RenewNewEngland.com

FERC Seeks Comment on Barriers to Integration of Renewables

Last Thursday, FERC issued a Notice of Inquiry (pdf) seeking comments on the extent to which barriers exist that may inhibit the integration of certain renewable energy sources into the electric grid.   FERC particularly identified locational challenges and limited dispatchability as problems associated with resources like wind and solar that can adversely affect reliability and (in the realm of “unintended consequences”) can require the addition of more conventional resources for balancing purposes.

In this proceeding, FERC intends to explore how existing rules, regulations, tariffs, or even industry practices hinder the development of variable energy resources, through either discrimination or imposing unjust rates, and as part of this, to consider potential reforms.   In the past, FERC has adopted targeted rules to encourage renewable resource development – such as standardizing interconnection agreements for wind resources (Order 661), or adopting a reduced penalty for imbalances caused by intermittent resources (Order 890).  In this proceeding, FERC will take a “fresh look” at all existing policies and rules, “with the aim of removing unnecessary barriers to transmission service and wholesale markets for Variable Energy Resources  (“VERs”) and other technologies that may aid their integration, and promoting greater efficiencies that ultimately will reduce costs to consumers.“  The seven specific areas FERC singled out are:

1. data and reporting requirements, including the use of accurate forecasting tools;
2. scheduling practices, flexibility, and incentives for accurate scheduling of VERs;
3. forward market structure and reliability commitment processes;
4. balancing authority area coordination and/or consolidation;
5. suitability of reserve products and reforms necessary to encourage the efficient use of reserve products;
6. capacity market reforms; and
7. redispatch and curtailment practices necessary to accommodate VERs in real time.

However, FERC will not consider transmission planning and cost allocation issues, as these are being considered in another docket. (Transmission Planning Processes Under Order No. 890, Docket No. AD09-8-000) Comments are due 60 days from publication in the Federal Register, expected to be the last week in March, 2009.

Webinar: Renewable Energy in 2010

Tomorrow, January 20, Pierce Atwood will host a lunchtime webinar on the outlook for renewable energy development in 2010.  The webinar is part of a monthly series of events presented by the American Council on Renewable Energy (ACORE) in collaboration with the Renewable Energy Resources Committee of the American Bar Association's SEER Section and the Energy Bar Association's Renewable Energy Committee.  

We hope you can join us for a lively and provocative discussion concerning financing, development, legislative and regulatory initiatives that will shape the future of renewable energy in 2010.

For more information on the webinar - or to register to attend at our offices in Portland, ME, Portsmouth, NH or Boston, MA, please contact Bill Hewitt or click here. 

Maine Ocean Energy Task Force Submits Final Report

The Maine Ocean Energy Task Force  submitted its final report (pdf) with detailed appendices (pdf), to Governor Baldacci on December 31, 2009.  (We discussed earlier drafts of this proposal in this previous post.)

OETF Co-Chairperson Beth Nagusky, Director of Innovation and Assistance at the Maine Department of Environmental Protection, has indicated that The Governor's Office will submit draft legislation to implement the OETF recommendations early in the legislative session.
Key findings of the Report include recommendations that Maine:

• Make a major commitment to development of offshore wind, tidal, and wave power;
• Commit to a goal of installation of 5 gigawatts (5,000 megawatts) of offshore wind energy generating capacity in Maine’s coastal waters and adjoining federal waters by 2030, and to a goal of timely and efficient development of tidal energy resources at optimal locations in Maine’s coastal waters, including but not limited to those in the Passamaquoddy Bay region;
• Improve the siting, permitting and governance framework for renewable ocean energy development;
• Move aggressively to support strengthening Maine's current out-dated transmission and distribution infrastructure, incorporating smart-grid technologies, and explicitly recognize in law the need for new transmission and distribution capacity to achieve the State’s wind power and energy conversion goals; and
• Support the financing and development of renewable energy goals by requiring the Maine Public Utilities to issue a Request for Proposal for renewable ocean energy generation where the rate impact is reasonable.

For more information about the Ocean Energy Task Force and offshore development opportunities in Maine, contact Pierce Atwood's Lib Butler.  

A Manufacturing Tax Credit Announcement & A Production Tax Credit Order

Last week, the Obama administration announced $2.3 billion in manufacturing tax credits, specifically designed to stimulate investment (and job growth) in the manufacturing sector associated with clean energy projects.  (For more on the manufacturing tax credit, see our previous post.)  With persistent unemployment plaguing the manufacturing sector, it makes sense that this initiative is receiving a lot of attention from the administration – and in the press.

Receiving less publicity – but reducing regulatory uncertainties for banks investing in certain renewable energy projects – is a recent FERC ruling regarding the production tax credit.  As noted in the Order (pdf), renewable energy project developers rely on passive equity investors that can monetize a project’s production tax credits.  By removing any concern that tax equity investors could be viewed as “affiliates” of a public utility that would have to be disclosed in a change in status filing under Section 203 of the Federal Power Act or would require a FERC waiver prior to investing, FERC’s order helps ensure that prospective tax equity investors will not be discouraged from investing in new wind power projects due to concerns over increased regulatory burdens.

For more information on FERC’s oversight of renewable projects, contact Randy Rich in Pierce Atwood’s Washington, DC office. 

Maine Energy Commission Releases Divided Report

After meeting throughout the fall, Maine's Commission to Study Energy Infrastructure has failed to reach agreement on a process for leasing or use of any state-owned or state-leased land as an energy infrastructure corridor, voting 7-5-1 in December to approve a "three-way report" to the legislature including Majority and two Minority reports.  The major split appears to be tied to efforts to extend a moratorium on new oil and gas pipelines in Maine as leverage in negotiations with the Canadian government regarding proposed LNG terminals near Calais.  The Maine Legislature will take up the Commission's recommendations for proposed legislation in 2010.

Whatever the eventual outcome, the Commission's deliberations have also produced a great deal of information about regional energy developments, including renewable energy.  For example, this overview of proposed energy infrastructure projects provides a list of planned transmission lines that would bring energy--wind from northern Maine or the Maritimes, or nuclear from Point LePreau in New Brunswick--into the comparatively richer markets of southern New England:

• Green Line - 140 mile undersea 660 MW HVDC line linking Wiscasset, Maine to Boston, MA.
• Maine Express - 150 mile, 1000 MW HVDC line linking Wiscasset, Maine to Boston, MA.
• Northeast Energy Link - 1100 MW underground HVDC line between Orrington, Maine and Boston, MA, along the I-95/I-295 corridor.
  

Three other proposed projects, the Maine Power Connection, the Northeast Energy Corridor, and the Loring Transmission project, would interconnect with and extend Maine's existing transmission backbone.  The primary competitor to these projects outside of Maine is a 1200-1400 MW line proposed by Northeast Utilities, NSTAR and Hydro-Quebec that will carry hydro from Quebec to Massachusetts and Connecticut via New Hampshire.   

The favored technology for the long distance lines is HVDC, which is less expensive and has lower losses than equivalent high voltage AC (and is essential for any interconnection between Quebec and the US, whose systems are asynchronous).  These lines are power conduits, and will only interconnect with the grid at their endpoints, providing no real electical benefit to the communities through which they pass.  In some cases, power will only flow one way (e.g., north to south).  Siting these lines in a highway corridor or underwater is an attempt to avoid the obvious difficulty: while some people think wind turbines are pretty, most people aren't fans of transmission lines. They're an even harder sell when the benefits accrue in another town, another state, or even another country.