Ameren Should LOSE the Latest Battle Over Option 1 Network Upgrade Funding in the Midcontinent ISO Region

Ameren is at it yet again--perpetuating a method for funding generator interconnection network upgrades in MISO that the Federal Energy Regulatory Commission (FERC) found to be unjust, unreasonable, and discriminatory over three years ago.  Ameren has already won two cases that allowed it to continue using Option 1 funding for certain interconnection customers.  But Ameren should lose this one.  Here's why:

A Brief History.  Prior to March 22, 2011, the MISO tariff provided three methods for funding interconnection network upgrades.  Option 1 required an interconnection customer to upfront fund the cost of network upgrades (post security and pay monthly construction costs); when those upgrades became commercially operational, the transmission owner would reimburse the full amount paid by the customer and then establish a transmission rate to charge the customer for using the upgrade on an ongoing basis.  Option 2 funding also required the customer to pay upfront construction costs, but then the customer was reimbursed a portion of those costs following commercial operation.  Option 2 did not include an ongoing rate.  As a result, over time Option 1 funding could result in multiples of the actual cost that a customer might pay under Option 2.  (The third option--"self-fund"--allowed a transmission owner to pay upfront costs itself and then charge a usage rate.)

On March 22, 2011, FERC responded to a complaint about Option 1 funding by independent power producers, determining that the method was "unjust, unreasonable, and discriminatory."  FERC ordered MISO to remove Option 1 funding from its tariff.  That order is found here:  E.ON Climate & Renewables.

However, in the past couple of years, Ameren has successfully won the right to continue using Option 1 funding in interconnection agreements that were signed prior to FERC's decision in E.ON.  After FERC issued its decision in E.ON, certain customers attempted to obtain the benefit of that decision by having FERC alter their agreements where they had agreed to Option 1 funding.  But FERC denied the attempts, primarily on the basis that those prior agreements expressly provided for Option 1 funding and that it would not be in the public interest to unilaterally modify the contracts.  In other words, those customers who sought to benefit from the E.ON decision had express notice that Option 1 funding would apply and they failed to raise a timely dispute; FERC would not reset the contracts they had agreed to.  Those decisions are available here:  Rail Splitter (agreed to Option 1 funding by signing a Facilities Service Agreement) and Hoopeston (agreed to Option 1 funding in its interconnection agreement).

Now we come to the current dispute over Option 1 funding.  This docket focuses on an interconnection agreement that Ameren signed with White Oak Energy in 2007.  At that time, Option 1 funding existed under the MISO tariff, but White Oak's interconnection agreement said nothing expressly about Option 1 funding.  In addition, Ameren was not required to select the funding method until the network upgrades reached commercial operation.  At the time of signing its interconnection agreement, if White Oak had disputed the potential application of Option 1, FERC would have likely dismissed the dispute for being unripe.  It wasn't a real issue yet.  

Fast forward four years.  Ameren completed construction of White Oak's network upgrades in 2011 and notified White Oak at that time that Option 1 would apply.  White Oak disagreed repeatedly, leaving Ameren forced to file White Oak's Facilities Service Agreement unexecuted with FERC.  Under the proposed funding method, White Oak's network upgrades (actual cost $2,399,128) will cost $8,292,180 over 20 years under the ongoing rate.  You can see Ameren's application to FERC here:  White Oak FSA Application.

So why should White Oak receive a different result than the customers in Rail Splitter and Hoopeston?  White Oak should be treated differently because, until now, it had no prior opportunity to complain to FERC about this method for funding network upgrades that we know to be discriminatory.  Unlike the customers in Rail Splitter and Hoopeston, who waived their opportunity to complain and consequently needed FERC to undo contracts they'd agreed to, White Oak has never agreed to Option 1 funding--there is no contract to undo  As a result, White Oak should now be afforded the chance to argue against Option 1 funding on the merits (see E.ON), rather than being hung up by procedural technicalities and the Mobile-Sierra doctrine.

If FERC were to rule in White Oak's favor, then the decision would help to restrict the application of this discriminatory method of funding network upgrades to a limited group of interconnection customers (i.e., those who expressly agreed to Option 1 in a contract) and to insulate those who are just now receiving notice of Option 1 funding from the absurd results that accompany it.  But we'll need to wait and see if those at FERC who call balls and strikes see it the same way.   

 

 

CPUC Adopts Transitional Net Metering Rules for Pre-Existing Distributed Generation Systems

On Thursday, March 27, 2014, the California Public Utilities Commission established rules for transitioning distributed generation renewable energy systems from the current net energy metering  (NEM) arrangement to the successor tariff which will be adopted by the CPUC in 2015.

The decision, D.14-03-041, was mandated by last year’s passage of AB 327, requiring implementation of changes to California’s NEM program by 2017.  AB 327 specifically directed the CPUC to establish a transition period for “pre-existing” systems based on a “reasonable expected payback period” and other factors consistent with California’s policy to promote the use of renewable energy.  Under the legislation, systems installed prior to the earlier of July 1, 2017, or the date upon which the customer’s utility reaches the 5% cap on its capacity subject to the net metering tariff, would be eligible for the transition period.   

The CPUC decided that 20 years from the date of installation (interconnection) would be the transition period for pre-existing systems.   The adopted period is longer than advocated by the utilities and certain ratepayer organizations and shorter than urged by some members of the solar industry and local governments.  The Commission also rejected arguments that customers installing systems after adoption of the transition rule should have shorter transition periods on the theory that they had notice of the coming change in tariffs and therefore could not have had reasonable expectations of more lengthy “payback” periods.  

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Fake Punt! Minnesota Commission Immediately Reevaluates Motion, Advances Solar Plus One (or more) Gas Plants

In a follow up to our prior post, we now report that the Minnesota Commission subsequently modified its initial decision to clarify that Xcel Energy is directed to negotiate a power purchase agreement with the solar bidder, which will be reviewed by the Commission to ensure the terms are consistent with the public interest. Xcel is also directed to negotiate with the natural gas project bidders and develop pricing terms for its own natural gas project. Here is the text from the revised motion.

Although all terms will be reviewed by the Commission, Xcel Energy's Minnesota ratepayers will likely have a utility-scale solar project and at least one natural gas project to meet capacity needs in the 2017-2019 timeframe. And it's fair to state the Commission's decision puts solar in the red-zone, first and goal.

For more information, please contact Drew Moratzka or Sara Bergan.

Minnesota Commission Punts on Resource Decision: Keeps Solar in the Game

After the years of inconclusive resource planning, months of contested case proceedings, and days of oral argument, discussion and review that led to today’s deliberations, the Minnesota Public Utilities Commission (“Commission”) unanimously decided not to decide. The ultimate question before the Commission was what capacity needs had been determined in the record and what should be done to fill that need on Xcel Energy’s system. At the turn of the new year, the Administrative Law Judge’s (“ALJ”) answers to these questions made national news by finding that the solar bid provided the best value for ratepayers (see our blog on that here). The ALJ made his determination, in part, based on new modeling done at the request of the Commission given the significant changes in circumstances that had occurred since docket was opened (e.g., Xcel Energy acquired 750MW of new wind and Minnesota passed a Solar Energy Standard). In light of the changed circumstances and uncertain need, the ALJ recommended selection of the solar resource that was independently “needed” by statute, a capacity bid that could be added as necessary to bridge for any further shortfall, and then conduct a more thorough analysis for the longer-term needs. Today the Commission instead chose to rely primarily on the original need determination that opened the docket, accept the ALJ’s findings only to the extent they were consistent with their own findings, and direct Xcel to negotiate with everyone proposing to build something and report back. 

Despite the above, the decision is a significant step forward for solar. This was the first time a solar proposal had competed directly with natural gas in a resource acquisition process and, despite significant pressure from the Department of Commerce to shuffle the solar bid off into a separate, solar-only proceeding, the Commission confirmed today that the solar bid was welcome at the big kids table.

Look for a forthcoming Order that includes something like this:

In order to meet reliability and adequacy requirements and to comply with MN energy policy statutes, direct Xcel to separately negotiate power purchase agreements with Geronimo Energy, Calpine, Invenergy and develop pricing terms for Black Dog 6 to address the overall Xcel system needs identified in this record and the March 5, 2013 Integrated Resource Plan Order and determine which resources best meet system needs and are in ratepayers’ best interests.

Find that negotiated terms that shift risk or unknown costs to ratepayers are not likely to be reasonable. Find that bidders shall be held to the prices and terms used to evaluate each bid for purposes of cost recovery from Xcel ratepayers. Ratepayers will not be at risk for costs that are higher than bid or for benefits assumed in bids that do not materialize. If actual costs are lower than bid, the bidders should be allowed to keep those savings.

Require that power purchase agreement provide terms that sufficiently protect ratepayers from risks associated with the non-deliverability of accredited capacity or energy from the projects as proposed.

For more information, please contact Drew Moratzka or Sara Bergan.

NV Energy Wants More Solar

NV Energy is in the market for solar. On March 10, 2014, the utility issued a Request for Information (“Solar Site RFI”), asking developers to help identify potential sites for solar projects that would be 20 MW AC or greater in size and are sufficiently developed to meet a 2016 commercial operation date. 

The Solar Site RFI comes in the wake of SB 123’s passage in June 2013. The law requires electric utilities to issue RFPs for at least 300 MW of generating capacity from new renewable energy resources by December 31, 2016.   Click here for more information. Responses are due March 21, 2014.

Value of Solar Achieves a New Dawn in Minnesota

Yesterday afternoon, the Minnesota Public Utilities Commission approved the methodology for calculating value of solar (VOS) tariffs in Minnesota as developed by the Department of Commerce. In doing so, Minnesota became the first in the nation to adopt a VOS tariff methodology.

The Commission was required by statute to take action on the VOS calculation methodology by the end of the month. It had three options: to approve it as proposed, reject it, or approve it with modifications and with the consent of the Department. For background on the Department's January 31st recommendation, see our blog posts here and here. The Department subsequently included several modifications affecting the fuel price escalation factor, the avoided distribution capacity cost, and the environmental cost categories.

In its ruling, the Commission approved the Department’s methodology, as amended, by a 3-2 vote.

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Xcel Announces 150 MW Solar RFP

This morning, Xcel Energy announced plans to issue a Request for Proposals (RFP) for up to 150 MW of solar energy generation. Xcel included its RFP plans in a filing submitted to the Minnesota Public Utilities Commission (Commission) outlining its strategy for complying with Minnesota’s new solar energy standard. The standard requires that public utilities like Xcel obtain 1.5 percent of their retail sales from solar energy resources. Xcel expects to obtain about 1/3 of its Minnesota solar requirement from distributed solar resources (including community solar gardens and small projects eligible for certain incentives). The other 2/3 of the mandate would be met via large-scale solar projects, which are the focus of the RFP.

Xcel anticipates issuing the RFP on April 15, 2014 with proposals due June 1, 2014. Following contract negotiations, selected projects would be submitted to the Commission in October 2014. 

 

In other Minnesota solar news, the Commission conditionally approved Xcel’s community solar garden plan yesterday, including the interim rates we wrote about last week. A compliance filing will be due within 30 days of the Commission’s written order. Then, Xcel is required to open the program within 90 days of the Commission’s approval of the compliance filing. 

Initial Rate for Minnesota Community Solar Gardens Set (Almost)

After a full day of hearing arguments on Xcel’s proposed Community Solar Garden (CSG) program (see more on that here), the Minnesota Public Utilities Commission deliberated in public on the issue yesterday and made some important modifications to Xcel’s proposal. The program would allow Xcel customers to invest in off-site solar facilities and receive bill credit for their portion of generation. Ultimately that credit would be at the Value of Solar rate, but as parties await a decision on the Value of Solar (VOS) methodology (more on the VOS here), the Commission settled on an interim rate for the program (though its final vote on the matter is still forthcoming). It is largely based on average retail rates but importantly includes a placeholder value of any transferred Solar Renewable Energy Certificates (SRECs). A CSG developer could transfer the S-RECs to Xcel at a compensation rate of $.02/kWh for facilities with a capacity greater than 250 kW and at $.03/kWh for those with a capacity of 250 kW or less. The S-REC value is not intended to reflect a market rate and is intended and is intended to be strictly temporary, expiring upon the approval of Xcel’s VOS tariff.  Furthermore the rate and S-REC value are to be reviewed annually and adjusted if necessary.

The illustrative range of rates (assuming the SREC is transferred) is as follows:

Residential: $.14033 or $.15033

Small General: $.13738 or $.143738

General Service: $.11456 or $.12456

 

In addition, Xcel’s proposed 2.5 MW quarterly cap on the program was removed given the statute precludes a cap. While a final decision has not yet been issued by the Commission, newsmedia have already begun to report on it (see Star Tribune article here).

 

For more information contact: Sara Bergan, Sarah Johnson Phillips or Drew Moratzka.

Viewpoints Diverge on the Value of Solar in Minnesota

Final comments were filed yesterday on the proposed methodology for calculating a value of solar (VOS) rate for utilities in Minnesota (more on the proposed methodology is here). With the Commission required to make a decision within 60 days of January 31, 2014, parties remain in fairly wide disagreement about what is required by statute, particularly what values are truly “known and measurable” and whether the value calculation or proposition applies to the particular utility or more broadly to society. Depending on the interpretation of these factors among others, the estimated  VOS rate could vary from half of that suggested by the Department’s original $0.135/kWh example to something considerably higher. The rate would eventually apply to Xcel’s Community Solar Garden (CSG) Program and potentially as an alternative to net-metering arrangements for projects under 1MW. In a separate proceeding yesterday, the Commission set interim rates for the CSG program that could be even higher with a placeholder SREC value included (more on that in a separate blog).

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What is the Value of Solar? Minnesota Agency Starts to Answer. . .

by Sara Bergan and Sarah Johnson Phillips

In May 2013, the Minnesota Legislature passed legislation that, among other things, set a solar standard, directed Xcel Energy to develop a community solar garden program, and provided for the development of an alternative tariff mechanism to net metering that would also serve as the rate for community solar garden programs. Under this new scenario and instead of traditional net-metering arrangements, customers would potentially buy all of their electricity from their local distribution utility and then sell all of their PV generation under that utility's Value of Solar (VOS) tariff which would be designed to capture the societal value of PV-generated electricity. 

The legislation directed the Department of Commerce to work with stakeholders to develop a VOS methodology and to deliver its recommendations to the Minnesota Public Utilities Commission (Commission) on Friday, January 31, 2014.  The Department’s filing today includes its recommendation, with a more in-depth document addressing the methodology.  The  Department’s recommendations do not set a rate, but rather propose the methodology for calculating a utility-specific rate for distributed PV solar (1 MW and smaller). If the Department’s sample calculation is any indicator of what’s to come, however, the value went from $0.126/kWh in its initial draft to $0.135/kWh in the documents filed this morning.

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Raising the Bar For Interconnection In the Southwest Power Pool

Like other Independent System Operators have done before it, the Southwest Power Pool (SPP) is back at the drawing board in an effort to further refine its generator interconnection procedures and improve on queue reforms initially put in place in 2009.  And also like other ISOs that have continued to tinker with queue reform, SPP is looking to make the interconnection process more demanding so that only the "viable" projects get through.  

Among the various proposed changes, there are a few that generation developers should key in on.  

  • SPP proposes to allow later-queued customers pass by higher-queued customers in terms of queue priority, provided that the later-queued customer is the first to reach the Facilities Study phase.  Previously, customers who reached the DISIS queue could not lose their queue priority and be passed by.  But now priority goes to customers who reach the Facilities Study first.  This change, of course, will impact customers' cost responsibilities, as priority to unused transmission capacity will be subject to the race to the top.
  • To enter the Facilities Study phase (and lock in queue priority), customers must complete a financial milestone by providing security equal to $3,000 per megawatt of the generator size.  SPP has proposed removing other choices that customers previously used for entering this phase of the study process.  But watch out--customers who later withdraw from the queue may forfeit this deposit.
  • Prior to signing an interconnection agreement, an interconnection customer may extend its commercial operation date by no more than three years.  Anything longer will be considered a material modification and will result in a loss of queue position.
  • Under proposed revisions to the interconnection agreement, a customer would have three years following its designated Commercial Operation Date to complete its generating facility.  A customer who fails to do so will have its interconnection agreement terminated.  In addition, customers who fail to bring their full generation capacity online within that timeframe will lose rights to any capacity that remains unused at the three-year mark.  
  • Lastly, customers who sign an interconnection agreement must post 20% of the costs of their network upgrades within 30 days of execution.  This deposit may be non-refundable under certain circumstances.

Given the queue reforms that FERC has accepted in other regions, it's likely that much of what SPP has proposed will make it into the tariff. 

SPP has asked that these latest reforms be made effective March 1, 2014, and applicable to any customer who does not have an interconnection agreement with an earlier effective date.  For those customers currently negotiating an interconnection agreement:  the race is on.

Other Bidders Question MN ALJ's Selection of Solar Generation

At the close of last year, Minnesota Administrative Law Judge Eric Lipman determined that the single solar proposal in a competitive resource acquisition process would provide the best value to Xcel ratepayers (see more here). Key to his decision was his conclusion that Xcel's capacity needs in the timeframe considered were uncertain and potentially declining substantially. Yesterday Xcel and the natural gas bidders (Calpine and Invenergy) in the process filed exceptions to his findings and took sharp aim at the Judge's determination that Xcel's capacity needs appeared to be declining from what had earlier been predicted. In a related news article, Bill Grant, the Deputy Commissioner for Energy Programs at the Department of Commerce, voiced concern that the Judge had relied on an "untested and unusually low forecast for future sales" and suggested that ratepayers would be better served by Xcel's procurement of solar resources through a solar-specific process. The parties with the selected solar (Geronimo) and capacity (GRE) bids, perhaps unsuprisingly, do not agree with these voiced concerns and largely applauded the Judge'sselection of scalable resources in light of uncertain need . Reply comments are due at the end of this month and ultimately the matter will soon be taken up by the Minnesota Public Utilities Commission.

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Minnesota Judge Rules Solar Provides Best Value for Ratepayers

Update: Initial exceptions to this ruling are due on January 21, 2014, see attached scheduling notice.

On December 31, 2013, Minnesota Administrative Law Judge Eric Lipman determined in a competitive bidding process that solar provided greater value to ratepayers than natural gas. In a first-ever competitive bidding process under Minn. Stat. §216B.2422, subd. 5, 4 bidders competed directly with Xcel Energy’s own natural gas proposal to fill an increasingly uncertain future need for capacity resources.  If the Minnesota Public Utilities Commission (the “Commission”) agrees with Judge Lipman, Edina-based Geronimo Energy will build 100 MW of solar energy across 20 different sites in rural Minnesota and additional procurement would be put off until better information is available for the timeframe beyond 2019.

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SDG&E Issues Renewables RFO

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

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

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

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

Important RFO Dates

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


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

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

Post-Conference Report: Solar Power International 2013

Thousands of solar industry participants gathered in Chicago for the Solar Power International expo in Chicago, Illinois on October 21-24 to discuss the state of the solar industry. Participatnts included banks, investors, developers and equipment suppliers, and also several Stoel Rives attorneys.

Many themes emerged during the week-long event, and a common thread running through these themes was “change.” The solar industry is undergoing significant changes, as demonstrated by the following:

  • Stoel Rives announced that Federal Energy Regulatory Commission Chairman Jon Wellinghoff will join the firm later this year following his impending resignation from the Commission;
  • The regulatory environment continues to morph as the 1603 cash grant phases out while the ITC reemerges pending its expiration, net-metering battles rage on in multiple states, and California has required investor owner utilities to procure and invest in significant amounts of energy storage;
  • Companies continue to search for investment grade projects while developers continue to hunt for PPAs with sustainable pricing;
  • Chinese equipment manufacturers continue to factor in the space, and several companies from mainland China attended the expo for the first time, now also joined by a growing number of Taiwanese and Korean companies;
  • As utility scale development opportunities in the United States continue to stagnate, many companies are turning their focus to Latin America where new and potentially lucrative opportunities are emerging;
  • The industry seems ripe for consolidation and the remainder of 2013 and 2014 may witness several significant mergers.

In this time of significant change, Stoel Rives will continue to serve the solar industry by providing high quality legal services and innovative solutions for the issues of today and the issues of the future.

Plans for Community Solar Gardens in Minnesota Emerge

After much anticipation, Xcel Energy submitted its petition for approval (PDF) of the company's proposed community solar gardens program on September 30th. The program would give utility customers a new way to engage in solar generation without having to invest onsite. A solar garden is a "facility that generates electricity by means of a ground-mounted or roof-mounted solar photovoltaic device whereby subscribers receive a bill credit for the electricity generated in proportion to the size of their subscription." Other required details of the program are set forth in Minnesota Statutes 216B.1641 and include: 

  • each garden must also have at least 5 subscribers whereby no single subscriber has more than a 40 percent interest;
  • each subscription must be at least 200 watts and the total garden size cannot exceed 1 MW; and
  • each garden must be within Xcel's service territory and its subscribers must be retail customers located in the same or contiguous county as the solar garden site.

While many of the details of the program are set forth by law, Xcel also clarified several procedural elements of its filing. For example, Xcel plans to take applications online on a first-come, first-served basis but limit the program to 2.5 MW per quarterly application period for the first two years of the program. A successful applicant would enter into a 20-year, fixed rate power purchase agreement with Xcel Energy.

Although the rate paid for the energy generated by a solar garden facility will eventually be the forthcoming Value of Solar rate, Xcel states that it is likely the solar gardens program will need to begin operations and issue bill credits before Xcel has a Value of Solar rate in place. For the interim period Xcel proposed to use a blended retail rate that differs by demand and non-demand class and by season. For no-demand metered service this would be just over $0.10/kWh and for demand metered service this would be just over $0.06/kWh, both with slight increases for the summer months. This price is expected to include the transfer of any and all solar renewable energy certificates generated by the garden to Xcel.

Army Pre-Qualifies Solar Developers Under MATOC

On August 28, 2013, the U.S. Army Engineering & Support Center in Huntsville, Alabama, acting in conjunction with the Army Energy Initiatives Task Force (“EITF”), issued a second round of awards under the multi-award task order contract for renewable and alternative energy that hit the streets last summer (Solicitation Number W912DY-11-R-0036, the “MATOC”). The number of awards is somewhat surprising, however, given the Army’s early-stated desire to qualify as many applicants as possible in each technology category. In total, there were 114 proposals submitted for the solar technology segment of the MATOC, but only twenty-two (22) Indefinite Delivery/Indefinite Quantity (“ID/IQ”) contracts were issued yesterday. Thus, the Army rejected more than 80% of the applicants. Of the awards the Army did make, only six (6) were to small businesses (as defined in the solicitation). 

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Long Island Power Authority Announces New And Expanded Clean Solar Initiative Feed-In Tariff Program

The Long Island Power Authority (LIPA) recently announced its Clean Solar Initiative Feed-In Tariff-II (FIT-II), a feed-in tariff program for solar projects between 100 kW and 2 MW in size and located in LIPA’s service territory. FIT-II is currently open for public comment, and will be effective only upon formal approval by the LIPA Board of Trustees.

