Despite the doom and gloom that seems to be dominating the renewable energy headlines of late, I’ve noticed an interesting trend that should bode very well for the continued development of renewable energy in the United States.  While the Federal Government’s lack of action on the 1603 grant has cast serious uncertainty about the future of federal tax incentives for renewables, many state governments have quietly introduced legislation to increase their Renewable Energy Standards (“RESs”) or Renewable Energy Portfolios (“REPs”).

I’ve provided an overview of these very important policies before, but as a quick refresher RES programs are essentially state legislative initiatives that require a certain threshold percentage of a utility’s total energy portfolio be generated from renewable sources (such as wind, solar, biomass, geothermal or other sources) by a certain date in the future.

For states that are trying to incentivize their public utilities to invest in renewable technologies, RES programs provide a relatively straight-forward way to achieve their goals.  However, RES programs are only effective for as long as it takes the utilities to build enough renewable generation or purchase enough Renewable Energy Credits (“RECs”) to meet the thresholds.  Encouragingly, many states that have set RES thresholds have seen their utilities quickly obtain sufficient renewable generation to satisfy the RES for years into the future.  However, once those projects have been developed, the utilities then have no further incentive to continue investing, so development of renewable projects unsurprisingly begins to languish.

This leads us to the good news.  Presented with undeniable evidence that RES programs do in fact lead to increased development of renewable projects, many states are now seeking to either implement RES programs for the first time, or increase the amount of renewable energy that is required.  Below are a few examples…

  • Kentucky: Legislation introduced by State Rep. Mary Lou Marzian, D-District 34, calls for the establishment of a RES which would require utilities to obtain 12.5% of their electricity from renewable energy by 2022.  (Source: NA Windpower)
  • Missouri: Renew Missouri, a group formed several years ago to support the state’s first RES, is introducing a new ballot initiative to close existing loopholes that have delayed implementation and increase the thresholds to 25% by 2025.  Jeffrey Tomich of the St. Louis Post Dispatch recently wrote an excellent article summarizing the issue.
  • Illinois: A ballot initiative is being considered which would increase the state’s current 10% by 2015 mandate to 25% by 2025.
  • New Jersey: Though ultimately struck down by Gov. Christie, legislation sponsored by State Sen. Bob Smith and Assembly Member Upendra J. Chivukula sought to more than double the solar output from utilities by 2014.  Jessica Lillian of Solar Industry Magazine provides this overview.
  • Vermont:  Legislation proposed in Vermont seeks to adopt very aggressive RES thresholds, amounting to 40% from existing renewable resources, plus 10% more from new resources by 2013, and adding an additional 40% from new renewable resources by 2025.

I would be remiss if I didn’t also mention a wonderful defense of Renewable Energy Standards written by Peter Fox Penner, Principal and Chairman of the Brattle Group, on Think Progress.  The article is packed full of great information, but among my favorite facts is the following:

In the midst of the worst economy since the great depression, the worldwide market for renewable energy continues to provide jobs and investment. And states are recognizing these economic benefits when setting energy and environmental policies.  The nonpartisan Brookings Institution recently studied employment trends in the clean energy sector and found that, “though modest in size, the clean economy [in the U.S., which according to the study includes many sectors other than renewable energy] employs more workers than the fossil fuel industry and bulks larger than bioscience.” The study also found that the renewable energy sectors “added jobs at a torrid pace.”

Energy policy issues are notoriously complex.  Seemingly small changes in a state’s energy policy can lead to wide-ranging and often unintended political, economic, and environmental consequences.  In an effort to facilitate thoughtful policy discussions about these issues in the state of Kansas, several attorneys from the Polsinelli Shughart energy practice group, Alan Claus Anderson, Britton Gibson and myself, have partnered with Dr. Scott W. White of the Kansas Energy Information Network to draft a report that relies on empirical evidence gathered from the nineteen wind farms currently in operation or under construction in the state of Kansas to estimate the true economic impact of these projects.  The text below is part of this larger report, which is available at http://www.polsinelli.com//files//upload/StudyKansasWind.pdf. 

