The Price of Developing Power Projects in Kern County Just Went UP

The East Kern Wind Resource Area (EKWRA)--it's a mouthful--and it's also a hotbed for renewable energy development and the location of a fight over millions of dollars among Southern California Edison (SCE), the California ISO, and independent power developers (IPPs).  Late last week, the Federal Energy Regulatory Commission (FERC) scored that fight in favor of SCE and the California ISO.

For the past few years, SCE has been working to reconfigure the transmission system in the EKWRA region in order to address a reliability issue occurring there.  But the reconfiguration would have another impact--it would modify the transmission system in the area so that it became a distribution system under SCE, rather than CAISO, control.  To IPPs, that modification came with significant cost consequences:  in the interconnection process, IPPs funding network upgrades on the transmission system receive a full reimbursement for the cost of those upgrades; distribution upgrades, on the other hand, result in no reimbursement.  For IPPs who had assumed they would be reimbursed the network upgrade costs that appeared in their interconnection agreements (which often cost a single project millions of dollars), it came as something of a surprise when they learned that the reconfiguration might cause their reimbursements to dry up.

And so the IPPs challenged SCE and the California ISO.  In its decision, FERC determined that the reconfigured EKWRA facilities are distribution, or non-integrated facilities, and that the California ISO correctly transferred control over the facilities to SCE's tariff.  As a result, no further reimbursements to the IPPs will occur.  "Despite being informed of the possibility of reclassification, [the IPPs] made a business decision to proceed with interconnection."  For some IPPs, this could have a very costly impact.  

You can read the entire order here:  EKWRA Order.

California's Utilities Must Lower Barriers to Energy Storage Systems

In a proposed decision issued yesterday from the California Public Utilities Commission, an administrative law judge (ALJ) determined that energy storage devices (i) that are paired with net energy metering- (NEM) eligible generation facilities, and (ii) that meet the Renewables Portfolio Standard Eligibility Guidebook requirements to be considered an "addition or enhancement" to NEM-eligible systems are "exempt from interconnection application fees, supplemental review fees, costs for distribution upgrades, and standby charges when interconnecting under current NEM tariffs.  

The issue of whether solar PV-integrated energy storage could interconnect through NEM tariffs heated up in recent months as utilities in California determined that such systems were not NEM-eligible and therefore imposed additional requirements (and costs) in order for a paired solar PV system itself to be NEM-eligible.  These requirements and costs acted as a barrier to using energy storage technologies with distributed generation.  But in this proposed decision, the ALJ encouraged the state's utilities to take a "more proactive and collaborative approach to avoid creating barriers," and found that energy storage should be exempt from these additional requirements when certain conditions are met.  

Sizing.  The proposed decision states that NEM-paired storage systems with storage devices sized at 10 kW or smaller are not required to be sized to a customer's demand or the NEM generator.  For NEM-paired storage systems with storage larger than 10 kW, (x) the discharge capacity of the storage system may not exceed the NEM generator's maximum capacity, and (y) the maximum energy discharged by the storage device shall not exceed 12.5 hours of storage per kW. 

Metering.  With respect to metering requirements, the proposed decision again draws distinctions between storage systems above 10 kW discharge and those at 10 kW and below discharge capability, although the decision proposes to impose certain requirements on both categories in order to "preserve the integrity of NEM."  For systems at 10 kW and below, the decision proposes using a de-rate factor to measure the AC energy that flows into, and out of, the NEM generator.  NEM-paired systems larger than 10 kW will be required to adhere to metering requirements similar to those under the NEM Multiple Tariff Facilities provision of utilities' NEM tariffs, although the costs of metering will be capped at $500.  In either category, the proposed requirements aim to ensure that only NEM-eligible generation receives NEM credit.  

The full proposed decision may be viewed here:  CPUC Proposed Decision re Energy Storage

California Public Utilities Commission Sets Agenda to Consider RPS Expansion

Assembly Bill (AB) 327 took effect in California at the first of the year, giving the California Public Utilities Commission (CPUC) authority to expand the State’s 33% Renewable Portfolio Standard (RPS). This week, the CPUC extended its RPS proceeding to determine, before February 2015, how to implement the new law. AB 327 provides that the CPUC may require the State’s investor-owned utilities to procure renewable energy in excess of 33%, but the law does not mandate an expansion of the RPS. As the utilities have almost filled their procurement needs to meet the 33% requirement, the market for utility-scale renewable projects in California will likely continue to shrink without an expanded RPS. The CPUC’s ruling left the scheduling of the work to implement AB 327 to the assigned ALJs and Commissioner. We will be alert for opportunities to participate in the CPUC’s further proceedings to implement AB 327. In the short term, there is an opportunity to comment on the CPUC’s consideration of the Renewable Auction Mechanism (RAM) program. Any comments are due January 30th. The fifth, and presently last-scheduled, RAM auction is to occur no later than June 2014. Expect a Proposed Decision from the CPUC on the fate of the RAM in 2Q 2014.

SDG&E Issues Renewables RFO

On December 16, 2013, San Diego Gas & Electric Company (SDG&E) issued its 2013 Request for Offers ("RFO") seeking Eligible Renewable Resources. This solicitation will facilitate SDG&E’s compliance with California’s Renewables Portfolio Standard (“RPS”).

The solicitation seeks Eligible Renewable Resources from all types of renewable technologies providing both Renewable Energy Credits (“RECs”) and Energy (“Bundled Products”), and REC-only products. SDG&E is soliciting Category 1 and 2 products for a term of 15 years or less and with contractual deliveries beginning in 2020. The Commercial Operation Dates of these facilities may be as early as 2016 or as late as 2021. SDG&E is also soliciting Category 3 products generated in 2018 at the earliest, with a preference for those generated in 2020 and 2021.

SDG&E encourages respondents to carefully review submission documents and provide sufficient details in all required bid forms. One pre-bid conference will be held via webinar on January 15, 2014 from 9:30am-12pm PST. Webinar information will be posted on the RFO website once it is finalized. Any party interested in attending the webinar should register on the PowerAdvocate® site and must send the company name, attendees’ names, titles and contact information to renewablerfo@semprautilities.com. Please limit your participation to two representatives per organization.

Offers in response to the RFO are due January 29, 2014 via the PowerAdvocate® online platform. In order to submit a bid, applicants must register at www.poweradvocate.com. Please monitor the RFO website and PowerAdvocate® online platform for subsequent updates, notices and announcements.

Important RFO Dates

• Bidder’s Conference: January 15th
• RFO Closing Date: January 29th (bids are due by 12 NOON PST on January 29th)
• Shortlisted Respondents Notified: March 10th


For additional information and to download the required documents visit: http://www.sdge.com/renewable-portfolio-standard-rfo-december-2013

Questions/comments can be submitted to: renewablerfo@semprautilities.com
 

1.3 GW California Energy Storage Procurement Mandate Approved

The California Public Utilities Commission has unanimously approved a 1,325 MW energy storage procurement target for the state’s largest utilities in Decision 13-10-040. PG&E, SDG&E, and SCE must collectively procure 1,325 MW of energy storage resources by 2020, for installation no later than 2024. The first of at least four competitive solicitations for energy storage projects will take place on December 1, 2014. While the press has hailed the 1.3 GW procurement target as the first of its kind in the nation, the Commission actually first authorized energy storage procurement in California last February, ordering SCE to procure at least 50 MW of energy storage in Decision 13-02-015. The amount of capacity up for grabs in the biennial RFOs is set by Decision 13-10-040, but storage projects already in the pipeline and contracts for storage approved by the Commission in other proceedings will likely eat into the capacity available. There is also a potential off-ramp, if proposed projects are not reasonable in cost or the utilities do not receive enough bids for operationally viable projects, each can defer up to 80% of its procurement target. As the utilities’ cost and fit evaluation methodologies will be developed over the coming year, what would constitute unreasonable cost has yet to be determined.

For more details about the energy storage procurement framework approved by the Commission, see our previous client alerts, here and here.

California Air Resources Board Issues Draft Update to AB 32 Scoping Plan

This week the California Air Resources Board (ARB) released a draft of its AB 32 Climate Change Scoping Plan Update. The original Scoping Plan was adopted in 2008 and must be updated every five years. The Scoping Plan serves as a blueprint for achieving AB 32’s goal of reducing greenhouse gas (GHG) emissions to 1990 levels by 2020.

The draft Update summarizes programs implemented over the last five years under AB 32 and outlines actions necessary to continue California’s progress toward the 2020 emissions reduction goal. The draft Update shows that California is on track to meet the 2020 emissions reduction goal and inventories the progress made across different economic sectors and programs like cap and trade. With the Update, ARB continues its strategy of achieving AB 32 goals through a mix of emissions reduction measures, including regulatory programs, incentives, and market-based approaches.

Continue Reading...

California AB 327 Passes California Legislature; Heads to the Governor for Signature

Following several months of debate among ratepayer advocates, utilities and solar industry groups, California's Assembly Bill 327 ("AB 327") passed the California Assembly this week and now awaits Governor Brown’s signature.

This bill would effect policy reform in three major areas:

  1. The tiered rate structure for residential customers, generally, and the fixed charges assessed to customers of the California Alternate Rates for Energy ("CARE") program, in particular;
  2. Time-of-use pricing for residential customers; and
  3. The net metering programs for the three largest investor-owned utilities: Pacific Gas & Electric ("PG&E"), Southern California Edison ("SCE"), and San Diego Gas & Electric ("SDG&E").

Today we issued an alert that focuses on those provisions of AB 327 that would impact the net metering programs for PG&E, SCE and SDG&E.

Click here to read the alert.

Solar Panels Proposed as Hazardous Waste under DTSC

My colleagues Wayne Rosenbaum and Ryan Waterman authored, "DTSC Rulemaking Proposes to Classify All Discarded Solar Panels As Hazardous Waste" today on our California Environmental Law blog

On June 27, California’s Department of Toxic Substance Control (“DTSC”) announced a 15 day comment period on new regulations concerning the disposal of photovoltaic (PV) modules—broadly defined as “any photovoltaic device that converts photons from the sun into electricity for general use . . . .”