FIT-II is capped at 100 MW, and follows the first version of the Clean Solar Initiative Feed-In Tariff (FIT-I). Unlike FIT-I, projects will not be selected for participation in FIT-II on a first-come, first-served basis. Instead, all applications submitted within the application period will be evaluated; those that pass a preliminary screening process of technical and administrative review will be eligible for further consideration under a Clearing Price Auction mechanism.

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Solar Panels Proposed as Hazardous Waste under DTSC

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

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

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

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

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

 

Oregon Legislature Clarifies EFSC's Jurisdiction Over Solar Power Generation

This just in from my colleague Elaine Albrich:

Oregon's House Bill 2820 provides a much-needed clarification of the Energy Facility Siting Council's ("EFSC's") jurisdiction over the siting of solar photovoltaic (PV) power generation facilities.  Prior to the passage of HB 2820, the definition of “energy facility” provided two hooks for EFSC to assert jurisdiction over a solar power generation facility: (1) under ORS 469.300(11)(J), a solar facility could fall within EFSC’s jurisdiction if it had an average electric generating capacity of 35 megawatts (MW) or more (e.g., 105 MW nominal generating capacity) or (2) under ORS 469.300(11)(D), EFSC would have jurisdiction if the facility occupied more than 100 acres of land. 

The two definitions presented a potential problem for future solar development in Oregon, given that 105 MW seemed incredibly high and that 100 acres seemed restrictively low, especially if EFSC was going to interpret the statutory language of “solar collecting facility” as capturing not only solar thermal but also solar PV facilities. Although it has not been a problem in practice (because EFSC has yet to permit a solar facility), it is nice to see that the permitting pathway is clear for solar development here in Oregon.   

Under ORS 469.300(11), as amended by HB 2820, EFSC now has jurisdiction over the following solar facilities:

 

  • Solar thermal power plants;
  • Solar PV power generation facilities on 100 acres or more of high-value farmland;
  • Solar PV power generation facilities on 100 acres or more of land “predominately cultivated or … if not cultivated, … predominately composed of soils that are in the capability classes I to IV”; and
  • Solar PV power generation facilities on 320 acres or more of any other type of land.

If you have questions or would like to talk about siting a solar project here in Oregon, Elaine Albrich can be reached at (503) 294-9394 or via email at eralbrich@stoel.com.

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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.

Failed Solar Cell Could Be Hazardous to More Than the Owner's Bottom Line

See my colleague Wayne Rosenbaum's recent post on the question of how failed solar panels could be treated under federal and California waste laws:

Recently the New York Times published an article highlighting the high rate of solar panel failures well before their expected life times.  While the article focused on the question of product liability, it raises another question.  How does the law, particularly waste laws, define a solar panel that is no longer fit for its original intended use or purpose?

Under current federal and California law, the manufacturer of a non-functioning solar panel does not have an obligation to take back panels at the end of life as it does under the EU WEEE Directive.  However, it is likely that this will change as the US PV market matures and more arrays approach end of life or fail.  Panel manufactures are encouraged to monitor this issue and potentially to participate in contingency planning or rulemaking. 

 

Regarding the disposal of defective panels, once an entity takes title to the panel it becomes the owner of that panel. This includes lenders who take title through foreclosure.   As such, the owner becomes responsible for the panel's proper handling and disposal.  This requirement raises the question:  Once the owner takes possession what will it do with the panel or its components at the end of their useful life?

 

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Governor Dayton Signs Bill Creating Solar Energy Standard

Yesterday, Minnesota Governor Mark Dayton signed the Omnibus Energy Bill into law. After months of negotiations, state legislators came to an agreement that brings Minnesota to the forefront of solar power following the creation of a solar energy standard, community solar garden program, and a unique value of solar tariff. Key provisions of the new law include: a solar energy standard, performance-based incentives for solar photovoltaic module manufactured in Minnesota, new pricing options for public utilities, and an expanded opportunity for distributed generation.

Solar Energy Standard

With Governor Dayton’s signature, Minnesota became the 17th state to enact a solar energy standard. Minnesota’s solar energy standard requires investor owned utilities to generate or procure a sufficient amount of solar energy so that by the end of 2020, at least 1.5 percent of the utility’s total retail electricity sales to retail customers in Minnesota comes from solar energy, with the goal of reaching ten percent solar by 2030. In addition, at least ten percent of the 1.5 percent required by 2020 must be met by solar energy generated by or procured from solar photovoltaic devices with a nameplate capacity of 20 kilowatts or less. Notably, the 1.5 percent requirement is in addition to, rather than carved out of, Minnesota’s existing renewable energy standard. Initial reports estimate that the solar energy standard will result in the development of more than 450 megawatts of solar by 2020.

Made in Minnesota

In addition to creating a solar energy standard, the new law creates a performance-based incentive for systems that use solar photovoltaic modules that were certified as "Made in Minnesota." Beginning January 1, 2014, and every each January 1 through 2023, $15 million will be collected from the public utilities and distributed to owners of eligible grid-connected solar photovoltaic modules with a nameplate capacity below 40 kilowatts as a production incentive payment. The commissioner of commerce is responsible for setting the solar energy production incentive rate for each module within 90 days of certifying a module as Made in Minnesota.

Solar Energy Incentive Program

The new law creates an additional incentive for small solar energy systems. Set to begin in 2014 and operate for five consecutive years, the program will collect $5 million a year from Xcel Energy (through its renewable development account) to fund solar energy systems of no more than a total nameplate capacity of 20 kilowatts. This program will assist the utilities in complying with their duty to secure 10% of the 1.5% solar standard from solar photovoltaic devices with a nameplate capacity of 20 kilowatts or less.

Community Solar Gardens

By September 20, 2013, Xcel Energy must file a plan with the Public Utilities Commission ("PUC") to operate a community solar garden program, which will begin 90 days after the PUC approves the plan. Community solar gardens give utility customers and other members of the designated community the option to buy solar panels that will be included in an array built in a communal location, rather than on the purchaser’s roof or in their backyard.  Participants receive the benefit of a monthly credit on their electric bill while avoiding the cost of maintaining the panels. A community solar garden may be owned by either a public utility or any other entity or organization that contracts to sell the output and must be designed to offset the energy use of at least five subscribers in each community, of which no single subscriber has more than a 40% interest. A single community solar garden cannot have a nameplate capacity of more than one megawatt or supply more than 120 percent of the average annual consumption of electricity by each subscriber at the premises to which the subscription is attributed.

The first community solar garden (developed before the passage of the new law) in Minnesota is expected to be completed this weekend and consists of 171 panels located on an empty field owned by the Wright-Hennepin Cooperative Electric Association. Subscribers purchased panels priced at $869 each.

Value of Solar Tariff

For the first time, a public utility will be able to offer an alternative tariff that compensates customer-generators through a credit on their energy bill for the value to the utility, its customers, and society for operating distributed solar photovoltaic resources interconnected to the utility system and operated by the customer-generator primarily for meeting his own energy needs. Once approved, the utility’s value of solar tariff can be applied to a customer-generator’s interconnections occurring after the date of approval and in lieu of the rates mentioned in the net metering section below.

By January 13, 2014, the Department of Commerce’s Division of Energy Resources ("DER") is tasked to establish a methodology that utilities would follow in appropriately calculating or setting their alternate tariffs. The calculations should, at a minimum, account for the value of energy and its delivery, generation capacity, transmission capacity, transmission and distribution line losses, and environmental value. The DER may also, based on known and measurable evidence of the cost or benefit of solar operation to the utility, incorporate other values into the methodology, including credit for locally manufactured or assembled energy systems, systems installed at high-value locations on the distribution grid, or other factors. Further, the PUC may not authorize a utility to charge an alternative tariff rate that is lower than the utility's applicable retail rate until three years after the PUC approves an alternative tariff for the utility. Lastly, the utility must enter into a contract with the owner of the solar photovoltaic device receiving an alternative tariff rate that has a term of at least 20 years and pays the same rate per kilowatt-hour generated each year for the term of the contract.

Net Metering

The new law will also greatly expand the opportunity for distributed generation by raising the limit on net metering from 40 kilowatts to 1,000 kilowatts. Facilities generating less than 40 kilowatts will continue to receive the utility’s retail rate for net excess generation, while systems between 40 kilowatts and 1,000 kilowatts will receive the avoided cost rate for net excess generation. In the future, utilities will have the opportunity to decide whether to continue offering net metering or switch to a value of solar tariff. Once the cumulative generation of net metered facilities reaches four percent of the public utility’s annual retail electricity sales, the public utility may request the PUC to limit the public utility’s additional net metering obligations.

In addition to raising the cap on net metering, the new law authorizes utilities to use meter aggregation. Meter aggregation allows customer-generators to offset charges for energy usage from multiple meters located on contiguous property owned by the customer.

Setting the Stage for Further Renewable Development

Although the final version of the new law did not increase the existing Minnesota renewable energy standard, it directs all electric utilities and transmission companies to conduct an engineering study of the impacts on reliability and costs of, and to study and develop plans for the transmission network enhancements necessary to support, increasing the renewable energy standard to 40% by 2030, and to higher proportions thereafter, while maintaining system reliability. A team of 15 individuals appointed by the commissioner, in consultation with the electric utilities and transmission companies, will review the study’s proposed methods and assumptions, ongoing work, and preliminary results. The study is due to be completed by November 1, 2014. Other studies required as part of the new legislation include: the value of on-site energy storage and the value of solar thermal.

Update: Minnesota Senate Passes Energy Omnibus Bill

Today the Minnesota Senate passed its omnibus energy bill by a vote of 37-26.  This follows the Minnesota House of Representatives’ passage of its version of the bill on Tuesday.  The bills now move to a conference committee for consolidation.  After the conference committee completes its work, the consolidated bill will then return to each chamber for a final vote before heading to Governor Dayton’s desk.

Some major differences between the two bills means the conference committee has its work cut out for it.  For instance, the Senate’s bill contains a 1% solar standard while the House of Representatives’ version includes a much more aggressive 4% solar standard.  Whatever the number that ends up in the final bill, Minnesota is set to become only the 17th state to enact a solar standard, and one of the few whose standard is not a carve-out of an existing renewable energy standard.

Community Solar Projects Coming to Minnesota

At a time when the Minnesota Legislature is considering a proposal that would create a solar electricity standard, community solar projects are gaining popularity.  Six weeks from now, Wright-Hennepin Cooperative Electric Association will begin construction on Minnesota’s first community solar program, with the goal of having the project completed by Memorial Day.

A community solar program gives utility customers and other members of the designated community the option to buy solar panels that will be included in an array built in a communal location, rather than on the purchaser’s roof or in their backyard.  Participants receive the benefit of a monthly credit on their electric bill while avoiding the cost of maintaining the panels.  To enroll in Wright-Hennepin’s program, located in Rockford, Minnesota, participants purchased panels priced at $869 each.  The 171 panels in the array sold out in four months. 

Wright-Hennepin will use panels built by Bloomington, Minnesota-based TenKSolar that provide a total of 53,000 kW of power - enough to power four homes.  In addition, the Wright-Hennepin project will be the first in the nation to incorporate battery storage.  The batteries, from Silent Power of Baxter, Minnesota, will enable the utility to use the stored power for load shifting when the sunshine is weak but customer demand is high.

While community solar projects are just getting started in Minnesota, they are already popular in states like Colorado, where two years ago the state legislature passed a law encouraging the development of such projects.  Were the Minnesota Legislature to create a solar electricity standard, community solar projects could become a popular way for the utilities’ to fulfill their obligations.

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Army Seeks Feedback on Standardized Performance Work Statement for Renewable Energy Projects

On April 1, 2013, the Army Energy Initiatives Task Force (“EITF”) and the U.S. Army Mission and Installation Contracting Command at Fort Sam Houston in Texas published a template Renewable Energy Service Agreement Performance Work Statement (the “PWS”) for comment by interested stakeholders. 

The proposed scope of the PWS is broad, covering everything from insurance and OSHA requirements to interconnection responsibilities and power prices. Thus, the PWS purports to be part power purchase agreement, part EPC agreement, and part operations and maintenance agreement. As discussed in my previous entry, this comment opportunity is important to all renewable energy developers that intend to contract with the Army. However, it should be of particular interest to teams that responded to the Army’s Multi-Award Task Order Contract (“MATOC”) last fall because the final PWS will likely be incorporated into each base-level RFP issued under the MATOC.

It is important to note that the template is not a “one-size-fits-all” document and contemplates quite a bit of input from individual bases at the time RFPs are issued. Thus, the PWS is malleable and the comments the Army receives through this request for information will not result in a final form of PWS that will be incorporated into every contract issued. Rather, the Army is looking for input to create a “clear, concise and understandable” PWS template that will reduce the need for discussion and clarification of provisions common to all contracts down the line. 

For more information, attend the EITF webinar on April 11, 2013 from 1:00-2:00 p.m. EST.  see Solicitation No. W9124J13EITF1, which can be found on the FedBizOpps website. To register for the webinar, go to https://www4.gotomeeting.com/register/518667447. Registration is limited to the first 500 participants.

As was the case with the MATOC, comments and questions must be submitted via Bidder Inquiry on the ProjNet website (https://www.projnet.org). Comments must be submitted no later than 5:00 p.m. EST on May 29, 2013

Army to Seek Comments on Standardized Performance Work Statement for Renewable Energy Projects

On February 12, 2013, the U.S. Army Contracting Command announced that the Army Energy Initiatives Task Force ("EITF") is developing a standardized Utility Service Contract Performance Work Statement ("PWS") to be used for contracts executed under its long-term power procurement authority (10 U.S.C. 2922a).  The intent is to have a PWS that is clear and understandable to both the renewable energy industry and the government.  The EITF intends to publish a draft utility service contract solicitation at the end of this month-i.e., on or about March 29.  Once published, they will accept comments for 60 days.

This comment opportunity will be important to all renewable energy developers that intend to contract with the Army, but it will be especially important for teams that responded to the Army's Multi-Award Task Order Contract ("MATOC") last fall.  The comments received through this solicitation will likely be incorporated into the PWS that is included in base-level RFPs issued under the MATOC.  And interestingly, the timing lines up pretty well.  Assuming that the draft PWS is issued at the end of March (like the EITF anticipates), then comments will be due at the end of May.  Last year, the Army was saying that it would announce awardees under the MATOC at (or near) the end of Q2 2013.  If that goal becomes a reality, then the comment period on the draft PWS will close one month prior to awards under the MATOC, which would ostensibly give the Army enough time to incorporate the revised language into any base-level RFPs that would follow quickly on the heels of the MATOC awards.

For more information, see Solicitation No. W9124J13EITF1, which can be found on the FedBizOpps website.

California Court Sides with Solar Project in Williamson Act Challenge

My California colleague Kristen Castaños has written an alert about a recent Fresno County Superior Court decision that denied a challenge to Fresno County's cancellation of a Williamson Act contract to accommodate a solar generating project.

The decision is the first time a court has considered the interplay between the Williamson Act, a California statute that seeks to protect agricultural land, and California’s directive to increase reliance on renewable energy in the state. In rejecting the challenge, the court gave the County substantial deference to determine whether the public interest in developing solar projects outweighs the public interest in protecting agriculture.

You can read Kristen’s complete alert at our firm’s website. *UPDATE: Kristen was interviewed by the Fresno Bee about this case. Read a summary here.

Army Issues RFP for Solar PV at Fort Detrick

On November 14, 2012, the Defense Logistics Agency- Energy ("DLA-Energy"), in coordination with the Army Energy Initiatives Task Force, issued a solicitation for the procurement of electricity from a solar photovoltaic energy project to be located on or contiguous with land at Fort Detrick, Maryland (SP0600-13-0416, the "Solicitation").  

DLA-Energy contemplates the award of a Firm-Fixed Price contract under the Department of Defense's long-term procurement authority set out in 10 U.S.C. 2922a.  According to the Solicitation, the government will only consider bids that do not exceed $0.0756 per kWh, compounded annually at 4.35%.  The contract will be for up to 26 years (one year for construction with a 25-year production term) and will include a price escalator beginning in year two.  Consistent with the Army's position in the Multi-Award Task Order Contract ("MATOC") solicitation that closed on October 5, the price will include the price for renewable energy credits ("RECs"), which the government intends to keep; however, REC-swapping will be permitted.  The Solicitation includes other provisions incorporated into to the MATOC based on feedback from the renewable energy industry, including those for special purpose entities and novation to facilitate third-party financing.

DLA-Energy does not specify the size of the project to be constructed pursuant to the Solicitation, only that the government desires to purchase "the maximum amount of power that is economically and technically feasible" from a project "installed on 69.1 acres of non-landfill sites and, as an option, on the 10.4 acres of capped landfill sites" at Fort Detrick.

The Solicitation can be found on the FedBizOpps website.  DLA-Energy anticipates holding a pre-proposal conference at Fort Detrick, though the date has not yet been announced.  Proposals are due no later than 2:00 p.m. EST on January 11, 2013

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ITC Confirms Anti-Competitive Trade Practices Finding -- Major Duties Imposed on Chinese Solar Imports

The U.S. International Trade Commission (ITC) today affirmed its preliminary ruling that Chinese trade practices were harming the U.S. solar technology industry. The ruling stems from the submission of trade cases by domestic solar-industry companies on October 19, 2011, that argued the Chinese government was using improper subsidies to underwrite its solar industry export campaign and dumping products at artificially low prices in order to gain U.S. market share.

The ITC ruling means that a series of duties will be imposed on Chinese solar products. Under a previous U.S. Department of Commerce ruling, the duties will consist of 31.73 percent on imports of solar photovoltaic cells and panels from Suntech, 18.32 percent from Trina Solar, 25.96 percent from other companies that had requested but not received individual duty determinations and 249.96 percent from all other Chinese producers, including those controlled by the Chinese government. In addition, the Commerce Department ruling called for anti-subsidy duties of 14.78 percent for imports made by Suntech, 15.97 percent Trina Solar and 15.24 percent for all other Chinese manufacturers.

The Commerce department ruling did not include photovoltaic cells produced in other countries and assembled in China within its scope. Some domestic solar companies have announced they will seek separate enforcement actions for these products, following the ITC’s harmful trade practices finding announced today.

Renewables Account for All New U.S. Electricity Generating Capacity Added in September

In September 2012, all new electricity generation came from solar and wind projects, according to the Energy Infrastructure Update (PDF) issued by the Federal Energy Regulatory Commission’s Office of Energy Projects. Five wind projects totaling 300MW and 18 solar projects totaling 133MW came online during the month.

The Energy Infrastructure Update also noted that nearly half (43.8%) of new generating capacity coming online in 2012 through September involve renewables: 77 wind projects (4,055 MW), 154 solar projects (936 MW), 76 biomass projects (340 MW), 7 geothermal projects (123 MW), 10 water power projects (9 MW), and one waste heat project (3 MW).

The looming expiration of the Section 1603 Treasury Cash Grant and the Production Tax Credit (PTC) is likely a significant driver of this end of year surge. See our October 18 post Economists Weigh in on the PTC Extension for our latest on the PTC.

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

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

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

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

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Utah PSC Approves 60 MW of New Distributed Solar PV in Utah

My colleagues Laura Suesser and Julia Pettit reported on a significant victory for solar development prospects in Utah.

On October 1, 2012, the Public Service Commission of Utah approved Rocky Mountain Power's Solar Incentive Program, which will support 60 MW of new distributed solar PV resources in Utah over the next five years (2013-2017).

The program will provide approximately $50 million in incentives and will support 60 MW of new distributed solar resources, allocated among three sectors: Residential (systems up to 4 kW), Small Non-Residential (systems up to 25 kW), and Large Non-Residential (systems up to 1,000 kW). Rocky Mountain Power will start accepting applications in January 2013 for the first program year.

For more details about the program, read Laura’s and Julia’s client alert.

Georgia Power Files for Advanced Solar Initiative

On September 26, 2012, Georgia Power filed with the Georgia Public Service Commission a proposal for the creation of the Georgia Power Advanced Solar Initiative, a program that would result in the procurement of up to 210 megawatts of solar generation through power purchase agreements. Of the 210 MWs, 180 will come from utility scale projects while 30 MW will come from distributed projects.

Utility Scale Projects.  The proposal calls for Georgia Power to issue RFPs in 2013, 2014, and 2015 for utility scale solar projects up to 20 MWs in size and to be located in Georgia.  The PPAs would have twenty year terms and with pricing not to exceed 12 cents per kWh. 

Distributed Projects.  Georgia Power will also enter PPAs with Small-Scale projects (up to 100 kW) and Medium-Scale projects (greater than 100kW and smaller than 1 MW).  In each of 2013, 2014 and 215, Georgia Power will enter 10 MW worth of PPAs with Small/Medium-Scale projects until anoverall cap of 30 MW is reached.

More information and a copy of Georgia Power's filing is available here.

TerraPass Issues California Renewable Energy RFI

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

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

The Impact of Increased U.S. Import Tariffs for Solar Cells and Modules of Chinese Origin

A legal update from our colleague Gary Glisson:

United States importers and purchasers of crystalline silicon photovoltaic cells and modules (“solar cells”) now face increased prices when sourcing their supplies from China. A recent order issued by the Department of Commerce’s International Trade Administration imposing an antidumping duty rate of 250% tariff against the Chinese solar cell industry generally, and a lower but increased “separate rate” of 31% tariff on 61 named Chinese manufacturers and exporters, is starting to be felt by the U.S. solar energy construction industry.

Although the order, dated May 25, 2012 (“May Order”) was widely reported in the U.S. solar industry press, many overlooked its retroactive effect to 90 days prior to the May Order—February 25, 2012. It was an unwelcome surprise to some U.S. solar equipment importers, lenders, installers and others involved in the financing and construction of solar energy projects when the Department of Homeland Security’s Customs and Border Protection agency began issuing notices of additional duties owed and started collecting the difference between the prior regular duty rate of up to 3.5% of the import price and the 31% or 250% tariffs imposed by the May Order. This means that solar cells imported into the United States and subject to the May Order will be charged either an additional 31% or 250% of their value. Many U.S. buyers who received shipments or placed orders for Chinese-made solar cells and related equipment between February 25 and May 25 were not expecting the significant increase in cost due to the new tariff rates.

Click here to continue reading about the impact and legal issues surrounding this order.

Seattle City Light Issues RFP for Renewable Energy

Seattle City Light recently issued a request for proposals f(RFP) or up to 150,000 megawatt-hours of renewable energy or renewable energy credits per year, starting in 2020.  The projects that generate the RECs or energy must qualify as eligible according to Washington State’s renewable portfolio standard. In addition, City Light will require a minimum output guarantee and credit assurances. The utility will also consider proposals for equity ownership.

In its RFP announcement, City Light said that it will consider a broad range of proposals, technologies, and contractual arrangements. A party submitting a proposal must be the owner of the eligible resource or renewable energy credits, or have written authorization from the owner to submit a proposal. City Light prefers baseload or dispatchable resources to complement existing supply resources that are predominately hydroelectric.
 

