Court Declares Minnesota Coal Law Unconstitutional: Electrons Favor the Laws of Physics to Those of Governments

Minnesota legislators passed the Next Generation Energy Act in 2007 which, in part, established power sector standards for carbon dioxide emissions. As a result Minn. Stat. §216H.03 now provides that no person shall:

  • Construct within a state a new large energy facility that would contribute to statewide power sector carbon dioxide emissions;
  • Import or commit to import from outside the state power from a new large energy facility that would contribute to statewide power sector carbon dioxide emissions; or
  • Enter into a new long-term power purchase agreement that would increase statewide power sector carbon dioxide emissions. For the purposes of this section, a long-term power purchase agreement means an agreement to purchase 50 megawatts of capacity or more for a term exceeding five years.

In 2011 neighboring state North Dakota, along with coal and utility interests, challenged the law and named as defendants the Commissioners of the Minnesota Public Utilities Commission and the Department of Commerce. Today District Court Judge Susan Nelson ruled in favor of the plaintiffs on cross motions for summary judgment. She determined the second and third provisions of the above statute unconstitutional, finding that they are per se invalid under the dormant Commerce Clause. Minnesota Governor Dayton quickly responded to the ruling with a press statement articulating his intentions to vigorously defend the law and appeal the decision.

Continue Reading...

U.S. Supreme Court Hears Arguments in Landmark Case on Federal Greenhouse Gas Regulation

My colleague, Daniel Lee, followed oral argument yesterday in the U.S. Supreme Court's consideration of federal greenhouse gas (GHG) regulation in Utility Air Regulatory Group v. EPA, and provides this analysis:

During oral argument for Utility Air Regulatory Group v. EPA this Monday, the Supreme Court conflicted over a number of issues including the application of Chevron deference,  the scope of the Court’s holding in Massachusetts v. EPA, and the nature of the Prevention of Significant Deterioration (PSD) program under the Clean Air Act (CAA). At the broadest level, the Court will decide whether the EPA’s PSD program regulating emissions from stationary sources will apply to greenhouse gas emissions. Much of the Justices’ questioning focused on whether EPA’s interpretation, that the PSD statute required regulation of GHGs, was reasonable and would receive Chevron deference. Pointing out that the parties had advanced four separate interpretations of the statute, Justice Sotomayor suggested the statute’s “quintessential ambiguity” implicated Chevron. Justice Kagan went further to suggest that EPA’s interpretation was “most reasonable” in light of its longstanding adherence to the position and that there is “nothing that gets more deference than this Agency with respect to this complicated a statute.” 

To overcome the Chevron hurdle, petitioners emphasized the incongruence between the local focus of the PSD program and the broader, global effects of GHGs. However, Justice Ginsburg countered that GHGs had “severe effects at the local level” according to EPA’s endangerment finding. In contrast, Justice Alito emphasized that GHGs are nevertheless distinguishable from other substances regulated under the PSD program because of the large quantity of GHGs emitted. 

 

Less aggressive was the questioning from Justice Kennedy, whose vote has often been the deciding factor for the Court. Justice Kennedy reaffirmed that the Court must abide by Massachusetts v. EPA, but nevertheless indicated that he “couldn’t find a single precedent that strongly supports” the EPA’s position. Yet he also opined that Brown & Williamson, a case relied on by the industry petitioners, was also distinguishable. 

 

If EPA’s interpretation is upheld, PSD and Title V permitting programs will continue to apply broadly to industrial emitters of GHGs.  If EPA’s interpretation is not upheld EPA could continue to regulate GHGs through the New Source Performance Standards program but would presumably need to withdraw the PSD and Title V permits issued for GHGs and many sources currently undergoing PSD and/or Title V permitting would see their permitting burdens greatly reduced. Additionally, Utility Air Regulatory Group v. EPA will likely add further contour to the sprawling case law on Chevron deference in the context of environmental regulation.

 

See our previous report on the Supreme Court's grant of certiorari in Utility Air Regulatory Group and its related cases for additional background on the controversy's road to the Supreme Court.

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...

Tentative Ruling Issued in California Cap and Trade Auction Lawsuit

A tentative ruling was issued yesterday in the related cases California Chamber of Commerce v. California Air Resources Board (ARB)  and  Morning Star Packing Co. v. ARB, pending before the Sacramento County Superior Court.  The cases challenge the legality of ARB's cap and trade auctions under two theories:  (1) the cap and trade auctions exceed ARB's authority under AB 32, and (2) the auctions amount to an illegal tax adopted without the requisite two-thirds approval of the California Legislature.  The Court tentatively ruled in ARB's favor that the agency's implementation of a cap and trade auction system is within the scope of AB 32, which delegated ARB authority to design the distribution of emissions allowances.  The Court did not rule on whether the allowance auctions constitute an illegal tax.  The tentative ruling outlined questions on this topic for oral argument, which was heard yesterday.  A ruling on the tax challenge is expected in the next 90 days.

ARB held its most recent quarterly auction on August 4, 2013.  2013 vintage allowances sold for $12.22.  In the advance auction of 2016 vintage allowances, held concurrently, allowances sold for $11.10.

President Obama Unveils Climate Action Plan

Today President Obama released his Climate Action Plan and highlighted the key components of the Plan at a speech at Georgetown University. The Plan has three primary goals: (i) cutting greenhouse gas (GHG) emissions in the U.S., (ii) preparing the United States for the effects of climate change, and (iii) leading international efforts to mitigate climate change. During his speech, President Obama listed three measures to address the first two goals: use more clean energy, waste less energy, and cut carbon emissions. The Plan includes some important new directives from the President, it incorporates some initiatives that are already underway and outlines some of the Administration’s intentions, without providing hard timelines or goals. 

The Climate Action Plan is limited to initiatives that the President can implement without Congressional approval.  Nevertheless, it has the potential to significantly affect a broad range of energy sector interests.  A summary of the Plan's key components follows. 

Using more clean energy:

  • The Interior Department is directed to support deployment of 10,000 MW of renewable energy on public lands by 2020. 
  • The Department of Defense (DoD) is directed to build 3,000 MW of renewable energy at military installations by 2025.
  • Federal agencies will aim to install 100 MW of rooftop solar on federally-subsidized housing by 2020.
  • The federal government commits to obtain 20% of its electricity from renewable sources by 2020.
  • The Red Rock Hydroelectric Plant, on the Des Moines River in Iowa, will be placed on the federal Infrastructure "Permitting Dashboard" for high-priority projects.
  • Federal agencies will streamline the siting, permitting, and review process for transmission projects.
  • The U.S. will seek a global agreement in the World Trade Organization modeled after the 2011 agreement among 21 Asia-Pacific Economic Cooperation economies to reduce tariffs to 5% or less by 2015 on 54 environmental goods, including solar panels and wind turbines.
  • The FY2014 budget will include $7.9 billion for clean energy research and development.
  • The Department of Agriculture’s Rural Energy for America program will provide renewable energy and energy efficiency grants and loan guarantees directly to agricultural producers and rural small business.
  • Natural gas will continue to be relied upon as a “transition fuel” while America works to develop an “even cleaner” energy economy.
Continue Reading...

Army Corps of Engineers Will not consider GHG impacts

The Army Corps of Engineers will not consider GHG impacts in its environmental review of PNW coal export facilities. See  for the testimony of Acting Chief of the Corps' Regulatory Program, Jennifer Moyer.  Ms. Moyer testified before yesterday before the House Committee on Energy and Commerce on the subject at a hearing titled, "US Energy Abundance:  Regulatory, Market and Legal Barriers to Export."

Fourth White Paper Released by House Committee

The House Committee on Energy and Commerce released its fourth white paper on the Renewable Fuel Standard.  The white paper discusses the energy impacts of the RFS and the changes in US energy demand in the five years since the RFS passed.  The paper calls for comments regarding the impact of the RFS on demand, petroleum prices, and how the RFS could be improved to better meets its energy security goals.  The next House white paper will address fraud issues.  Comments on the RFS energy white paper are due by June 21st.

US Federal Social Price for Carbon Skyrockets

The Obama administration took another step forward with its greenhouse gas control program yesterday when it quietly posted its "Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis under Executive Order 12866."  Executive Order 12866 was issued by President William Clinton on September 30, 1993, and established broad principles of regulatory process including risk assessment.  In the recent Obama Technical Update, the social cost of carbon for 2020 increased in value from a range of $7 to $81 per ton, to a revised range of $12 to $81.  The increased range will support more rigorous regulations with the first example being in the domain of microwave efficiency.  Businesses and industries in the energy sector will be well-served to evaluate the impact of the revised risk assessment on their activities.

Results for Third California Cap and Trade Auction Released

The results are in for the third California cap and trade auction.  A metric ton of CO2e went for $14 in the third auction, which took place on May 16, 2013. The top bid at the auction was $50.01, with a mean bid of $16.67 submitted. All of the 14.5 million 2013 vintage allowances available at the auction were sold, with 1.78 bids submitted for each available allowance. Demand was down compared with the second auction, that took place in February 2013, where roughly 2.5 bids were received for every available 2013 vintage allowance. In the third auction, just over 90% of the allowances were purchased by entities that have compliance obligations under the cap and trade program. Allowance prices have continued to slowly rise, with a settlement price of $10.09 per metric ton CO2e in November 2012, $13.62 in February 2013, and $14 in this most recent auction. See my earlier blog post for some details on auction rules.

CARB also held an advance auction of 2016 vintage allowances on May 16. 7.5 million of roughly 9.6 million allowances available were purchased at this advance auction. The settlement price was the same as the minimum bid price allowed, $10.71 per metric ton CO2e. Though all of the 2016 vintage allowances offered were not sold in the third advance auction, demand rose over the second advance auction held in February 2013. In the third advance auction, CARB received about eight bids for every ten 2016 vintage allowances available; in the second advance auction, there were about five bids for every ten 2016 vintage allowances. 

An Allowance Price Containment Reserve sale will take place June 27, 2013. The next allowance auction will be held August 16, 2013.

RIN Futures Become a Reality

In a development that will increase liquidity and transparency in the RIN market, two major providers are making RIN future contracts available to be traded.  Both CME Group and the IntercontinentalExchange (ICE) will have RIN products available to be traded by mid May.  CME Group and ICE will enable over the counter trading (OTC) of D4 RINs, D5 RINs, and D6 RINs.  D6 RINs are the most common RINs, typically fulfilled by corn ethanol production.  D5 RINs are the most flexible premium RINs, representing advanced biofuel that may consist of biogas, advanced drop in fuels, or other fuel types that meet the 50% GHG reduction standard.  D4 RINs are biomass-based diesel RINs, fulfilled primarily by biodiesel and renewable diesel fuels.  The development of a futures market could provide a substantial boost to the development of advanced biofuel facilities by enabling their financing.  Many financial market participants have in the past regarded RIN revenue as too speculative to include in a plant's pro forma but are likely to be reassured by the presence of RINs in the OTC market.  We speculated in our recent white paper that the EPA's rulemaking on Quality Assurance Programs (QAPs) could facilitate the establishment of a RIN futures market.  See http://www.stoel.com/showarticle.aspx?Show=10180

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...

Results of California Cap and Trade Quarterly Auction Released

On February 19, 2013, the California Air Resources Board held its second auction of greenhouse gas (GHG) emission allowances for its Cap and Trade Program. This was the first quarterly auction for 2013; the first auction was held November 14, 2012. All ‘covered entities’ – GHG emitters regulated under Cap and Trade – were eligible to participate in the auction. Voluntarily associated entities, i.e. groups who wish to retire allowances or sell allowances on the market, were also eligible to participate. Some key rules of the auction: 

  • Participants submit sealed bids, for multiples of 1,000 allowances. 
  • For 2013 auctions, the minimum bid is $10.71 per allowance.
  • One allowance equals the right to emit one metric ton of CO2 (or other GHGs in CO2-equivalent terms). 
  • Allowances are awarded beginning with the highest bid and proceeding through successively lower bids until the total number of allowances available for sale have been awarded.
  • The final price of allowances for all participants in the auction, the “settlement price,” is the lowest bid received at which the supply of available allowances for sale is exhausted.

In this auction, the settlement price for 2013 vintage allowances was $13.62. All of the approximately 13 million allowances offered for sale were sold. The auction also included the advance sale of 2016 vintage allowances. The settlement price for 2016 allowances was $10.71. 4,440,000 2016 vintage allowances were sold, approximately half the total number offered for sale. There were approximately 2.5 bids for every one allowance, compared with approximately one bid for each allowance during the November 2012 auction. Not surprisingly, auction participation is up, with covered entities facing compliance obligations this year.

 

The settlement prices for this auction were slightly higher than those of the first auction, held November 14, 2012. The settlement price for 2013 vintage allowances in November 2012 was $10.09. Advance sales of 2015 vintage allowances were settled at $10, the minimum price, in the November 2012 auction. The Air Resources Board will hold an allowance price containment reserve sale on March 8, 2013, offering allowances at a three tiers of fixed prices.

DC Circuit Upholds EPA's Greenhouse Gas Rules

Our colleague Tom Wood has prepared a helpful summary of the DC Circuit opinion, released this morning, that upheld the EPA’s approach to regulating greenhouse gases under the major new source review program, the Title V program and the vehicle emission standards program.

The lawsuit had challenged three separate rulemakings: (1) EPA’s “Endangerment Finding” in which it determined that greenhouse gases may “reasonably be anticipated to endanger public health or welfare,” (2) EPA’s “Tailpipe Rule,” which set emission standards for cars and light trucks, and (3) EPA’s “Timing and Tailoring Rules” which set alternate applicability standards and phase-in provisions for regulating greenhouse gases under new source review and Title V. The DC Circuit said that EPA acted reasonably in issuing the Endangerment Finding and the Tailpipe Rule. The DC Circuit dismissed all petitions challenging the Timing and Tailoring Rules for lack of jurisdiction. The decision is a huge win for EPA.

 

Read Tom’s analysis of the decision and its implications.

Gov. Kitzhaber Names Margi Hoffman as Oregon's Energy Policy Advisor

Oregon Governor John Kitzhaber announced today that he has named Margi Hoffman to serve as his Energy Policy Advisor.  She will join the Governor's office on April 2.

Ms. Hoffman has served as Senior Vice President and Director of Oregon Operations with Strategies360, a strategic consulting firm, and has also worked closely with Renewable Northwest Project (RNP) .  The news release from the Governor's office can be found here.

Congratulations, Margi!

New Resources for Electric Energy Storage

For those who like to pay close attention to developments in the energy storage industry, take a look at Stationary Electricity Storage, which collects and presents articles about storage industry news, noteworthy projects, and other topics.  It's well organized (with articles filtered by category, storage provider, organization and location), offers a free daily newsletter and looks like a good way to stay on top of developments in this expanding sector.  (Thanks to Greg DelSesto for introducing me to this new site.)

On a related note, I'll be chairing Infocast's Developing Grid Storage Projects in Dallas from October 5 through October 6.  Stoel Rives partner John Thompson will be speaking on "Intellectual Property Protection for Grid Storage," and Dave Hattery, a partner in our Seattle office, will be speaking on "Negotiating the Terms and Navigating the Risk of a Procurement Contract and Other Financial Documents."  The conference features an impressive list of speakers who are very active in the energy storage industry, and I hope to see you there!

PSU's Hatfield School of Government Offers "Summer Series on the New Energy Economy"

This summer, the Center for Public Service at the Hatfield School of Government at Portland State University will be offering a series of short, 2-3 day classes under an umbrella called the "Summer Series on the New Energy Economy."  These are non-credit courses, specifically designed for energy industry leaders, a wide range of professionals, and other community members with an interest in learning more about key energy topics.The series is being coordinated by Jeff Hammarlund, one of PSU’s adjunct faculty, who in recent years has taught a series of popular classes on various aspects of the Smart Grid.

The summer series will kick off with the first class on July 11-12. Entitled  "Dissolving Complex Problems in the New Energy Economy," this course will bring a systems science focus to core energy structure, regulation, and policy questions. Other classes, which will run in July, August, and September, include

     * Green Inc: Business Models for the New Energy Economy (July 13-15);

     * Comprehending the Climate Conundrum (July 25-27);

     * Riding the Waves of Change: Project Management and the New Energy Economy (August 10-12); and

     * The Smart Grid and Sustainable Energy Systems (September 14-16);

Additional information and registration instructions can be found here. If you have specific questions, contact Christine Hanolsy at PSU at 503-725-5114 or hanolsy@pdx.edu.

