Renewable Energy Law News - Week of August 19, 2013

Advocates protest as more utilities stop or reduce projects eligible for renewable energy credits 

Washington Electric Cooperative is the only utility in Vermont that has continued to accept applications to its net-metering, renewable-energy program, even after surpassing a legal marker that no longer compels it to do so.

But as of Oct. 1, the utility will accept only solar installations with a capacity of 5 kilowatts (kW) or less.

Vermont’s net metering law requires utilities to credit renewable energy projects that generate less than 500 kW for every kilowatt-hour (kWh) they produce. A utility, however, no longer has to accept applications for net-metering systems when the capacity of a utility’s total net metering surpasses 4 percent of its peak demand from the previous year or from 1996, whichever is greater.

When the Hardwick Electric Department and Vermont Electric Cooperative — the state’s second largest utility — hit the 4 percent mark, both utilities stopped accepting net-metering applications. The Morrisville Electric Department recently hit the cap, and they, too, are no longer accepting applications.

Leadership at Hardwick Electric and Vermont Electric say other customers are footing the bill for net-metering customers because net-metering customers don’t pay their fair share of the grid’s fixed costs. A new law passed in 2011, allows net-metering customers to apply the credits from the energy they produce to all charges, not just to kWh power charges.

This means that even though net-metering customers are using the power grid, they oftentimes aren’t paying for its maintenance. This financial situation is the major impetus behind Washington Electric’s decision to scale back the size of net-metering applications.

“We embraced net metering from the outset and have worked diligently to support WEC members who were interested in pursuing it,” Barry Bernstein, Washington Electric’s board president said in a statement. “However, as more and more members have signed up over the 4 percent threshold, we are growing concerned of the cost impact on other members.”

Even though Washington Electric was the first utility to hit the 4 percent marker, the utility has continued to accept applications. The news that the utility was scaling back its program catalyzed an avalanche of outcry from renewable energy advocates.

Gabrielle Stebbins of the trade organization Renewable Energy Vermont said she was disappointed by Washington Electric’s decision.

“Our net metering program has been our state’s primary successful renewables initiative, fostering clean energy, lowering peak costs on summer days for all customers, and creating local jobs,” she said in a statement. “As a result, Vermont has become 11th in the country for solar jobs. Unraveling a customer’s right to net meter would take us squarely backwards from our state’s adopted renewable energy goal of 90 percent by 2050.”

Green Mountain College Divests from Fossil Fuels

Green Mountain College has become the second higher education institution in Vermont to commit to divestment from fossil fuels. College trustees agreed at their meeting Friday to withdraw investments from 200 publicly traded companies holding coal, oil and gas reserves. The investments are part of the school’s endowment portfolio, which is valued at about $3.4 million.

Sterling College trustees voted at their winter meeting to divest from fossil fuel holdings in that school’s $960,000 endowment. Students at the University of Vermont and Middlebury College have mounted divestment campaigns that await possible action by trustees. The divestment issue has also been raised at St. Michael’s, Goddard and Marlboro colleges.

Three other colleges in New England have also divested: Hampshire College, in Massachusetts; and Unity College and College of the Atlantic, in Maine.

“We see this as another step in an ongoing effort to connect our investment decisions with our ideals,” said Paul Fonteyn, president o f Green Mountain College, in a news release. “Investing endowment funds on the basis of social, economic and environmental criteria is one of the ways Green Mountain College expresses its values.”

The divestment campaign was a collaboration of a student group, Divest GMC, and the administration, and featured a teach-in. In 2010, trustees invested 15 percent of the endowment in a portfolio of ecologically responsible companies. The college also switched from fuel oil to wood chips as a primary heating source with installation of a new biomass plant.

The action won praise from Bill McKibben, scholar-in-residence at Middlebury College and a leader in 350.org, a national advocacy group that seeks to build support for reducing greenhouse gas emissions.
“I’m delighted Green Mountain College has taken a leadership role in this important issue,” McKibben said in the news release. “GMC has long had a great reputation for environmental studies. Now they’ve demonstrated that it’s a core part of their values. What leadership!”

Renewable Energy Law News - Week of July 15, 2013

 
PV Renter bill signed into law in Hawaii

HONOLULU, Hawaii – A bill that would remove barriers for landlords to invest in renewable energy became law today.

Governor Neil Abercrombie signed four bills related to energy at a ceremony on Oahu on Wednesday. One of those measures was Senate Bill 19, Relating to Renewable Energy. SB 19 was enacted as Act 261, and is being called the “PV Renter” bill. The new law…

Exempts landlords and lessors who install renewable energy systems on their property and provide, sell, or transmit electricity generated from those renewable energy systems to tenants or lessees on the premises from the definition of public utility, under certain conditions.

Those conditions, taken from the language of the bill:

(i) An interconnection, as defined in section 269-141, is maintained with an electric public utility to preserve the lessees’ or tenants’ ability to be served by an electric utility;

(ii) Such person does not use an electric public utility’s transmission or distribution lines to provide, sell, or transmit electricity to lessees or tenants;

(iii) At the time that the lease agreement is signed, the rate charged to the lessee or tenant for the power generated by the renewable energy system shall be no greater than the effective rate charged per kilowatt hour from the applicable electric utility schedule filed with the public utilities commission;

(iv) The rate schedule or formula shall be established for the duration of the lease, and the lease agreement entered into by the lessee or tenant shall reflect such rate schedule or formula;

(v) The lease agreement shall not abrogate any terms or conditions of applicable tariffs for termination of services for non-payment of electric utility services or rules regarding health, safety, and welfare;

(vi) The lease agreement shall disclose: (1) the rate schedule or formula for the duration of the lease agreement; (2) that, at the time that the lease agreement is signed, the rate charged to the lessee or tenant for the power generated by the renewable energy system shall be no greater than the effective rate charged per kilowatt hour from the applicable electric utility schedule filed with the public utilities commission; (3) that the lease agreement shall not abrogate any terms or conditions of applicable tariffs for termination of services for non-payment of electric utility services or rules regarding health, safety, and welfare; and (4) whether the lease is contingent upon the purchase of electricity from the renewable energy system; provided further that any disputes concerning the requirements of this provision shall be resolved pursuant to the provisions of the lease agreement or chapter 521, if applicable; and

(vii) Nothing in this section shall be construed to permit wheeling.

