President Trump’s decision to withdraw the United States from the Paris Accords is disheartening for many that work in and around the renewable energy industries, and believe in the importance of a truly diversified energy portfolio.  While it is certainly not a perfect agreement, 195, now 194, countries from around the world recognized a pressing need to take steps to cut carbon emissions and attempt to turn the tide on climate change.  That level of unity across cultural and national boundaries is unprecedented, and underscores the importance of the ultimate goal.  The withdrawal of the United States from that coalition is disappointing on many levels.

However, out of that disappointment, an uplifting trend is beginning to emerge.  Where the United States federal government has refused to act, state and local governments are picking up the slack.  There are several fantastic examples.  On June 1, Hiroki Tabuchi and Henry Fountain of the New York Times reported that a group of 30 mayors, 3 governors, more than 80 university presidents and more than 100 businesses are negotiating with the United Nations to enter into an individual commitment that could equal or even exceed the United States’ previous commitment under the Accord.  In that same vein, just yesterday, the New York Times reporter Jonah Engel Bromwich’s published an article on Hawaii’s passage of two pieces of legislation committing to a reduction in greenhouse gas emissions in line with the Paris Agreement.

In many ways, this shift to more locally-driven climate policy is not surprising.  Over the last decade, state and local governments have been arguably the most significant drivers of encouraging renewable energy developments in the United States.  Currently, 29 states have adopted renewable portfolio standards that require a certain percentage of the electricity produced by local utilities come from renewable sources, and 8 more states have adopted voluntary renewable energy goals.  Hawaii and California stand out as particular leaders in this regard.  Hawaii has passed legislation requiring 100% of its net electricity sales to be derived from renewable resources by 2045.  In California, which currently has a 50% renewables by 2030 requirement, the State Senate just last week passed legislation that would require 100% renewables by 2045, with 50% by 2026.  The U.S. federal government, by contrast, has entertained several federal renewable portfolio standard bills since 2009, but has failed to gain any serious traction.

All in all, perhaps it makes sense for state and local governments to take the reins on climate policy.  After all, the economic case for vigorously pursuing a more diversified energy portfolio is strong, and it is the individual localities that host projects that can best gauge the economic benefits received through increased tax revenues, landowner payments, and new jobs.  Where the federal government has dropped the ball, the answer might very well be for state and local governments to take the lead.

As always, if you have any questions about any of the issues discussed herein, please don’t hesitate to reach out to me at lhagedorn@polsinelli.com or give me a call at (816)572-4756.

I am excited to announce that several members of the Polsinelli Energy Group (myself included) will be attending the AWEA Wind Project Siting & Environmental Compliance Conference this week in Austin, TX.  Our energy team has been hard at work with AWEA over the last few months to develop a few exciting new offerings for AWEA members, which we hope to roll out shortly (more on that soon).  We’ll be on the floor throughout the conference, so feel free to flag us down if you’d like some more information.  Also, we’ll be hosting a casual happy hour on Tuesday night, so feel free to reach out or find us on the conference floor for details!

I’m looking forward to seeing you there!

I wanted to provide a quick heads-up to let you all know that I will be participating as a panelist at the Linda Hall Library’s “Second Saturday Conversation”  tomorrow, March 11th, from 11 AM to noon Central Time.  The topic will be the hopes, concerns, and possibilities for research funding, infrastructure projects, and energy development under the new Trump administration, which should prove to be a fruitful topic. I’m looking forward to an excellent discussion.  I will be joined by Gretchen Ivy, ‎Planning Group Director and Associate Vice President for HNTB Corporation and Sarah Zanders, PhD, Assistant Investigator for the Stowers Institute for Medical Research.

For those of you that are not familiar with the Linda Hall Library, it is one of the world’s foremost independent research libraries devoted to science, engineering, and technology, located in Kansas City.  It is a fantastic organization with an admirable mission statement, and I’m thrilled that they’ve asked me to participate in this conversation.