For more information on submitting a proposal, contact Robert W. Cromwell, Jr., director of power contracts and resource acquisition at robert.cromwell@seattle.gov, by phone at (206) 684-3856 or by FAX at (206) 386-4555.

 

City of Palo Alto Announces Renewables RFP

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

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

Army Holds Pre-Proposal Conference in Huntsville on Renewable Energy Procurement

On August 22, 2012, the U.S. Army Engineering & Support Center in Huntsville, AL held a pre-proposal conference to discuss the final multi-award task order contract that was issued on August 7, 2012 (the “Final RFP” or “MATOC”).  My colleague, Lane Tucker, and I attended to hear the Army’s presentations and to engage directly with renewable energy developers, consultants, seasoned government contractors, large energy service contractors (ESCOs), and others. The conference provided attendees a great opportunity to explore the field of potential contractors and subcontractors and start (or continue) conversations about potential teaming arrangements that could result in both a MATOC award and one or more base task order awards. 

For those who could not attend, fear not; all of the presentation materials will soon be available on the Army EITF website and the Huntsville team will post all of the questions presented, along with the Army’s formal responses, to the ProjNet website. Also important is that Tonju Butler, the Procuring Contracting Officer, indicated that the deadline for questions on the Final RFP would be extended from today until September 7, 2012, so that individuals and teams can have additional time to formulate and posit questions that may be important to their proposals.  However, that change has not yet been posted to the FedBizOpps website as an amendment.  It is too early to tell whether this extension foreshadows an extension of the October 5, 2012 proposal deadline. Right now, the Army is holding firm to that date, so individuals and teams that intend to respond should plan accordingly. Keep an eye out for other amendments to the Final RFP, too. Conference attendees were assured that more would be forthcoming to clarify small technical issues and, hopefully, to flush out the structure for proposing prices. All amendments will be posted to the FedBizOpps website for the MATOC.

Here are a few takeaways and a short discussion about some important issues. Be sure to check the Q&A on the ProjNet website for any official responses from the Army on these topics. 

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Arizona Public Service Company Gila Bend Solar RFP

Arizona Public Service Company has announced that it is seeking proposals from solar developers and installers to build a 32 MW solar PV facility.  APS would finance the project  through its AZ Sun Program.  When completed, the new solar facility will be owned and operated by APS and is expected to provide electricity to more than 8,000 Arizona homes.  Projects must employ commercially proven technology as identified in the RFP. 

According to APS's RFP page, the RFP will open for bid submission on August 22, 2012 and will close October 8, 2012.  APS encourages interested parties to participate in a bidder's webinar on August 29, 2012. Registration with PowerAdvocate is required.  Additional information concerning the RFP can be found can be found on APS' RFP page.

Bill to Stabilize New Jersey Solar Market Signed into Law

On July 23, New Jersey Governor Chris Christie signed into law a bill which amends the state's solar energy incentive program in an effort to increase the demand for solar renewable energy credits (SRECs), stabilize the market for SRECs, which has seen a substantial decline in price over the last year, and support the development of solar projects within the state.

The primary features of the law include an increase in the solar renewable portfolio standard (SRPS) in the near term to accelerate utilities' purchase of SRECs and reduce the current oversupply, and an extension of the "shelf-life" of SRECs for up to 5 years, from 3, permitting developers more flexibility to sell SRECs into the market at advantageous times. To prevent an over-supply of RECs and protect ratepayers, the law also calls for the Board of Public Utilities (BPU) to establish an approval process for large non-net metered projects to qualify for SRECs, changes the SRPS from a fixed megawatt requirement to a variable percentage reflective of the demand for energy, and significantly reduces in the penalties for failure to comply with the SRPS to effect a lower ceiling price on SRECs.

In addition, the New Jersey law provides certain incentives for brownfield development, such as an exemption from the BPU approval process, authorizes certain public entities to aggregate net metering to permit such entities to offset electricity costs at non-connected buildings, and clarifies that large net metered systems can connect to higher voltage lines to create more space for all systems on the distribution system.

According to the trade group Mid-Atlantic Solar Energy Industries Association, construction activity in New Jersey’s solar sector could increase 30% over the next two years on account of the new law. However, some remain concerned that the program may not yield sufficiently consistent and attractive prices to draw banks and financiers after a similar SREC initiative enacted in Massachusetts at the end of 2010 has so far met with skepticism from banks. Until the financial players are satisfied, the benefit of this law will be realized by very small-scale projects.

New Jersey Solar Energy Legislation Signed into Law

From my colleague Alex Mertens:

On July 23, New Jersey Governor Chris Christie signed into law a bill which amends the state's solar energy incentive program in an effort to stabilize the market for solar renewable energy credits (SRECs) and support the development of solar projects within the state. Key features of the law include: (a) an increase in the solar renewable portfolio standard (SRPS) in the near term to accelerate utilities' purchase of SRECs and reduce the current oversupply; (b) an extension of the "shelf-life" of SRECs for up to 5 years, from 3, permitting developers more flexibility to sell SRECs into the market at advantageous times; (c) a significant reduction in the penalties for failure to comply with the SRPS, intended to protect ratepayers from bearing the burden of high penalties; (d) incentives to encourage the development of solar systems on brownfields, landfills, and parking lots, as opposed to on farmland and greenfields, and (e) the authorization of aggregated net metering for certain public entities, which will permit such entities to offset electricity costs at non-connected buildings. 

In the near future, we plan to send out an Energy Law Alert describing the new law in more detail. If you would like to sign up to receive our Energy Law Alerts, please go to http://www.stoel.com/subscribe.

U.S. Department of Interior Moves to Streamline Solar Development in the West

As my colleagues Kristen Castaños and Melissa Foster posted on the Stoel Rives California Environmental Law Blog, the U.S. Department of the Interior announced today that it will publish the Final Programmatic Environmental Impact Statement (“Solar PEIS”) for solar energy development in six southwestern states—Arizona, California, Colorado, Nevada, New Mexico, and Utah.  The Solar PEIS is a major step forward in the permitting of utility-scale solar energy on public lands in the West.   

The Solar PEIS will establish solar energy zones with access to existing or planned transmission and with the fewest resource conflicts and provide incentives for development within those zones.  The roadmap set forth in the Solar PEIS will make for faster, more streamlined permitting of large-scale solar projects on these public lands.  The focus of the Solar PEIS is on Bureau of Land Management (“BLM”) lands that are most suitable for solar energy development.  It identifies 17 Solar Energy Zones (“SEZs”), totaling about 285,000 acres of public lands, as priority areas for utility-scale solar development.  The Solar PEIS also notes the potential for additional zones through ongoing and future regional planning processes and allows for utility-scale solar development on approximately 19 million acres in variance areas lying outside of identified SEZs.

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El Paso Electric Seeks to Pre-Qualify Solar Developers for Project at U.S. Army's Fort Bliss

El Paso Electric (“EPE”) is seeking to pre-qualify interested parties capable of providing renewable energy services (including design, installation, commissioning, operation, maintenance, and ownership) of a 20 MW solar photovoltaic project that is expected to be located within the Fort Bliss military reservation in El Paso, Texas. EPE published a Request for Statement of Qualifications (“SOQ”), along with information letter, on the EPE website indicating that EPE expects to issue a request for proposals (“RFP”) at a later date to those parties that have pre-qualified. Through the RFP, EPE expects to negotiate a power purchase agreement (“PPA”) with a term of up to 25 years. On the back-end, EPE would expects to enter into a multi-year agreement for the term of the PPA with the U.S. Army to serve Fort Bliss. For those who have been paying close attention to the regulatory issues facing the military’s procurement of renewable energy, this arrangement may become more and more popular as a fix for state-law limitations relating to utility exclusive service territories.

SOQ responses are due no later than 4:00 p.m. MDT on August 8, 2012!

California Judicial Council Announces Expedited CEQA Litigation Court Rules for Qualifying Development Projects

From our colleague Wayne Rosenbaum:

As Juliet Cho blogged about in our California Environmental Law blog, California Governor Jerry Brown  signed the Jobs and Economic Development through Environmental Leadership Act of 2011 (also known as AB 900) into law last September. The law aims to provide an incentive for applicants to move forward with their development projects by requiring that any challenge to a “leadership project” Environmental Impact Report (“EIR”) under the California Environmental Quality Act (“CEQA”) will be venued immediately in the Court of Appeal.  The court will then have a maximum of 175 days to issue its decision on the challenged EIR. For a description of the qualifying criteria of a “leadership project” see Juliet’s blog post.

AB 900 also required the Judicial Council to adopt rules of court to implement the new law. Recently, the Council announced its proposed rules.  These rules, which are to be adopted no later than July 1, 2012, impose a highly expedited briefing schedule and require payment  of a special $100,000 fee to the Court to reimburse for costs related to the expedited handling of the case.  Currently, at least one Solar PV project has applied for special handling under AB 900.

It remains a question whether the added costs for this expedited process are worth it for Solar PV and other developers.  While no project has actually gone through the process as of this date, utility scale Solar PV projects should carefully consider the possible benefits.  One benefit of immediate appellate review would be a dramatic reduction of the judicial review period by twelve to eighteen months.  Having the Governor certify the project as an environmentally superior major job creator would also likely expedite the administrative review process before the land use agency. 

SCE and SDG&E Announce 2012 RAM 2 RFOs

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

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

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

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

PG&E Announces 2012 RAM RFO

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

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

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

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

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

DOE Concludes 1603 a Big Job Creator

A surprise to no one involved in renewable energy, the DOE (via NREL) has just issued a report concluding 1603 created tens of thousands of new jobs.

See the report at http://www.nrel.gov/docs/fy12osti/52739.pdf

 

PG&E Announces 2012 PV PPA RFO

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

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

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

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

 

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

 

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

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

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

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

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

Energy Conversion Devices, Inc. - "363 Sale" of Solar Business Unit

From my colleagues Erin Eliasen and David Levant:

Energy Conversion Devices, Inc. (“ECD”) and its subsidiary United Solar Ovonic LLC (“USO” and together with ECD, the “Debtors”), which manufacture lightweight, flexible PVs, have filed for chapter 11 bankruptcy and seek to sell USO’s solar business unit pursuant to section 363 of the Bankruptcy Code.

The Debtors seek qualified bidders for the purchase of USO’s stock or assets that comprise its solar business unit (the “Assets”). The deadline to submit “qualified bids” for the Assets is April 17, 2012. To be a “qualified bidder” a party must (i) execute a confidentiality agreement; (ii) provide a statement “demonstrating a bona fide interest” in the assets to be purchased and listing a “non-binding” range of value for such assets; and (iii) demonstrate proof of financial wherewithal to purchase the assets. If multiple qualified bids are received, an auction will be held on April 24, 2012. At present there is no “stalking horse bidder”, but if one comes forward and is overbid, the Bankruptcy Court has approved the payment to the stalking horse bidder of the lesser of a “break-up fee” of 2.0% of the purchase price or expense reimbursement up to $200,000. All purchases are subject to approval by the Bankruptcy Court.

This proposed sale is unusual in that it does not have a minimum bid requirement and there is no proposed stalking horse bidder. These factors may indicate an opportunity to obtain PVs and other of USO’s assets at a discount.

If you are interested in purchasing all or any of the Assets, please contact Erin Eliasen at (206) 386-7605 or David Levant at (206) 386-7601.

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!

Upcoming Event: Energy Storage for the Grid: Watchful Waiting or the Perfect Storm?

I'll be moderating Energy Storage for the Grid: Watchful Waiting or the Perfect Storm? at the MIT Enterprise Forum Northwest's May 8, 2012 program at Seattle's Museum of History and Industry (MOHAI) , 2700 24th Ave East.  The event, which includes a networking reception, will be held from 5:00 to 8:30 pm. 

The evening's panelists will be:

  • Terry Oliver, Chief Technology Innovations Officer, Bonneville Power
    Administration
  • Alexander H. Slocum, Professor, Massachusetts Institute of Technology
  • Chris Wheaton, Chief Operating & Financial Officer, EnerG2
  • Nathan Adams, Manager of Development and Emerging Technologies, Puget Sound Energy

Among other topics, the panel will address:

  • The most promising energy storage strategies
  • How different storage methods could work together with the grid in the Northwest and nationally
  • How entrepreneurs, the changing energy marketplace, grid operators, and utilities are responding to the call to build the foundation for a clean energy economy 

For more information about this event, visit MITEF Northwest's web site

I hope to see you there!  In the meantime, for those who are following energy storage, I'm "tweeting" regularly on that topic as well as Department of Defense renewables procurement  at @BillHolmesStoel (#energystorage)

 

PG&E Announces Plans to Issue 2012 Solar PV RFO

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

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

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

Army Issues Draft RFP for $7 Billion in Renewable Energy Contracts

On Friday February 24, 2012, the U.S. Army Engineering & Support Center in Huntsville, Alabama issued a draft request for proposals (Solicitation No. W912DY-11-R-0036, the “Draft RFP”) titled “Large Scale Renewable Energy Production for Federal Installations.” 

The objective of the solicitation, in its current form, is to procure renewable and alternative energy through power purchase agreements (“PPAs”) or contractual equivalents for terms of up to 30 years. The government does not want to acquire generation assets, only energy. Projects may be located on or near any federal property located within the United States, including Alaska, Hawaii, territories, provinces or other property under the control of the United States. “The intent is to award contracts to all qualified and responsible offerors, both large and small businesses.” As stated in the Draft RFP, the proposed categorization of projects is as follows:

Energy Production Task Order Competition Caveats
Greater than 12 MW Unrestricted competition  
4 MW up to 12 MW The Contracting Officer will first consider reserving the Task Order for small businesses. The determination will examine the size of the project, the complexity of the project, and the level of financing required. Before making the determination on a particular project, the Contracting Officer will request a letter of interest from all small business firms. If fewer than two responses are received, the Task Order will open for unrestricted competition.
Less than 4 MW Reserved for small businesses If no proposals are received, or if all proposals are technically unacceptable and/or unreasonably priced, the Task Order will open for unrestricted competition.

Technologies that will be considered include solar, wind, biomass, and geothermal.  The estimated maximum value of all contracts awarded pursuant to the Draft RFP is $7 billion over a period of 10 years. 

It is important to note that the final RFP "may significantly vary from this draft."  The Army is accepting comments via the ProjNet website through March 21, 2012.  The final RFP will be issued at some point after that date.

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

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

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

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

PIRP Changes Off the Agenda for December CAISO Board Meeting

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

Upcoming Energy Conference Highlights

Through industry presentations and publications as well as through our blog, our energy attorneys are dedicated to helping you stay informed and knowledgeable about legal developments that affect your business.

Visit our website for the latest calendar of events. Upcoming highlights include:

Distributed Solar Summit 2011
November 30-December 2 – San Diego, CA
This event is a unique opportunity for the entire distributed solar community to connect and discuss successful strategies for funding distributed solar projects. Stoel Rives attorneys Morten Lund and Brian Nese will moderate discussion panels covering “The California Market – Market Environment and Business Opportunities,” “Asset and Portfolio Capital Providers' Appetite for Investing in Distributed Solar,” and “EPC/Installers Views on Contracting Relationships.” As a sponsor, Stoel Rives is offering a 15% registration discount with code 118926.

Siting & Permitting Renewable Energy Projects in the West
December 7-9 – San Diego, CA
On December 8 hear Tim McMahan co-present “Impact of the Endangered Species Act, NEPA and Other Environmental Legislation on Current and Planned Projects,” and Tim Taylor participate in the discussion panel “Strategies for Working Successfully with the Regulators to Get Projects Permitted and Developed.” Wayne Rosenbaum will chair the Pre-Conference Workshop on December 7.

Hydropower’s Evolving Role in Western Power Grid Reliability
December 12-13 – Sacramento, CA
Join Stoel Rives attorneys Chad Marriott, Bill Holmes and Barbara Brenner for one of the year's most important hydroelectric power events. On December 13, Bill Holmes will present "Storage: How Changing Policies and Technologies Influence Hydropower Utilization," and Chad Marriott will present "Recognizing the Role of Small Hydro in the West."

US-China Wind 2011: Building Strategic Cooperation
December 13-15 – San Francisco, CA
Join Stoel Rives’ Mike Mangelson, William Clydesdale, David Benson, and Ed Einowski as they examine the factors driving developments of the US and Chinese wind power markets. Mike Mangelson will serve as the pre-summit chair, at which time William Clydesdale will present “Negotiating the Joint Venture Agreement.” During the main summit, chaired by Ed Einowski, David Benson will present “Alternative Financing Structures.” As the Platinum Sponsor of this event, Stoel Rives is offering a 15% registration discount with code 116011.

2012 Pacific West Biomass Conference & Trade Show
January 16-18 – San Francisco, CA
This event focuses on biomass utilization in the western US, and brings together area producers of biomass-derived electricity, heat, and power with waste generators, utility executives, equipment manufacturers, and more. On January 16, Lee N. Smith will moderate the discussion panel "Capitalizing on Energy Rich Waste Streams and Technical Approaches for their More Varied Conversion," and Greg Jenner will serve as a panelist for "Capitalization Strategies in Challenging Financial Environment." Stoel Rives is a proud sponsor of this event.

Projects & Money 2012
January 18-20 – New Orleans, LA
Stoel Rives is proud to be a Gold Sponsor for this one-stop meeting center for project professionals working to kick off their project finance plans. Stoel Rives attorney David Benson will be in attendance, and Stoel Rives attorney Julia Pettit will moderate the discussion panel "Buying and Selling Project Assets (Project M&A)" on January 19. Stoel Rives is pleased to offer a 10% registration discount with code 120366.

Wind & Solar Integration Summit
January 18-20 – Scottsdale, AZ
Stoel Rives attorneys Stephen Hall and Bill Holmes come together with policy makers, transmission owners and operators, and renewable energy developers to network and exchange valuable information about operational changes and their impact on distributed solar and grid-scale wind energy. Bill Holmes will serve as Summit Chair, and Stephen Hall will present "Approaches to Handling Environmental Redispatch and Curtailment.”

PV Project Due Diligence Requirements
January 23-24 – San Diego, CA
Hear Stoel Rives attorney Howard Susman present "Project Contractual Relationships" on Monday, January 23 as he covers such issues as PPAs, financing, siting and permitting, and more.

Next Generation Bio-Based Chemicals Summit
January 23-26 – San Diego, CA
Join Stoel Rives attorneys David Quinby, Christopher Voss and Jere Webb for this innovative biotech/biofuels event with a comprehensive, in-depth focus on sustainably sourced chemicals — and the platforms, resources, business models and tools required to deliver them. Stoel Rives is a Platinum Sponsor for this event.

EUEC 2012
January 30-February 1 – Phoenix, AZ
See over 600 professional presentations on 12 specialized tracks, and browse over 200 exhibits. Allison Smith will present "Strategies for Complying with Current GHG Regulations in California,” and Kristen Castaños will present "Utility-Scale Solar Projects in California - The Keys to Development Permits in Desert Areas and on Farmland."

Wind Power Finance & Investment Summit
February 8-10 – San Diego, CA
Join Ed Einowski and members of the Stoel Rives Wind team as they participate in one of the best deal-making and networking events in the wind industry. Stoel Rives is proud to be a Platinum Sponsor for this event.

Solar Power Finance & Investment Summit
February 27-March 1 – San Diego, CA
Join Stoel Rives attorneys Howard Susman, Julia Pettit, David Benson, Morten Lund and Greg Jenner to learn about putting together solar power project deals. Hear investors discuss their future plans and what they seek when getting involved in deals in 2012 and beyond. David Benson will Chair, Julia Pettit will moderate, “The Buying and Selling of Distributed Solar Projects,” and Morten Lund will moderate, “Financing 2-20 MW Scale Projects.” Stoel Rives is proud to be a Platinum Sponsor at this event.

Upcoming Energy Conference Highlights

Through industry presentations and publications as well as through our blog, our energy attorneys are dedicated to helping you stay informed and knowledgeable about legal developments that affect your business.

 

Visit our website for the latest calendar of events. Upcoming highlights include:

 

Southeast Biomass Conference & Trade Show
November 1-3 – Atlanta, GA
Join Stoel Rives attorneys Lee Smith, Greg Jenner, Joe Thompson, and Tim Taylor in Atlanta for this BBI conference. Stoel Rives is a proud sponsor of this event. Our attorneys will participate in discussion panels covering Environmental Compliance, Biomass Procurement and Supply Chain Management, and Federal Incentives.

 

WoWE Leadership Forum
November 2 – Carlsbad, CA
Stoel Rives and the Women of Wind Energy (WoWE) are pleased to announce the second installment of this special Forum. Stoel Rives attorneys Elizabeth Cason, Dina Dubson and Julia Pettit, member of the 2011 planning committee, will be in attendance.

 

AWEA Wind Energy Fall Symposium
November 2-4 – Carlsbad, CA
Join Stoel Rives attorneys Julia Pettit, Howard Susman and Wayne Rosenbaum at this exclusive event designed for professionals in every segment of the wind industry.

 

Solar Power Project Development
November 9 – San Diego, CA
Join Stoel Rives attorney Brian Nese in San Diego where he will co-present the Solar Status and Update session.

 

Green Energy M&A Outlook for 2012
November 15-16 – Santa Clara CA
Stoel Rives is proud to be a Platinum Sponsor at this event. Attorneys Duff Bryant, Ed Einowski and Julia Pettit will moderate discussion panels covering the Corporate M&A Landscape, Renewable Developers’ Perspectives, and Wind M&A Deals. Duff Bryant and Ed Einowski will serve as Summit Co-Chairs. We are pleased to offer a 15% registration discount with code 119631.

 

CalWEA 11th Annual Meeting
November 16-17 – Carlsbad, CA
Join Howard Susman, Wayne Rosenbaum, Randy Faccinto, Brian Nese, and Elizabeth Cason as they gather with other members of the California Wind Energy Association. Stoel Rives is proud to be a breakfast sponsor at this event.

 

Utah Renewable Energy Business Summit
November 16-17 – Salt Lake City, UT
Join Stoel Rives attorney Julia Pettit for this two-day event presented by the Governor’s Office of Economic Development.

 

Distributed Solar Summit 2011
November 30-December 2 – San Diego, CA
Hear discussions moderated by Stoel Rives attorneys Morten Lund and Brian Nese covering The California Market Environment and Business Opportunities, Asset and Portfolio Capital Providers' Appetite for Investing in Distributed Solar, and EPC/Installers Views on Contracting Relationships.

 

Siting & Permitting Renewable Energy Projects in the West
December 7-9 – San Diego, CA
Tim McMahan will co-present Impact of the Endangered Species Act, NEPA and Other Environmental Legislation on Current and Planned Projects and Tim Taylor will participate in the discussion panel Strategies for Working Successfully with the Regulators to Get Projects Permitted and Developed.

