SREC II Carves Out More Room for Community Solar

The Massachusetts DOER has released its revised regulations amending the State’s RPS to implement the next phase of support for solar in the Commonwealth. Redlined pages are available here.

From here the regulations will be reviewed at most for 30 days by the Massachusetts Legislature’s Joint Committee on Telecommunications, Utilities, and Energy which may provide comments to DOER. After review of any such comments by DOER, DOER may make additional changes in response to those comments and, thereafter, the regulations will become final.

As for the content, the Commonwealth has significantly broadened its definition of a “Community Shared Solar Generation Unit.” Previous drafts of the regulations had required direct ownership of the facility by participants in the project, none of whom were permitted to receive the beneficial output of more than 25kW of the project’s capacity.

As revised, the definition no longer requires all participants to be owners of the project; receipt of power or net metering credits will now suffice. This change will significantly expand the commercial and financial structures that would qualify as “community shared.”

The revised definition also now permits the participation of two offtakers who each receive in excess of that 25kW measure but who together may not account for more than half of the capacity of the project.

With these changes, larger systems with good-credit ‘anchor’ customers engaged under net metering credit agreements may now participate in “community shared” structures, enabling more numerous smaller participants to fill out the remaining half of the capacity of the project.

The favored SREC Factor provided to these projects should result in some interesting (hopefully straightforward, replicable and successful) business models for community solar in Massachusetts, potentially challenging the now dominant (formerly emergent) third-party owned rooftop model.

Governor Patrick Announces Climate Change Preparedness Initiatives: Not Everyone’s On Board

Originally posted on January 16, 2014 in Law and the Environment

herald-re-climate-change-285x300On Tuesday, Governor Patrick announced a series of climate change preparedness initiatives, including about $50 million in funds for a variety of programs.  Before summarizing the plan, I’ll note that Massachusetts appears to have jettisoned “adaptation” as the descriptor for programs designed to mitigate the effects of  climate change.  We are no longer “adapting”.  Now, like the Boy Scouts, we will be “prepared.”  Shrewd call.

The biggest piece of the pie with be $40 million for a municipal “resilience” grant program, the main purpose of which will be to harden energy supply infrastructure, including projects to deploy micro-grids.  There will also be money to address coastal infrastructure and dam repair.

For years, my view was that we should focus on reducing GHG emissions and thus avoid the problem, but I have been persuaded that the time for adaptation, or at least preparedness, has come.  However, as reflected in this cover for the Boston Herald, our local tabloid newspaper, not everyone seems to agree.

Categories: Climate Change, Energy Efficiency Comments Trackbacks

Massachusetts Issues Draft SREC II Regulations: Headed Toward 1.6GW of Solar By 2020?

Originally posted on January 14, 2014 in Law & the Environment

Last year, Governor Patrick announced a goal of 1.6GW of solar electricity in Massachusetts by 2020; a goal that requires more than 1.2GW of new solar in the next six years.  The Massachusetts Department of Energy Resources has now issued draft regulations for its SREC II program.  The regulations are too complicated to summarize in a blog post, but you can read the details in our client alert.

One tidbit for the purely environmental lawyers among our readers — the draft regulations include a significant preference for siting solar arrays on brownfield and landfills; such installations will receive a higher SREC factor than greenfield installations.  They are also excluded from the annual program-wide cap that limits the number of greenfield installations permitted to participate in the SREC II program.

Categories: Regulation, Renewable Energy Credits, Solar Comments Trackbacks

Is Renewable Energy At Parity With Fossil Fuels? Not Quite, But Certainly Closer

Originally posted on January 8, 2014 in Law and the Environment.

According to ClimateWire on Tuesday, a Minnesota state administrative law Judge’s recommendation to the state Public Utility Commission may be the first time that a solar project has been declared cost-competitive against natural gas in an open bidding situation. That might be a little bit hyperbolic, given that Xcel Energy, which would be purchasing the power, has an obligation to significantly increase its solar portfolio and the decision recognized the economic value of the solar renewable energy credits that the recommended winner, Geronimo Energy, would produce. Nonetheless, if affirmed, it will be an important decision and is certainly a sign that the economics of solar energy are improving. After all, the opinion does state that:

The record in this proceeding indicates that Geronimo’s proposal, when properly analyzed [], is the lowest cost resource proposed.

The opinion is worth reading, because it highlights some of the developments in this area and some of the advantages that the Geronimo proposal had. First, there was significant question just how much power Xcel would in fact need over the relevant time period. The Geronimo proposal was for a distributed solar project that would include up to 20 sites, at 2-10 MW/site, for a total of 100 MW of AC current. This was smaller than any of the proposed gas projects. The judge clearly was not convinced that all of the power from these larger projects would be needed. He referred multiple times to the need for “scalable”projects.