 

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.

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.

California Cap & Trade Challenge Final Order Issued

On Friday, May 20, 2011, Judge Goldsmith of San Francisco Supreme Court issued a final order  (PDF) with respect to a lawsuit challenging the environmental review of the Cap and Trade regulations created under California’s AB 32 Greenhouse Gas statute and the associated Scoping Plan. In its order, the Court enjoined the Cap and Trade portion of the Scoping Plan.

This revised final order is narrower than the draft order previously circulated in March.  The order applies only to the Board Regulation O8-47  and Executive Order G-09-001 (approving the climate change scoping plan) as they relate to Cap and Trade; and the Cap and Trade regulations themselves Regulation 10-42.  The Executive order enjoins the California Air Resources Board (CARB) from:

“[e]ngaging in any cap and trade-related Project activity that could result in an adverse change to the physical environment until ARB has comes into complete compliance with ARB’s obligations  under its certified regulatory program and CEQA, consistent with the Court’s Order.  This includes any further rulemaking and implementation of cap and trade especially but not limited to any action in furtherance of California Cap and Trade Program Resolution  10-42.”

Keep in mind, this lawsuit was filed challenging a CEQA type document which is procedural in nature.  Thus, once CARB revises the environmental document in the manner required by the court and it is determined to be sufficient at the time the writ is returned, the project may go forward.  Additionally, in the interim, those portions of AB 32 that are not related to Cap and Trade, such as mandatory reporting, are still in effect pursuant to the Implementation Schedule.

In the interim, it will be interesting to see whether various interests will attempt to make changes to the Cap and Trade program.  The Sierra Club has already come out in favor of changes related to emissions levels and environmental justice issues. 

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.

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.

Non-Profit Groups Challenge Colorado's RES and Question Public Policy Favoring Wind Energy

          Stoel Rives partner Bev Pearman reviewed the complaint filed Monday in American Tradition Institute, et al., v. Colorado and prepared this analysis:

          On April 4, 2011, the American Tradition Institute (“ATI”), the American Tradition Partnership (“ATP”), and Rod Lueck filed suit in the U.S. District Court for the District of Colorado arguing that Colorado is unconstitutionally discriminating against out-of-state renewable energy producers. ATI is a nonprofit organization “dedicated to the advancement of rational, free-market solutions to America’s land, energy, and environmental challenges,” and ATP is a lobbying organization “dedicated to fighting environmental extremism and promoting responsible development and management of land, water, and natural resources in the Rocky Mountain West and across the United States.” Rod Lueck is a member of ATI and ATP. 

Colorado’s renewable energy standard (“RES”) states that by 2020 the state’s two major investor-owned utilities must get 30 percent of electricity sold from recycled or renewable resources. Renewable energy resources are “solar, wind, geothermal, biomass, new hydroelectricity with a nameplate rating of ten megawatts or less, and hydroelectricity in existence on January 1, 2005, with a nameplate rating of thirty megawatts or less.” “Fossil and nuclear fuels and their derivatives” are not “eligible energy resources” for complying with the RES.   Additionally, each kilowatt of electricity generated in Colorado from certain recycled or renewable sources is given an enhanced value of one and one-quarter kilowatt-hours for purposes of meeting the mandated standards.

   

Plaintiffs raise both a sweeping Commerce Clause claim and a more focused Commerce Clause claim. The sweeping claim is that the statutory scheme is unconstitutional because it discriminates against non-renewable generation resources, both in-state and out-of-state, with plaintiffs alleging that such non-renewable generation is “legal, safer, less costly, less polluting and more reliable than renewable generation.  A more focused claim is that the statutory preference given to in-state renewable electricity establishes a “market-bias against otherwise qualifying renewable sources located outside of Colorado and an inflated cost of complying with the RES requirements.”

 

Plaintiffs’ Commerce Clause claim is grounded in a U.S. Court of Appeals for the Tenth Circuit’s decision in KT&G Corp. v. Attorney General of the State of Oklahoma, 535 F.3d 1114, 1143 (10th Cir. 2008), which says a state may violate the dormant Commerce Clause by:

 

·         Discriminating against interstate commerce in favor of intrastate commerce, unless “the discrimination is demonstrably justified by a valid factor unrelated to economic protectionism;” or

 

·         Imposing “a burden on interstate commerce incommensurate with the local benefits secured;” or

 

·         Creating mandates with the “practical effect of extraterritorial control of commerce occurring entirely outside the boundaries of the state in question.”

 

We expect that Colorado will vigorously defend the RES as being constitutional because its interest in promoting renewable energy generation is an important policy choice. Plaintiffs are attacking that position head-on, however, by challenging the policy of favoring renewable resources, particularly wind energy. They allege that wind energy is not reliable, causes more pollution due to the cycling of coal and natural gas plants during times when wind generation is not possible, and drives up utility costs for consumers. They do not attack other forms of renewable energy as vociferously, but still argue that any scheme favoring renewable resources over other energy sources burdens interstate commerce and violates the Commerce Clause. 

      

The more focused claim (based on the preference given in-state renewable resources) is similar to a Commerce Clause challenge was brought nearly a year ago in Massachusetts by TransCanada Power Marketing, Ltd. (“TransCanada”).  The Massachusetts suit did not challenge the policy of promoting renewable energy over non-renewable energy sources. It instead focused on renewable energy mandates and incentives favoring in-state generation. We do not know what arguments Massachusetts would have raised in defense of its program because the case was stayed after the state suspended the regulation underlying the statute in question. It issued emergency regulations, which were later adopted as final regulations, but the statute that establishes the challenged policy has not been amended. On April 1, 2011, the Alliance to Protect Nantucket Sound, an advocacy group that is leading the opposition to the Cape Wind project, filed a motion to intervene in that proceeding. It argued that TransCanada does not represent the interests of Massachusetts ratepayers. Their economic interests are allegedly harmed because the program at issue discourages utilities from entering long-term contracts with out-of-state generators, which has the effect of reducing out-of-state competition and increasing the cost of renewable energy for ratepayers.

      

The outcome of both of these cases could have far-reaching effects on other state’s RESs and renewable portfolio goals (RPGs). If the plaintiffs are successful with their claims, then the states with RESs and RPGs may have to modify their standards so they are not discriminating against out-of-state renewable energy generators. As we have noted before, the RESs with regional preferences may not be as much at risk. A key question that the courts have yet to answer are whether the RESs and RPGs create protectionist barriers to interstate trade. Check here for regular updates as these groundbreaking cases moves forward.

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.

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. 

Recommendations for Carbon Capture and Storage in California

The California Carbon Capture and Storage Review Panel released its final recommendations last week after nine months of fact-finding and deliberations. The Panel was sponsored by the California Energy Commission, the California Public Utilities Commission, and the California Air Resources Board (“CARB”), with participation from the California Department of Conservation and the California State Water Board. The Panel was formed to review the statutory and regulatory barriers to the use of carbon capture and storage (“CCS”) as a strategy to combat climate change. CCS is a technology with potential to reduce carbon dioxide emissions from power plants and industrial sources on a large scale by capturing the emissions and sequestering them in geologic formations underground.

The Panel’s recommendations focus on:

  • ensuring that CCS can play a role in meeting California’s greenhouse gas emission (“GHG”) reduction requirements (e.g., the Panel recommends that CARB consider and integrate CCS into its GHG rules);
  • addressing regulatory and permitting barriers for CCS projects (e.g., the Panel recommends establishing a coordinated permitting system with the California Energy Commission as the lead agency);
  • addressing key legal issues and uncertainties (e.g., the Panel recommends that the legislature declare surface owners to be the owners of subsurface pore space that could be used for carbon dioxide storage); and
  • ensuring the safe, equitable, and cost-effective use of CCS in California (e.g., the Panel recommends that the legislature establish that any cost allocation mechanisms for CCS projects be spread as broadly as possible across all Californians).

The Panel was comprised of experts from industry, trade groups, academia, and environmental organizations. Stoel Rives’ Jerry Fish served on the Panel’s Technical Advisory Committee along with representatives from the relevant state agencies and other expert consultants. With assistance from other members of Stoel’s CCS team, he contributed white papers on carbon dioxide pipelines, pore space rights, and enhanced oil recovery issues and advised on the Panel on a variety of property, liability, and regulatory issues for CCS. For more information on CCS or the Panel’s work, please contact:

Read the Panel’s key findings and recommendations after the jump or download the full background report and final recommendations report from the California Climate Change Portal.

Continue Reading...

Plaintiffs Question "Carbon Negative" Water

The Fiji Water Company has attracted the attention of plaintiffs lawyers with its “carbon negative” bottled water.  The Newport Trial Group, a law firm representing California consumers, sued Fiji Water last month, arguing that Fiji’s carbon offset claims are deceptive and misleading.  The complaint against Fiji Water argues that the product is not necessarily carbon negative because Fiji’s offsets are premised on a speculative carbon offset method that “may or may not happen in the future.” 

According to the California consumers, Fiji’s carbon offsets are misleading because they  rely on “forward crediting,” a method of accounting for carbon offsets based on future offsetting activities.  The complaint explains that this method of carbon offsetting is unreliable and speculative according to the Stockholm Environment Institute, an independent scientific think tank.  

Fiji claims that its products are “carbon negative,” based on the purchase of carbon offsets equal to 120% of the company’s carbon emissions.  Even if Fiji can prove that its carbon offsets will ultimately meet that goal, expect the plaintiffs to argue that the carbon negative claim is still deceiving, on the theory that consumers were not apprised of the fact that offsets will occur in the future.  If Fiji’s future carbon offsets are found to be mismanaged, disorganized, or even false, consumers may succeed in obtaining a substantial judgment at trial, or a cash settlement.

The question of whether Fiji Water has actually deceived consumers will certainly be the focus of litigation in the California proceeding for at least a couple years.  In the meantime, while the Federal Trade Commission’s proposed new Green Guides, released last fall signal increasing federal enforcement against greenwashing, the Fiji Water case is an important reminder that environmental marketing claims may also be challenged by private parties.   

Another interesting aspect of this case is that while the California Consumers do not make reference to the FTC’s new Green Guides, the theory of their case is consistent with FTC policy.  The proposed new Guides tell marketers that they should “clearly and prominently disclose if [their] carbon offset represents emission reductions that will not occur for two years or longer.”  FTC regulations are not California law, but California’s consumer protection statute actually makes reference to the Green Guides, establishing a legal defense for companies if they can prove that their marketing claims comply with the Guides.  

Finally, regardless of how the Fiji water case proceeds, it teaches another valuable lesson.  Whether the claim is for carbon offsets, renewable energy, or another type of green claim, marketers must follow the key principles of clarity and disclosure.  A bare claim is risky –  but clear, concise disclosure can reduce and potentially eliminate that risk.
 

California Adopts its Cap-and-Trade Program for Greenhouse Gas Emissions

After a full day of testimony and deliberation on December 16, 2010, the California Air Resources Board (ARB) adopted the state’s Cap-and-Trade Program on a 9-to-1 vote. The Program is promulgated under the California Global Warming Solutions Act (A.B. 32) as a market-based compliance mechanism to help achieve reduction of the state’s greenhouse gas (GHG) emissions to 1990 levels by 2020. The 10-hour public hearing on the proposed regulation included more than six hours of public testimony, crisscrossing the broad spectrum of stakeholders with an interest in the Program. The large scope of comments made it clear that there were numerous details that still need to be resolved, and that litigation may be pending.

Indeed, even with the December 16 approval, there will be several modifications to the Cap-and-Trade regulation that was released in early November for public review, based on ARB staff-proposed changes presented at the hearing. These changes and other “conforming modifications” will be released for an abbreviated 15-day comment period. Staff will then continue to revise the fine points of the regulation that do not purportedly require further Board action, with a goal of having all the details of the Program confirmed by July 2011. ARB’s approval also included four protocols for creating offset credits. The Cap-and-Trade Program, which contains numerous convoluted provisions, consists of several major elements.

Click here to continue reading.

If you have any questions about the issues of this update, please contact:

Lee N. Smith at (916) 319-4651 or lnsmith@stoel.com
Allison C. Smith at (916) 319-4759 or acsmith@stoel.com

California Adopts Cap-and-Trade

After a marathon 10-hour public hearing last Thursday, the California Air Resources Board voted 9-to-1 to adopt the state’s landmark Cap-and-Trade Program. My colleague, Lee Smith, and I spent the day at the packed California EPA auditorium, monitoring the hearing.  Over 150 people strode up to the podium to give testimony during the public comment period, spanning the gambit from staunch environmentalists, to climate change skeptics, environmental justice advocates, and many, many a representative of soon-to-be regulated industries and businesses. The chain of testimony was broken up six hours into the hearing by a feel-good guest appearance by Governor Schwarzenegger, who waxed eloquent on the mission of A.B. 32, California’s green jobs revolution, and the momentous step that the state’s Cap-and-Trade Program represented. Indeed, there were many thank yous from commenters to ARB staff and the Board for their hard work on crafting the extraordinarily complex Program and trying to make it more palatable for those affected. Regulated entities noted the outstanding efforts that staff had taken to work with them during the development process. 

It was clear, however, that many are still not satisfied with the Program, whether as a whole or with the details of its implementation that will affect various sectors. Environmental justice advocates, such as representatives from the Center for Race, Poverty and the Environment, are largely not in favor of the Cap-and-Trade Program as proposed, dissatisfied with the lack of guarantees that the Program will not disproportionately impact low income communities or communities of color. Most people testifying made pleas to have one aspect or another of the Program changed in some manner. 

Lucky for those industries hoping to get some kinks ironed out to make the regulation less painful for their business, staff’s job is not done yet. Many details on implementing the Program remain to be worked out. At the hearing, staff presented several modifications to the Cap-and-Trade regulation that was released in early November for public review, and Board members, based on testimony or questions they had, gave staff a laundry list of additional points to further study. The changes to the regulation and other “conforming modifications” will be released for a 15-day comment period. Staff will then continue to tweak the fine points that do not require further Board action, hopefully having all the details of the Program firmed up by July 2011. Regulated entities certainly canvassed for the implementing details to be finalized as soon as possible before the regulation goes into effect on January 1, 2012, in order to have some certainty as to their compliance obligations. 

The first hour or two of public comment was dedicated to testimony on the forest projects offset protocol that will allow certain forest projects that sequester carbon to create offset credits which emitters can buy to meet a percentage of their compliance obligations. Several foresters and forest industry representatives testified, but the bulk of the comment was an emotional plea from environmentalists and residents of the Sierras to prevent clearcutting and forest monoculture under the proposed protocol. 

How can a program to reduce greenhouse gas emissions involve clearcutting? The protocol requires adherence to California forest management practices, even for out of state projects. These forest management practices may be more stringent or protective of the environment than those of other states, but California practices allow for clearcutting on areas of 40 acres or less and for even-aged stand management. Under the forest projects protocol, such practices could be utilized in connection with an offset project, but staff and members of the working group that developed the protocol emphasized that the overall carbon storage of a forest stand in a project must be maintained or increased in order for it to qualify under the protocol and generate offsets. Even with an overall net storage of carbon, however, environmental groups stridently objected to even-aged stand management because older or more diverse forest stands may be replaced with stands having less biodiversity and such stands may be managed with herbicides.

With the considerable objections to this protocol and the Board’s aversion to appearing to be ‘for’ clearcutting, ARB considered modification of the protocol at the hearing. Board Member D’Adamo pressed for an exclusion of any future forest project that involved clearcutting, with several other Members agreeing. However, in the end, the Board approved the protocol as it was presented. Chairman Nichols noted that it may be beyond the scope of the Board’s job under A.B. 32 to dictate different forest practices from those developed by the state’s agencies charged with forest management. The environmental protections embedded in the protocol and the overall requirement to have a net zero carbon loss within any given project seemed to satisfy the majority of the Board in the end.

Continue reading for an explanation of some the major points of the Cap-and-Trade Program.

Continue Reading...