 

US-China Wind 2011: Building Strategic Cooperation
December 13-15 – San Francisco, CA
Visit with Mike Mangelson, William Clydesdale, David Benson, and Ed Einowski in San Francisco for the 2nd Annual US-China Wind Summit. Stoel Rives is proud to be a Platinum Sponsor at this Infocast event, and we are pleased to offer a 15% discount on registration with code 116011.

 

If you have problems viewing this email, you can view it as a web page.

To see the full calendar of events, click here.

CUB Policy Center and UO Hold Inaugural Smart Grid Conference in Portland

The CUB Policy Center, in partnership with the University of Oregon School of Law,  will be holding its inaugural policy conference: Smart Grid: Today's Regulation and Tomorrow's Technology, on Friday, October 21, 2011, at the University of Oregon White Stag Block (70 NW Couch St., Portland, OR 97209).  The luncheon keynote speaker will be former FERC Commissioner Nora Mead Brownell, who is the co-founder of ESPY Energy Solutions.

The conference is designed to educate utility analysts, policy analysts, attorneys, industry professionals, stakeholders and others on the current regulatory environment in Oregon and the region and to provide a forum for investigating the opportunities and challenges of integrating the Smart Grid into that environment. The CUB Policy Center notes that space for this conference, which promises to be well attended, is limited and encourages attendees to register early.   

I'll be participating in the Closing Panel to recap and discuss lessons learned during the day, and I hope to see you there.

STOEL RIVES PUBLISHES UPDATED EDITION OF SOLAR ENERGY LAW GUIDE

The Stoel Rives Energy Development group is proud to announce the publication of the third edition of Lex Helius: The Law of Solar Energy.

In the wake of recent state and federal policies and incentives, investment in solar energy has become increasingly competitive. Accordingly, our energy team desires to provide our readers with the most up-to-date solar market insights. The authors, contributors and editors of Lex Helius have done just that.

Lex Helius analyzes critical issues that solar power project developers confront during the development process, including real property acquisition, regulatory and permitting requirements, interconnection issues, power purchase agreements, financing, and construction contracting.  The guide also discusses federal and state incentives available to solar projects, financing structures, market conditions, and sale and transfer of renewable energy credits.

The new edition of Lex Helius will be available at the Stoel Rives booth (#3043) at the Solar Power International 2011 conference in Dallas, October 17-20, 2011.


The guide can also be downloaded, along with the entire Stoel Rives “Law of” library at www.stoel.com/lawofseries.

 


 

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!

Upcoming Energy Conference Highlights

Through industry presentations and publications as well as through our blog, our energy attorneys are dedicated to helping you stay informed and knowledgeable about legal developments that affect your business.

Visit our website for the latest calendar of events. Upcoming highlights include:

Utah Solar Tour 2011
September 24 – Salt Lake City, UT
Join Stoel Rives attorney Julia Pettit for the Utah Solar Energy Association’s annual Solar Tour. This year’s tour features sites with geothermal heat pumps, small wind, passive solar design, solar shingles, and many energy efficiency design techniques. Stoel Rives is proud to be a Gold sponsor at this event.

In-Depth Tax Planning for Renewable Energy Projects
September 26 – Chicago, IL
Stoel Rives attorneys Greg Jenner, Adam Kobos, Carl Lewis and Kevin Pearson will serve as faculty for this course which will outline tax issues involved in developing renewable energy projects and negotiating tax equity incentives.

REFF West
September 26-27 – San Francisco, CA
Join Duff Bryant, Julia Pettit, John McKinsey and over 400 senior executives and investors as they discuss opportunities for private equity and venture capital in clean tech energy companies. Review in detail the latest technologies moving the industry forward, and examine prospects for rapid renewable growth across the West Coast. Be sure to visit Stoel Rives in the exhibit hall!

National Hydropower Association Pumped Storage Workshop
October 3 – Bellevue, WA
Join Stoel Rives attorneys Bill Holmes, David Benson, Cherise Oram, and Michael O’Connell for this workshop intended for industry professionals with an interest in the development of new pumped storage projects. Bill Holmes will join the discussion panel What Would Energy Storage Asset/Revenue Modeling Look Like? from 4:00-5:00 p.m.

Independent Energy Producers Association Annual Meeting
October 3-5 – South Lake Tahoe, CA
John McKinsey and Seth Hilton will be in attendance at The IEP 30th Annual Meeting, featuring speakers from CPUC, CARB, CEC, and FERC. Stoel Rives is a proud sponsor at this event.

Developing Grid Storage Projects
October 5-6 – Dallas, TX
John Thompson, David Hattery and Bill Holmes are headed to Dallas to explore market opportunities, models, technologies and barriers to energy storage. Bill Holmes will Chair the conference, and instruct the pre-conference workshop, Developing the Business Case for Grid Storage on October 5. Other Stoel Rives presentations on October 5 include John Thompson, presenting Intellectual Property Protection for Grid Storage, and David Hattery, presenting Negotiating the Terms and Navigating the Risk of a Procurement Contract and Other Financial Documents.

Biogas USA West 2011
October 11-12 – San Francisco, CA
Visit with David Benson and Lee Smith, who will join the discussion panel Project Development Optimization on October 11. Be sure to attend the post-conference event reception, proudly hosted by Stoel Rives.

Solar Power International
October 17-20 – Dallas, TX
Stoel Rives attorneys David Benson, Kristen Castaños, Bill Clydesdale, David Hattery, Bill Holmes, Greg Jenner, Morten Lund, Jennifer Martin, Julia Pettit, David Quinby and Howard Susman are headed to Dallas! Julia Pettit will join the Financing Strategies for Utility-Scale Projects discussion panel, and Bill Holmes will moderate the discussion panel, Energy Storage Market and Policy Developments. Visit Stoel Rives at booth #3043 in the exhibit hall!

GEA Geothermal Energy Expo & GRC Annual Meeting
October 23-26 – San Diego, CA
Stoel Rives attorneys John McKinsey and Erin Anderson will be in attendance at the Geothermal Energy Association Energy Expo, co-located with the Geothermal Resources Council Annual Meeting. Erin Anderson will present during the pre-meeting workshop, held on Friday, October 21 from 8 a.m. – 5 p.m. While you’re there be sure to visit Stoel Rives in the exhibit hall!

CALIFORNIA RPS: Meeting the Mandate
October 24-25 – Los Angeles, CA
On Monday, October 24, Seth Hilton will present, In-State vs. Out-of-State Renewable Resources to Satisfy RPS Requirements from 10:30-11:15 a.m.

Green Energy M&A Outlook for 2012
November 15-16, 2011 – Santa Clara, CA
Stoel Rives’ Duff Bryant and Ed Einowski, will serve as Summit Co-Chairs, and on Tuesday, November 15, Julia Pettit will moderate the discussion panel, The Green Corporate M&A Landscape, from 8:45 - 9:45 a.m. Stoel Rives is proud to be a Platinum Sponsor of this event.

To see the full calendar of events, click here.

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Great River Energy Issues Request for Proposals

On August 15, 2011, Great River Energy (GRE) issued a request for proposals (RFP) for community-based energy development (C-BED) renewable energy resources.  Eligible energy technologies include: wind, solar, hydroelectric of less than 100 megawatts, biomass, municipal solid waste, landfill gas and anaerobic digesters, and hydrogen produced from any of the previous resources.

In announcing the RFP, GRE noted that it already has enough renewable resources in its energy portfolio to meet Minnesota's Renewable Energy Standard.  Minnesota's RES requires electric utilities to supply an increasing percentage of their energy sales from renewable energy sources, reaching 25 percent by 2025. Nevertheless, GRE issued the RFP to "evaluate if additional C-BED renewable resources can provide value to our member cooperatives in the future," according to Jon Brekke, Great River Energy vice president of member services.  GRE plans to evaluate proposals based on their impact to wholesale power rates and other factors.

Proposals are due before 4pm Central Prevailing Time on Sept. 9, 2011.  GRE plans to notify short listed bidders by September 30 and has targeted November 1, 2011 as the execution date for a power purchase agreement (PPA).  GRE is clearly looking for bargains from developers who can take advantage of the Section 1603 cash grant, a program that expires on December 31, 2011, and who can place a project in service by December 31, 2012.  Since projects seeking the cash grant will need to "begin construction" (as that concept is defined in Section 1603) by December 31, 2011, the November 1 target execution date will likely be critical for developers seeking to arrange project financing before year end.

GRE is interested in entering into a PPA rather than a build-transfer or other ownership arrangement.  GRE's form of PPA can be found here.   The RFP itself can be found here.  For more information about the RFP, contact Mark Rathbun at 763-445-6104 or 2011cbedrenewablerfp@grenergy.com.

Section 1603 Cash Grants for Renewable Energy Projects TeleBriefing

With the end of 2011 drawing near, many renewable energy developers are seeking to qualify their projects for the Section 1603 cash grant.  Developers continue to try to understand the complexities surrounding the grant requirements, especially the determination of when projects are considered to have met the “beginning construction” requirement.

On August 24, I'll moderate a Law Seminars International (LSI) Telebriefing on Section 1603, featuring Stoel Rives partner Greg Jenner and  Victoria McDowell, the Compliance Program Manager, Section 1603 Program, U.S. Department of the Treasury. 

The TeleBriefing will take place from 10 AM – 11 AM Pacific Time/ 1 PM -- 2 PM Eastern Time.  During the briefing, attendees will learn how to meet the “beginning construction” test and receive clarification from the Treasury Department on project requirements.  We'll also discuss the fate of projects that fail to qualify for the cash grant.

 

Registration is available online through Law Seminars International.

 

Puget Sound Energy Files for WUTC Review of "All-Source" RFP

Puget Sound Energy (PSE) has filed with the Washington Utilities and Transportation Commission (WUTC) a Request for Proposals for All Generation Sources (the all-source RFP) and a Request for Proposals for Electric and Demand Side Resources (energy-efficiency RFP). PSE filed the draft all source RFP on August 1, 2011 and plans to issue a separate energy efficiency RFP later.  

Under the all source RFP, PSE is seeking proposals for energy generation resources as capacity generation resources, as well as transmission products from BPA’s system to PSE's system. PSE is willing to consider both existing generation resources and resources that are under development but expected to achieve commercial operation no later than December 2015. According to PSE, a revised assessment of its portfolio needs and peak customer power requirements demonstrates a need for approximately 500 MW of capacity by the end of 2012.  PSE would be willing to consider various commercial arrangements under the RFP, including power purchase agreements, temporal exchange agreements, ownership arrangements (e.g., a transfer of development assets, a build-transfer arrangement, or sale of an existing asset), as well as transmission-only products from BPA’s system.

 

PSE will be hosting an RFP Proposal Conference on August 16, 2011, in Bellevue, Washington, to discuss the all-source RFP. To register for the conference, email janice.brown@pse.com. Public comments on the draft RFP are due on September 2, 2011, and PSE expects to receive WUTC approval by September 28. If the schedule holds, PSE plans to issue the final RFP solicitation on October 5, 2011.  PSE expects to select a final short list and notify respondents in 1Q 2012.

PSE’s web page for the RFP (including its proposed schedule and the draft RFP itself) can be found here.

Recent RFPs for Renewable Energy

Several requests for proposals ("RFPs") have been issued recently with July deadlines.  Here's a brief summary of each:

  • Progress Energy Carolinas is seeking proposals for energy and renewable energy certificates from newly constructed or existing wind projects of at least 5 MW to comply with North Carolina's renewable energy portfolio standard.  Projects do not have to be located in North Carolina.  The deadline for proposals is currently set at 5:00 p.m. EST, July 25.  The utility anticipates shortlisting in August and executing final contracts in late October.  More information can be found here.
  • Tucson Electric Power and UniSource Energy Services are seeking up to 50 MW of Arizona-based wind generation.  There will be a bidder teleconference at 1:30 p.m. PST on Monday July 18.  Bids are currently due by 4:00 p.m. PPT on August 25 and the utilities expect to make a decision by September 30.  Information about the joint request for proposals can be found here
  • The City of Roseville, California, through its electric department, Roseville Electric, seeks to procure eligible renewable energy resources from renewable electrical generation facilities as defined by California's SBX1-2.  Targeted procurement is outlined on the request for offer document.  The deadline to submit questions is July 22.  Responses are currently due July 26 and the City anticipates shortlisting on or about September 30.  More information is available here.
  • National Grid has issued a second request for proposals for renewable energy in Rhode Island.  The Narragansett Electric Company d/b/a National  Grid is seeking proposals for capacity, energy, and renewable energy credits under 10-15 year contracts.  A bidders conference will be held on July 15 in Rhode Island.  Notices of Intent to Bid are currently due by 5:00 p.m. EPT on July 20, and proposals will be due by 5:00 p.m. EPT on August 4.  Details can be found 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.

Envision Solar Emphasizes Growing Intellectual Property Portfolio

 

Posted on behalf of Stoel Rives Partner, Aaron Barker.

Envision Solar International, Inc. recently announced that it has filed for a U.S. patent application for the company’s multi-axis Envision Trak™ solar tracking systems, which are designed to increase energy output by approximately 20 percent over a standard fixed PV array. Envision Solar emphasized that it is “pursuing an aggressive technology and product development program” and that the “company’s intellectual property portfolio is growing.”

Because most patent applications are not published until 18 months after filing, details of the new patent application are not available. However, Envision Solar states that the company’s new patent application advances its “previously patented Solar Tree® products into Envision Solar’s next generation—ultra-high output solar parking array technologies.”

U.S. Patent No. 7,705,277 is Envision Solar’s previous patent covering sun tracking solar panels. The patent is related to maximizing solar energy utilization by moving a solar panel to track movement of the sun from sunrise to sunset. An example claim and drawing from U.S. Patent No. 7,705,277 are shown below.

 

Claim from U.S. Pat. No. 7,705,277

1. An apparatus for moving an energy converting unit to maximize solar energy utilization which comprises:

    at least one solar panel having a substantially flat surface with a plurality of the energy converting units mounted thereon;

    a mount for supporting the solar panel with the flat surface thereof inclined relative to a terrestrial horizon at a fixed angle "α" wherein the mount includes a pole anchored in the ground;

    a means for rotating the panel on the mount about a central axis, wherein the central axis is aligned with the pole and is substantially perpendicular to a horizontal plane defined by the terrestrial horizon; and

    a controller for controlling rotation of the panel through successive one-directional cycles in accordance with a programmed schedule to maximize generation of solar energy.

 

According to Envision Solar, the company’s new patent application describes a “Device for Continuously Reorienting a Solar Panel.” The company also hints that the new patent application covers “a hybrid, multi-axis design, [that] provides a highly functional solution which allows the entire Solar Tree® canopy to track the sun, while not restricting traffic flow in drive aisles of parking lots.”

We look forward to the publication of Envision Solar’s new patent application.

Substantial Increase in Solar Patent Activity in 2010

By Aaron Barker

The Solar Energy Industries Association (SEIA) reported that the U.S. solar market grew 67% in value in 2010. We have also noticed that the amazing growth in the solar industry is reflected in U.S. patent activity. Because the solar industry covers a wide range of technologies, we looked at a simple example of issued U.S. patents that include the word “solar” in the title. We found that the number of “solar” patents increased 42% in 2009 and 73% in 2010. The chart below shows that the number of “solar” patents was relatively flat during most of the 1990s (hitting a low of 106 patents), increased during 1999-2003 (228 patents), dipped during 2004-2005 to 1998 levels (126 patents), and rose slightly during 2006-2008 to 2004 levels (170 patents). There were 242 patents in 2009 and 419 patents in 2010.

Using broad categories for the “solar” patents that issued in 2010, we estimate that 142 patents cover solar cell technologies, 109 patents cover solar powered devices or systems, 63 patents cover solar panel assemblies, 43 patents cover solar heating or cooling, 18 patents cover power plant technologies, and 17 patents cover mounting or packaging technologies.

 

The increase in solar-related patent activity is consistent with an increase in overall U.S. patent activity. In the recently published Oregon Patent Report for 2008-2010, intellectual property attorneys at Stoel Rives reported that the number of patents issued to corporate and individual inventors in Oregon rose a healthy 18.1%, compared with drops of 7.5% in 2009 and 4.4% in 2008. Nationally, the number of patents awarded to all U.S. inventors in 2010 rose 27.5%, compared with only a 3.3% increase in 2009 and a 1.8% drop in 2008. Thus, in addition to strong growth in the overall U.S. solar market, at least some of the increase in solar patent activity in 2010 may be attributed to a general increase in companies using the patent system to protect their innovations, the U.S. Patent and Trademark Office’s push to reduce a mountainous backlog, and an uptick in the number of patent applications filed just before the recent economic downturn.

CEC Holds Workshop on Energy Storage for 2011 IEPR

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

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

 

 

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

 

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

 

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

 

BLM Notices Interim and Proposed Rules Protecting Renewable Energy Development From Mining Claims

Stoel Rives attorney Heath Curtiss, one of the
co-authors of "Federal Land Issues with Siting
and Permitting" in our Law of Wind, describes
a Bureau of Land Management ("BLM") plan to
protect certain land suitable for renewables
development from the location of mining claims :

As many of our clients with right-of-way (“ROW”) applications pending before BLM know, mining claims located prior to a final ROW grant can prove difficult obstacles to clear in the context of project permitting, finance, and development.  Unfortunately for renewables developers, mining claims are easy to locate, and difficult to invalidate.  This gives mining claimants leverage vis-à-vis other public land developers.  As one might expect, with the recent uptick in renewable ROW applications, we’ve also seen an increase in mining claims.  According to BLM, over the last two years, 437 new mining claims were located within wind energy ROW application areas on BLM lands, and another 216 new mining claims were located within solar energy ROW application areas.

In an effort to address such conflicts, on April 25, 2011, BLM published notice of an Interim Rule effective immediately, and a nearly identical proposed rule, that gives BLM the ability to segregate lands included within wind and solar ROW applications, or lands that BLM identifies for potential wind and solar ROWs.  Once segregated, such lands would no longer be subject to appropriation under the appropriations laws, including location under the General Mining Law of 1872.  Segregation would not, however, explicitly restrict leasing under the Mineral Leasing Act of 1920, or sales under the Materials Act of 1947, presumably because those acts already give BLM significantly more discretion to balance competing uses.  Likewise, neither the interim nor proposed rule purport to affect existing mining claims.

The foregoing segregation would take effect once BLM publishes notice in the Federal Register, and would terminate on the earliest of (i) a decision to grant or deny the ROW application, (ii) automatically at the end of the segregation period, not to exceed 2 years from the date of publication, or (iii) upon publication of a notice of termination.

BLM is accepting comments on the interim and proposed rules until June 27, 2011.

 

 

 

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

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

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

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

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

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

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

 

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

 

RFI for Substation-Size Li-ion Energy Storage System Demonstration Project

Electric Power Research Institute (EPRI) and Technology Transition Corporation recently issued a request for information (RFI) to prepare for multiple demonstrations and the market introduction of 1MW / 2MWh lithium ion battery energy storage systems (ESS) for electric utility grid management solutions.  EPRI and TTC have assembled a utility team for this project, and they encourage manufacturers of Li-ion systems and energy storage system integrators to respond to the RFI. The utility team will evaluate the responses to determine which ESS suppliers should be invited to a 2-day utility-manufacturer workshop to be held in June 2011 to discuss the project’s technical specification and demonstration plans.  The responses to the RFI will also influence the forthcoming Request for Proposals and the technical specification for approximately three demonstrations scheduled for 2012.

To be considered for participation in the proposed ESS project, including receipt of the resulting RFP in Q3 2011, responses must be received electronically, by 8 pm (20:00) Eastern Time, Monday, May 2, at storagespec@ttcorp.com.  A detailed description of the RFI process and the RFI response form can be found on the Technology Transition Corporation's website, here

Thanks to Emanuel Wagner, Project Coordinator for TTC, for bringing this RFI to my attention.  According to Emanuel, this would be the first Li-ion storage project of this size in the US, if not the world.  

Petition for Review Filed in TXU v. FPL Curtailment Case

On April 11, 2011, FPL Energy, LLC, et al., filed with the Texas Supreme Court a petition for review of the Texas Court of Appeals’ decision FPL Energy, LLC, v. TXU Portfolio Management Company, L.P. The case illustrates the significant economic impact that curtailment can have on variable energy resources. For a detailed description of the case and its implications, see our Renewable + Law Blog entry on the Court of Appeals’ decision here.

The petition for review focuses on the question of whether the Court of Appeals was correct in enforcing the liquidated damages provisions contained in three wind energy power purchase agreements. The pertinent provisions in each PPA required the petitioners to pay $50 for every MWh that the plants fell short of achieving the their minimum REC output guarantees—the Court of Appeals’ holding meant that the petitioners owed TXU roughly $29 million in shortfall damages for a four year period of curtailment imposed by the transmission provider (ERCOT), on top of the pain of losing the contract price and the production tax credit on each MWh of energy curtailed.

Continue Reading...

Budget Compromise Looks OK for Projects in DOE Loan Guarantee Pipeline

The current version of the budget compromise provides relatively good news for projects seeking DOE loan guarantees. During the past several months, renewable energy projects in the DOE’s Loan Guarantee pipeline have been exposed to substantial uncertainty as a result of the budget crisis in DC. The developers of these projects have previously invested substantial resources to apply to the program which would become wasted effort if the program funds evaporate as the projects wait for DOE approval. The Loan Guarantee Program Office led by Jonathan Silver was clearly aware of this issue and prudently allowed all open solicitations to expire in early 2011 without issuing any new ones. The renewable energy project developers’ concern has been that the budget deal would involve a substantial claw back of previously appropriated funds that have not yet been committed to projects. 

The battle is not yet resolved but the current compromise is encouraging for these projects. There is a claw back of $18.183 billion in uncommitted funds but these were funds appropriated under provisions that required that the Credit Subsidy Cost to be paid by developers. The Credit Subsidy Cost was the bane of the Loan Guarantee Program as it essentially required the program applicant to cover the present value risk that the project would default on the loan. The Stimulus Bill solved this problem and greatly increased the attractiveness of the Loan Guarantee Program by appropriating funds to cover the Credit Subsidy Cost. Similarly, the current budget compromise appropriates an additional $1.183 billion in funds and allows these funds to be utilized to cover Credit Subsidy Costs. Thus, while the provision claws back funds, these are funds that were not attractive due to program limitations whereas new funds are appropriated to the preferred program. In addition, the proposed legislation imposes an Office of Management and Budget certification of compliance requirement as a control on the program.

The current bill is HR 1473 and is likely to be voted on later this week and thus is still subject to amendments. To obtain the latest details and access to the bill, see the Open Congress site at http://www.opencongress.org/bill/112-h1473/show 

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

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

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

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

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

Upcoming Electric Energy Storage (EES) Workshops

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

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

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

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

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

California Public Utility Commission to Reopen Rule 21 Working Group

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

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

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

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

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

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

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

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

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

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

A Unique RFP for Energy Storage

Santa Fe-based Chamisa Energy Corporation recently announced a request for proposals for up to 250MW of nameplate wind generation resources to be used to provide energy to a 135 MW or larger compressed air energy storage (CAES) facility under development in Swisher County in the Texas panhandle.  The proposed CAES facility would compress air and store it in solution-mined underground caverns.  To convert the stored potential energy back into electricity, the stored air would be released and mixed with a small amount of natural gas to drive a turbine.  The RFP describes CAES as a "bulk electric storage technology used to complement wind energy generation so that wind energy becomes a fully dispatchable resource suitable for peaking, intermediate, baseload or tolling resource." 

