Today, I will continue my well-intentioned but perhaps ill-advised plan to provide you, my loyal readers, with state-by-state updates of recent noteworthy renewable energy stories (seriously, 50 states…what was I thinking?).   Fortunately, today’s state, Kansas, is near and dear to my heart. 

As I’m sure most of you are aware, Kansas is exceptionally windy.  NREL and AWEA have ranked Kansas’ wind resource #2 in the United States, with the potential to generate a staggering 950,000 MW annually from wind alone.  What you may not have realized is that Kansas also ranks in the top 10 states for its solar resource.  Put simply, there is a lot potential for utility-scale renewable projects in the Sunflower State.

Do you know of any Kansas-related news items that you would like me to comment upon or add to this list?  Leave a comment or send me an email at lhagedorn@polsinelli.com and I’ll be sure to add it.  With that background in mind, lets check in with what has been going on in Kansas…

New Kansas Commissioner Sworn In

Kansas Governor Sam Brownback recently named a new Commissioner, attorney Mark Sievers, to the Kansas Corporation Commission.

“Mark’s career began in public service as a police officer in Colorado Springs in 1975, and after receiving a law degree and a master’s degree in Economics, he went on to distinguish himself at the highest levels of the public and private sectors across the country. Mark will bring a wealth of training, experience and knowledge to the commission,” Governor Brownback said.

Commissioner Sievers’ prior professional experience includes time as a collegiate level professor at the Utah State University, the University of Utah and the University of California, an attorney for both large and small f irms, and a Senior Executive at Sprint, SBC, GTE, and Verizon, where he was part of the senior executive team that created Verizon, then the world’s largest merger at $56 billion, with operations in 21 countries and involving 250,000 employees.

Commissioner Sievers was sworn in on May 18, 2011, and will now join Commissioners Ward Lloyd and Thomas Wright.

Kansas Governor Brownback Announces ‘Road Map for Wind Energy Policy’

Kansas Governor Sam Brownback recently announced his “Road Map for Wind Energy Policy” for the state.  This announcement attempts to strike a balance between what Gov. Brownback refers to as the “3 E’s – the Economy, Energy, and the Environment.”  As part of this Road Map, Gov. Brownback sets forth a plan to expand an existing informal moratorium on wind development within a tallgrass prairie area in the Flint Hills region of Kansas.  Under the proposed expansion, the “Heart of the Flint Hills” moratorium will more closely track the geographic area identif ied by the USFWS as a conservation area.

The prior moratorium was established approximately seven years ago by then Governor Kathleen Sebelius to protect development in areas designated as “pristine prairie.” That moratorium was never codified in law.  

In commenting on how this expansion might affect other wind projects within the state, Gov. Brownback stated:

“I do not, however, wish to convey a negative message about the future of wind energy in our state. My administration will continue to work with wind developers and wholeheartedly support their activities in other parts of the state. The Tallgrass Heartland will not prohibit the construction of necessary electric transmission improvements. Wind farms that are currently under power purchase agreements within the protected area, are of course, expected to fulfill those contracts and will have every opportunity to renew their agreements moving forward. However, they will not be expanded.”

Kansas Corporation Commission Approves PPAs for 369 MWs of Wind Energy

On November 10, 2010, Westar Energy, Inc. and Kansas Gas and Electric Company, filed a petition with the Kansas Corporation Commission for a predetermination of the ratemaking principles and treatment that will apply to the recovery in rates of the costs to be incurred pursuant to certain power purchase agreements (PPAs) for the purchase of 369 MW of wind energy. In its petition, Westar indicated the wind farms would become operational in 2012 and proposed that the costs of the purchases under the PPAs be recovered through its Retail Energy Cost Adjustment (RECA).

On March 25, 2011, Westar, the Commission’s Staff, and the Citizen’s Utility Ratepayer Board (CURB), jointly filed a motion to approve a Stipulation and Agreement which supported adoption of Westar’s petition as filed. 