EPA Releases Two New Final Rules Today Regarding Geologic Sequestration of Carbon Dioxide

An update from Sara Bergan and Sarah Johnson Phillips

Federal Requirements Under the Underground Injection Control (UIC) Program for Carbon Dioxide (CO2) Geologic Sequestration (GS) Wells See Pre-publication Rule

The rule finalizes minimum federal requirements under the Safe Drinking Water Act for underground injection of carbon dioxide (CO2) for GS purposes. It establishes a new class of well, Class VI, and sets minimum technical criteria  for projects. The guidance covers steps from permitting and site characterization to ongoing monitoring of the CO2 stream, injection wells and CO2 plume to well plugging, post-injection site care and site closure. All criteria are set for the purposes of protecting underground sources of drinking water (USDW) only. The rule covers owners and operators of new CO2 injection wells used for Class VI GS as well as those transitioning CO2 injection wells from Class I,II, or V to Class VI GS.   Notably the final rule, as changed or clarified from the earlier proposed rule, provides for the following:

  • Independent primacy exclusively for Class VI wells under subparagraph §145.1(i) of the final rule;
  • Adaptive rulemaking whereby EPA will review the rulemaking every 6 years to make changes as necessary to incorporate new research, data and information about GS technologies;
  • Reevaluation of the Area of Review (AoR) for GS projects every 5 years in order to address concerns about the inherent uncertainties in modeling CO2 movement and with emerging GS technology;
  • Requirement that owners or operators use direct methods to monitor for pressure changes in the injection zone and to supplement with indirect, geophysical techniques; and
  • Clarification of the requirements necessary to ensure financial resources are available to protect USDWs from endangerment over the long term.

The Final Rule will be published in the Federal Register. Information on the Final Rule and earlier actions can also be found at www.regulations.gov, under Docket ID No. EPA-HQ-OW-2008-0390.

 

Final Rule: Mandatory Reporting of Greenhouse Gases: Injection and Geologic Sequestration of Carbon Dioxide See Pre-publication Rule

EPA amended the Greenhouse Gas (GHG) Reporting Program, 40 CFR part 98, to cover GHG monitoring and reporting requirements for owners and operators of facilities conducting GS activities (subpart RR) and of any other facility conducting CO2 injection (subpart UU). The data collected under the GHG Reporting Program will inform EPA policy decisions under the Clean Air Act related to the use of CO2 capture and sequestration (CCS) for mitigating GHG emissions. Owners or operators of GS facilities are required to develop and implement a site-specific Monitoring, Reporting and Verification (MRV) plan that would be used to verify the amount of CO2 sequestered and quantify any emissions leaks.

 

All UIC permitted Class VI wells will be covered under subpart RR. Enhanced oil and gas recovery (EOR) projects using CO2 will be covered under subpart UU, but could be covered by subpart RR if they choose to opt in or apply for a Class VI well permit. Opting into subpart RR would not, for example, require an existing EOR project with a UIC Class II well permit to obtain a Classs VI permit.

 

The EPA approval process for the purposes of GHG reporting and verification is separate from the UIC permitting process, and the GHG reporting requirements were developed to minimize overlap with the UIC requirements.  Despite the effort to avoid overlap, both programs require regular reporting on the quantity of CO2 injected (flow rate) but at different frequencies and specifications. There may also be overlap in monitoring for CO2 leakage to the surface, although the UIC purpose in doing so is to protect USDWs whereas the GHG program’s purpose is to assess the efficacy of GS as a climate change mitigation strategy. The GHG rule is drafted to build upon the UIC requirements and accept information obtained under the UIC program where feasible. Research and development projects meeting eligibility requirements are exempt from reporting under subpart RR.

 

The Final Rule will be published in the Federal Register. Information on the Final Rule and earlier actions can also be found at www.regulations.gov under Docket ID No. EPA-HQ-OAR-2009-0926.

California's Proposed GHG Cap-and-Trade Program Out for Public Comment

The California Air Resources Board (ARB) has issued its proposed greenhouse gas cap-and-trade program, pursuant to the California Global Warming Solutions Act (AB 32). The proposed regulation builds on the conceptual framework for ARB’s cap-and-trade program, released in November 2009. The 45-day public comment period on the regulation opened yesterday and closes on December 15, 2010. Whether by design or happenstance, ARB released this latest on the cap-and-trade program just before Californians will vote today on whether to suspend AB 32 under ballot box Proposition 23. Proposition 23 would suspend AB 32 until California’s unemployment rate dropped to 5.5% or less, for four consecutive quarters. Given that the state’s current unemployment rate is about 12%, and the unemployment rate has been below 5.5% for four consecutive quarters only three times since 1980, Proposition 23 could halt the implementation of AB 32 indefinitely.

Continue Reading...

RNP and AWEA respond to WSJ editorial about wind energy

Good News and Bad News for DOE's Loan Guarantee Program

There has been a wave of good and bad news this past week regarding the DOE's Loan Guarantee Program.  On the positive side, Secretary Chu announced on Friday that the Department would be adding an additional compliance period for the Innovative Solicitation.  The current deadline for the Part I application under the program is August 24th.  Secretary Chu announced the applications would be accepted until October 5th thus providing six more weeks of time to applicants.  Secretary Chu did not extend the Part II deadline and cannot extend the September 30, 2011 start construction deadline as that deadline was established by the Stimulus Bill itself.  Still, the extension was generally viewed as a respite and perhaps an indication of a willingness to further extend the program.

On the bad news side, the Senate approved the FMAP state aid bill to avert teacher layoffs and pay for Medicaid which is to be funded in part by taking $1.5 billion in funds that the Stimulus Bill appropriated to the DOE Loan Guarantee program.  Clearly driven by Pay-Go requirements, this is a reminder of the $2.0 billion fleecing that the Loan Guarantee Program suffered when Cash for Clunkers program was passed.  While it has been promised that the funds will be restored, the fact that the Cash for Clunkers funding has not yet been restored raises concern about whether the restoration will occur. 

Interagency Ocean Policy Task Force Issues Final Recommendations

On Monday, July 19, 2010, the White House Council on Environmental Quality ("CEQ") issued the Final Recommendations of the Interagency Ocean Policy Task Force.  The Final Recommendations are the culmination of a process that began on June 12, 2009 when President Obama formed the Task Force and tasked it with developing recommendations to enhance national stewardship of the ocean, coasts, and the Great Lakes and promote the long-term conservation of those resources. 

The Final Recommendations will likely be carried over into an Executive Order to be signed by the President, which will establish a National Policy for the Stewardship of the Ocean, Coasts, and Great Lakes and create a National Ocean Council to enhance ocean governance and coordination between federal and state agencies.  The Final Recommendations also express the Task Force's unanimous agreement that the United States should acceed to the Convention on the Law of the Sea and ratify its 1994 Implementing Agreement.

The CEQ's press release is available here.  Attorneys at Stoel Rives are reviewing the Final Recommendations and assessing their impact on, among other things, offshore renewable energy development including offshore wind and marine and hydrokinetic projects.  Stay tuned for more on this important development.

EPA Issues Proposed RFS2 Rules for 2011

The EPA has issued proposed RFS2 rules for 2011 that provide some indications that the agency is dedicated to jump starting the advanced biofuels industry.  Most notably, the EPA held fast to an overall mandate of 13.95 billion gallons of renewable fuel.  While the agency intends to deviate downward on cellululosic biofuels with a cut of 90% or more anticipated, the proposed rule maintains the overall Advanced biofuel mandate at 1.35 billion gallons and the Biomass-based diesel requirement at 800 million gallons.  Thus the agency is paying significant attention to the existing capacity of the biodiesel industry despite the lack of approval for the blender's credit six months into the year.  Biofuel supporters hope that this policy gap will be addressed shortly or that RIN values will continue to increase for Biomass based diesel.  

The proposed rule contains two other notable components:  tentative but retroactive RIN credit for canola, sorghum, pulpwood and palm oil biofuel producers; and a petition process for foreign countries to avoid the onerous feedstock obligations that now apply in favor of the aggregate approach available within the US.  The referenced feedstocks have been under consideration by EPA for Life Cycle Analysis since prior to the original RFS2 Final Rule was released but the work has still not been completed.  The severe challenge for this group of biofuel producers is that EPA has previously indicated that RIN generation would trigger only when the pathway was certified.  EPA's proposed new flexibility is an improvement but still falls short of providing full RIN value for these producers due to the lag time and uncertainty associated with the approach.  The proposed petition process for foreign countries is an apparent attempt to level the playing field for foreign producers who now must trace and certify feedstocks such as soy and corn in a manner not required within the US.

The rules will be published in the Federal Register shortly and the public comment period will likely run to approximately August 13th.

Discussion on Kerry Lieberman and EPA with William Brent


Here is a Q&A I did with William Brent, the head of Weber Shandwick’s cleantech practice and blogger at www.mrcleantech.com:

WB: I asked my friend Graham Noyes of law firm Stoel Rives who focuses his practice on bioenergy projects, federal energy incentives and carbon monetization for his thoughts on the Kerry Lieberman bill.

Q (WB): What was your main takeaway from the bill?

A (GN): Some context first. There’s a massive potential hammer out there on GHG emitters in terms of the risk of regulation under the Clean Air Act (CAA) by the EPA, which has already issued an endangerment finding that found GHGs to be a danger to public health and welfare, thereby making the EPA obligated to regulate GHG's under the CAA. So the wheels are turning forward at the EPA to regulate GHG. That’s what the EPA will do if nothing else happens. So it’s really surprising that Kerry Lieberman imposes what I think to be much stricter limitations on the EPA than the status quo.

In that sense the bill is very favorable to those industries that have the most to lose from GHG regulation, because it essentially weakens the regulatory landscape for GHG intensive industry when compared to what the EPA is likely to do. That’s why we have the strong industry support lined up for the bill. What’s odd is that we have universal Republication opposition (from a party known for its pro-business stance), and near universal Democratic support (from a party known to support more environmental protections). That is a fundamental disconnect.

The 800 lb gorilla in the room is the EPA's ability to utilize the CAA if the Kerry-Lieberman bill stalls. That’s a really interesting regulatory and political landscape for this thing to play out.

Q: Can you be more specific on how Kerry Lieberman is easier on emitters?

A: We don’t know what the EPA will do precisely in order to get its targets in the endangerment finding. Emissions levels, cost implications for regulated industries – we don’t know. But it’s easy to imagine a scenario in which the EPA ratchets down harder and harder on these emissions to get the problem under control, specifically the PPM concentration of CO2 in the atmosphere.. By contrast, Kerry Lieberman has a slow front-end phase-in (with only some industries included in the first years), price collars and very substantial offset programs to lower the economic impact, none of which the EPA would necessarily do. Most people expect the EPA would be more onerous than Kerry Lieberman.

Q: Is legislation or regulation better at the end of the day?

A: The Clean Air Act was not designed for GHGs, but for what we usually think of as pollutants- emissions that are directly unhealthy. CO2 is not something people worry about breathing, it’s the indirect risk of global warming caused by the escalating CO2 levels that triggerred the finding. CO2 is also more ubiquitous than other pollutants hence the tailoring rule actually reduces scope of CAA enforcement.

The EPA would regulate by mandate, not by consensus. If we can’t get legislation passed and the EPA begins enforcement, there will be a lot of criticism about over-reaching and strangling industry. EPA would take a lot of heat for this.

Q: Some argue that EPA will take much longer to regulate than legislation.

A: I don’t necessarily think so. This legislation requires extensive rule-making that will take a long time to happen, consider the RFS2 delay. And the EPA won’t build in phase-in limits like Kerry Lieberman. If EPA moves ahead on its present course, I think it would have a faster impact on emissions than the bill.

Ultimately, I think this landscape will spur a deal with a surprising alliance.

What are the top three ramifications on business from this bill?

The bill would establish a long-term value to CO2e reductions. This will benefit all renewable energy projects and support US offset projects in methane capture, agriculture and forestry that make good GHG sense. 
 

Washington Revising its State Energy Strategy

The Washington State Department of Commerce (formerly the Department of Community, Trade and Economic Development or CTED) has announced that it is attempting to revise Washington’s comprehensive energy plan (the “State Energy Strategy”). 

The State Energy Strategy was last revised in 2003, and it does not serve current energy realities and forecasts. Therefore, the Washington State Legislature has tasked the Department of Commerce with updating the State Energy Strategy while taking account the following three goals and nine principles:

Continue Reading...

DOT, EPA Boost Fuel Economy, Set GHG Emission Limits for Light Vehicles

The U.S. Department of Transportation (“DOT”) and the U.S. Environmental Protection Agency (“EPA”) have established new federal rules for greenhouse gas (“GHG”) emissions standards for all new passenger cars and light trucks sold in the US.  The rules improve fuel efficiency, could save the average buyer up to $3,000 over the life of a 2016 model year car, conserve about 1.8 billion barrels of oil, and reduce nearly a billion tons of GHG emissions over the life of a new vehicle.

The joint issue of rules allows automakers to comply with one set of rules, instead of three different sets (DOT, EPA, and a state standard).

 

NHTSA and EPA believe automakers can meet the new standards by adopting  existing efficiency technologies such as lighter materials, more efficient engines, transmissions, tires, and  air conditioning systems.

 

For more information, see the DOT press release, the final rule (PDF 6.93 MB), and the Web page for the EPA climate regulations.

Tradable RECs Now Count Toward California's RPS

On Thursday March 11, 2010, the California Public Utility Commission (the "CPUC") created a market for tradable renewable energy credits ("TRECs") in the state.  That's big news.  In its 149-page decision, the CPUC stated that investor-owned utilities ("IOUs"), energy service providers, and community choice aggregators may now use TRECs to comply with California's ambitious renewable portfolio standard ("RPS").  These entities are now permitted to purchase a portion of their RPS compliance from generation sources other than those they own (e.g., distributed solar generation facilities within the state and certain out-of-state facilities).

 

Continue Reading...

Conservation Advocacy Group Files Lawsuit to Force ESA Decisions on Dozens of Pacific Northwest Species

Last month, the Center for Biological Diversity (CBD) filed a lawsuit in the U.S. District Court for the District of Oregon alleging that the U.S. Fish and Wildlife Service violated the Endangered Species Act (ESA) by failing to take action on a number of listing petitions.

When a listing is petitioned, the Fish and Wildlife Service has 90 days to determine whether action may be warranted and then 12 months to issue it's finding.

The CBD’s lawsuit alleges that the Service has failed to issue 90-day and 12-month findings, for dozens of northwest species in violation of the ESA.

Stoel Rives attorney Ryan Steen issued a law alert exploring the significant implications surrounding these suits and the potential ESA listings.

EPA Delays Regulation of GHGs as Stationary Source Emissions

From Stoel Rives partners Lee Smith and Krista McIntyre:

In response to a letter drafted by eight democratic senators and general industry adverse reactions, the EPA announced on February 22, 2010 that there would be delays to implementation of the regulation of green house gases as stationary source emissions under the Clean Air Act, and included additional conditions to the implementation. It is expected that the EPA will phase in permit requirements and regulation of GHG for large stationary sources beginning in calendar year 2011.

 

The additional conditions include only requiring facilities that are applying for air permits for non-greenhouse gas emissions to be permitted under the new GHG permitting system in the first half of 2011, and permitting at a level higher than the 25,000 ton level originally proposed, for the latter half of 2011 through 2013. The letter can be found here

SEC Adopts Interpretive Guidance on Disclosure Regarding Climate Change

As described in a previous alert, the Securities and Exchange Commission ("SEC") voted on Wednesday, January 27, 2010 to adopt an interpretive release to provide guidance on existing public company disclosure requirements as they apply to business or legal developments relating to climate change. The SEC has now distributed the interpretive release itself, which can be found here.  The interpretive release indicates that its purpose is to provide guidance on how to interpret existing SEC disclosure rules and requirements as applied to business and legal developments associated with climate change.  For our detailed alert on the subject, click here.

SEC Posts Climate Change Interpretive Release

Earlier today, the Securities Exchange Commission (SEC) posted its climate change interpretive release, which can be found at http://www.sec.gov/rules/interp/2010/33-9106.pdf.  Our prior Blog on the subject is here, and our alert on the topic can be found here.  Stoel Rives corporate securities partners Ron McFall and CJ Voss will be posting a follow up alert shortly. 

 If you'd like to sign up for our Energy Law Alerts, click here

SEC Issues Interpretive Guidance on Greenhouse Gases

My partner Tom Wood circulated this preliminary alert this afternoon:

"Earlier today the U.S. Securities & Exchange Commission (SEC) approved interpretive guidance intended to inform public companies how climate change must be taken into account when applying existing disclosure requirements.  Specifically, the SEC's interpretative guidance highlights the following areas as examples of where climate change must be considered in crafting disclosures:

 

·         The direct effects of existing and pending environmental regulation, legislation and international accords and treaties on the company’s business, its operations, risk factors and in Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A);

 

·         The indirect effects of climate change legislation and regulation on a company’s business—this could include new opportunities or risks posed by legal, technological, political and scientific developments related to climate change; and

 

·         The actual and potential effect on a company’s business and operations resulting from physical changes to the planet resulting from climate change.

