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.

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rapidly expanding renewable energy like wind and solar power, this energy must now travel across millions of miles of outdated infrastructure.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

 

 

 

 

 

 

 

 

 

As part of our continuing effort to provide current, topical information relating to renewable energy projects, RenewableEnergyLawInsider provides a series of posts from individuals with a wide range of experience and expertise. Today, Tracy Hammond from the Polsinelli Public Policy Group in Washington D.C. provides an update about the impact that the federal government shutdown will have on renewables in the United States.

The federal government shutdown is now in its fourth day, and there is no quick resolution of the   partisan standoff in sight.  Both Republicans and Democrats appear to be digging in instead of reaching out, and it is likely that this shutdown could last two to three weeks, with a breakthrough coming only as the U.S. approaches its borrowing limit (or debt ceiling) October 17th.

Although there’s enough speculation, prognosticating and second-guessing to fill volumes; I’ll focus here on how this shutdown will impact renewable energy.

In thee near term, the government shutdown could delay the release of federal renewable fuel requirements for 2014.  Renewable fuels stakeholders expected the U.S. EPA to release its proposed targets—levels of conventional and advanced biofuels that must be blended into gasoline and diesel—in mid-October.  The release will almost certainly be delayed and the longer the shutdown, the longer the delay.  A long delay in the release of the requirements will increase  uncertainty in the fuels market, giving critics of the RFS additional opportunities to call for repeal or modifications to the program.  A delay will also affect efforts in Congress, where a group of lawmakers from the House Energy and Commerce Committee are crafting legislation to reform the standard. However, their efforts will hinge  on what EPA decides to do with its 2014 numbers.

Other rules that could drive renewable energy development, like EPA’s efforts to draft emissions caps for greenhouse gases will also be delayed, making it even more difficult to meet the timeline laid out by President Obama earlier this year.

During the shutdown, many Congressional offices are working with significantly reduced staffs.  And with much, if not all, of the attention focused on funding the government and raising the debt ceiling, work is not being done on a host of other legislative priorities.  Just one example is the renewable energy Production Tax Credit (PTC), now set to expire in less than three months.  In addition to wind, the PTC provides a 2.3 cent-per-kilowatt-hour credit for geothermal energy and closed-loop biomass, and a 1.1 cent-per-kilowatt-hour credit for qualified hydropower facilities, marine and hydrokinetic power, landfill gas, trash combustion, small irrigation power facilities and open-loop biomass. The Congressional Joint Committee on Taxation found that a one-year extension of the tax credit would cost about $6.1 billion over 10 years. A five-year extension would cost roughly $18.5 billion.  Given the current budget pressures, these are not insignificant amounts.  Without some sort of as-yet-unknown “grand bargain”, it seems very unlikely that the PTC will be extended before the end of 2013.

Because nearly all other legislation has taken a back seat to the funding and debt discussions, the Farm Bill remains in limbo.  With no new Farm Bill agreement, programs like the Renewable Energy for America Program (REAP), the Biomass Crop Assistance Program (BCAP) and the Advanced Biorefinery Assistance Program are attempting to operate with only leftover money from previous years.  Soon, these programs will expend all of their resources and be forced to shut down until Congress passes a Farm Bill authorizing new funding.

Speaking of REAP, BCAP and other similar programs, with no one at USDA, DOE and other agencies to review and approve applications, no new funds will likely be released to worthy recipients.  Projects will be put on hold and construction will stop on efforts to increase energy efficiency and deploy new renewable energy across the country.  Although this may only be a short term hiccup lasting a few weeks, delays take a toll on project financing, increase expenses and push off potential completion.  As the budget battles continue, federal departments and agencies will almost certainly continue to try to do more with fewer resources—both human and monetary.  This trend will inhibit deployment and make it more difficult for deserving projects to move forward.

The first rule of medicine is do no harm.  As Congress continues to fail at its most basic task—funding the federal government—renewable energy and those that earn a living in the sector won’t be mistaking their congressional leaders for doctors anytime soon.

As part of our continuing effort to provide current, topical information relating to renewable energy projects, RenewableEnergyLawInsider provides a series of posts from individuals with a wide range of experience and expertise. Today, Tracy Hammond from the Polsinelli Public Policy Group in Washington D.C. provides an update about the ongoing attention being paid to the Renewable Fuel Standard by the U.S. House of Representatives.