Through a Final Order issued on May 9, 2011, the Commission approved Westar’s recovery of the costs of the PPAs through its Retail Energy Cost Adjustment. In reaching this conclusion, the Commission held that it is reasonable for Westar to enter into these particular PPAs now in order to meet its obligations under the RES Act both in 2011 and in 2016 because the terms and pricing under these PPAs are favorable and execution of the PPAs now will result in benefits to Westar’s customers.

*If you enjoyed these updates, don’t forget to also check out our prior state updates on Arizona, Colorado, and Illinois.

Jeffrey Tomich of the St. Louis Post-Dispatch recently wrote an excellent article about a transmission line proposed by Clean Line Energy Partners, a Houston-based transmission company.  This article struck me as being particularly timely, as there are (at least) two significant problems that keep us from achieving renewable energy’s full potential in the U.S.: 

1.) Many of the best renewable resources in the country lack necessary access to the transmission grid; and

2.) Due to a number of factors, as we have discussed before, local opposition often poses substantial barriers to successful renewable energy developments.  

Fortunately, there are innovative companies out there like  that have set out to find creative solutions to both of these issues.  

First, as Mr. Tomich describes in his article, to address the transmission access problem, Clean Line is focusing on constructing high-voltage transmission lines to connect areas of the country that are rich in renewable resources but far from the current transmission grid with population centers across the country.   Clean Line is currently proposing to construct roughly 2,750 miles of transmission lines across the country, which in turn will help facilitate the development of countless new renewable energy projects.

To address the second issue, it appears that Clean Line is looking for opportunities to proactively reduce local opposition to their projects.  Clean Line has recently announced that it will work in collaboration with Missouri chapter of The Nature Conservancy to mitigate the environmental impacts of the Grain Belt Express, an estimated $1.7 billion, 550-mile long high-voltage direct current transmission line that will deliver up to 3,500 MW of renewable energy from Kansas to Southeastern Missouri.

Michael Skelly, President of Clean Line Energy, had this to say about the announcement:

Siting a transmission line is a long and challenging process and it’s our responsibility and intent to develop and build this project the right way. We appreciate the opportunity to work with and receive guidance from the Missouri Chapter of The Nature Conservancy as we gather relevant information that will aid in the development, construction and operation of the Grain Belt Express Clean Line. 

We live in a world of corporations and non-profits, which can make it easy to forget that NIMBY activism usually starts with a few individual people who feel like their voices have not been heard.  With this simple truth in mind, it seems to me that working towards collaborative solutions early in a project’s developments is one of the best (and most cost-efficient) ways to ensure that all parties feel like their input has been valued, which in turn reduces tensions before they develop into potentially project-threatening NIMBY opposition.  I have to applaud companies like Clean Line who actively try to facilitate these relationships early and often.

Welcome to another addition of the Renewable Law Link Round-Up.  Every Friday I let you, my faithful readers, sit back and relax while I pass along a few of the most interesting Renewable Energy stories and blog posts that I ran across this week:

1.) Changes in Wind Power Safety Regulations Could Rock the Industry

Jon Harmon, the Head of Renewable Industries for Wind Energy Update, posted a very informative piece on the Occupations Safety and Health Administration’s (“OSHA”) National Emphasis Program (“NEP”), which starting next year will require the wind industry to  step-up the enforcement of employee safety regulations.  As Jon explains, this new emphasis marks a distinct change from prior OSHA practices, as before investigations were only made in response to specific complaints of unsafe conditions or accidents on the project sites.

I absolutely agree with Jon that this new focus on renewable energy projects is something that all developers should be aware of as they design and implement their employee safety programs. 

2.)  Global Solar PV Installations Expected to Exceed 21 GW in 2011

A recent study by IMS Research,  a leading independent market research firm in the global electronics industry, predicts that 21 GW of new PV capacity will be installed in 2011, as compared to the 18 GW that was installed in 2010.  This is certainly not surprising, but it is certainly always nice to see these numbers continuing to grow.

