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Congress Is on the Verge of Passing Multi-Year Extensions for Solar and Wind Tax Credits

Lawmakers reached a compromise as part of a spending package. Will there be enough votes to pass it this week?

by Stephen Lacey
December 16, 2015
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House Republicans unveiled legislation late Tuesday night that included multi-year extensions of tax credits for solar and wind.

The credit extensions were attached to a broad set of spending measures as part of a negotiation with Democrats over lifting the ban on exports of U.S. crude oil.

Rhone Resch, president of the Solar Energy Industries Association, predicted in November that solar tax credits would likely be added to any deal around lifting the oil export ban. He called it “our best opportunity.”

“Democrats are saying, ‘We need to get something for it,’ and the White House is chiming in too,” said Resch.

This month, Republicans demanded an end to the 40-year-old ban as part of a legislative tax and spending package that would fund the government through next fall.

Although many Democrats oppose ending the ban, they saw it as an opportunity to demand extensions of the Investment Tax Credit (ITC) for solar and the Production Tax Credit (PTC) for wind.

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Yesterday afternoon, Democratic leaders said they would only support the Republican proposal if renewable energy credits were added to a tax or spending bill.

“We have 2 paths: 1. Pair oil export ban with policies to reduce carbon emissions; 2. Pass gov’t funding without oil/renewables,” tweeted Senator Harry Reid yesterday afternoon.

In 1975, Congress made it illegal for domestic drillers to ship crude out of the country. The export ban was designed to protect America from volatile oil prices in the wake of the Arab Oil Embargo. As U.S. production dwindled over the proceeding years, the policy was not contested.

Today, America is a leading producer of crude — and drillers argue they should be able to export oil as an incentive to expand production.

Some see the tradeoff as a good deal.

“An oil-exports-for-renewables-tax-credits deal looks likely to be a win-win. Removing the oil export ban is good policy. Supporting zero-carbon energy innovation, including through appropriate deployment subsidies, is good policy,” wrote Michael Levi, a senior fellow at the Council on Foreign Relations, in a recent analysis of the deal.

Last night, House Speaker Paul Ryan unveiled an omnibus spending bill that would lift the ban, while also extending solar and wind tax credits for two years.

The PTC — a 10-year, 2.3-cent per kilowatt-hour credit — would be extended through 2020. After December of 2016, the credit would be cut each year until it fully expired in 2020.

The ITC — a 30 percent credit for utility, commercial and rooftop solar installations — would get phased down through 2022. The credit would stay at 30 percent through 2019, and then fall to 26 percent in 2020. It would drop to 22 percent in 2021 and 10 percent in 2022. The bill also offers a commence-construction clause that would extend the credit to any project in development before 2024.

“The extension to the federal ITC is without question a game-changer for U.S. solar’s growth trajectory. Between now and 2020, the U.S. solar market is poised to see a number of new geographies open up with a 30% ITC, within both distributed and utility-scale solar,” said Cory Honeyman, a senior solar analyst at GTM Research.

The House and Senate will likely vote on the package Thursday night or Friday morning.

Although Democrats have signaled their willingness to support the deal, House Speaker Nancy Pelosi told Bloomberg that broad agreement wasn’t guaranteed — even with strong extensions of renewable energy credits.

Opponents see lifting the ban as a massive subsidy to oil producers and an environmental risk. In an op-ed this week, climate activist Bill McKibben explained why so many progressive environmentalists opposed a change to the law.

“What makes the plan to lift the ban especially galling is that the administration and congressional Democrats insist they’re getting a reasonable deal because the Republicans will concede tax breaks for solar and wind producers in return. But the logic of the Paris accords — with their theoretical commitment to a world that will warm just 1.5 or 2 degrees — means that we don’t get to keep making this kind of tradeoff,” wrote McKibben.

Speaker Ryan assured reporters that he would get the votes to pass the package.

“I am not going to predict how the vote count will go down,” Ryan said this morning during a press event. “Look, in negotiations like this, you win some, you lose some. Democrats won some, they lost some, we won some, we lost some. At the end of the day, we are going to get this done.”

CA Digest CALIFORNIA Roundup, October 2015

A Message from LEAN’s Executive Director

Over the past year, CCA has evolved from an anomaly to an almost-standard item on the agendas of many local governments in California. Many coastal counties and several inland communities are in some stage of inquiry, and several are in pre-launch. Case in point, the San Mateo County Board of Supervisors had the first reading of their CCA ordinance on October 20, putting them on pace to be the next operational CCA in California!

