Tuesday, October 12, 2010

New Bill for Cooperative Utilities

Sen. Bill Nelson (D-Neb.) and several Senate renewable energy stalwarts introduced a bill yesterday to allow public utilities to issue unlimited bonds to pay for renewable energy projects.

Nelson joined Sens. Maria Cantwell (D-Wash.), Patty Murray (D-Wash.) and Bernie Sanders (I-Vt.) on the bill, which would provide consumer-owned public utilities comparable federal tax incentives as ‘for-profit‘ utilities, according to the sponsors.

‘Public power providers are key contributors to our nation's clean energy future, and their ratepayers should benefit from the same incentives as anyone else,‘ Cantwell said.

‘Public power utilities serve half the people in Washington state and one in four nationally, yet the federal incentive available to public power is only one-tenth of that available to investor-owned utilities. This bill will unleash billions of dollars in clean energy investment and result in lower costs for consumers and the creation of thousands of green jobs nationwide,‘ she said.

In the 2005 energy bill, Congress empowered public utilities to sell bonds that pay investors tax credits instead of interest to help finance renewable energy projects. This type of funding helps bring down the price of the projects for the public utilities.

Congress has provided $2.4 billion for the program, including $1.6 billion in the 2009 stimulus bill. Public power providers, governmental bodies and electric cooperatives equally divide the allocations under the current system and they are distributed by the Internal Revenue Service.

The bill would remove that limit -- about $800 million per category -- an amount that could be used by just one applicant for one project ‘if given the opportunity,‘ Cantwell's office said in a statement.

The bill also makes technical modifications to the program to be more in tune with other types of tax credit bonds, enables consumer-owned utilities to develop and own renewable resources directly and clarifies that American Indian tribe utilities can issue the bonds.

Wednesday, October 6, 2010

New Fishing Regulations Out Soon! Department Rules Overturned.

This summer, in Washington the salmon fishing was good.  In fact, better than it has been in recent memory.  Now, the coho are running strong.  Fishing is a highly regulated activity in Washington state.  The idea here is conservation.  But what happens to restricted fishing schedules when the fish are more plentiful than ever.  That’s the thrust of Puget Sound Harvesters Ass’n v. Washington State Dept. of Fish and Wildlife.   

Here is the background:  Association representing non-treaty salmon gillnet fishermen brought action seeking declaratory and injunctive relief under the Administrative Procedure Act, claiming that the fall chum salmon fishing schedule set by two rules adopted by Department of Fish and Wildlife was arbitrary and capricious. The Superior Court, Thurston County, H. Christopher Wickham, J., declared the two rules to be invalid as arbitrary and capricious, and ordered Department to pay attorney fees and costs. Department appealed.

The Department lost. The court of appeals aptly determined that rules regarding the fall chum salmon fishing schedule by allocating fishing opportunities between gillnetters and purse seiners without regard to the effect on fish harvest is arbitrary and capricious.

The harvesters called the court’s attention to the inflexibility of the rule with respect to run volumes.  The court noted, “[t]his information demonstrates that fishing opportunity is generally proportional to harvest opportunity. To disconnect one from the other on this record is not supportable.”

The takeaway means a new rule for salmon fishing restrictions and gillnetting allocations.  Watch for comment period to get your say in the mix.  This is an important matter to Washingtonian fishery business.

Friday, September 3, 2010

SEPA Exceptions

Does your project need Environmental Documentation? The Washington State Environmental Protection Act (SEPA) contains the following exemptions for your reference:

•minor new construction,

•repair, remodeling and maintenance activities,

•certain water rights appropriations,

•certain real property transactions,

•minor land use decisions,

•open burning,

•certain variances under the Clear Air Act,

•actions with respect to water quality certifications,

•certain enforcement and inspection actions,

•business or other regulatory licensing,

•certain agency administrative actions,

•certain financial assistance grants,

•forming local improvement districts,

•information collection and research,

•acceptance of filings,

•certain procedural actions,

•adoption of building codes,

•certain review and comment actions,

•certain utility-related actions,

•certain natural resource management activities,

•siting of personal wireless service facilities,

•the approval of forest road maintenance and abandonment plans,

•approval by the department of natural resources of future timber harvest schedules involving east-side clear cuts,

•acquisitions of forest lands in stream channel migration zones, and

•acquisitions of conservation easements pertaining to forest lands in riparian zones.

Wednesday, September 1, 2010

Future of Clean Energy Development

In Arizona, there is a field of solar panels arching beams of sunlight that stretches for over 100,000 square feet of desert. On the other hand, many homeowners are taking clean energy in their own hands and installing rooftop solar panels. Both sides suggest promising energy resources, however, at the moment the game seems to be to pick the best one.

Small energy seems to be losing. The shaky future of PACE indicates that small energy will not receive a boost from government backing. Nevertheless, small energy promises lower overall waste and cheaper energy. Imagine 1,000 homes outfitted with their own renewable energy source. There would be no middle man utility, which raises prices. However, the small model may be doomed by the fact that any payout would likely take 14 years with current technology and Congress has yet to extend a renewable energy tax credit, which would surely boost small development. Bill Gates recently announced a policy to invest in research and development. Although R&D could save small energy, we’ll have to wait and see.