In Part 1 of this series, we discussed Kansas’ unique wind resource, and in Part 2 we provided a brief history of Kansas’ wind industry.  Today, we will take a look at how technological advances and a increasingly robust transmission grid will effect Kansas’ potential for future generation.  Additional sections of this report will follow in subsequent posts.

Future Project Development

Despite the significant growth the Kansas wind industry has experienced over the past few years, the vast majority of the state’s wind resource remains untapped. This growth potential is attributable to many factors, including the fact that the wind resource in Kansas is still significantly underutilized, with a large number of potential projects sites ready to be developed.  While some of these sites simply await a buyer, some of them merely require access to sufficient transmission to move the electricity, while others require incremental improvements in wind generation technology.

Expansion of the Transmission Grid

Wind energy projects are viable only if they have access to a transmission grid that can transport the power to customers.  Historically, this has been an important factor for wind project developers looking for suitable project locations in Kansas, because the bulk of the state’s best wind resource is located in areas with limited access to transmission lines.  This issue is currently being addressed by a number of public and private entities. 

The Kansas“V-Plan,” the northern portion of the Southwest Power Pool’s (“SPP”) “Y-Plan,” is particularly noteworthy.  The “V-Plan” consists of high-voltage transmission that connects eastern and western Kansas with the dual purpose of improving electric reliability and carrying more electricity from various sources, including wind, and thus further establishing a competitive energy market in the state.  Two companies, ITC Great Plains and Prairie Wind Transmission, LLC, a joint venture between Westar Energy and Electric Transmission America, are participating in the construction of this 180-mile transmission line which is expected to be completed in 2014.  The “Y-Plan” will help support the addition of 2,500 MW of new wind generation in Kansas, Oklahoma, and the Texas panhandle.

In addition to the “V-Plan,” ITC is also developing a 210-mile high-voltage transmission line between Spearville, Kansas and Axtell, Nebraska.  Construction of this line, known as the “KETA Project” began in 2009 and is expected to be completed by the end of 2012. Once completed, the KETA Project, which was encouraged by the Kansas Electric Transmission Authority (“KETA”), will support renewable generation development by providing more potential interconnection locations and transmission capacity for renewable energy generators.

 Finally, Clean Line Energy, a private company based in Houston, Texas, is in the process of developing a significant transmission project across the state known as the “Grain Belt Express Clean Line.”  Once constructed, this privately-owned project will provide a 700-mile, 600 kV extra high voltage direct current (“HVDC”) transmission line starting in Kansas and running east through Missouri, enabling Kansas wind to be exported to serve utility customers in Missouri, Illinois, Indiana, and points farther east.  Clean Line anticipates that this project will enable approximately $7 billion of new, renewable energy projects to be built. Clean Line Energy has set 2018 as the goal for commercial operation of this new transmission line.

As Figure 4 below illustrates, these new transmission lines are located in the heart ofKansas’ most productive wind areas and provide valuable paths to market for future wind projects in those areas.

Improvements in Wind Generation Technology

 Generally speaking, wind speeds increase as turbine heights (referred to as “hub heights”) increase. Since wind speed is the single most important factor in creating electricity out of the wind, tapping into high winds is key to a successful wind project. For this reason, the most noticeable wind turbine technology improvements have focused on taller hub heights and larger rotor diameters. The combination of these improvements have led to significant increases in efficiency, which have resulted in wind farms with higher capacity factors or similar capacity factors in areas with lesser winds or lower elevations.Wind speeds have historically been measured at 50 meters for wind farm development and subsequent wind maps (such as that shown in Figure 1) reflected this. However, utility-scale wind turbine hub heights have been significantly higher than 50 meters for many years (as an example, the Gray County wind farm, built in 2001, has a hub height of 65 meters).

On average, Kansas possesses a robust wind resource at a height of 50 meters.  However, as Figure 5 below illustrates, at a height of 80 meters, roughly half the state experiences average wind speeds between 8 and 9 meters per second, which is well above the 7 to 8 meters per second commonly found at a height of 50 meters.

Given that wind speed increases with an increase in altitude, there has been a trend across the wind industry to erect turbines with taller hub heights.  As seen in Figure 6 below, over the last decade, hub heights across the country have steadily increased from an average of approximately 60 meters in 2001 to 81 meters in 2011.

As technology continues to improve, and construction costs for these towers decrease, it is probable that 100 meter hub heights will become common for wind projects in Kansas.  This trend towards taller hub heights is evidenced by the fact that, in 2011, 128 turbines were installed in the United States with hub heights of 100 meters, a sharp increase over the 17 turbines of that size installed in 2010.

As the average hub heights forKansasprojects increase from the current average of 80 meters, access to high-quality wind resources will increase and more locations inKansaswill be economically viable.  As shown in the following Figure, the wind speeds available at 100 meters are predominantly in the range of 8.5 to 9.5 meters per second.

Ultimately, the combination of an expanding transmission infrastructure and technological advancements will significantly expand the areas of the state that can support viable wind development. 

_____________________________

If you have any questions or comments about the Kansas wind industry, please feel free to leave a comment below or contact me directly at lhagedorn@polsinelli.com or (913)234-7416.

I’m proud to announce that Dave Strieker, a partner in Polsinelli Shughart’s Energy Group, and I recently published a paper for the annual meeting of the American Bar Association’s Section of Environment, Energy and Resources. 

The paper, entitled “Greenhouse Gas Permitting Advantages for Biomass Projects,” explores the EPA’s “Tailoring Rule,” which places significant regulatory burdens on certain emission sources of greenhouse gases.  Importantly for biomass project developers, the Tailoring Rule specifically exempts biomass projects for a period of three years, thus giving biomass an important advantage over traditional energy sources.  The abstract for the paper is as follows:

Ground breaking greenhouse gas regulation, know as the Tailoring Rule, has recently been implemented at the federal level. The Tailoring Rule will have far reaching impacts on industries that produce significant amounts of carbon dioxide emissions. While this may prove to be a heavy burden to established industries using fossil fuels, the Tailoring Rule contains a three year exclusion for projects utilizing a qualifying biomass feedstock. Accordingly, the Tailoring Rule’s biomass exclusion may provide a window of opportunity for the biomass industry to compete on a more level playing field with fossil fuel based projects. This paper will provide background regarding the Tailoring Rule and explore its specific implications on the biomass industry.

The paper can be downloaded here.  If you have an interest in biomass projects, or if you know anyone that does, feel free to download this paper and pass it along as you see fit.  If you have any questions or comments, feel free to contact either myself (lhagedorn@polsinelli.com) or Dave Streiker (dstreicker@polsinelli.com).

The Kansas Supreme Court on Friday issued a much anticipated ruling on a case involving a number of key issued for wind developers.  The case, Zimmerman v. Board of County Commissioners of Wabaunsee County, revolves around a dispute between the Board of County Commissioners of Wabaunsee County, Kansas and a group of landowners in Wabaunsee County who have entered into easement agreements to develop large-scale wind energy development systems on the landowners’ property.

Background

In order to develop a wind farm in Wabaunsee County, it is necessary to apply for a Conditional Use Permit (“CUP”) from the Wabaunsee County Board of Commissioners.  In November of 2002, the Board passed a temporary moratorium on the granting of CUPs for wind development projects in the county.  While this moratorium was in place, the Plaintiffs and the Plaintiff Intervenor entered into agreements which they contend severed the wind rights from the ownership of the underlying property and transferred the ownership of those wind rights to the Plaintiff Intervenor.

On June 28, 2004, after the wind development agreements had been entered into by the Plaintiffs and Plaintiff Intervenor, the Board amended the county zoning regulations to allow for small wind energy conversion systems (“SWECs,” essentially single turbines under 100’ in height generating less than 100 kilowatts), but outright prohibiting the placement of commercial wind energy development systems (“CWECs”) in the county. 