 

"The interpretive guidance specifies that public companies must have adequate knowledge of their greenhouse gas emissions—a requirement that is consistent with recent EPA regulations requiring many (but not all) significant greenhouse gas emitters report their direct emissions starting in calendar year 2010.  The SEC stated “management should ensure that it has sufficient information regarding the registrant’s greenhouse gas emissions and other operational matters to evaluate the likelihood of a material effect arising from the subject legislation or regulation.”

Unsurprisingly, the SEC said that registrants must weigh whether climate change related information is material or not.  In doing so, they said that if it was a close question, the company should decide in favor of disclosure."

 

The complete language of the interpretive guidance has not yet been released.  Corporate securities partners C. J. Voss and Ron McFall are reviewing the issue and will be issuing an Energy Law Alert on the topic.  If you'd like to sign up for our Energy Law Alerts, click here

CPUC Proposed Decision on TRECs--Comments Due January 19

The California Public Utilities Commission ("CPUC") issued a proposed decision on December 23, 2009 that would, if adopted, allow California investor-owned utilities, energy service providers, and community choice aggregators to purchase renewable energy credits alone, without the associated energy (sometimes referred to as "unbundled renewable energy credits ("RECs)" or "tradable RECs"), to satisfy their obligations under California's RPS. California's largest investor-owned utilities—Pacific Gas and Electric, Southern California Edison, and San Diego Gas and Electric—would be limited to meeting no more than 40% of their annual procurement targets under the RPS with tradable RECs, and a price cap of $50 would be imposed. The CPUC will revisit both the percentage cap and the cost cap and whether those caps should be revised within 24 months of the decision.

Out-of-state renewable energy projects could be adversely impacted if the proposed order were adopted. The proposed decision would define all renewable generation purchased from out-of-state facilities1 as the purchase of unbundled or tradable RECs, making any out-of-state renewable energy sale subject to the cap that bars the large investor-owned utilities from using such sales to meet more than 40% of their overall RPS obligation. Although the proposed decision states that this classification would apply only to contracts signed on or after the effective date of the decision, contracts signed prior to the effective date would be considered REC-only contracts from the effective date forward, and would be "subject to the limits and rules applying to REC-only contracts" according to the proposed decision. Furthermore, although the purchase of tradable RECs from out-of-state facilities would be permitted, the delivery requirement in the RPS legislation would still have to be met, so a comparable amount of power would have to be imported into the state, along with the RECs. The jurisdiction to determine whether and how this delivery requirement is met, however, still remains with the California Energy Commission.

Comments on the proposed decision are due on January 19, 2010, and reply comments are due January 25, 2010.

For additional information about the history and effect of the proposed decision, see our Stoel Rives alert on the topic.

Zino Green Investment Forum

The ZINO Society, a Seattle-based angel investment group, announced last week that its annual “ZINO Green Investment Forum” would be held on March 4, 2010, at the McKinstry Innovation Center in Seattle.   Up to fifteen early-stage companies in “green tech, clean tech, and sustainable products or services” will be selected by the ZINO Green screening board to present their businesses to angel investors and business leaders attending the investment forum. Finalists will be selected to compete for a $50,000 award from ZINO’s investment fund.

Last year’s winner of ZINO Society’s $50,000 GreenFund award was Hydrovolts, the developer of a hydrokinetic turbine.  After winning the award last year, Burt Hamner, CEO of Hydrovolts, stated that “Our new technology makes it possible to generate renewable energy from fast water currents that could not be tapped before, using a really novel turbine design.  It’s a challenge to explain [our technology] quickly and the presentation, coaching and business model feedback we received from ZINO Society members was incredibly helpful.” Hydrovolts went on to win the  2009 Clean Tech Open National Sustainability Award.

Stoel Rives has been a proud sponsor of The Zino Society since its inception.

The application to apply to present at ZINO Green may be found at https://angelsoft.net/angel-group/zino-society. More information about the event is available at ZINO’s website http://www.zinosociety.com/calendar/1143/ or by contacting Rob Brown at r.brown@zinosociety.com or 206-621-0466.

EPA Announces "Endangerment" and "Cause or Contribute" Findings

Stoel Rives partner Tom Wood reports:

Minutes ago EPA announced its long awaited “endangerment” and “cause or contribute” findings in relation to six key greenhouse gases – carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride.  While technically this announcement is of limited significance (applying only to motor vehicle emissions), the policy import of these determinations is tremendous. 

 

In 2007, the U.S. Supreme Court held that greenhouse gases are air pollutants covered by the Clean Air Act in the Massachusetts v. EPA decision.  This case arose in relation to EPA’s choice not to regulate carbon dioxide emissions from new motor vehicles.  The Court held that EPA must determine whether or not emissions of greenhouse gases from new motor vehicles cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare, or whether the science is too uncertain to make a reasoned decision.  

 

Earlier this year EPA proposed to issue the two part finding required to commence regulation of greenhouse gas emissions from new motor vehicles.  This required first a finding that greenhouse gas emissions endanger public health and welfare and a second finding that emissions from new motor vehicle engines cause or contribute to greenhouse gas air pollution.  The comment period for these proposed findings ended June 23, 2009 and EPA received over 380,000 public comments.  Today, Lisa Jackson (EPA Administrator) signed final findings that greenhouse gases endanger both the public health and the public welfare of current and future generations and that the combined emissions of these greenhouse gases from new motor vehicles and new motor vehicle engines contribute to the greenhouse gas air pollution that endangers public health and welfare.

 

As a legal matter, today’s findings relate only to vehicle emissions.  However, the precedent that they create will almost certainly result in substantial regulation for other source categories.  It is no coincidence that this finding was announced on the first day of the Copenhagen talks on climate change.  The Obama administration both wanted to show that some progress was being made in the U.S. and it wants to leverage this progress into further statutory or regulatory requirements. 

 

Towards this goal, one of the more interesting things to come out of the determinations is the formal establishment of the new pollutant: “Well-Mixed Greenhouse Gases.”  This term is now officially entered into EPA’s regulatory lexicon as a pollutant to be regulated.  Well-Mixed Greenhouse Gases consists of the 6 Kyoto gases (carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride) but introduces the grouping now as a regulatory unit.  It is noteworthy that vehicles are not material sources of all of these greenhouse gases and so the use of this term should be seen as setting the stage for future regulation.

 

Also of interest is an EPA restatement in a footnote that at this time it does not consider greenhouse gases to be a regulated air pollutant.  This is of tremendous significance to stationary sources of greenhouse gases as the moment that greenhouse gases become regulated, there is the potential argument that they are subject to Title V and major new source review permitting.  At the risk of understating the issue, that would be a mess of biblical proportions. 

 

For those wishing to read all 284 pages of the findings document, it can be found at:  http://www.epa.gov/climatechange/endangerment/downloads/FinalFindings.pdf

The findings are not valid until 30 days after they are published in the Federal Register.  Expect publication to occur later this month.

 

 

Come Visit Us at E3, The Midwest's Premier Energy, Economic and Environmental Conference, on Nov. 17, 2009

As a proud Exhibit Hall sponsor of E3, the Midwest’s premier energy, economic and environmental conference, Stoel Rives LLP would like to encourage you to attend this annual event. Hosted by the University of Minnesota’s Initiative for Renewable Energy and the Environment, E3 will focus this year on the intersection of innovative technologies and policies, environmental benefits and emerging market opportunities across the renewable energy spectrum.

Stoel Rives attorneys Mark Hanson, Bill Holmes and Greg Jenner are part of the event faculty. Mark will moderate a panel presentation on the challenges and opportunities of converting carbon dioxide to fuels. Bill will moderate a panel discussing exactly how sophisticated smart power grids need to be in order to scale up renewables as a major U.S. energy contributor. Greg, meanwhile, will participate in a panel discussion on the most efficient and effective strategies for financing renewable energy projects.

 

For more information and to register, please visit the following link: http://bit.ly/XUUjJ. We hope to see you there, and encourage you to visit our booth (#24). In addition to our presenters, Debra Frimerman, Kevin Johnson, Kevin Prohaska, Katie Roek, Mary Sennes, Joe Thompson and Vicki Twogood will be available to discuss any questions you may have. Don’t forget to pick up complimentary copies of our Law of Series handbooks, including The Law of Solar, The Law of Wind, The Law of Biofuels, The Law of Building Green, Lava Law,and our most recent additions The Law of Algae and Show Me the Money: The Law of the Stimulus (2d ed).

EPA Aims to Limit Greenhouse Gas Regulations to Large Facilities

The U.S. Environmental Protection Agency (EPA) is proposing a rule that would limit future greenhouse gas (GHG) regulations under the Clean Air Act to large industrial facilities emitting the equivalent of 25,000 tons or more of carbon dioxide annually. Effectively,  the application of GHG regulations will be confined to facilities such as power plants, refineries, and factories, which produce nearly 70% of U.S. GHGs.  This proposal lets relatively small GHG emitters off the hook.  The EPA was apparently alarmed at predicitions that the application of GHG regulations to low emitters would cause state permitting authorities to be inundated with more paperwork than they could handle with existing resources.

Under the proposed rule, 3,000 GHG emitters - mostly municipal landfills -  will now be required to file for a GHG permit. The proposed rule, announced by the EPA on September 30, will be open for public comment for 60 days once it has been published in the Federal Register - which had not happened as of yesterday.

Major emitters of GHGs will also have to apply for a permit when they increase their GHG emissions by between 10,000 and 25,000 tons of carbon dioxide, although the EPA is seeking input on those levels.

EPA Issues Final GHG Reporting Rule

On the topic of Greenhouse Gas reporting, my partner Tom Wood recently circulated this "heads up" about EPA's final rule:

On September 22, 2009, EPA issued its final rule on greenhouse gas (GHG) reporting.  Fossil fuel and industrial GHG suppliers, motor vehicle and engine manufacturers, and facilities that emit 25,000 metric tons or more of CO2 equivalent per year will be required to report GHG emissions data to EPA annually.  

Recordkeeping obligations commence on January 1, 2010 with the first report due in 2011 (for 2010 emissions).   Relaxed requirements will apply for reporting year 2010 as EPA recognizes that not all monitoring can be implemented in the weeks remaining in this year. 

In a blow to the consulting industry, third party verification is not being required; sources will be able to self-certify their emissions.  EPA says that its program does not preempt state reporting programs, but our hope is that with a final rule the state and regional efforts will conform to EPA’s lead.

Look for more details as Tom gives the rule a more thorough review.

Federal Appeals Court Reinstates Carbon Dioxide Nuisance Suit Against Utilities

 

My partner Tom Wood recently composed and circulated this email alert about the return of the "Global Warming" case against several electric utilities:

 

Five years ago eight states and New York City made headlines when they sued several electric utilities alleging that their carbon dioxide emissions constituted a federal common law nuisance.  The plaintiffs wanted to force the companies to cap and reduce their carbon dioxide emissions.  The federal trial court dismissed the case, holding that the issue was a political question that had to be addressed through the political branches of government and not through the courts.  Earlier today the Second Circuit Court of Appeals reversed the trial court.  This enables the plaintiffs to resume their nuisance lawsuit against the generating companies, but does not guarantee them victory as they will have significant evidentiary challenges to address.  In reinstating the suit, the Second Circuit touted the judiciary’s ability to handle complex cases of this type and said that doing so would not interfere with the business of the other branches of government.  However, the court noted in several places that the judiciary would be preempted in the future from addressing carbon dioxide through nuisance law if either Congress (i.e., the legislative branch) amends the Clean Air Act to regulate carbon dioxide or the executive branch, through EPA, moves to regulate carbon dioxide under existing authority.

 

Today’s decision will potentially have significant impacts on future climate change litigation.  One of the areas heavily debated in the case was who has the ability to bring a federal nuisance claim such as that alleged here.  The defendant companies recognized that states have the ability to bring federal common law nuisance claims, but argued that the potential contribution of carbon dioxide emissions to climate change was not the sort of issue for which a federal nuisance suit is available because, among other reasons, the impacts could not be traced to particular emission sources.  The Second Circuit rejected this argument, setting the stage for the state suits to continue.  The court also rejected arguments that private parties cannot bring federal nuisance suits related to climate change.  The court recognized that the Supreme Court had never addressed this question, but concluded that private parties should be able to proceed with federal nuisance claims related to climate change when they invoke an overriding federal interest or federalism concerns.   By holding that private parties can bring federal nuisance suits and by recognizing that climate change is of overriding federal interest, the court potentially cleared the way for federal lawsuits against all types of companies that emit material levels of greenhouse gases.

 

The decision will create significant new pressure on EPA and Congress to regulate greenhouse gas emissions.  The court noted that it was reasonable to assume that EPA has the authority to regulate greenhouse gas emissions if it first determines that they “cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare” (referred to as an “endangerment finding”).  However, as the court noted, EPA has only proposed to make such a finding and only in relation to mobile sources—not stationary sources such as factories and power plants.  When/if EPA makes such findings, it must then develop a regulatory program.  Until such time that a program is developed, the court held that the field is left open for federal common law nuisance suits.  This holding will undoubtedly create increased support for taking the regulation of greenhouse gases out of the courts and back into the legislative or executive branches. 

 

EPA is poised to issue several rules that will commence the regulation of greenhouse gases for mobile and stationary sources.  These rules were not considered by the court as they had not been finalized.  As these rules become finalized in the weeks and months ahead, the plaintiff’s victory may prove short-lived.  However, there is no question that the decision is likely to have a tremendous impact on the debate regarding whether to proceed with greenhouse gas regulations.

Obama Administration Officials Release Report on Ocean Policy

Last week, Obama Administration officials released the Interagency Ocean Policy Task Force Interim Report (the “Interim Report”), which lays out a comprehensive national policy for protecting and managing the use of our oceans, coasts, and the Great Lakes. Created by President Obama via a June 12, 2009 Presidential Memorandum, the Interagency Ocean Policy Task Force (the “Task Force”), is led by the Council on Environmental Quality’s Chair, Nancy Sutley and is composed of twenty-four senior-level officials from government agencies, departments, and offices. In preparing the Interim Report, the Task Force sought input from within the federal government, and from local officials, tribal representatives, scientists, legal and policy experts, and other stakeholders. The Task Force also solicited public input via a 90-day public engagement process. 

The Interim Report identifies three key components to its comprehensive ocean and coastal strategy: (1) a national policy, (2) a robust governance structure, and (3) categories for action. The Interim Report’s national policy proposal is premised on the stewardship of the ocean, coasts, and Great Lakes as being “intrinsically and intimately linked” to human health, environmental sustainability, economic prosperity, security, foreign policy, social justice, and adaptation to climate change. With respect to the robust governance structure, the Interim Report calls for increased coordination among government agencies. To this end, the Interim Report proposes an interagency National Ocean Council to facilitate interagency coordination on ocean-related issues and implement the National Ocean Policy. The Interim Report also prioritizes nine categories for action in order to address the main challenges currently confronting our oceans, coasts and Great Lakes, including ecosystem-based management, improved observing systems and data collection, coastal and marine spatial planning, and regional ecosystem protection and restoration.

There is a 30-day window for submitting written comments on the Interim Report. The Task Force is also holding several regional public meetings to brief the public and accept comments on the Interim Report, and to obtain input on developing a framework for coastal and marine spatial planning. The Task Force has until December 9, 2009 to submit its proposed coastal and marine spatial planning framework to President Obama. The final Task Force report will also be issued later this year.

November 17: Energy, Economics and Environment (E3) Conference

The University of Minnesota’s annual conference on Energy, Economics and the Environment – E3 – will be held in St. Paul on November 17. Hosted annually by the University of Minnesota’s Initiative for Renewable Energy and the Environment (IREE), this year’s conference will explore current technologies, environmental benefits and market opportunities in renewable energy.

Stoel Rives will be a sponsor of the E3 conference and will, as usual, host a booth at the event. Minneapolis tax partner Greg Jenner will join a panel to discuss “What’s the most efficient and effective strategy for financing renewable energy projects?” To review the agenda and register for the conference, click here.

Free Webinar on Loan Guarantee Program Hosted by DOE

The U.S. Department of Energy is hosting a free webinar on "How to Build a Strong Application" for the DOE Loan Guarantee Program on Tuesday, September 8, 2009 from 1:00 PM - 2:00 PM EST.  The webinar is intended to explain the loan guarantee program and help lenders and applicants navigate the application process.  DOE will also be providing suggestions on how to create a strong loan guarantee application

DOE recently released two solicitations under the program for innovative energy efficiency, renewable energy and advanced transmission and distribution technologies and transmission infrastructure investment projects.  DOE is particularly interested in wind, closed-loop biomass, open-loop biomass, geothermal, landfill gas, trash-to-energy, hydropower and solar projects that are able to commence construction before September 30, 2011. 

DOE will be hosting a series of free webinars on the application process over the next few months. 

Show me the Money: Washington State Issues Final Guidance for Competitive Energy Efficiency and Conservation Block Grant Program

The American Recovery and Reinvestment Act provides $3.2 billion for energy efficiency and conservation block grants. Most of this money has been allocated directly to various local governments. Washington has an additional $6.4 million available through a competitive grant program.

Washington’s competitive grant program is administered through its Department of Commerce. Today, the Department of Commerce has announced the issuance of final guidelines for applications by smaller cities and counties for funds from the Energy Efficiency and Conservation Block Grant Program. Cities with populations lower than 35,000 and counties with populations lower than 200,000 are eligible to apply. Eligible cities and counties may choose to sub-grant their funds to other local governments, non-profits, or the private sector consistent with the guidelines.

 

The application guidelines, form, and frequently asked questions are available at www.commerce.wa.gov/recovery. The Department of Commerce will host a webinar on September 10, 2009, 9:00-11:00a.m., to review the final guidelines and answer questions. You can register for the webinar at https://www2.gotomeeting.com/register/352879171. For more information contact Heather Ballash at energy_policy@commerce.wa.gov.

Australia passes 20% renewable energy target by 2020

From my colleague Adam Walters:

On August 20 the Australian government announced the passage of a bill quadrupling its Renewable Energy Target (RET) to ensure that 20% (approximately 45,000 GWh) of Australia’s electricity is generated from renewable energy sources by 2020.

 

How does Australia’s RET Scheme Work?

 

The RET scheme is an expansion of Australia’s Mandatory RET scheme introduced in 2001, the first of its kind in the world. It works through the creation and sale of Renewable Energy Certificates (RECs) by renewable power generators to “liable parties” (mainly large-scale electricity utilities and consumers), who must provide a designated quantity of REC’s to Australia’s renewable energy regulator to demonstrate compliance and avoid having to pay charges for any shortfall. One of the changes brought about the new legislation is to increase from $40/MWh to $65/MWh.

Renewable energy sources eligible for accreditation under the RET scheme include: solar, wind, hydro, tidal, wave, biomass and geothermal, as well as solar water heaters and other smaller generation units. Hydro has historically dominated Australia’s renewable energy landscape, but recent project announcements and funding opportunities for wind and solar projects signal greater diversification of the industry, particularly for proven technologies.        

Continue Reading...

United States and China to Cooperate on Climate Change and Energy

From our colleague, Jerry Chiang:

The United States and China signed a memorandum of understanding (“MOU”) on July 28, 2009, detailing the partnership between the two countries on climate change, energy, and the environment. The MOU commits both countries to reaching a successful international agreement that will address climate and energy issues. It also provides for cooperation in confronting climate change and developing, promoting, and implementing energy efficiency, renewable energy, smart grid technologies, electric vehicles, and other energy technologies.

The United States and China will have ongoing conversations on what each nation is doing to reduce greenhouse gas emissions and to further international climate negotiations in preparation for the United Nations Climate Change Conference in Copenhagen this December.

Steven Chu, Secretary of Energy, remarked at the signing ceremony, “Both of our countries understand the importance of clean energy for our economies and for our security. Both of us understand the imperative of fighting climate change. What the U.S. and China do in the coming decades will help shape the fate of the world . . . . Today’s agreement should send a clear signal that the United States and China are ready to work together on clean energy and climate change.”

Read the complete remarks at the signing ceremony here: http://www.state.gov/secretary/rm/2009a/july/126575.htm. For a funding opportunity on the U.S.-China climate and energy partnership, go here: http://www.stoel.com/showalert.aspx?Show=5653.

$22 Million for Community Renewable Energy

The Department of Energy (DOE) announced this week that up to $22 million from the Recovery Act would be allotted to up to 4 eligible communities nationwide in order to encourage utility-scale renewable energy systems that provide clean, reliable, and affordable energy supplies for their communities, while creating jobs and new economic development opportunities. The projects will demonstrate how multiple renewable energy technologies, including solar, wind, biomass, and geothermal systems, can be deployed at scale to supply clean energy to communities.  Eligible applicants are local and state governments, Indian Tribes and Tribal Energy Resource Development Organizations or Groups.

Successful applicants will be awarded financial assistance to support the implementation of an integrated renewable energy deployment plan for a community, and the construction of renewable energy systems.  DOE expects each project to also have substantial private sector investment in addition to the funds from DOE.  Completed applications are due September 3, 2009 and the DOE will select awardees by the end of November 2009.

Algal Fuels Developments

The recent blog posting (available here) regarding Exxon's $600 million investment in biofuels served as a reminder to me that comments are due soon (August 3, 2009) on the Department of Energy's draft  "National Algal Biofuels Technology Roadmap" (the "Roadmap").

The Roadmap was prepared by a working group commissioned by DOE.  The working group was commissioned to assess the current state of algae technology and to determine the next steps toward commercialization.  For more information, see my earlier blog.

To submit comments, complete the "Algal Road-Mapping: Request for Information (RFI) Response Form" and submit it as an attachment  to an e-mail message addressed to algaeRFI@go.doe.gov

Further, Gary Hunt has reported (available here) that Prize Capital, LLC has issued a $10 million algae fuel prize to encourage the development of advanced algal fuels.  For more information about this contest, click here.

Show me the Money: Applications Available for the Washington State Energy Program

Washington previously received $60.9 million in Recovery Act funding for its State Energy Program (“SEP”). The Washington Legislature later provided $38.5 million to the Washington State Community, Trade and Economic Development (“CTED”) agency to administer a loan and grant program for eligible projects in the areas of energy efficiency, renewable energy and clean energy innovation (see our earlier blog entry here for more details). The deadline for submitting a notice of intent to apply is July 27, 2009 at 5:00 p.m. Pacific time, and the application is due August 17, 2009 at 5:00 p.m. Pacific time.

I attended an informational meeting held by CTED on July 13, 2009. The meeting provided an overview of the loan and grant program, as well as funding details, eligibility guidelines and evaluation criteria. Eligible projects can receive between $500,000 to $2 million in loans and grants in the first round, with the requirement that applicants provide other sources of funding at least equal to the amount of the loan or grant request. The non-SEP funding may include amounts spent or committed to the project since January 1, 2009. Projects will be evaluated based on the feasibility and quality of the project plan, the experience and qualifications of the project team, the ratio of matching funds to SEP funds, job creation, and energy savings/production. CTED intends to announce award decisions in September 2009.

Treasury Issues Guidance on Applications for Grants in Lieu of the ITC and the PTC

 

The American Recovery and Reinvestment Act of 2009 (ARRA), which was enacted in February, permits an applicant to receive a grant from Treasury in lieu of claiming investment tax credits (ITCs) or production tax credits (PTCs).

Today the U.S. Treasury Department issued much-anticipated guidance concerning applications to receive cash grants in lieu of claiming income tax credits for certain renewable energy projects. Although the guidance includes a sample application form, the U.S. Treasury has stated that it will not accept applications until August 1.

Read the full analysis on this guidance including grant details, eligibility and the application process at www.stoel.com

If you have questions about today's Treasury Department guidance and grants in lieu of ITCs or PTCs, contact:

Chris Heuer at ckheuer@stoel.com
Greg Jenner at gfjenner@stoel.com
Carl Lewis at cslewis@stoel.com
Kevin Pearson at ktpearson@stoel.com
Adam Kobos at  ackobos@stoel.com

Show me the Money: Applications Available now for Washington's State Energy Program

On July 1, 2009, Washington State’s Department of Community, Trade and Economic Development (“CTED”) issued application guidelines and forms for its State Energy Program (“SEP”) (available by clicking here). The American Recovery and Reinvestment Act of 2009 (the “Recovery Act”) provided $60.9 million in new funding for Washington’s SEP. Subsequently, the Washington Legislature allocated $38.5 million to CTED to administer a loan and grant program for energy efficiency and renewable energy program (see our client alert, available here, regarding the legislative action). 

Continue Reading...

Show me the Money: $7.5 Million Available to Develop Commercial Energy Efficiency Training Programs

On June 26, 2009, the Department of Energy ("DOE") released a funding opportunity announcement ("FOA") to deploy $7.5 million in Recovery Act funds to further its goals of reducing energy consumption and achieving net zero-energy buildings (defined as buildings that produce as much energy as they consume).  In order to reach these goals, DOE recognizes that a workforce must be created to help existing buildings reach, and new buildings keep, their full energy efficiency potential.

This specific FOA provides ten to thirty individual awards from $250,000, to $750,000 to develop training programs for three specific sets of commercial building specialists:

  1. Equipment technicians,
  2. Operators, and
  3. Energy commissioning agents/auditors

Entities involved with energy efficiency, professional development associations, trade training/development associations, universities, community colleges, technical trade schools, and apprenticeship programs are encouraged to apply.

Applications must be submitted by September 1, 2009 at 8:00 p.m. Eastern Time

Stoel Rives Expands Its San Diego Office

 

We welcome energy attorneys Morten Lund and David Quinby to the firm’s San Diego office as members of the Energy and Telecommunications group. They join attorneys Howard Susman and Brian Nese. The San Diego office has relocated to a larger space at 12265 El Camino Real, Suite 303, to accommodate further expansion (new contact information below).

http://www.stoel.com/images/photos/Lund-M.jpg

Morten Lund, formerly a partner with Foley & Lardner LLP in Milwaukee, has experience in a broad variety of financing transactions, with particular focus on the development and financing of wind and solar energy projects. Morten is a frequent presenter and author on renewable energy topics. He earned his law degree from Yale University in 1995 and obtained his A.B. at Augustana College in 1992. He is admitted to practice law in the state of Wisconsin and is pending bar admission to the state of California.

_____________________________________________

http://www.stoel.com/images/photos/Quinby-D.jpg

David Quinby is the current office managing partner of the firm’s Minneapolis office, and will now split his practice between California and Minneapolis. He concentrates his practice on corporate, securities, finance, and merger and acquisition matters, with a particular focus on renewable energy clients and their project development efforts. David is admitted to practice law in the state of Minnesota and is pending bar admission to the state of California.

The California energy team's capabilities also include real estate, land use and permitting, equipment procurement and construction, state and federal regulation, environmental matters, and dispute resolution.

Stoel Rives has received a national ranking for its Renewables and Alternative Energy practice from Chambers USA: America's Leading Lawyers for Business (2009), rating among the top law firms in this category. The firm has been at the forefront of growth in renewables in recent years and represents many of the industry leaders in solar, wind energy, geothermal, biomass, hydroelectric, ocean, combined-cycle natural gas, carbon sequestration and biofuels project development in California, the United States, Canada and abroad.

For more information about the Stoel Rives Renewable Energy Group, visit www.stoel.com/renewableenergy or contact:

Howard Susman at  (8... or hesusman@stoel.com
David Quinby at  (8... or dtquinby@stoel.com
Morten Lund at  (8... or malund@stoel.com
Brian Nese at  (8... or bjnese@stoel.com

 

Show me the Money: $12.9 million available for Geologic Sequestration Training and Research

The Department of Energy ("DOE") has released $12.93 million to fund geologic sequestration training and research. $7.93 million is available for awards to all universities, colleges, and college-affiliated research institutes and $5 million is available for awards to historically black colleges and universities or other minority institutes listed on the Office of Civil Rights's accredited post secondary minorities institution list. 

Individual awards will be made across five areas of interest:

  1. Simulation and Risk Assessment
  2. Monitoring, Verification, and Accounting
  3. Well Completion, stimulation, and Integrity
  4. Capture and Transport- including pipeline transport and pre-combustion capture
  5. Post-Combustion capture- including oxy-combustion capture

DOE anticipates awarding 42 awards ranging from $100,000 to $300,000 to fund research projects involving field projects for hands-on training opportunities. 

 

Green Trademarks and Eco-Friendly Claims

Jere Webb, a partner in our Trademarks and Intellecutal Property Group, recently wrote the following interesting piece about green marketing claims:

It is evident that virtually every business now is trying to position itself as being “green”. For a discussion of restrictions on “green advertising”, particularly the FTC’s green ad guidelines (the “Green Guides”), and similar efforts at the state level, see “Green Claims Advertising – What You Can Say and What You Can’t”. The FTC is reviewing the Green Guides and likely will amend them in the near future. For comments submitted in the review process and additional information, see Green Guides.

 

            The newer arena is green trademarks. The United States Patent and Trademark Office is now routinely rejecting, based on descriptiveness, multiword trademarks, that start with or contain the word GREEN. An example is the mark GREEN JOURNEY for hybrid cars. But in the same application, the applicant sought to register for clothing, and the Trademark Office accepted the mark, but with a disclaimer of the word GREEN. It found that the two word mark was merely “suggestive” of clothing, not “descriptive”. See "Green" Trademarks Face Hostile Climate in USPTO.    

 

            For an example of a green mark that passed muster, the Trademark Trial and Appeal Board (TTAB) recently reversed an examining attorney’s descriptiveness refusal for the mark GREEN INDIGO for clothing, finding it to be an “incongruous” term for clothing and therefore merely suggestive and not descriptive. The case is In re Jones Investment, Inc.  (TTAB Jan. 21, 2009.) 

 

            The lesson is: If you want to include the word “GREEN” in a trademark, some careful review and advice from a trademark lawyer is in order.

 

            Want to read more? See “Eco-Friendly Claims Go Unchecked” (USA Today June 22, 2009).   The FTC’s brochure “Sorting Out Green Advertising Claims” can be found here:  http://www.ftc.gov/bcp/edu/pubs/consumer/general/gen02.pdf

 

 

Show me the Money: Florida, Idaho, and Kansas State Energy Programs Received $77.1 Million from the Recovery Act

On June 24, 2009, the Department of Energy (“DOE”) announced more than $204 million in Recovery Act funding to ten states for their State Energy Programs ("SEPs"). 

Here is a summary of how the monies will be used in Florida, Idaho, and Kansas:

Florida's SEP will fund energy efficiency, renewable energy, and alternative fuels projects in the state.  Florida will deploy these funds through several loan and grant programs to promote the commercialization of new clean technologies.  Florida was awarded $50.4 million, and will receive an additional $63 million after demonstrating successful implementation of its SEP.

Idaho's SEP will launch a set up new programs, including the Renewable Energy Business Development Program, to further renewable energy development in the state while creating new jobs and stimulating the economy.  Further, new zoning regulations will be created to attract renewable energy developers and projects.  Idaho received $11.4 million and will receive more than $14 million in additional funding after demonstrating successful implementation of its SEP.

Kansas's SEP will launch several initiatives to boost energy efficiency in commercial buildings, increase financial options for renewable energy, and increase cost savings for individual homeowners in its state.  A portion of the money will also be deployed to create a new utility rate price plan and to fund an energy audit rebate plan.  Kansas received $15.3 million and expects to receive an additional $19 million after demonstrating successful implementation of its SEP.

 My colleagues are blogging on the other states that received funds. 

Show me the Money: Conneticut and Utah State Energy Programs

Today, the Department of Energy (“DOE”) announced more than $204 million in Recovery Act funding to ten states for their State Energy Programs ("SEPs"). 

Here is a summary of how the monies will be used in Connecticut and Utah:

Connecticut will use its SEP funding to further a variety of programs. Examples include the deployment of alternative-fuel vehicles and in-home energy audits. In-home energy audits involve a specialist performing an energy assessment, weatherizing the home, and installing energy conservation devices. After demonstrating successful implementation of its plan, the state will receive an additional $19 million, for a total of $38 million.

Utah will use its SEP funding to collect data about potential renewable energy resources in the state and to improve energy efficiency. The energy efficiency program will provide financial incentives to upgrade residential, commercial, public education, and government buildings. New construction developments will also qualify for rebates if they meet specific energy efficiency goals. After demonstrating successful implementation of its plan, the state will receive an additional $17 million, for a total of $35 million.

My colleagues are blogging on the other 8 states that received funds today. 