The House Energy and Commerce Committee this week completed 2 days of hearings on the renewable fuel standard (RFS), the federal mandate to blend 36 billion gallons of biofuels into the nation’s gasoline supply by 2022.  Multiple industries and interests weighed in on the economic, environmental and technical impacts of the law. The hearing capped off an effort that began with a series of white papers the panel released this summer to gather information and feedback on the program.

The RFS is one of the largest and most controversial renewable energy program ever mandated by the federal government.  Since its creation in the 2005 and expansion in 2007, interest groups have launched major lobbying campaigns both supporting and opposing the standard. It has suffered additional criticism since last summer’s record drought badly damaged the nation’s corn crop, raising questions about the viability of corn-based ethanol, the most common biofuel in the U.S.

For the first time since 2007, Congress is taking a very serious look at revising the standard.  Although some, like the oil and refining sectors and their congressional allies, are calling for a full repeal of the law, there is not sufficient support for such a dramatic policy reversal.  This sentiment was summed up best by senior Democrat Rep. Gene Green (D-TX), “I would probably vote for repeal of the RFS, but I don’t just see where we’re going to get there.”

There does, however, seem to be support—at least in the committee—for making changes to the standard to address rising ethanol credit prices and the 10% “blend wall,” or the technically feasible limit to the amount of ethanol that can be blended into the nation’s fuel supply.  This is echoed by Rep. John Shimkus (R-IL), “You don’t have enough for a repeal, but you do have enough for a reform.”

Other Members complained that U.S. EPA, which administers the RFS program, sets excessively high targets for cellulosic biofuels.  These fuels made from purpose-grown plants, ag waste, algae, energy grasses and other feedstocks that don’t conflict with food crops are 2nd generation biofuels and were hoped to eventually displace corn ethanol and soybean biodiesel.  Unfortunately, the development of these fuels has been agonizingly slow.  For example, the mandate calls for 1 billion gallons of cellulosic biofuels made this year. Instead, EPA has proposed revising that number down to just 14 million—and that target will not likely be met by the advanced biofuels industry.

Senate Democrats from the Mid-Atlantic states are also wading into the debate.  Sen. Ben Cardin (D-MD) is working on legislation to reform the RFS, while senators from neighboring states, including Delaware and Pennsylvania, are urging the EPA to temporarily waive some blending requirements for obligated parties (refiners) in their states.  Like their House counterparts, oil-patch Republicans in the upper chamber have also called for a full repeal.

As with many things involving Congress, this process will take a long time to play out.  After 6 years of “fuel vs. food” fights, questions about the sustainability of corn ethanol, and the near non-existence of a cellulosic biofuels industry; however, we may be reaching a tipping point that will force lawmakers to make changes to the most contentious parts of the RFS both in order to appease critics and perhaps even prevent the standard’s total collapse.

As part of our continuing effort to provide current, topical information relating to renewable energy projects, RenewableEnergyLawInsider provides a series of posts from individuals with a wide range of experience and expertise. Today, Tracy Hammond from the Polsinelli Public Policy Group in Washington D.C. provides an update about the U.S. House of Representative’s failed Farm Bill and its impact on the renewable industries.

I was prepared to title this piece “A Tale of Two Farm Bills” after the U.S. House of Representative’s presumed-passage of comprehensive farm legislation this week.  I would have reported on the drastic differences between the Energy Titles within the House and Senate Farm Bills while speculating on what a future compromise might look like.  However, after the House failed to pass its version of the bill (H.R. 1947) 195-234, it is now unclear if we will even see legislation enacted at all.  While the Senate approved its bill (S. 954) on June 10th by a bipartisan vote of 66-27, the House’s failure leaves the fate of the Farm Bill and its energy provisions uncertain at best.  This, coupled with the expiration of current programs at the end of September, leaves us all with an option no one wants—an extension of current policy with no real funding for renewable energy in rural America.

How did we get here?  Well, in addition to setting federal agriculture policy, the Farm Bill also has a dramatic impact on rural, renewable energy. In 2002, Congress began shaping energy policy through farm legislation.  Then—and again in the 2008 bill—Congress has used the Farm Bill to create renewable energy programs for rural America and incentivize ethanol and biodiesel production.  This year; however, many of these innovative programs are likely to receive reductions in funding or may be ended completely.