3.)  New Report Debunks Anti-Wind Myths

A Candian environmental advocacy group, Environmental Defence, has recently released a report which attempts to correct the misinformation being promoted by anti-wind activists in Ontario.  The report, titled “Blowing Smoke: Correcting Anti-Wind Myths in Ontario,” argues that, despite a huge number of studies conducted all across the world, there is no scientific evidence of health impacts from wind power projects.  The report also demonstrates that wind power is technically viable and has economic and environmental benefits for Ontario. 

Though specifically tailored to Ontario, this report responds to issues that are universally raised in opposition to wind projects, and is well worth a read.

4.) Wisconsin RES threatened by new legislation

Thomas Content of the Milwaukee Journal Sentinel wrote a great article regarding a proposed amendment to the Wisconsin Renewable Energy Standard.  The amendment, Assembly Bill 146, seeks to eliminate the current shelf-life restrictions on Renewable Energy Credits in the state, which has the potential to significantly decrease the utilities’ motivation to continue developing renewable energy projects in the future. 

I’ve written before about the importance of setting a strict Shelf-Life requirement for RECs.  Issues like this reaffirm my fascination with the nuance in Renewable Energy Standard and Renewable Energy Credit legislation.  Changes which might seem insignificant at first glance can lead to huge impacts on the policies’ effectiveness down the road.

I’d also like to quickly applaud Mr. Content.  These are extremely complex issues, and it is a pleasure to see them handled as adeptly as he was able to do in this article.

It has been an active few months for renewable energy in the United States, as several states have made headlines or advanced new renewable energy legislation. Over the next few posts, I’ll be highlighting a few of the most noteworthy renewable energy stories from a few of the states within Polsinelli Shughart PC’s ever-growing footprint.  Today, we’ll begin with the solar-energy jewel of the Southwest, Arizona.

Lawsuit Threatens Arizona’s RES

A lawsuit which called into question the legality of the Arizona RES was recently struck down by the Arizona Court of Appeals. The lawsuit, which was filed by the Goldwater Institute, a Phoenix, Arizona-based conservative public policy research organization established in 1988, argued that the Arizona Corporation Commission did not have the authority to impose its Renewable Energy Standard on public utilities.

In upholding the RES, the Court found that enforcement of the RES was within the legitimate powers of the ACC, and took special note of the fact that the RES relates to the regulation of electricity rates.

I’ll talk more about this in an upcoming post, but the use of litigation to challenge the validity of a RES appears to be part of a larger national trend. It is definitely something to watch out for as more and more states look to increase the pressure on public utilities to switch to renewable energy options.

For more information about state Renewable Energy Standards, you can see this primer that I wrote on the topic.

Arizona Bill Proposes Changes to Transmission Siting Procedures

Rep. Frank Pratt, chairman of the Arizona House Energy and Natural Resources Committee, recently introduced an amendment to legislation which supporters claim would remove a big procedural hurdle for new interstate power lines in Arizona. The amendment, which has been attached to SB 1517, proposes three key modifications to the ACC’s normal siting procedure:

• The ACC would be permitted to decide on a case-by-case basis whether transmission proposals will be evaluated by the Line Siting Committee, an 11-member appointed body, or whether the issue will go directly before the five-member Commission. Currently, any proposal for a line of more than 115 kilovolts must be heard by both the Line Siting Committee and the ACC.

• For individual power lines, the ACC would be directed to approve any project that meets federal guidelines under the National Environmental Policy Act. It should be noted, however, that even with this change the Line Siting Committee could still impose certain conditions on a line’s construction.

• The ACC would be allowed, but not required, to hold public hearings on proposed power lines.

This legislation managed to clear the House Energy and Natural Resources and Rules Committees, but failed to reach a final vote prior to the adjournment of the legislature. We’ll keep you posted on how the legislature handles this bill once it reconvenes later this year.

If you have any questions about state siting standards, feel free to contact the Polsinelli Shughart Energy Group for more information.