The proposed rulemaking would treat discarded PV modules as Universal Waste, placing them in the same category as electronic devices, batteries, and aerosol cans. As such, PV modules would be subject to special handling and treatment rules, and would be barred from disposal in sanitary landfills. This could have significant impacts on decommissioning costs for PV arrays as well as increasing the costs of routine maintenance for operating systems.

While DTSC considered four options in developing the proposed rule, it considered and rejected the option of testing the modules for hazardous characteristics in favor of its preferred approach of declaring all non-functioning modules to be hazardous. DTSC’s rationale for this approach is based on the assumption that all damaged PV modules contain toxic heavy metals that have the potential to leach into the environment in toxic amounts. Accordingly, DTSC assumes that by defining all damaged modules to be hazardous, the rule would avoid ambiguity for end users and create a robust recycling industry. DTSC did not appear to consider the impacts the rule could have on attempts by PV manufacturers to reduce the use of metals in their products, however, and may unintentionally stifle innovation of green technologies.

Comments on the new rule will be accepted until 5 PM on Thursday, July 11, 2013. Details regarding DTSC’s rulemaking are available at: Proposed Regulations: Proposed Standards for the Management of Hazardous Waste Solar Modules

 

CPUC Approves Standard Contract for New California Feed-In Tariff

The California Public Utilities Commission has adopted Decision 13-05-034, approving PG&E, SCE, and SDG&E’s joint standard contract for California’s expanded feed-in tariff (FiT) program. D.13-05-034 also revises several provisions of the FiT tariff and addresses two petitions to modify D.12-05-035, the Commission’s previous decision implementing the expanded FiT. The most recent legislation affecting the FiT, SB 1122 (2012), directing the utilities to procure 250 MW from bioenergy projects, is not addressed in D.13-05-034, but will be implemented in a later decision.

Barring any delays in finalizing the contract and tariff revisions ordered in D.13-05-034, the utilities will begin accepting Program Participation Requests for the new FiT on October 1, 2013 and the first bi-monthly FiT program period will commence November 1, 2013.

For details on changes to the FiT approved in D.13-05-034, and requests for modification rejected by the Commission, read on.

Continue Reading...

California Public Utilities Commission Sets Fourth and Fifth Solicitations for the Renewable Auction Mechanism Program

On May 9, 2013, the California Public Utilities Commission adopted Resolution E-4582, scheduling the fourth Renewable Auction Mechanism (RAM) auction to close on June 28, 2013 and setting a fifth RAM auction for no later than June 27, 2014. The RAM program allows renewable energy developers to bid their 3 MW to 20 MW projects to California’s three largest utilities – PG&E, SCE, and SDG&E – for a standard contract. The final Resolution did not differ substantively from the Commission’s draft Resolution, issued in early April 2013 and detailed in a previous blog post.  Advice letters filed today with the CPUC provide the utilities' procurement targets for the fourth RAM auction.  SCE will solicit projects totaling 181 MW, PG&E is seeking a total of 82 MW, and SDG&E is looking to procure 47 MW in total.  The advice letters also breakdown the utilities' total procurement goals into the capacity sought in each of the three RAM product categories - baseload, peaking as-available, and non-peaking as-available.

Various parties commented on draft Resolution E-4582, attempting to influence the Commission's direction with the RAM program.  Commenting on the draft Resolution, the Division of Ratepayer Advocates requested that the fourth and fifth auctions be delayed so that RAM projects from these auctions would come online during the utilities’ third RPS compliance period (2017-2020). In their comments, Recurrent Energy, the Solar Energy Industries Association, and the Large Scale Solar Association proposed that the Commission hold the fifth RAM auction within six months of the fourth auction, rather than up to a year after the fourth auction, and hold three subsequent auctions on an annual basis thereafter. They did not propose an increase in the total capacity of the RAM program; the three additional auctions would solicit capacity to replace any previously executed contracts that fail or are terminated. The Commission did not amend the draft Resolution to incorporate these recommendations.

California Links to Québec's Cap and Trade System

On April 19, 2013, the California Air Resources Board (CARB) voted to link the California cap and trade program to Québec’s cap and trade system. CARB approved changes to the California cap and trade regulation on Friday to allow for the linkage, which is effective January 1, 2014. In practical terms, the linkage opens a new market for greenhouse gas allowances and offsets for California’s regulated entities and offset generators. As Québec’s cap and trade participants enter the California market, regulated entities in California could face tighter competition in bidding for allowances at CARB’s quarterly auctions. 

CARB is also planning for additional amendments to the California cap and trade regulation this year. Many of the potential changes were teed up for consideration in CARB Resolutions 12-33, 12-51, and 11-32. Topics up for potential amendment include:

  • Refining the definition of resource shuffling and clarifying how CARB will deal with the problem. CARB will base proposed amendments to resource shuffling provisions on the recommended actions presented by staff in October 2012. 
  • Providing transition assistance to electrical generating facilities with legacy power purchase agreements that do not provide for recovery of the cost of compliance with the cap and trade program. 
  • Exemption for steam and waste heat emissions from combined heat and power. 
  • Exemption for emissions from waste-to-energy facilities during the first compliance period (2013-2014).
Continue Reading...

Newly Published CEQA Decision Sets Precedent Regarding EIR Project Alternatives

A legal update from my colleagues Barbara Brenner and Kristen Castaños:

We are pleased to report that the California Third District Court of Appeal recently granted our request to publish its decision in a California Environmental Quality Act (CEQA) case in which we were lead counsel. In a challenge to the certification of an environmental impact report (EIR), plaintiffs had argued that the EIR failed to include an adequate range of alternatives to the project. The Court rejected this argument.

The case is significant for two reasons. First, it provides precedent for a lead agency and project proponent to reject alternatives that are not feasible, thus avoiding the time and cost of analyzing an infeasible alternative for fear of a CEQA suit. Second, the Court upheld the rule of reason in its finding that the analysis of the project and the No Project alternative amounted to a reasonable range of alternatives. CEQA practitioners often advise clients to identify at least one alternative that is potentially feasible. Based on this determination, a record clearly showing there is no feasible project alternative can be upheld.

Read on to learn more about the procedural background, our involvement and the significance of the ruling.

SB 594 Signed into Law: Intended to Expand Virtual Net Metering in California

California Governor Jerry Brown recently signed a new law that could significantly expand virtual net energy metering in California. Since 1996, California utility customers owning renewable energy systems have been able to offset their electricity bills with credits earned by feeding power generated by their systems back to the utility. SB 594 amends California’s net metering law to allow customers to aggregate energy consumed at multiple meters located on their property (or on their contiguous property) and net that use against the power produced by the customer’s renewable facility on the same site. 

Meters on contiguous properties must be solely owned, leased, or rented by the eligible customer-generator to be included. Parcels divided by a street, highway, or public thoroughfare are considered contiguous provided that they are otherwise contiguous and under the same ownership. The customer-generator will be able to use the sum of the load of the aggregated meters for purposes of establishing the maximum size renewable generation system to be used for net metering purposes. However, the existing maximum size limit (1 MW) for net-metered generation facilities will apply to customer-generators aggregating multiple meters. Overall, expanded virtual net metering would provide a way for many customers with multiple meters to use on-site generation more efficiently and economically.    

Implementation of SB 594 is contingent upon the California Public Utilities Commission (CPUC) making a determination that the expanded virtual net metering program established by the bill will not result in costs being shifted to non-participating ratepayers. The CPUC is required to make this determination by September 30, 2013. 

Continue Reading...

PG&E Announces Energy Storage RFI

California's Pacific Gas and Electric Company (“PG&E”) announced today that it plans to issue an Energy Storage Request for Information (“RFI”) to obtain information on utility-scale, dispatchable, and operationally flexible storage resources through a solicitation of interest from technology providers, owners, and developers of energy storage resources.  PG&E said that it plans to issue the RFI and to ask for responses from RFI participants this year.     

PG&E explained that the RFI will help it to learn about different storage technologies and their costs, to understand which storage technologies could bid into a future RFO, and to identify and value the various attributes of those technologies. The company plans to open up its Energy Storage RFI website later this week--the new website will list the types of questions that PG&E plans to ask in the RFI.  PG&E invites feedback on its proposed questions in the form of comments or questions to EnergyStorage@pge.com.

Persons who want to to subscribe to PG&E's general RFO distribution list should go to www.pge.com/rfo to fill out theregistration form and submit the Excel form as an attachment to the Renewable RFO mailbox.  Registrants will receive notices about this energy storage RFI and other PG&E long-term procurement solicitations. 

Governor Brown Signs Three Biogas Bills Into Law

Here's a California law update from my partner Wayne Rosenbaum in San Diego:

The California legislature continues to emphasize the importance of renewable energy for the State’s environment and economy. Of the renewable energy bills passed by the legislature and signed by the Governor this year, three of them focused on biogas. Some of the aspects of these bills actively encourage the increased use of biogas for electricity generation by calling on the California Public Utilities Commission (“CPUC”) to look at access to transmission facilities and setting minimum procurement quotas for public utilities. These new laws will also regulate the quality and sources of the biogas that can be used. Here’s a brief summary of some important provisions in each:

SB 1122 requires the CPUC to direct the electrical corporations (PG&E, SDG&E, and SCE) to collectively procure at least 250 megawatts of cumulative rated generating capacity from developers of bioenergy projects that commence operation on or after June 1, 2013.

AB 1900, chaptered as Health and Safety Code 25420 et seq., seeks to do three things primarily:

  1. Regulate chemicals of concern. AB 1900 requires state agencies to compile a list of, and regulate, compounds and elements of concern that could pose resins? to human health that are found at significantly higher concentrations in biogas than in natural gas. The bill also prohibits the sale or transmission of biogas generated at hazardous waste landfills.

     

  2. Identify barriers to procurement. AB 1900 requires the CPUC to hold public hearings to identify the impediments to procurement of biogas in California, including interconnections. It then requires the CPUC to adopt policies and programs to promote the in-state production and distribution of biogas.

     

  3. Adopt pipeline access rules. AB 1900 requires the CPUC to adopt pipeline access rules that ensure non-discriminatory access to the gas pipeline system for biogas generators.