California’s state leadership has recognized CCA as a viable and important part of the state’s energy strategy. And yet, there remain inconsistent signals about where the state’s energy policy and infrastructure is headed– in ways that will affect CCA in the future. For example, California has made a commitment to new and better green technologies, but the CPUC continues to approve gas-fired central station generation and appears to support utility proposals that could hurt development of behind-the-meter energy resources. While the State says it’s committed to increasing distributed resources, it seems to be setting up a process to support massive investments in transmission and huge, utility-scale renewable projects that have significant environmental impacts.

Bigger and more centralized resources may be increasingly anachronistic and yet we will be saddled with their environmental and economic costs for many years to come. Although the state’s CCAs have and should continue to have different power supply strategies, a few things are constant: California CCAs are proving to be effective vehicles for new clean power development, energy conservation programs, and the integration of clean technology at the local level. And that’s a story we plan to tell the world as we head to the UN Conference on Climate in Paris next month.

With the passage of SB 350 and the Governor’s explicit commitment to leadership on climate and energy, we will have many opportunities to raise these issues and inconsistences–and we appreciate your support and participation in the process.
Shawn Marshall signature
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We’re Headed to Paris!     

LEAN Energy US is among a small but mighty CCA delegation that is attending the UN Climate Talks in Paris this December. Thanks to the efforts of Tom and Jane Kelly and the support of the Sequoia Foundation, we’ll be sharing the results of California’s CCA leadership on Saturday, December 5thalongside colleagues from Columbia and India who will be sharing their stories of local energy innovation and climate solutions. It is a wonderful collaboration!
Watch our Facebook page for up-to-the-minute posts on the happenings in Paris. And check our website page for updates and downloads. We are thrilled to have the opportunity to bring clean energy CCA to the world stage!
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Update of CCA Program Developments in California
Earlier this week! The Contra Costa County Board of Supervisors approved exploration of CCA program options for the county and its cities. The San Mateo County Board of Supervisors voted unanimously to pass their CCA ordinance, putting Peninsula Clean Energy in the lead to be the next operational CCA in the State.
Other updates …   

City / County of San Francisco  
Announced a 6 week delay in program launch to deal with 50+ bids for power services exceeding SFPUC spending cap!
Los Angeles County  Technical Study underway; BKi is lead author; SouthBay Clean Power has secured supporting resolutions from 13 of the 16 Southbay COG communities.
City of San Diego  
Initial study published by Protect Our Communities Foundation shows viability in San Diego with one big regulatory challenge. Validation study planned shortly.
Mendocino County 
Has engaged LEAN to support community education effort, working on service RFP and program options with Lake and Humboldt Counties.
City of Davis / Yolo County  
Technical Study underway which will include an analysis of forming their own CCA or joinging Marin’s program; The Energy Authority is lead author.
Santa Barbara County / Ventura & San Luis Obispo 
SLO County voted to join with Santa Barbara County and Ventura County to develop tech study and allocated $50,000 to the work; load data authorizations and CCE advisory committee development underway.
Elsewhere…   
First New York program soon to launch with approximately 150,000 customers, expansion already occurring to neighboring counties in NY. Interest from some areas in UT is re-emerging.

 

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The Latest from California CCAs
MCE UPDATE–MCE’s CEO, Dawn Weisz, reports on MCE’s progress with various programs:

    Energy Efficiency–MCE has applied to the CPUC to be default services provider, which would allow MCE to roll in cheaper program components (now performed by PG&E) into more comprehensive building envelope projects, making MCE projects more cost-effective overall. MCE also wants to be the single point of contact for customers in order to improve market penetration and level of service. As part of this approach, MCE would offer services related to traditional energy efficiency improvements, storage, demand response, solar, water heating and water conservation measures. MCE is already working with the local water district to leverage the conservation programs of both agencies.

    Hiring for Local Energy Project Construction –MCE has a 50% local hire requirement for its 10.5 MW solar project in the City of Richmond. It is working with RichmondBUILD’s construction training program to get local residents work on the project. It has also coordinated efforts with the Laborer’s Union and iBEW. IBEW states it will not be able to provide job candidates for the project but the Laborer’s Union continues to collaborate with MCE on this.