Procedural History

The Plaintiffs filed suit in the Wabaunsee District Court, asking that the Board’s decision be declared void and requesting damages under a number legal theories. Among the arguments made, the Plaintiffs stated the County’s actions diminished the economic value of their wind rights in their own property, and therefore amounted to a taking of their property interest in violation of their Fifth Amendment rights.  

The Plaintiffs also argued that by allowing small wind projects, but banning utility-scale projects, the County was unjustly burdening out-of-state commerce in violation of the Commerce Clause of the United States.  Ultimately, however, the District Court granted a Motion to Dismiss in favor of the Board, and the Plaintiffs and Plaintiff Intervenor appealed to the Kansas Supreme Court.

On October 30th, 2009 the Kansas Supreme Court issued a decision in favor of the Board for the majority of the issues presented, with a few notable exceptions.  Specifically, the Supreme Court decided to table the issues of whether the Board’s amendment violated the Takings Clause or the Commerce Clause of the United States Constitution.   

These issues remained tabled until October 21, 2011, when the Court issued a ruling on the Takings and Commerce Clause arguments advanced by the Plaintiffs and Plaintiff Intervenors.

The Takings Issues

The Plaintiffs’ essentially raised three legal bases for their contention that the County was unlawfully “taking” legal property interests: (1) the County violated Article 5 of the United States Constitution, which prohibits the taking of private property for public use, without just compensation; (2) the County’s action constituted an act of inverse condemnation; and (3) the County’s action constituted a violation of 42 U.S.C. § 1983.

In its October 21 Order, the Court disposes of all three of these takings arguments in one swoop.  Essentially, the Court notes that in order to prevail on a takings claim a party must first establish that a vested interest exists in the property in question.  “Vested interest” has been defined by the Court in the past as a right that “is not dependent on any future act, contingency or decision to make it more secure.” 

Here, the Court found that no such vested interests exist, as all of the Plaintiffs’ and Plaintiff Intervenors’ interests are conditioned upon the Board’s discretionary issuance of a CUP.  Thus, because there were no vested property interests, there can be no taking under any of the various legal theories advanced by the parties.

The Commerce Clause Issues

Overview of Dormant Commerce Clause

Before describing the decisions, it might first be helpful to provide an overview of Commerce Clause jurisprudence.  Article I, §8 of the U.S. Constitution (the “Commerce Clause”) grants Congress the power to regulate interstate commerce.  The “dormant” Commerce Clause refers to the prohibition, implied in the Commerce Clause, against states passing legislation that discriminates against or excessively burdens interstate commerce.

In a Dormant Commerce Clause case, a court is initially concerned with whether the law facially discriminates against out-of-state actors or has the effect of favoring in-state economic interests over out-of-state interests. If the action is facially discriminatory, it will be deemed invalid unless the County can show that it has no other means to advance a legitimate local purpose.

If the action is not facially discriminatory, the Court is much more flexible. If the law is not outright or intentionally discriminatory or protectionist, but still has some impact on interstate commerce, the court will apply a balancing test which examines whether the interstate burden outweighs the local benefits. If it does, the law is usually deemed unconstitutional.

Remand of Commerce Clause Issues

In addressing the Dormant Commerce Clause issues in this case, the Court first notes that, because the zoning regulations prohibit all CWECs in the county regardless of the connection to interstate commerce, there was no facial discrimination. 

Therefore, the Court must examine whether the burden imposed in interstate commerce is “clearly excessive in relation to the putative local benefits.”  Specifically, the Court notes that it should consider (1) the nature of the putative local benefits advanced by the County action; (2) the burden placed on interstate commerce by the statute; and (3) whether the burden is “clearly excessive” when weighed against these local putative benefits.

