Category Archives: Climate Change

Vermont Public Service Board Revamps Renewable Energy Standard-Offer Program; Establishes Market-Based Mechanism for New Projects

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Back in May 2012, the Vermont Legislature enacted into law (Act 170) significant changes to the “SPEED” Standard Offer program for in-state renewable electric energy projects with a capacity of 2.2 megawatts or less.  In an Order issued on March 1, 2013 (Dockets 7873/7874), the Vermont Public Service Board implemented the new statutory mandates, including replacing the existing lottery-based system of selecting eligible projects with a market-based approach and a cap on the price to be paid to these projects for the energy, capacity, and renewable energy credits they produce over the term of the standard offer contract (10 – 25 years).  The new selection criteria and prices take effect on April 1, 2013.

With the exception of solar projects, the Board left in place the standard-offer prices (the “avoided costs“) for each class of renewable technology that it previously set in 2012 in Docket 7780 – wind, biomass, hydro, farm methane, and landfill gas.  The standard offer price for solar projects was lowered by approximately 5% (from $0.271 per kWh to $0.257/kWh), reflecting the downward trend in solar panel prices and the belief that price declines will continue into the foreseeable future.  These avoided costs were set as caps on the prices solicited through the market-based mechanism.

The market-based mechanism is a drastic departure from the system previously required by statute, implemented, and used by the Public Service Board to qualify projects for a standard-offer contract.  In the past, project developers entered a lottery and, if their project was selected through a random drawing, they were guaranteed the standard-offer price for the contract period (provided they met a few basic requirements concerning site control, application for interconnection, application for a section 248 certificate of public good, etc.).  As there were many more proposed projects than could be accommodated under the Program’s statutory cap of 50 MW, a sizable waiting list (queue) was created.  After Act 170 and the Board Order of March 1st, the selection process is now more complex and more competitive.

For some background, Act 170 requires the Board to establish a market-based mechanism so long as the Board first finds that such a mechanism (1) is consistent with federal law and (2) meets the goals of timely development at the lowest feasible cost.  The Board made those findings in its Order, and went on to lay out what the market-based approach would entail.

Starting on April 1, 2013, a developer seeking to build a renewable energy project under a standard offer contract will need to respond to a Request for Proposal (“RFP”) to be issued by the SPEED Program Facilitator.  Projects will be ranked from lowest to highest based upon the prices offered by each proposed project, with the lowest price projects receiving first priority in the “queue” towards a given year’s programmic capacity (5 MW in 2013).  In no event can a project receive more than the avoided cost set by the Board for the particular technology class, as reflected in the Board’s Order.

Should the last-selected project in the bid list exceed the annual plant capacity cap for a given year, that project will simply take some space in the next year’s capacity.  The Board also established a 4.5 MW reserve capacity for projects that were not selected within the annual cap.  This will create a de facto waiting list that will allow unselected projects to take the place of selected projects should any drop out of the process.  To ensure that bidders have done their due diligence in putting forth their proposals, the Board will now require bidders to provide “proposal security” (a deposit) of $10/kWh, which is only refundable upon commissioning of the project to incent developers to make realistic bids for projects that can actually be built.  Thus, a project that is selected but doesn’t move forward to completion will lose its deposit.  And, developers must demonstrate control of the proposed site at the time they respond to the RFP, rather than making such a showing at the time the contract is signed, as was formerly allowed.

The Board directed the SPEED facilitator to issue the RFP at 9 A.M. on April 1, 2013.

The Board also directed the SPEED Facilitator to eliminate the current waiting list of projects that were not selected in the inital lottery and have not yet signed a standard-offer contract as of March 1, 2013; projects that were in the old queue will have the opportunity to respond to the April 1, 2013 RFP, and any additional capacity that opens up between March 1 and April 1, 2013 will be added to the April 1, 2013 RFP.

To recap, here’s what you need to know about the biggest changes to the standard-offer program:

  1. Projects will be selected pursuant to a market-based approach; developers will now have to submit a proposal pursuant to an RFP process, lowest cost projects are given priority (other value factors were expressly rejected by the Board);
  2. The SPEED waiting list as it existed on February 28, 2013 is gone; those who were on the waiting list (and anyone else, for that matter) can respond to the RFP issued by the SPEED Facilitator; and
  3. The Speed Facilitator will issue an RFP to fill the 2013 capacity on April 1, 2013;  developers will have until 3 p.m. on May 1, 2013 to submit their proposals.