For more information about the event, please visit http://www.lindahall.org/event/second-saturday-conversation-science-outlook-2017/.  I’m also told that the discussion will be live-streamed, so if you are not able to attend in person, feel free to check out their website and view the proceedings online.

Recently, Alan Anderson and I were thrilled to be invited to present to a class at the Washburn University Law School.  For those of you that don’t know, Washburn has developed a truly exceptional energy and oil & gas law program (something that I dearly wish I could have had in law school), thanks in large part to the efforts of Prof. David Pierce.  When Prof. Pierce’s invites us to do just about anything, we usually jump at the chance.

For this presentation, our goal was to provide a high-level but fairly comprehensive overview of the types of legal issues that arise during the main stages of a wind project’s design, construction and operation phases.  Interestingly, after we sat down to plan out the basic categories of information that we wanted to cover, we realized the rough outline of our presentation could be converted into an interesting one-page resource.  With a little coaxing, we were able to distill our notes down into the following chart:

Polsinelli - Wind Project Chart

When it came to preparing the presentation itself, however, we obviously had to provide quite a bit more detail on each of the three main phases of project development.  Our environmental law colleague, Adam Troutwine, proved to be invaluable (as he so often does) by providing an overview of the various state and federal permits that are required for a wind project.  A copy of our PowerPoint is available here:

Powerpoint

I know that I speak for Alan in once again thanking Washburn, Prof. Pierce, and the students for inviting us to speak., and we are very much looking forward to the opportunity to do it again soon.

As always, if you have any questions about any of the materials that we’ve linked to above, or any of the issues discussed therein, please don’t hesitate to reach out to me at lhagedorn@polsinelli.com or give me a call at (816)572-4756.

 

wind8

On May 28, 2015, Kansas Governor Sam Brownback signed legislation that will have a significant impact on the future of wind generation in the state.  The history of the political struggle underlying this legislation is a topic worthy of its own post, but suffice it to say that SB 91 represents a compromise between the wind industry and a faction of legislators that have attempted to reduce the state’s support of wind energy over the course of the last several legislative sessions.

On a political level, this deal largely revolved around the future of Kansas’ 20% by 2020 Renewable Portfolio Standard, which has been subjected to a number of attacks over the last few legislative sessions.  All of these previous efforts failed, but the political pressure to reduce or repeal the RPS appears to have been steadily ratcheting up for an increasingly motivated faction of the Kansas legislature.

Ultimately, however, the Kansas RPS battle has turned out to be much ado about nothing.  While the legislature was fighting over the ideology of the RPS, Kansas public utilities acquired huge amounts of low-cost renewable capacity.  By the start of 2015 legislative session, every one of the Kansas public utilities had acquired sufficient renewable capacity to satisfy their 2016 RPS requirements, as well as essentially satisfying their 2020 threshold.  Thus, while the RPS was a significant component of the political drama, in reality its fate does not have as much of an impact on current and future wind projects in Kansas as other portions of the legislative package that accompanied the RPS legislation.

Of particular concern for future wind developers in Kansas, one of SB 91’s key components is to introduce a cap on the statutory property tax exemption for future wind projects.  Historically, wind generation assets in Kansas have benefitted from a property tax exemption for the entire life of the project (K.S.A. 79-201).  This exemption, originally enacted in 1999 (pre-dating Kansas’ first wind farm), was originally enacted to provide an incentive to encourage wind development in the state, and there can be no dispute that it has been very effective in that regard.

Under SB 91, existing projects have been grandfathered-in under the old lifetime exemption language, and therefore will continue to receive the full tax exemption (barring any future legislative efforts).  However, any new wind projects will only receive a property tax exemption for the first ten years of the project’s life.  Beginning in year 11, the project will be subject to taxation at its full value.  Specifically, the capped exemption will apply to any projects that 1) have not filed an application for exemption with the Kansas Department of Revenue by December 31, 2016, or 2) have not received a conditional use permit from the applicable county by December 31, 2016.