    Integrated Resource Planning–MCE’s new 10-year integrated energy planincludes a supply portfolio that is 80% renewable and 95% greenhouse gas free by 2025! The County’s new climate action goal for 2030 would reduce greenhouse gas emissions to levels 30% below 1990 levels. Press release here…
For more information on MCE’s programs, please visitwww.mcecleanenery.com
LCE FULLY LAUNCHED! Lancaster Choice Energy’s program director, Barbara Boswell, reports that the City launched its citywide CCA program on October 1. Opt out rate so far is less than 5%, although Barbara warns that number could go up with additional customer notices. LCE has experienced some operational challenges in its interface with SCE but they are not expected to be ongoing or expensive to fix.

Kudos to LCE for some great regulatory victories this past week including the Energy Division’s rejection of SCE’s attempt (in an advice letter) to remove the PCIA exemption for CARE customers.  This sets important precedent for CCAs in Edison territory. See the SCE disposition letter here. We’ll have more to report about LCE’s regulatory victories next month.

For more info on LCE’s program please visit www.lancasterchoicenergy.com
SCP UPDATE –Kate Kelly, Director of Public Affairs and Marketing, reports on some key SCP updates:
  • SCP hosted the “Drive Electric” vehicle event with Tesla that was well-attended; SCP has stated its objective to support EV development in its service area as part of its resource strategy
  • SCP’s feed-in tariff is already 50% subscribed
  • SCP has started its “Recapture” campaign, designed to invite opt-out customers back to SCP

For more info on SCP’s programs, please visit www.sonomacleanpower.org

What Are “Back Office Operations,” Anyway?

Drake Welch, VP of Customer Care at Noble Energy Solutions, describes the nature of CCA “back office” services.
Back office functions are the components of a CCA’s operations that manage load and meter data, and interface with customers and the utility on billing issues and data requirements. These services include:

  • Electronic Data Communication, including EDI certification
  • Customer Information System (CIS)/ Customer Relationship Management (CRM) System that provides electronic data management and information
  • Billing Administration Services
  • Settlement Quality Meter Data Reporting Services
  • Customer Call Center Services
  • Qualified Reporting Entity (QRE) Services, including reports required by CAISO for firming and shaping delivered supplies and settlements
  • Reporting Services, including information about Aging, Call Center Statistics, Cash Receipts, Collections, Invoice Summary, Opt Up/Out Transactions, Snapshot, Unbilled 810s
For a copy of Drake’s slide presentation on this topic, please contact Alison Elliott at LEAN Energy, aelliott@leanenergyus.org.
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Regulatory and Legislative Happenings
A couple of CPUC updates this month…
  • PG&E 2016 ERRA Application (A. 15-06-001) MCE, SCP and LEAN filed briefs opposing PG&E’s proposal to increase the PCIA by 70%. The briefs proposed addressing ways to stabilize the PCIA rate with a sort of amortization account or in another phase of the proceeding. LEAN will be asking for your support on the opposition to this unprecedented rate increase during the decision-making process – more on this soon.
  • Long Term Procurement Planning Rulemaking (LTPP) (R. 13-12-010) – The ALJ in the proceeding published a proposed decision that would, among other things, require SCE and PG&E to incorporate CCA forecasted load losses in their demand forecasts. While this is already Commission policy, its application has been in question.
In Sacramento…
  • Governor Vetoes SB 660 (Leno)–In spite of overwhelming support from both sides of the aisle, Governor Brown vetoes SB 660, which would have required various reforms to CPUC decision-making. You can see the veto message here.
PCIA and CAM Decoded…
  • MCE has provided an overview of two regulatory “mechanisms” that are key for CCAs, which should help the rest of us understand these complicated issues and how they affect CCA operations and customers. This is an important document that outlines policy recommendations and regulatory fixes to these vexing issues. (view here)
If you would like more information or have ideas for collaboration, please contact Kim Malcolm  kmalcolm@leanenergyus.org

 
Thanks to our Members!
barn raising pix
We’d like to extend an enthusiastic thanks to all our members, whether you’re new on the scene or renewing your membership. Your support is critical to our success, and to the success of CCA everywhere.

Thanks to our newest members!

BKi Energy Services
San Mateo Community Choice
South Bay Clean Power
David McCoard 

What?

You say you’re not a member yet?! You can join through our website
 sign-up form, or contact LEAN’s Administrative Coordinator, AlisonElliott, at aelliott@leanenergyus.org

Click here for our membership flyer information.
You can see logos of all our current members on our website HOME page. Please take the time to peruse their websites–you may find some important contacts there.

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Our Consulting Clients 
In addition to providing information resources to all interested parties, LEAN Energy also provides consulting services to communities involved in CCA investigation and development.