Here, the Court noted that because the lower courts dismissed the case without allowing discovery or an evidentiary hearing, there is not enough evidence in the record to conduct a full analysis of the benefits and burdens of the County’s actions.  Therefore, the Court reversed the District Court’s grant of the County’s Motion to Dismiss and remands the case back to the District Court for a full analysis of whether the interstate burden outweighs the local benefits.

If you have any questions about the impact of this ruling or would like any additional information about renewable project development in Kansas going forward, please feel free to leave a comment below or contact me directly at lhagedorn@polsinelli.com.

We here at Renewable Energy Law Insider would like to congratulate BP Wind Energy North America Inc. (BPWENA) on its announcement of a new 420 MW wind project located in Barber and Kingman Counties, Kansas.  The new wind project, known as Flat Ridge 2, will be located approximately 60 miles southwest of Wichita, Kansas. 

Kansas Governor Sam Brownback, an active supporter of Kansas wind, attended the announcement ceremony on October 3rd.  During his remarks, Gov. Brownback stated,

We have enjoyed working closely with BP Wind Energy to create jobs and grow the economy in our state. Kansans have a proud history of meeting the needs of the world. We export wheat to feed the hungry and will now be exporting our latest crop – clean, reliable and affordable wind energy to power the needs of our nation.

Flat Ridge 2 and BPWENA have worked diligently with the residents and government officials of these counties to ensure a positive local reception to the project.  To that end, Flat Ridge 2 has entered into payment in lieu of taxes (PILOT) agreements and road maintenance agreements (RMA) with Harper County and Kingman County, and has entered into long-term leases with area landowners for placement of all wind turbine generators necessary for successful completion of the Project.

Commercial operation of the Project is currently planned for January 1, 2013. 

For more information about this project, see BPWENA’s press release, or Daniel McCoy’s excellent article in the Wichita Business Journal, “BP announcement another step toward Brownback’s renewable vision.”

Today’s post is part of an on-going series in which we offer practical, plain english definitions of some of the most baffling and complex terms thrown around in the renewable energy industry. 

For today’s edition of Renewable Term of the Week, we will focus on Feed-in Tariffs.

Feed-in Tariffs (FITs)

A feed-in tariff (often referred to as FITs) is a governmental policy that is intended to encourage renewable energy development by guaranteeing that project developers will be able to enter into long-term purchase agreements for the electricity they generate from renewable resources.  Under FITs, utilities are typically required to offer a specified price above market value for every kilowatt-hour (kWh) of electricity produced by renewable developers.  When done well, this guaranteed boost to the profit margin for renewable projects creates a huge incentive to develop renewable projects, which in turn can dramatically alter the energy portfolios of the public utilities that are subject to the policy.

Depending on the policy goals that the legislators want to achieve, the guaranteed price can be tailored to offer added incentives to develop certain types of the technology, small or large projects, or any number of other variables.  Similar to a Renewable Energy Standard, the FIT can also include a cap of sorts, so that the specified price is only offered up until a predefined quota of energy met.  The FIT can also be tailored so that the specified price can decrease over time, or as certain renewable energy goals are met, to more closely reflect the supply/demand curve as the more renewable energy becomes available on the market.

For those industry readers outside of the United States, Feed-in Tariffs are a part of everyday life.  To give you a sense of just how broadly these tariffs are utilized world-wide, the National Renewable Energy Laboratory estimates that, in total, FITs are responsible for approximately 75% of global PV and 45% of global wind deployment.  However, in the United States, FITs have not been nearly as popular. 

One reason that the U.S. has not seen wide-spread use of FITs are potential legal concerns that might come into play.  Specifically, opponents to FITs in the U.S. argue that because FITs involve a wholesale sale of electricity between a renewable developer and to public utility, any state FITs would be preempted by either the Public Utility Regulatory Policies Act (PURPA) or the Federal Power Act (FPA).  Nonetheless, ample research and analysis has been conducted on this topic by some of the leading energy law scholars in the United States, and it appears that solutions to these legal obstacles can be found through careful planning.  For more information on these topics, please see the excellent January 2010 NREL report, “Renewable Energy Prices in State-Level Feed-in Tariffs: Federal Law Constraints and Possible Solutions,” written principally by Scott Hempling with the National Regulatory Research Institute (NRRI).