EU Takes on German Green Energy Law

The European Commission plans to open proceedings on Wednesday against Germany's renewable energy law on the grounds that it breaches EU competition regulations.

Under the law, German electricity users pay a charge that goes towards funding renewable energy generation. Competition Commissioner Joaquin Almunia believes that exemptions granted to some energy-intensive German companies from those charges run counter to EU law.

The Commission plans to launch proceedings aimed not only at banning such exemptions in the future, but also requiring companies to repay the charges they were exempted from in the past.

Energy Commissioner Günther Oettinger even called the entire renewable energy law into question in remarks to a conference hosted by German energy company E.on last week.

Photo via Flickr.

Renewable Energy Law News - Week of July 1, 2013

 Hawaii Governor Signs ‘Game-Changing’ Green Energy Policy Into Law

Gov. Neil Abercrombie packed his ceremonial room today with a rare combination of leaders from the Legislature, HECO, environmental nonprofits and union groups who all support his signing of a progressive new energy policy.

The so-called "green infrastructure" bill is aimed at helping low-income homeowners, renters and nonprofits take advantage of renewable energy technology.

As Richard Lim, the head of Hawaii’s Department of Business, Economic Development and Tourism, put it: "We want to promote the democratization of green energy."

Public Utilities Commission Chair Mina Morita underscored the importance of Senate Bill 1087 for thousands of people in Hawaii who struggle to pay the nation’s highest electric rates but can’t afford solar panels for their homes.

The bill will help more people take advantage of renewable energy technology through a new on-bill financing program and low-cost loans.

Colorado Renewable Energy Law Gets Mixed Reactions

Early this month, Gov. John Hickenlooper signed into law a controversial bill that doubles the renewable energy target for rural electric cooperatives.

The new law requires cooperatives to supply 20 percent of electricity from renewable sources by 2020 — up from a previous requirement of 10 percent by 2020 — among other things.

Noting that the bill was “imperfect,” Hickenlooper also issued an executive order to set up a panel to evaluate the feasibility of the compliance timeline and the cost.

The bill was hotly contested in the legislature, with rural cooperatives, agricultural groups and Republican lawmakers pitted against environmentalists and renewable energy companies in debates. And in the wake of the signing, it continues to create division, though many in this region support it.

One of the law’s major opponents is Tri-State Generation and Transmission Association, which supplies electricity to the local energy cooperative San Miguel Power Association.

Photo via Flickr.

Renewable Energy Law News - Week of June 10, 2013

First U.S. Grid-Connected Offshore Wind Turbine Launched in Maine

The United States' first grid-connected, offshore, floating wind turbine prototype was launched on May 31 off the coast of Castine, Maine. Led by the University of Maine, this project—supported by a $12 million Energy Department investment over five years—represents the first concrete-composite, floating-platform wind turbine to be deployed in the world.

The University of Maine and its project partners conducted extensive design, engineering, and testing of floating offshore wind turbines, followed by the construction and deployment of its 65-foot-tall VolturnUS prototype. At an eighth of the scale of a commercial installation, this project will collect data to validate and improve floating wind turbine designs, while helping to address technical barriers to greater offshore wind cost reductions.
 
Heavy hitters push US tax bill

A number of the largest renewable energy players in the United States have joined forces to lobby for tax changes to level the playing field for clean energy development.

Founding members of the coalition include First Wind, Vestas, Gamesa, OWN Energy, Everpower, Invenergy, Geronimo, Pattern Energy, juwi, Keybanc Utility, Power and Renewables, Terra-Gen Power and TradeWind Energy.

The group, called Financing America’s Investment in Renewables (FAIR), supports a change in a law that currently allows oil, gas, coal and other natural resources-based energy projects, but not renewable energy projects, to use master limited partnerships (MLPs), a business structure that facilitates investment in qualifying projects.

Such a change has been proposed in the bi-partisan Master Limited Partnerships (MLP) Parity Act recently re-introduced in both the US House and Senate.

An MLP is a business structure that is taxed as a partnership, but whose ownership interests are traded on an exchange like corporate stocks. This provides the state and federal tax benefits of a partnership with the liquidity of a publicly traded company.

Renewable energy assets are not currently eligible to use the MLP structure.

Colo. Gov. Signs Renewable Energy Expansion Bill Into Law

Gov. John Hickenlooper, D-Colo., signed into law S.B.252, which increases the renewable energy standard (RES) for cooperative associations that provide wholesale electricity in Colorado and for large electric associations that provide service to at least 100,000 meters. The bill expands Colorado's RES to 20% by 2020, while capping retail cost increases at 2%.

The bill, "Setting Renewable Energy Standards for Rural Colorado," authorizes the co-ops to collect a monthly surcharge to offset the cost of meeting the target. Hickenlooper also signed an executive order calling for the creation of a panel to study if the goal is achievable and if ratepayers get enough protection from the rate cap on the surcharge.

S.B.252 expands access to wind, solar and other clean energy for rural Colorado at a time when major renewable investments are being made across the region.

"We believe that this legislation, while imperfect, is necessary to keep diversifying electric generation and reaping the associated rate, economic and environmental benefits," Hickenlooper said. "Vetoing this bill and waiting until the 2014 legislation session for a more perfect version would set Colorado back one year in our pursuit of a more diverse energy portfolio. We cannot afford to lose this valuable time, especially with the expiration of the federal production tax credit on wind generation at the end of this year."

According to Western Resource Advocates (WRA), large cooperatives, such as Tri-State Generation and Transmission, have bet heavily on coal as a primary energy source and predicted that S.B.252 could lead to skyrocketing energy costs.

Photo via Flickr. 

Renewable Energy Law News - Week of May 28, 2013

  
Japan's feed-in-tariff system for clean energy mired in regulations

The nuclear disaster in Japan two years ago ignited a push to develop a new and clean energy industry, but those efforts are being stymied by a raft of regulations.

As part of its policy goal to diversify supply, the government introduced a feed-in-tariff system last July to kick-start the market for renewable energy.

The shift was due to the reactor meltdowns that triggered the release of vast amounts of radioactive materials at the Fukushima No. 1 nuclear power plant following the March 2011 Great East Japan Earthquake and tsunami.