Whether you’re just considering formation or further along, LEAN can help flatten your learning curve, provide critical guidance, and prep you for launch in record time. You’ll learn from those who’ve already done it successfully and from those who are well along the path.

Here are some of LEAN’s current CCA consulting clients:

Alameda County

Contra Costa County

San Mateo County
Silicon Valley CCE Partnership
Santa Cruz County/Monterey Bay        Community Power
City of Davis
Santa Barbara County
Mendocino County

Looking for help with CCA Formation? Call Us!   

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Odds and Ends
Educational Workshops Available

Would a workshop on CPUC regulation or an informational CCA webinar be useful for your community or working group? LEAN Energy can help!

To inquire or schedule a session, contact Alison Elliottaelliott@leanenergyus.org

 

 

Next Monthly Market Call
Friday, Nov. 13th, 10-11 am
Join us to hear about all the latest developments in the CA marketplace. Contact Alison Elliott for more information.aelliott@leanenergyus.org or register here.

Help Design our Market Calls
We’re asking for input and suggestions about what’s most important to YOU.

Please

click here

to take our very brief survey and make sure your voice is heard!
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Remember to follow us on facebook and Twitter for up-to-the-minute news flashes on the CCA marketplace.

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Acronym Cheat Sheet 

Are the acronyms and abbreviations stumping you? Here’s a quick glossary of some frequently used terms:

 

ALJ – Administrative Law Judge 

BoS – Board of Supervisors

CAISO – California Independent System Operator

CAM – Cost Allocation Mechanism

CIS – Customer Information System

CPUC – California Public Utility Commission

CRM – Customer Relationship Management

ERRA – Energy Resource Recovery Account

iBank – California Infrastructure & Economic Development BankIBEW – Int’l Brotherhood of Electrical Workers

ISO – Independent System Operator 

JPA – Joint Powers Authority

PCIA – Power Charge Indifference Adjustment

PPA – Power Purchase Agreement

QRE – Qualified Reporting Entity

REC – Renewable Energy Credit

T & D Rates – Transmission and Distribution Rates
TOU Rates – Time of Use Rates

CCA vs. CCE – What’s the difference? Nothing!
Community Choice Aggregation is sometimes called Community Choice Energy. The first is a legal term; the second is more descriptive and consumer-friendly.

LEAN Energy US
www.LEANenergyus.org / 415-888-8007

PO Box 961 / Mill Valley / CA  94941

 

 

ITC Cliff

The potential loss of solar capacity is about equal to the total amount currently installed

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What will happen if the federal investment tax credit (ITC) so many solar developers depend on isn’t extended?

“If the investment tax credit is not extended, we see it as a disruption, not a death for the industry,” said Maddy Yozwiak, U.S. Power and RECs analyst  and co-author of the recently-released report, “How extending the investment tax credit would affect US solar build,” from Bloomberg New Energy Finance (BNEF).

“It will be a disruption that will take years to recover from, but the recovery is there. Long-term costs continue to improve,” Yozwiak added. “That doesn’t go away, even without the ITC.”

For now, the ITC is a 30% tax credit, but that is slated to change at the end of 2016, when it would drop to 10% for business investments in solar, and nothing for residential solar projects.

With that policy change, BNEF calculated that  the US can expect about 73 GW of solar PV to come online by year-end 2022. Build rates will fall from “an average of 8 GW per year from 2014-16 to 6 GW per year from 2017-22.”

The solar industry is lobbying hard for a five-year extension of the 30% business and personal ITC. If congress puts it in place by mid-2016, that would boost average build rates to about 10 GW per year from 2017-2022, the analysis concluded, amounting to an installed capacity of over 95 GW.

Given the success of the ITC and the value of solar, Yozwiak said, the real question “is whether it is worth causing the change after 2016, and havingdisruption at the scale we forecast it.”

Standard Solar CEO Tony Clifford agreed.

“There are going to be changes in 2017, likely very dramatic changes,”  Clifford said. “But we shouldn’t spend time arguing about how big this cliff will be. We should be working to make sure we don’t go over it.”

Legislation to Level the Playing Field for Renewable Energy Reintroduced in Congress

Taylor--(NEW)--shutterstock_221970928

On June 24th, the Master Limited Partnership (MLP) Parity Act was reintroduced in both the House and Senate.  U.S. Senators Chris Coons (D-DE) and Jerry Moran (R-KS), and Representatives Ted Poe (R-TX-02) and Mike Thompson (D-CA-05) put forth this bipartisan legislation to level the playing field by giving investors in renewable energy projects access to a decades-old corporate structure whose tax advantage is currently available only to investors in fossil fuel-based energy projects.