In addition the property tax exemption cap, there is one final component of the SB 91 package that impacts both current and future wind projects, a reclassification of the tax rate that applies to wind generation assets.  While wind generation assets have not historically been subject to property tax in Kansas, other components of the project (for example, transmission equipment) have been taxed at as “public utility” assets at a 33% tax rate, as opposed to the standard 25% commercial rate.  For true public utilities, the burden of paying this higher 33% tax rate is mitigated by the fact that those costs are ultimately passed on to ratepayers during the utility’s next rate case.  Wind projects are not traditional utilities, and do not recover costs through rate cases.  Thus, the burden of a 33% tax rate can substantially impact the economics of a particular project.  Now that SB 91 will subject future wind project to property taxation, it was important to wind advocates that this tax rate discrepancy be remedied.

With this in mind, as part of the package of legislative amendments in SB 91, an exemption has been added to definition of “public utilities” subject to the 33% tax rate, for any entity that:

  1. generates, markets or sells electricity only at wholesale;
  2. has no retail customers; and
  3. generates energy from an electric generation facility that is actually and regularly used to predominantly produce and generate electricity utilizing renewable energy resources or technologies.

Importantly, this exemption will apply to both current and future projects, so any wind project assets that are subject to taxation will be taxed at a 25% rather than a 33% rate.  For existing projects, this lower tax rate will apply to non-generation assets, such as transmission equipment.  For new projects that will be subject to the 10-year exemption window, the lower rate will apply to all project assets.

Ultimately, wind developers’ views of the changes ushered in by SB 91 probably depends upon whether they have wind projects currently operating or in-development in the state, or alternatively are hoping to construct projects in the future.  Broadly speaking, for existing wind projects, the changes to the RPS and property tax exemptions should not have a significant impact, and the lower tax rates for non-generation assets should be net positive.  For new projects, and for the state’s efforts to continue attracting new projects, the increased tax burden from the property tax exemption cap will have an unavoidable impact on a potential project’s economics.  Only time will tell whether this new burden is severe enough to jeopardize Kansas’ reputation as a wind-friendly state.

If you would like any information about Kansas wind projects or renewable policies, please don’t hesitate to contact the Polsinelli Energy group at:

Luke Hagedorn, 816.572.4756, lhagedorn@polsinelli.com

Last week the White House released its first installment of the Quadrennial Energy Review (QER) recommending investments in energy transmission, storage and distribution infrastructure.  While the U.S. is now the largest producer of oil and natural gas and is rapidly expanding renewable energy like wind and solar power, this energy must now travel across millions of miles of outdated infrastructure.  Ultimately, the QER envisions ensuring resilience, reliability, safety and security of the transmission, storage and distribution infrastructure by funding various state grant programs.

White House officials tout the QER as a two-pronged tool:

  1. Assess the effect of recent developments such as widespread hydraulic fracturing and the decreasing costs of renewable energy technologies like solar and wind.
  2. Recommend various policies that would improve the reliability of the electric grid, secure domestic supplies of oil and gas, and drive the types of GHG reductions that will be necessary for the president’s overall climate goals.

The QER makes several specific recommendations.