The energy would be provided to the facility pursuant to a power purchase agreement (PPA).  Chamisa invites wind plants located either in the Southwest Power Power (SPP) or the Electric Reliability Council of Texas (ERCOT) to respond. Chamisa will consider proposals that supply wind energy for seven years, but prefers a minimum term of 15 years.  The target date for delivering electricity to the Storage Facility is the second quarter of 2014. 

Chamisa notes that it is not aware of completed or pending PPAs between WGR and CAES facilities, and thus anticipates that the successful proposal "will be creative in its approach to the RFP."  Although the RFP isn't explicit on the point, Chamisa's plan may be to purchase energy from a wind generator or wind generators pursuant to the PPA, store the energy, and then sell the electricity and ancillary services from the facility to a third-party off-taker.  If Chamisa can take the bulk of the energy into CAES primarily in off peak hours and then sell the stored energy during on-peak hours, might in theory be able to profit on the arbitrage between the two price points, although past efforts to get grid-scale storage to pencil out on that basis have had limited success.  Alternatively, the facility may be able to profit by using the stored energy to provide ancillary services, grid congestion relief, grid stability and support for grid expansion.

In principle, the CAES facility could also be used in a tolling arrangement by which a utility or a seller of wind energy hires the CAES facility for storage, pays a reservation and storage charge to Chamisa, and then dispatches the stored energy at will--in other words, the third-party offtaker could be the same party as the generator delivering the wind energy to the facility (e.g., a utility that is buying wind energy that it wants to shift from off-peak hours to on-peak hours).  Under this structure, the party tolling electricity would retain title to the electicity being stored and could arbitrage or otherwise deploy the stored energy into the market as it saw fit.  However, a tolling transaction of that type isn't clearly called for by the RFP (although it doesn't appear to be precluded).

Regardless, Chamisa's RFP will be worth monitoring to see whether an independent storage developer can create a workable market structure for its storage assets in order to facilitate financing.  The outcome of this effort will be of great interest to developers of solar and wind resources, as well as to developers of pumped storage and other grid-scale storage solutions.

The deadline for written or email questions is March 31, 2011, and proposals are due no later than 5pm Mountain Standard Time on May 16, 2011.  If submitted by mail, proposal(s) must be postmarked May 16th.  E-mail submission is preferred.  You can access Chamisa's RFP by clicking here.

 

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.

Upcoming Energy Conference Highlights

Through industry presentations and publications as well as through our blog, our energy attorneys are dedicated to helping you stay informed and knowledgeable about legal developments that affect your business.

Visit our website for the latest calendar of events. Upcoming highlights include:

Renewable Energy World Conference & Expo North America 2011
March 8-10, 2011 – Tampa, FL
Featuring speakers Bill Holmes, Greg Jenner, David Benson and Ramona Monroe. Visit us at booth #726 in the Exhibit Hall.

Tax Equity Financing for Renewables
March 16 - Webinar
This webinar, part of EUCI's Law of Renewable Energy Series, is instructed exclusively by Stoel Rives Partners Gary Barnum, Greg Jenner, Kevin Pearson, and Moderated by Ed Einowski. It will provide a refresher on the 1603 grant, the PTC and the ITC, and discuss the requirements and complexities of bonus depreciation, and the opportunities to utilize New Market Tax Credits.

Biomass for Power, Fuels and Chemicals
March 21-22 – Minneapolis, MN
Visit with Mark Hanson, Jennifer Martin, Bill Holmes, and John Eustermann, who will cover topics from PPAs and feedstock agreements to project due diligence and case studies.

Solar Power Finance & Investment Summit
March 22-24 – San Diego, CA
Join speakers Morten Lund and Howard Susman along with Julia Pettit, David Quinby, Brian Nese, Jennifer Martin, Kristen Castaños, Greg Jenner and David Benson in sunny San Diego – save 15% on conference registration with code 111561

Solar EPC and Long-Term Component Supply
March 28 – Webinar
Stoel Rives Partners Ed Einowski, David Hattery and Morten Lund will serve as the exclusive instructors for this webinar, part of the Law of Renewable Energy Series presented by EUCI.

National Hydropower Association's Annual Conference
April 4-6 – Washington, DC
Cherise Oram will discuss how best to navigate the Endangered Species Act at the Federal Energy Regulatory Commission licensing, relicensing and mid-license stages as she presents, "Working Toward Successful ESA Outcomes."

Idaho Temporarily Reduced the Availability of Published Avoided Cost Rates for Wind and Solar. Now What?

On February 7, 2011, less than two weeks after hearing oral arguments on the issue, the Idaho Public Utilities Commission (“IPUC”) issued Order No. 32176 (the "Order"), temporarily reducing the published avoided cost rate eligibility cap for wind and solar qualifying facilities (“QF”) from 10 aMW to 100 kW. The reduction applies to wind and solar projects only, and was given a retroactive effective date of December 14, 2010.  

The Order is the latest in the Joint Petition docket filed by Idaho Power, Avista Corporation and PacifiCorp d/b/a Rocky Mountain Power (the “Utilities”), whereby the Utilities petitioned the IPUC “to investigate and address various avoided cost and other related issues” regarding QFs under the Public Utilities Regulatory Policies Act of 1978 (“PURPA”). Joint Petition at 1. In particular, the Utilities requested a reduction in the eligibility cap from 10 aMW to 100 kW for all resources, “to be effective immediately.” Joint Petition at 7. The Utilities focused specifically on the need to address the “excessive” number of wind QFs currently requesting contracts under the published 10 aMW avoided cost rate, and the disaggregation of wind resources (i.e., dividing large wind projects into multiple 10 aMW projects to qualify for the avoided cost rate), arguing that the Utilities’ ability to continue to accept the QF energy without negatively impacting the electric system and their customer’s is at risk.

In the Order, the IPUC found that “a convincing case has been made to temporarily reduce the eligibility cap . . . for wind and solar only,” but the IPUC maintained the current 10 aMW cap for other QF projects including biomass, small hydro, cogeneration, geothermal, and waste-to-energy facilities. Order at 9. 

The IPUC was careful to note that it is “supportive of all small power producers contemplated by PURPA, including wind and solar, and it is not the Commission’s intent to push small wind and solar QF projects out of the market.” Order at 11. The IPUC is instituting additional proceedings specifically to investigate an avoided-cost rate structure that “(1) allows small wind and solar QFs to avail themselves of published rates for projects producing 10 aMW or less; and (2) prevents large QFs from disaggregating in order to obtain a published avoided cost rate that exceeds the utility’s avoided cost.” Order at 11. During the temporary eligibility cap reduction, the Utilities are still required to purchase power produced by wind and solar QFs, but projects larger than 100 kW must individually negotiate avoided cost rates.

So, now what?

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Will California's Best Management Practices and Guidance Manual help streamline renewable energy permitting in the California deserts?

The California Renewable Energy Action Team's (REAT) final Best Management Practices and Guidance Manual for Desert Renewable Energy Projects is now available. The Manual was adopted by the California Energy Commission on December 15, 2010. The final version posted online last week includes the minor additions from the December 15 meeting.

The REAT is made up of the California Energy Commission, California Department of Fish and Game, U.S. Fish and Wildlife Service, and the U.S. Department of Interior Bureau of Land Management. The REAT has the task of helping accelerate the permitting of renewable energy facilities in the California Mojave and Colorado Deserts, while minimizing environmental impacts and conserving natural resources in these areas. This will facilitate California’s larger goals of generating 33% of the state’s electricity from renewable sources by 2020. For more background information on the REAT and Executive Order S-14-08, creating the Team, see our previous legal alert

 

The REAT is preparing a Desert Renewable Energy Conservation Plan for the California Mojave and Colorado Deserts ecological areas. The Best Management Practices and Guidance Manual provides interim guidance to facilitate renewable energy during preparation of the comprehensive Conservation Plan. The Manual is designed to provide guidance to renewable energy developers on designing and siting renewable energy projects in these desert areas. The Manual’s stated goals also include assisting agencies in reviewing and permitting renewable energy projects and accelerating environmental review of renewable energy projects, though there is less practical material on these goals.

 

The Manual mainly details actions that should be taken prior to filing an application for a renewable energy project to streamline the permitting process. Many of the recommendations, though, are what savvy developers would strive for in any project:  start coordinating early with agencies with long permitting lead times and provide them with complete materials so the process is not delayed, design and site your project to lessen environmental impacts and make sure it is not in conflict with local requirements, plans, or zoning, and complete your long-lead items in the environmental review process, like season-specific surveys, early. In fact, the Manual states “if the majority of the actions are not addressed it is likely that environmental review and decision-making will take additional time.” While it isn’t groundbreaking advice, it is useful for developers new to California or to serve as a checklist. The Manual, disappointingly (but perhaps not surprisingly) doesn’t provide agencies with any new means to shortcut the laborious permitting process. The main pre-filing recommendations are:

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Here Comes the Sun! PG&E Issues RFO for Solar PV

Today, Pacific Gas and Electric ("PG&E") issued its 2011 Photovoltaic Program Power Purchase Agreement Request for Offers (the "RFO").  PG&E is looking to execute 20-year power purchase agreements for a total of 50 MW of new solar PV resources.  Eligible facilities will be new facilities between 1 MW and 20 MW located within PG&E's service territory, and interconnected to its electric system.  This RFO represents the first round of acquisitions to achieve PG&E's larger goal of adding 250 MW of new solar PV in the next five years.

PG&E will host a bidder's conference next Tuesday, February 8, from 9:00 a.m. to 3:00 p.m. in the auditorium of PG&E's headquarters at 245 Market Street in San Francisco.  Participation is limited to two people per bidding company.  Registration is required and is due by 5:00 p.m. TODAY, February 2nd.  The registration form can be found here and may be submitted to PVProgram@pge.com.

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Renewable Electricity and Wine - A Perfect Pairing

An entry from our colleague Jake Storms:

While wineries and vineyards have long been moving toward being “green,” several have taken the next step by installing renewable energy generation onsite. One of the most recent is August Cellars, just outside Newberg, Oregon. The winery recently installed a 150-foot-tall, 50-kilowatt wind turbine. August Cellars maneuvered around the somewhat prohibitive cost of the project (between $70,000 and $100,000) by not actually owning the turbine, but instead leases the turbine from a third party with an option to buy.

August Cellars is following in the footsteps of such giants as Constellation Wines, which, in September 2010, announced it would increase its solar photovoltaic (PV) usage to nearly 4MW with new installations at its Estancia, Ravenswood, and Clos du Bois wineries in California. These systems would expand on the company’s already existing use of solar PV at its Gonzales winery. Constellation will own the systems and take advantage of the tax credits. Once completed, the installations will cover nearly 100% of the energy needs of Estancia and Ravenswood, 75% of Clos du Bois, and 60% of Gonzales and is projected to save the wine giant nearly $1 million annually from reduced energy costs.

The move by wineries toward renewables is not merely a “West Coast thing” either. Red Caboose Winery, a 10,000-case rural winery located in Meridian, Texas, recently released a statement that it would be using a USDA Rural Energy for America Program (REAP) grant of $15,617 to help install a solar PV system. According to the owners, the new system will allow the winery to have a net annual energy consumption of zero.

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Come Learn What Every Renewable Energy Developer and Storage Provider Needs to Know About Integrating Variable Energy Resources

Wind & Solar Integration Summit, Scottsdale, AZ

January 24, 2011, 8 a.m. – 5 p.m., Workshop

January 25, 2011, 7 a.m. – 5:15 p.m., Conference

January 26, 2011, 9 a.m. – 11:45 a.m., Conference

 

As the Workshop Chair, I would like to extend you an invitation to the Wind & Solar Integration Summit, presented by Infocast. Join me and my colleagues in sunny Scottsdale, Arizona as we gather with industry experts—federal and state regulators, representatives from ISOs, independent power producers, and pioneers in energy storage—to discuss the challenges posed by renewable energy integration and the opportunities for businesses that make the necessary adjustments to prepare for the 21st century grid. We will be kicking off the conference with a keynote address by FERC Chairman, Jon Wellinghoff.

 

This 3-day event will include a pre-conference workshop on the fundamentals of integrating variable energy resources and electric energy storage (EES), and will feature a presentation by Stoel Rives partner and Conference Chair, Stephen Hall. The conference will address issues and recent developments in integration, including market solutions and investments to facilitate renewable energy integration, changes to the regulatory landscape, and the role of EES in enabling increased renewables integration. Stoel Rives partners Ed Einowski, Bill Holmes, and Jennifer Martin will present on managing the risks associated with curtailment and integration issues in PPAs. 

 

In case you need another good excuse to get to Arizona in January, Stoel Rives is currently offering a discount on registration. For more event details and registration information, please see: http://www.stoel.com/showevent.aspx?Show=7277

Solar Energy Development on U.S. Bureau of Land Management Lands: Opportunities and Obstacles Created by Shifting Legal Sands

A legal update from our colleagues, Aaron Courtney, Michael O'Connell & Jake Storms:

Unlike other types of energy development on lands administered by the U.S. Bureau of Land Management ("BLM") (e.g., wind, geothermal), solar energy has consistently encountered significant delays caused in large part by a regulatory authorization system that has yet to catch up to industry demand. ]

In an effort to streamline the analysis of solar energy developers seeking right-of-way grants from BLM, the agency, together with the U.S. Department of Energy, has proposed a draft Programmatic EIS for Solar Energy Development that could have significant implications for solar project development on BLM lands in Arizona, California, Colorado, Nevada, New Mexico and Utah (http://solareis.anl.gov/).

Just as the regulatory landscape appears to be heading toward a more predictable, expedient system of authorizations, however, opposition to solar development by tribes and other stakeholders is on the rise and has turned litigious. To continue reading, click here.

Bar on Military Purchases of Chinese Solar Panels

In a blow to China’s position as the world’s dominant producer of solar panels, the new military authorization law  prevents the Defense Department from buying Chinese-made solar panels, but allows it to buy solar panels from any country that has signed the W.T.O.’s side agreement on government procurement.

The W.T.O. Government Procurement Agreement, which requires free trade in government purchases, has been signed by virtually all industrialized countries. China agreed to sign it on joining the W.T.O. in November 2001, but still has not done so, possibly because of internal pressure that strongly favors steering lucrative government contracts to domestic companies.

Chinese leaders have strongly criticized provisions like the “Buy America” provision in the 2009 economic stimulus legislation, despite having similar restrictions on the use of its own stimulus funds.

 

China accounted for at least half the world’s production of solar panels in 2010 and its market share is rising. While the United States and Europe have focused on subsidizing solar panel purchasers, China has focused on subsidizing its solar panel manufacturers. It then exports virtually all of its panels to the United States and Europe, taking advantage of American and European consumer subsidies.  

 

Industry experts predict that the new legislation will boost the American solar panel market, partly by requiring future military contracts to specify American-made panels and partly by encouraging Chinese solar panel manufacturers to establish factories in the United States, with the concomitant higher labor and overhead costs.

Stoel Rives Helps Launch Solar Industry's First EPC Contract Template

SolarTech, a non-profit private/public consortium, recently announced the solar industry’s first engineering procurement and construction (EPC) contract template for solar financing. Whereas a PPA (power purchase agreement), loan agreement or operating lease agreement handle the front-end financing relationship, the EPC agreement handles the execution phase of the project. The template was developed by the SolarTech Finance committee, with the support of my colleague Howard Susman, and is projected to reduce contract negotiations by 50 to 75 percent.

In SolarTech’s announcement, Howard said that “our guiding principles in developing this form were, first, to achieve sufficient balance in the allocation of risks that both contractor and owner would feel comfortable with the terms, and second, to include provisions typically acceptable to the financial community, without whose acceptance, there would be no projects at all.”

 

You can download a copy of the EPC contract template here (free for SolarTech members; $395 for non-members).

New Community Solar Guide Available

The U.S. Department of Energy’s Solar American Communities program released a community solar guide late last week. The guide presents detailed information about three project models: utility-sponsored projects, special purpose projects formed for producing community solar power and non-profit sponsored projects.

The guide outlines the legal and financial implications of each model, provides practical tools and tips for planning community solar projects, and outlines best practices. It is intended to provide an outline of hurdles community project organizers might incur. The guide also includes an appendix with information about the Interstate Renewable Energy Council's Model Community Renewables Program rules.

The guide was developed by Northwest Sustainable Energy for Economic Development, Keyes and Fox, Stoel Rives, and the Bonneville Environmental Foundation. My colleague Janet F. Jacobs and I contributed to the Community Solar Project Models chapter, the Tax Policies and Incentives chapter and the Securities Compliance chapter.

The Guide to Community Solar can be accessed on and downloaded from the Solar America Communities Web site

DOE to Fund up to $50 Million for Innovative, Cost-Competitive Solar Energy

Today, the Department of Energy issued a Notice of Intent regarding funding of up to $50 million to test and demonstrate innovative technologies that will lead to cost-competitive solar energy technologies. The Nevada National Security Site will be the test site for cutting-edge solar technologies which can be deployed in the Southwest areas of the United States where there is an abundance of solar energy.

The Funding Opportunity Announcement (Reference Number DE-FOA-0000233) won’t be issued until early next year but you can look at the Notice of Intent by going to https://www.fedconnect.net/FedConnect/ and plugging in the Reference Number. Stay tuned for  more information via this blog or in a client alert.

Stoel Rives Energy Regulation Report

IN THIS EDITION:

  1. FERC opens a rulemaking on variable energy resources.
  2. FERC extends the comment deadline in the appeals by wind farms registered for transmission reliability functions.
  3. FERC denies a petition to protect priority to interconnection capacity rights.

FERC Opens Rulemaking on Intra-Hour Scheduling, Forecasting Requirements, and Integration Services for Variable Energy Resources

The Federal Energy Regulatory Commission (FERC) proposed amending its pro forma open access transmission tariff to correct practices that are unduly discriminate against variable energy resources (VERs) such as wind and solar energy generators. In the November 18, 2010 Notice of Proposed Rulemaking, FERC outlines measures that, if adopted, will (a) require transmission providers to offer transmission service that can be scheduled on 15-minute intervals, (b) require interconnection customers that operate VERs to provide site-specific forecasting and meteorological data to transmission providers that are deploying and/or developing power production forecasting processes, and (c) add a new rate schedule for generation regulation (i.e., integration) services. The proposed rulemaking is the first to come out of the January 2010 Notice of Inquiry on the Integration of VERs—a docket that received well over 100 comments from industry stakeholders.

Read more on the Notice of Proposed Rulemaking on VERs here.

FERC Extends Comment Period in Wind Farms’ Appeal of NERC Decision to Uphold Registration as Transmission Owners/Operators

FERC has extended the comment deadline in an appeal by two wind farms that were registered for Transmission Owner and Transmission Operator reliability functions, a potentially costly registration for the wind farms that was affirmed by the North American Electric Reliability Corporation (NERC) in October. The NERC decision and its supporting analysis, if affirmed by FERC, have the potential to broadly apply to many generation developers, owners, and operators.

Read more on the wind farms’ appeal here.

FERC Denies Puget Sound Energy's Request to Protect Interconnection Capacity Rights

In June of this year, Puget Sound Energy (Puget) filed a petition with FERC for a declaratory order to protect its rights to 1,250 MW of interconnection capacity that would eventually serve the Lower Snake River Project wind farm. Puget argued that constructing the entire interconnection capacity needed for the full project upfront was financially efficient and environmentally responsible, and that other developers should not be able to claim rights to the capacity. On November 18, 2010, FERC distinguished the petition from an earlier decision in Milford and denied Puget’s request to establish its priority rights to the interconnection capacity. FERC reasoned that the capacity over Puget’s generator lead lines must be governed by its open access transmission tariff. FERC also found that any interconnection capacity that is not appropriately reserved for Puget’s native load must be made available to other open access customers.

Read more on the FERC decision denying Puget’s request to protect its interconnection capacity rights here.

If you have questions about the issues addressed in this report, please contact:

Marcus Wood at (503) 294-9434 or mwood@stoel.com
Jennifer Martin at (503) 294-9852 or jhmartin@stoel.com
Jason Johns at (503) 294-9618 or jajohns@stoel.com
Sara Bergan at (503) 294-9336 or sebergan@stoel.com

Oklahoma's Significant Renewable Energy Legislation is Going Into Effect

An update on Oklahoma from Laura Suesser and Sara Bergan:

The Oklahoma legislature passed three bills (H.B. 2973, S.B. 1787, and H.B. 3028) in 2010 that affect the renewable energy industry. Two have already gone into effect and the third will go into effect on January 1, 2011. A summary of each bill is included below.

The Oklahoma Wind Energy Development Act (the “Act”), H.B. 2973, becomes effective on January 1, 2011 and will be codified in Okla. Stat. tit. 17 §§160.11-17 (2010). The Act includes the following:

  • Decommissioning: Decommissioning requirements apply to any wind energy facility entering into or renewing a power purchase agreement (PPA) on or after January 1, 2011. If energy is not being sold under a PPA, the requirements apply to wind energy facilities which commence construction on or after January 1, 2011. The requirements include:
    • Restoration: Owners of a wind energy facility must remove wind energy equipment (to a depth of 30”) and restore land surfaces to substantially the same pre-construction condition (excluding roads) within 12 months of abandonment of a project or the end of the useful life of the equipment.
    • Cost Estimate and Posting of Financial Security: After the 15th year of operation, facility owners must file a professional estimate of the decommissioning costs together with a financial security (either a surety bond, collateral bond, parent guaranty or letter of credit) to cover such costs. Those failing to so file may incur an administrative penalty of up to $1,500/day.
  •  Payment Statements and Access to Records: Any owner or operator making payments to landowners based on the amount of electrical energy produced is required to deliver a statement to the landowner, within 10 business days of payment, explaining the payment calculation and a means for the landowner to confirm its accuracy. Landowners have the right to inspect owner/operator records to confirm the accuracy of payments for up to 24 months following payment. Records must be made available for review within the state of Oklahoma.  
  •  Insurance:   Owners or operators are required to obtain commercial general liability insurance policy with limits consistent with prevailing industry standards (or a combination of self insurance and excess liability insurance policy), which name the landowner as an additional insured and certificates of insurance must be delivered to landowner prior to commencing construction of the facility.
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REMINDER: Applications for SBIR and STTR Phase I Grants Due November 15th

Don't forget that the deadline for Phase I grant applications under the U.S. Department of Energy's ("DOE") Small Business Innovation Research ("SBIR") and Small Business Technology Transfer ("STTR") programs is 8:00 p.m. Eastern, November 15, 2010.  Qualified small businesses with strong research capabilities in science or engineering in any of the research areas identified in the September 28, 2010 Funding Opportunity Announcement are encouraged to apply.  Phase I grants of up to $150,000 will be awarded in FY 2011 under the SBIR; and grants of up to $100,000 will be awarded under the STTR. 