The 2008 Farm Bill expired in 2012; however, Congress approved a bare-bones extension (to September 30, 2013) of current policy in the year-end “Fiscal Cliff” deal.  Unfortunately, this deal failed to include any funding for the bill’s energy programs, essentially suspending them for 9 months.

Even if Congress can get the Farm bill back on track, the House and Senate bills treat their respective energy titles very differently in terms of funding levels and prioritization.  The Senate bill provides $880 million in mandatory funding (over 5 years) for various energy programs like the Rural Energy for America Program, the Biorefinery Assistance Program, and the Biomass Crop Assistance Program. S. 954 would also authorize another $1.12 billion in discretionary funds. H.R. 1947, on the other hand, would eliminate all mandatory funding and authorize $1.4 billion in discretionary funds.  By comparison, the current 2008 farm bill authorized $1.1 billion in mandatory funds and $1 billion in discretionary funds.

Although these figures sound like a lot of money, Congress rarely (if ever) actually appropriates any of the discretionary funds included in these bills.  Thus, the only money that will ever go to farmers and rural small businesses must come from mandatory funds.  Because of their budgetary concerns, House Republicans have essentially called for the end of several energy programs aimed at rural America even if they can pass a bill out of their chamber.

It is still possible that the House can approve a bill and that some funding will survive a House-Senate compromise later this year; however, it’s increasingly likely that several energy programs will receive dramatically reduced funding and may end altogether if Democrats and Republicans can’t compromise and cobble together a path forward.

I wanted to drop in to quickly announce that the June edition of North American WindPower includes a cover article drafted by yours truly, Alan Claus Anderson and Britton Gibson of the Polsinelli Energy Group.  The article, entitled “On the Front Lines: Advocates Prevail in State RPS Fight,” provides an overview of the recent legislative battles that have occurred in Kansas in relation to the state Renewable Portfolio Standard.

As part of the combined legislative efforts of the wind industry, the Wind Coalition, the Climate and Energy Project, the Kansas Energy Information Network, and many other groups, Polsinelli and Scott White of KEIN prepared a report that detailed the economic benefits of wind generation for the state of Kansas.  We presented that report before several Kansas House and Senate Committees, as well as at a series of Business Leader Forums hosted by the Climate and Energy Project across the state to help educate business owners and community leaders about the numerous economic benefits of wind energy.

Ultimately, I’m happy to report that the efforts to repeal the Kansas RPS were unsuccessful.  However, there are numerous other states all across the United States that are facing very similar legislative challenges to RPS policies.  We believe that the lessons we have learned in Kansas can translate well into defending RPS policies in other states, and hopefully this article can serve as a template of sorts for organizing a successful defense of these important policy initiatives.

If you have any questions about the national or state-level attacks being raised against RPS policies, or about the economic benefits of the wind industry for a particular state or region, please feel free to write a comment, email me at lhagedorn@polsinelli.com, or call me at (913)234-7416.

On June 7th, 2013, the U.S. Court of Appeals for the Seventh Circuit issued an opinion that could have significant impacts on transmission and renewable energy policies across the country. The decision, issued by Judge Richard Posner, one of the most influential legal scholars in the country, considers the propriety of two orders of the Federal Energy Regulatory Commission (“FERC”) pertaining to the allocation of the costs of new transmission projects that bring renewable energy (primarily wind) from remote locations in the Midwest to population centers.

As a brief overview, transmission projects in the United States are largely controlled by Regional Transmission Organizations (“RTOs”), which are regional non-profit organizations tasked with operating transmission facilities in an efficient and non-discriminatory manner. The activities of the RTOs by law, involving the cost of constructing and operating these transmission projects must be “just and reasonable” and must be apportioned to individual customers based, to some degree, on the customer’s role in creating such costs.

In 2010, the Midwest (now Midcontinent) Independent System Operator (“MISO”), one of the RTOs, sought FERC’s approval to implement a tariff allocating the cost of construction of new “multi-value projects” among its members. MISO proposed allocating the cost of these projects, consisting of a series of transmission lines designed primarily to bring wind power in the Midwest to market, among the various utilities based upon each utility’s share of the total power consumption. In effect, this places the majority of the costs of these new transmission lines on the urban population centers that consume the energy, rather than on the typically rural areas where the energy is generated.

