The New Mexico Public Regulation Commission (PRC) has voted 4-1 to pass an order establishing a reasonable cost threshold (RCT) for New Mexico’s public utilities to use when calculating the amount they spend annually on clean energy in order to meet the state’s renewable portfolio standards.
The new RCT requires companies like Public Service Company of New Mexico to spend 3% of its total annual retail revenue on renewable energy. Of that energy, 30% must be generated from wind, 20% from solar and 5% from other green sources like biomass.
Utility cooperatives will also begin complying with a 5% RCT beginning in 2015.
Do New Rules Mean
Trouble For Wind?
The Idaho Public Utilities Commission (PUC) has established new rules for renewable energy projects that enter into sales agreements with regulated utilities.
The rapid development of wind projects led utilities to petition the PUC in November 2010 to investigate the methods the commission uses to set the price that should be paid to renewable energy developers. Utilities complained that the federal Public Utility Regulatory Policies Act (PURPA) was forcing them to buy power they did not need at rates that were too high.
Congress passed PURPA in 1978 to encourage renewable energy development. The law requires regulated utilities to buy energy from qualifying renewable small-power projects, called qualifying facilities (QFs). Although the “must buy” provision of PURPA is a federal law, Congress left it to states to determine the rate to be paid to QF developers.
That rate, called an avoided-cost rate, is to be based on the cost the purchasing utility avoids by not having to generate the power itself or buy it from other sources. According to the PUC, because ratepayers end up paying for QF energy, the intent of PURPA is that, cost-wise, ratepayers are indifferent as to whether their utility uses more traditional sources of power or buys from qualifying renewable energy projects.
Under the new rules, the cap for wind and solar projects seeking the PUC’s published avoided-cost rates is 100 kW. The eligibility cap for all other QFs remains 10 MW. Wind and solar projects larger than 100 kW are eligible for a negotiated avoided-cost rate using each utility’s long-range growth plan as the basis for the negotiation.
The PUC denied an Idaho Power Co. proposal to use the Integrated Resource Plan (IRP)-based negotiated rate methodology for all QFs. The PUC also denied a proposal by Idaho Power that would relieve it from its PURPA mandatory purchase obligations by allowing it to curtail generation from some projects during certain periods of light customer load. The PUC said that while federal law allows curtailment under specified conditions, Idaho Power did not provide sufficient evidence to support its proposal.
Projects with published-rate contracts will be able to keep the renewable energy certificates (RECs) associated with their projects. Wind and solar projects larger than 100 kW and all projects larger than 10 MW with negotiated contracts using the IRP methodology will retain one-half of the RECs associated with their project, while the purchasing utility retains the other half.
Fuel-price forecasts and load forecasts will be updated on June 1 of each year so that the price paid to QFs more accurately reflects avoided cost. Until now, a large part of the rate paid to QFs was updated only when the Northwest Power Planning and Conservation Council issued an updated natural-gas price forecast. The new annual update will be based on natural-gas price forecasts provided by the federal Energy Information Administration’s Annual Energy Outlook.
The maximum contract length for sales agreements between utilities and QFs remains 20 years. Alternatives to a 20-year contract may be negotiated by the parties and considered by the commission.
New QF contracts will be paid for capacity based only on the project’s ability to deliver during peak hours and when a utility’s long-range plan shows the utility is capacity deficient. Currently, QFs are paid for both energy and capacity, the latter being potential surplus the utility may need during peak-load hours.
“Wind and solar are intermittent resources with unique characteristics,” the PUC said. “A 100 MW wind farm or solar project can be broken up into 10 MW pieces in order to maintain multiple published-rate contracts.” That, the commission said, no longer produces a rate that accurately reflects the value of the energy to the utility.
“Congress intended to allow PURPA cogeneration and small renewable projects to produce and sell power without the burden of being regulated as an electric utility,” the PUC added. “Congress did not intend for multinational corporations to fund large wind farms for the benefit of their shareholders and the detriment of utility ratepayers. Indeed, PURPA transactions are intended to hold ratepayers harmless.”
Wind Benefits From
Oregon Gov. John Kitzhaber has released a new 10-year energy plan that outlines the steps the state will take to meet renewable energy, energy efficiency, greenhouse-gas reduction and transportation objectives.
The plan presents three core goals:
- Meeting 100% of new electric load growth through energy efficiency and conservation;
- Enhancing clean energy infrastructure development by removing finance and regulatory barriers to attract new investment and pursue promising new technologies; and
- Accelerating the market transition to a more efficient, lower-cost and cleaner transportation system, including strategies for fleet vehicle conversion and access to cleaner-burning and more efficient vehicles.
The governor’s plan proposes streamlined permitting for renewable energy facilities in order to provide more certainty for companies considering investments in Oregon, as well as recommends workforce development initiatives to ensure Oregonians have the skills and training necessary to land clean energy jobs.
The plan also calls for building retrofits and efficiency improvements on up to 4 million square feet of state-owned buildings and office space to improve their energy performance and help drive private-sector investment.
Sen. Jim DeMint, R-S.C., a conservative lawmaker and vocal opponent of renewable energy, has left the Senate to become president of conservative think tank The Heritage Foundation.
DeMint had sought to repeal all energy-specific tax credits, including those for wind power. Last year, he introduced an amendment to the Senate Transportation Bill that, in addition to eliminating all energy tax credits, would have made the PTC expire retroactively on Jan. 1, 2012. (The Senate defeated the amendment.)
DeMint was elected to the U.S. House of Representatives in 1998 and to the U.S. Senate in 2004 and 2010.
“I’m leaving the Senate now, but I’m not leaving the fight, DeMint said in a statement. “I’ve decided to join The Heritage Foundation at a time when
the conservative movement needs strong leadership in the battle of ideas. … My constituents know that being a senator was never going to be my career.”
Tribes To Benefit
The U.S. Department of Energy (DOE) has announced two new initiatives aimed at driving increased renewable energy production and sustainable economic development on tribal lands.
At the White House Tribal Nations Conference, held in December, DOE Secretary Steven Chu issued a policy statement and guidance to give preference to American Indian tribes when the DOE’s facilities contract to purchase renewable energy products or byproducts, including electricity, fuel sources and renewable energy certificates.
Under this policy, DOE facilities can utilize this purchase preference when a Tribal Nation holds a majority ownership position in a renewable energy project and the cost is no more than the prevailing market rate, pursuant to the DOE’s authorities under the Energy Policy Act of 2005.
This procurement policy will help spur the development of untapped renewable energy resources on American Indian lands near DOE facilities and help tribes capture the economic benefits of their own resources, the DOE says.
The DOE also unveiled new training and educational resources to help U.S. Tribal Nations advance local renewable energy project financing and development. w
N.M. Increases Wind Requirement
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