Among other things, AB 2196 amends the definition of a renewable electrical generation facility under the California Energy Commission’s Renewable Energy Resources Program . The new definition provides that if the RPS program eligibility of a facility is based on the use of landfill gas, digester gas, or another renewable fuel delivered to the facility through a common carrier pipeline, the transaction for the procurement of that fuel, including the source of the fuel and delivery method must meet certain conditions including green biomethane claims and greenhouse gas reduction claims.

TerraPass Issues California Renewable Energy RFI

TerraPass Inc., recently issued a Request for Information (RFI) on behalf of a client that is interested in ownership, investment and/or long-term bundled renewable energy offtake opportunities within PG&E territory.  The RFI seeks information from firms with renewable energy projects that are currently under development or construction in California and have projected online dates in 2014 or 2015. TerraPass' client will consider a project or portfolio of projects with expected generating capacity of up to 230 million kilowatt-hours per year.  

TerraPass' contact for this RFI is Erin Craig, who can be reached at 415-644-578.  We understand that the deadline for the RFI response is October 26.

City of Palo Alto Announces Renewables RFP

The City of Palo Alto, California, is seeking a minimum of 20 gigawatt-hours (GWh) annually, not to exceed 80 GWh/year, from eligible renewable resources. The City will not, however, consider proposals for the sale of Renewable Energy Certificates (RECs) alone . The City intends to negotiate and execute one or more power purchase agreements with one or more selected bidders, for terms of five (5) to thirty (30) years. The energy and RECs procured will be used to meet Pal Alto's City Council-imposed renewable energy supply target of 33% by 2015. 

The City will hold a pre-proposal conference at 10:00 am on Septemer 6, 2012.   The deadline for bid submission is 3:00 pm Wednesday, September 19, 2012.   Details of the RFP can be found here   The City's Contract Administrator is Carolynn Bissett, 650-329-2460.

California Issues 2012 Bioenergy Action Plan

The California Bioenergy Interagency Working Group has released its 2012 Bioenergy Action Plan, with the goal of facilitating the development of bioenergy in California on a variety of levels, including research and development support, streamlining and consolidating permitting, facilitating access to transmission, pipelines, and other distribution networks, and policies and laws to monetize the benefits of bioenergy. The Working Group is a broad coalition of state energy, environment, and resources agencies, including the California Public Utilities Commission, Energy Commission, Air Resources Board, Natural Resources Agency, Cal Fire, Cal Recycle, and the Department of Food and Agriculture, as well as the California Biomass Collaborative and the Central Valley Regional Water Quality Control Board. The 2012 Plan builds on the Working Group’s 2006 and 2011 Bioenergy Action Plans, providing a more detailed set of actions for the constituent agencies to undertake and incorporating more of Governor Brown’s policies for energy, waste reduction, and job creation.  Bioenergy has met some obstacles in California in recent times, including challenges by major and local environmental groups to biomass-fueled electrical generation contesting claims of greenhouse gas neutrality and the Energy Commission’s suspension, in most cases, of pipeline biomethane as an eligible renewable fuel for gas-fired facilities to help meet the state’s 33% renewable portfolio standard. A concerted focus by the state agencies on specific Action Plan items will undoubtedly help move bioenergy forward in California. Bioenergy advocates should also keep an eye on several bioenergy and biomethane bills still active during this last week of the California 2011-2012 Legislative Session, including A.B. 1900, A.B. 2196, and S.B. 1122.

SDG&E to Host RAM Forum

On June 22, 2012, SDG&E will host a forum on the Renewable Auction Mechanism.  The forum will be held at the SDG&E Energy Innovation Center located at 4760 Clairemont Mesa Blvd, San Diego, CA 92117.   The forum begins at 10 AM and concludes at 12 PM.  The forum will also be available via webinar.  In person or webinar reservations can be made by sending an email by June 19, 2012 to ramsolicitation@semprautilities.com.

The forum will cover the following topics:
 

  1. Overview of the results of the November 2011 RAM (including feedback from the Independent Evaluator)
  2. Overview of the important changes between the November 2011 RAM and the May 2012 RAM
  3. Request for feedback from RAM participants and stakeholders on various topics, including: eligibility requirement, bid evaluation methodology (including Resource Adequacy value, and SDG&E process (website, email communication, Q&A, etc.)

Stoel attorney Brian Nese will be attending the forum.

 

 

 

SCE and SDG&E Announce 2012 RAM 2 RFOs

On April 30, 2012, SCE announced the launch of its second Renewable Auction Mechanism (RAM) RFO (RAM 2). SCE's RAM program is open to all RPS eligible technologies not greater than 20 MW and interconnected within any of the service territories of SCE, Pacific Gas & Electric or San Diego Gas & Electric.  The RAM RFO will be conducted using the RFO website provided by Accion Group, the independent evaluator for the RAM 2 RFO. According to SCE, Interested parties should visit the RFO website for more information, to submit an Offer, or to ask a question.  On May 11, 2012, SCE will host a RAM Program Forum at the SCE office in Rosemead. More information can be found on the RFO website.   .

SDG&E  announced its RAM 2 RFO on May 1, and the details can be found here.  SDG&E notes that its RAM program is designed to procure a total of 155 MWs over the course of four solicitations.  The company's first RAM solicitation, held in November of 2011, resulted in the procurement of 15 MWs, leaving 140 MWs to procure over the course of the next three solicitations.  In the RAM 2 solicitation, SDG&E intends to procure 45 MWs pursuant to 10, 15 and 20-year RAM Power Purchase Agreements (PPAs) with independent power producers.  SDG&E plans to hold one pre-bid conference on May 7, 2012 from 1:00 PM to 5:00 PM in San Diego-- instructions for registering can be found on SDG&Es RAM 2 web page

PG&E announced yesterday that it planned to issue its RAM 2 RFO today.  Details can be found on PG&E's RAM 2 website. 

For a discussion of changes to the RAM process recently approved by the CPUC, see Allison Cook's recent blog on the topic. 

PG&E Announces 2012 RAM RFO

PG&E announced today that it expects to issue its Renewable Auction Mechanism (RAM) RFO on May 1, 2012. Offers under the RAM RFO will be due no later than 12:00 noon (PPT) on May 31, 2012.

PG&E will host a Bidders’ Conference at the company's headquarters on May 16, 2012, from 1:30 PM to 3:00 PM. The Bidder's Conference will also be available via Webinar. Attendees are required to register for the Bidders' Conference.

Following the Bidders’ Conference, PG&E will hold a Bidders’ Forum. The Forum will cover survey results and lessons learned from the first RAM RFO. It will also address the valuation of resource adequacy and proposals to address excess transmission costs.

For more information and program specifics, visit PG&E’s website.

The CPUC recently implemented some changes to the RAM program--see Allison Smith's recent blog entry for details.

CPUC Implements Changes to the California Renewable Auction Mechanism

The California Public Utilities Commission (CPUC) has adopted several changes to the state’s Renewable Auction Mechanism program (RAM), created in 2010. The RAM program operates as a reverse auction, offering a standard contract with the state’s three largest investor-owned utilities for energy from renewable distributed generation facilities of up to 20 megawatts (MW). The utilities will procure up to 1,000 MW of renewable energy under the program over two years. The first RAM auction took place in November 2011 and the second auction is schedule for next month. Resolution E-4489, adopted last Thursday, modifies the CPUC decision creating the RAM program, Decision 10-12-048, and Resolution E-4417, which served to implement details of the program. Resolution E-4489 approves changes to align the RAM with recent updates to Southern California Edison’s Solar Photovoltaic Program and incorporate a change requested by Pacific Gas & Electric Company.

 

Continue Reading...

First California Cap-and-Trade Auction Delayed, Lawsuit Filed to Challenge Offset Protocols

From Allison C. Smith and Lee N. Smith:

Last week was busy for the California Cap-and-Trade Program, adopted by the California Air Resources Board (CARB) last December under A.B. 32. First, last Tuesday, CARB Chairman Mary Nichols announced at a Senate hearing that the first scheduled Cap-and-Trade allowance auction, scheduled for August 2012, will be a “practice” auction rather than a “real” auction for the purchase of actual allowances. Reportedly, the delay is to allow industry to gain an understanding of how actual, future auctions will work. The first “real” auction is still scheduled for November 1, 2012.

On Wednesday, March 28, two environmental groups, the Citizens Climate Lobby and Our Children's Earth Foundation filed suit in San Francisco Superior Court challenging the use of greenhouse gas emission offsets by entities regulated under Cap-and-Trade to meet their Cap-and-Trade compliance obligations. Although the suit will not necessarily delay implementation of Cap-and-Trade and the offset program, if the lawsuit ultimately invalidates the offset protocols and eliminates the use of offsets to meet Cap-and-Trade obligations, the cost of compliance for industry could be substantially increased. Plaintiffs are alleging that the offset program, with its four adopted offset protocols, are reductions that would have occurred in the normal course of business, and are therefore not "additional” greenhouse gas reductions and threaten the overarching integrity of the Cap-and-Trade Program. The plaintiffs request a repeal of the four offset protocols approved in December 2011 and a prohibition on using offsets in place of greenhouse gas allowances to meet Cap-and-Trade obligations.

PG&E Announces 2012 PV PPA RFO

Pacific Gas & Electric Company (PG&E) announced yesterday that it had issued its 2012 Photovoltaic Program Power Purchase Agreement Request for Offers (“PV PPA RFO”).  PG&E seeks to procure PPAs for 50 MW of new photovoltaic resources to be located in PG&E’s service territory.  

Copies of the solicitation protocol and related information and materials are now available on PG&E’s website .  In its announcement, PG&E advises prospective bidders to "use the current versions of the documents when submitting an offer for this RFO." Offers are due by May 3.

PG&E will host a Participants’ Webinar on April 11 from 10:00 AM to 12:00 PM Pacific time.  To register for the Webinar, complete the Webinar Registration Form and return it to PVProgram@pge.com by April 6, 5:00 PM PPT. 

For information or questions about PG&E’s 2012 PV PPA RFO, please email PVProgram@pge.com.

