Category Archives: Renewable Energy

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 Standard Offer RFP Process to Begin April 1; PSB Revises RFP Schedule

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As we previously reported, on March 1st the Vermont Public Service Board (PSB) significantly overhauled the Standard Offer program for renewable energy projects, switching to a new Request for Proposal (RFP) process. Under the revised program, the SPEED Facilitator will issue an annual RFP in increments of 5 MW (increasing at certain fixed points), until the program’s total capacity of 127.5 MW is filled.

The Board has recently revised the schedule for the RFP process.  The new RFP schedule extended the time allowed after the issuance of the RFP for the execution of standard-offer contracts to 30 days in order to allow developers time to file an interconnection application with the proposed project’s interconnecting utility.  The new schedule is:

April 1, 2013 – Release of RFP
April 15, 2013 – Deadline for Questions on RFP
April 22, 2013 – Final Responses to Questions
May 1, 2013 3:00 PM ET – Proposal Submission Deadline
May 15, 2013 – Announcement of Award Group
June 26, 2013 – Execution of Standard-Offer Contracts by Award Group

For more information, see the SPEED Facilitator’s 2013 Request for Proposals.

Sequestration Hits Renewables Sector: 1603 Treasury Grants Cut by 8.7%

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The U.S. Treasury made the following announcement last week to implement the sequestration cuts required by the Balanced Budget and Emergency Deficit Control Act of 1985, as amended.

 [P]ayments issued under Section 1603 of the American Recovery and Reinvestment Tax Act of 2009 for specified energy property in lieu of tax credits, are subject to sequestration.  This means that every award* made to a Section 1603 applicant on or after March 1, 2013 through September 30, 2013 will be reduced by 8.7 percent, irrespective of when the application was received by Treasury.

 In this context “award” means the final decision by Treasury to pay a claim as evidenced by the “Section 1603 Award Letter” and effective the date of the letter.

 Awards made prior to March 1, 2013 will not be affected. The sequestration reduction rate will be applied until the end of the fiscal year (September 30, 2013), at which time the sequestration rate is subject to change.

 Treasury will continue to review applications and make determinations in accordance with current practice. Applicants are reminded that the amount of their Section 1603 claim must be calculated in accordance with the Section 1603 Program Guidance and the laws applicable to calculating basis for federal tax purposes. Applicants may not adjust claims to account for the impact of sequestration.

 Given the time and effort it takes to work through the 1603 process and provide the necessary documentation to Treasury in order to obtain a final awards letter, it seems likely that some Vermont renewable projects that were placed into service by December 31, 2013 and thus eligible for a 1603 grant may be subject to the 8.7% cut.

Entities that may be impacted by this change should consult with their tax counsel and advisers.

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.

Burlington Free Press Article: Brian Dunkiel on The Art of Making Green Marketing Claims Stick

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Brian Dunkiel

Consumers are increasingly looking for Green products in today’s marketplace, but how can marketers highlight the environmental performance of their product while adhering to the recently-released Federal Trade Commission Green Guides?

Dunkiel Saunders partner Brian Dunkiel’s article about how to ensure that green marketing strategies are both effective and legal is featured in today’s Burlington Free Press. Read it at:

http://www.burlingtonfreepress.com/apps/pbcs.dll/article?AID=2012312130009&nclick_check=1

Image by Michael Riddell

 

 

 

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

Vermont Energy Siting Commission to Evaluate Permitting Examples From Other New England States

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Governor Shumlin’s Energy Siting Commission will convene again this week to consider potential changes to the process for siting and permitting energy facilities in Vermont.

At the Commission’s first informational meeting on October 31, 2012 Commission members heard presentations from a number of state agencies on the current permitting process for energy generation facilities in Vermont.

The Public Service Department (PSD) provided an overview of the statutory program that governs development of energy facilities, commonly called the Section 248 process (30 V.S.A § 248).  Staff from the Agency of Natural Resources then presented information on that agency’s relevant regulatory programs, including the numerous permits an energy developer may be required to obtain from ANR during the project approval process, such as operational and/or construction stormwater permits, wetland permits, stream alternation permits, Section 401 water quality certifications, and endangered species taking permits. Finally, for comparison purposes, the Natural Resources Board staff provided an overview of Vermont’s land use development law (Act 250), which applies to commercial, industrial, and larger-scale residential development in Vermont (but not to energy facilities, which are regulated under Section 248).  If you missed the first meeting a full transcript is available on the Commission’s website.

This week the Commission turns its attention to examples of permitting regimes in other New England states, and has invited speakers from New Hampshire, Connecticut, Massachusetts and Maine.  The invited speakers include:

  • Mike Iacopino, Counsel to the NH Site Evaluation Committee
  • Linda Roberts, Executive Director of the Connecticut  Siting Council and Melanie Bachman, Staff Attorney to the Connecticut Siting Council
  • Andrew Greene, Director of the Massachusetts Energy Facilities Siting Board and James Buckley, General Counsel to the Massachusetts Energy Facilities Siting Board
  • David Littell, Commissioner at the Maine Public Utilities Commission

This week’s meeting will take place Wednesday, November 14 from 9AM to 12PM in the Pavilion Auditorium of the State Pavilion Building, located at 109 State St. in Montpelier, Vermont.

The Commission will continue its hearings through the winter and spring of 2013. The Governor has directed the Commission to provide a report and recommendations to the legislature by April 30, 2013.

We will provide an update on future meeting dates and agendas as they are published by the Commission.

Governor’s Commission on Energy Generation Siting: Are Changes on the Horizon?

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On October 2, 2012, Governor Shumlin signed Executive Order 10-12, convening a 5 member energy-siting commission whose appointees were subsequently selected by the Commissioner of the Department of Public Service, Liz Miller.  The Commission’s charge is to prepare a written report by April 30, 2013 regarding best practices for approval and public participation in the siting of electric generation facilities.  Excepting net metered projects, the Commission’s report will address siting of electric generation facilities generally.

The Governor has specifically requested that the Commission recommend changes in the current scheme to be implemented through legislation or Public Service Board Rule to meet the goals it identifies in its report.  In developing its report, the Commission will compare, review, analyze, and consider the procedures that other states—with specific emphasis on New England states—engage in to site new electric generation facilities.  Among other things, the Commission will specifically look at opportunities in Vermont for public participation in the siting process at the local and regional levels, comparing those opportunities with other states; review ADR processes for facility siting in other states; analyze best practices for monitoring environmental impacts of approved and built facilities going forward; address whether Vermont’s criteria for siting approval adequately protect Vermont’s environmental and cultural resources; and consider whether generic siting guidelines should be developed on a technology-by-technology basis.

Liz Miller, in addition to being an ex officio Commission member along with the Secretary of ANR, tapped 5 individuals with diverse backgrounds for the group:

    • Gaye Symington, former Speaker of the Vermont House and current Executive Director of the High Meadows Fund
    • Jan Eastman, former ANR Secretary
    • Jim Matteau, former Director of the Windham Regional Commission
    • Louise McCarren, former Public Service Board Chair
    • Scott Johnstone, former ANR Secretary and current Executive Director of the Vermont Energy Investment Corporation

The Commission will have open doors, seeking public input throughout the process, and “may request the assistance or advice of any stakeholder or expert individuals with interests in electric generation siting.”  More info can be had here.  For some interesting takes on the Commission, check out this Seven Days Article and this Free Press Article.  To submit a public comment to the Commission, click here.  The Commission will have its first information session on Wednesday, October 31, 2012 from 12-3 p.m. in Room 11 of the Vermont Statehouse in Montpelier, Vermont.

Vermont State House

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.