The Phase I Technical Topics document lists several areas of particular interest for the renewable energy industry.  Note that the following is not an exhaustive list.  The full list and descriptions can be found in the Phase I Technical Topics document.

  • Advanced Cooling and Waste Heat Recovery: Advanced Cooling; Advanced Waste Heat Recovery; Geoexchange heat pump (GHP) component R&D; Innovative GHP System/Loop Designs.
  • Production of Bioenergy and Biofuels from Cellulosic and Non-Food Biomass:  Biomass Feedstock Stabilization and Drying; Biomass Torrefaction; Sugar Catalysis to Advanced Biofuels and Chemical Intermediates; Pyrolytic Thermal Depolymerization.
  • Hydrogen and Fuel Cells:  Reducing the Cost of High Pressure Hydrogen Storage Tanks; Fuel Cell Balance-of-Plant; Demonstration of Alternative-Fuel Fuel CElls as Range Extenders.
  • Innovative Solar Power:  High Efficiency, Low Cost Thin Film Photovoltaics; Low Cost Building Integrated Photovoltaics; Static Module PV Concentrators; Solar-Powered Water Desalination; Distributed Concentrating Solar Power ("CSP").
  • Advanced Water Power Technologies: Pumped Storage Hydropower; Advanced Hydropower Systems; Wave and Current Energy Technologies; Advanced Component Design for Ocean Thermal Energy Conversion Systems.
  • Wind Energy Technologies: Transportation and Assembly of Extremely Large Wind Turbine Components for Land-Based Wind Turbines; Wind Energy Capture in Non-Conventional Wind Resources; Offshore Grid Infrastructure Hardware Development; Offshore Mooring and Anchoring Technology.

Detailed descriptions of each subtopic are included in the Phase I Technical Topics document.

New Defender of the PACE Program

 

There is new hope for the PACE financing program (the acronym stands for: “property-assessed clean energy”). The PACE program was started in Berkeley, CA in 2007 and made loans available to homeowners to help defer the cost of renewable energy/energy efficiency equipment and installations. The loan funds come from municipalities who raise the money through bonds and is  paid back through assessments on the homeowner's property tax bill. This innovative program has a huge benefit: the loan stays with the home and the homeowner can transfer the loan to a buyer on a sale of the home.

 

About 20 other states saw the benefit of the California program and passed some sort of PACE legislation by the first quarter of 2010. The Obama administration supported PACE programs with the Department of Energy awarding more than $150 million in federal stimulus funds to back the program.

  

But last September, Fannie Mae and Freddie Mac announced if a homeowner wanted to refinance or sell their home, the PACE loan had to be paid off in full. This effectively halted all PACE activity and the application of federal stimulus funds. 

 

Last week,  the National Resources Defense Council (“NRDC”) filed a lawsuit in a New York federal district court against the (a) Federal Housing Finance Agency (“FHFA”), which regulates Fannie Mae and Freddie Mac, and (b) the Office of the Comptroller of the Currency (“OCO”), which regulates national banks. The NRDC’s complaint protests the cessation of the PACE program and alleges that the FHFA and the OCO put a stop to the programs without solid justification and without following the proper legal protocols (which would include an environmental review and getting public comment).

 

We will continue to follow the story and you can read a copy of the complaint here: http://docs.nrdc.org/energy/files/ene_10100601a.pdf.

Smart Grid Oregon Announces Its First Policy Conference--November 9, 2010

Following on the heels of a September 2010 report by GTM Research forecasting that the smart grid market in the U.S. will grow more than 70%, from $5.6 billion in 2010 to $9.6 billion by 2015, Smart Grid Oregon today announced the new organization’s first conference to be held on November 9, 2010 at the World Trade Center in downtown Portland.

The conference will feature keynoters Kurt Yeager, Executive Director of the Galvin Electricity Initiative and President and Chief Executive Officer of the Electric Power Research Institute; and Roy Hemmingway, past Chair of the Oregon Public Utility Commission and also past Chair of the New Zealand Electricity Commission.

 

Smart Grid Oregon is a trade association that was launched in June 2009 and is dedicated to making Oregon a leader in the implementation of Smart Grid technologies and in supporting companies that build and market Smart Grid products and services.  The aim of the first Smart Grid Oregon Public Policy Conference is to help public and utility officials, regulators, legislators, city and county governments and other stakeholders in Oregon and the region gain a better understanding of the Smart Grid and policy decisions that will need to be addressed in the coming years.

 

Stoel Rives is a member of Smart Grid Oregon, and we are a sponsor of the November 9 conference.  See you there!

To learn more, go to www.smartgridoregon.org or contact Ashley Henry at Ashley@smartgridoregon.org or 503-866-9191.

RNP and AWEA respond to WSJ editorial about wind energy

Sen. Kerry's Energy Tax Bill Would Help Energy Storage Technologies

On August 5, 2010, Sen. John Kerry (D-Mass.) introduced S.3738—the Clean Energy Technology Leadership Act of 2010—which would have some impact on the growth of energy storage technologies in the United States. 

Among other things, the bill would provide for an extension and modification of the Advanced Energy Manufacturing Tax Credit (the “MTC”), a credit authorized under the American Reinvestment and Recovery Act aimed at stimulating and expanding the domestic manufacturing industry for clean energy technologies.  The MTC is also referred to as Section 48C of the Internal Revenue Code (the “IRC”). The proposed modifications would extend the MTC to “statutory advanced energy property,” the definition of which includes property used exclusively to manufacture or fabricate fuel cell power plants and systems for the electrochemical storage of electricity (other than lead-acid batteries) for use in connection with electric grids. 

Also noteworthy is that S.3738 is similar to the STORAGE 2010 Act, introduced by Sens. Bingaman (D-NM), Wyden (D-OR), and Shaheen (D-NH) in July. Click here for more on that bill. Both bills amend Section 54C of the IRC to allow grid-connected energy storage systems to qualify for Clean Renewable Energy Bonds (“CREBs”). In addition to including energy storage technology in the CREBs program, S.3738 would expand the program by increasing the national new clean renewable bond limitation by $3.5 billion in 2010; sixty percent (60%) of that amount must be allocated by the Department of the Treasury to public power providers, and forty percent (40%) must be allocated to electric cooperatives. 

A major distinction between Sen. Kerry’s bill and the STORAGE 2010 Act is that Sen. Kerry’s bill does not add energy storage devices to the list of technologies eligible for the federal investment tax credit.  The full text of the bill can be found here.

Clean Energy Jobs Focus of New Manufacturing Solicitation Issued by the DOE

On August 12, 2010, Energy Secretary Steven Chu announced a new loan guarantee solicitation for renewable energy manufacturing projects.  The Commercial Technology Renewable Energy Manufacturing Projects solicitation (the "Solicitation") is supported by the American Recovery and Reinvestment Act (the "Recovery Act") through Section 1705 of the Loan Guarantee Program and is focused primarily on providing new green energy jobs and the deployment of renewable energy technologies that reduce greenhouse gas emissions.

The solicitation specifically identified "Eligible Projects" to include renewable energy manufacturing projects or facilities located in the United States that:

  • Manufactures Commercial Technology products that support the generation of electricity or thermal energy from renewable resources;
  • Has Project Costs greater than seventy-five million dollars ($75,000,000);
  • Is able to obtain a credit rating equivalent of "BB" or better from Standard & Poor's or Fitch, or "Ba2" or better from Moody's, as evaluated without the benefit of any DOE guarantee or any other credit support;
  • Will create or retain jobs in the United States; and
  • Otherwise meets all applicable requirements of Title XVII, including Section 1705, the Solicitation, including all attachments and all applicable requirements of the Recovery Act.

The Solicitation also provided, for illustrative purposes, examples of the types of Eligible Projects that may qualify, which include the following:

  • wind energy component or systems manufacturing facilities;
  • solar photovoltaic (PV) component or system manufacturing facilities;
  • concentrated solar power component or system manufacturing facilities;
  • hydropower component or system manufacturing facilities;
  • geothermal component or system manufacturing facilities;
  • other geothermal power cycle component or system manufacturing facilities; or
  • ocean wave, tidal, and river current (e.g. hydrokinetic) component or system manufacturing facilities
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DOE Issues Waiver Under Section 1605 of ARRA for Solar PV Equipment Projects

From our colleagues Jere Webb and Jason Davis:

On August 6, 2010, the Assistant Secretary for Energy Efficiency and Renewable Energy (“EERE”), through delegated authority by the Department of Energy, issued a nationwide limited public interest waiver under Section 1605 (the “Buy American Provisions”) of the American Recovery and Reinvestment Act of 2009 (the “Recovery Act”) for EERE-funded projects for incidental and/or ancillary solar Photovoltaic (“PV”) equipment when such equipment is used in solar installations containing either domestically manufactured PV cells or panels.

After recognizing that the Buy American Provisions do not contain a requirement with regard to the origin of components in manufactured goods used in a project, but rather that the focus of the Buy American Provisions is on whether the solar panels are manufactured in the United States, the EERE granted a public interest waiver to the Buy American Provisions for six months (ending February 6, 2011) for the purchase of the following solar PV equipment: (1) domestically-manufactured panels containing foreign-manufactured PV cells; (2) foreign-manufactured panels comprised of 100 percent domestically-manufactured PV cells; and (3) any ancillary items and equipment (including without limitation charge controllers, combiners and disconnect boxes, breakers and fuses, racks, trackers, lugs, wires, cables, and all other incidental equipment with the exception of inverters and batteries) utilized in either #1 or #2, regardless of country of origin. According to the EERE’s research on the domestic solar manufacturing industry, this waiver would allow approximately nine companies to compete for grantees’ solar PV projects (of the nine, four companies produce solar PV panels in the United States). The EERE also states that the waiver does not apply to thin-film solar PV panels.

As noted above, this waiver expires on February 6, 2011, but the waiver is unclear whether the solar PV project must be completed by the expiration date or whether the solar PV equipment (that qualifies under the waiver) simply must be purchased by the expiration date. A review of an EERE waiver, dated March 19, 2010, applying to the purchase of light emitting diode LED lighting and HVAC units (although the waiver circumstances in this instance were quite different from the solar PV equipment waiver), might suggest that the solar PV equipment waiver will apply to those circumstances where the recipient of Recovery Act funds has taken substantial steps to commit funds for the purchase of solar PV equipment, such as placing an order or executing a contract for such equipment prior to the waiver expiration date; however, the absence of similar detail in the solar PV equipment waiver leaves quite a bit of uncertainty. Hopefully the EERE will issue future guidance to clarify the expiration date terms.

The complete solar PV equipment waiver is expected to be posted soon to the EERE’s website at http://www1.eere.energy.gov/recovery/buy_american_provision.html.

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. 

CPUC Lifts Hold On CSI Applications

From our colleague Morten Lund:

On July 29, the California Public Utilities Commission (“CPUC”) issued a ruling lifting a prior temporary hold on certain applications under the California Solar Initiative (“CSI”). The CPUC had on July 9 placed a hold on new CSI applications for PBI projects and government/non-profit projects pending comments on certain proposed program changes. Generally, the CPUC and the State of California are concerned over the costs of the program going forward, despite the fact that the program provides ever decreasing incentives as more capacity is installed. But the condition that California finances are in has state regulators in all agencies looking closely at programs that dispense funds to try and find ways to cut such expenditures.

In the July 29 ruling, Commissioner Peevey declared that the temporary hold created an “unacceptable level of market disruption,” and that the temporary hold was therefore lifted. All applications submitted during the hold will be processed, and new applications accepted.

The July 29 ruling can be found on the CPUC’s website here: http://docs.cpuc.ca.gov/efile/RULINGS/121304.pdf
The July 9 ruling can be found on the CPUC’s website here: http://docs.cpuc.ca.gov/efile/RULINGS/120427.pdf

New Tool for Renewable Energy Investors, Entrepreneurs, and Companies

On June 30, 2010, the U.S. Department of Energy ("DOE") launched its Technology Commercialization Portal (the "Portal").  The Portal is an online resource that provides a mechanism for investors, entrepreneurs and companies to identify new technologies coming out of DOE laboratories and other participating research institutions.  Relevant technologies include:

  • Advanced Materials
  • Biomass and Biofuels
  • Building Energy Efficiency
  • Electricity Transmission and Distribution
  • Energy Analysis Models, Tools and Software
  • Energy Storage
  • Geothermal
  • Hydrogen and Fuel Cell
  • Hydropower, Wave and Tidal
  • Industrial Technologies
  • Solar Photovoltaic
  • Solar Thermal
  • Vehicles and Fuels
  • Wind Energy

The Portal contains marketing summaries about the various DOE technologies that are available for licensing.  Each marketing summary describes a technology's applications, advantages, benefits and state of development.  Further, the Portal also provides access to information on patents and patent applications that have been created using DOE funding since 1992.

The Portal is located at http://techportal.eere.energy.gov/

California Solar Initiative Handbook Update: Warranty Requirements

Morten Lund reports:

The California Solar Initiative Handbook was updated June 8, 2010. The new version can be found by clicking here.

Of particular interest are changes to Section 2.4 (warranty requirements). These changes are not necessarily substantively significant, but may require some manufacturers and contractors/installers to conform their warranty language in order to ensure continued eligibility for CSI payments.

Treasury Department Issues Additional Guidance Regarding Cash Grant Begin Construction Requirement

The U.S. Treasury Department today released on its website additional guidance regarding the "begin construction" requirement for qualifying for the 30% ARRA cash grant. To qualify for the grant, a project either must be placed in service in 2009 or 2010 or, if construction begins on or before December 31, 2010, must be placed in service by a specified credit termination date (December 31, 2012 for large wind projects; December 31, 2013 for biomass, certain geothermal and other projects; and December 31, 2016 for solar and other projects).  For the Stoel Rives Energy Tax Alert on the topic, click here

Massachusetts Suspends In-State Requirement for Renewable Energy Generation and Modifies Solar Carve Out

From our colleagues Beverly Pearman and Jeremy Sacks:

Massachusetts Department of Public Utilities (“DPU”) has modified the two programs challenged by TransCanada Power Marketing Ltd. (“TransCanada”) in a federal law suit. TransCanada filed its complaint on April 16, 2010, alleging that portions of the Green Communities Act that were intended to increase in-state renewable energy resources were unconstitutional because they favor Massachusetts producers in violation of the Commerce Clause. The Commerce Clause generally prohibits states from enacting laws that burden out-of-state businesses in order to give a competitive advantage to in-state businesses.

The first modification came in early June as a result of settlement negotiations. Massachusetts modified the Solar Carve-Out program to grandfather in rates for Alternative Compliance Payments (“ACP”) that were contractually committed or renewed before January 1, 2010. ACP are paid by electric companies that do not hold the required amount of Solar Renewable Energy Credits (“SRECs”) that must be produced only by facilities located in Massachusetts. In exchange for this rule change, TransCanada dismissed its claims challenging the Solar Carve Out on June 9, 2010, but continued to press forward with its Commerce Clause challenge to a Request for Proposals for Long-Term Contracts for Renewable Energy Projects (the “RFP”) issued by the Massachusetts Department of Energy Resources (“DOER”) this year.

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Upcoming Webinar: The Race to Solar: Who's In It to Win It?

The Race to Solar: Who's In It to Win It?
Tuesday, June 22, 2pm ET

Shift Worldwide's panel of industry and investment experts, including Stoel Rives’s Greg Jenner will discuss the Race to Solar between the US and China in an interactive, 60-minute virtual panel (vPanel) discussion. Topics include international markets, investor advisories, the competitive landscape and more.

For more information or to register, please visit: http://www.vpanels.com/schedule_vpanel.html

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Release of the "Western Wind and Solar Integration Study"

The National Renewable Energy Laboratory ("NREL") recently announced the release of the "Western Wind and Solar Integration Study"  (the "WWSIS"), which investigated the operational impact of up to 35% energy penetration of wind, photovoltaic, and concentrating solar power on the power system operated by the WestConnect group of utilities in Arizona, Colorado, Nevada, New Mexico and Wyoming.  The WestConnect group includes the following:  Arizona Public Service, El Paso Electric Co., NV Energy, Public Service of New Mexico, Salt River Project, Tri-State Generation and Transmission Cooperative, Tucson Electric Power, Western Area Power Administration, and Xcel Energy.

The WWSIS was prepared by GE Energy and conducted over two and a half years by a team or researchers in wind power, solar power, and utility operations.   The WWSIS was designed to answer questions that utilities, Public Utility Commissions, developers, and regional planning organizations had about renewable energy use in the West, such as:

  • What is the operating impact of up to 35% renewable energy penetration and how can this be accommodated?
  • How does geographic diversity help to mitigate variability?
  • How do local resources compare to remote, higher quality resources delivered by long distance transmission?
  • Can balancing area cooperation mitigate variability?
  • How should reserve requirements be modified to account for the variability in wind and solar?
  • What is the benefit of integrating wind and solar forecasting into grid operations?
  • How can hydro generation help with integration of renewables?

 

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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:

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Utah's Salt Lake County Will Announce a Solar Project RFP on May 14, 2010

On May 14, 2010, Salt Lake County, Utah will be releasing a Request for Proposals (“RFP”) for a 1 MW solar project. If your company is interested in receiving the RFP as soon as it is released, you should register with BidSync (registration is free).

About the Solar Project:
It is anticipated that the initial solar project will include three County facilities (Salt Palace Convention Center, Environmental Health, and the Riverton Senior Center) with solar installations totaling approximately 1 MW. This solar project will utilize a power purchase agreement (“PPA”) financing model. It will also employ public and private capital, Federal grants, and public/private subsidized bonds that are able to work together efficiently because of the recent Stimulus Bill. The project also makes use of recent changes to Federal tax rules, and the recent re-awakening of private capital markets that make a significant public-private partnership possible. The County is working to coordinate these financial resources to make them easily accessible. More details will be available in the RFP. Longer term, Salt Lake County Mayor Peter Corroon has set a goal to install 10 MW of solar on as many county-owned facilities as possible.

PPAs and Third-Party Financing Now an Option in Utah:
In 2010, with the passage of HB 145 – Renewable Energy Financing Provisions, Utah enabled third-party financing of renewable energy systems for the following entities: a county, municipality, city, town, other political subdivision, local district, special service district, state institution of higher education, school district, charter school, or any entity within the state system of public education; an entity qualifying as a charitable organization under 26 U.S.C. Sec. 501(c)(3) operated for religious, charitable, or educational purposes that is exempt from federal income tax and able to demonstrate its tax-exempt status. Significantly, this recent legislation clarified that certain third-party financing arrangements are exempt from regulation by the Utah Public Service Commission, which is consistent with how these arrangements are viewed in several other states across the country. This clarification will now open the door for more innovative financing for renewable energy technologies, which has the ability to remove the upfront cost hurdles of capital intensive investments and offer an attractive bundle of services, including: design, installation, financing (including monetizing tax benefits), permitting and interconnection, maintenance, etc.

CPUC Approves 500 MW PG&E Program

The California Public Utilities Commission ("CPUC") has given the green light to a five-year solar photovoltaic program to develop up to 500 MW of solar PV facilities in Pacific Gas and Electric Co.'s ("PG&E") service area.

The program is designed to allow PG&E and third parties to develop PV facilities:

  • Under the utility-owned part of the program, PG&E may install up to 250 MW of PV facilities over 5 years, at a rate of 50 MW per year.  Each facility will have between 1 and 20 MW of capcity and will be located in PG&E's service area. The CPUC has allocated up to $1.454 billion for capital costs which will be adjusted if PG&E develops less than 250 MW over the five-year duration of the PV program.  PG&E will solict competitive bids for the construction  of the facilities, which it will own and operate.
  • Under the third-party-owned part of the program, PG&E can solicit energy from up to  250 MW of PV facilities which  located in PG&E's service area and which are owned by third parties - same size and annual installation restrictions apply.  Pricing for this portion will be based on competitive bids, with the successful bidders entering into a 20-year power purchase agreement with PG&E.

In an effort to secure good rates, CPUC is requiring PG&E  to use an independent evaluator to review the bids on both parts of the program.

PG&E built a 2 MW pilot project  in Vacaville, CA to demonstrate the viability of this program. The CPUC decision allows PG&E to recover the costs of construction the pilot project.

Nebraska Public Power District Wind and Renewables RFPs

The Nebraska Public Power District has two open RFPs that may be of interest to renewable energy developers. 

In Request for Proposal (RFP) 10018, the District announced that it intends to expand its power supply by adding wind-powered resources to its generation portfolio . The District seeks proposals to provide power from wind projects between 50 megawatts (MWs) and 300 MWs capacity.  The resulting PPAs would have a term of 20 years.  Bids are due by 5:00 pm Central Time on June 4, 2010.

The District also issued Request for Proposal (RFP) 10005, a separate request for energy, capacity and  environmental attributes from small renewable energy projects.  The solicitation defines a small project as one with a nameplate capacity at each location of less than ten (10) MW but greater than the maximum size allowed in the interconnecting utility’s Net Metering Policy.   Bids are due by 5:00 pm Central Time on September 1, 2010.

The District's contact for each RFP is Sarah Hopwood, Tel 402 563-5405, Fax 402 563-5034
sjhopwo@nppd.com.

Solar Development Guidelines Released by Arizona Game and Fish Department

On March 12, 2010, the Arizona Game and Fish Department ("AGFD") released finalized guidelines for solar development in Arizona ("Solar Guidelines"), the objective of which "is to assist energy developers in identifying potential impacts to wildlife and wildlife habitats from their proposed development and potential alternatives to avoid, minimize, and/or mitigate for these negative impacts."  The AGFD encourages local governments and permitting authorities to integrate the recommended study proposals described in the Solar Guidelines.  The document is organized around five basic project development steps:

  1. Wildlife Protection Regulations
  2. AGFD Regulations and Review
  3. Gather preliminary information and conduct site screening
  4. Identify potential impacts to wildlife
  5. Mitigation

The Solar Guidelines were compiled by the AGFD employees and have not undergone any external public review or input from the solar energy industry.  It should be noted that some of the information contained in the Solar Guidelines was taken from the AGFD's wind guidelines.  In light of the fact that county officials often defer to the AGFD in matters of wildlife concerns, special attention should be given to the section of the Solar Guidelines focused on "Avoiding or Minimizing Impacts" and the recommendations contained therein.

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Colorado Increases its Renewable Energy Standard to 30% by 2020

From our colleague Adam Walters:

In February we blogged about Colorado HB-10 1001, a bill then pending in the Colorado legislature that would increase Colorado’s Renewable Energy Standard (RES) from 20% to 30% by 2020. The Democrat-sponsored bill was passed by the legislature on March 11 on a party line vote and yesterday it was signed into law by Colorado Governor Bill Ritter with great fanfare.

With the passage of this law Colorado now has one of the most ambitious RES’s in the country, and second only to California’s 30% requirement.