 

Upcoming Webinar on Order No. 755 (Frequency Regulation) and Energy Storage

 

In October 2011, the Federal Energy Regulatory Commission (FERC) issued Order No. 755, which requires regional transmission organizations (RTOs) and independent system operators (ISOs) to pay for frequency regulation services based on the actual amount of service provided in response to actual or expected frequency deviations or interchange power imbalances.  The order directs RTOs and ISOs to implement a two-part payment for frequency regulation services consisting of (1) a capacity payment that includes the marginal unit's opportunity costs, and (2) a performance  payment that reflects the quantity of frequency regulation service that a resource provides when it is accurately following the dispatch signal. In February 2012, FERC issued Order 755-A, denying a motion for rehearing filed by Southern California Edison. 

On Tuesday April 10, 2012, 11 am to 12:30 pm Eastern time (8 am to 9:30 am Pacific), I'll be moderating a Webinar produced by that Infocast to discuss the implications and effect of Order No. 755.  We'll review the Order itself, the process that is underway in the RTOs and ISOs to implement the Order, and the Order's implications for energy storage, demand response and other aspects of the frequency regulation market. 

Infocast has assembled an excellent panel for this Webinar.    Jacqueline DeRosa, Director of Regulatory Affairs, California, Customized Energy Solutions and Rahul Walawalkar, PhD, CEM, CDSM, Vice President,  Emerging Technologies Markets, Customized Energy Solutions,  will jointly provide a cross-market overview of the current approaches and proposed responses to Order No. 755 in key ISOs and RTOs (i.e., PJM, NYISO and CAISO) .   Eric Hsieh, Regulatory Affairs Manager, A123 Systems, Inc., (which participated actively in the Order No. 755 docket) will offer a technology provider's perspective on the order and the ongoing process.   Praveen Kathpal, Director of Marketing and Regulatory Affairs, The AES Corporation, will provide the perspective of a technology-neutral independent energy storage developer.

You can register for the Order No. 755 conference here.  Use the Stoel Rives discount code (128505”) to reduce the tuition to $150.

In the meantime, for those who are following energy storage, I'm "tweeting" regularly on that topic at @BillHolmesStoel (#energystorage)

PG&E Announces Plans to Issue 2012 Solar PV RFO

Pacific Gas & Electric Company (PG&E) announced today that it expects to issue its 2012 Solar Photovoltaic PPA RFO (“PV PPA RFO”) in late March or April .  PG&E's goal in this second round of the RFO is to procure 50 MW of new PV generation. 

Two of the eligibility requirements of the PV PPA RFO are (1) that participants provide proof that an interconnection application has been filed, and (2) that participants must pursue Resource Adequacy for their projects.  If you need to file an application, note that the current Cluster 5 window closes March 31, 2012.  For program information, please visit PG&E’s 2012 PV PPA RFO website.  Among other things, PG&E notes on the RFO website that it has developed an interactive, Google-based map of its service territory as a tool to help renewable energy developers identify potential project sites (although the map is not a guarantee that generators can interconnect at any particular time and place).

PG&E plans to conduct a Participants’ Webinar to discuss the 2012 PV PPA RFO shortly after its issuance. Registration for this event will be posted on the 2012 PV PPA RFO website at a later date.

CAISO Initiates Broad Cost Allocation Stakeholder Process

Yesterday, the California Independent System Operator Corp. (“CAISO”) issued a straw proposal entitled “Cost Allocation Guiding Principles.” The straw proposal kicks off a new stakeholder process designed to establish a set of guiding principles for cost allocation that can be applied throughout the CAISO’s various markets and services. 

As expected, the stakeholder community has been divided over how to address cost allocation. Recently, the CAISO has reviewed cost allocation issues in several initiatives impacting renewable energy generators in the CAISO balancing authority area, including the Renewable Integration: Market and Product Review Phase 1, the Renewable Integration: Market Vision and Roadmap, and the Flexible Ramping Product. The stakeholder comments in these initiatives and others provided the basis for the CAISO’s current straw proposal. The CAISO plans to apply this new set of guiding principles both new programs (starting with the ongoing Flexible Ramping Product initiative) and, later in 2012, existing programs (CAISO expects to make a broad-spectrum review of existing cost allocations to ensure consistency with the new guiding principles.

Read on for a summary of the guiding principles proposed by the CAISO yesterday, which are similar to the Federal Energy Regulatory Commission’s cost causation principles in Order No. 1000:

Continue Reading...

Update: California Energy Commission Postpones Action on Proposed Decision Allowing PV Projects to Opt-In to CEC Permitting Process

In a previous blog, we reported on a proposed decision pending consideration by the California Energy Commission (CEC), which would allow solar photovoltaic project developers to opt-in to the CEC's permitting process.  The CEC has announced that its decision on this matter has been postponed to an as-yet undetermined date.

The Interconnection Landscape Changes Yet Again: FERC Conditionally Accepts the California ISO's Interconnection Queue Reform Phase 2

On January 31, 2012, the Federal Energy Regulatory Commission (FERC) conditionally accepted additional reforms to the California ISO’s Generator Interconnection Procedures (GIP) that significantly change the rules that apply to developers seeking to interconnect power generation facilities in the California ISO’s balancing authority area.

The decision continues the California ISO’s efforts to reform the GIP that began in 2008, and focuses on 18 specific issues that arose from stakeholder efforts, interconnection agreement negotiations, the California ISO’s transmission planning process, or that were carried over from the previous round of reforms.

The reforms addressed the following issues and more:

• Deliverability Status
• Financial Security Deadlines
• Posting of Security and Reimbursement of Costs for Network Upgrades
• Reductions in Project Size

Click here to continue reading this alert.

To learn more about the reforms approved yesterday and how they may affect your generation development plans, please contact one of the attorneys listed below.

Maurcus Wood at (503) 294-9434 or mwood@stoel.com
Seth Hilton at (415) 617-8943 or sdhilton@stoel.com
Jason Johns at (503) 294-9618 or jajohns@stoel.com
Chad Marriott at (503) 294-9339 or ctmarriott@stoel.com

California Energy Commission Issues 2011 Integrated Energy Policy Report

Yesterday, the California Energy Commission (CEC) issued a notice that, as part of the CEC’s February 8, 2012 Business Meeting, the Commission will consider adoption of the Lead Commissioner’s Final 2011 Integrated Energy Policy Report (IEPR). 

The CEC’s notice included the following information:

Background
Senate Bill 1389 requires the CEC to adopt an integrated energy policy report every two years. The objective of the IEPR is to evaluate market trends and develop energy policies that will "conserve resources, protect the environment, ensure energy reliability, enhance the state's economy, and protect public health and safety." The Final 2011 IEPR has been prepared in response to this direction and is available on the CEC’s website.

To prepare the report, the Energy Commission conducted 30 public workshops on a range of issues facing California's electricity, natural gas, and transportation fuel sectors. On December 5, 2011, the Energy Commission released the Draft 2011 IEPR to solicit public comments. The Final 2011 IEPR considers all written comments on the draft report.

Written Comments
The Energy Commission will accept comments on the Final 2011 IEPR and requests parties to submit comments in writing by February 1, 2012, so that comments can be considered before  the February 8, 2012, Business Meeting. Comments will also be accepted at the Business Meeting.   

 

CPUC Adopts Decision Implementing RPS Portfolio Content Categories

A legal update from our colleagues Seth Hilton and Allison Smith:

On December 15, 2011, the California Public Utilities Commission adopted Decision 11-12-052, implementing Portfolio Content Categories for the 33% Renewables Portfolio Standard (RPS) Program in California. The Decision implements portions of Senate Bill (S.B.) x1-2, which created the 33% RPS Program. S.B. x1-2 established three categories of RPS-eligible electricity, applicable to RPS contracts executed after June 1, 2010:

  • Category One includes electricity from RPS-eligible resources that have their first point of interconnection with a California balancing authority, RPS-eligible resources with a dynamic transfer arrangement with a California balancing authority, and RPS-eligible resources scheduling their electricity directly into a California balancing authority without substituting electricity from another source.

     
  • Category Two includes firmed and shaped RPS-eligible electricity.

     
  • Category Three includes transactions that do not meet the criteria of Category One or Two, including unbundled renewable energy credit (REC) transactions.
     

Click here to read the entire update on the Portfolio Content Categories and this decision.
 

Proposed Decision Would Allow Solar PV Projects to Opt-In to California Energy Commission Permitting Process

Next Wednesday, the California Energy Commission will consider adoption of a Proposed Decision that would “expand” the Commission’s jurisdiction over the permitting of energy facilities in California.  The Proposed Decision arises from a motion by Solar Trust of America asking the Energy Commission to find that photovoltaic electrical generating facilities may voluntarily submit to the Commission’s exclusive permitting jurisdiction.  For thirty-five years, the Commission has acted as the “one-stop shop” for the permitting of thermal energy facilities greater than 50 megawatts capacity in California, including gas-fired, geothermal and solar-thermal power plants.  However non-thermal facilities (e.g. wind and solar PV) and projects under 50 megawatts were excluded from CEC jurisdiction. The Proposed Decision provides an interpretation of an existing statutory “opt in” provision, which would allow solar photovoltaic projects (and logically, by extension, other non-thermal projects of less than 50 megawatt) to opt in to the Energy Commission’s permitting process and avoid local permitting jurisdiction.  The Commission’s jurisdiction over a proposed energy facility generally dispenses with the need to obtain most other local, regional, and state permits, though it does not eliminate the obligation to comply with applicable local, regional, and state laws and regulations.  Solar Trust’s motion to open up the Commission’s state-level permitting process for the first time to strictly non-thermal projects has been of interest to a variety of sectors and numerous parties participated in the briefing leading to the Proposed Decision.  The Proposed Commission Decision Affirming that Warren-Alquist Act Section 25502.3 Applies to Photovoltaic Electrical Generating Facilities is available for public comment preceding the December 14 hearing.