  • Given how renewables and fossil fuels have developed away from population centers, establish a new grant program called the Actions to Support Shared Energy Transport Systems (ASSETS), dedicated to improving energy transportation infrastructure connectors. Estimated cost: $2 billion to $2.5 billion over 10 years.
  • Create a DOE program to support state energy assurance plans to help respond to current and future energy disruptions. Estimated cost: $350 million to $500 million over 10 years.
  • Establish a DOE grant program to award states for creative approaches to infrastructure hardening and resilience. Estimated cost $3 billion to $5 billion over 10 years.
  • Create a program to award states that cooperate with public utility commissions, energy offices and environmental regulators; other states; and infrastructure owners and operators to modernize the grid. Estimated cost $300 million to $350 million over 5 years.
  • Create a competitive program at DOE to accelerate pipeline replacement and enhance maintenance programs. Estimated cost: $2.5 billion to $3.5 billion over 10 years.
  • Coordinate between federal agencies and states to mitigate the loss of electric transformers—in part by creating a “transformer reserve” in case of emergency.
  • Improve grid communication through standards and interoperability by increasing cooperation amongst DOE, NIST, industry, state officials, and other stakeholders to identify efforts to promote open standards that enhance grid connectivity and interoperability.
  • Enact financial incentives for the construction of CO2 pipelines, such as the Administration’s proposed Carbon Dioxide Investment and Sequestration Tax Credit which would authorize $2 billion in refundable investment tax credits for carbon capture technology and associated infrastructure at electric generating units that capture and sequester CO2.

While the QER touches on concerns regarding the siting and permitting requirements associated with building new transmission, it does NOT propose an overhaul of the National Environmental Policy Act (NEPA).  The QER also does not address the controversial issue of granting FERC “backstop” authority to site powerful transmission lines along high priority corridors.

Going Forward

In the long term, the need for a more resilient grid is necessary not only because of climate-related threats, but also because of potentially more disastrous dangers from cyber or physical attack. These efforts will be part of a formal national strategy—planned for release later this year—for strengthening the security and resilience of the entire electric grid.

Republican energy leaders in both the House and Senate welcomed the QER as an important contribution to the broader energy policy debate and said they are eager to keep working with the administration.  Chairman Upton’s House Energy and Commerce Committee has already begun a series of legislative hearings with the goal of completing a comprehensive measure this year.  Senate Energy Chairwoman Lisa Murkowski (R-AK) has asked her panel’s members to introduce legislation they’d like to see in a broad energy bill in short order to allow for hearings and markups, so that an energy bill can reach the Senate floor this summer.  In addition, five members of Murkowski’s committee, including Ranking Democrat Maria Cantwell (D-WA), are expected to drop legislation in the coming days to modernize the grid and bolster storage to help stabilize the generation of intermittent renewable energy.

A bipartisan, comprehensive energy bill is still considered a long shot in the 114th Congress, but the reactions from Capitol Hill to the QER may have improved the odds.  Although the QER calls for billions in new spending, its overarching focus on energy infrastructure needs—to capitalize on domestic production, secure a reliable electric grid, and ensure safe transport of renewables as well as fossil fuels—coincides with many of the priorities being addressed by bipartisan lawmakers.

If you would like any information about the federal renewable energy policy, please reach out to the Polsinelli Public Policy or Energy practice groups, or contact us directly at:

Tracy Hammond, 202.626.8322, thammond@polsinelli.com

Luke Hagedorn, 816.572.4756, lhagedorn@polsinelli.com

On Nov 4th, Congressional Republicans beat back their Democratic opponents in nearly every part of the country.  Because of this resounding victory, Republicans have a tighter control of Congress than they’ve enjoyed since America teetered into the Great Depression at the end of the 1920s.  (Hopefully this is not foreshadowing).

Although Republicans already enjoyed a solid, governing majority in the House heading into the 2014 midterms, the party still managed to gain more than a dozen seats (a few contests sill remain too close to call, so a final tally isn’t yet known).  The Senate—as is generally the case—is a bit tighter, but Republicans managed to pick up at least 8 seats with the possibility of a 9th if Bill Cassidy (R) defeats Mary Landrieu (D) in the Louisiana runoff on December 6th (as he’s expected to do).  While legislating is much more difficult to do in the Senate, particularly when the majority party lacks the 60 votes necessary to overcome filibusters, Republicans will now have effective control over the Senate floor and all committee work, where the party can set priorities and push favored legislation.

So, what does this all mean for renewable energy?  In a word: Trouble.