To see the RFP, click here.

Here is the RFP Schedule:

 *This blog post was co-written by Erik Nielsen and Andy Raubvogel.

FTC Issues Final Revised Green Guides 2012

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Today, as anticipated, the Federal Trade Commission (FTC) issued its updated Green Guides for 2012.

At a briefing on the Green Guides held today in New York City, the FTC’s, Jim Kohm, explained that the FTC applied some basic principles when reviewing the thousands of public comments on the draft Green Guides, which were published more than two years ago.  These principles included:

1. The FTC is not an environmental enforcement or policy setting agency.  The purpose off the Green Guides is to help consumers get truthful information about products and services and to help make sure that that market for these products and services is a fair playing field for marketers.

2. The final guides generally follow the draft guides, unless comments provided sound evidence supporting a change is warranted and made specific recommendations for modifications supported by the evidence provided.

3. The FTC tried to harmonize the Green Guides with International environmental marketing standards, but frequently could not do so because international standards often have the purpose of promoting green choices, which is not a statutory directive for the FTC.

This third principle is likely to be a source of frustration for some stakeholders following the FTC’s work on environmental claims.

As expected, the FTC’s final Green Guides remained silent on sustainable, natural, and organic claims.

We will soon post further analysis on various claims covered by the Green Guides, including new guidance on claims involving: general environmental benefits, recyclable products, recycled content, carbon offsets, biodegradable, compostable, renewable materials, renewable energy, and others.

Elements of Proposed Vermont Environmental Reform Bill

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The Vermont Senate Natural Resources Committee passed a bill out of committee this week that would bring some changes to the Environmental Division of the Vermont Superior Court and to the appeal process for various types of environmental and land use permits, including Act 250 permits and permits issued by the Agency of Natural Resources (ANR).  Other elements of the bill would legislatively override recent Environmental Court precedent regarding party status in Act 250 proceedings and direct the Natural Resources Board (NRB) to report to the legislature on how Act 250 can better address several of the most intractable environmental and land use issues facing the state: anthropogenic climate change; allowing rural and agricultural areas to remain open and available for agricultural and forest land; and handling the cumulative effects of development.

This bill grew out of the NRB and ANR’s joint report to the legislature, which was developed, in part, through a series of focus group meetings with environmental and land use stakeholders and public meetings.  The main elements of the bill that the Senate Natural Resources Committee passed this week follow.

1.      Add a magistrate to the Environmental Court

  • The magistrate would be a full-time employee, nominated, appointed, confirmed, and retained in the same manner as a superior court judge, but compensated as a magistrate in any other state court.
  • Magistrate Powers and Duties:
    • Case management
    • Discovery process management
    • Decide procedural issues
    • Decide whether appeals should be consolidated or coordinated
    • Decide whether to refer matters to Alternative Dispute Resolution (ADR)
    • Conduct ADR
    • Issue recommended decisions on the merits of any matter to an Environmental Court judge (all parties to the matter would have the opportunity to comment on the recommended decisions before the judge makes a final decision)
    • Issue final decisions on the merits of relatively simple matters deemed non-significant in terms of precedential effect (a judge will determine if a matter meets these criteria)

2.      Codify ethical standards for Act 250 district commissioners.

  • The ethical standards include a one-year moratorium on former district commissioners preventing them from advocating before their own former district commissions for pecuniary gain and from advocating, for pecuniary gain, before any public body, including the legislature, regarding any matter that they had substantive involvement with while on the district commission

3.      Act 250 Party Status Change.

  • Ease the requirements to establish party status in Act 250 cases so that a person seeking party status must initially merely allege a “particularized interest protected by [Act 250] that may be attributable to a proposed development or subdivision.”  If the allegations are challenged, the party must prove only a “reasonable possibility of injury to a particularized interest” due to the proposed project in order to overcome a challenge to party status.
  • This change is intended to relieve the perceived burdens to establishing Act 250 party status that were set out in the Environmental Court’s July 2010 decision In re Pion Sand & Gravel Pit, Docket No. 245-12-09 Vtec (July 2, 2010).