PIRP Changes Off the Agenda for December CAISO Board Meeting

On November 30, the California Independent System Operator Corporation ("CAISO") announced that it would not push for changes to the Participating Intermittent Resources Program ("PIRP") at the December 15-16 Board of Governors meeting.  The announcement came as welcome news to intermittent renewables advocates as the CAISO and stakholders have spent the past year negotiating issues set out in one Straw Proposal, five Revised Straw Proposals, and a Draft Final Proposal on changes to PIRP eligibility requirements and cost allocation, bid cost recovery ("BCR"), and a lowering of the energy bid floor.  Instead of making changes to PIRP now, the CAISO will revisit the discussions in the second quarter of 2012- when it is scheduled to begin a stakeholder process to review decremental bidding options for participating intermittent resources in the Renewable Integration- Market and Product Review, Phase 2 initiative.  Changes to the BCR netting methodology and the incremental lowering of the energy bid floor are still scheduled for review by the CAISO Board this month.

California Energy Commission Releases Comprehensive Energy Storage Analysis

This week the California Energy Commission's PIER program released a comprehensive report titled "2020 Strategic Analysis of Energy Storage in California."  The report discusses the state of technology, policy, barriers to deployment and suggested reforms.  A staff workshop related to the report will be held on November 15, 2011 at 10 am at the CEC located at 1516 Ninth Street, Sacramento, California 95814 (webex also available).

CPUC Seeks Comments in AB 2514 Electric Storage System (ESS) Docket R.10-12-007

California’s AB 2514 directs the California Public Utility Commission (CPUC) to determine appropriate targets, if any, for load-serving entities to procure viable and cost-effective energy storage systems. If the CPUC decides that targets are appropriate, it is supposed to set dates for achieving those targets.

As a follow up to an AB 2514 workshop held on June 28, 2011, Administrative Law Judge Amy C. Yip-Kikugawa issued a ruling asking for comments on the presentations made at the workshop by the California Energy Commission, the California Independent System Operator, Southern California Edison, the California Energy Storage Alliance, AES Energy Storage, Beacon Power Corporation and KS Engineers, all of which were attached to the ruling. The ruling asks the parties to comment on whether they agree or disagree with the presentations.

In addition, the ruling seeks comments from parties on the following questions:

  1. Which barrier(s), either identified by the presenters or the CPUC, do you believe present the greatest impediment to more widespread usage of energy storage and development of ESS in California?
  2.  

  3. Are there other barriers that were not identified during theworkshop? Please explain how these other barriers impede theusage or development of energy storage and whether they needto be resolved at the Commission or other forums.
  4.  

  5. To whatextent can the Commission assist in removing these barriers?In your opinion, are there certain barriers that need to beresolved first, and therefore have higher priority?

The deadline for comments is August 29, 2011, and reply comments will be due September 16, 2011. Your can find a copy of the ruling and attachments here.

PG&E Unveils its Smart Grid Deployment Plan

Pacific Gas and Electric Company (“PG&E”) released its Smart Grid Deployment Plan which represents a disciplined and integrated approach to using new monitoring and control technology to provide safe, reliable, responsive and environmentally sustainable service to its customers in Northern and Central California. 

The 290-page Plan includes future projects that will take advantage of a wide range of advanced communications, computing, sensing and control technologies. PG&E hopes to improve service and reliability, lower customer costs and incorporate more renewable energy onto the grid, all in accordance with the California Public Utility Commission’s decisions and policies implementing California's Smart Grid bill.

The Plan adopts several high-priority objectives to guide PG&E’s Smart Grid investments and initiatives over the next 10 years. Those objectives include the following:

  1. To engage customers, PG&E will:
    1. Use the existing SmartMeterTM technology to allow customers not only to view but to modify their energy usage;
    2. Improve the use of demand response resources in energy and ancillary service markets; and
    3. Invest in infrastructure to support the electric vehicle market.
  1. To support Smart Energy Markets, PG&E will:
    1. Improve its forecasting of market conditions; and
    2. Integrate renewable resources (primarily wind and solar) on a large scale into the grid.
  1. To support Smart Utility practices, PG&E will:
    1. Improve its response to outages;
    2. Enhance its grid monitoring and control;
    3. Maintain system voltage levels; and
    4. Improve substation monitoring.
  1. PG&E will also continually improve and upgrade the infrastructure supporting the smart grid. 

The Plan can be found at:  

http://www.pge.com/includes/docs/pdfs/shared/edusafety/electric/SmartGridDeploymentPlan2011_06-30-11.pdf

 

Compliance with California Cap-And-Trade May Be Deferred until 2013

Yesterday, the Executive Director of the California Air Resources Board (CARB), Mary Nichols, announced that CARB is proposing to delay full implementation of California’s cap-and-trade program for a year. In testimony before the California Senate Select Committee on the Environment, the Economy, and Climate Change, Nichols stated that CARB is proposing to “initiate” the cap-and-trade program in 2012, but delay requirements for compliance until January 1, 2013. CARB adopted cap-and-trade in December 2010 and the program was set to go into effect on January 1, 2012, the statutory deadline for all greenhouse gas emissions reduction measures under A.B. 32 to become operative. CARB’s announcement comes despite an order from the California Court of Appeals last Friday that CARB can continue with implementation of cap-and-trade pending appeals related to the program in Association of Irritated Residents v. CARB. Earlier this month, CARB issued a revised analysis of alternatives to the cap-and-trade program, as ordered by the lower court in Association of Irritated Residents v. CARB. That supplemental environmental document is currently open for public comment until July 28 and CARB will consider adoption of the supplement on August 24, 2011. Nichols stated in her testimony that CARB will hold a public workshop in the next few weeks on its proposal to delay cap-and-trade compliance and other elements needed to finalize the cap-and-trade regulation. Look for CARB to issue an updated draft regulation in advance of the public workshop.

Stoel Rives Partners to Present Wind Project Development Case Study at Chinese Wind Conference in Beijing

Stoel Rives Partners Alan Merkle, Ed Einowski and Michael Mangelson will participate in the upcoming Workshop on Investment in U.S. Wind Energy by Chinese Companies, held in Beijing, China on June 30, 2011.

The opportunities for mutually beneficial cooperation between U.S. and China wind power industries have become increasingly profitable.  Now more than ever it’s important for key players on both sides to understand and evaluate where their best prospects lie, as many basic business assumptions can become lost in translation. 

This workshop, organized by the Chinese Wind Energy Association (CWEA), the U.S.-China Energy Cooperation Program (ECP) Wind Power Working Group (WPWG), and the National Energy Administration (NEA), gathers wind experts from across the U.S. and China to discuss the globalization of the Chinese wind energy industry, strategies for undertaking M&A transactions in the U.S., and a variety of case studies based on wind energy development projects.

Stoel Rives attorneys prepared their own case study, which will be presented during the workshop by Alan Merkle.  Case Study: Development of a Wind Project in California, is based on a hypothetical 200 MW wind development project in Southern California. The case study covers the legal framework for a project of this scale, including real estate, permitting, transmission and interconnection, power purchase agreement, renewable energy credits, turbine supply and balance of plant agreements, and financing. It is available as a PDF for download in English and Chinese.

Ed Einowski will provide workshop attendees with a presentation titled Setting the Stage for Investing In U.S. Renewable Energy Projects: The Business and Legal Environments. The PowerPoint presentation is available as a PDF for download in English and Chinese.

The Stoel Rives Law of Wind Energy (now in its 6th edition) is also available for download in both English and Chinese editions here.

Coming Very Soon: CPUC Energy Storage Workshop

On Tuesday, June 28, 2011, the CPUC will hold an “Electric Energy Storage Workshop” as part of its R10-12-007 proceeding for AB 2514, which defines the process by which the CPUC will consider electric energy storage standards for California’s investor owned utilities. The workshop will be held at in the Golden Gate Room at CPUC’s headquarters from 9:30 am to 4:00 pm.

According to a draft agenda circulated by the CPUC, the theme of the workshop will be addressing barriers to entry facing Electric Energy Storage (EES). The workshops goals are to identify actions that the CPUC should consider, as well as whether and how it should participate in other forums.

The morning will feature presentations from several different perspectives, with each presentation to be followed by Q&A:

 

  • Presentation from UC Berkeley and California Energy Commission (CEC) team on “2020 Vision Project”
  •  

  • Presentation from CAISO about recent storage-related activities at the Independent System Operator, including findings from recent studies.
  •  

  • Presentation from Southern California Edison (SCE) discussing a white paper entitled Moving Energy Storage from Concept to Reality.
  •  

  • Presentation from California Energy Storage Alliance about developer’s perspectives

The afternoon will feature a facilitated presentation about a staff straw proposal concerning potential CPUC actions. The CPUC will allow parties to provide post-workshop comments on both the presentations and the staff straw proposal.

The CPUC is willing to accommodate short presentations (five minutes or less) or share prepared material pertinent to the workshop. Any party who wishes to do so may contact Michael Colvin at michael.colvin@cpuc.ca.gov. For reference (or inspiration), a series of energy storage presentations made to the CPUC as part of its 2011 IEPR process can be found here.

Stoel Rives attorneys Seth Hilton and Janet Jacobs will be attending the workshop.

Supreme Court Dismisses Common Law GHG Case Against Energy Producers

On June 20, 2011, the U.S. Supreme Court issued an opinion on American Electric Power Co., Inc., et al. v. Connecticut, et al. 

This case is significant because it dismissed a lawsuit in which several states and environmental groups sought court orders requiring large electrical utilities (alleged to be “the five largest emitters of carbon dioxide in the United States”) to reduce their greenhouse gas emissions because the emissions were alleged to be a public nuisance.  Plaintiffs alleged that the emissions violated federal common law (nuisance) or state tort law.  The plaintiffs were thereby requesting a court decree setting a cap for C02 emissions to be reduced annually.

The Supreme Court in a fairly short opinion touched upon a number of significant issues. The Court first dealt with the issue of jurisdiction and then with the issue of whether there is a federal common law cause of action of nuisance.  The Court split on the issue of whether the plaintiffs had Article III standing, i.e., whether there was sufficient specific injury to the plaintiffs such that the Article III Claims and Controversies requirement would be met, allowing the plaintiffs to avail themselves of the jurisdiction of the federal court system. Half of the Court believes that there was no standing, the other believes (assuming the prior cases are an indication) that some of the plaintiffs (the states) had sufficient standing that the case could be brought. This issue was addressed in the Massachusetts v. EPA case in which the Court held that greenhouse gases were regulated under the Clean Air Act. In that case the state of Massachusetts was found to have had sufficient standing to allow the case to be heard. 