Geronimo also emphasized the reliability of the project. All of the installations would be located near existing substations and make use of existing transmission lines. Obviously, outages in one area would not necessarily affect the remaining generation from the project. This was not the only economic advantage of the solar project. The opinion concluded that:

When one accounts for avoided energy costs, avoided capacity costs, avoided transmission costs, the impact of emissions and the cost to Xcel from transmission line losses, the benefits of Geronimo’s proposal amounts to a savings of $46 million of net present value of societal costs.

The recommendation does have to be adopted by the PUC, and I suspect that that is by no means certain, since the DPU recommendation was for one of the gas-fired projects. Even so, parity is coming, particularly where the analytical methodology takes social costs, i.e., externalities, into account.

Categories: Energy Efficiency, Regulation Comments Trackbacks

Wind Turbines Still Don’t Hurt Property Values

1184115_60881666A report  published last week by researchers at the University of Connecticut and the Lawrence Berkeley National Laboratory looked at more than 122,000 home sales that occurred between 1998 and 2012 in proximity to current or proposed wind turbines in Massachusetts.  Like the study discussed in this space last summer 

(which shared a co-author), it found no statistical evidence that wind turbines impact the value of nearby properties.  The report, supported by the Massachusetts Clean Energy Center, is obviously of particular interest here in Massachusetts.  Its authors intend for it to fill a data gap by focusing on wind facilities located in relatively urban areas and on wind facilities that contain fewer than three turbines (as opposed to larger wind farms) – circumstances common in Massachusetts and other relatively densely populated areas.

While the report’s findings are undoubtedly favorable for developers, studies like this are unlikely to directly affect the siting difficulties and host-community challenges experienced by some wind energy projects.  Host community reactions to wind energy projects are more complex than can be captured by looking at the effect (or lack thereof) that such projects have on property values.  One of the more interesting portions of the report is a discussion of an expanding literature studying the factors that shape public attitudes towards wind energy projects.  The report describes studies, many from Europe, that link public acceptance of or opposition to wind energy projects to community perceptions of risk, equity, and ownership.  If those links are truly predictable and robust, they may influence the structuring of future projects.

Categories: Wind Comments Trackbacks

Massachusetts Department of Public Utilities Opens Investigation on Electric Vehicles and Electric Vehicle Charging

On December 23rd, the Massachusetts Department of Public Utilities (the Department) issued an Order opening an investigation into electric vehicles and electric vehicle charging .  That Order, issued the same day as the Department’s straw-proposal on grid modernization , looks to be a response to recommendations made by the Grid Modernization Stakeholder Working Group  that the Department conduct a separate investigation into policies to facilitate and accommodate adoption of plug-in electric vehicles (EVs).  At this stage, the investigation is largely open-ended and seeks to explore the proper role for the Department with respect to this important technology.  The process begun with this proceeding, however, could well lead to rules affecting the charging options available to EV owners and the costs associated with charging, including the ability of EV owners to realize benefits from off-peak charging.

The Department’s EV investigation will focus on: (1) if and how EV charging, particularly charging offered to the public for a fee, should be regulated by the Department; (2) the demands that widespread adoption of EVs will place on the electric distribution system and how electric distribution companies plan to account for and accommodate such demands; (3) if and how electric distribution companies should own or operate vehicle charging infrastructure; (4) metering policies and rate structures that should apply to vehicle charging, particularly how off-peak charging could be incentivized; and (5) consumer protection issues. 

The Department is likely to look to the experiences of other states on many of these issues.  California has been working on policies for electric vehicles for some time (see, for example, the PUC’s Orders on the subject from 2009 and 2011).  Oregon adopted specific EV policies  through a similar process.  And New York opened a proceeding on EV policies in May of 2013 and recently disclaimed jurisdiction over publicly available charging stations . Other states have exempted EV charging services from utility regulation by statute or are similarly in the midst of investigations or rulemakings  related to these issues (see here  and here for two 2013 reports on the regulatory status of EV charging nationwide).  Massachusetts has taken some steps to promote EVs – last year Massachusetts initiated the “Massachusetts Electric Vehicle Initiative” task force a stakeholder group with a mission to increase electric vehicle sales in Massachusetts, and Massachusetts has   entered into a Memorandum of Understanding with several other states to cooperate in efforts to increase the adoption of zero emission vehicles – but this current proceeding represents Massachusetts’ first dive into formally addressing energy regulatory issues pertaining to EVs and EV charging.

The Department has asked for comments and has posed specific questions.  Initial comments are due by February 14, 2014.

Categories: Energy Efficiency, Legislation Comments Trackbacks