This bill would provide an important modification to the federal tax code that would release private capital by helping additional energy-generation and renewable fuel companies form master limited partnerships, which combine the funding advantages of corporations and the tax advantages of partnerships.  Solar energy companies would be among the biggest beneficiaries of this extension.

“Renewable energy technologies have made tremendous progress in the last several decades, and they deserve the same shot at success in the market as traditional energy projects,” Senator Coons said. “By updating the tax code, the bipartisan Master Limited Partnerships Parity Act levels the playing field for all domestic energy sources — renewable and non-renewable – to support the all-of-the-above energy strategy we need to power our country for generations to come. This practical, market-driven solution will unleash private capital and create jobs, and that’s why it has earned broad support from Republicans and Democrats in Congress as well as academics, outside experts, business leaders and investors.”

Private capital is the strongest way to grow solar energy production in the U.S. and such renewable energies should certainly enjoy the same legislative incentives that exist for oil and gas ventures.  When taxed at the individual investor level, a solar business with the MLP structure would have more financial flexibility and a lower cost of capital.  Today, solar is the fastest-growing source of renewable energy in America and this proposal would go a long way to support this clean, affordable source of energy.

The Congressional calendar remains uncertain entering the fall; however, the MLP Parity Act has broad support from the business community as well as the legislature.  The bill was previously introduced in 2013 and hopes have been high since that time that the language may find its way into a comprehensive tax reform effort often cited as a priority of the Senate Finance and House Ways and Means Committees.  While comprehensive reform appears stalled for the foreseeable future, smaller energy-focused tax packages (including solar investment tax credit extension) are currently being discussed.

SEMI maintains an advocacy team in Washington, D.C., focused on building support for solar/PV legislation such as the MLP Parity Act.  As these initiatives move forward, SEMI will remain a vocal supporter of a level playing field for U.S. solar companies.

Grid
SEMI
www.semi.org
September 23, 2015

GREENWASH GRIPES

 

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Roy Phillips is owner of REP Energy of San Rafael, which is building a 1.5-megawatt solar project at the abandoned Cooley Quarry near Novato. The project is among several local energy projects benefiting from long-term energy purchase agreements with Marin Clean Energy. Frankie Frost — Marin Independent Journal

Workers for Synapse Electric of Mill Valley install solar panels at the San Rafael Airport in 2012 for Marin Clean Energy, which has contracted to purchase electricity produced by the 1-megawatt project for 20 years. Robert tong — Marin Independent Journal

Marin clean energy: What is it?

Marin Clean Energy was created five years ago with the objective of making it possible for every person in the county who pays an electric bill to also help in the monumental battle against global climate change.

It was the first successful attempt in California to launch a public model for providing electricity to residents.

The joint power authority’s birth was made possible by a “community choice aggregation” law passed in 2002, which allows local governments to aggregate (or cluster) electricity demand within their jurisdictions to buy and sell renewable energy while maintaining the existing electricity provider for transmission and distribution services.

When Marin Clean Energy flipped the switch in May 2010, it had 6,000 customers. Today, it has some 170,000 customers and its membership spans all of Marin County, unincorporated Napa County and the cities of Benicia, El Cerrito, Richmond and San Pablo.

Marin Clean Energy’s standard Light Green energy was 56 percent renewable in 2014 compared with Pacific Gas and Electric’s electricity, which was 27 percent renewable.

Marin Clean Energy customers paid slightly less than PG&E’s. The average monthly bill for a typical residential customer using about 473 kilowatt-hours was $99.45 for Light Green customers and $100.92 for PG&E customers. The Marin agency’s Deep Green residential customers, who get 100 percent renewable electricity, paid an average of $104.18 per month in 2014.

Half of the premium that Deep Green customers pay goes into Marin Clean Energy’s fund for developing local energy projects.

The agency’s operating budget for the 2015-16 fiscal year is $145.9 million and it has 30 employees.

— Richard Halstead

A union representing Pacific Gas and Electric Co. workers and a San Francisco consumer group are taking aim at the common use of energy credits by groups including Marin Clean Energy.

They’re pushing an initiative in San Francisco and new state legislation designed to curb such practices.

Their contention: Marin Clean Energy and other purchasers of those credits, such as the city of Palo Alto, Cisco Systems Inc. and the Sacramento Municipal Utility District, are using paper certificates to “greenwash” their energy.

What’s a rec?