Electric utilities are obliged to purchase renewable energy generated by developers at fixed rates to power homes and businesses through their networks. This encompasses solar, wind and geothermal energy as well as small- and medium-scale hydraulic power and energy generated by biomass.

The price is set at a level that covers the cost of production, plus a premium.

The incentive program spans 10 to 20 years, depending on the type of energy produced and the output. The utilities are permitted to pass on the purchase cost through electricity rates.

Wave and Tidal Energy Finally Entering Spotlight in Scotland

The All Energy conference and exhibition in Aberdeen, Scotland saw growing evidence of the wave and tidal sector's push toward commercialisation. Over 210 of the 580 exhibitors were involved in marine energy, the organizers said, and 15 hours of the conference were devoted to the sector. And, for the first time at this long-running show, an innovation technology showcase featured wave and tidal device developers from the UK, Norway, Australia, Canada and Russia.

Scotland’s energy minister, Fergus Ewing, announced that the nation’s £18 million (US$27 million) Marine Renewables Commercialisation Fund (MRCF), established last year, will be used going forward to provide support for the wave energy sector. Project applications will be accepted from June, and the first funds are expected to be distributed later in the summer. And in a related announcement, the world’s largest commercial wave farm to date — 40 MW off Scotland’s northwest coast — has been approved by the Scottish government. Developer Lewis Wave Power Ltd, a subsidiary of Aquamarine Power, says the project will use 40-50 of Aquamarine's Oyster devices, which capture energy from near-shore waves. But plans may have to be scaled back, as grid owner SSE said last week that it won’t be able to start building the necessary grid connector before 2017.

Aquamarine’s wave farm and MCT’s planned 10-MW tidal stream array in Wales represent wave and tidal power’s initial steps toward commercialisation and make this an exciting time for the sector, which is "now tackling barriers to deployment", said David Blunt, Gamesa’s director of public policy for UK and EU institutions, in a conference presentation. All Energy’s wave and tidal conference sessions were focused on steps to market and calls for Europe’s large number of research programmes to develop a common agenda to better support emerging technologies. And as the European Marine Energy Centre (EMEC) celebrated its 10th year of testing wave and tidal devices, Norstec, a new trade organisation for the European North Sea offshore sector, was announced.

Photo via Flickr. 

Renewable Energy Law News - Week of April 15, 2013

Vermont Representative introduces legislation to make it easier to finance renewable energy projects

Joined by Vermont renewable energy companies that are putting Vermonters to work and charting a cleaner energy future, Rep. Peter Welch has announced bipartisan, bicameral legislation that will make it easier to finance renewable energy projects in Vermont and throughout the country.

"MLPs provide the opportunity for increasing capital for renewable energy projects, driving down their cost and helping make projects happen," says David Blittersdorf, president and CEO of AllEarth Renewables, a solar tracker manufacturer based in Williston, Vt. "It makes common sense to extend this financing option currently available for fossil fuels to renewable energy."

At AllEarth Renewables in Williston, Welch outlined his Master Limited Partnership Parity Act, which would allow renewable energy companies to take advantage of a key financing tool used by the energy sector known as master limited partnerships (MLPs). For nearly 30 years, MLPs have driven investment in oil, gas, and coal projects. Under current law, renewable energy projects cannot take advantage of MLPs. Welch’s bill expands the definition of qualified projects to include renewable energy.

“Expanding MLP financing to renewable energy projects will be a boost for the renewable industry and for a cleaner energy future. If oil, gas, and coal projects can take advantage of this important tool, there is no reason why renewable projects should be excluded. This is a simple, common sense idea that will drive investment in renewable energy projects for years to come,” Welch says.

An MLP is a business structure that is taxed as a partnership, but whose ownership interests are traded like corporate stock on a market. Whereas profit from publicly traded corporations is taxed at both the corporate level and the shareholder level, income from MLPs is taxed only at the shareholder level because it is treated as a partnership for tax purposes. 

IRS Defines Start of Construction for the Production Tax Credit

The Internal Revenue Service explained today what developers must do this year to be considered to have started construction of new renewable energy projects.

The IRS adopted roughly the same definition for start of construction as under the Treasury cash grant program.

Wind, geothermal, biomass, landfill gas, incremental hydroelectric and ocean energy projects that are under construction by December 2013 will qualify for 10 years of production tax credits on the electricity output or an investment tax credit upon project completion for 30 percent of the project cost.

There is no deadline to complete projects that start construction this year.

The IRS departed from the Treasury cash grant rules in one significant respect.

There are two ways to show that a project is under construction in time.

One is by showing that “physical work of a significant nature” commenced at the site or at a factory that is making equipment for the project. Work at the factory counts only if done after the project has placed a binding equipment order with the manufacturer.

The other is by showing that the developer “incurred” at least 5 percent of the total project cost. Costs are not usually “incurred” merely by spending money; the developer must take delivery or title to services or equipment.

Many developers gravitated toward the 5 percent test under the Treasury grant program because anyone relying on the physical work test had to show a continuous pattern of construction after work started. There was no similar requirement for the 5 percent test. This let tax equity investors and lenders determine with more certainty at the outset whether a project was under construction in time.

The IRS said it will require developers relying on the 5 percent test to show “continuous efforts” in the future on a project. Developers relying on the physical work test will have to show “continuous construction.”

Renewable energy bill passes House, heads to Senate's rocky ground

Florida - A bill exempting renewable energy improvements from property tax assessments passed the House Wednesday, but the bigger hurdle may be in passing the Senate.

HB 277 is the only legislation dealing with renewable energy that is moving in the Legislature.

The bill would implement a constitutional amendment that passed in 2008 with 61 percent of the vote. The amendment also exempted improvements for wind resistance from property tax assessments.

Similar legislation implementing a 2008 constitutional amendment passed the House the three previous years but those bills didn't pass the Senate.

Rep. Michelle Rehwinkel Vasilinda, D-Tallahassee and HB 277 sponsor, said she doesn't know why the bill hasn't passed the Senate but she thinks its prospects are better this year.

That's because it doesn't include exemptions for wind resistance improvements, which could increase the loss of tax revenue for cities and counties.

"I think it makes common sense," she said of the bill. "When people want to make some improvements to their home to lower their utility bills and take part in energy conservation and renewable energy decisions, they shouldn't then have their property values raised for ad valorem taxes."