FERC approved MISO’s proposed allocation in 2011, and the issue was brought before the Seventh Circuit Court of Appeals for review. In its June 7th, 2013 opinion, the U.S. Court of Appeals upheld FERC’s orders, thus approving MISO’s proposed allocation. Though the issues could be further appealed to the U.S. Supreme Court, for the time being the Court of Appeals’ decision will be controlling.

Potential Impacts

This decision could have several significant impacts for public utilities, transmission operators, renewable project developers, and retail customers throughout the region, but perhaps the two most pressing results are as follows:

Impact on State RPS Policies

In reaching its conclusion, the Court of Appeals considered the propriety of Michigan’s renewable portfolio standard, which requires Michigan utilities to obtain at least 10 percent of their generation from renewable sources by 2015 and mandates that, with certain exceptions, the renewable energy must come from projects located within the state. Because the law restricts the use of out-of-state renewable energy, Michigan argued that they would receive less benefit from the proposed multi-value projects, and thus should pay a lesser portion of the costs. Rejecting this argument, the Court of Appeals held that “Michigan cannot, without violating the commerce clause of Article I of the Constitution, discriminate against out-of-state renewable energy.” Most states in the U.S. have “geographic sourcing” requirements in their renewable energy standards (“RES”) or renewable portfolio standards (“RPS”) that favor in-state generation, and this precedent could encourage a surge of legal challenges to those provisions in the coming months. If successful, such challenges could open up numerous new markets for comparatively inexpensive Midwestern wind generation.

Impact on the Development of Transmission Projects

By approving MISO’s cost allocation methodology, this decision should help drive the continued development of transmission lines that bring remote renewable generation to market. Allocating the costs of constructing these lines based upon the total consumption of energy rather than by local region, MISO’s previous allocation method, effectively increases the economic viability of the lines for the transmission developers and Midwestern utilities that would construct the projects.

If you have any questions about the Court of Appeals decision or the impact of transmission projects generally, please contact myself or another member of the Polsinelli Energy Group. In addition to its established group of energy attorneys, Polsinelli is proud to have recently been joined by Kevin Gunn, the immediate past Chairman of the Missouri Public Service Commission (“MPSC”), who bring unique insights to these issues through his work with the MPSC, his service on the board of directors of the national Association of Regulatory Utilities Commissions, and his participation on the executive committee of the Eastern Interconnection States’ Planning Council.

 

 

 

 

 

 

 

 

 

 

As one of the final acts of the 2013 legislative session, on May 17th the Missouri legislature approved an amendment that will phase-out the Missouri solar rebate between 2014 and 2020. The approved amendment was based largely upon similar legislation that was supported by the Missouri solar industry trade group, MOSEIA, as well as the Missouri public utilities.

As background, pursuant to Proposition C, the voter intiative implementing Missouri’s Renewable Energy Standard, the state’s public utilities provide a rebate of $2.00 per watt for new or expanded solar systems on customers’ premises, up to a maximum of 25 kW per system (for a maximum total rebate of $50,000 per system), subject to a 1% annual cost cap for the utilities.

This rebate has been viewed as extremely effective in encouraging the development of the Missouri solar industry over the last few years. In light of this success, going into the 2013 legislative session both the solar industry and the public utilities believed that it was necessary to begin planning for the phase-out of the incentive over the next few years. To this end, a number of bills were introduced setting forth proposed phase-out schedules ranging from 4 to 6 years. Though none of the stand-alone bills garnered enough support to pass both chambers prior to the session end on Friday, an amendment to an existing utilities bill which included the phase-out language was successfully proposed and passed on the final day of the session.

As passed, the amendment sets forth the following phase-out schedule for the solar rebate:

  • $2.00/watt before June 30, 2014;
  • $1.50/watt between July 1, 2014 and June 30, 2015;
  • $1.00/watt between July 1, 2015 and June 30, 2016;
  • $0.50/watt between July 1, 2016 and June 30, 2019; and
  • $0.25/watt between July 1, 2019 and June 30, 2020.

In addition to the phase-out, there are a number of other provisions included in the amendment that could potentially impact the Missouri solar industry and the public. If you have any questions about the solar rebate, this legislation, or the potential impacts on the solar industry or your company, please feel free to leave a comment or contact me at lhagedorn@polsinelli.com or (913)234-7416.