Category Archives: Energy Efficiency

Vermont PSB Approves Three Projects for Standard-Offers

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On May 16 the Vermont Public Service Board (PSB) announced the selection of three renewable energy projects as part of the SPEED Standard Offer program’s new Request for Proposal (RFP) process. The proposals were submitted after the PSB implemented programmatic changes to the Standard-Offer program in March (discussed in detail in a previous post).

The PSB authorized the SPEED Facilitator to enter into Standard Offer contracts with the three projects that proposed the lowest prices on a $/kWh basis: (1) Bennington Solar (2.0 MW, Ecos Energy, LLC); (2) Sudbury Solar (2.0 MW, Ecos Energy, LLC); and (3) Champlain Valley Solar Farm (2.2 MW, Champlain Valley Solar Farm, LLC).  The PSB additionally authorized the Facilitator to place three projects in the 4.5 MW project reserve authorized under the new program; projects slated for the reserve are: (1) Otter Valley Solar Farm; (2) Whiting Solar Center; and (3) Mountain View Solar Center.

The top three lowest price proposals were actually Bennington Solar, Apple Hill Solar, and Sudbury Solar, with Champlain Valley Solar coming in fourth.  However, Apple Hill was disqualified after the PSB determined that, because the proposed Bennington Solar and Apple Hill Solar projects “are located on the same parcel of land and have similar interconnection points,” they “constitute[d] a single 4.0 MW plant for the purposes of Section 8002(14)” (defining what constitutes a “plant” under the statute).  The statute only allows projects to be up to 2.2 MW.  Because the proposals were separately submitted, the PSB determined that the higher priced and second-in-line Apple Hill project was the ineligible one.  On May 21st Ecos Energy filed with the PSB a request for reconsideration of its decision to reject Apple Hill’s proposal.

Relative to the provider block, the PSB authorized the Facilitator to enter into a contract with Green Mountain Power to develop a 150 kW solar project in Rutland.

Absent an extension, authorized Standard-Offer contracts must be executed by June 26, 2013.

Here’s a snapshot from the Order of the top-10 (lowest priced) projects:

Top 10 Proposals

photo by Photovoltaik

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.

PSB Holds Standard Offer Workshop

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On Thursday November 29, the Public Service Board (“PSB”) held a standard-offer workshop to whittle down the issues it must consider in developing prices based on an avoided cost methodology and market-based pricing methodology.  The workshop was an informal meeting of various stakeholders in the SPEED community.  Representatives of renewable energy developers, the Department of Public Service, the Department of Agriculture, and Green Mountain Power, among others, all weighed in on the issues the PSB should consider going forward.

The workshop was part of PSB Docket No. 7874, established as a result of the mandate of Act 170 which requires the PSB to, among other things, develop prices based on an avoided cost methodology and consider developing a market-based pricing methodology.  The PSB’s independent consultant in the docket—John Dalton—delivered a presentation suggesting that inputs for the existing models used to determine avoided cost should be updated relative to large wind and solar projects.  In a nutshell, avoided cost is what a utility would pay to generate the same electricity from the utility-owned renewable energy source, but which it is “avoiding” paying because the utility is buying the electricity from an outside renewable energy source.

The Board set some important dates for those interested in weighing in.  December 14, 2012 is the deadline for interested parties to contact the PSB and suggest changing the avoided cost model itself, not just its inputs.  That date is also the date on which interested parties must submit a request that the PSB consider new inputs for other technologies (besides solar and large wind).  The deadline to file direct testimony on avoided cost model inputs is January 7, 2013; replies are due on January 18, 2013; the PSB will hold a hearing on January 25, 2013.

A webinar will be held on December 11, 2012 at 9 a.m. to address price-methodology issues for additional clarification to the group.  For more information on attending the webinar, contact the PSB or the author of this blog post.

Image by John Dalton

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.

Brian Dunkiel Talks Green Advertising and FTC Green Guides at VBSR’s Spring Conference

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On Tuesday, May 15, Dunkiel Saunders’ Brian Dunkiel served as moderator for a panel discussion entitled “Green Marketing: How to Be Effective” at VBSR’s Spring Conference. The panel, which included Seventh Generation’s Joey Bergstein, Cara Bondi, and Chris Miller, provided a variety of viewpoints on the topic of green advertising, as each of its members serve in a different profession (scientist, marketing/branding professional, CR professional, and lawyer). With a variety of examples and discussion starters, the panel invited attendees to consider the advantages and drawbacks to various green marketing claims, as well as the potential pitfalls. The panel discussed the FTC’s proposal to revise the Green Guides, including its proposal to provide new guidance on renewable materials, renewable energy, and carbon offsets. The proposal also sets forth revisions to unqualified general environmental benefit claims, unqualified degradable claims, compostable claims, and free-of claims. Other discussion points included how to create a sound claims review process, best practices for crafting green marketing claims, and what good green marketing claims can – and can’t – accomplish for your business.

Check back for updates on similar presentations in the future.

Click here to view the presentation.

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.

DPS releases Vermont Draft Energy Plan

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The Vermont Department of Public Service (DPS) released a draft of the new 2011 Comprehensive Energy Plan (CEP) earlier this week.  By statute, the Comprehensive Energy Plan must be updated every five years, and the plan is intended to provide a policy road map for Vermont’s energy future, touching on electricity, thermal heating sources, transportation and land use issues.

This draft follows several months of public comment sessions held by the DPS around the state and provides a valuable perspective into the Shumlin Administration’s top energy policy goals.  Governor Peter Shumlin has been a strong supporter of renewable energy for many years and has also been outspoken both on climate change and on closing Vermont’s only nuclear plant, Vermont Yankee.  Renewable energy advocates have been anxious to see how the administration will translate those general positions into specific policies, and this draft plan gives some clear perspective on the direction the Shumlin administration is headed.

We are still reviewing the details of the 420-page draft plan, but several highlights are worth noting quickly.  Among other things the draft plan:

  • Sets a goal of attaining 90% of energy from renewables.  Where nonrenewables are necessary, the plan recommends using natural gas and biofuel blends ”to virtually eliminate” reliance on oil.
  • Broadens efficiency focus beyond electricity by increasing investment in heating efficiency and developing a “whole-building approach to all-fuels efficiency.”
  • Directs renewable energy generation to serve transportation and heating needs, not just electricity needs.  (Renewable generation currently provides over half of Vermont electricity needs but only 23% of Vermont’s total energy usage.)
  • Recommends adoption of a streamlined Renewable Portfolio Standard (RPS) for electricity load, with an aggressive total electricity goal, and a next-generation Standard Offer program for small-scale distributed generation.
  • Seeks mandatory mediation for Section 248 siting projects so that developers and opponents can seek solutions and avoid litigation.
  • Plans for expansion of natural gas infrastructure to Middlebury and eventually Rutland.

Public comment sessions on the draft plan are scheduled around the state on the following dates:

  • September 27th (7-9 p.m.) – Middlebury High School (73 Charles Avenue)
  • September 28th  (7-9 p.m.) – Brattleboro High School (131 Fairground Road)
  • September 29th (7-9 p.m.) – Rutland High School (22 Stratton Road)
  • October 3rd (7-9 p.m.) – Colchester High School (131 Laker Lane)
  • October 6th (7-9 p.m.) – Danville School (148 Peacham Road)

Public comments may also be submitted in writing until 5:00 pm, Monday, October 10, 2011.  Filing instructions are at http://www.vtenergyplan.vermont.gov/comment.

For more coverage on the new draft energy plan, please see these recent articles: