Sustainability Law Blog

Recently Pacific Gas and Electric Company (PG&E) announced it has entered into a series of contracts with BrightSource Energy, Inc. for a record total of 1,130 megawatts (MW) of solar power. These power purchase agreements cover seven projects, the first of which is expected to begin operation in 2012. All seven of the projects are expected to produce enough power each year to equal the consumption of about 530,000 average homes.

This announcement shows the impact the California renewable portfolio standard is having. California has one of the nation's most ambitious renewable portfolio standards, requiring electric utilities to increase procurement from eligible renewable energy resources by at least 1% of their retail sales annually, until they reach 20% by 2010. Governor Schwartzenneger has signed an executive order establishing a goal of serving retail consumers with 33% of their power from renewable resources by 2020. According to the California Public Utilities Commission, PG&E serves 11.4% of their 2007 retail electricity sales with eligible renewable power. PG&E and other California utilities are working hard to reach the aggressive goals established for renewable energy in 2010 and 2020.

Post authored by David White, partner practicing in the Sustainability Practice Group.

Pike Research, a cleantech market research firm, has forecast that installed wind capacity in the U.S. will reach 320 gigawatts by 2015, which is an increase of 165% over 2008. This forecast is 20% lower than other forecasts put out by the wind energy industry, but still shows that wind energy has favorable prospects for growth over the next 5 years as compared to other industries. Pike believes that as the credit markets loosen up we will see reinvestment in the wind energy sector faster than in other sectors of our economy. I think this relative optimism was reflected in the general positive tone of Windpower 2009 in Chicago a few weeks ago.

Post authored by David Petersen, partner practicing in the Sustainability and Real Estate and Land Use Groups.

Most of us who have been working with the alternative energy industries went into this session of the Oregon Legislature with fear and loathing. Given the budget crisis, it was easy to see the Business Energy Tax Credits (BETC) as a likely victim in the effort to shore up the state's sagging revenues. This hasn't been the case with respect to alternative energy manufacturing. In fact, the major reform of the BETC program (HB2472) pointedly rejected any attempt to weaken this valuable tool for recruiting these industries to the state. This bill passed out of the Revenue Committee with a 6-2 vote and one of the "no's" voted that way because he likes the program as it is and didn't want to make even the minor changes that were made (mostly impacting large wind generating projects and biomass projects).

The House Sustainability and Economic Development Committee expanded, somewhat, the use of BETC's with HB2180. This bill allows limited use of the BETC for co-generation projects and authorizes the Department of Energy to adopt rules that will clarify how one qualifies for a biomass project. It also extends the program to the purchasers of "plug-in hybrid vehicles." The net result of this bill should be to encourage legitimate projects in many of the alternative energy fields go forward, while allowing the Department to be selective by creating rules that will give them the ability to deny the credit on more questionable projects. This bill has passed the first committee and now has subsequent referral to House Revenue.

This is a great recognition on the part of the House of Representatives of the importance of alternative energy manufacturing in the long-term revenue picture for the State of Oregon. It is also standing about as firm as one could expect on the commitment to a "greener Oregon." In this budget climate that's about all we can hope for.

Post authored by Tom Hughes, consultant in the Government Relations and Public Policy Group.

Windpower 2009 has come to a close. I took away two primary impressions from the conference. First, the industry is a jobs driver -- 22,000 people attended and only a small minority were there for the jobs fair. People are employed in this business and working enthusiastically. Second, the conference showed how windpower is maturing as an industry -- as one person I met said, the companies that had big displays at prior conventions put up smaller displays, and the little guys multiplied exponentially. Rather than the 100 or so players you would see five years ago, the industry now has tens of thousands of companies involved. There is depth and diversity in the supply chain that reflects an industry putting down strong roots in our economy. I'm already looking forward to Windpower 2010 in Dallas.

Post authored by David Petersen, partner practicing in Sustainability and Real Estate and Land Use Groups.

The Oregon Public Utility Commission recently published proposed rules implementing the renewable portfolio standards. This third phase of the Commission's rulemaking focuses on compliance with the Renewable Portfolio Standards under the Oregon Renewable Energy Act (ORS 469A.005 through ORS 469A.210). Electric companies must comply with the standards starting in 2011.

The proposed new rules implement critical portions of the renewable portfolio standard in Oregon. These include:

• the method for calculating the incremental cost of compliance;
• the requirements for implementation plans that must be filed every two years;
• alternative compliance rates and use;
• compliance standards including most importantly application of the cost limit;
• compliance reports

A key part of the new proposed rules is the cost limit contained in the Oregon Renewable Energy Act, which excuses electric companies from compliance with the renewable portfolio standards to the extent that the cost of complying exceeds 4% of a utility's revenue requirement. The proposed rules establish the method for calculating incremental cost of compliance and other key provisions for this "off ramp" from the renewable portfolio standards.

While these rules are technical and detailed, they are extraordinarily important for the development of renewables in Oregon and the Pacific Northwest. It is likely that the Commission will fine-tune these rules as the RPS takes effect in 2011 but important policies are being established with these proposed rules.

Comments regarding the proposed rules may be filed anytime before May 21, 2009. A public hearing will be held May 18, 2009, at the Commission.

Post authored by David White, partner practicing in the Sustainability Practice Group.

It probably is a four mile walk to see every exhibit in the convention hall at Windpower 2009 in Chicago. There are 20,000 people here, which is 10 times the population of my hometown of Arcade, New York. The sheer size and scope can be overwhelming. But it is also encouraging. In this difficult economy, the enthusiasm and capital directed at wind energy continues to grow exponentially. There is no economic gloom and doom to be heard. People here see the recession as a bump in the road to our inevitable clean energy future. The collective enthusiasm is infectious and makes me glad to be involved in this industry.

Post authored by David Petersen, partner practicing in the Sustainability and Real Estate and Land Use Groups.

First day of Windpower 2009 in the Windy City. I attended this conference in Los Angeles in 2007 and thought it was big then, but this conference is twice the size. Most notable difference? 2007 was mostly developers and turbine manufacturers. This year I see a lot of contractors, construction companies and component manufacturers. Everything from crankcase oil to safety harnesses. I think lots of people recognize this is one industry still functioning in this economy.

Post authored by David Petersen, partner practicing in the Sustainability and Real Estate and Land Use groups.

On March 17, 2009, Secretary of the Interior, Ken Salazar, and Acting Chairman of the Federal Energy Regulatory Commission (FERC), Jon Wellinghoff, announced that the two agencies will draft a memorandum of understanding for the permitting of offshore renewable energy projects.

Until this announcement, a longstanding dispute over which agency had jurisdiction over offshore wave and tidal energy projects hindered the development of such projects. The Department of the Interior (DOI) maintained that it had jurisdiction, through the Minerals Management Service, under the Energy Policy Act of 2005, to grant leases, easements and rights of way for non-oil and non-gas energy projects. FERC argued that it had jurisdiction for hydrokinetic power under the Federal Power Act.

This regulatory certainty is good news for developers of offshore energy projects. FERC will be the lead agency for licensing hydrokinetic projects on the Outer Continental Shelf and in state waters, with the active involvement of DOI. The upcoming memorandum of understanding will describe "the process by which permits and licenses related to renewable energy resources in offshore waters will be developed."

Post authored by Kimberlee Stafford, attorney practicing in the Sustainability and Real Estate and Land Use Groups.