The Court held that the federal common law nuisance which had been recognized in several interstate environmental cases was displaced by the statute even absent the setting of emission standards (EPA’s CO2 regulations are due in May 2012.)  The Court also indicated that the agency should be allowed to act first, before the judiciary, as the expert agency is better equipped to do the job then the judiciary who typically lack the economic technological resources to cope with these issues. Plaintiffs’ proposal to have federal judges determine these emission limits in the first instance could not be reconciled with the statute. 

Finally, the Court did not reach the issue of the viability of the state nuisance claims because they had been dropped by the lower courts when they held that the federal common law governed over state law.  Because there was no briefing on the state law preemption issue, the issue was left for consideration on remand. The Court did indicate that the issue of whether there was preemption of the federal common law by federal legislation, as in this case, did not require “the same sort of evidence of a clear and manifest (congressional) purpose” required for preemption of state law. (Citing City Milwaukee II 451 U.S. at 304, 317 (1981)).

This decision, while sending the case back to the lower courts, raises several unresolved issues. Will the courts continue to allow plaintiffs, particularly non-states such as the industry groups in the Massachusetts case, and the environmental groups in this case, Article III standing where there is an argument that no specific injuries have been pled? Will the courts find that state common law claims are also pre-empted by the federal Clean Air Act? Will this theory of agency primacy be applied at other levels? What happens if the EPA or Congress decides not to issue greenhouse gas regulations?   We’ll be continuing to monitor the case as it works its way back through the lower courts—stay tuned for updates.

Energy Storage Industry Expresses Optimism at Energy Storage Association Annual Meeting

This week I attended the 21st Annual Meeting of the Energy Storage Association in San Jose, California. The meeting broke its attendance record by attracting over 420 attendees, including representatives from electric energy storage (“EES”) technology companies, utilities, venture capital funds, consultancies and government agencies. Key note speakers included Dr. Imre Gyuk of the U.S. Department of Energy, Assemblywoman Nancy Skinner of the California Assembly, Fan Wong of Pacific Gas & Electric, and Vinod Khosla of Khosla Ventures. Over 50 other distinguished speakers presented lectures and materials on various topics including flow battery applications, advanced storage technologies, smart grid interface, lithium ion battery applications, economics and policy, and venture capital markets. 

The record attendance at the meeting and reports of successful pilot projects were strong indicators that the EES industry has matured over the past years. The general sense at the meeting was that the EES industry is poised to emerge from the product development stage and move into the commercialization and deployment stage. In order to successfully make that leap, the EES industry must first overcome several hurdles.

Prospective EES customers, including utility representatives, contended that, except for pumped hydro, EES applications are not yet cost competitive and that EES systems must achieve significant price reductions before they can be competitive. Various utility representatives encouraged the EES industry to continue to bring down costs with the goal of becoming cost competitive with gas peaker plants. 

Project developers and technology companies acknowledged this reality, but stressed that when comparing EES applications to gas peakers, it is imperative that the market recognize the broad range of combined value streams and utility benefits that EES applications offer. These benefits include:

  • Ancillary services and frequency regulation
  • Reactive power, voltage, and power quality
  • Renewable integration and smoothing
  • Multiple hour peak shifting
  • Demand response
  • Islanding
  • Deferred T/D upgrades
  • Minimizing spinning reserves

In addition to these benefits, various speakers emphasized the siting and permitting advantages EES enjoys over gas plants. From a land use perspective, EES applications are relatively low impact. Many EES projects can obtain required permits based on a negative declaration and thereby avoid the lengthy siting proceedings that can drag on for years for some thermal generation projects. These siting and permitting advantages that EES applications enjoy translate into reduced costs and quicker development timelines and give EES a distinct advantage over gas peakers. 

The future of EES will in part hinge on the development of supportive federal and state regulations. Accordingly, ongoing proceedings at the Federal Energy Regulatory Commission and the California Public Utilities Commission are critical to the future of EES.

Further, EES system providers will face challenges in structuring transactions to finance and build EES projects. Consultants and legal advisors, including Stoel Rives attorneys, are currently wrestling with various options to solve these challenges.

The EES industry will meet again in San Diego for Infocast’s Storage Week  on July 11-14, and several Stoel Rives attorneys will be presenting and attending.

Injunction on California Cap & Trade Rules Stayed by Appeal

At the prompting of the Petitioners, on June 6, 2011, the San Francisco Superior Court delivered an order criticizing the California Air Resources Board for continuing to work on AB 32, Greenhouse Gas regulations, despite the injunction issued in the CEQA case and ordered them to appear to discuss the issue.  However, late last week the Appeals Court hearing the appeal in the case issued a stay of that same injunction pending the appeal of that case. The question of whether the stay will he re-imposed, will be the subject the parties will need to argue in June 2011.  For additional information see our blog entitled, "Cap & Trade Injunction Stayed by Appeal of Lower Court Decision."

CEC Moves Forward on Implementation of 33% RPS

On June 3, the California Energy Commission (“CEC”) issued a Notice of Intent to Implement 33 Percent Renewables Portfolio Standard (“RPS”). The new 33% RPS was signed into law by Governor Brown on April 12, 2011. The legislation for the first time expanded the RPS to publicly-owned utilities (“POU”), and tasked the CEC with, among other things, monitoring POU compliance with, and developing regulations to enforce, the new 33% RPS.

The Notice also encourages all regulated entities, including POUs, to participate in the California Public Utilities Commission (“CPUC”) proceeding addressing the new RPS, Rulemaking 11-05-005, “so that, where appropriate, the [CEC] and CPUC may coordinate program development.” 

The Notice states that the CEC will implement the new RPS through two processes: (1) amending the RPS Eligibility Guidebook through the existing amendment process so that it conforms with the new legislation, and (2) initiating a rulemaking proceeding to address POU compliance. Although the new RPS legislation set a target date of July 1, 2011 for the CEC to adopt regulations for POU compliance, pending legislation (Senate Bill 23) may extend that deadline to July 1, 2012. 

 

On June 6, the CEC also noticed a staff workshop for June 17, 2011 to introduce the scope and a tentative schedule for the rulemaking proceeding concerning POU compliance, and to solicit comments from interested stakeholders. Written comments may also be submitted to the CEC by July 1, 2011.

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:

  1. 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?
  2. 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?
  3. How can energy storage technologies be best integrated into the utilities’ existing portfolios?
  4. 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?
  5. 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?
  6. Is it possible to develop a single unifying policy for energy storage when storage has a wide variety of uses?
  7. 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?
  8. 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:

  1. How should energy storage applications/attributes be valued?
  2. What are the costs for the various types of energy storage applications?
  3. 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?
  4. 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.

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' Bill Holmes and David Benson to Speak at Storage Week 2011

Please plan to join me and my colleagues - Bill Holmes, David Benson, John Thompson, and Morten Lund - at Storage Week 2011. Stoel Rives is proud to be a Platinum Sponsor at this premier event.

Storage Week kicks off on July 11 with four in-depth market and technical tutorials to provide you with all the background details necessary to maximize your experience at the two-day main event. Network with every key group playing a role in rewriting the rules of power markets, from policy strategists, state regulators, and grid operators, to utility planners and IPPs, vendors and more. This event lines up block-buster case studies, key project developers, investors, engineering firms and consultants covering bulk storage development, as well as distributed storage business models.

Click here for a detailed agenda, registration information, and our exclusive 15% off discount code!

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.

CEC Holds Workshop on Energy Storage for 2011 IEPR

The 2011 IEPR Committee Workshop on Energy Storage for Renewable Integration was held Thursday, April 28th at the California Energy Commission (CEC) offices in Sacramento.  The Workshop was presented in a three panel format, with each panel addressing specific topics, including (1) the need for energy storage in light of California’s renewable portfolio standard, greenhouse gas goals, smart grid and demand response, (2) the costs, benefits and revenues from energy storage applications, and (3) utility perspectives on energy storage. The full agenda, which describes the topics and the questions addressed at the Workshop, can be found here.

The CEC is not planning any further workshops on energy storage, but it will be making recommendations about the topic in its 2011 Integrated Energy Policy Report (IEPR). We understand that the CEC is seeking input on energy storage from all arenas, including developers and owners of gas-fired peaker plants.  Among other things, the CEC wants to understand the economic and environmental benefits and impacts of peakers (i.e., facilities that have the ability to ramp up in ten minutes, generate for a full hour, then be taken off line) compared to the cost and benefits of various energy storage technologies.  The CEC will use the information it gathers to determine if it makes sense economically to recommend a lower or a higher target for energy storage in its 2011 IEPR. 

 

 

The CEC’s report will be taken into account by the California Public Utility Commission (CPUC), which is conducting a separate proceeding under AB 2514 to determine appropriate energy storage targets for California’s investor-owned utilities. You can find our previous descriptions of the AB 2514 process here , here and here.  A report on last year's CPUC staff whitepaper describing energy storage technologies and their potential use in the California market can be found here

 

Parties who want to weigh in on energy storage in California must submit their comments to the CEC by 5 p.m. on May 16, 2011.   The comments must include the docket number “11-IEP-1N” and indicate “Energy Storage for Renewable Integration” in the subject line or first paragraph of the comments.  All filings in the IEPR proceeding are now accomplished electronically and can be submitted in either Microsoft Word format or as a PDF by e-mail to docket@energy.state.ca.us

 

Thanks to Kimberly Hellwig in our Sacramento office for her help in preparing this Blog!

 

California Public Utilities Commission Holds Prehearing Conference on Energy Storage Procurement Targets

As we’ve previously discussed, California’s AB 2514 requires the CPUC and municipal utilities in California to open proceedings by March 1, 2012 to determine appropriate targets, if any, for the procurement of viable and cost-effective energy storage systems by load-serving entities. Over a year before that deadline, the CPUC opened Rulemaking 10-12-007 in December of last year to both implement AB 2514 and “on [the CPUC’s] own motion to initiate policy for California utilities to consider the procurement of viable and cost effective storage systems.” In early March, the CPUC held an initial workshop on the scope of the rulemaking proceeding.