4.      Pilot Project to Test Use of Record Review of Act 250 Decisions through July 2016.

  • Only applies to Districts 1, 4, and 5.
  • Decision to hold on-the-record hearings will be made after a prehearing conference to consider the issue.
  • Criteria for the decision to hold on-the-record hearings are:
    • whether the proposed project is likely to be contested and appealed
    • whether on-the-record hearings would likely save cost and time
    • whether on-the-record hearings would assure complete information and argument submitted to the district commission
    • whether on-the record hearings will unnecessarily burden parties
    • whether on-the-record hearings will significantly deter citizen participation or pro se party participation
  • The district commissions must provide video recording of on-the-record hearings.
  • On appeal to the Environmental Court, the appellant has the burden to demonstrate that the district commission committed reversible error.
  • The appellant may not raise any objections that were not raised at the district commission in the underlying hearings.
  • The standard of review for factual findings is that the district commission’s findings will be conclusive as long as they are supported by substantial record evidence.
  • The standard of review for other district commission decisions and conclusions is the “arbitrary, capricious, abuse of discretion, or otherwise not in accordance with the law” standard.

5.      ANR Report to the Legislature Regarding Record Review of ANR Decisions by 2013.

  • The report would:
    • document the number of appeals of ANR decisions that have occurred in the preceding three years and the amount of staff time needed for those appeals;
    • state the changes needed within ANR to provide for on-the-record review of its decisions; and
    • recommend the appropriate standards of review of ANR decisions in any appeal, whether de novo or on-the-record, and detail any changes needed at ANR to make those standards of review appropriate.   

     

6.      NRB Report to the Legislature Regarding Act 250 Effectiveness on Pressing Issues by 2013. 

  • The report would make recommendations on how Act 250 could better address:
    • anthropogenic climate change;
    • preservation of “Vermont’s settlement pattern,” which allegedly involves “concentrated settlements surrounded by rural countryside and prevention of sprawl and the related loss of agricultural soils and forestland”; and
    • the “cumulative impacts of development over time.”

Now that the bill has left Senate Natural Resources, it must move to the Rules Committee for approval to continue.  Likely next steps would be to the Senate Appropriations Committee before reaching the Senate floor.  The House has not yet considered this bill; therefore, if it passes the Senate, the House may take it up in a committee.

Green Marketing Claims – FTC Green Guides: Renewable Energy and Carbon Offsets

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When informing customers, clients and consumers about the new solar panels located at your business, is there any difference between saying that the electricity is being “powered by solar energy” versus “generating energy from the sun”?  Yes, there very well could be.  According to the Federal Trade Commission (FTC) and other regulators, when it comes to advertising a business’s best intentions to obtain energy from more climate-friendly sources, it could be the difference between a truthful advertisement and consumer fraud. The line between the two could depend on whether the Renewable Energy Credits (RECs) associated with the new solar panels are retained or sold.

The rapid development of renewable energy projects and the marketing of the environmental attributes associated with them have attracted the FTC’s attention and that of several other regulators (including several states’ attorneys general and even the Vermont Public Service Board).  The FTC’s draft revised Guides for the Use of Environmental Marketing Claims (Green Guides) was published almost eighteen months ago and observers still await its final publication.  What is delaying the FTC in releasing the final revised guides?  Some observers suspect the delay could be due to the thousands of comments the agency received, many in response to the Green Guides’ proposed handling of renewable energy and carbon offset claims.

The Green Guides are not binding regulations.  The Green Guides provide marketers with insight into how the FTC may define deceptive marketing claims under the Federal Trade Commission Act (FTC Act).  The FTC Act gives the FTC broad powers to prosecute “deceptive acts or practices,” including misleading advertising and marketing.

The proposed Green Guides guidance on renewable energy includes:

  • Marketers should not make unqualified renewable energy claims if the power used to manufacture any part of the product was derived from fossil fuels.
  • Marketers should qualify claims by specifying the source of renewable energy (e.g., wind or solar). Additionally, marketers should qualify claims if less than all, or virtually all, of the significant manufacturing processes involved in making the product/package were powered with renewable energy or conventional energy offset by renewable energy certificates (“RECs”).
  • Marketers that generate renewable energy (e.g., by using solar panels), but sell RECs for all of the renewable energy they generate should not represent that they use renewable energy.

Guidance offered by the FTC on carbon offsets includes the following:

  • Marketers should have competent and reliable scientific evidence to support their carbon offset claims, including using appropriate accounting methods to ensure they are properly quantifying emission reductions and are not selling those reductions more than once.
  • Marketers should disclose if the offset purchase funds emission reductions that will not occur for two years or longer.
  • Marketers should not advertise a carbon offset if the activity that forms the basis of the offset is already required by law.