It’s no secret that Republicans generally view renewable energy less favorably than their Democratic colleagues.  While it’s true that several Republicans have voted in the past to support renewable incentives and programs, many in the GOP have more recently opposed government support for renewable energy.

Renewable energy’s first test will come during the current Lame Duck session when Congress must decide whether or not to approve a package of tax “extenders” that includes the Production Tax Credit for wind and geothermal energy; as well as separate credits for cellulosic ethanol and biodiesel fuels.  These credits expired at the end of 2013, and have been stuck in limbo since.  Since November 4th, several conservative organizations and some lawmakers have called for an end once and for all to the PTC. Although it’s ultimately likely that Congress passes this suite of tax extensions, pressure is mounting to end, or at a minimum phase out, the PTC.  Republican leadership in the next Congress will likely look for ways to make this happen.

If history is any guide, Congressional Republicans will also attempt to trim spending on renewable energy programs.  These include the now-solvent loan guarantee programs at the Departments of Energy and Agriculture; as well as ongoing efforts at the Department of Defense to incorporate more renewable power into its own energy mix.  The GOP-controlled House has continually tried to shift money from renewable energy over to fossil-fuel programs, and it’s expected the incoming Republican Senate will do the same

Besides tax incentives, the two biggest federal programs driving renewable energy development will be the ongoing Renewable Fuels Standard (RFS) and the Environmental Protection Agency’s proposed Clean Power Plan to limit greenhouse gas emissions from the utility sector.  With many Midwestern Republicans and Democrats alike supporting the RFS, repeal is all but impossible.  Substantial revisions could be on the way; however, as reformers are looking to scale back the mandates for as-yet-to-be produced advanced (cellulosic) fuels and perhaps even opening up the standard to nonconventional petroleum products.

Unlike the RFS, EPA’s efforts face near-unanimous Republican opposition.  Speaker Boehner and incoming Majority Leader McConnell have already promised action to stop the agency from moving forward with GHG regulations.  It’s very unlikely McConnell will have the 60 votes needed to overcome a certain filibuster—much less 67 votes to overcome a veto—but he does have alternative ways to get at his goal.  First, Republicans could attempt to use the Congressional Review Act (CRA) to override agency action.  Although using the CRA is immune from Senate filibuster and only needs 51 votes for passage, this tactic has only been used successfully a single time since its creation.  Further, the CRA can only be implemented once a rule has been finalized (at least 18 months away in this case) and Republicans will not want to wait until then before acting.  Their second alternative is to use the appropriations process to prevent EPA from implementing rules related to reducing GHG emissions.  This tactic faces better odds, although success isn’t guaranteed.   It’s unlikely a full repeal of the Clean Power Plan would be enacted, but Republicans might find some bipartisan support—and a less confrontational White House—if they craft more targeted changes that could lead to additional state flexibility or longer compliance timelines.

With Congress unable to move significant legislation, the RFS and the Clean Power Plan could still push renewable energy development; however, Congressional interference or repeal of these efforts could create additional uncertainty and drive away investment.

If you would like any information about the federal renewable energy policy, please reach out to the Polsinelli Public Policy or Energy practice groups, or contact us directly at:

Tracy Hammond, 202.626.8322, thammond@polsinelli.com

Luke Hagedorn, 816.572.4756, lhagedorn@polsinelli.com

Even though the administration is likely to raise its targets for both ethanol and advanced biofuels while finalizing 2014’s Renewable Fuels Standard (RFS) levels, the RFS has provided anything but certainty for biomass developers.  Seven months into the year, it also remains unclear when the EPA will even publish the final targets for obligated parties since the White House’s Office of Management & Budget hasn’t even received the rule for review which can take several months.

Thus, with the EPA showing increased deference to the “blend wall” and a recognition of the slower-than-expected deployment of fueling infrastructure, it is worth taking a look at what other policies can help bring more biomass products into the marketplace.