You may have noticed that things are looking a little bit different on the site today.  Yesterday afternoon marked the completion of a major transition for the blog, and today I’m proud to announce that Renewable Energy Law Insider (formerly the Renewable Energy Law Blog) has officially joined the LexBlog network!   There are lots of upgrades and handy little perks that come with this transition, but here are a few of the most obvious changes that benefit you, my loyal readers:

1.) The LexBlog team has created an amazing new design and layout for Renewable Energy Law Insider.  I know it looks great, but try not to let it distract you from all the great content that I’ll be putting together for you!

2.) There is a new streamlined comment system that should make writing, editing and moderating your comments and questions a much easier process for you.  In fact, it would be a shame to see such a great system go to waste, so why don’t you give it a trial run by letting me know what you think of our new design?

3.) I’m happy to announce that Renewable Energy Law Insider is now part of the LexBlog network, a group of the best of the best legal blogs from around the country.  Check out some of links in the “More Blogs” section of the sidebar to get a sampling of the hugely valuable content that other great legal minds from around the country are creating on a daily basis.

I want to end by quickly thanking the LexBlog team that put in the time and effort to create such a great end product.  In particular, thanks to Joshua Lynch, Neil O’Shaughnessy, Kara Roberts and Kevin McKeown for making this process painless and patiently answering my many questions.  Also, thanks to the designers, editors and programmers that put in a ton of hard work to make this site look great and function smoothly. 

Now, back to our regularly scheduled programming…

As this blog has noted numerous times, it isn’t always easy to get a solar or wind project constructed.  In fact, as we’ve discussed before, often one of the most expensive impediments to a project’s development is the local and state permitting process.  The Colorado Solar Energy Industries Association (COSEIA) puts a number on this expense, stating that permitting costs can add about $2,516 per U.S. residential installation and can easily exceed $100,000+ for large scale installations.

As it turns out, the state of Colorado has been, until recently, one of the worst offenders when it comes to tacking on substantial state and local permitting fees to renewable energy projects.  The Vote Solar Initiative and the COSEIA recently teamed up to collect and evaluate information about the current state of permitting in 34 local jurisdictions throughout Colorado.  The resulting study, which was recently released by the two groups, indicated that the average fee for obtaining the necessary local permits in Colorado for a solar project is nearly twice as high, and the approval process can take up to seven times as long, as the national permitting best practices.  The groups point to this result as reinforcing the need for Colorado to adopt a more standardized, streamlined solar permitting practices.

However, there is hope in sight.  Shortly after the study was released, the Colorado State Senate approved legislation that seeks to prevent the state and local governments from charging excessive permit fees and plan review fees to customers installing solar technologies.  The Legislation, entitled the Fair Permit Act (H.B.1199), was sponsored by Rep. Bob Gardner, Sen. Bob Bacon, and Sen. Shawn Mitchell to address these high permit costs and inefficiency.  The legislation now only needs the signature of Colorado Governor John Hickenlooper to become law.

Specifically, the Act improves transparency in the permit process by requiring the government agency to clearly and individually identify all solar fees and taxes assessed on an invoice, and limits solar permit fees to the government’s actual costs in issuing the permit, not to exceed $500 for a residential installation or $1,000 for a commercial system.

If you have any anecdotes about permitting renewable energy projects in Colorado, or if you’d like more information about permitting projects in general, leave a comment or send me an email at lhagedorn@polsinelli.com.

Illinois has seen a flurry of activity at the county level regarding how to best balance the economic and environmental benefits of wind energy development in the state with the concerns of local landowners.  In addressing this issue, Bureau County and Iroquois County have recently decided upon dramatically different approaches, and the resulting economic impacts should provide an interesting comparison point for future legislative and permitting efforts within the state.

On the pro-development side, Donna Barker of the Bureau County Republican has reported that the County Board of Bureau County recently voted to not only extend the conditional use permits that had been previously awarded to Midwest Wind for the company’s planned 150-MW Big Sky project, but also went a step further and rejected a proposal to institute a wind moratorium in the county.  With moratoriums becoming a more common trend across the nation, it is refreshing to see a county take it upon itself to gain the necessary expertise within a time frame that won’t delay development of actual renewable projects.

