Carbon Harvest Energy

Carbon Harvest Energy's proposal to turn old landfills into no-waste energy producers has been in the news lately, with stories both in the Burlington Free Press and on Vermont Public Radio. Carbon Harvest Energy will be taking a defunct landfill-based methane facility in Brattleboro and turning it into an active, zero-waste, energy-producing facility. According to the Free Press article, the electricity, heat and carbon dioxide produced by the methane-fueled generator will all be utilized. The former landfill will be able to sell the electricity, heat a greenhouse and a fish tank, and use the carbon dioxide as a contribution to an algae farm. The Vermont Food Bank will be the main recipient of the food and fish raised in the facility, and the University of Vermont’s Rubenstein School of the Environment and Natural Resources is partnering with Carbon Harvest to study the algae produced.

Standard Offer Docket No. 7533 - Update

Several important updates are provided below on the Vermont Standard Offer program.

On October 16th, the PSB issued an Order resolving numerous questions pertaining to how the Standard Offer program will be implemented. One of the key issues ruled upon covers how the SPEED Facilitator is to handle it if applications for projects exceed the limits by energy source provided in the PSB's September 30th Order. The PSB ruled that a lottery system would be used to select projects that submit a timely application.

The queue opened for applications on October 19th. Yesterday, the SPEED Facilitator filed a report on the first day of the program. The totals appear at the top of this post and are contained in a story on VPR.

Solar and biomass project applications exceed their allocations of the 50 MW available under the Standard Offer program, and a lottery to select projects will occur at the PSB on Thursday (10/22) at 10am. You must request permission from the PSB to observe the lottery.

In the VPR story, Representative Tony Klein, who sponsored the legislation creating the program, reacted to the first day's results by stating: "This is what the economy desperately needs at this moment. What's so exciting to me as a legislator is to see and realize that in May we create this legislation and here we are in the middle of October we almost have boots on the ground ready to get this technology deployed."

We agree with Representative Klein that Monday's results are a good signal, but would offer that the real measure of success of the program should be based on projects actually built and generating electricity.

PSB Standard Offer Docket Nos. 7523 & 7533 - Update

On September 30th, the Vermont Public Service Board issued its Order establishing the Standard Offer Program. A copy of the Order can be found here. The copy of the Standard Offer contract can be found here.

Here are some key issues resolved by the PSB in the Order:

1. There will be a queue. The details of it will be “worked out” between the PSB and Speed Facilitator. The Speed Facilitator will begin accepting applications at 9am on 10/19, unless the PSB sets a different date.

2. Speed Facilitator is directed to ensure that “no one technology fills more than 25% of the queue. This cap will be revisited after 6 months.

3. Standard Offer contract will require a $200 administrative fee (non-refundable) and a $10 per kw refundable deposit. If the project is commissioned within three years of the date of this contract, 100% of the deposit will be refunded; if Producer voluntarily withdraws from the Queue within the first year, the entire deposit is returned; if Producer withdraws from the Queue after the first year, but before the end of the second year, 75% of the deposit is returned; and if Producer withdraws from the Queue after the second year, but before the end of the third year, 50% of the deposit is returned. Any interest earned on the refundable deposits shall be retained by Facilitator and utilized to defray Facilitator's costs of operation.

4. Documentation of site control is necessary to get into the queue: (In order to demonstrate site control, Producer shall provide evidence of: (i) fee simple title to such real property or (ii) a valid written leasehold interest for such real property or (iii) a valid written option, exercisable unconditionally by the Producer or its assignee, to purchase or lease such real property or iv) a duly executed contract for the purchase or lease of such real property.

5. Standard Offer contract will require developer to provide cost information for the project, but certain information can remain confidential as trade secrets.

Image Source: Richard Masoner

Vermont Public Service Board Establishes Interim Standard Offer Contract Prices; Proposes Schedule For Hearings to Determine Final Contract Prices

On September 15, 2009, the Vermont Public Service Board (“the Board”) issued an Order establishing interim standard offer contract prices for small-scale renewable generators under the SPEED program, as required by the Vermont Renewable Energy and Efficiency Act of 2009 (“the Act”) (the subject of two prior posts).

The Board adopted default interim prices stated in the statute for all resources except farm methane, for which it established a higher interim price.In addition, the Board determined “the average residential rate per kWh charged by all of the state’s retail electricity providers weighted in accordance with each such provider’s share of the state’s electric load,” which the Act establishes as the default interim price for hydroelectric power, biomass, and wind resources over 15 kW.

The interim standard offer contract prices are as follows: landfill methane ($0.12/kWh); farm methane ($0.16/ kWh); wind - 15 kW or less ($0.20/kWh); wind - over 15 kW (0.125/kWh); solar PV ($0.30/kWh); hydropower ($0.125/kWh); biomass ($0.125/kWh).

The Act requires the Board to set final standard offer contract prices based on a more detailed cost analysis by January 15, 2010.

This analysis will consider, among other issues, whether the rate of return on equity the Board assumed in establishing the interim prices (12.13%) is unreasonably high. The Board will also further review whether a greater degree of “granularity” in contract prices is desirable – i.e., whether and to what degree different prices should be established for different size projects within a technology classification.

On September 24, 2009, the Board issued a proposed schedule for discovery and evidentiary hearings concerning the cost data that will inform the final standard offer contract prices. The proposed schedule, the Board’s September 15th Order, the “Report and Recommendations of the Cost Analysis Subgroup” that the Board considered in determining the interim contract prices, and other information regarding implementation of the Act are available here.

PSB Standard Offer Docket Nos. 7523 & 7533 - Update

The Vermont Public Service Board (PSB) issued an Order yesterday in the Standard Offer docket resolving certain threshold legal issues.