As of now, the corporate model promises to be the most successful in offering renewable energy on a large scale. First, the power output (as indicated by the fields in Arizona) has a high potential. Second, the contribution margin achievable by the corporate model may aid in economic viability of large scale energy projects.

The contribution margin is not certain, however. FERC has control over utility markups and financial models.

On May 8, 2009, the D.C. Circuit issued an opinion in which it denied Alcoa's appeal of the FERC's approval of the use of the “net energy for load” method by NERC for allocating its costs of service among electric customers. In both Order No. 672 and the Certification Order, the FERC concluded that the “net energy for load” methodology was a “fair and reasonable method for allocating costs” to electric customers on the basis of energy consumption alone. Alcoa appealed the FERC's approval of this method arguing that it departed from the FERC's traditional two-part rate structure, composed of a demand charge and an energy charge. Alcoa also argued that

[b]ecause a significant portion of the organization's costs will be demand related, and because net energy for load does not distribute these costs according to each customer's demand-related needs, customers with traditionally low demand charges will be forced to shoulder a greater share of the organization's costs than they would under the traditional two-part rate structure.

The D.C. Circuit held that the FERC's conclusion that the “net energy for load” method is “fair and reasonable” was not arbitrary and capricious. In addition, it concluded that while it is not clear that the FERC deviated from its prior practice, the FERC “adequately explained any departure from its traditional two-part transmission rate precedent.”

Tribal development is also on the horizon, which may inhibit FERC’s ability to control contribution margins, resulting in stronger overall financial viability.

See you soon.

Friday, August 27, 2010

Help for Clean Energy Developers

Written by Eco Law Group
For Washington Clean Energy Developers looking to make money, have you heard of PACE? PACE (or, the Property Assessed Clean Energy) Program works by letting homeowners pay for rooftop solar arrays and energy-saving retrofits through a surcharge on their property tax bills. The cost is paid back over 10 to 20 years. In this way PACE removes high upfront costs and ensures that property owners don't lose out if it they sell -- the new buyer inherits both the home improvements and the tax assessment. PACE creates work for building contractors, cuts carbon pollution, and essentially runs on private capital, since cities and towns that offer PACE fund it through municipal bonds.

However, Fannie regulators object to the liens that PACE puts on properties, which get paid off ahead of mortgages if a borrower defaults. That adds a theoretical risk into an already jittery credit market.

This objection makes the future of PACE shaky at best.

However, the future does look bright for Clean Energy providers and developers

First, Washington incents clean energy through a variety of methods. One such incentive is ESSB 6170, which modifies business and operations (B&O) tax for wholesale manufacturers of solar energy systems, as well as solar component technicians doing business in the state of Washington. Other incentives for clean energy are business oriented and municipally-oriented to the city of Seattle.

Second, the new idea is tribal development – i.e., using tribal land to develop clean energy fields. Not only would this supply a city with cleaner and greener energy, but developers familiar with navigating tribal law would be flush with business. We will keep you posted on this as it develops.

Tuesday, August 24, 2010

Washington Clean Air Standards

Written by Eco Law Group
Many claim that the Russian heat wave is a sign of global warning. However, NASA has recently published a report indicating that the heat wave was a natural event.

“The natural process of atmospheric blocking, and the climate impacts induced by such blocking, are the principal cause for this heat wave.”

The human element viz. extreme weather events will continue to play an important role in the promulgation of stricter regulations. To the extent human generated green house gases have an effect on extreme events such as mega downpours, heatwaves, etc, such activities will be a target for the EPA.

With respect to the Russian heat wave it should be noted, however, warming surface temperatures – owed chiefly to human-generated green house gases and emissions – will magnify the effects of any future natural heat wave.

How does this play out for Washington and Seattle locally?

The federal Clean Air Act (CAA) directs the EPA to develop primary and secondary National Ambient Air Quality Standards (NAAQS) for six “criteria” pollutants: carbon monoxide (CO); ozone (O3); small particulate matter (PM10);3 oxides of nitrogen (NOx); sulfur dioxide (SO2); and lead (Pb).

Washington has tightened air quality standards by promulgating its own ambient air quality standards for radionuclides and for fluorides. The regulations provide that “[e]missions of radionuclides in the air shall not cause a maximum effective dose equivalent of more than 10 mrem/y to the whole body to any member of the public. This emission rate is relatively easy to meet for older technologies. However, for new construction or development, a higher burden is imposed through Best Alternative Radionuclide Control Technology (BARCT). A responsible person (i.e., a corporate officer) may be personally liable for compliance with these regulations.

Flouride regulation is also a sensitive compliance area for rural Washington businesses, as the regulations primarily apply to livestock grazing areas and pastures.

An area not in compliance with Air Quality Standards is classified as a Non-attainment Area. Seattle and Tacoma are currently classified as nonattainment areas. There are different standards for gases and liquids which include fluoride elements.

Accordingly, Washington has filed an EPA-required State Implementation Plan (SIP). The Washington SIP targets motor vehicle emissions. This SIP creates heavy fees for businesses operating fleets which are major sources of emissions pollution.

As a Washington company, it is patently important to understand what substances are being created and released as byproducts from business. Not only are significant benefits available for those in compliance, but significant penalties are available for those not in compliance.

Also, one should be mindful that Seattle/Tacoma is currently applying for reclassification as an attainment area, which will mean new and stricter regulations for local businesses.