Great River Energy Issues Request for Proposals
On August 15, 2011, Great River Energy (GRE) issued a request for proposals (RFP) for community-based energy development (C-BED) renewable energy resources. Eligible energy technologies include: wind, solar, hydroelectric of less than 100 megawatts, biomass, municipal solid waste, landfill gas and anaerobic digesters, and hydrogen produced from any of the previous resources.
In announcing the RFP, GRE noted that it already has enough renewable resources in its energy portfolio to meet Minnesota's Renewable Energy Standard. Minnesota's RES requires electric utilities to supply an increasing percentage of their energy sales from renewable energy sources, reaching 25 percent by 2025. Nevertheless, GRE issued the RFP to "evaluate if additional C-BED renewable resources can provide value to our member cooperatives in the future," according to Jon Brekke, Great River Energy vice president of member services. GRE plans to evaluate proposals based on their impact to wholesale power rates and other factors.
Proposals are due before 4pm Central Prevailing Time on Sept. 9, 2011. GRE plans to notify short listed bidders by September 30 and has targeted November 1, 2011 as the execution date for a power purchase agreement (PPA). GRE is clearly looking for bargains from developers who can take advantage of the Section 1603 cash grant, a program that expires on December 31, 2011, and who can place a project in service by December 31, 2012. Since projects seeking the cash grant will need to "begin construction" (as that concept is defined in Section 1603) by December 31, 2011, the November 1 target execution date will likely be critical for developers seeking to arrange project financing before year end.
GRE is interested in entering into a PPA rather than a build-transfer or other ownership arrangement. GRE's form of PPA can be found here. The RFP itself can be found here. For more information about the RFP, contact Mark Rathbun at 763-445-6104 or 2011cbedrenewablerfp@grenergy.com.
LEED Avoids Class Action, Energy Savings Claim Left Untested
There’s big news in the battle between consultants in the green building industry and the U.S. Green Building Council (“USGBC”). Following almost a year of litigation, it appears that the USGBC may have defeated a $100 million class action lawsuit brought by engineers and designers, according to a court order issued last week. The plaintiffs’ complaint filed last October argued that USGBC made false claims about the energy efficiency of buildings certified under its LEED program. According to plaintiffs, who were not LEED accredited professionals, the USGBC’s allegedly false claims about energy saving and energy efficiency deceived consumers into pursuing LEED certification, and along with it, hiring LEED accredited consultants. But the veracity of USGBC’s energy efficiency claims remains undecided for now, as the federal district court for the Southern District of New York has ruled that the plaintiffs lacked “standing” to pursue their case under both federal and state false advertising laws.
More precisely, the court found that engineers and designers were not in a position to claim that the alleged false advertising could have harmed them. The court rejected the plaintiffs’ injury claims. For one thing, engineers and designers are not direct competitors of USGBC – the Council certifies buildings, while the plaintiffs provide construction and design consulting services. Also, according to the court, the engineers and designers could not show that any alleged false advertising by USGBC caused them to lose clients, because the LEED building certification program does not require builders to use LEED accredited engineers or designers. Even if the USGBC deceived builders about the LEED program, the court reasoned, LEED didn’t preclude them from hiring plaintiffs.
Naturally, energy use is a critical component of the LEED program. And while the class of dejected New York plaintiffs may never get to challenge the truth of LEED’s past advertising, stakeholders involved in green building can draw some valuable lessons from this skirmish when it comes to green building certification and energy efficiency.
The court’s order briefly touched on the most important of these lessons. Citing USGBC’s own filing in the case, the court noted that green building certification doesn’t necessarily address energy performance so much as the potential for energy efficiency. In other words, LEED certification may establish the potential for energy saving, but it doesn’t prove it. Then again, the LEED program does award points for the use of renewable energy, for on-site generation of renewable energy, and for monitoring and reporting energy use. Bottom line – because so many different factors go into a green building score, a clean/renewable energy claim about a green building can be potentially misleading.
So what does this mean? For one thing, one shouldn’t discount the value of a green building certification, whether from LEED, National Association of Home Builders, Green Globes, or any other comparable program. Certifications provide a nice, simple way to prove the green credentials of a building. On the other hand, additional disclosure may be prudent, particularly for those who market or advertise certain green attributes of a building. Architects, builders, owners – and anyone else who might profit from such claims – must be careful to not overstate or misstate the significance of a green building certification. With respect to energy efficiency, for example, a good LEED score may be the result of significant energy efficiency, or it may not.
Finally, what about the New York plaintiffs and their $100 million claim against USGBC? While the merits of their case remain unproved, don’t be surprised if the plaintiffs appeal the district court’s order. If they can convince a higher authority that they may have lost business to the LEED program, they may get a second chance to go after USGBC’s energy efficiency claims.
Joint Agency Effort to deploy $510 Million to Support Drop-In Aviation and Marine Biofuels
Yesterday, President Obama announced that the U.S. Departments of Agriculture (“USDA”), Energy (“DOE”), and Navy (“USN”, and together with the USDA and DOE, the “Agencies”) will invest up to $510 million over the course of the next three years to support advanced drop-in aviation and marine biofuels to power military and commercial transportation. This is a follow up to President Obama’s Blueprint for a Secure Energy Future (the “Blueprint”). In the Blueprint, the President expressed a desire to begin construction on at least four commercial-scale cellulosic or advanced bio-refineries over the next two years and challenged the Agencies to work together to spur the development of competitively priced substitutes for diesel and jet fuel.