For more information about Feed-in Tariffs, or any other renewable energy topics please feel free to contact Luke at lhagedorn@polsinelli.com.

Like the rest of America, I have been closely following the numerous (and often unflattering) accounts of the debt-ceiling drama that has unfolded in the U.S. Congress and Senate.  The questions being debated have countless implications for industries all across the country, but very few have quite as much at stake as the renewable energy industry.   

As we all know, renewable resources will only become the new standard when the cost of generating energy from wind and solar resources is equal to or less than the cost of generating energy from natural gas.   As the market stands right now, both traditional and renewable energy sources receive a number of tax breaks and economic incentives from the federal government.  The legislature can tip the scales one way or another and make those incentives favor renewable resources or traditional resources, and which way they go is a huge factor in determining how quickly cost parity can be reached.

Last week, Congress and President Barack Obama agreed on a deal that increased the U.S. debt limit by at least $2.1 trillion, and implemented additional discretionary spending caps for a period of 10 years.  Perhaps most importantly for renewable energy developers, the legislation also created a bipartisan committee of Congressman and the Senators to take a hard look at the U.S. federal budget and propose $1.5 trillion in cuts.  The Committee’s recommendation will then go to Congress for approval, but if Congress fails to approve the Committee’s recommendations by December 23, 2011, automatic spending reductions will be made beginning in 2013, split evenly between domestic and defence spending.

In essence, the true impact of these budget cuts will depend entirely on the Congressman and Senators that are appointed to the “Super-Committee.”  As I have described previously, energy policy has always seemed to defy traditional party lines, and you can’t always predict whether a politician will favor traditional resources, nuclear energy, or renewable resources based solely upon their party affiliations.  Nonetheless, whether the federal energy incentive scale gets tipped towards coal and natural gas, nuclear or renewable energy will largely depend on how many representatives on the Committee are willing to take a stand for each of these camps.

In short, it is clear that energy policy will be one of the issues that the “Super-Committee” closely examines, but without knowing more about the specific political motivations of the decision-makers, we cannot know which programs are likely to be cut.  Bloomberg writers Jim Efstathiou Jr. and Christopher Martin wrote an excellent summary of the energy programs that might be at risk over the coming months.  In an effort to shed some positive light on the potential ramifications of this process on renewable energy, they close the article with the following quote from Denise Bode, the chief executive officer of the American Wind Energy Association (AWEA):

Current wind ‘projects are safe, and prospects for extension of the program beyond 2012 are as good as ever,’ Bode said in an e-mail. ‘I had a front-row seat to tax reform in the mid-1980s, and I feel confident that wind incentives will survive this process.’

As an optimist-at-heart and a supporter of the various renewable energy industries, I certainly hope that this is the case.  However, as someone who has had a front-row seat to the political process, I am also positive that we won’t be able to predict the true impacts of this deal until we know which Congressman and Senators will be appointed to the “Super-Committee.”  There is no question that quite a bit is at stake.

Every once in a while, I stumble across something so good that I have to share it with you all. 

Here’s the back-story.  I’ve always been fascinated with the concept of first-movers.  It takes a peculiar mix of genius, foresight and a seemingly illogical disregard of risk to do something truly original.  Being the geek that I am, a few weeks back I decided to find out some more about the first-movers in the field of wind-generated electricity. 

A few google-filled hours later, I came across an article written in the publication “Scientific American” on December 20, 1890.  The article described the story of Mr. Charles F. Brush of Cleveland, Ohio and his amazing windmill dynamo. 

Having made his fortune designing a “dynamo” (essentially an electric generator) and an arc light system that had been placed in-service in cities all across the country (including powering Broadway in New York City), Mr. Brush decided to retire from the business world at the age of 40.  