In addition to increasing the State’s RES, the law attempts to assist in job creation in the solar installation industry by placing greater emphasis on distributed generation (DG). For instance, the law requires Colorado utilities to spend 3% of its power purchases on distributed solar installations. The law also allows a utility to develop and own, as part of its rate base, up to 50% of the DG capacity it acquires from power purchase agreements and new construction if the cost is reasonably comparable to current market cost. The Public Utility Commission must also allow utilities the same cost recovery for the construction of new DG systems as allowed for new coal-fired facilities.
 

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).

 

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Proposed Legislation to Limit ITC Grants for Renewable Projects

Proposed legislation in the Senate would greatly limit the effectiveness of the grant in lieu of tax credits for renewable energy projects under section 1603 of the American Recovery and Reinvestment Act.

The section 1603 grant currently applies to renewable energy projects, such as wind, solar, geothermal and biomass, that are placed in service before 2011 or for which construction begins in 2009 or 2010 (and that are placed in service by certain dates). In its current form, if a project qualifies for the grant, the Treasury Department is required to pay the grant.

Expressing concern that a significant portion of the grants paid so far have gone to non-U.S. companies,  Senator Charles Schumer (NY) and three other Democratic senators have sponsored a bill that would make payment of the grant subject to the discretion of the Treasury Department. It also would make the grant subject to the Buy American requirements of the stimulus bill, and would require that Treasury conduct an analysis of the "domestic job preservation and creation provided by" a project for which a grant application is submitted.

Various trade associations involved in renewable energy (such as AWEA, GEA and SEIA) are taking immediate action to register their opposition. Their focus will be on the incorrect assumptions underlying the proposal (for example, that it does not create U.S. jobs) and that, if enacted, it likely would destroy the effectiveness of the program.

We encourage our readers to register their strong opposition with their members of Congress and with the trade associations with which they are associated. The more opposition that is registered, and the longer the proposal drags out, the less likely it is to be enacted. 

Read the March 4, 2010 Stoel Rives Law Alert on this proposed legislation.

POSSIBLE RESTRUCTURING OF 1603 GRANTS

Congress is considering a complete rewrite of the 1603 grant program.  Some of the changes being considered are very helpful while others would be extremely troubling.  Please continue reading to get the full story ...

 

 

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APS Announces Wind and Solar RFPs

On January 27, Arizona Public Service (APS) announced two requests for proposals (RFPs), one for new sources of photovoltaic (PV) solar energy and the other for Arizona-based wind.  

The RFP for solar PV seeks proposals for projects that are between 15 and 50 megawatts and that employ commercially proven technology.  APS's goal is to procure approximately 220,000 megawatt hours per year from this PV solicitation. Respondents are required to provide proposals for long-term power purchase agreements and/or "turn-key" agreements.  The latter are sometimes called BTAs (Build-Transfer Agreements) or DBS (Design-Build-Sell) agreements--however named, APS anticipates that the agreement would require the developer to build the project and transfer it to APS when the project is completed.  (As an aside, turn-key agreements that do not transfer the asset until commercial operation require very careful attention to "notice to proceed" clauses and conditions, lest defects in title, permits or some other matter thwart the closing and leave the developer's asset unsold or, worse, stranded.)

In its press release, APS encouraged parties to participate in the photovoltaic RFP bidder's conference on March 12, 2010.  Additional information about the conference and the RFP is available online at www.aps.com/rfp.  RFP submissions are due April 7, 2010.

On the wind side, APS is looking for wind projects between 15 and 100 megawatts located entirely within Arizona.  Respondents are required to provide proposals for long-term power purchase and/or "turn-key" agreements.   Interested parties are encouraged to participate in the Arizona-based wind RFP bidder's teleconference on March 17, 2010.  Additional information about the conference and the RFP is available online at www.aps.com/rfp.  RFP submissions are due April 14, 2010.

 

Stoel Rives Clients Receive Huge Tax Credit Awards

Stoel Rives would like to congratulate REC Silicon and SolarWorld on their awards of tax credits by the IRS and DOE. These two companies, combined, received over 10 percent of all the tax credits awarded nationwide under section 48C of the tax code.

On Friday, January 8, the Department of Energy awarded to 183 companies $2.3 billion in tax credits for projects designed to expand, re-equip or establish manufacturing facilities for the production of equipment used to produce renewable and other green energy. The $2.3 billion was the full amount authorized by Congress in the stimulus bill as part of new section 48C of the tax code.

Applications for the credit far exceeded the dollar amount of credits available. Stoel Rives is proud to have been directly involved with these companies in preparing the complex applications for the credit. REC Silicon received the largest award of any company -- $154.8 million. SolarWorld received the seventh largest award -- $82.2 million. These credits will provide these companies with a dollar-for-dollar offset against their federal income tax liability.

There is considerable discussion in Congress regarding adding additional funds to the section 48C program, which will permit another round of awards. Please contact your favorite Stoel Rives attorney if you have any questions about these awards or extension of the section 48C credit.

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.

Technical Correction to Section 1603 Grant May Loosen Rules for Investment by Tax Exempts

 

On December 2, House Ways & Means Chairman Rangel and Ranking Member Camp introduced a tax technical corrections bill (H.R. 4169).  We will likely see an identical version introduced in the Senate very soon.

Included among the technicals are changes to the Grant in Lieu of ITC under section 1603 of ARRA.  The most important change is one that allows the grant to be made to certain tax-exempt organizations.

Under current law, the grant may not be made to a governmental entity, tax-exempt entity, certain other entities (including Indian tribes and electric coops), or a pass-thru entity that includes any of the former as an equity owner.  This provision has made it impossible for these organizations (or funds that include such organizations) to invest in renewables and receive the grant unless they establish a blocker (taxable) corporation to hold their interest in the project.  Many entities are uncertain whether they have the authority to establish taxable corporations.

The technical, if enacted, would provide that a grant may be made to tax-exempt organizations, retirement funds, and to state colleges and universities (but not other governmental entities) if the income from the project is treated as income from an unrelated trade or business (“UBTI”).  In most situations, this would be the case where power from the qualified facility was being sold.  It is not clear whether this provision would apply if the power was being used for the entity’s own purposes (not sold).  Where applicable, the technical will eliminate the need for a blocker corporation in cases where the tax exempt or retirement fund is an investor or where a college or university is selling the power.  Note -- the technical does not eliminate the need for a blocker corporation in order for the entity to qualify for accelerated depreciation.

Nevertheless, this could be a major change, particularly for colleges and universities that are selling renewable power but which otherwise could not receive the grant. 

A cautionary note: the technical has not yet been enacted and it is not clear when it will be.  However, to even be introduced, a technical has to have been agreed upon by both tax writing committees, which means its enactment is virtually assured eventually.

Please contact your favorite Stoel Rives attorney with any questions. 

 

California Solar Initiative issues Second Grant Solicitation

 

The California Solar Initiative (“CSI”) has announced the release of a second Grant Solicitation for its Research, Development, Demonstration, and Deployment Program.

Up to $15 million in funding is available for improved PV production technologies and innovative business models. Eligible applicants include individuals, businesses, public entities, non-profit institutions, universities, or national laboratories. Award amounts will range from $200,000 up to $3 million. Each project is required to have a minimum of 25% cost sharing (which may include funding for related activities under the American Recovery and Reinvestment Act).

A pre-bid webinar will held on November 18, 2009 at 10:00 a.m. (PST). The deadline for submitting grant proposals is January 13, 2010 by 4:00 p.m. (PST).  CSI estimates that approvals will be sent out in April 2010.

For more information, see: http://www.calsolarresearch.ca.gov/Current-Solicitations/solicitations-second.html

Public Service Commission of Utah Investigates Third-Party Power Purchase Agreements For Renewable Energy Generation

On October 12, 2009, the Public Service Commission of Utah ("PSC") joined the ranks of several other states in the west, including  Oregon, when it established a docket to investigate whether, and the extent to which, certain third-party arrangements for renewable energy generation are subject to the PSC's jurisdiction.   www.psc.utah.gov/utilities/misc/miscindx/0999912indx.html,  Pursuant to the notice, the PSC may consider the following issues:

  • Whether the third-party is a public utility under Utah law;
  • Whether the third-party is a public utility under Utah law when arrangements are entered into primarily as a financing mechanism for distributed renewable energy generation systems whereby a third-party owns the renewable generation equipment, which is installed on a utility customer's premises, there is a long-term contract with the customer to supply a portion of that customer's electricity use, and payments are based on kilowatt-hours;
  • Whether the third-party is a public utility under Utah law when (i) there is a single relationship between the third-party owner of the generation and a customer or (ii) there are multiple customers taking power from the same third party;
  • Whether the third-party is a public utility under Utah law when arrangements involve the leasing of distributed generation equipment from non-utility lessors to lessees that are also retail customers of utilities.

Comments and/or legal briefs regarding the above issues must be filed with the PSC by November 16, 2009.  A technical conference to discuss the specific terms and conditions surrounding third-party financing arrangements and other issues will be held on November 23, 2009, at 1:30 p.m. to 4:00 p.m., Fourth Floor Hearing Room Room 401, Heber M. Wells State Office Building, 160 East 300  South, Salt Lake City, Utah.

 

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).

DOE and NREL Announce Open PV Mapping Project

National Renewable Energy Laboratory (NREL) and the U.S. Department of Energy (DOE) announced the release of the Open PV Mapping Project. The Project is a collaborative effort between government, industry, and the public to develop a comprehensive database of photovoltaic (PV) installation data for the United States.

The Project will provide a Web-based resource for users to easily understand the current status and past progress of the PV industry from the data that show current and recent trends of the PV market. Users can also add their own PV installation data, browse PV data input by others, and view statistics. NREL plans to add additional data and use the information to monitor and analyze market growth.

Solar Power International '09

Next week, the Anaheim Convention center hosts Solar Power International, which bills itself as 'North America's largest business to business solar industry event.’ With over 900 exhibitors (Stoel Rives included) and 25,000 attendees expected, there is no doubt that this conference will be one of the largest and most heavily attended solar industry events in the world this year. The conference starts on Monday October 26 with pre-conference workshops and runs through Friday October 30. This year’s keynote speaker is Robert F. Kennedy Jr. the keynote address will take place on Wednesday morning.

If you are attending the conference, please stop by our exhibit booth (No. 1744), which is centrally located in the “PV Cells and Modules” section of the Exhibit floor. Stoel Rives attorneys Howard Susman, Morten Lund, Pat Boylston, Gregory Jenner, Stephen Hall, Kristen Castaños, David Quinby and Adam Walters will be in attendance. 

California and the U.S. Department of Interior Sign an MOU on Renewable Energy

The State of California and the U.S. Department of Interior (DOI) have entered into a Memorandum of Understanding on renewable energy, building on existing collaboration by California and its federal partners to facilitate the development of renewable energy resources in the state. The MOU stems from California and DOI energy policy directives, and California’s legislative mandate to reduce greenhouse gases to 1990 levels by 2020 and 80% below 1990 levels by 2050, and produce 33% of California’s electrical needs from renewable energy sources by 2020. The MOU notes one reason for California and DOI to really get the ball rolling on their collaboration: the American Recovery and Reinvestment Act specifically directs economic stimulus funding to qualified renewable energy projects that begin construction by December 1, 2010.

The California-DOI MOU complements and expands on several MOUs issued over the past year to establish and outline the activities of the California Renewable Energy Action Team (REAT). The REAT was provided for in California Executive Order S-14-08, issued November 17, 2008, to “establish a more cohesive and integrated statewide strategy, including greater coordination and steamlining of the siting, permitting, and procurement processes for renewable generation … .” In other words, let’s dispense with the permitting hang-ups and delays that plague development projects in California and get more renewable energy facilities online.  While Executive Order S-14-08 does not focus on the development of solar energy in particular, this MOU is geared to faciliting California's burgeoning solar energy industry.

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Avista Seeks Additional Renewable Energy

Avista announced earlier this week that it is seeking proposals from suppliers of renewable energy.  Avista wants to acquire roughly 35 average megawatts (aMW) of long-term qualified renewable energy, to be supplied by the end of 2012 . The company is looking for proposals from wind, solar, geothermal, biomass, qualified hydroelectric and other renewable resources that meet Washington's RPS standard.

Avista plans to host a conference call for potential bidders on September 30. Responses to the  request for proposals are due by October 23, 2009. The full RFP and instructions for bidders can be found here

$13 Million Awarded from the Rural Energy for America Program

In an earlier blog, my colleagues, Debra Frimerman and Janet Jacobs reported about the Rural Energy for America Program (“REAP”), in general and specifically in regards to small wind projects.  REAP is a Department of Agriculture (“USDA”) program that provides grants and loan guarantees to agricultural producers and rural small businesses to purchase renewable energy systems, make energy efficiency improvements and conduct feasibility studies for renewable energy systems.  Eligible renewable energy systems include those that generate heat, electricity or fuels from wind, solar, biomass, geothermal, hydro power, and hydrogen based feed stocks.

The USDA has announced that it has awarded more than $13 million in REAP funds for 233 renewable energy projects in 38 states. Examples of the awards include a $1.8 million guaranteed loan and $500,000 grant for Milford Wind Energy, LLC; a $435,271 guaranteed loan and $435,271 grant for Unaka Forest Products, Inc.; and a $15,000 grant to Pacifica Marine, Inc.

 

 

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DOE to release eagerly awaited commercial solicitation

On a webinar yesterday, Michael Fraser, Senior Program Manager at the DOE, advised that the DOE plans to release a commercial solicitation for the loan guarantee program later this month or in early October.  The current solicitation that is active for renewable energy projects requires that projects satisfy the innovative requirement.  A project is defined as innovative only if it has not been employed in three or more similar applications in the US of five years duration.  Thus many established renewable energy projects such as those utilizing wind or geothermal technology that is tested and proven, cannot apply under the current solicitation. The release of a commercial soliciation has been eagerly awaited by renewable energy project developers.  These loans will be backed by private banks as well with DOE typically only guaranteeing 80-90% of the loan.  DOE hopes that this structure will motivate private lenders to perform much of the due diligence necessary and only bring shovel-ready and bankable projects to the table.  Interest rates on the loan are anticipated to run at Treasury plus 25 to 75 basis points.  This is a very attractive interest rate but there are substantial fees associated with the program that will offset a portion of this value.  The other key factor for projects to consider is whether they will be able to meet American Reinvestment and Recovery Act requirements and thus be eligible to have their credit subsidy costs covered by government funding.  I am cautiously optimistic that DOE will be successful with these efforts and we will see a flurry of good projects moving forward Q1-Q2 2010 with the assistance of this program.

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. 

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.        

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NV Energy Issues RFI for Short Term (1 Month to 3 Years) Energy Supply

 

On August 21, NV Energy issued a press release reminding renewable energy developers of that it has issued a Request of Information (RFI) for renewable energy that can be provided on a short-term basis.  This solicitation is separate from NV Energy's recently announced 2009 Renewable Energy Request for Proposals.  NV Energy will consider proposals for solar, wind, geothermal, biomass and other resources eligible for portfolio energy credits under the Nevada renewable portfolio standard.

NV Energy is now looking for proposals from entities that can deliver renewable energy to its system on or after Oct. 1, 2009 and for a period of one month to three years.

 

Parties interested in submitting a response to the RFI, or those seeking more information related to the RFI or renewable energy laws can contact NV Energy at: ShortTermRFI@nvenergy.com .  In addition, prospective bidders can email any questions to Ron Helbing, rhelbling@nvenergy.com.  

 

Bidders must submit their responses  to NV ENergy's short term renewables solicitaion by 9:00 AM (PPT) on Sept. 2, 2009.     

SCE Solicits Feedback on Solar PV Program; CPUC to Host Feed-in Tariff Panel

SCE Solar PV Program:

Back in June, the California Public Utilities Commission (“CPUC”) issued a decision authorizing Southern California Edison (“SCE”) to execute contracts for up to 250 MW of generation from solar PV facilities owned and operated by independent power producers through a competitive solicitation process. The CPUC decision required SCE to file an advice letter outlining the criteria for selection of bids and containing a draft standard power purchase agreement (“PPA”).

SCE recently filed the requisite advice letter requesting approval of its proposed competitive solicitation process and criteria and a draft standard PPA. Anyone may file protests or responses to SCE’s advice letter. Protests are due on August 10, 2009. For more information, as well as a link to SCE’s draft standard PPA, go to the CPUC website.

CPUC Panel on Feed-in Tariffs:

The CPUC announced that it will host an interactive panel discussion on feed-in tariffs for renewable energy on August 27, 2009. The panel will feature international experts from Germany, Spain, the United States, and elsewhere with experience in the global solar power market. The panelists will offer their insights on the global solar market, the role of feed-in tariffs and other mechanisms for advancing renewable energy development, and California’s role in facilitating wholesale renewable distributed generation.

The panel will be held from 1-2:30 PM at the CPUC Auditorium, 505 Van Ness Ave., San Francisco, CA.

Show me the Money: DOE Proposes Amendments to its Loan Guarantee Program

Today, the Department of Energy (DOE) issued a notice of proposed rulemaking to amend 10 CFR Part 609, the rule regulating the loan guarantee program authorized by section 1703 of Title XVII of the Energy Policy Act of 2005.  The two principal goals of section 1703 of Title XVII are to encourage commercial use of new or significantly improved energy-related technologies and to achieve substantial environmental benefits.  (See these recent alerts regarding the DOE loan guarantee program and the related application process)

After reexamining Title XVII, the DOE has concluded that the statute does not require a first lien on all project assets.  DOE has discovered that its current requirement that it be in lien position is in conflict with the financing structure of many energy projects.  For example, many utility scale power plants are jointly owned by public power agencies, cooperative power systems and investor-owned utilities.  In these cases, it may not be commercially feasible to obtain a lien on all project assets or the credit of a sponsor may be sufficient to support a more modest pledge of assets.

Furthermore, DOE has found that other parties are interested in participating as co-lenders, co-guarantors, or insurers of Title XVII loans.  However, these other parties expect to share, on a pari passu basis, in any collateral securing such loans.

Consequently, DOE proposes two amendments to the current rules:

  1. Delete the requirement of a first priority lien on all project assets and leave to the Secretary (of DOE) the determination of an appropriate collateral package, as well as intercreditor arrangements; and
  2. Allow the Secretary (of DOE) to determine if pari passu lending is in the best interests of the United States

 

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Xcel Proposes Connectivity Fee for its Net-Metered Solar Customers

Just as the Bonneville Power Administration led the charge on the addition of a wind integration rate, Xcel Energy now seeks to impose a solar connectivity charge on its net-metered customers in Colorado. The proposed monthly fee is intended to pay Xcel for setting aside electricity capacity for solar customers, in case they need to draw energy from the grid. Because this is a capacity-based charge, it would apply even if the net-metered customers do not actually use any of the capacity in a given month. If the fee is approved by the Colorado Public Utilities Commission, Xcel will be the first utility in the U.S. to charge net-metered solar customers for the ability to access the grid when needed.

Tom Henley, a spokesman for Xcel, described the fee as necessary to prevent solar customers from getting a windfall, as they currently do not pay to use the grid as a backup. However, solar energy advocates countered that the proposed fee overlooks the benefits that the net-metered customers provide: namely, generating clean, renewable energy that can be fed into the grid. One net-metered Xcel customer noted that the solar panels on his roof generate enough electricity to power five or six houses around him.

 

The proposed fee would go into effect in April 2010 and apply to customers who purchase solar panels on or after the effective date. The 2.6 cent per kilowatt-hour fee would be based on the largest amount of electricity per month that a solar customer has extracted from the grid during the last year. Henley estimates that the fee would amount to an additional $1.90 per month for a person adding a 4.5 kilowatt solar array to his or her home.

 

The Colorado Public Utilities Commission is holding a public hearing on the proposed rate increase on August 5th. 

Show me the Money: $11.8 Million Awarded for Solar Energy Grid Integration

Today, in recognition that solar energy is a critical factor in the President's clean energy agenda, the U.S. Department of Energy (DOE) announced that $11.8 million ($5 million from the American Recovery and Reinvestment Act) will be deployed to five projects related to the development of solar energy grid integration systems (SEGIS).  This follows our earlier client alerts regarding funding opportunities for solar technologies.

SEGIS activity began in 2008 with a partnership between DOE, Sandia National Laboratories, industry, utilities, and universities interested in complete system development.  Funded projects are related to the integration of solar technologies into the U.S. electrical grid while maintaining or improving power quality and reliability.

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$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.

$52.5 Million for Concentrating Solar Power Research and Development

The U.S. Department of Energy (‘DOE”) today announced plans to provide up to $52.5 million to research, develop, and demonstrate Concentrating Solar Power systems capable of providing electrical power both day and night at low cost. This is a competitive funding opportunity which focuses on:

1.    Research and development of concepts and components for a CSP system that enables a plant to produce low-cost electricity at least 18 hours of the day; and

2.    Evaluation of the feasibility and development of a prototype complete CSP system capable of operating at least 18 hours per day while generating low-cost power.

 

The DOE will award money for research and development of solar systems that produce power at least 18 hours a day.Funding depends on continuing annual appropriations. DOE anticipates making up to 13 project awards totaling up to $52.5 million.

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). 

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Show me the Money: $10.5 Million for Solar America Cities

Today, the U.S. Department of Energy (“DOE”) announced new funds of up to $10.5 million to inform and educate local governments nationwide about solar energy. As part of the Solar America Cities program, a joint effort with 25 cities dedicated to increasing their use of solar energy, the DOE has assembled educational materials about the benefits and value of solar energy. The DOE will now work with outreach organizations to share these materials and tools with local government officials, with the aim of speeding up the implementation of solar energy. The application deadline is October 15, 2009, with selections expected to be announced no later than December 15, 2009.

For more information, click here for our recent Energy Alert.

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).

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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.

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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

 

Interior Department Expedites Solar Energy Development in the West

 

 

The U.S. Interior Department has instigated initiatives to accelerate the development of solar energy on Western lands. About 670,000 acres currently administered by the Bureau of Land Management (“BLM”) in Arizona, California, Colorado, Nevada, New Mexico, and Utah will be evaluated for the development of large-scale solar energy production. These areas of land will be reserved for solar projects producing 10 megawatts or more of electricity and the goal is to fast-track the permit applications.

Each piece of land is at least 2,000 acres and has been selected for its solar resources, slope, proximity to roads and transmission lines or designated corridors. The evaluation will be funded with Stimulus monies under an ongoing federally-funded evaluation of solar energy development on public lands in six Western States. The evaluation should be completed in late 2010.

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. 

Labor Unions Target Renewable Energy Development

My partner Dennis Westlind recently posted this article to our sister blog, the Labor & Employment Group's  World of Work:

Labor unions are seeing a rare growth opportunity in green power.  Despite the recession, there has been a building boom in green energy, in particular solar and wind projects.  As reported recently in the New York Times, labor unions see something in green energy for them as well, and they're using intense political pressure to get it.