The Senate companion, SB 1064, has passed two committee stops without opposition votes and has one more stop before it reaches the Senate floor.

Photo credit
 

Renewable Energy Law News - Week of February 11, 2013

Two Energy Revolutions in The State of the Union

It was no surprise that energy and climate change featured prominently in Tuesday's State of the Union speech. The President devoted an entire section of his address to these topics, leading into it in a very upbeat way: "Now is the time to reach a level of research and development not seen since the height of the Space Race. And today, no area holds more promise than our investments in American energy." You'd never guess from that introduction that this president faces a strikingly different energy challenge than his seven most recent predecessors. There are two energy revolutions underway in the US, and the unplanned one is racing ahead of the one to which he devoted most of his remarks--and most of his efforts on energy for the last four years.

Let's start with the positives. Even more than in last year's speech, President Obama presented energy as more of an opportunity than a problem. He described our impressive recent progress in oil and natural gas production, renewable energy generation, and the reduction of greenhouse gas emissions. As fact-checkers have pointed out, he stepped into aspiration when he claimed credit for doubling automobile fuel economy--a goal that might or might not be attained by 2025--but even this fits within a broad set of energy trends that are all finally moving in the right direction.

The President also endorsed a very good idea that has been floating around for a long time, but has never been seized upon. He suggested funding R&D for electric and natural gas vehicles and biofuels with the revenue from federal oil and gas lease bid premiums and royalties. This "Energy Security Trust" would yoke the success of future energy technology to the enormous cash cow represented by the vast oil and gas resources beneath public lands and waters. He'll have to sort out the allocation of revenues with the states, who surely won't want the new set-aside to come from their share. If he can work that out, the government will have an even bigger vested interest in ensuring that responsible oil and gas development on these lands proceeds, in order to advance energy innovation.

The 2013 Renewable Fuel Standard: A 10-Minute Guide

In Washington, the U.S. Environmental Protection Agency (EPA) issued its proposed 2013 Renewable Fuel Standards (RFS2).??The proposal will be open for a 45-day public comment period and EPA will consider feedback from a range of stakeholders before the proposal is finalized.

For 2013, the program is proposing to implement EISA’s requirement to blend more than 1.35 billion gallons of renewable fuels over the amount mandated for 2012.

The Proposed Standard

Here, we have given you the proposed 2013 RFS2 volumes, and the original 2013 targets set under the 2007 EISA legislation. We’ve also provided the final 2012 and 2011 numbers, so that you can evaluate the growth rate in each pool and in the overall Standard.

Note: RFS2 is nested, so the figures for Cellulosic biofuels and Biomass-based diesel are nested inside the overall Advanced Biofuels number — and in turn the Advanced biofuels pool is nested (alongside the corn ethanol target) within the overall Renewable Fuel Standard.

It may sound complex, but it is designed that way so that shortfalls in one pool can be made up by expanding the targets in another pool. That’s why you have to be wary of people who flag a shortfall in one nested pool, for example, cellulosic biofuels. Any shortfalls are easily made up by sourcing qualifying advanced biofuels elsewhere.

Norway to support the renewable energy sector in Angola

The governments of Angola and Norway Friday in Luanda signed a cooperation protocol in the area of renewable energy, for the 2013-2015 period, Angolan news agency Angop reported.

Under the terms of the protocol, Norway will provide technical assistance, organise training for Angolan Energy and Water Ministry staff and support Angola to promote activities for more efficient electricity use in the country.

At the end of the ceremony, the secretary of state for Water, Luís Filipe da Silva, said that Norway was a highly developed country in terms of hydroelectricity and that Angola hoped to benefit from that experience further to improve its energy sector.

“The protocol includes drawing up a proposed strategy and plan of action for rural electrification through use of renewable energy, drawing up proposals for the legal framework of renewable energy development and its uses,” noted the secretary of state.

Norway, according to Silva, will support Angola in improving its technological development, through several activities such as assistance in execution of the investment programme for pre-paid electricity meters, campaigns to raise awareness of more efficient use of electricity, amongst other activities.

Photo via Flickr. 

Renewable Energy Law News - Week of January 7, 2013

Wind Energy Tax Credit Extension Passes with Fiscal Cliff Deal

On January 1, 2013, Congress passed legislation that included the long-sought extension of wind energy tax credits in a bill to avert the "fiscal cliff" that now moves to President Obama for his expected signature.

The extension of the production tax credit (PTC) and Investment Tax Credit (ITC) is expected to save up to 37,000 jobs and create far more over time, and to revive business at nearly 500 manufacturing facilities across the country. Wind energy PTC, and ITC for community and offshore projects, will allow continued growth of the energy source that installed the most new electrical generating capacity in America last year, according to the American Wind Energy Association (AWEA).

The version included in the deal would cover all wind projects that start construction in 2013. Companies that manufacture wind turbines and install them sought that definition to allow for the 18-24 months it takes to develop a new wind farm.

Leaders of the Senate Finance Committee included that version in a "tax extenders" package they assembled in August, which made it into the overall fiscal cliff deal that passed the Senate early Tuesday morning and the House Tuesday night. President Obama is expected to sign the bill into law swiftly.

The Energy Information Administration said that wind set a new record in 2012 by installing 44 percent of all new electrical generating capacity in America, leading the electric sector compared with 30 percent for natural gas, and lesser amounts for coal and other sources.

U.S. Gauging Interest in New York Offshore Wind Farm Projects

The Obama administration is gauging interest in wind power development off the coast of New York, after a state agency proposed an offshore project 11 nautical miles south of Long Beach.

The Bureau of Ocean Energy Management issued a request today for any competing interests in the proposed lease area, which covers about 127 square miles (329 square kilometers), according to an e-mailed statement. If no other parties express interest, the New York Power Authority can get a lease on a non- competitive basis.

The agency, part of the U.S. Interior Department, is also seeking comments on potential environmental effects of a wind farm in the area. The authority has proposed a project that would generate 350 to 700 megawatts of power for Long Island and New York City.

There are no offshore wind farms currently operating in the U.S. The government has awarded two offshore wind-energy leases, in Massachusetts in 2010 and in Delaware in October, through non-competitive arrangements with Cape Wind Associates LLC and NRG Energy Inc. The administration plans to conduct the first competitive lease auctions this year for projects off the coasts of Massachusetts, Rhode Island and Virginia.