 

Show me the Money: $10 million for Climate Showcase Communities

On June 16, 2009, the Environmental Protection Agency ("EPA") issued a request for applications ("RFA") for its Climate Showcase Communities Grant Program.  The RFA provides $10 million for programs to help lower green house gas ("GHG") emissions through energy and resource management.

Eligible activities are those that reduce GHG emissions in the following priority areas:

  • Use or supply of green power products, on-site renewables, and other clean energy supply options;
  • Energy performance in municipal operations (including municipal energy, water, and waste-water utilities);
  • Energy performance in residential, commercial, agricultural, aqua-culture, and/or industrial buildings;
  • Land use, transportation, or community master planning;
  • Reduction of vehicle miles traveled;
  • Solid waste management;
  • Agricultural, aqua-cultural, and natural resource management;
  • Heat island management;
  • Removal of barriers for greenhouse gas management, through the development of effective programs, policies, or outreach; or
  • Other innovative activities which generate measurable reductions of greenhouse gases

The EPA expects to award up to 30 cooperative agreements.  Individual awards can be as high as $500,000, but most awards will range in value from $300,000 to $500,000.  Eligible entities include local governments, Indian tribes, and intertribal consortiums.

Applicants must submit an informal notice of Intent to Apply by July 1, 2009 and full applications are due July 22, 2009 at 4:00 p.m. EDT.

Show me the Money: $6.97 Million for Sequestration Training

The Department of Energy is requesting proposals for regional sequestration technology training.  The funding is available to develop regional training that promotes the transfer of knowledge and technologies related to carbon capture and sequestration technologies. 

Up to $6.97 million in Recovery Act Funding as available for up to 7 individual awards.

Proposals must be submitted by July 22, 2009.

Western Governors Consider Regional and National Polices Regarding Global Climate Change

At the Western Governors' Association Annual Meeting on June 15, 2009, the Western Governors heard a sobering  and candid report from Secretary of Energy Steven Chu, which, at its core, indicated that climate change is real and happening faster than scientists previously warned.  According to Secretary Chu, "the news is getting scary . . . but the most scary thing in my mind is the [scientific] observations.  People can be entitled to their own opinions, but they are not entitled to their own facts."  A few of the observations cited by Secretary Chu included the following:

  • Loss of 1/2 of the Northern polar ice cap in the last 10 years
  • Sea level rise
  • 40% of the British Columbia pine is dead
  • Extreme water stress in the Western United States (with exception to the Pacific Northwest) as a result of decreased snow pack and changing weather patterns

Secretary Chu was particularly concerned with the continued melting of the permafrost in the Northern Hemisphere, which he predicted could have "runaway effects" due to the massive release of CO2 and methane from the biomass that has accumulated over time. 

President of the World Bank, Robert B. Zoellick, also participated in the discussion on climate change, indicating that the rule making that will be necessary for implementing climate change policies will stay with us for decades and will be some of the "toughest negotiations" he has ever seen.  Mr. Zoellick stressed the importance of having the Governors plugged into the rule making process since this will be the framework that the states will have to live with.  There was also an acknowledgment among the group that the farmers and ranchers are skeptical about climate change, but that this is a key stakeholder group that needs to be part of the equation.  Governor Bill Richardson commented that the key will be the creation of a carbon offset market that will  work.  Secretary of Agriculture, Tom Vilsack, concurred indicating that a carbon offset market will be critical to the survival of rural communities. 

Continue Reading...

Show me the Money: Carbon Capture and Benficial Carbon Dioxide Use

On June 8, 2009, the Department of Energy (“DOE”) issued a Funding Opportunity Announcement (“FOA”) to deploy over $1.4 billion from the American Recovery and Reinvestment Act (“Recovery Act”) to be used to lower our nation’s carbon emissions. The FOA will support projects in two areas: (1) the capture and sequestration of carbon dioxide emissions from industrial sources, and (2) demonstration of innovative concepts for beneficial CO2 use. 

Applications under this FOA are Due August 7, 2009.

Show me the Money: Seminar for Identifying Funding for Renewable Energy Projects

The American Recovery and Reinvestment Act provides almost $94 billion dollars in direct and indirect spending to clean energy company and projects. See Show me the Money: A Guide to Sources of Funding through the American Recovery and Reinvestment Act

On June 17, 2009, I will be speaking in Cle Elum, Washington about how to get your project "shovel ready" for Stimulus Funding.  The seminar will also include sessions on identifying sources of funding and application mechanics.

Please click here for event information

Commercial Scale Carbon Sequestration

On June 12, 2009, the Department of Energy ("DOE") announced that an agreement has been entered to develop the nation's first commercial scale, fully integrated, carbon capture and sequestration project in the country. 

The Project will be constructed by the FutureGen Alliance and will serve as a flagship facility to demonstrate commercial scale carbon capture and storage.  DOE will issue a Record of Decision on the project by the middle of July.  Funding will be phased and conditioned based on completion of NEPA review.

The Project will receive funding from the following sources:

  • $1 billion from Recovery Act funds for carbon capture and storage research
  • $73 million from other federal funding
  • $400-600 million cost share from the FutureGen Alliance (based on 20 member companies contributing $20-30 million each over a four to six year period)

 

 

Show me the Money: $256 Million Investment to Improve Energy Efficiency

On June 1, 2009, the Department of Energy ("DOE") announced plans to deploy $256 million from the American Recovery and Reinvestment Act ("Recovery Act") to be used to improve the energy efficiency of the American economy. Three recent DOE Funding Opportunity Announcements ("FOAs") have been issued in conjunction with this Recovery Act announcement. Additionally, a related FOA has been announced using funds appropriated outside of the Recovery Act. The recently announced funding will support projects in three areas: (1) sustainable energy infrastructure and energy efficient industrial technologies, (2) improved energy efficiency for information and communication technology and (3) advanced materials in support of clean energy technologies and energy-intensive processes.

Click here for more complete details.

 

 

Annual Meeting of the Western Governors' Association: June 14-16, 2009, Park City, Utah

The Western Governors' Association ("WGA") will hold its annual meeting in Park City, Utah on June 14-16, 2009.  Based on a review of the Agenda posted to the WGA's website, the focus of the meeting will be on developing regional and global strategies for addressing important issues related to energy resources, climate change and water.  I will be attending the annual meeting this year and reporting on the outcome of discussions on the following topics:

On June 14, 2009, there will be a panel discussion on policies and technologies to address water use in an era of declining water supplies due to climate change.  Panelists include:  Dr. Peter H. Gleick, co-founder and president of the Pacific Institute; Professor Eilon Adar, Zuckerberg Institute for Water Resources, Ben-Gurion University of the Negev; Doug Miell, Principal, Miell Consulting; Cameron J. Brooks, Ph.D., Director of Solutions and Business Development for IBM Corporation's Big Green Innovations initiative.

On June 15, 2009, Secretary of Agriculture Tom Vilsack, Secretary of the Interior Ken Salazar, Secretary of Energy Steven Chu and FERC Chairman Jon Wellinghoff will provide their perspectives on developing large amounts of clean energy in the West and the transmission lines needed to bring it to market.  Following their remarks, they and the Governors will have the opportunity to discuss what cooperation is needed between states and the federal government to accelerate progress.  An outline of discussion points that might be expected from the Governors during this session could include topics addressed in the letter dated May 1, 2009 from the WGA to the Senate Energy & Natural Resources Committee.

Continue Reading...

FERC and Washington Sign MOU on Hydrokinetic Projects

Late last week, the Federal Energy Regulatory Commission (“FERC”) and the State of Washington signed a Memorandum of Understanding (“MOU”) to coordinate their review of hydrokinetic energy projects in Washington state waters.  The MOU is intended to  reduce some of the regulatory barriers associated with siting and permitting such projects, while also ensuring that projects are undertaken in an environmentally and culturally sensitive manner. 

As described in the MOU, FERC and Washington have pledged to collaborate in the following ways:  (1) notifying each other of potential applicants for a preliminary permit, pilot project license, or license; (2) agreeing upon a schedule for processing license applications that will include milestones and encourage collaboration among various stakeholders; (3) coordinating the environmental reviews of projects proposed in Washington state waters and consulting with stakeholders on the design of applicable studies; and (4) agreeing that if Washington prepares a comprehensive plan with respect to the siting of hydrokinetic projects, in determining whether to approve a project license, FERC will consider whether the project is consistent with the state plan.  Notably, the MOU recognizes that Washington may submit an amendment to its coastal zone management plan to the National Oceanic and Atmospheric Administration (“NOAA”) for approval, and that such a plan may identify a limited number of areas within Washington state waters where hydrokinetic projects may be initially located.  Whether NOAA would approve such a plan is unclear. 

Evaluating Climate Change Impacts under the California Environmental Quality Act: Center for Biological Diversity v. Town of Yucca Valley

Query this:  the California legislature has passed the California Global Warming Solutions Act (AB 32) and Senate Bill 97, making it clear that the impact of a project’s greenhouse gas (GHG) emissions has to analyzed under the California Environmental Quality Act (CEQA).  Your project is one GHG source among literally thousands of sources in California contributing to global climate change.  There is no recognized CEQA threshold of significance for GHG emissions. We’re months away from having new CEQA Guidelines adopted under SB 97, but, in any case, the proposed draft amendments to the CEQA Guidelines do not establish a threshold of significance. And yet, you, as a project developer, need to analyze and reach a definitive (and defensible) conclusion on the cumulative impact of your project on climate change. What do you do? 

Continue Reading...

Doing Business with Indian Tribes

My colleagues Michael O'Connell and Stephen Kelly, both of whom have a great deal of experience representing clients engaged in energy and natural resources transactions with Indian tribes, are putting on a webinar entitled "Doing Business with Indian Tribes." Since the best private lands are often already spoken for, renewable energy developers are looking more and more at developing projects on public lands and Tribal lands. The Webinar that Mike and Steve are presenting will discuss doing business with tribes generally, but their presentation will be relevant to those seeking to develop renewable energy projects in partnership with Indian tribes or on tribal lands.

Details are as follows: 

Please join Stoel Rives attorneys Michael O’Connell and Stephen Kelly for a webinar on Doing Business with Indian Tribes on Wednesday, June 10, 2009. They will conduct a lively, interactive program that will cover:

There are over 550 federally recognized Indian tribes. Indian tribes engage in a broad range of business transactions governed by a complex array of federal, tribal and state laws. Stoel Rives is pleased to offer a webinar that will offer you tools to recognize the unique legal status of Indian tribes and how it affects business transactions with Indian tribes.

  • Tribes and tribal business structures
  • Contracting, sovereign immunity, and dispute resolution
  • Leases, easements, and other agreements for use of tribal land
  • Tribal and federal environmental reviews and approvals
  • Taxation issues

When:

Wednesday, June 10, 2009
11:30 - 11:45 a.m. PST - Registration and Lunch
11:45 a.m. - 1:30 p.m. PST - Presentation


Cost:

Complimentary (lunch included)


Where:


Stoel Rives LLP
900 SW Fifth Avenue, Suite 2600
Portland, OR 97204

Or at your computer. Information on how to access the webinar will be provide to those who register.

Parking:

We will validate parking for most nearby parking garages.

RSVP:

Space is limited! Register online by Monday, June 8.

 

"Show Me The Money"

 

We announce the publication of a guide to federal clean energy funding opportunities under the $787 billion American Recovery and Reinvestment Act (“ARRA”). Titled “Show Me The Money,” the guide reviews the various programs and potential sources of federal funding for clean energy companies and projects. The guide addresses funding opportunities under the ARRA for each of the following energy industry areas: wind, solar, biofuels, biomass, smart grid, transmission, geothermal, marine and hydrokinetic, green building, energy efficiency, advanced battery and fuel cell technology, clean energy equipment manufacturing, green vehicles and clean coal. The guide also contains information about some of the funding opportunities and updates at the federal and state level which we will continue to track closely.

$150 Million to Fund ARPA-E Transformation Energy R&D Projects

On April 27, 2009, the first Funding Opportunity Announcement (FOA) under the Advanced Research Projects Agency-Energy (ARPA-E) was announced offering up to $150 million to fund transformation energy research and development projects. These funds are part of the $400 million appropriated to ARPA-E under the American Reinvestment and Recovery Act. Individual awards of $500,000 to $20 million are available to eligible projects. This FOA is aimed at projects that have a well-formed R&D plan that can make a significant contribution towards enhancing the economic and energy security of the United States by reducing imported energy, reducing energy-related gases, including GHG, and improving energy efficiency.

To be eligible, an interested applicant must submit a concept paper to ARPA-E that briefly outlines the technical concept for its project between May 12 and June 2.  Early submission is strongly encouraged. Successful applicants will then be asked to submit full applications. More information on this FOA is available at www.grants.gov.  

U.S. EPA Holds Public Hearings in California on Proposed Mandatory Greenhouse Gas Reporting Rule

U.S. EPA is holding a public hearing in Sacramento, California today on the agency's proposed rule on mandatory greenhouse gas emissions reporting.  EPA held public hearings on the new rule in the Washington D.C. area earlier this month. 

Over 13,000 facilities nationwide, accounting for about 85% to 90% of GHGs emitted in the U.S., will be required to report their emissions under the rule.  Reporting will largely be done on a facility-level, with the threshold for mandatory annual reporting based on facility capacity, rather than emissions.  Where a capacity threshold is not feasible or appropriate, facilities that emit 25,000 metric tons or more of GHGs per year will be required to submit annual emissions reports.  Data collection will begin January 2010, the first reports due in March 2011. EPA estimates that the cost to all industries to comply with the new reporting requirements would be $160 million in the first year, and $127 million annually in subsequent years.

The rule was published in the Federal Register on April 10, and comments on the rule are due to EPA no later than June 9, 2009. 

President Obama Clamps Down on Lobbyists and First Amendment

On March 20th, President Obama issued a directive to the heads of executive branch departments and agencies.  The directive is aimed at achieving the laudable goal of ensuring merit based decision-making for grants and other forms of stimulus funds provided by the American Recovery and Reinvestment Act of 2009 (usually referred to as the Stimulus Bill).  It seems that while candidate Obama promised repeatedly during his campaign to limit the influence of lobbyists in Washington DC, the passage of the Stimulus Bill has sent record numbers of lobbyists to D.C. to scramble for federal dollars.

In apparent response to this, President Obama has singled out registered lobbyists and regulated their contacts with the executive branch.  His directive provides that “executive department or agency officials shall not consider the view of a lobbyist registered under the Lobbying Disclosure Act of 1995, concerning particular projects, applications, or applicants for funding under the Recovery Act unless such views are in writing.”  Officials are directed to inquire regarding the possible presence of registered lobbyists both upon the scheduling and commencement of phone calls and in-person conversations “with any person or entity concerning particular projects, applications, or applicants for funding under the Recovery Act.”  If any registered lobbyists are detected, the directive forbids them from attending the meeting or participating in the phone call.

Not surprisingly, the American League of Lobbyists (ALL) has objected to the Obama Administrations restrictions.  In a demonstration that politics does indeed sometimes make strange bedfellow, ALL has been joined by the ACLU and the Citizens for Responsibility and Ethics in Washington (CREW).  In a letter to the President released Tuesday, these three groups requested that President Obama rescind the constitutionally offensive provisions of the directive immediately.   

As tempting a political target as they may be, registered lobbyists have a place in our political system and rights under our Constitution.  The President should heed the groups’ advice and tailor his directive to enable transparency while not muzzling any voices--including those paid to advocate.

Stoel Teams with EUCI to Present Law of Renewable Energy Webinars

Stoel Rives LLP is teaming up with EUCI to present a series of webinar’s based on our series of “Law of” books about renewable energy. The Law of Renewable Energy web conferences will address the major legal issues associated with the development of renewable energy projects.  The web conferences will include the following topics:

Tax and Project Finance Structuring Issues for Renewable Energy Projects
April 27, 2009

Real Estate and Site Rights for Renewable Energy Projects
May 11, 2009

PPAs for Renewable Energy Projects
May 18, 2009

Siting and Permitting for Renewable Energy Projects
June 1, 2009

EPC, Major Component, Construction and Balance of Plant Contracts for Renewable Energy Projects
June 8, 2009

Regulatory and Transmission Issues for Renewable Energy Projects
June 15, 2009


Please sign up here if you’d like to get your own copy of any book in our “Law of” series. We update the “Law of” books regularly, and we'll have copies of the Law of Wind (5th edition) at Booth No. 3148 at the AWEA conference in Chicago on May 4-7, 2009. In addition, please sign up here if you’d like to receive our Stoel Rives Energy Law Alerts and other periodic updates.
 