On the anti-development side, Kevin Borgia of the Illinois Wind Daily recently reported that the County Board of Iroquois County recently approved a remarkable 2000-foot setback from non-participating property lines.  This would be among the most restrictive county setback requirements in the nation, and could have a significant negative impact on renewable energy investments in the county.

I’ve previously discussed the dramatic impact that local activism and permitting obstacles can have on the development of renewable projects, and I must admit that I’m very curious as to whether the amount of renewable energy investments that these two counties are able to generate support that conclusion.

I’ll be sure to keep you all updated on the status of these counties’ efforts going-forward, but in the meantime, I’d love to see whether you have run across any anecdotal evidence of the impact of local NIMBY activism or highly-restrictive permitting processes on renewable project development.  Feel free to leave a comment or drop me an email at lhagedorn@polsinelli.com with your experiences.

1.) “U.S. Fish and Wildlife Service, AWEA, Wind Developers Sign Agreement to Promote Endangered Species Conservation,” by Tom Gray on the AWEA Blog: Into the Wind

“The U.S. Fish and Wildlife Service (FWS), the American Wind Energy Association (AWEA) and wind energy companies have signed a memorandum of understanding, pledging to work together to develop a wind energy habitat conservation plan (HCP) for the FWS’ Midwest region.”

This is a very encouraging sign for renewable energy developers all across the Midwest. As I’ve discussed before, environmental objections raised by agencies such as U.S. Fish and Wildlife can lead to serious and costly complications for renewable projects. Though the details of the agreement still need to be worked out, I have to believe that undertaking the process of thinking through these issues on a national scale will set us further down the road towards finding workable solutions in the future.

2.) “Turner, Pickens urge quick climate action to save nation, planet,” by Robert Webb of the National Press Club

“Billionaires Ted Turner and T. Boone Pickens called for quick action by Congress and the American people on energy and climate change to help save the nation and planet at an April 19 National Press Club luncheon.”

One of the things that I truly love about working in this industry is that Renewable Energy is a topic that largely defies the normal partisan political divides in our country. Case-in-point, Ted Turner and T. Boone Pickens sat down this week to discuss the importance of rethinking our national energy policy. Granted, the paths that the two men advocate differ in a number of significant areas, but both agree with the basic premise that a significant change is needed to ensure our nation has an economically and environmentally sound future.

3.) “The Plunging Cost of Renewables and Boulder’s Energy Future,” by Anne Butterfield of the Boulder Daily Camera

“In Colorado, plunging costs for renewables are furled against the steady upward march of fossil fuels.”

This fantastic article places the national trend of falling renewable resource costs and increasing traditional energy costs squarely within the microcosm of Colorado. This is obviously a great read for Coloradans, but it also does a great job of placing this state-wide issue within the national and international context.

4.) “Google Continues Clean Energy Spending Spree,” by Chris Barth on Forbes.com

“Right on the heels of announcing a $168 million investment in the Ivanpah solar tower facility, Google announced today that it is investing $100 million more in Shepherds Flat Wind Farm, a wind farm located outside of Arlington, Oregon.”

Wow. Google has certainly been bitten by the Renewable Energy bug. It seems like a day doesn’t go by that I don’t run across some article or blog post about a new multi-million dollar investment by the internet giant in renewable projects around the country. Not only do these huge investments by Google help the industry by providing much needed capital for projects around the country, but it also having one of the largest and best known brands in the world advocating the importance of these projects provides a tremendous public relations benefit.

Yesterday, the Montana legislature passed important new legislation that will have a significant impact on the development of wind projects within the state.  The bill, titled the “Wind Energy Rights Act” addresses many of the big issues that state legislatures around the country are grappling with, including:

1) How to create uniform wind energy agreements between developers and landowners;

2) Whether landowners should be allowed to separately sell their interest in the airspace over their property from their interest in the land and mineral rights (commonly referred to as “severing” the wind rights); and

3) How to address any conflicts between wind developers and oil and gas developers that have rights to explore the same piece of land.

