and
- Certain Bio-Diesel Vehicles (if replacing gasoline powered vehicles).
Infrastructure projects must be related to the storage, distribution, dispensing of advanced fuels or electric vehicle supply equipment. Examples of eligible infrastructure projects include:
- New dispensing facilities, or additional equipment or upgrades to existing refueling sites;
- Facility upgrades or building modifications necessary to accommodate alternative fuels for fleet garages and other maintenance centers;
- Solar charging systems dedicated to providing on-site vehicle motive electrification
Funding requests must be between $100,000 and $400,000 with a minimum 10% non-federal match. Precise requirements of this grant are located at http://www.pugetsoundcleancities.org/documents/CleanCitiesFY09FOAModification007.pdf
UPDATE: California Utilities Issue 2011 RFOs for Renewables
Following up on my blog Thursday, all three of California's major investor-owned utilities, Pacific Gas & Electric ("PG&E"), San Diego Gas & Electric ("SDG&E"), and Southern California Edison ("SCE") have issued their 2011 requests for offers ("RFO") and requests for proposals ("RFP") for eligible renewable resources, triggering their timelines for new contract proposals.
Information on PG&E's RFO, issued Wednesday May 11, can be found here. PG&E will hold a bidders conference on May 19. According to the current schedule, offers must be received by noon on June 15.
Information on SDG&E's RFO, issued Thursday May 12, can be found here. SDG&E will hold a pre-bidders conference in San Diego on June 2, and another one in El Centro on June 6. According to the current schedule, offers must be received by noon on July 12.
Information on SCE's RFP, issued Friday May 13, can be found here. SCE will hold a proposal conference on May 26. According to the current schedule, offers must be received by 1:00 p.m. on June 27.
Debate Heats Up over Minnesota Wind Energy Siting Standards and Setbacks
Late last week, an administrative law judge (“ALJ”) found that the Minnesota Public Utilities Commission (the “Commission”) is not obligated to consider or apply a county wind ordinance containing siting standards that are stricter than the Commission’s statewide standards. And even if the Commission were obligated to consider and apply the more stringent standards, the ALJ recommended that the Commission be excused from doing so for lack of good cause under the Minnesota Wind Siting Act (the “Act”). The ALJ’s recommendations to the Commission were released at the same time Minnesota legislators are considering a proposed state law that would require larger setbacks for wind turbines from neighboring property lines statewide.
In October 2010, Goodhue County amended its zoning ordinance for wind projects to, among other things, require turbines to be setback 10 rotor diameters (or about half a mile) from dwellings of landowners not participating in the project. In comparison, the project developers proposed setbacks of 1,500 feet from non-participating dwellings and the Minnesota Office of Energy Security recommended this setback distance as a permit condition. State standards typically require setbacks of 750 to 1,500 feet to comply with noise standards. Two weeks after Goodhue County adopted its wind ordinance, the Commission determined that it did not have a sufficient record before it to determine how or whether to apply the county’s standards. To develop that record, the matter was referred to an ALJ at the Office of Administrative Hearings for a contested case proceeding.
The Act provides that a state site permit for a wind project 5 MW or larger is the only site approval required. The state permit supersedes and preempts all local zoning, building, or land use rules, regulations, or ordinances. Local governments retain authority to regulate siting and construction of wind projects 5 MW and smaller. The Act allows counties to assume responsibility for permitting wind projects 5 MW and larger up to 25 MW using general permit standards developed by the Commission. However, the Act includes a provision that allows counties to adopt more stringent standards for wind energy projects 5 MW and larger, which the Commission must consider and apply before granting a site permit in that county unless the Commission finds good cause not to do so. The ALJ found that the Act does not require the Commission to consider or apply Goodhue County’s ordinance and that, even if it did, there would not be good cause to do so. The case now moves back to the Commission for a final decision.
Recent attention to wind siting standards in Minnesota hasn’t been limited to the Goodhue County case. Yesterday, the Minnesota Senate Energy, Utilities and Telecommunications Committee heard wind siting/setback legislation (S.F. 1069) that would require wind turbines to be set back one-half mile or more from property lines of non-participating landowners in townships exceeding certain population densities. The House companion bill (H.F. 811) was heard last week and failed to pass out of committee on a tied vote. The setback requirements proposed in these bills could significantly reduce the amount of land area available for wind development in Minnesota.
BLM Notices Interim and Proposed Rules Protecting Renewable Energy Development From Mining Claims
Stoel Rives attorney Heath Curtiss, one of the
co-authors of "Federal Land Issues with Siting
and Permitting" in our Law of Wind, describes
a Bureau of Land Management ("BLM") plan to
protect certain land suitable for renewables
development from the location of mining claims :
As many of our clients with right-of-way (“ROW”) applications pending before BLM know, mining claims located prior to a final ROW grant can prove difficult obstacles to clear in the context of project permitting, finance, and development. Unfortunately for renewables developers, mining claims are easy to locate, and difficult to invalidate. This gives mining claimants leverage vis-à-vis other public land developers. As one might expect, with the recent uptick in renewable ROW applications, we’ve also seen an increase in mining claims. According to BLM, over the last two years, 437 new mining claims were located within wind energy ROW application areas on BLM lands, and another 216 new mining claims were located within solar energy ROW application areas.
In an effort to address such conflicts, on April 25, 2011, BLM published notice of an Interim Rule effective immediately, and a nearly identical proposed rule, that gives BLM the ability to segregate lands included within wind and solar ROW applications, or lands that BLM identifies for potential wind and solar ROWs. Once segregated, such lands would no longer be subject to appropriation under the appropriations laws, including location under the General Mining Law of 1872. Segregation would not, however, explicitly restrict leasing under the Mineral Leasing Act of 1920, or sales under the Materials Act of 1947, presumably because those acts already give BLM significantly more discretion to balance competing uses. Likewise, neither the interim nor proposed rule purport to affect existing mining claims.
The foregoing segregation would take effect once BLM publishes notice in the Federal Register, and would terminate on the earliest of (i) a decision to grant or deny the ROW application, (ii) automatically at the end of the segregation period, not to exceed 2 years from the date of publication, or (iii) upon publication of a notice of termination.
BLM is accepting comments on the interim and proposed rules until June 27, 2011.