The Long Island - New York City Offshore Wind Project is being backed by the New York Power Authority, Long Island Power Authority and Consolidated Edison Co., according to its website. The Long Island Power Authority canceled plans in 2007 to build a wind farm off Jones Beach after costs rose.

Photo via Flickr. 

Renewable Energy Law News - Week of December 31

Virginia utilities, lawmakers to reform renewable energy policy

Virginia lawmakers, environmental groups and utilities are working to revamp the state's 2007 Electric Utility Re-Regulation Act, which is designed to bolster renewable energy generation.

Stakeholders want to reform loophole in the law allows utilities to receive financial credit for renewable energy investments made outside of Virginia.

A November report released by Virginia Attorney General Ken Cuccinelli found that renewable energy standards introduced in 2007 did not address environmental concerns in the state and also led to consumer bill increases over the past five years. The report noted that utilities have purchased RECs from existing renewable generation rather than investing in new development.

But Cuccinelli, who is currently a candidate for governor, did not blame the utilities for the lackluster results and said in a release that they should "not be criticized for making beneficial business decisions based on choices provided or incentives offered by the law."

Virginia environmental groups echoed that sentiment.

Wind power deadline sees US firms rush to build turbines

US energy companies are racing to install wind turbines before a federal tax credit expires at the end of this year.

Experts say that wind power has exceeded the construction of natural gas plants in recent months.

However the financial incentive for wind could be lost as congress struggles to avoid financial deadlock.

Even if the credit is extended it is expected that new installations will decline in 2013.

According to industry analysts, the federal government's production tax credit has played an important role in the expansion of wind energy across the US since it was first introduced in 1992. 

Photo via Flickr.
 

Renewable Energy Law News - Week of November 12

Fate of wind energy production tax credit in hands of Obama, House GOP, officals say

The fate of a tax credit that advocates say is needed to maintain tens of thousands of wind energy jobs will be decided during high-stakes, last-minute negotiations between President Obama and House Republicans over fiscal issues, officials said Tuesday.

The wind energy production tax credit is due to expire at the end of the year. Its extension stalled in Congress this summer amid fierce opposition from some conservative House Republicans. The last chance to extend the measure is in the budget deal that will be cut between Obama and Republicans in the lame duck session of Congress.

Backers of the credit tried to ramp up pressure to extend the $12 billion break Tuesday with a teleconference featuring several governors, who noted that uncertainty over its fate has led to thousands of job losses across the country. A study by a wind energy group found that 37,000 jobs would be lost if the credit expires.

The credit's supporters say the government has subsidized fossil fuels like oil for more than a century. Opponents argue it distorts the energy marketplace and leads to higher prices.

Governors Urge Congress to Renew Wind Energy Production Tax Credit

Salt Lake City, UT -- With the expiration of the wind energy Production Tax Credit looming and the clock ticking rapidly away to the end of 2012, a bipartisan group of U.S. governors is urging Congress to act now to save jobs. In a joint press conference held today, Senator Chuck Grassley (R-IA) stressed that uncertainty over the extension of the wind energy Production Tax Credit (PTC) is already beginning to have an impact on renewable energy jobs.

“The uncertainty about the future of this tax incentive,” Grassley said, “hurts the economic good that these policies do.” Grassley, who authored the original wind energy PTC in 1992 and has also sponsored Senate bill (S. 3521), which aims to extend the tax credit for at least another year, pointed to the expiration of the biodiesel tax credit in 2010 as an example that he says resulted in 23,000 jobs being “put on hold.” This is a situation that all involved are keen to prevent from happening to wind energy in their states.

Governor Terry Branstad (R-IA) also cited uncertainty about the wind energy PTC’s fate as a major playing factor in the decision of some companies to have already begun eliminating jobs. “Due to the uncertainty,” Branstad said, “we’ve begun to see a negative economic impact and loss of jobs in our states. In Iowa, Siemens recently announced the layoff of 400 employees at their plant in Fort Madison, and Clipper Windpower laid off 100 workers at their plant in Cedar Rapids. We have literally thousands of wind energy related jobs in our state. These are high tech, high paying jobs.” Branstad says he remains hopeful that Congress will act quickly to extend the PTC.

Branstad is the chair of the Governors’ Wind Energy Coalition, which is a group comprised of 28 state governors who all share the goal of leveraging wind energy resources as a way to pursue the long-held goal of lasting energy independence.

“Nationally, wind energy drives about $10 to $20 billion a year in private sector capital investment and employs almost 75,000 Americans,” said John Kitzhaber (D-OR), Governor of Oregon and vice chair of the Governors’ Wind Energy Coalition. Kitzhaber used Oregon’s own Sherman County as an example of how rural communities can utilize wind energy production to drive revenue. “The county now receives $33 million per year in revenue from wind farms,” Kitzhaber said. “That’s revenue that has proved essential to sustain schools, fire departments and road maintenance.”

Hawaii issues new rules for renewable energy tax credit

HONOLULU - The state Department of Taxation on Friday issued new rules for the renewable energy tax credits that have spurred more residents to install solar panels.

The department said it is doing so to provide clarity to taxpayers, but environmentalists and renewable energy advocates said the new rules jeopardize the state's progress in moving away from imported fossil fuels.

The rules, which will take effect on Jan. 1, require renewable energy systems to meet set output capacity requirements. The Sierra Club and Earthjustice said the change would limit the solar tax credit for the average residential solar power system to $5,000. This would effectively cut the tax credit in half and put solar power out of the reach of many families, they said.

The department explained its decision by saying the previous rules, issued in 2010, created uncertainty and an unlevel playing field. The department has been receiving complaints about the rules for more than a year, it said.

The law grants residents and businesses a tax credit for installing a renewable energy system. Some people, however, have been advised by the companies putting in their solar panels to say their installation consists of multiple systems and then claimed the credit multiple times. This has made solar panels more affordable and encouraged many more people to buy them but it's also depleted tax revenues and made it harder for the state to balance its budget.

"After listening to taxpayers concerns, the department is issuing these new temporary rules in order to provide consistent, uniform and fair application of the tax credit law, while still supporting the State's public policy goal of reducing our reliance on fossil fuel," the department said in a statement.