The Montana legislation takes an interesting approach to these issues:

Uniform Agreements

On the issue of uniform wind agreements, the Act sets out the information that must be included as part of several of the most common types of agreements between landowners and project developers: wind energy agreements, wind easements, and wind option agreements.

Severance of Wind Rights

The Act follows the recent trend across the U.S. of prohibiting severance.  However, interestingly, the Act states that if a landowner decides to enter into a wind agreement, but later decides to sell the property, the seller is allowed to retain any payments associated with those existing wind agreements to the exclusion of the new owner.

This would seem to increase the long-term risk for project developers, because the new owner of the property would be required to uphold the agreement with the developer, without being entitled to payments.

Dominance of Mineral Estates

Finally, the Act specifically states that it does not modify the existing statutory language regarding the dominance of mineral estates, so holders of a wind interest will be subordinate to oil and gas developers with existing mineral rights leases on the property.  This potentially raises a number of problems for renewable project developers, and can significantly increase the cost and risk of a given project.

For example, say a developer spends a significant amount of money building a turbine on property that is already subject to an oil and gas lease.  Arguably, should the oil and gas developer decide to construct an oil derrick or pipeline that interferes with the wind project in some way, this provision will make it very difficult for the wind developer to raise any objections.

The Act has passed the legislature and now just needs to be signed by Governor Schweitzer to go into law.

Let me start with this up-front.  I can’t shake the feeling that the term “NIMBY” comes off as somehow derogatory.  That is not what I intend to convey when I use the term.  For the uninitiated, NIMBY is short for “not in my backyard” and describes local activists who campaign against renewable projects in their communities.

One of the great ironies of Renewable Energy is that the energy and enthusiasm that spurs its development is the same energy and enthusiasm that ultimately shuts many projects down.  It tends to go something like this:

1.)    Coal and natural gas plants impact the environment.

2.)    Environmentalists call for renewable projects that rely on wind, solar, geothermal, biomass, hydro, etc.

3.)    Renewable projects impact the surrounding ecosystems, though far less than coal or natural gas.

4.)    Environmentalists object to the impact on the local environment, and call for greater regulation of the renewable projects.

5.)    The cost to develop the project increases and may no longer be competitive with coal or natural gas.

6.)    We stick with the coal and gas plants that we started with.

Let there be no doubt, this NIMBY resistance is the single greatest impediment to the future of renewable energy in the United States.  As I pointed out a few weeks ago, recent studies have shown that wind farms in the United States face just as much local opposition as coal plants.  The “Project No Project” iniative put together by the U.S. Chamber of Commerce has compiled a list of energy projects (traditional and renewable) that have been stalled, stopped, or outright killed nationwide due to NIMBY activism or permitting delays.  Of the over 700 challenged projects that that the database tracks, 351 are renewable energy projects.

There are some legitimate concerns with renewable projects, but the real heart of this conflict is simple…FEAR.    Fear of the unknown impacts of new technologies on the ecosystems of our homes. Fear of the potential intrusion of noise or shadows in our daily lives.  Fear of unnatural objects on the horizon when we look out our windows.

This is the issue that we face.  The human brain is an amazing thing.  It will come up with an infinite number of obstacles to prevent us from facing our fears and trying something new.  But, when properly focused, it also has an amazing capacity to come up with innovative and insightful solutions to seemingly insurmountable obstacles.

So, the question is…what are we going to do to solve the NIMBY dilemma?  I have a few ideas, but first I want to send out this digital-age call to action.  The NIMBY movement is effective because it is well-connected, motivated and energetic.  Let’s use that model. What can you and I do as members of our community, voters, professionals in this industry, or simply as human beings to help address and remove the fear of NIMBY activists?

Feel free to email your thoughts and suggestions to me at lhagedorn@polsinelli.com or discuss your ideas in the comments section of this post.  I’ll also set up a hashtag on twitter (#NIMBYplan) if you would like to post your thoughts there.  I’ll track our collective ideas and insights and give you all the results in an upcoming post.