August 2014 – Global Power Law & Policy

Energy Storage RFPs May Spread to Oregon

Aug 25 2014

The Oregon Department of Energy (ODOE) recently announced that it is considering issuing a solicitation for demonstration electrical energy storage projects in late 2014. To prepare for possible funding opportunities, ODOE seeks public comments about the “scope, number and priority” of proposals that use “electrical storage technology, specifically batteries” to provide resiliency and regulation. ODOE noted that potential proposals may include, among others, projects that support transmission system devices such as static var compensators, projects that would be co-located with renewable energy generation where there are transmission constraints, projects that would provide stabilization to industrial facilities during outages, and projects that would co-locate renewable energy generation with distributed energy storage.

ODOE also seeks comment on the selection criteria that it has preliminarily identified, which include the sponsor’s ability to secure adequate funding for project implementation, the project’s commercial viability, the sponsor’s willingness to allow multiple public entities to collect data from the project for a year after commissioning, “integrity benefits” to the distribution or transmission system, and “resiliency benefits” to emergency service providers or critical services.

ODOE also seeks comments on whether it should prioritize geographic areas in Oregon that would benefit from grid improvements, whether it should prefer certain parties (such as small utilities) as grant recipients, whether it should give preference to certain technologies, what kind of transparency and data requirements should be used, and how a pilot energy storage project could be used to support standards development.

ODOE’s “Comment Opportunity” can be found here. Comments are due on August 29.

The agency’s request for comments is an outgrowth of an energy storage workshop co-hosted by ODOE and the Oregon Public Utility Commission (OPUC) in Portland in March 2014. I attended the workshop, and found it very informative. The morning session of the workshop featured panels that discussed a range of energy storage technologies and their potential applications. During the afternoon session, participants broke into groups for roundtable discussions on various topics. ODOE and OPUC did a good job of reducing the proceedings to writing—you can find summaries of the Roundtable sessions and the presentations here. These materials provide useful background on how ODOE and OPUC are thinking about the development of energy storage in Oregon.

ODOE’s ability to proceed with the solicitation appears to be conditioned on what the agency describes as a “potential partnership” with U.S. Department of Energy, Sandia National Laboratories and the Clean Energy States Alliance. Whether this particular solicitation materializes or not, Oregon is now among a number of states such as California, Hawaii and New York that are recognizing the important role that energy storage will play in electric power supply, delivery, and security in the years ahead.

DOE 2013 Wind Market Report – Lots of Wind Projects Coming!

Aug 25 2014

The US Department of Energy (DOE) recently released its 2013 Wind Technologies Market Report summarizing the accomplishments of the U.S. wind energy industry. The full report can be found here. Compared to the record-setting 13 GW of new operating wind projects in 2012, 2013 was clearly an off-year, with only a little over 1 GW of new wind energy capacity added. One of the major reasons for this dramatic fall-off was the expiration of the federal income tax production tax credit (PTC) at the end of 2012, which created a land rush of projects being placed in service at end of year 2012, depleting the project pipeline for 2013. The revival of the PTC in 2013 was too late to stimulate significant project completion in 2013. The good news is that because projects that commenced construction by the end of 2013 will qualify for the PTC, a flood of wind projects will be placed in service in 2014 and 2015. The boom and bust cycle of PTC driven wind project development continues.

IRS Attempts to Clear the Air with Additional Guidance on Renewable Energy Tax Credits

Aug 14 2014

On August 8, 2014, the IRS issued Notice 2014-46, which provides guidance on several issues relating to the implementation of recent changes to the renewable electricity production tax credit (PTC) under Section 45 of the Tax Code and the energy investment tax credit (ITC) in lieu of the PTC under Section 48. In particular, the Notice addresses the manner in which taxpayers can satisfy the “physical work” test and the effect of various types of transfers of ownership after the construction of a facility has begun. In addition, the Notice modifies the 5% safe harbor test included in previous notices. In light of the issuance of the Notice, the IRS says it will not issue private letter rulings on the topics addressed in the Notice.

BOEM Defines Wind Energy Areas Offshore North Carolina

Aug 14 2014

On Monday, the U.S. Department of the Interior announced that the Bureau of Ocean Energy Management (“BOEM”) has defined three Wind Energy Areas off the North Carolina coast for potential commercial wind energy development.

The three Wind Energy Areas cover approximately 307,590 acres, which is a reduction in the area initially considered by BOEM for commercial scale wind power development. The Wind Energy Areas announced Monday include about 122,405 acres off the coast of Kitty Hawk, North Carolina, and two areas of 51,595 acres and 133,590 acres off the coast of Wilmington, North Carolina. A map of the Wind Energy Areas can be found here.

Renewable Energy Reform Pushing Ahead in Mexico

Aug 12 2014

Yesterday in Mexico City President Enrique Peňa Nieto signed into law the much anticipated landmark reform of the energy sector, ending a 76 year state run monopoly and opening the sector to foreign investment. The energy reform act is one of the key goals of his administration. “This represents a historic change that will accelerate the economic growth and development of Mexico in the coming years,” the president told hundreds of guests at a ceremony in the capital.

IRS Releases Guidance on the Wind Production Tax Credit

Aug 11 2014

On August 8, 2014, the IRS released Notice 2014-46. The Notice provides guidance with respect to a number of issues. Specifically, the Notice (i) clarifies how to satisfy the “physical work” test under the begin construction requirement, (ii) clarifies the effect of various types of transfers of interests in a facility after construction has begun and (iii) modifies the application of the 5 percent safe harbor as it applies to a single project comprised of a number of facilities. The Notice can be found here. We will post a discussion of the Notice later this week.

Washington UTC clarifies its authority to regulate third-party ownership of solar panels and requests further legislative direction

Aug 05 2014

The Washington Utilities and Transportation Commission (WUTC) has issued an interpretive policy statement clarifying its jurisdiction to regulate third-party owners of solar panels and other net metering systems as “Public Service Companies.” Docket No. UE-112133 (July 30, 2014) (statement). While the WUTC’s policy statement provides useful guidance on the agency’s current position and the action it will likely take in the future, the statement is not binding on the agency. Read More

Archive:August 2014