EPA’s GHG Rules

EPA’s proposal for reducing greenhouse gas (GHG) emissions from existing power plants will likely be the biggest single federal policy driver for renewable energy implemented by the Obama Administration.  In its draft rule released in June, the EPA stated that “biomass fuels can yield climate benefits as compared to burning conventional fossil fuels.

Although there is still some uncertainty over permitting for new biomass facilities in the wake of the U.S. Supreme Court’s decision to thrown out EPA’s tailoring rule, preconstruction permitting won’t be required for biomass plants if the only pollutant that would trigger Prevention of Significant Deterioration (PSD) regulations is carbon dioxide.  Only if a biomass facility is large enough to trigger permitting for other pollutants, will it have to get permitting for CO2 emissions.

Algae is seen as a potential win-win for energy development and the environment.  Although neither EPA’s proposal for new or existing power plants includes carbon capture and reuse technologies as strategies for reducing GHG emissions, these proposals have not been finalized.  Time remains for the agency to recognize the role algae can play in reducing carbon emissions from any number of power sources, which could create incentives for power plants to use new technologies that capture waste carbon and feed it to algae.

DOD

According to the Energy Information Agency, the Pentagon is requesting that biofuels be included in its annual request for fuels that are delivered to its facilities. This is the first time the request has included biofuels, which would be blended with military-specified diesel fuel and jet fuel.  The request is part of the Navy’s request to reach its goal of generating 50% of its energy from alternative sources by 2020.

Electric Vehicles

In a final rule issued earlier this year, the EPA said it would allow renewable electricity made from certain biomass sources to qualify under the RFS if it is used to power electric vehicles (EVs). Under the rule, entities would be allowed to generate credits for that electricity and sell them to refiners.  The standard applies broadly to biomass-derived transportation fuel, and EPA has determined that renewable electricity made out of biogas from landfills, municipal wastewater treatment and solid waste digesters, and agricultural digesters meets the 60% GHG reduction threshold to qualify as a cellulosic biofuel.

Green Banks

Three years ago, Connecticut started to lend money to fund commercially viable green projects. The goal was to combine public financing with private loans from community banks and other financial institutions to help create a renewable energy marketplace.  New York started its own green bank in 2013 and is now evaluating proposals to fund.  California, Hawaii, and New Jersey have plans to create similar enterprises.

FARM BILL

The Farm Bill enacted this year provides rural energy programs with $881 million in mandatory funding over the next five years.  This legislation reauthorized the 9003 Biorefinery Assistance Program with mandatory funding of $100 million for fiscal 2014 and $50 million each for fiscal 2015 and 2016. It also allows renewable chemicals to qualify for funding for the first time.  The Biomass Crop Assistance Program (BCAP), created to help farmers grow crops for energy and fuels, was reauthorized at $25 million per year for five years.

So, even though EPA’s implementation of the RFS has been frustrating to the biomass community, several other federal and state policies remain in place to help bring this feedstock into America’s energy market.

On June 2nd, 2014, the Environmental Protection Agency (EPA) announced perhaps the most significant environmental reform in its history.  Entitled the Clean Power Plan (CPP), the proposed regulations are designed to reduce greenhouse gas (GHG) emissions nation-wide by 30 % below their 2005 levels by the year 2030.

Overview of the Proposed Rule

Under the CPP, states are given individual pollution goals relating to their “carbon intensity,” defined as tons of carbon per megawatt-hour of electricity, as opposed to its overall tons of carbon produced.  Specifically, for Kansas and Missouri, the CO2/MWh reduction goals set forth in the proposed rule are as follows:

Proposed Output-Weighted-Average Pounds of CO2 Per Net MWh

From All Affected Fossil Fuel-Fired EGUs

Kansas

Interim Period (2020-2029)

Final (2030)

Projected Baseline

Goal

Projected Baseline

Goal

1,833

1,578

1,790

1,499

Missouri

1,986

1,621

1,970

1,544

To reach these goals, states will have until June of 2016 to design either individual or multi-state implementation plans.  States submitting individual state implementation plans (SIPs) may apply for a one-year extension, with a final plan due on June 30, 2017, while states that submit multistate plans are eligible for a two-year extension, with final plan due dates of June 30, 2018.