Like most retirees, he devoted a considerable amount of his time and effort into maintaining his property.  However, whereas many retirees focus on having the greenest lawn or the most impressive gardens, Mr. Brush decided to build an 85-foot tall wind turbine in his backyard.

I’m sure his neighbors were thrilled.

The structure itself was a technical marvel, and represented the first fully-automated electricity generating wind turbine in the world.  Standing just over 85 feet tall, the turbine featured a 56 foot wide wheel that was made up of 144 blades with a surface area of 1,800 square feet.  Additionally, the entire structure was on a revolving platform and utilized a 60 foot long tail which turned the wheel directly into the wind.

Inside the tower was a generator of Mr. Brush’s own design.  The generator was connected to the wheel via a series of pulleys that allowed the generator to have 50 revolutions for every one revolution of the wheel.   At full load, the generator was capable of 500 revolutions per mintue and it could generate 12,000 watts of electricity.

The entire system is amazing, but the part that really blows me away was that Mr. Brush even thought to tackle one of the biggest problems that still plagues the wind industry, battery storage.  In the basement of Mr. Brush’s mansion was a series of 408 battery cells, each with a capacity of 100 ampere hours.  This allowed Mr. Brush to have a contiuous supply of electricity, even when the wind was not blowing.

Unfortunately, Mr. Brush’s wind turbine design never moved out of his backyard and into mainstream use.  Nonetheless, over the course of its 20-year life, the entire structure reliably powered the 350 incandescent lights in Mr. Brush’s home.  In the end, Mr. Brush’s amazing wind dynamo stands as a truly amazing display of ingenuity and the motivational power of too much free-time.  It is important to take some time every once in a while to remind ourselves that, even in cutting-edge fields like renewable energy, we are still standing on the shoulders of giants.

If you are interested in learning more about Mr. Brush and his amazing wind dynamo, feel free to send me an email at lhagedorn@polsinelli.com or leave a comment below.

*I’d like to give a special thanks to Scientific American, a publication that continues to put out quality content to this day.

Effective July 1, 2011, wind and solar project developers in the state of Kansas are subject to a number of new requirements.  These new requirements were proposed in Kansas Senate Bill 227, which was introduced by the Senate Committee on Ways and Means, chaired by Senator Carolyn McGinn.  The Bill passed through Committee and the Kansas House and Senate in a mere three weeks, and was signed by Governor Brownback on April 13, 2011.

The new requirements fall into the following three categories:

1.) Severance of Wind and Solar Rights: The statute states that no person other than the surface owner of a tract of land shall have the right to use the land for the production of wind or solar generated energy unless granted such right by the lawful owner of the surface estate by lease or easement for a definite period.  This new law is in-line with a national trend against severance of wind and solar rights, and effectively prohibits a landowner from selling the wind or solar rights to a project developer while retaining the ownership of the underlying property.

2.) Solar Leases and Easements: Prior to this statute, Kansas had enacted K.S.A. 58-2272, which set forth requirements related to descriptions and terms that had to be included in wind leases and easements. Under the newly enacted Senate Bill 227, these requirements have been expanded to also encompass solar leases and easements. Specifically, under the new standards, every lease and easement involving solar resources and technologies to produce and generate energy must include (among certain other things) the following information:

a. a description of the real property subject to the easement and a description of the real property benefitting from the solar lease or easement; and

b. a description of the vertical and horizontal angels, expressed in degrees, and distances from the site of the solar power system in which an obstruction to the solar system is prohibited or limited.

3.) Marking of Anemometer Towers: Anemometer towers that are at least 50 feet high shall be marked so as to be recognizable in clean air during daylight hours. These markings include painting the top 1/3 of the tower in equal, alternating bands of aviation orange and white, attaching two marker balls on each of the outside guy wires, and attaching one or more seven-foot safety sleeves at each anchor point.

With the state and federal legislatures out of session, it has been a relatively slow couple of weeks in the world of renewable energy law.  Fortunately for you, what may seem like a lack of significant new developments is actually an excellent opportunity for me to highlight a few of the significant stories that I wasn’t able to cover the first time around.