Photo via Flickr. 

Renewable Energy Law News - Week of October 15

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Obama Administration Approves Roadmap for Utility-Scale Solar Energy Development on Public Lands

WASHINGTON, D.C. - As part of President Obama’s all-of-the-above energy strategy to expand domestic energy production, Secretary of the Interior Ken Salazar today finalized a program for spurring development of solar energy on public lands in six western states. The Programmatic Environmental Impact Statement (PEIS) for solar energy development provides a blueprint for utility-scale solar energy permitting in Arizona, California, Colorado, Nevada, New Mexico and Utah by establishing solar energy zones with access to existing or planned transmission, incentives for development within those zones, and a process through which to consider additional zones and solar projects.

Today’s action builds on the Administration’s historic progress to facilitate renewable energy development. On Tuesday, with the authorization of the Chokecherry and Sierra Madre Wind Energy Project site in Wyoming, Interior reached the President’s goal of authorizing 10,000 megawatts of renewable power on public lands. Since 2009, Interior has authorized 33 renewable energy projects, including 18 utility-scale solar facilities, 7 wind farms and 8 geothermal plants, with associated transmission corridors and infrastructure. When built, these projects will provide enough electricity to power more than 3.5 million homes, and support 13,000 construction and operations jobs according to project developer estimates.

“Energy from sources like wind and solar have doubled since the President took office, and with today’s milestone, we are laying a sustainable foundation to keep expanding our nation’s domestic energy resources,” said Secretary Salazar, who signed today’s Record of Decision at an event in Las Vegas, Nevada with Senator Harry Reid. “This historic initiative provides a roadmap for landscape-level planning that will lead to faster, smarter utility-scale solar development on public lands and reflects President Obama’s commitment to grow American made energy and create jobs.”

The Solar PEIS establishes an initial set of 17 Solar Energy Zones (SEZs), totaling about 285,000 acres of public lands, that will serve as priority areas for commercial-scale solar development, with the potential for additional zones through ongoing and future regional planning processes. If fully built out, projects in the designated areas could produce as much as 23,700 megawatts of solar energy, enough to power approximately 7 million American homes. The program also keeps the door open, on a case-by-case basis, for the possibility of carefully sited solar projects outside SEZs on about 19 million acres in “variance” areas. The program also includes a framework for regional mitigation plans, and to protect key natural and cultural resources the program excludes a little under 79 million acres that would be inappropriate for solar development based on currently available information.

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Wind Energy Jobs, PTC Surface At Second Presidential Debate 

The first presidential debate came and went without mention of the wind energy production tax credit (PTC) and hardly any discussion of renewables. The story was quite different, however, at the second debate between President Barack Obama and Republican presidential candidate Mitt Romney, held Tuesday night at Hofstra University in Hempstead, N.Y.

In fact, energy was arguably one of the most contentious issues of the night, and sparked heated disputes between the two candidates, who traded jabs on policies that - as described Tuesday night - did not differ all that much.

Obama has said he favors an "all of the above" energy approach, including oil, gas, wind, solar and biofuels - a position he stated in the first presidential debate and reiterated Tuesday night.

“We’ve got to control our own energy, you know - not only oil and natural gas, which we’ve been investing in - but also, we’ve got to make sure we’re building the energy sources of the future,” he said at Tuesday’s debate. “Not just thinking about next year, but 10 years from now, 20 years from now. That’s why we’ve invested in solar and wind and biofuels, energy-efficient cars.”

And despite the virtual absence of renewables from Romney’s official energy plan, released in August, this time, the former Massachusetts governor also expressed support for clean energy like wind and solar power.

“Look, I want to make sure we use our oil, our coal, our gas, our nuclear, our renewables,” he said. “I believe very much in our renewable capabilities - ethanol, wind [and] solar will be an important part of our energy mix.”

At the first debate, neither candidate mentioned the jobs being lost in the wind energy supply chain due to the looming expiration of the PTC.

The PTC’s omission from the first debate may have seemed glaring to some in the wind industry, considering that the president had made the critical tax credit a cornerstone of his campaign efforts in Iowa and Colorado - two states that have lost hundreds of wind energy jobs over the past few months.

This time, however, Obama came out swinging against Romney, who has stated he would let the PTC expire at the end of this year.

“What I’m not for is us ignoring the other half of the quotation,” Obama said, referring to renewables. “So for example, on wind energy, when Gov. Romney says these are ‘imaginary jobs,’ when you’ve got thousands of people right now in Iowa, right now in Colorado who are working, creating wind power, with good-paying manufacturing jobs - and the Republican senator in that, in Iowa, is all for it, providing tax credits to help this work - and Gov. Romney says, ‘I’m opposed; I’d get rid of it’ - that’s not an energy strategy for the future.”

Romney refuted the claims, saying he does, in fact, support wind jobs.

“I don’t have a policy of stopping wind jobs in Iowa, and they’re not phantom jobs - they’re real jobs,” he said.

“I appreciate wind jobs in Iowa and across our country,” he added. “I appreciate the jobs in coal and oil and gas. I’m going to make sure that taking advantage of our energy resources will bring back manufacturing to America. We’re going to get through a very aggressive energy policy, 3.5 million more jobs in this country.”  

Louisiana's Solar Tax Credit Under Review

Louisiana, USA -- The Louisiana Department of Revenue weighed the future benefits of solar energy at a public hearing last week in Baton Rouge. Homeowners in Louisiana can choose solar-generated electricity and realize a 50-percent, one-time, refundable, state income tax credit for the purchase and installation of the system under provisions of the Wind and Solar Energy Systems Tax Credit created by state legislation in 2007.

Louisiana’s investment in this incentive program is something the solar energy industry does not want to see fade away.

Nearly 100 people, from all over the state and nation, filed into the hearing room to shed some light on LDR’s rules for the Income Tax Credits for Wind or Solar Energy Systems.

The solar power industry generated more than just energy that day as more than a dozen people registered to speak.

“It appears there was a lot of interest,” said Byron Henderson, press secretary for the Department of Revenue, “This is just a public hearing on proposed rule changes for the tax credits on the wind and solar energy systems.”