Here in Vermont, the Public Service Board has addressed renewable energy marketing claims in the context of renewable energy projects participating in Vermont’s Standard Offer program (also known as a Feed-in Tariff).  In Vermont’s Standard Offer program, selected new renewable projects enter into a long-term power purchase agreement (PPA) with the program’s facilitator.  Under the PPA, all of the renewable and other environmental attributes of the power produced at the plant are to be managed in a manner to benefit Vermont ratepayers and are sold to retail utilities.  This raises the issue of what, if any, marketing claims the plant owners can make about the environmental characteristics of the energy produced at these projects.

In some early Public Service Board (PSB) proceedings for Standard Offer projects, the Department of Public Service (DPS) asked the PSB to set conditions in the Certificate of Public Good (CPG) limiting how a project owner can describe the energy produced at the plant.  More specifically, the DPS sought a condition that would have prohibited a plant owner from doing anything that could “cause the renewable energy credits (“RECs”) or other environmental attributes . . . to be double counted.”  In later proceedings, the PSB required plant owners to follow all pertinent Standard Offer program rules and declined to adopt a specific condition like the one sought by DPS.

In plain terms, RECs are “double counted” when the renewable energy attributes of the energy are claimed by more than one party.  These attributes can be claimed in advertisements or marketing or in more formal ways to satisfy regulatory requirements.  No matter the nature of the claim, the attributes should only be claimed by one party.  Green-E, an organization that certifies environmental commodities and products that mitigate climate change has published several reports on “best practices” to follow when making renewable energy and climate neutrality claims.

Small and large businesses are concluding that the multiple bottom line benefits of renewable energy are compelling.  Promoting the production of renewable energy for advertising purposes, however, is increasingly complicated business.

Green Marketing – USDA Biobased Certified Products Coming Soon

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The U.S. Department of Agriculture has launched a voluntary product certification for biobased commercial and industrial products.

The first round of certification approvals went to goods from 11 companies, including cleaning and personal care items by Seventh Generation.

The “USDA Certified Biobased Product” label will designate products, other than food and feed, that derive a certain proportion of their materials from biological sources, such as plants.

According to the USDA, the purpose of the USDA BioPreferred® program is to promote the increased purchase and use of biobased products. The program is expected to promote economic development, creating new jobs and providing new markets for farm commodities.

A final rule initiating the labeling system is being published in today’s Federal Register.

Dunkiel Saunders Celebrates Opening of First Wind’s Sheffield Wind Project

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In the distance, the Sheffield turbines salute the project's completion.

A unique celebration took place last Wednesday on the top of Granby Mountain and Libby Hill in Sheffield, Vermont as the Sheffield Wind Project, developed by First Wind, was inaugurated with a ceremonial ribbon cutting attended by the Governor, state legislators, utility representatives, Sheffield residents and numerous others.  The project, which began officially operating at full power in mid-October, has a capacity of 40 megawatts and is expected to generate about 115,000 megawatt hours a year – that’s the equivalent of meeting the needs of all 15,000 homes in Caledonia County.

Dunkiel Saunders has been involved in the project for more than six years, providing legal counsel and strategic advice to First Wind since the project’s earliest development stages in 2005.  Over the course of the project, our attorneys assisted First Wind on a wide range of regulatory, litigation, permitting and finance-related issues, including obtaining the project’s overall state approval — Certificate of Public Good (CPG) — from the Vermont Public Service Board (PSB), as well as state and federal environmental permits, municipal approvals, and host town agreements. The PSB’s original order approving the project is available here.

Dunkiel Saunders also successfully represented First Wind before the Vermont Supreme Court in defending against an appeal of the Public Service Board’s CPG; in federal court in appeals related to FAA lighting and NEPA compliance; before the Vermont Agency of Natural Resources and the Vermont Environmental Court to obtain stormwater permits for the project; and in a final appeal of the construction stormwater permit to the Vermont Supreme Court.  Litigation over the project ended last week when opponents formally withdrew their final appeal at the Vermont Supreme Court, after construction of the Project was completed and Dunkiel Saunders moved to dismiss the case on the basis of mootness.

For First Wind and Dunkiel Saunders, as well as the many other individuals who contributed to the completion of the project, the ceremony marked the culmination of several years of hard work and the recognition of their success.

First Wind has put together a nice video on the development of the project and its contribution to the local economy:

More news on the ribbon-cutting is also available here and here.