On April 21, the Commission held a prehearing conference to determine the scope and schedule for the proceeding. Stoel Rives partner Seth Hilton attended the conference. Among the issues discussed at the prehearing conference, led by Administrative Law Judge Yip-Kikugawa, was whether to conduct the proceeding in phases (e.g., first examining how storage might be applied, and then in a subsequent proceeding setting what the mandate will be for storage procurement), the issues to be covered in each phase , and whether evidentiary hearings would be necessary. 

According to ALJ Yip-Kikugawa, a scoping memo should issue in the next two to three weeks. The scoping memo will set out the issues to be considered in the proceeding and a schedule for their resolution. 

We'll be posting further information on Renewable + Law Blog when the scoping memo comes out, so stay tuned for further developments.

LexisNexis Selects Renewable + Law Blog to its Top 50 Environmental Law Blogs List

Having first reported to our readers in February that LexisNexis had nominated the Stoel Rives Renewable + Law Blog for its Top 50 Environmental Law & Climate Change Blogs for 2011 award, we are pleased to announce we made the list of winners! In publishing its Top 50 list, LexisNexis declared that our Renewable + Law bloggers’ “avowed passion for solar energy, wind energy, biofuels, ocean and hydrokinetic energy, biomass, waste-to-energy, geothermal and other clean technologies is evident in the care they take with this blog-the posts are frequent, the topics are interesting and cutting edge, and the writing is top notch.”

 

Thanks again to all our readers who make regular use of Renewable + Law Blog and those who wrote in to support us for this award. We're honored and inspired, and we plan to keep those Blogs and letters coming.

 

Governor Brown Signs Bill Increasing California's Renewable Portfolio Standard to 33%

A Legal News Alert from Seth Hilton and the Stoel Rives Renewable Energy Law Group:

California’s Governor Jerry Brown signed Senate Bill ("SB") X1-2 on Tuesday requiring California's electric utilities to procure 33% of their energy from renewable resources by 2020.  Upon signing the bill, Governor Brown stated the "bill will bring many important benefits to California, including stimulating investment in green technologies in the state, creating tens of thousands of new jobs, improving air quality, promoting energy independence and reducing greenhouse gas emissions."

Details concerning the implementation of the new legislation will have to be worked out at various California regulatory agencies, including the California Public Utilities Commission and the California Energy Commission. The legislation will likely spawn numerous regulatory proceedings as the various regulatory agencies struggle to come to grips with the new RPS mandate.

For more information about SBX1-2, please see our earlier blog post and detailed Renewable Energy Law Alert, dated March 29, 2011.

Upcoming Electric Energy Storage (EES) Workshops

California’s AB 2514 requires the CPUC and municipal utilities in California to open proceedings by March 1, 2012 to determine appropriate targets, if any, for the procurement of viable and cost-effective energy storage systems by load-serving entities. By October 1, 2013, the CPUC must (1) determine whether a procurement target for energy storage is appropriate and, if so, (2) adopt a procurement target for each load-serving entity under its jurisdiction to be achieved by December 31, 2015 and a second target to be achieved by December 31, 2020. Municipal utilities have an additional year to meet these requirements.

In December of last year, the CPUC opened Rulemaking 10-12-007 both to implement AB 2514 and “on [the CPUC’s] own motion to initiate policy for California utilities to consider the procurement of viable and cost-effective energy storage systems.” Order Instituting Rulemaking (“OIR”) at 1, R.10-12-007. 

On March 9, 2011, a workshop was held to address the scope of the rulemaking proceeding. The workshop included discussions of current and emerging energy storage technologies, the goals and applications of energy storage, existing barriers to storage implementation, and whether a unified storage policy would work or whether the policy should be written to address specific barriers to entry. The workshop also considered how the CPUC could and should work with other agencies addressing energy storage or related issues, including the California Energy Commission, the California Independent System Operator, and the Federal Energy Regulatory Commission. You can find Seth Hilton’s report about the March 9 workshop here.

The CPUC has scheduled a pre-hearing conference in the rulemaking proceeding for April 21, 2011The conference will be held before ALJ Amy C. Yip-Kikugawa, beginning at 10 am, in the Commission Courtroom, State Office Building, 505 Van Ness Avenue, San Francisco, California. Stoel Rives partner Seth Hilton will attend the conference.

In addition, as part of its 2011 Integrated Energy Policy Report (IEPR) Schedule, the California Energy Commission has scheduled a committee workshop on energy storage for renewable integration, which will begin at 9:30 on April 28 in Hearing Room A, CALIFORNIA ENERGY COMMISSION, 1516 Ninth Street, First Floor, Sacramento, California. Stoel Rives attorneys are planning to attend the workshop.

California Public Utility Commission to Reopen Rule 21 Working Group

A report from Stoel Rives attorney Jake Storms (Sacramento):

The California Public Utility Commission (“CPUC”) recently announced that it will reopen the Rule 21 Working Group. Rule 21 governs the interconnection of distributed generation to a utility’s distribution system.

Each of the three largest investor-owned utilities—Pacific Gas and Electric, Southern California Edison, and San Diego Gas and Electric—have a version of Rule 21 in their electric tariffs, which are subject to approval by the CPUC. The last Rule 21 workshop was held in 2008. The CPUC stated that, given the substantial changes in the technical and regulatory landscape in the past several years, Rule 21 is in need of reconsideration and has set forth a list of issues it believes should be addressed by the new Working Group. These include:

• The need for transparency in processing, queue information, and customer application information

• The need for review and potential reconsideration of technical screens within Rule 21 to ensure that the appropriate issues are being studied

• The need for articulation of cost-allocation methodology when network upgrades are required

• The need for review of utility tariffs for consistency with each other and with state law

• The need for additional standard interconnection agreements to accommodate the different types of distributed generation projects anticipated to come online

The first meeting of the Rule 21 Working Group will be Friday, April 29, 2011 from 10:00 a.m. to 3:00 p.m. at the Auditorium of the CPUC located at 500 Van Ness Avenue, San Francisco, CA.

Legislature Passes SBX1-2 to Increase California RPS to 33%

Legal News Alert from Stoel Rives Renewable Energy Law Group

The California Legislature has passed Senate Bill (“SB”) X1-2, which requires California’s electric utilities to increase their renewable generation to 33% by 2020. Passage of the legislation is the culmination of years of effort to increase California’s Renewable Portfolio Standard (“RPS”) from its current 20%. In 2009, the Legislature passed SB 14, which also would have increased California’s RPS to 33%, but the bill was vetoed by Governor Schwarzenegger on the ground that it imposed too many restrictions on the use of out-of-state generation to meet California’s RPS requirement. Governor Schwarzenegger then issued an executive order directing the California Air Resources Board to develop its own 33% Renewable Energy Standard under the Board’s authority pursuant to Assembly Bill 32, the Global Warming Solutions Act of 2006. Last year, the Legislature again tried to pass another 33% RPS bill, SB 722, but the session expired before the legislation could reach a final vote. Two bills were introduced in this session: SB 23 and SBX1-2. SBX1-2 was identical to SB 23, but it was introduced in special session in an attempt to speed passage of the legislation. SBX1-2 now goes to Governor Brown for signature, and he is expected to sign the legislation into law.

For more background and information on the decision and its implications, click here.

All Party Meeting Concerning California's 2011 RPS Procurement

My partner Seth Hilton attended last Friday's all-party meeting on California's 2011 RPS procurement and prepared the following update:

On February 11, 2011, California Public Utilities Commission (CPUC) Administrative Law Judge Burton Mattson issued a Proposed Decision (PD) conditionally accepting the 2011 Renewables Portfolio Standard (RPS) Procurement Plans for Southern California Edison (SCE), Pacific Gas and Electric Company (PG&E), and San Diego Gas and Electric Company (SDG&E). If adopted, the Decision would set a schedule for the utilities’ 2011 RPS solicitation. The PD was on the agenda for the CPUC’s March 24, 2011 business meeting, but was held at Commissioner Florio’s request until the April 14 meeting.

On March 25, Commissioner Florio held a well-attended all-party meeting on the PD. Among the issues raised by Commissioner Florio was where California’s investor-owned utilities stood relative to the current RPS procurement targets and the targets contained in pending legislation (SBX1-2), and whether a 2011 RPS solicitation was necessary.

 

All three investor-owned utilities—PG&E, SCE and SDG&E—stated that holding a 2011 RPS solicitation would be prudent. PG&E stated that it was on track to meet the current 20% RPS this year and through 2013. However, future compliance, especially with the higher procurement targets under SBX1-2, is dependent on several large projects that are scheduled to come online in the next few years. Any delay or failure of those projects would require PG&E to procure additional resources to get to the 2016 target under SBX1-2, and therefore holding a solicitation this year made sense. 

 

According to SCE, a 2011 solicitation would be prudent for a number of reasons, not only to assist SCE to reach the goals in SBX1-2. SCE noted that a solicitation would be beneficial for current contract administration by setting the price for any replacement power and that annual RPS solicitations were important for maintaining a vigorous RPS market. 

 

SDG&E stated that it too was not done with procurement and would need further procurement to comply with the 2016 goal under SBX1-2. 

 

Other parties also advocated in favor of a 2011 solicitation, with TURN noting that there may be some bargains available to the utilities due to the fact that no RPS solicitation was held last year and that competition would be fairly robust for RPS contracts. 

 

The Division of Ratepayer Advocates was one of the few dissenters (along with CARE), arguing that because a new cost containment mechanism would apply under SBX1-2, the CPUC should consider waiting until it had addressed cost containment before commencing a new RPS solicitation. 