Tucker Crawford, co-owner of a Louisiana-based solar energy company and president of the Gulf States Renewable Energy Industries Association – which is a non-profit, trade organization that represents solar and renewable energy firms in Louisiana, Mississippi and Alabama– told the committee that the entire Louisiana solar industry has far exceeded the state’s initial estimates.

“That’s a good thing to Louisiana energy consumers,” Crawford said. “In 2007, Louisiana only had five licensed solar installers. Today, we have 196 and counting; many of them are represented here today.”

Crawford said that the 2007 state law – which allowed income tax credits for wind or solar energy systems purchased and installed by taxpayers to cut costs on their homes or buildings – has created local jobs, increased the state’s energy independence and reduced or eliminated utility bills for more than 3,100 Louisiana households.

Renewable Energy Law News - Week of September 24

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19 Companies Urge Congress To Extend Wind Tax Credit

A group of 19 leading companies has sent a letter to Congress asking lawmakers to immediately extend a key tax credit for wind that is set to expire at the end of the year.

The diverse coalition of firms, which includes Ben & Jerry’s, Johnson & Johnson, Levi Strauss, Starbucks, and Yahoo!, says that raising taxes on the wind sector would be bad for businesses that buy large amounts of wind electricity.

These companies join a very large bi-partisan chorus of renewable energy supporters asking Congress to give the wind industry some certainty and put the sector on a level tax playing field with the oil and gas industry, which enjoys billions of dollars in permanent tax benefits.

Over the last year, the National Governor’s Association, County Commissioners, and numerous Republican politicians have all sent separate letters to Congressional leaders in support of extending federal wind tax credits for at least another year. Now this latest group of prominent companies is playing up another theme: Ending support for wind isn’t just bad for the wind industry, it’s bad for downstream non-utility companies that procure energy from wind:

"As major U.S. employers and some of the largest non-utility purchasers of renewable energy, we urge you to extend the Production Tax Credit (PTC) for wind energy before the end of the 112th Congress. A failure to pass an extension will amount to levying a tax on companies committed to buying American energy and growing the U.S. economy. In today’s economic climate, a taxhike on American businesses buying American renewable energy is unwarranted.

"In the past decade American businesses have significantly ramped up their purchase of American wind energy. For consumers of wind electricity, the economic benefits of the PTC are tremendous. Electricity rates, which reflect marginal costs for power plant operations and fuel prices, consistently decrease when wind enters the market. Because wind prices can be locked in up front, businesses incorporating wind into their energy portfolios are better equipped to hedge market volatility in traditional fuels markets caused by supply shocks. We are concerned that allowing the PTC to expire will immediately raise prices for the renewable electricity we buy today."

California Congresswoman Capps Joins in to Pass Legislation to Extend Renewable Energy Tax Credits

Congresswoman Lois Capps (CA-23) joined her colleagues in the Sustainable Energy and Environment Coalition (SEEC) on the floor of the House of Representatives urging the Speaker to immediately renew tax incentives for wind energy. The renewable energy Production Tax Credit (PTC) provides an income tax credit for each kilowatt-hour of electricity produced by a renewable energy source, including wind, and has been a key factor in the expansion of clean energy over the last decade.Unfortunately, the PTC is set to expire on December 31st of this year without Congressional action. A recent report from the U.S. Department of Energy highlighted the importance of extending the PTC to ensure growth in wind energy production and manufacturing.

Video of Capps’ floor statement is available here.

With precious few weeks left in the Congressional calendar, it’s time for the Speaker of the House to stop holding bipartisan legislation to extend tax incentives for wind energy hostage,” said Capps. “The country cannot afford to wait any longer to develop wind energy projects that will create jobs and move our country forward to a cleaner, healthier future.”

In May, Capps spoke about the PTC’s role in creating jobs on the Central Coast with employees at Infinity Wind Power of Santa Barbara. She has co-sponsored bipartisan legislation, the American Renewable Energy Production Tax Credit Extension Act of 2011 (H.R. 3307) to extend the PTC through 2016. She also wrote to the Speaker in May urging him to bring this legislation to a vote. Earlier this month, the Senate Finance Committee included extension of the PTC when reporting a bipartisan tax bill just before Congress adjourned for the August district work period, but the House has yet to act.

Feed-in Tariffs Do More for Wind at Less Cost to Ratepayers than RPS, Says German Agency

In a recent report, the German Renewable Energy Agency says that across Europe countries using feed-in tariffs develop more wind energy and pay less for it than countries using quota systems.

In North America, the quota model is known variously as Renewable Portfolio Standards (RPS) or Renewable Energy Standards.

The agency, the Agentur für Erneuerbare Energien, says that RPS-related tendering programs raise the payments for wind energy in Europe to as much as €0.15/kWh ($0.19/kWh) in Italy. In contrast, Germany, which uses a feed-in tariff, pays only €0.089/kWh ($0.11/kWh). Spain, which also uses a feed-in tariff, pays even less.

Germany operates the most wind energy capacity in Europe, 29,000 MW, Spain follows with nearly 22,000 MW.

Italian wind generation has fallen behind electricity generation from solar photovoltaics for the first time in an industrialized country. Italy uses feed-in tariffs to pay for solar energy instead of a trading system in green certificates, one of the hallmarks of a quota system.

Great Britain, which also uses a quota system for large-scale wind energy and has the best wind resources in Europe, pays 20% more for wind energy than Germany: €0.108/kWh ($0.135/kWh). More than half of German wind capacity is now installed in lower wind areas of mid-Germany and yet Germany still pays less than Great Britain for wind energy.

Payments for wind energy normally reflect the costs of wind energy and costs are substantially less where the wind resources are greater. Thus, it is unusual that Britain pays more for wind energy than Germany even though its wind resource is so much better.

Renewable Energy Law News - Week of July 23

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Christie signs bill to boost solar

New Jersey Gov. Christie and the state's environmental groups have landed on common ground _ a highly unusual occurrence.

That's because [on Monday] Christie signed a bill that would encourage the growth of the solar industry in the state.

New Jersey already is a leader. It is second in the nation in solar installations. So far, more than 775 megawatts of solar has been installed in the state, enough to power about 130,000 homes. (Or, as the environmental groups note, more than the amount of energy produced by Oyster Creek Nuclear Plant, which they have pushed to have shuttered.)