The methods utilized to reach the goal thresholds are left largely to the discretion of the individual states, with the EPA designating four broad “building block” categories that states may choose from.  These include:

  • improvements to carbon intensity at individual plants (increase plant efficiency)
  • shifting baseload generation to lower emitting plants (switching coal for natural gas)
  • new investment in low- and no-carbon generation (renewables and nuclear)
  • demand-side efficiency (energy efficiency programs and demand response)

Because of this flexibility, it is likely that individual compliance plans will vary from state-to-state, depending upon the specific characteristics of the local energy markets and any emission reduction actions that are currently underway.

Aside from setting forth the individual components utilized to achieve the emission reduction goals, each plan must satisfy the following criteria:

  • The plan must be enforceable (quantifiable, verifiable, straightforward, and calculated over as short a term as reasonable ) and in conformance with the Clean Air Act;
  • The projected CO2 emission performance by affected EGUs must be equivalent to, or better than, the required CO2 emission performance level in the state plan;
  • The plan must specify how the effects of the plan will be quantified and verified, including CO2 emission monitoring, reporting, and recordkeeping requirements for affected EGUs; and
  • The plan must specify a process for annual reporting to the EPA of overall performance and implementation and include a process and schedule for implementing corrective measures if reporting shows the plan is not achieving the projected level of performance.

Potential Impacts

It is likely that this proposed rule will have significant impacts on energy generation and consumption in the Midwest.  Utilities that rely upon coal-fired generation plants may be required to install expensive pollution control retrofits or technology to allow the facilities to reach higher operating efficiencies, or they may have to heavily curtail or retire the facilities altogether to be replaced with less carbon intensive generation sources.  However, it should be noted that even under the CPP, coal will still be used to generate approximately 30% of the electricity in the United States in the year 2030, down from 39% in 2013.  Additionally, the first threshold must be satisfied by 2020, providing utilities several years to make the necessary plans and implement any required changes.  Nonetheless, energy intensive industries may face higher costs as the price of power rises to reflect the fleet modifications utilities will be required to undertake.

Conversely, the wind, solar and energy efficiency industries in Kansas and Missouri stand to benefit from this regulation, as it gives utilities greater incentives to invest in carbon-free generation resources and demand-response initiatives to off-set existing carbon-emitting sources. The CPP also includes proposals to increase inter-state carbon credit trading, which produces an additional opportunity for states that develop robust renewable generation.

What’s Next?

It’s important to remember that this proposed rule is currently still in draft form and won’t expected to be finalized until June of 2015 at the earliest, and potentially even later.  On the immediate horizon, the EPA will initiate a 120 day public comment period beginning on the date the regulation appears in the Federal Register.   Interested parties are invited to submit comments electronically via EPA’s electronic portal (www.regulations.gov) , by email to A-and-R-Docket@epa.gov, or by mail to EPA Docket Center, Room 3334, EPA WJC West Building, 1301 Constitution Ave., NW, Washington, DC, 20004.

There will also be a series of four public hearings scheduled between July 28 and 31, 2014, in Atlanta, Denver, Pittsburg, and Washington D.C. EPA committing to make every effort to accommodate all speakers who arrive and register.

In the meantime, the proposed rule is very likely to come under legislative and judicial attack over the coming weeks and months.  The Congressional Energy and Commerce Subcommittee on Energy and Power will hold a hearing to review EPA’s proposal the week of June 16.  Lawmakers have already promised to introduce legislation blocking the rule, although this will be extraordinarily difficult as long as Democrats control the Senate and President Obama sits in the White House.