Stimulus Bill Funding for Data Center and Telecom Technology Energy Efficiency, Smart Grid, Enhanced Geothermal Systems, and More

The American Recovery and Reinvestment Act of 2009, also known as the “Stimulus Bill,” allocated billions of dollars in funding for renewable energy, energy efficiency, energy storage, and other projects under the energy and climate change umbrella. Of the vast sums of money available for such projects, $16.8 billion goes to the U.S. Department of Energy’s (“DOE”) Office of Energy Efficiency and Renewable Energy (“EERE”). Another $4.5 billion in direct spending on smart grid demonstration projects will be overseen by DOE’s Office of Electricity Delivery and Energy Reliability. 

On March 5th, DOE’s EERE Industrial Technologies Program (“ITP”) released a Notice of Intent to issue funding for technologies that increase the energy efficiency of server-based information and communication technology (“ICT”) systems housed in data centers and telecommunications central offices. The solicitation seeks proposals for projects that would increase the efficiency of IT equipment, software, power systems, and cooling systems. The solicitation also extends to the demonstration and field-testing of pre-commercial technologies in these areas, as well as in distributed generation or alternative power technologies used to power ICT systems. ITP intends to release the solicitation sometime this month. 

DOE also recently announced its intention to issue a Funding Opportunity Announcement (“FOA”) for smart grid demonstrations. In addition, DOE issued two FOAs for enhanced geothermal systems (“EGS”). The EGS FOAs offer up to $84 million over six years, including $20 million for the 2009 fiscal year. Check out our recent Energy Law Alert for more information on DOE funding for smart grid demonstrations and enhanced geothermal systems.   

Because of the relatively short window for responding to FOAs, DOE recommends that prospective applicants complete several one-time pre-application steps. Information on submitting applications is available at www.grants.gov.

 

FERC Technical Conference on Wind Integration

From our colleague Jason Johns:

The Federal Energy Regulatory Commission will host a technical conference on March 2 to discuss the challenges of integrating large amounts of variable generation into wholesale markets and the grid. The Commission is also asking for innovative proposals that will help accomplish such large integration. Notably, the conference could hardly occur at a more appropriate time, as wind installation grew by 8,358 MW in the US in 2008 (more than gas-fired capacity) and certain regions of the country are hotly debating the costs of putting wind on the grid. Conference panelists will include Don Furman (Iberdrola Renewables), Brian Parsons and Brendan Kirby (National Renewable Energy Laboratory), Bob Kahn (Northwest & Intermountain Power Producers Coalition) and Steve Oliver (Bonneville Power Administration, which put its first wind integration charge in place in 2008).

The technical conference is available by free webcast.

FERC Rejects MISO's Market Coordination Service Proposal, Approves Anchor Tenant Merchant Transmission

From our colleague and FERC guru, Jason Johns:

MISO’s Proposed Market Coordination Service:

The Federal Energy Regulatory Commission today rejected the Midwest ISO’s proposed Market Coordination Service that would have given certain transmission owners access to the ISO energy and operating reserve markets without requiring those owners to hand over control of facilities or share in transmission development costs.  Although the proposal was an innovative approach to expanding the ISO’s market footprint, FERC worried that the proposal would harm consumers and cause the ISO to unravel as transmission owners opt out of full membership to avoid transmission cost-sharing.  FERC also questioned whether the proposal would attract more wind energy into the ISO market because, by leaving pancaked transmission rates intact, wind resources could face higher transmission rates as ISO members withdraw in favor of Market Service.  The Midwest ISO must remove all Market Service language from its tariff within the next 30 days.

Renewable Energy Transmission Project Rates:

In other news, FERC accepted a request for waiver of criteria traditionally used to evaluate merchant transmission projects.  In their applications, the Zephyr and Chinook merchant transmission projects proposed to presubscribe 50% of the projects’ 3,000 MW capacity to an “anchor tenant” wind developer in order to defray upfront development costs, and then allocate the remaining 50% through a traditional open season process.  The proposal was intended to avoid the “chicken-and-egg” scenario often associated with merchant transmission, i.e.,resources will not develop without assurances that transmission is available, and likewise transmission projects will not move forward without assurances from resource developers.  FERC’s acceptance of this modified approach to merchant transmission expressly opened the door to similar proposals in the future.  “Anchor tenant” merchant transmission is the new standard.

Utah Governor Urged to Withdraw from Western Climate Initiative

On February 13, the Utah Public Utilities and Technology Committee voted to favorably recommend a House Resolution urging Governor Huntsman to withdraw Utah from the Western Climate Initiative. The resolution, 1st Sub. H.R. 3, contains recitals referring to “Utah’s abundant and clean burning coal,” the lack of balance in the Governor’s Blue Ribbon Council on Climate Change, the absence of economic analysis of the costs and benefits associated with carbon reduction mandates, and other concerns regarding the economic impact of a cap and trade mandate. The resolution is among a number of proposed resolutions and bills addressing energy issues, including H.J.R 9, Joint Resolution on Cost-Effective Energy Efficiency and Utility Demand-Side Management, H.J.R. 12, Joint Resolution Supporting Hydrogen Power From Advanced Coal and Carbon Capture and Sequestration Technology, and House Bill 412, Energy Policy Amendments.

Will California be Able to Regulate GHG Tailpipe Emissions?

The California Air Resources Board may soon get its wish.  Back in 2005, ARB first requested a waiver from the U.S. Environmental Protection Agency, to allow California to regulate motor vehicle greenhouse gas emissions.  EPA denied the waiver two years later, after California threatened to sue EPA to force the agency to take action on the request.  The very day after President Obama's inauguration into office, ARB filed with EPA a request for reconsideration of its waiver request.  Several days later, President Obama himself signed a Presidential Memorandum directing EPA to assess whether denial of the waiver was appropriate in light of the Clean Air Act.  Last Friday, Lisa Jackson, head of the EPA, issued a Notice for Public Hearing and Comment on California's request for consideration of the previous waiver denial, which officially initiates reconsideration by EPA.  Discussion at the public hearing on March 5, 2009 may get interesting, as the Notice's 'supplementary information' included a brief discussion on how the waiver denial had "significantly departed from EPA's longstanding interpretation of the Clean Air Act's waiver provisions and from the Agency's history, after appropriate review, of granting waivers to California for its new motor vehicle emission program."  Stay tuned.

Continue Reading...

On the Senate Side, Alternatives to the House's Proposed Renewable Energy Incentives

On Friday, January 23, the Chairman of the Senate Finance Committee released his version of the economic stimulus bill.  Like its House counterpart (H.R. 598), the proposal by Chairman Max Baucus ("Chairman’s Mark") is called the American Recovery and Reinvestment Tax Act of 2009.  The Chairman’s Mark is scheduled to be considered in the Finance Committee on Tuesday, January 27.

As with H.R. 598, the Chairman's Mark would extend the production tax credit ("PTC") sunset date, permit taxpayers to elect to claim the investment tax credit ("ITC") in lieu of the PTC for certain projects, and extend bonus depreciation through 2009.  Importantly, however, the Chairman’s Mark does not include the provision in the House bill that would enable taxpayers to receive cash grants in lieu of the ITC for certain projects.  Without this grant provision, questions have been raised as to whether the Chairman's proposal would accomplish the legislative purpose of promoting investment in renewable energy development.  Other provisions of note in the Chairman's Mark are modifications to the general business credit and a new 30% credit for investment in certain property used in a "qualified advanced energy manufacturing project."

Click here for a detailed summary of the Chairman's Mark.  To view our recent Energy Law Alert on the House bill, click here.

House Bill Could Boost Incentives for Renewable Energy Projects

As part of an $825 billion stimulus plan to help revitalize the economy, the American Recovery and Reinvestment Tax Act of 2009 (H.R. 598) was recently introduced in the House of Representatives. The Bill aims to shore up tax incentives and offer new grants that would facilitate the development of renewable energy projects. Highlights of the proposed legislation include an extension of the production tax credit (“PTC”) sunset date, an election between the PTC and the investment tax credit, project grants in lieu of tax credits for certain projects, and an extension of bonus depreciation through 2009.

Check out our recent client alert for more information on HR 598 and its implications for project financing. The House Ways and Means Committee began its markup of the Bill on Thursday, January 22. We will report further developments as the Bill progresses. If you’d like to receive Stoel Rives Energy Law Alerts, click here.

Governor Kulongoski Proposes Nine Bills to Promote Renewable Energy Projects, Energy and Fuel Efficiency

Oregon Governor Ted Kulongoski continues to take aggressive action in the green business realm. Having made renewable energy one of his budget priorities, Gov. Kulongoski filed nine bills under the climate change umbrella to be considered in the 2009 legislative session. According to Gov. Kulongoski, the bills will “build on our leadership in renewable energy that will create jobs and reduce greenhouse gas emissions.”

Continue Reading...

ASTM Proposes Corporate Climate Change Disclosure Standard

ASTM International (formerly the American Society for Testing and Materials) recently published a proposed voluntary standard entitled “Financial Disclosures Attributed to Climate Change,” intended to provide guidance on when public company disclosure of climate change matters is required.  While the standard itself isn’t available via the Internet, a summary is available from the Brattle Group, which helped craft the standard, and we have a copy of the ASTM proposal if you’re interested.  There have been numerous discussions on the proposal over the last year (see, for example, Global Reporting Initiative and Carbon Disclosure Project materials), including last year’s detailed petition to the SEC by a coalition of environmental groups and investment funds.  It remains to be seen to what extent companies will modify their disclosures if the proposal is adopted as written.  Generally speaking, public disclosure is backward looking and conservative, and therefore currently includes only those items that are substantive and measurable, such as lawsuits, new environmental regulation, and capital expenditures.  That being said, environmental groups, both on the disclosure front and the proxy proposals front, and the New York Attorney General, continue to voice their thoughts on this concept.

If you'd like to receive any of our law alerts, please let us know.  And as always, stay tuned!

A Change in Direction: EPA Must Consider CO2 Emissions When Issuing Permits for New Power Plants

In case there was any doubt after the recent watershed election, the times they are a-changin’. The U.S. Environmental Protection Agency (“EPA”) Environmental Appeals Board’s (“EAB”) recent ruling, In Re Deseret Power Electric Cooperative, could pave the way for EPA-imposed CO2 emissions limits on power plants and other significant sources of CO2 emissions. In response to a lawsuit filed by the Sierra Club over the EPA’s issuance of a permit authorizing the construction of a new coal generating unit near Bonanza, Utah, the EAB has ruled that the EPA must consider CO2 emissions when determining whether to issue permits for new power plants. 

Continue Reading...

Dingell Unseated; Waxman to Head House Energy and Commerce Committee

In a move that could have a significant impact on the energy sector (and create a buzz among political science departments) nationwide, Representative Henry Waxman (D-CA) has dethroned Representative John Dingell (D-MI) in his nearly 28-year post as chairman of the influential Committee on Energy and Commerce. The 137-122 secret vote has shaken up the seniority system that has driven the caucus for decades. It also replaces a long-time friend of the auto industry with someone who has been championed by environmentalists for his positions on clean air and global warming. 

Waxman’s ascension to the Energy and Commerce Committee chairmanship is particularly significant because the committee shepherds legislation on climate change, energy, and health care—all of which are key priorities of the Obama Administration. Waxman (who also has a strong leadership record on health care issues) has pushed for aggressive targets for carbon emissions reductions, more stringent auto emissions standards, and a national cap-and-trade program. Although Dingell recently proposed legislation that would impose gradual reductions in greenhouse gas emissions, Waxman has put forth much more ambitious climate change legislation. 

 

Also of note is Obama’s recent appointment of Philip Schiliro, a longtime aide to Waxman, as the new White House director of Congressional relations. This appointment is considered to be significant in that it provides Waxman with a direct channel to the White House. Congressional insiders have also noted that House Speaker Nancy Pelosi is a close ally of Waxman’s. This web of connections underscores the potential for the Obama Administration and Congress to work closely together to usher in major changes to U.S. climate change policy.  

           

Washington Supreme Court Gives Green Light to Kittitas Wind Project

In a decision of great importance to the wind energy industry, the Washington State Supreme Court this morning upheld the approval of Horizon Wind Energy’s Kittitas Valley Wind Power Project.  See Residents Opposed to Kittitas Turbines  v State Energy Facility Site Evaluation Council (EFSEC).   The wind project will be located to the east and west of Highway 97 approximately 12 miles northwest of Ellensburg in Kittitas County, Washington, and is permitted for up to 65 wind turbines.  With a proposed installed capacity of approximately 100 megawatts, the project will be able to generate clean renewable power for approximately 30,000 average homes each year. 

The Washington Supreme Court’s unanimous decision sets important precedent on the authority of the Washington Energy Facility Site Evaluation Council (EFSEC) to offer  “one-stop” licensing for large energy projects.  Horizon Wind Energy had worked collaboratively to get approval of EFSEC, Gov. Chris Gregoire and many governmental environmental agencies and nonprofit groups.  However, some local residents and the Kittitas County Commission opposed the project and argued that EFSEC could not preempt the County’s authority under the Growth Management Act.  The Washington Supreme Court rejected their arguments.  Developers wishing to site wind and other energy projects in Washington now know what the Washington EFSEC can do, and many of the principles articulated in the decision will be helpful to the wind developers fighting similar battles in other states. 

 

My colleagues Tim McMahan and Erin Anderson, who have worked tirelessly on behalf of Horizon Wind Energy in pursuit of this result, are preparing a summary of the Supreme Court’s sixty-page decision.  We'll be sending out the summary and its implications as an Energy Law Alert shortly.  If you’d like to sign up to receive Stoel Rives Energy Law Alerts, you can do so by clicking on this link and filling out the form.   

 

In the meantime, for stories covering the Washington Supreme Court’s decision, see:

 

Renewable Northwest Project Press Release

 

MarketWatch Report

 

Seattle Times Report

California's Green Governor To the Rescue?

California has not been afraid to jump off the deep end when it comes to tackling some of the biggest environmental concerns of our era. With the 2006 Global Warming Solutions Act, otherwise known as AB 32, California was the first state to institute mandatory greenhouse gas emissions reductions. And Governor Arnold Schwarzeneggar has been right there with the Legislature. While AB 32 mandates a reduction in greenhouse gas emissions to 1990 levels by 2020, in 2005 the Governor called for even further reductions: 80% below 1990 levels by 2050. 

California is going full steam ahead with AB 32, and also SB 375, which implements a variety of land use and planning requirements and incentives to encourage urban development, decrease vehicle miles traveled, and ultimately reduce greenhouse gas emissions.  Meanwhile, Governor Schwarzeneggar is also planning for the worst case scenario. Executive Order S-13-08, released on October 14, 2008, addresses planning for the probable effects of climate change. The Executive Order makes the case that “the longer that California delays planning and adapting to sea level rise the more expensive and difficult adaptation will be.” This may sound like commonsense, but it’s also demonstrated by the numbers. As the Order points out, “billions of dollars in state funding for infrastructure and resource management projects are currently being encumbered in areas that are potentially vulnerable to future sea level rise.”

The Order tasks a conglomeration of state agencies with coordinating the preparation of a Sea Level Rise Assessment Report by December 2010. In the interim, all state agencies planning construction projects in vulnerable areas have to consider “a range of sea level rise scenarios for 2050 to 2100.” The vulnerability of a project must be assessed, and the agency must reduce risks and increase resiliency to sea level rise to the extent feasible. An agency is off the hook for this additional analysis if it has already issued a Notice of Preparation for an environmental impact report under the California Environmental Quality Act, or a project is programmed for construction funding in the next five years. 

The requirements of the Order do not bleed over into private development, but one has to wonder . . . will this additional level of analysis next be shifted to the private developer who proposes a project in a vulnerable coastal area? This would mean another layer of data to incorporate into a project’s environmental review, including information on local uplift and subsidence, coastal erosion rates, predicted higher high water levels, and storm surge and storm wave data. What would it take to reduce the risks associated with sea level rise for a project your company would like to undertake on the coast? How would you increase the project’s “resiliency” to sea level rise? We can’t put everything in the coastal zone on stilts, but what could be required of an individual project?

 

I know I’ll be looking for notice of the public workshop on the Sea Level Rise Assessment Report that has to take place before the end of next March.

Continue Reading...