The USDA, DOE and USN responded to the Blueprint by signing a Memorandum of Understanding (the “MOU”). The MOU outlines a plan for the Agencies to partner with the private sector to construct or retrofit several drop-in biofuel plants and refineries. The agencies have stated goals of limiting our nation’s dependence on foreign oil for national, providing tactical and strategic advantages for our military and creating economic opportunities in rural communities. We expect that the USDA will take the lead on addressing feedstocks, the DOE will take the lead on technology, and the USN will be the initial primary consumer of the advanced biofuels.
Each of the Agencies have committed to spending $170 million over the next three years and an Executive Steering Group (the “ESG”) will be established to coordinate the programs. It is expected that the ESG will work with the Agencies to develop and release solicitations to industry beginning in December 2011. The solicitations will be issued in accordance with the Defense Production Act (50 U.S.C. App. 2061 et seq), the Commodity Credit Corporation Charter Act (15 U.S.C. 714 et seq), the Economy Act (31 U.S.C. 1535) and other appropriate authorities. Consequently, rights in inventions made as a consequence of, or in direct relation, of these solicitations will be administered in accordance with the applicable Agency’s governing laws and policies.
Section 1603 Cash Grants for Renewable Energy Projects TeleBriefing
With the end of 2011 drawing near, many renewable energy developers are seeking to qualify their projects for the Section 1603 cash grant. Developers continue to try to understand the complexities surrounding the grant requirements, especially the determination of when projects are considered to have met the “beginning construction” requirement.
On August 24, I'll moderate a Law Seminars International (LSI) Telebriefing on Section 1603, featuring Stoel Rives partner Greg Jenner and Victoria McDowell, the Compliance Program Manager, Section 1603 Program, U.S. Department of the Treasury.
The TeleBriefing will take place from 10 AM – 11 AM Pacific Time/ 1 PM -- 2 PM Eastern Time. During the briefing, attendees will learn how to meet the “beginning construction” test and receive clarification from the Treasury Department on project requirements. We'll also discuss the fate of projects that fail to qualify for the cash grant.
Registration is available online through Law Seminars International.
EPRI's Call to Action: It's Time for Grid Operating System 3.0
The Electric Power Research Institute (“EPRI”) recently released the smart grid white paper: “Needed: A Grid Operating System to Facilitate Grid Transformation.” The white paper dissects the first two distinct phases in grid operating systems and then calls for the creation of the 3rd. In order to support the “tectonic changes” already happening in the power system, EPRI offers to help fund, facilitate and catalyze the development of the architecture and functional specifications for Grid 3.0. Without this development, EPRI argues, “the full value of a lot of individual technologies like electric vehicles, electricity energy storage, demand response, distributed resources, and large central station renewables such as wind and solar will not be fully realized.”
Continue Reading...Puget Sound Energy Files for WUTC Review of "All-Source" RFP
Puget Sound Energy (PSE) has filed with the Washington Utilities and Transportation Commission (WUTC) a Request for Proposals for All Generation Sources (the all-source RFP) and a Request for Proposals for Electric and Demand Side Resources (energy-efficiency RFP). PSE filed the draft all source RFP on August 1, 2011 and plans to issue a separate energy efficiency RFP later.
Under the all source RFP, PSE is seeking proposals for energy generation resources as capacity generation resources, as well as transmission products from BPA’s system to PSE's system. PSE is willing to consider both existing generation resources and resources that are under development but expected to achieve commercial operation no later than December 2015. According to PSE, a revised assessment of its portfolio needs and peak customer power requirements demonstrates a need for approximately 500 MW of capacity by the end of 2012. PSE would be willing to consider various commercial arrangements under the RFP, including power purchase agreements, temporal exchange agreements, ownership arrangements (e.g., a transfer of development assets, a build-transfer arrangement, or sale of an existing asset), as well as transmission-only products from BPA’s system.
PSE will be hosting an RFP Proposal Conference on August 16, 2011, in Bellevue, Washington, to discuss the all-source RFP. To register for the conference, email janice.brown@pse.com. Public comments on the draft RFP are due on September 2, 2011, and PSE expects to receive WUTC approval by September 28. If the schedule holds, PSE plans to issue the final RFP solicitation on October 5, 2011. PSE expects to select a final short list and notify respondents in 1Q 2012.
PSE’s web page for the RFP (including its proposed schedule and the draft RFP itself) can be found here.
USFS Finalizes Long-Awaited Wind Energy Directives
My colleagues Heath Curtiss and Sarah Stauffer Curtiss are reviewing the final directives for US wind energy special use authorizations that the Forest Service issued today. Here’s their brief update, which will be followed by a more detailed energy law alert:
Nearly five years after issuing its draft directives, on August 4, 2011, the U.S. Forest Service issued final directives for wind energy special use authorizations. The new directives supplement existing Forest Service guidance on wildlife and special uses, but specifically address issues associated with the permitting and siting of wind energy facilities. Key components of the new directives can be found in a new chapter, “Wind Energy Uses,” in the Special Uses Handbook and a new chapter, “Monitoring at Wind Sites,” in the Wildlife Monitoring Handbook. Generally speaking, the Forest Service modeled its wind energy directives after the Bureau of Land Management Instruction Memoranda on wind energy development. There are, however, key differences, including, for instance, significantly greater potential for competitive bidding and substantially more explicit wildlife monitoring requirements. See the Federal Register notice here: http://www.gpo.gov/fdsys/pkg/FR-2011-08-04/pdf/2011-19673.pdf.
Please read our legal update for more information.