Assuming the rules proceed as proposed, the most significant decisions will be made on a state-by-state basis under the supervision of the state governments.  It is likely that the individual state environmental agencies will be responsible for the ultimate preparation of the SIPs with input from the governor’s office and the state legislature, the state public utility commission, the local utilities, renewable energy developers, and large industrial users.  Thus, it is likely that the most significant opportunity to impact the changes that will be required will come from state-level lobbying and participation in the state planning process.

For additional information about these regulations or their potential impact, please contact a member of the Polsinelli Energy, Environmental or Public Policy Groups.

Since 2008, the price of solar technologies has decreased significantly and the U.S. solar market has experienced rapid growth.  The White House has just released a report chronicling this progress as well as ongoing efforts.  To recap some of the highlights:

  • In 2013 solar represented the 2nd largest source of new electricity capacity added to the nation’s grid (behind only natural gas)
  • The amount of solar power installed in the U.S. has increased from 1.2 gigawatts in 2008 to an estimated 13 gigawatts today—enough to power more than 2.2 million homes
  • Since the beginning of 2011, the average price of solar panels has dropped more than 60% and the price of solar photovoltaic (PV) systems have dropped by about 50%—PV solar modules cost about 1% of what they did 35 years ago
  • 60% of major homebuilders now offer PV as a standard available feature in new construction
  • 5 years ago, there were no commercial-scale solar energy projects on federal lands, but today the Interior Department is on pace to permit 20 GW of renewable energy projects by 2020
  • After the Dept. of Energy helped finance the first 5 domestic utility-scale PV projects larger than 100 megawatts to show the technology’s viability, 10 new similarly-sized projects have been financed by the private sector without DOE’s help
  • In 2010, the BLM approved the first utility-scale solar project on public lands and has since approved 28 solar and associated transmission projects with the potential to generate over 8,500 megawatts

The Obama Administration continues work to leverage initiatives to deploy solar through collaborations with state and local communities; as well as bolster solar production on federal lands and use by the federal government.

Working with State & Local Communities

  • While solar panels get cheaper every year, the soft costs like connection fees and labor of solar remain a price barrier.  In 2011, DOE launched its Rooftop Solar Challenge to task local and regional teams to streamline processes and make it easier to go solar. In the initial round, 22 teams worked to standardize permit processes, update planning and zoning codes, improve grid connectivity standards, and increase financing options. These efforts helped cut permitting time by 40% and reduce fees by over 10%.  Now, 8 new teams are working with industry and stakeholders to simplify the solar installation process on a more regional scale.
  • The U.S. EPA, with help from the National Renewable Energy Lab, has developed a mapping tool and suite of financing, siting and environmental assessment techniques in the Re-Powering America’s Land Initiative.  The mapping tool identifies the energy generating potential of each renewable energy source by region—advising states and communities on the most effective renewable energy source for their area.
  • DOE’s new Solar Market Pathways program will target state and local market barriers with a focus on commercial-scale solar. It will fund programs to help spur solar market growth—including establishing or expanding community solar programs and local financing mechanisms, such as commercial property assessed clean energy (PACE).

Expanding Solar Power on Public Lands & in the Public Sector

  • The Defense Department has set a goal to deploy 3 gigawatts of renewable energy on its installations by 2025, and the federal government has committed to sourcing 20% of the energy consumed in federal buildings from renewables by 2020.
  • In 2012 BLM created the Solar Energy Program to make future solar energy project permitting more efficient for utility-scale development on federal lands.  The program creates solar energy zones with access to transmission, incentives for development, and a process to guide the deployment of additional zones and projects.  BLM established an initial set of 17 Solar Energy Zones to serve as priority areas for commercial-scale development, with the potential for additional zones through regional planning processes. If fully built out, projects in the designated areas could produce as much as 23,700 megawatts of solar energy.

With Congress unable to enact meaningful energy policy and state incentives facing increased resistance, it’s worth taking a step back to recognize the progress made by the solar industry and focus on the considerable opportunities still available for continued deployment.