When a new solar or wind project is being built, a union will approach the builder and demand that it use only union labor on the project.  If the builder agrees, the union then urges local regulators to quickly approve the project; if the builder refuses, however, the union then raises myriad environmental concerns with regulators in an attempt to stall or even completely derail the project.  Apparently, a union-built solar installation won't have the same impact on the habitat of the short-nosed kangaroo rat or the ferruginous hawk as a non-union one.  Right. 

These tactics aren't new; labor unions have made aggressive use of the environmental laws for years to put pressure on traditional energy producers to use union labor.  But, with union membership in an overall decline, unions are desperate to maintain relevance in the growing green economy. 

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: Government Requests for Solar Systems

Numerous federal agencies are actively seeking services and materials related to solar power.  For example, the following opportunities are currently open:

  • The Department of Defense is seeking a ten year photovoltaic (PV) solar power purchase agreement related to its Defense Distribution Depot in Tracy, California.  The total contract quantity is 12,200,000 kWh.  Responses are due July 28, 2009.
  • Federal Prison Industries is seeking integrator and financing services for PV panel systems.  The work includes, but is not limited to, the design, construction, supplies, and financing for turnkey PV systems.  Responses are due July 6, 2009.
  • The Fish and Wildlife Service is requesting proposals for the equipment, labor, and material necessary to install a grid tied 20KW nominal PV system at a site in Southwest Montana.  Responses are due July 10, 2009.
  • The Western Montana Acquisition Zone is requesting proposals to generate power at a site in Missoula, Montana.  Responses are due July 1, 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

Show Me the Money: $117.6 million in Stimulus Funds Available Now for Solar Energy

On May 27, 2009, President Obama announced that the Department of Energy ("DOE") is to provide $117.6 million to support the widespread commercialization of clean solar technologies and to scale up U.S. solar manufacturing and production. The funds are intended to promote partnerships between DOE's national laboratories, universities, local government, and the private sector to promote and improve the U.S. solar industry. The DOE issued two funding opportunity announcements ("FOA") for high-penetration solar deployment and market transformation and one program announcement related to concentrated solar power research and foundational photovoltaics.

For more specific information, see this recent alert.

New Minnesota Solar Power Incentives

Minnesota politicians held a news conference yesterday on the state capitol mall to provide an overview of recent legislation relating to solar energy projects. Minnesota has allocated $14.5 million in stimulus money for renewable energy projects, with a portion flagged for solar projects to encourage the installation and use of solar-powered systems. Another piece of legislation gives utilities the opportunity to double their commitments to solar energy projects under the Conservation Improvement Program currently in place. Representatives from Xcel Energy Inc. (Xcel), which serves more than 1.2 million customers in Minnesota, announced yesterday that they filed a $280 million plan with regulators to offer incentives for Minnesota customers to conserve energy, which could include installation of solar panels on homes and businesses.  Under Xcel’s proposed “Solar Rewards Program,” Xcel would provide rebates to customers who install solar photovoltaic systems of up to 40 kilowatts on their premises.

LLC Law Monitor

Renewable energy developers often use limited liability companies (LLCs) as project companies and to form entities for other purposes.  My partner Doug Batey has started a new law blog that will likely be helpful to those charged with setting up, understand and maintaining these LLCs.  Here's today's announcement: 

Stoel Rives LLP is pleased to introduce its new LLC law blog, LLC Law Monitor, at www.llclawmonitor.com

The LLC Law Monitor focuses on the rapidly developing laws affecting limited liability companies. LLCs are a popular form of business entity and are a relatively new development in the law. LLC statutes vary from state to state, and cases of first impression are being decided by state courts every month.

In light of this new and evolving legal environment, Stoel Rives has launched LLC Law Monitor to provide business executives, attorneys, accountants and other professionals engaged in or working with LLCs with timely updates and insights on the new and developing laws shaping this burgeoning business sector.

LLC Law Monitorauthor Douglas L. Batey has nearly 30 years of experience advising executives on corporate and business legal matters. His experience includes counseling clients in a wide range of industries on company formation, mergers and acquisitions, and general corporate governance matters.

We hope that you will find the LLC Law Monitor helpful.

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Douglas L. Batey
Stoel Rives Corporate Attorney

Apply Now for REAP Grants and Loan Guarantees

The USDA announced today that it is accepting applications under the Rural Energy for America Program (“REAP”).  REAP provides grants and loan guarantees to agricultural producers and rural small businesses to purchase renewable energy systems, make energy efficiency improvements and conduct feasibility studies for renewable energy systems.

REAP funds are available in the following amounts:

  • Grants for energy efficiency projects are available for up to the lesser of $250,000 or 25% of the project costs.
  • Grants for renewable energy systems are available for up to the lesser of $500,000 or 25% of the project costs.
  • Grants for feasibility studies for renewable energy systems are available for up to the lesser of $50,000 or 50% of the costs of the study.
  • Loan guarantees are available for up to the lesser of $25 million or 75% of the project costs. 

Applicants must be agricultural producers or rural small businesses.  Agricultural producers are farmers or ranchers that obtain more than half of their gross income from agricultural operations.  Small rural businesses are small businesses, as determined in accordance with the Small Business Administration's small business size standards, located in rural areas.  Applications are due July 31, 2009.

DSIRE launches new solar website

 

DSIRE SOLAR is the latest offering by the DSIRE project – it provides solar-specific policy information to consumers, policy makers, program administrators, the solar industry and other stakeholders. The new DSIRE SOLAR site still has all the features of the DSIRE site, including the interactive US map, but now displays solar incentives only.  Users can also select PV or solar thermal or both (incentives) when using the state-by-state map.

The solar policy guide is another key feature, condenses information like conference papers in one place, giving users an overview of policy options promoting solar, as well as status and trends, examples, resources, and links.

Click here to access the DSIRE SOLAR site.

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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.

 

Washington's American Recovery and Reinvestment Act Comprehensive Application

On May 11, the Washington Department of Community, Trade, and Economic Development (“CTED”) filed an application with the United States Department of Energy to receive American Recovery and Reinvestment Act (“ARRA”) funds for Washington’s State Energy Program (“SEP”). The application contains funding for renewable energy, energy efficiency, and farm energy assessments. Once the SEP is approved, funding will commence through CTED with advice from the Clean Energy Leadership Council.

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"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.

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.
 

New tax credit for "qualifying advanced energy project"

Although this blog is focused on renewable energy, manufacturers in the renewable space should be aware of a new tax credit included in the stimulus bill.  The provisions is complicated and unlike most tax credits.  Nevertheless, its benefits, especially for manufacturers on the cutting edge, may be too great to ignore. 

Taxpayers who qualify are entitled to a 30 percent tax credit for investment in a “qualifying advanced energy project."  A "QAEP" is defined as one that reequips, expands or establishes a manufacturing facility that produces:

1.  property designed to produce energy from the sun, wind, geothermal, and other renewable resources,

2.  fuel cells, microturbines, or an energy storage system for use with electric or hybrid-electric motor vehicles

3.  electric grids to support the transmission of intermittent sources of renewable energy, including storage of such energy,

4.  property designed to capture and sequester carbon dioxide emissions,

5.  property designed to refine or blend renewable fuels or to produce energy conservation technologies, and

6.  new qualified plug-in electric drive motor vehicles (and components),

The program is to be established by IRS, in consultation with Energy Department, on or before August 26, 2009. 

Once the program is established, the Secretary of Treasury is to award certifications for tax credit.  Applications must be submitted within 2 years, and applicants will have one year from the date their application is accepted to provide evidence that requirements for certification have been met.  After certification awarded, an applicant has 3 years to place project in service.

The following are the criteria for certification:

    -- Reasonable expectation of commercial viability

    -- Greatest domestic job creation (both direct and indirect)

    -- Greatest net impact in reducing air pollutants, greenhouse gases, etc. 

    -- Greatest potential for technical innovation and commercial deployment

    -- Lowest levelized cost of energy generated or stored or of measured reduction in energy consumption or greenhouse gas emissions

   -- Shortest project time from certification to completion.

The credit generally applies only to construction, etc. after February 17, 2009. 

The credit is new and unlike anything IRS has ever administered before.  Therefore, it is reasonable to expect that IRS will take some time to get the program fully functional.  Nevertheless, it makes considerable sense to begin assembling materials that explain the company’s project and address the criteria for selection.  In addition, it would be advisable to submit any applications as soon as possible after the program is established.

Stoel Rives would be pleased to assist in planning for and submitting applications for the credit.
   
 

California PUC Proposes Criteria to Evaluate the Viability of Proposed RPS Projects

Under California’s Renewable Portfolio Standard, investor-owned utilities only have until 2010 to procure 20% of their power from renewable sources (although certain flexible compliance measures do apply). There are concerns that the  rapidly-approaching deadline is leading utilities to sign power purchase agreements with projects that are not viable and may never achieve commercial operation. To help prevent this going forward, the California Public Utilities Commission Energy Division has proposed project viability criteria to evaluate each project bidding into California’s RPS program. Utilities would be required to score potential RPS projects based on developer experience in project financing, RFOs, and facility ownership and operation; technical viability; and project-specific viability criteria such as equipment procurement, project development lead time, transmission lead time and cost of transmission interconnection, site control, permitting, and pricing structure. The project viability score could be taken into account in PPA approval by the CPUC and in gaging whether to excuse utilities that fail to meet RPS goals. Scoring projects based on viability criteria has the potential to affect who successfully participates in the RPS solicitation process and the types of technologies that are selected as RPS projects. Comments on the CPUC proposal are due on February 27, 2009. Read more about the proposal in my colleagues’ recent Renewable Energy Law Alert.

 

Utah PSC Revises Net-Metering Policy Creating New Incentives for Solar and Wind Energy

Renewable energy supporters in Utah are cheering a recent order which will make renewable energy systems such as wind turbines and solar panels more cost effective for consumers.

On February 12, 2009, the Utah Public Service Commission issued an order revising the Rocky Mountain Power net metering policy. In the past customers who own renewable-energy facilities were credited for excess generation based on an avoided-cost calculation, which results in a low financial benefit to the customer. The new net-metering policy provides a "full retail" or dollar-for-dollar credit for every kilowatt-hour of excess power generation, creating a much greater incentive for renewable-energy production by residential, commercial and industrial consumers. In addition, the order declared that renewable energy certificates shall be "deemed owned by the net-metering customer or as otherwise agreed to or designated by the net-metering customer." The PSC order will become effective on April 1, 2009.

Salt Lake County Mayor Peter Corroon and Salt Lake City Mayor Ralph Becker, both supporters of renewable energy and this net-metering policy change, are reportedly investigating ways to promote investment in solar power in the region having jointly received a Solar America grant from the U.S. Department of Energy.

 

AGREEMENT REACHED ON STIMULUS PACKAGE

Congressional leaders have just announced that they have reached an agreement on the details of a stimulus package.  The details have yet to be announced, other than the total cost of the bill is estimated to be $789 billion.  That amount is less than either the House or Senate bill.

We will post details as they become available and will be sending out an alert.  Congressional leaders are currently meeting with their respective caucuses to obtain their approval.  The Conference Committee is expected to meet in formal session immediately after. 

Consultant Reports on City of Los Angeles' Solar Plan

On February 2, 2009, Huron Consulting Group released its independent assessment  of the City of Los Angeles’ proposed Measure B, which would require the Los Angeles Department of Water and Power to develop 400 megawatts of solar generation by 2014. In late 2008, the Los Angeles City Council approved a motion to place Measure B on the March 3, 2009 ballot. Measure B is one component of the City’s “Solar LA” program, which is designed to increase the amount of renewable energy powering the City.

According to its Report, Huron based its analysis on a macro evaluation of the solar industry, expected program costs, and identification of key value drivers. Huron created a computer model based on a series of twelve inputs, including, amongst other things, hardware costs, installation costs, monitoring and maintenance costs, capacity factor, and cost of capital. Interestingly, the Huron Report projects that the cost per DC watt installed for solar generation will decline to $2.20-$2.40 in 2012. Additionally, the Huron Report predicts that thin film technologies will create more competition in the solar market and that “the realization of lower thin film manufacturing costs and scalability will put pricing pressure on traditional crystalline silicon PV technology manufacturers.” Huron ran 10,000 simulations through its model to compute the expected cost per kilowatt. The Huron Report concluded that the expected cost of implementing 400 MW of LADWP owned solar generation is $0.119 per kWh generated, which equates to an incremental rate increase of approximately one percent over LADWP’s existing financial plan.

The Los Angeles Times (1/29/09 editorial ) has criticized the process by which Measure B was placed on the ballot, pointing out that the City Council was not provided with the estimated cost of the project before it approved placing Measure B on the March 3, 2009 ballot. It remains to be seen whether the Huron Report allays these concerns. 

The Wind and Solar Power Industries Now Employ Twice the Number of Workers in the U.S. as the Coal Mining Industry

In the midst of an unprecedented amount of bad news surrounding the economy, the robust growth in employment in the wind and solar energy sectors has been receiving a lot of attention. Wind industry jobs have increased 70% over the past year, totaling 85,000 in 2008. These 85,000 jobs in the wind industry include some 13,000 manufacturing jobs, many of which are being filled by workers who lost jobs in other manufacturing industries, like the steel industry. Similarly, the solar industry employs more than 80,000 workers in the U.S. 

CNNMoney.com ran an article earlier this week noting that the wind industry now outstrips the coal mining industry in number of workers.  The article, “Wind Jobs Outstrips Coal,” noted that the coal mining and extraction industry employs about 81,000 workers. According to a 2007 U.S. Department of Energy report cited in the article, these numbers have been steady in recent years, but are down nearly 50% since 1986. Estimates for the total direct employment in the U.S. coal industry range from 136,000 to 174,000 workers, and includes those who mine coal, haul it by rail, barge and truck, and who operate and maintain coal-fired power plants. Thus, the solar and wind energy sectors have quickly caught up the coal industry in terms of overall employment and will soon surpass the coal industry in total employment.

These facts demonstrate the potential of renewable energy to lead the country’s economic recovery when you consider that renewable energy currently supplies a tiny portion of the nation’s electricity supply—about 3 percent—compared to coal, which supplies about 50 percent of our electricity.

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.”

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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.  

           

Governor Schwarzenegger Strikes Again: 33% RPS by 2020 and Streamlined Renewable Energy Permitting in California

Governor Schwarzenegger’s been keeping busy on California’s big-ticket environmental issues. Yesterday the Governor’s office issued Executive Order S-14-08, with the laudable goal of accelerating the development of renewable energy resources . . . not to mention bolstering California’s economy with clean-tech jobs. Governor Schwarzenegger announced the Order at what will be the largest solar panel manufacturing facility in North America. The Governor’s remarks on his Executive Order highlighted that investing in renewable energy projects will help us fight climate change, “while driving the state’s green economy.”

Executive Order S-14-08 calls for California to get 33% of our electric energy from renewable sources by 2020. The current Renewable Portfolio Standard (RPS), instituted in SB 107 in 2006, requires that 20% of California’s power come from renewable sources by 2010. Unlike the current RPS, the Governor's new target applies to both investor-owned utilities and public utilities.  A recent ballot initiative in California, which would have applied California's RPS to public utilities, failed on November 7th, after being opposed by a broad coalition of environmental groups and renewable energy industry groups.  The Governor says he will propose legislation that will codify the 33% RPS for all retail sellers of electricity.

The Order also implements an MOU signed yesterday by the California Energy Commission (CEC), the California Department of Fish and Game (DFG), the U.S. Bureau of Land Management (BLM), and U.S. Fish and Wildlife Service.

Starting in February 2009, renewable energy projects should enjoy a streamlined project approval process before a special joint unit of DFG and CEC. But exactly how will these two agencies “immediately create,” as the Order directs, a one-stop process for permitting renewable energy generation power plants? For thermal power plants over 50 MW, including geothermal and solar thermal facilities, the CEC already is, supposedly, the one-stop shop

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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.

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California PUC Moves to Allow Unbundled RECs

 

The California Public Utility Commission issued a draft decision on October 29th authorizing the use of unbundled and tradable renewable energy certificates (“RECs” or “TRECs”) for compliance with California’s RPS. 

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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.

 

Senate Passes Renewable Extensions

Despite the urgency of the crisis gripping Wall Street, the Senate stepped up yesterday to resoundingly pass HR 6049. The bill must still be reconciled with the competing House version, HR 6899, particularly on the pay-go issues associated with energy measures. The White House released an administration position on HR 6049 suggesting that, while the President opposes the revenue raisers in the bill which raise taxes on the oil and gas industry, the President does not plan to veto the bill. The Senate is pushing the House with this leverage to coalesce behind the Senate version. 

Kudos to renewable energy leaders like Senator Cantwell and Representative Inslee who have steadily advocated for the industry. Unless one of the pending bills is successful, the sun will set on the Production Tax Credit, Investment Tax Credit and several related measures that have proven highly effective in the expansion of the wind, solar and biofuels industries. Congress is scheduled to adjourn on September 26th for the electoral season and perhaps the remainder of 2008. Absent a quick Congressional action compromise behind a unified bill, these renewable industries will suffer from lost investment, delayed projects and the dark cloud of future uncertainty.

The Production Tax Credit (PTC) applies to facilities utilizing wind, open and closed-loop biomass, landfill gas, geothermal, hydropower and waste to produce energy. The “placed in service date” in the PTC determines whether qualifying facilities will be eligible for crucial federal subsidies to improve their project economics. The solar energy and fuel cell Investment Tax Credit (ITC) provides powerful subsidies to these promising industries. The biodiesel blenders excise tax credit is crucial to the growth of this industry that is seeking to diversify into next generation feedstocks. While not strictly in the renewables sector, carbon sequestration, energy efficiency, plug-in vehicles, smart grid expansion and incentives for idling reduction units in heavy duty trucks are other promising energy programs awaiting extension or approval.

As referenced above, it is not the renewable energy sources, efficiency measures, or energy innovations that create the central dispute but the issue of “pay go” or “pay as you go”. A broad consensus has emerged that a diversified energy policy is an imperative. The problem arises from the price tag. The simple concept of “pay as you go” is that Congress should simultaneously appropriate or otherwise pay for any expenditures that it includes in a particular piece of legislation. The price tag for the comprehensive new energy package has been in the range of $17 to $18 billion dollars over the next 10 years. Notably, even the use of the 10 year cost evaluation period has caused recurring problems for the renewable energy industry as it encourages Congress to pass shorter term measures that cost less under the pay as you go accounting rules.

The two key pending bills in Congress illustrate the controversy vividly. The “Comprehensive American Energy Security and Consumer Protection Act” (HR 6899) passed the House on September 16th. The “Energy Improvement and Extension Act of 2008” (HR 6049) is the bill that was passed in the Senate with the sponsorship of Senators Baucus, Grassley and Reid. The two bills would both address the price tag issue by repealing some oil and gas domestic production tax subsidies and changing the rules for the calculation of foreign oil and gas extraction income. Renewable industry proponents had recently been encouraged that tentative compromises would allow one of the bills to be passed, thereby extending the sunset dates on the energy programs.

The hurricane and the crisis in the financial markets have shortened the time opportunity for Congress to work out the details of the compromise. There is speculation that even if Congress fails to act this year, a compromise will be reached next year that will be retroactive to January 1st. In other words, If Congress fails to act this year to extend the credits, they will act sometime next year and provide credits to the respective industries for the time when no credits were in place.

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Portland General Electric's RFP Garners offers of 3,000 MW

The Portland Business Journal is reporting that Portland General Electric Company received 38 offers in its April 2008 RFP totaling up to 3000 MW in renewable energy. 

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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.

 

 

Oregon Public Utility Commission Gives Green Light to Third-party Ownership Model for Distributed Generation

Now for some good news. Today the Oregon Public Utility Commission (OPUC) issued an important decision giving a green light to companies seeking to own and operate solar and wind-powered distributed generation facilities. Third-party ownership of renewable distributed generation—especially solar—has really taken off in the past few years because it allows a utility customer to enjoy the benefits of on-site renewable energy, but pay the facility owner only for the electricity generated by the facility.  Continue Reading...

Comments on 500+ Page MMS Rule Due September 8

On July 9, 2008, the Department of the Interior's Minerals Management Service (MMS) issued proposed regulations for granting leases, easements and rights of way for alternative energy project activities and for alternative uses of existing facilities located on the Outer Continental Shelf (OCS). For those who are less than excited at the prospect of wading through the 500+ page text of the proposed rules, my partner Cherise Oram and summer associate Chad Marriott (University of Oregon) have written an executive summary of the MMS's Proposed Regulations Governing Development of Wind, Wave, Current, Solar and Other Alternative Energy Sources on the Outer Continental Shelf. Comments on the proposed rules must be submitted to MMS no later than Monday, Spetember 8, 2008.

Relocating the Wind: Creative Transmission Solutions

A recent article by my partners Marc Wood and Jennifer Martin explores the transmission challenges faced by wind and other intermittent energy resources and then explains how transmission obstacles can be reduced by the effective use of dynamic scheduling, physical storage and exchange (shaping), or some combination of the two.  The article urges FERC to initiate technical workshops to explore the potential of dynamic scheduling and storage & exchange as tools for improving the capability of existing transmission systems. 

The article "Relocating the wind: New strategies for moving wind generation from high-wind areas to high-load areas" appeared in the May/June 2008 issue of North American Clean Energy.

Ohio's New RPS Yields Duke Renewables RFP

Spurred by Ohio's new renewable energy portfolio standard, Duke Energy Ohio is requesting proposals for renewable energy resources that would begin delivering energy in 2009-2012.   Duke is interested both in PPAs and asset acquisitions, and the resources must be able to deliver energy to the MISO grid.  Bids are due by August 8, 2008.

In Ohio,  "renewable energy resources" include solar PV, solar thermal, wind, hydroelectric, biomass, biogas, fuel cells, renewable power storage, and others.  Because Ohio's RPS requires the state's utilities to generate or acquire 50% of their renewable energy requirements from generation facilities located in Ohio, Duke will give preference to Ohio facilities. 

Although solar energy is often associated with the sunny southwestern United States, the Duke RFP shows that solar has a role to pay in the Midwest, where it can help to meet summer peak loads.  Duke plans to be taking delivery of 15,000 MWh of solar by 2012. 

Duke has established a web site for interested bidders

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Lex Helius: The Law of Solar Energy Now Available!

As technologies develop and commercial acceptance grows, solar photovoltaic installations are increasingly providing a viable alternative for the small-scale distributed generation of electricity to supplement more traditional polluting sources. The growth of the solar industry in the United States over just the past two years has been phenomenal. Having a rooftop solar photovoltaic installation on corporate headquarters, major distribution centers, and other high-profile real estate has become a significant way fro major global corporations to demonstrate their commitment to a cleaner environment. New sources of investment capital are flooding into this niche, and power buyers large and small have been drawn to solar as a way of demonstrating their independence from traditional generation sources and desire to play a part in moving the United States toward a more independent future. States across the country have moved to fill the federal leadership vacuum, in many cases enacting renewable portfolio standards and state renewable energy tax credits, which are critical to the continuing development of our solar resources. The industry is vibrant.

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