But solar advocates, such as Rhone Resch, president and CEO of the Solar Energy Industries Association, have contended that the growth of the solar industry was threatened because of uncertainty in the Solar Renewal Energy Credits market.

The cost of most project factors in the value of these credits, which are sold as electricity is generated, as part of the pay-off of the system. Like many states, New Jersey has a Renewable Energy Portfolio Standard, which requires that utilities either produce a certain amount of power from solar or that they buy it through the SRECs. Even a homeowner with a small system could get SRECs and sell them to help pay off the system.

In the early days of SRECs, the value was high. But now it has dropped. System owners aren't the only ones suffering. Those who are contemplating installing solar don't have the financial incentive they might need.

The Christie administration worked with the SEIA to come up with the new law, which accellerates the state's Renewable Energy Portfolio Standard, leading to more demand for SRECS.

Renewable energy: U.K. Onshore wind subsidy to be cut by 10%

The United Kingdom - The subsidy for onshore wind energy generation is to be cut by 10%, the government has announced.

The Treasury is thought to have favoured a larger cut of up to 25%.

It is one of a number of cuts which the Department for Energy and Climate Change said should encourage up to £25bn in new investment in energy generation between 2013 and 2017.

The measures should also reduce the impact on household energy bills, it said, saving £5-£6 a year on average.

Under the current arrangements £44 of the average household bill would go towards renewables in 2013-14, rising to £50 in 2016-17.

Under the new subsidy levels, that will be £6 less in 2013-4, £5 less in 2014-5, but will be £1 higher in 2015-6 and £3 higher in 2016-7.

Energy firms pass on the cost of investing in new cleaner generation to consumers, and MPs on the Commons Energy and Climate Change Committee warned earlier this month that cutting subsidies too fast could increase bills.

Moving Solar Beyond 1603 – There Are Alternatives

The 1603 Federal Grant Program is dead. Fine, so let's all move on because PV solar is here to stay and will be a critical component of our economic growth and environmental health.

The 1603 Grant allowed for the monetization of the 30% ITC (investment tax credit), encouraging relatively simple and efficient third party finance models. The models allowed for the transfer of the up-front capital costs to an entity with greater access to capital, a lower cost of capital, or greater ability to utilize tax specific incentives and has been critical to commercial and industrial (C&I) customers adopting solar technology. The expiration of 1603 Grant at the end of 2011 has left these customers with little to no way to monetize the ITC, all but bringing this segment of the market to a standstill as developers and customers search for alternative financing structures that must now include a more complex tax equity component.

Without a new approach the C&I market will be left to self-funding. This will make solar available to the few profitable and brave companies or institutions (those able to monetize the tax benefits) that are willing to take on the challenge of financing, managing and maintaining their own systems over 20 plus years. As history has shown there are relatively few willing participants in this market structure and the sales cycle is long and uncertain.

Renewable Energy Law News - Week of July 16

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 Bill would allow utilities into energy efficiency

Electric utilities in Delaware would be able to count energy efficiency toward their state renewable energy purchase requirements, under a bill under consideration in the General Assembly.

The bill would also allow Delmarva Power to offer energy efficiency programs to residents and businesses. It is largely restricted from doing so under current law, which assigns the Sustainable Energy Utility that responsibility.

Delmarva Power has long supported energy efficiency programs for its customers, said Matt Likovich, spokesman for the utility. Delmarva has programs such as offering money for trading in old appliances in Maryland, but in Delaware, its only efficiency programs are those directly tied to the use of its “smart meters.”

The SEU, a not-for-profit, state-created energy efficiency organization, has mostly focused on large state and university buildings since overspending its residential and small business efficiency budget late last summer.If the bill is signed into law, the utilities, along with the SEU, will become responsible for carrying out energy efficiency programs in Delaware, Likovich said. If that happens, “Delmarva Power looks forward to cooperating with the SEU and the State Energy Office to offer energy efficiency programs to our Delaware customers.”

Japan: Japan Launches The Feed-In Tariff System For Renewable Energy

Effective July 1, 2012, Japan implemented a new feed-in tariff ("FIT") system under the Act on Special Measures Concerning the Procurement of Renewable Energy by Operators of Electric Utilities (the "Act"). Under the terms of the FIT system, power utilities must purchase electricity from applicable renewable energy sources, including solar, wind, hydro, geothermal, biomass, and others, generated by certified power generating facilities (the "Certified Facilities") at a fixed price (the "Purchase Price") for a given period (the "Purchase Period"). This Commentary provides an overview of the FIT system with specific focus on key items stipulated in the newly promulgated ordinance for the Act (the "Ordinance").

Purchase Price and Purchase Period

The Ministry of Economy, Trade and Industry ("METI") has set the Purchase Price and the Purchase Period for the mandatory purchase of power generated by renewable energy sources under the FIT system for fiscal year 2012. The initial Purchase Price and the Purchase Period apply to a renewable energy project if (1) a power utility receives a written request from the generator for connection of a Certified Facility to the power utility's transmission facility and a power generating facility is certified as a Certified Facility and (2) the date of such request or certification (whichever is later) falls between July 1, 2012 and March 31, 2013. The Purchase Period starts from the date renewable energy supply commences to the power utility. The following chart sets forth the initial Purchase Price and Purchase Period for each type of renewable energy subject to the FIT system:

METI designed the Purchase Price and the Purchase Period for each type of renewable energy with the goal of providing sufficient incentives for new investments in renewable energy projects. Although METI fixed the Purchase Price for the applicable Purchase Period, it retains authority to revise the Purchase Price during that period if required by a significant change in prices and other economic factors, in accordance with the opinion of a third-party committee of experts and subject to reporting the basis of the calculation of the revised prices to the Diet. 

United Kingdom - DECC delays announcement on renewable subsidies

Ministers had been expected to reveal new support levels for projects from April next year.

But the Department of Energy and Climate Change (DECC) said it was still "discussing and finalising" details.

Labour's shadow energy minister, Tom Greatrex, claimed investment in clean energy would grind to a halt unless ministers "end the dithering".

Scottish Power also expressed concern, arguing that sticking to the timetable was key to investor confidence.

The DECC was due to announce the outcome of a review into renewable obligation certificate (ROC) banding, a system which obliges electricity companies to buy a certain amount of their electricity from renewable sources.