With this in mind, it is time once again to continue our series of state-by-state updates of some of the most signficant renewable energy stories.  Today, we will focus on Missouri. 

Ranked 13th in the nation for wind capacity, 24th in the nation for solar resource, and first in our hearts, the Show-Me State is currently facing a critical juncture in its renewable energy development due to uncertainty surrounding the state’s Renewable Portfolio Standard.  With this background in mind, let’s take a look at what has been going on in the Missouri…

Missouri Public Service Commission Announces New Chairman 

Missouri Governor Jay Nixon recently appointed Kevin Gunn as the new chairman of the Missouri Public Service Commission. Chairman Gunn will replace Robert M. Clayton III, who will remain on the Commission. 

Chairman Gunn was appointed to the Commission in 2008 to a six-year term. Prior to that appointment, Chairman Gunn was an attorney in St. Louis. He received his bachelor’s degree from American University and his law degree from Saint Louis University School of Law.

In commenting on the appointment, Governor Nixon stated that

Kevin Gunn has experience and vision that will be invaluable as we formulate Missouri’s energy policy for the coming decades. A key part of that will be wise investment in renewable energy sources, and Kevin will give us strong leadership on that issue. I appreciate Commissioner Robert Clayton’s service as chairman of the PSC for the past two years in standing up for the fair treatment of Missouri energy consumers, and look forward to his continued good work on the commission.

Missouri RES Provisions Still in Flux

As I briefly mentioned above, in 2008, Missouri voters approved ballot initiative Proposition C by 66% of the vote. Proposition C requires electric utilities to obtain 15% of their electricity from renewable sources by 2021, and includes a cost cap that limited the increase to retail rates resulting from compliance with the mandate to an average annual 1%. However, the language of the ballot measure was ambiguous, and a controversy over the voters’ intent continues to be debated by legislators as they work to clarify the statute.

There are a number of issues at the heart of this debate, but perhaps the most contentious is whether the renewable energy has to be generated in or delivered to Missouri, as opposed to allowing a Missouri utility to buy a REC (renewable energy credit) from another location in order to meet the RES requirement. 

I have discussed the importance of geographic sourcing requirements before, and this is yet another excellent example of how important the issue can be in practice.  Public utilities justifiably want to purchase RECs from projects located in other states, because those RECs are almost always cheaper than building their own generation or buying RECs from projects within Missouri.  Nonetheless, allowing for the purchase of out of state RECs effectively destroys the incentive to develop renewable projects within the states, as there is no longer any guarantee for project developers that the energy that they generate will be purchased by the utilities.

To address the contentious issues surrounding the RES, the Missouri Speaker of the House formed a Special Committee on Renewable Energy and appointed Representative Jason Holsman, a Democrat from Jackson County, to chair the Committee.  Rep. Holsman, a supporter of renewable energy, filed legislation (HB 613) to address the Prop C issues.   Among other things, this legislation specified that utilities can only satisfy their RES requirement with energy that is generated within the state, or energy that can serve Missouri customers. 

To complicate the political dynamics on this issue, a nuclear cost recovery bill was also proposed that, in many peoples’ eyes, may have hindered passage of HB 613. Through this bill, Ameren and the other regulated electric utilities, the electric cooperatives, and the municipal utilities proposed allowing Ameren to recover the costs of obtaining an early site permit from ratepayers for the construction of a new nuclear plant. There was strong opposition to the bill from certain members of the Senate and all efforts to move the bill forward were stalled. Though the two bills were unrelated on their face, the nuclear bill and the renewable energy bill have been indirectly associated with one another, and a loss of momentum for the nuclear bill harmed the chances of any success for the Proposition C revisions.

Ultimately, it will still be a while longer before we know the fate of Missouri’s Renewable Energy Standard.  The Missouri legislative session concluded on May 13, 2011, and no progress was made on either of the bills prior to the conclusion of the session.