The three threshold legal issues were:

Issue 1 -Nature of Docket 7533. In response to concerns raised by a participant, the July 15 memorandum requested comments on whether: (a) the process established in the June 29 Order should be altered; (b) Docket 7533 must be a contested case as a matter of law; and (c) even if Docket 7533 does not need to be a contested case, certain procedures associated with contested cases, such as hearings or ex parte rules, must apply to Docket 7533.

Issue 2 - Legal authority to conduct an auction to assist in the determination of standard offer prices. The July 15 memorandum stated that any participant that believed that an auction is consistent with the statute must file such an analysis, along with sufficient detail of the auction to allow meaningful comment.

Issue 3 - Project eligibility. The July 15 memorandum requested comments on what event should determine whether a particular project is eligible for standard offer prices; in particular, are standard-offer prices available to: existing generation facilities; facilities that have been constructed but have not yet begun selling power; and facilities that have not been constructed but have received approval under 30 V.S.A. § 248 or 219a? In addition, the July 15 memorandum asked whether the Board can limit the participation of small-scale facilities and whether there are any statutory barriers to establishing a queue for resources.

In its August 18, 2009 Order, the PSB resolved these issues as follows:

Issue 1 - Nature of Docket 7533: The PSB rejected numerous parties arguments that Docket 7533 must proceed as either a contested case or as a rulemaking, and specifically determined that the "processes set forth in [the PSB's] Orders of June 3 and June 29, 2009, are the most efficient means of carrying out [the PSB's] statutory requirements." Therefore, the Docket will proceed as a non-contested case.

Issue 2 - Legal authority to conduct an auction: No party briefed this issue, even though it was originally raised by the Department of Public Service, so the PSB concluded that it does not need to address the issue further.

Issue 3 - project eligibility: The PSB concluded "that any project that sought regulatory approval prior to May 27, 2009, the effective date of Act 45, is not eligible to participate in the standard offer program.” In support of this conclusion, the PSB specifically cited Act 45 direction to the PSB to ensure that the SO program “provides sufficient incentive for rapid deployment and commissioning of plants.” Order at 11 citing 30 V.S.A. §8005(b)(2)(B)(i)(III)." The PSB also concluded that projects approved under the net-metering statutes and rules may not withdraw from that program and apply for a standard offer contract. Therefore, "a project on which site preparation or construction had begun, under the net metering process, would not be eligible for standard offer prices." The PSB also ruled that there is no statutory basis to exclude "small-scale projects" from the standard offer program.

U.S. Treasury Department Accepting Applications for ITC Grants

The Treasury Department and the Department of Energy announced on Friday that they are now accepting applications for grants for renewable energy facilities under section 1603 of the American Recovery and Reinvestment Act of 2009 (ARRA). Section 1603 established the grant in lieu of a tax credits program, which authorizes the Treasury Department to issue grants to renewable energy facilities that would otherwise qualify for the investment or production tax credit (ITC or PTC). The Treasury Department released guidance for the grant program earlier in July.

According to the DOE and Treasury press release, the two agencies estimate distributing at least $3 billion in financial support to approximately 5,000 biomass, solar, wind, and other types of renewable energy production facilities.

To be eligible for the program the facility must be either (1) placed in service between January 1, 2009, and December 31, 2010, (regardless of when construction begins), or (2) begin construction between January 1, 2009, and December 31, 2010 and be placed in service after 2010 but before the "credit termination date" for that type of facility. The "credit termination date" varies by facility:

• Large wind facilities must be placed in service before January 1, 2013;
• Open and closed loop biomass facilities, landfill gas facilities, trash facilities, qualified hydro facilities, marine facilities, and geothermal facilities authorized under Internal Revenue Code Section 45 are eligible if placed in service before January 1, 2014;
  
• Solar facilities, combined heat and power facilities, small wind facilities, and geothermal facilities authorized under Internal Revenue Code Section 48 must be placed in service by January 1, 2017.

Grants will generally be limited to 30% of the cost basis for the facility.

The Treasury Department has set up a website for submitting section 1603 grant applications on-line.

The New York Times has a report on this program, as well as other renewable energy funding opportunities announced by DOE on Friday.

$54 Million in ARRA Funds Awarded to Four States for Energy Efficiency and Renewable Energy Projects

The U.S. Department of Energy (DOE) has announced allocations of more than $54 million in funding from the American Recovery and Reinvestment Act to support energy efficiency and renewable energy projects in Nevada, Rhode Island, Vermont, and Wisconsin. Under DOE's State Energy Program, states and territories have proposed statewide plans that prioritize energy savings, create or retain jobs, increase the use of renewable energy, and reduce greenhouse gas emissions.

The DOE press release continues:

"This funding will provide an important boost for state economies, help to put Americans back to work, and move us toward energy independence," said Secretary Chu. "It reflects our commitment to support innovative state and local strategies to promote energy efficiency and renewable energy while insisting that taxpayer dollars be spent responsibly."

These states and territories are receiving 40% of their total State Energy Program (SEP) funding authorized under the Recovery Act today. They will now have received 50% of their total Recovery Act SEP funding. The initial 10% of total funding was previously available to states to support planning activities; the remaining 50% of funds will be released once they meet reporting, oversight, and accountability milestones required by the Recovery Act.

Activities eligible for State Energy Program funding include energy audits, building retrofits, education and training efforts, transportation programs to increase the use of alternative fuels and hybrid vehicles, and new financing mechanisms to promote energy efficiency and renewable energy investments.

The following states were awarded money under this allocation:

• Nevada - $13.5 million
• Rhode Island - $9.5 million
• Wisconsin - $22.2 million
• Vermont - $8.8 million

We've posted more details on Vermont's allocation over at our Vermont Environmental Law Blog