Governor Kulongoski's Climate Change Agenda Unveiled

Earlier this week, I attended Climate Solutions’ Business Briefing on the Governor’s Proposed Climate Change Policy. Hosted by Gerding Edlen, the briefing offered a snapshot of the Governor’s legislative agenda for 2009 and beyond, and gave the sustainable business community the opportunity to offer feedback on what needs to happen to move the plans forward.

The Governor’s Climate Change Agenda (the “Agenda”) covers four major areas: greenhouse gas (“GHG”) reductions, renewable energy, sustainable transportation, and energy efficiency. Some highlights follow.

Continue Reading...

Congress Extends PTC and ITC--More Analysis to Follow

In an email alert that we just sent out, my colleagues in the Stoel Rives Tax Section report:

Today the House passed, and President Bush signed into law, H.R. 1424, which includes the Energy Improvement and Extension Act of 2008 (the Act). The Act contains the much-anticipated extension of the production tax credit (PTC) and investment tax credit (ITC) sunset dates.

The Act extends the PTC placed-in-service sunset date for certain wind and refined coal facilities until December 31, 2009, and extends the PTC placed-in-service sunset date for certain other qualifying facilities until December 31, 2010. The Act also expands the PTC to include certain marine and hydrokinetic renewable energy facilities placed in service on or before December 31, 2011.

The Act extends the ITC placed-in-service sunset date for solar, fuel cell and microturbine property until December 31, 2016 and expands the ITC to include combined heat and power system property, qualified small wind energy property, and geothermal heat pump system property.

In addition, H.R. 1424 contains a variety of other renewable energy tax provisions, including provisions allowing the energy credit to offset alternative minimum tax liability; increasing the amount of the biodiesel and renewable diesel fuel credits and extending the sunset dates until December 31, 2009; authorizing new clean renewable energy bonds and qualified energy conservation bonds; and extending the energy efficient commercial buildings deduction and the new energy efficient home credit.

Our Tax Section is working on preparing a more detailed analysis of the tax aspects of HR 1424.  If you'd like to receive updates concerning H.R. 1424 and other renewable energy and clean tech issues, please subscribe to our Renewable Energy Mailing List.

 

Ocean Energy Makes Waves Again

For those who are following the development of ocean and wave energy on the West Coast of the United States and Canada, The Oregonian published an interesting article by Gail Kinsey-Hill entitled Off Oregon's Coast, Wave Energy Makes a SplashThe article provides a good overview of the latest Oregon developments in ocean and wave energy, describing the big payoffs, the challenges, the concerns of crabbers and fishermen, and the competing technologies (including Ocean Power Technologies' buoy-like "point absorbers" and Pelamis' sausage-like sea snake).

As The Oregonian's article suggests, those interested in learning more about cutting edge ocean technology should consider attending Oregon's Third Annual Ocean Renewable Energy Conference at the Mill Convention Center in Coos Bay.  The two day conference will be held this Thursday and Friday (September 25-26).  The event is hosted by Oregon Wave Energy Trust, and you can learn more about the conference and register for it at oregonwave.org

My partner Cherise Oram, one of the nation's leading legal experts on ocean, tidal and other forms of hydrokinetic energy, will be speaking on a panel discussing how wave projects are developed from concept to commercialization.  She'll have on hand plenty of complimentary copies of the new second edition of Stoel Rives' Law of Ocean and Tidal Energy , or you can download your own today.

Algae Takes Wing

The August 16-22, 2008 issue of NewScientist features a very interesting article called "A tank of the green stuff" (pages 34-37).  Airlines are facing volatile and rising fuel costs, plus the risk of fuel shortages.   Unlike land transport, which it least in theory can be converted to run entirely on electricity, air travel depends on energy-dense kerosene.  As if that weren't bad enough, the aviation industry is a significant source of carbon dioxide emissions that will come under increasing scrutiny as countries try to manage and eventually reduce their emissions.

So the airlines are looking seriously at turning biofuels into aviation fuel.  The problem with first generation biofuels (apart from an unfortunate but solvable tendency to clog in high-altitude cold conditions) is that they require large amounts of feedstock to produce.  When Virgin Atlantic airlines test-flew a 747 from London to Amsterdam earlier this year, it used a biofuel made from coconut and babssu oil produced by Imperium Renewables of Seattle.  But according to NewScientist, that flight alone would have consumed 3 million coconuts had it been run entirely on biofuels.  That's why Virgin and its partners stressed that the flight was "proof of concept."  Because of the large volumes involved, NewScientist estimates that biofuels derived from Jatropha and even biomass (e.g., waste timber) would use up huge swathes of land (much larger than France and Germany, respectively) .

Enter algae.  Biofuel from algae could be produced, in theory, at 36 tonnes per hectare.  To satisfy the 2007 consumption of jet fuel, that would require commiting 66,000 square kilometers to algae produce--an area about the size of Ireland.  That certianly sounds a bit more manageable!

There are many technical hurdles between now and commercial production of algae, but the airlines may provide an important catalyst for the development of this new technology.  Related stories on the topic can be found in The Minneapolis Star-Tribune and Biodiesel Magazine.

Recognizing that algae is likely to be among the most important next generation of biofuels, Stoel Rives is in the process of preparing the new Law of Algae, which will be our eighth "Law of" book (unless, of course, we can come up with a catchier title between now and the publication date),  Stay tuned--the new book should be available in October.  Please subscribe to our Renewable Energy Mailing List if you'd like to receive notice when the Law of Algae is published.

When is a Green Building Lease Like a Power Purchase Agreement? Avoiding Deja Vu All Over Again

On April 16, 2008, Northern States Power filed a petition with the Minnesota Public Utilities Commission for a determination that "Xcel Energy has all legal rights necssary to possess, use and dispose of any renewable energy credits ('RECs') arising from the production of renewable energy that Xcel purchases under its renewable energy power purchase agreements ('PPAs')."  NSP's request was directed primary at "46 older PPAs that did not contain language explicity addressing the treatment of RECs."  Suprisingly, until 2003, Xcel Energy's form of PPA for certain small facilities was silent on the question of which party--the generator or the utility--was entitled to the RECs associated with the renewable energy.  Xcel and the affected generators are now filing pleadings before the Commission to sort out the question of who gets to claim the RECs produced by these renewable energy projects--NSP, as the utility buyer, which needs more RECs to meet Minnesota's RPS; or the generators, who wouldn't mind being able make a little more money by selling reserved, unbundled RECs in a separate transction (some of them may have already done just that, and may be unpleasantly surprised if the Commission rules that Xcel is the true owner of those RECs).  The discussion rages on in Docket E-002/M-08-440. (To see the filings, go to the Minnesota Public Utility Commission's e-docket and enter "08" in the year and "440" as the docket.)

So, what do renewable energy PPAs have to do with the lease of a green building?  Well, imagine this scenario.  A developer designs and builds a marvelous new high performance green building with a Platinum LEED certification.  The building's developer/owner leases the building to a company that wants to enjoy the prestige of occupying a top-knotch green office space.  A couple of years later, the state recognizes and values "white tags" (energy efficiency credits); or, the federal government gets around to enacting a comprehensive carbon cap and trade law.  Suddenly, the green building may be yielding additional value in the form of white tags, carbon offset credits or other environmental attributes. 

So who gets that value?  The owner, who took all that risk to develop the green building?  Or the lessee, who is perhaps paying a higher than market rate to rent space in a very desirable green building?  Perhaps a lender has a claim that the value was pledged as collateral for its loan.  If the lease is silent on the point, the lessor and lessee may find themselves quarreling over who gets to own and sell the tags or offsets.  The same issue can crop up in agreements to sell "green" condominiums or other transactions in which some feature of a green building is conveyed to another party.

To avoid re-learning the lesson that Xcel and its generators are now absorbing in a different context, the simple fix is to make sure that the green building lease or transfer agreement directly addresses the question of who gets to keep (or receive) any credits or benefits that are recognized as a result of the building's high performance, green status.  Some forethought about how these agreements are drafted can avoid disputes later on.

 

More on The Oregon Public Utility Commission's Decision in Honeywell

For those who have been tracking the Oregon Public Utility Commission's In re Honeywell proceeding, Stephen Hall and Pat Boylston have just released a Stoel Rives Energy Law Alert explaining the significance of the decision for third party "on site" solar and wind generation and net metering. 

Gail Kinsey Hill reported on the decision and its importance for solar development in a story entitled "Ruling gives solar energy projects in Oregon a big boost", which appeared in The Oregonian on August 1.

Although the OPUC's ruling is a big win for the solar industry in Oregon, the same principles would apply to third "on site" wind generation (although it would not apply to other renewable energy sources).

More Good News for Solar!

Coming on the heels of the Oregon PUC's decision in the Honeywell case (see Steve Hall's blog below), scientists at MIT announced today that  they had discovered a cheap way to separate oxygen from hydrogen using techniques learned from studying plant photosynthesis.  Once separated, the hydrogen and oxygen can be used to power a fuel cell.  During the daytime, a home would run on solar power--at night, it would draw energy stored in the fuel cell.

Could this development be a game changer?  The full story is to be published in Science today--in the meantime, check out ScienceDaily.

 

 

The New (2nd) Edition of the "Law of Biofuels"

Stoel Rives has now published seven original Law of books covering various topics in the renewable energy industry.  To write these books, our attorney-authors draw on over 20 years of legal and business experience in wind, geothermal, biofuels, and other renewable energy resources.  The books are intended to provide a succinct but thorough overview of industry segments in a way that is practical, business-oriented and not overly legalistic.

Of course, the renewable energy world is changing constantly.  This Renewable + LawSM Blog is our effort to stay on top of these issues as quickly as they emerge.  But at least once each year, we also update our Law of books.  The update process helps us develop a deep and immediate understanding of complex issues, and it's a great way to build a proficient team of lawyers who know how to work efficiently together. 

The Law of Biofuels (2d Ed) will be making its debut at the Stoel Rives booth (No. 718) at The American Coaliton for Ethanol (ACE) conference on August 12-14 at the Qwest Center in Omaha, Nebraska .  You can also order it or download it online.  The new book includes a chapters on Next Gen Biofuels, technology and licensing, financing, tax, siting and permitting, construction, commercial contracts, and real estate.  Biofuels attorneys from all of Stoel Rives' contributed their insights to this book

At the ACE conference, my partner David Quinby, an old hand at biofuels and energy M&A,  will be speaking on a panel addressing "Ethanol Today & Tomorrow: Growing and Selling Considerations,"  in which he will explain how biofuels plants can grow, diversify, recapitalize or sell in today's world of narrow margins and volatile markets.  Dave promises an exciting presentation, a little like "The Dark Knight" but with more humor.

The Cutting Edge of Carbon Sequestration Law

On July 17, my partners Jerry Fish and Tom Wood made a well-received presentation on geologic carbon sequestration at the Rocky Mountain Mineral Law Institute (RMMLI).  RMMLI will soon publish their very detailed law review article on the subject--the article will discuss both real property issues (who owns the rights to store or sequester carbon dioxide,  anyway?), as well as the environmental, permitting and regulatory issues raised by carbon sequestration.  In the meantime, for those who can't wait for RMMLI to publish its 2008 proceedings, here's Jerry and Tom's Power Point presentation about "Carbon Sequestration Property and Regulatory Issues".

Is the Glass Half Empty, or Half Full?

The Oregonian ran an interesting front page article today (July 21, 2008) about the expected explosive growth of wind energy in the Pacific Northwest.  The good news (or what should have been the good news) is that wind developers are planning to quadruple the amount of wind power in the region. 

The Bonneville Power Administration's recent transmission "open season" produced substantial "pay to play" commitments from major wind developers (including national players IBERDROLA, Horizon Wind Energy, and enXco, among others) and regional utilities, who are together planning to add more than 4,700 MW of installed wind capacity to our region over the next five years.  (The article reports that the region's transmission system now handles about 1,490 MW of installed wind capacity, which will rise to about 2,000 MW by the end of 2008.) Once the five year build out is finished, about 8%of the region's electricity needs would be served by wind, which would be among the highest percentages in the nation--wind currently serves about 1% of all US energy needs on average, rising to highs of around 5% in windy Iowa and Minnesota.

Unfortunately, the morning print edition of The Oregonian ran a somewhat sensational headline announcing that "Wind power could blow grid," adding that "utilities and developers want to quadruple Northwest's output, but power lines can't hold that much more."  It would have been more accurate  to announce "Wind to Power 2,000,000 Homes," but what do I know about selling newspapers?  Anyway, the whole point of the BPA's open season was to lay the groundwork for building the new transmission infrastructure that will enable us to make effective use of all that wind without "blowing the grid."  In fact, most of the proposed projects won't be built if the transmission infrastructure isn't improved--the crisis that the headline predicted really can't happen.  Sadly, a large number of people who don't read "below the fold" aren't going to grasp this little nuance and are going to come away with the impression that "wind is bad."  Challenging, yes--bad, no.

Here's the on line version of the article, more plausibly entitled "Rush of wind to hit Pacific Northwest." 

A Darker Shade of Green: Stoel Rives Announces Firmwide Sustainability Campaign

Our renewable energy team here at Stoel Rives has been a big fan of purchasing green power for years--we were one of the first US law firms to purchase green tags to offset a portion of the firm's electricity use.

In 2008, we kicked off an even more ambitious firmwide GO GREEN campaign that goes beyond buying green power. In many of our offices, we have removed garbage cans from individual offices and now walk our garbage to a central location on each floor where the waste can be recyled, composted or, as a last resort, thrown away.  (Needless to say, the sudden disapperance of office garbage cans stimulated a lot of discussion, but it certainly taught us how many things could actually be composted or recycled if we tried hard enough.).  We've logged enough alternative commuting miles in the past 6 weeks to drive round trip from Portland, Oregon to Miami, Florida over 15 times.  We also learned that we we can save over $70,000 a year in costs by just changing the firm's printers to a default duplex mode.  We're now one of only seven law firms in the United States  to qualify as a leader in the EPA/ABA Climate Challenge.

To learn more about the things we're doing here at Stoel Rives to reduce our impact on the earth and support renewable energy, check out our Go Green Press release

.

The Role of Biofuels Producers in Climate Change

A recent article by Stoel Rives Boise Partner John Eustermann highlighted the role that biofuels producers can play in climate change in the United States as voluntary carbon trading markets continue to mature and carbon legislation becomes more likely.  The article provides an overview of the current state of the carbon credit trading market in the United States, as compared to those countries which are signatories to the Kyoto Protocol, and identifies the benefits to companies who enter the voluntary market in the United States in anticipation of establishment of a formal trading market. 

The article, entitled "Committing to Carbon Credits," appears in the July 2008 issue of Biofuels International magazine.  Another recent article of John's on the topic was featured in the April 2008 issue of Ethanol Producer magazine, entitled "Capturing the Value of Carbon Credits in Biofuels Projects."

Welcome to the Renewable + LawSM Blog

Greetings! On behalf of the Stoel Rives Renewable Energy Initiative, I would like to welcome you to our blog, Renewable + Law.SM We intend Renewable + LawSM to be a catalyst for lively discussion about renewable energy and climate policies, major renewable energy projects, emerging technologies, market developments, new laws, tax credits and industry scuttlebutt.   

 

For reasons ranging from concern about global warming and the environment to economic growth, jobs, and national security, renewable energy has evolved into a major industry. Globally, renewable energy was a $148 billion business in 2007. In addition to renewable energy, emerging climate policy is shaping up to be one of the most important economic forces in our time. As of this writing, all three U.S. presidential candidates are in favor of some form of carbon cap and trade program at the federal level. At the state level, California has already adopted economywide caps on greenhouse gas emissions and other western states are pursuing a similar program through the Western Climate Initiative. Together, the western states are leading the nation in the development of cap and trade policies. Climate policy, in turn, will spur greater demand for renewable energy, energy efficiency, green building, carbon offset projects and other cleantech applications. 

 

From Seattle to San Diego, from Portland to Minneapolis, and from Boise to Salt Lake City to Sacramento, Stoel Rives has offices with lawyers working on renewable energy projects. Providing valuable advice to clients requires us to keep abreast of renewable energy and climate policy developments to place those novel legal questions into a larger context. Renewable + LawSM lets us share with you our passion for solar energy, wind energy, biofuels, ocean and hydrokinetic energy, biomass, waste-to-energy, geothermal and other clean technologies.  

 

Thank you for your interest. We hope that you enjoy Renewable + Law!SM

 

STEPHEN HALL

 

Learn more about Stoel Rives and our national legal practice devoted to renewable energy. You may also have an interest in our complimentary books on various legal issues involved with developing various renewable energy projects