 

The parties also discussed various issues to be resolved by the PD, including how economic curtailment should be handled in the pro forma RPS contract, congestion adders and integration cost adders. As currently drafted, the PD would require all three utilities to amend their pro forma agreements to use the economic curtailment provisions proposed by PG&E, which would allow utilities to economically curtail projects up to five percent of the project’s expected annual generation, for which PG&E would pay the project the full contract price but would not reimburse the project for any lost production tax credits. The California Wind Energy Association noted that although it supported PG&E’s proposal, the proposal should be amended to make it clear that the cap applies to any economic curtailment caused by the utility, even if the curtailment was in fact ordered by the California Independent System Operator, and to provide for the payment of any lost production tax credits as well.

 

As for congestion adders, the PD would require the utilities to consider congestion costs when evaluating projects and order the utilities to release congestion cost information in their 2012 and future plans, so that project developers will be fully informed when making siting decisions.

 

Finally, the PD declined to allow the use of integration cost adders when evaluating bids, despite both SCE’s and SDG&E’s requests that they be permitted to do so. 

 

If you have any further questions on this all-party meeting or any other California energy regulatory issue, please contact:

Seth Hilton at (916) 319-4749 or sdhilton@stoel.com

Bill Holmes at (503) 294-9207 or whholmes@stoel.com

Jennifer Martin at (503) 294-9852 or jhmartin@stoel.com

California Court Enjoins Implementation of Cap-and-Trade

Legal News Alert from Stoel Rives Environmental Law Group

 

March 23, 2011

San Francisco Superior Court has issued a final decision in Association of Irritated Residents v. California Air Resources Board.  For the moment, the California Air Resources Board (CARB) is enjoined from further rulemaking to implement the California Global Warming Solutions Act (A.B. 32), including for the cap-and-trade program.  The Court upheld the validity of CARB’s Scoping Plan for implementation of A.B. 32, saving CARB from having to revise the Plan.  But, the Court found flaws with CARB’s environmental review of the Scoping Plan under the California Environmental Quality Act (CEQA), in particular its analysis of alternatives to the Plan’s recommended greenhouse gas (GHG) reduction measures, such as cap and trade.  CARB is enjoined from further rulemaking until the agency has come into compliance with CEQA by amending its environmental review of the Scoping Plan. 

For entities facing regulation under A.B. 32, this decision has important implications.  Scoping Plan GHG reduction measures that have already made their way through the rulemaking process appear unaffected.  But CARB’s cap-and-trade program never made it out of the formal rulemaking process. While the Board members of CARB approved the cap-and-trade program in December 2010, it left it to the Executive Officer to take final action to adopt the proposed regulation (or bring it back to the Board) after more details were finalized.  CARB had a packed schedule this year to finalize cap and trade prior to its January 1, 2012 start date.  Under the Court’s final decision, these activities will have to be shelved if they fall within the rubric of further rulemaking or implementation.  Regulated entities may thus have a temporary reprieve from the onset of cap and trade in 2012.  But continued uncertainty over the details of CARB’s planned GHG regulation of stationary sources is a less than ideal situation for regulated sources.

For more background and information on the decision and its implications, click here.

If you currently subscribe to Stoel Rives legal updates, click here to update your contact information and preferences. To join the Stoel Rives mailing list and ensure direct delivery of future alerts, click here to subscribe. To unsubscribe, send an email to unsubscribe@stoel.com.

California Court Enjoins Implementation of Cap-and-Trade

Legal News Alert from Stoel Rives Environmental Law Group

 

March 23, 2011

San Francisco Superior Court has issued a final decision in Association of Irritated Residents v. California Air Resources Board.  For the moment, the California Air Resources Board (CARB) is enjoined from further rulemaking to implement the California Global Warming Solutions Act (A.B. 32), including for the cap-and-trade program.  The Court upheld the validity of CARB’s Scoping Plan for implementation of A.B. 32, saving CARB from having to revise the Plan.  But, the Court found flaws with CARB’s environmental review of the Scoping Plan under the California Environmental Quality Act (CEQA), in particular its analysis of alternatives to the Plan’s recommended greenhouse gas (GHG) reduction measures, such as cap and trade.  CARB is enjoined from further rulemaking until the agency has come into compliance with CEQA by amending its environmental review of the Scoping Plan. 

For entities facing regulation under A.B. 32, this decision has important implications.  Scoping Plan GHG reduction measures that have already made their way through the rulemaking process appear unaffected.  But CARB’s cap-and-trade program never made it out of the formal rulemaking process. While the Board members of CARB approved the cap-and-trade program in December 2010, it left it to the Executive Officer to take final action to adopt the proposed regulation (or bring it back to the Board) after more details were finalized.  CARB had a packed schedule this year to finalize cap and trade prior to its January 1, 2012 start date.  Under the Court’s final decision, these activities will have to be shelved if they fall within the rubric of further rulemaking or implementation.  Regulated entities may thus have a temporary reprieve from the onset of cap and trade in 2012.  But continued uncertainty over the details of CARB’s planned GHG regulation of stationary sources is a less than ideal situation for regulated sources.

For more background and information on the decision and its implications, click here.

If you currently subscribe to Stoel Rives legal updates, click here to update your contact information and preferences. To join the Stoel Rives mailing list and ensure direct delivery of future alerts, click here to subscribe. To unsubscribe, send an email to unsubscribe@stoel.com.

New Stoel Rives California Environmental Law Blog

Stoel Rives LLP is pleased to present the California Environmental Law Blog (http://www.californiaenvironmentallawblog.com), which will focus on emerging environmental and natural resource issues specific to California.

The Stoel Rives California Environmental Law Blog is written by leading environmental and natural resources attorneys, whose posts will discuss comprehensive legal and business issues involving water rights, water quality, land use and CEQA, timber and forest products, energy, agribusiness and food processing, wineries and vineyards, Proposition 65, and delta legislation.

We look forward to many lively discussions with ag interest owners, wineries, property rights owners, food processors, local governments, public entities, forest product companies, landowners, and timber companies, as well as others interested in California environmental law.

We hope you enjoy the California Environmental Law Blog!

COMMISSIONER FLORIO NOTICES ALL-PARTY MEETING CONCERNING 2011 RENEWABLE PORTFOLIO STANDARD PROCUREMENT

 

On February 11, 2011, California Public Utilities Commission (CPUC) Administrative Law Judge Burton Mattson issued a Proposed Decision conditionally accepting the 2011 Renewables Portfolio Standard (RPS) Procurement Plans for Southern California Edison, Pacific Gas and Electric Company, and San Diego Gas and Electric Company.  If adopted, the Decision would set a schedule for the utilities’ 2011 RPS solicitation.  The Decision was on the agenda for the CPUC’s March 24, 2011 business meeting, but was held at Commissioner Florio’s request until the April 14 meeting.

 

On March 17, 2011, Commissioner Florio noticed an all-party meeting on the Proposed Decision for March 25, 2011.  Yesterday, Commission Florio circulated an agenda for the meeting.  Among the issues raised by the agenda is whether an RPS solicitation in 2011 is necessary and prudent.

 

Stoel Rives’ Partner Seth Hilton will be present at the all-party meeting, and will provide an update afterwards. 

California Public Utilities Commission Holds Workshop on Energy Storage Legislation

On Wednesday, March 9, the California Public Utilities Commission (“CPUC”) held a workshop on its implementation of California’s recent energy storage bill, Assembly Bill (AB) 2514, signed by Governor Schwarzenegger on September 29, 2010.

AB 2514 requires the CPUC and municipal utilities in California to open proceedings by March 1, 2012 to determine appropriate targets, if any, for the procurement of viable and cost-effective energy storage systems by load-serving entities. By October 1, 2013, the CPUC must (1) determine whether a procurement target for energy storage is appropriate and, if so, (2) adopt a procurement target for each load-serving entity under its jurisdiction to be achieved by December 31, 2015 and a second target to be achieved by December 31, 2020. Municipal utilities have an additional year to meet these requirements.

Continue Reading...

FERC and Feed-in Tariffs: Opportunities and Challenges in California and Other States Webinar - March 2, 2011

Seth Hilton, Jason Johns, and Morten Lund will be presenters at the following webinar on Wednesday:

FERC and Feed-in Tariffs: Opportunities and Challenges in California and Other States
Wednesday, March 2 at 11:00 a.m. CST/ 9:00 a.m. PST.

After prolonged consideration by the California Public Utilities Commission, California recently adopted a reverse auction mechanism for renewable energy projects 20 megawatts or smaller. That program initially arose from the California Public Utilities Commission's efforts to expand an existing feed-in tariff program and was structured as a reverse auction mechanism to avoid potential conflicts with Federal Energy Regulatory Commission (FERC) jurisdiction. This webinar will explore feed-in tariffs and similar programs, such as California's Renewable Auction Mechanism. It will also address the Federal Energy Regulatory Commission's decision in October concerning the California Public Utilities Commission's proposed feed-in tariff for combined heat and power generators, as well as the implications of that decision for feed-in tariff design.

Learning Outcomes

  • Discuss feed-in tariff policies, including benefits and drawbacks
  • Analyze FERC's decision on California's feed-in tariff for combined heat and power generators
  • Recognize the implications of FERC's decision on feed-in tariff design
  • Examine California's Renewable Auction Mechanism and feed-in tariff
  • Compare California's feed-in tariff with those in other states while examining feed-in tariff success in other states

Tradable Renewable Energy Credits in California Webinar - March 1, 2011

My partner Seth Hilton will be presenting on Tuesday March 1st on Tradable Renewable Energy Credits in California.

Tradable Renewable Energy Credits in California
Tuesday, March 1 at 12:00 p.m. CST/ 10:00 a.m. PST

In January, 2011, the California Public Utilities Commission lifted its moratorium on the use of Tradable Renewable Energy Credits for compliance with California's 20% Renewable Portfolio Standard (RPS). However, the CPUC imposed a cap on the use of TRECs, limiting the amount that California's three largest investor-owned utilities and their energy service providers can use to reach RPS.

In addition, The California Air Resources Board adopted regulations to implement a 33% Renewable Energy Standard last year, and intends to harmonize its RES with the limits on TRECs adopted by the CPUC.

Join a panel of esteemed energy experts, including Stoel Rives Partner Seth Hilton, for an engaging discussion of where California is headed with a 33% RPS, the use of TRECs, and how regulated TRECs will affect the REC market.