A renewable energy certificate (REC) is a tradable environmental commodity used in North America to represent proof that 1 megawatt-hour of electricity was generated by an eligible renewable energy resource such as solar, wind, geothermal, biomass, hydroelectric and tidal power.

During the 1990s, states began requiring that utilities acquire a specific percentage of their electricity from renewable sources. To facilitate the sale of renewable electricity nationally, a system was developed that separates renewable electricity generation into two parts: the electrical energy produced by the renewable generator and the renewable “attributes” of that generation.

The electricity associated with a REC may be sold separately and used by another party or it may remain bundled with the REC. If the energy is sold separately it is no longer considered renewable and cannot be used by utilities to meet their state-mandated goals for renewable energy use. The unbundled REC now carries all of the renewable attributes and can be sold separately.

For example, electricity generated at the Mountain Air Projects in Idaho, 60 wind turbines with a capacity of 138 megawatts, is sold to Idaho Power, the investor-owned state utility. Idaho does not require Idaho Power to buy any minimum amount of renewable energy, so the utility has no incentive to pay the extra cost associated with renewable energy. Idaho Power pays about the same price for the electricity as it would for power generated using natural gas. The owners of the project sell the unbundled RECs to Marin Clean Energy and other entities, who then take possession of the “renewable attributes” associated with the power.

— Richard Halstead

At issue is something known as an “unbundled, renewable energy certificate” — a credit that, when purchased, allows the buyer to legally claim ownership of 1 megawatt hour of renewable electricity. It has been “unbundled” from the actual renewable electricity that was generated.

The International Brotherhood of Electrical Workers, Local 1245, which represents PG&E’s electrical workers, is collecting signatures for a ballot measure that would bar San Francisco from promoting its electricity as clean or green if it uses unbundled RECs.

“RECs have been dismissed by many experts as an accounting gimmick that do nothing to reduce greenhouse gas emissions or create more clean power,” said Hunter Stern, a spokesman for Local 1245. “We introduced this measure to require that San Francisco disclose the sources of the power they sell, so they cannot sell brown power as green.”

But Dawn Weisz, Marin Clean Energy’s executive officer, said Local 1245’s ballot initiative is attempting to rewrite the definition of renewable energy so that no out-of-state supply would qualify as renewable. Most unbundled RECs come from projects outside California.

“The IBEW wishes to promote California sources of renewable energy because it wishes to promote jobs for its members,” Weisz said. “While this is valuable, it should be presented in a clear way, not by relying on confusing information about RECs, and should be considered together with the other goals of a power portfolio.”

A second offensive is being mounted against the use of unbundled RECs in the state Legislature.

Assemblyman Phil Ting, D-San Francisco, has introduced AB 1110, which would prohibit an adjustment in the calculation of emissions of greenhouse gases through the application of unbundled RECs. The legislation was sponsored by The Utility Reform Network, a consumer advocacy organization based in San Francisco.

“What we’re looking for here is an apples-to-apples comparison and full disclosure by all about exactly what the product is they’re selling to customers,” said Mindy Spatt, a TURN spokeswoman. “Customers want to know whether it is actual clean energy or RECs.”

RECS ARE ‘VALUABLE’

But James Critchfield, director of the U.S. Environmental Protection Agency’s Green Power Partnership, said unbundled RECs are an important part of the national system that developed after many states began requiring utilities to get a certain percentage of their electrical power from renewable sources: solar, wind, geothermal, biogas, biomass and low-impact small hydroelectric resources.

“The EPA, the Federal Trade Commission, and the National Association of Attorneys General have all recognized the REC as the instrument through which renewable energy usage claims are substantiated,” Critchfield said. “It’s a market-based approach that is valuable to growing the market.”

Local 1245 began raising the issue of Marin Clean Energy’s use of unbundled, renewable energy certificates about a year ago. It was the Oakland-based Local Clean Energy Alliance, however, that first questioned their efficacy with a report it issued in October 2013.

‘WHAT THE HECK IS A REC’

Al Weinrub, co-author of the report, “What the Heck is a REC,” and coordinator of the alliance, said the concern at the time was a PG&E proposal for using RECs.

“PG&E said they were going to offer a 100 percent green option. It turned out the way they were going to do that was to buy the cheapest unbundled RECs they could find on the market,” Weinrub said.

He said PG&E dropped the plan after meeting opposition.

In the paper, Weinrub and co-author Dan Pinkel wrote that the short-term purchase of unbundled RECs “while generally making renewable generation more profitable, makes only a questionable contribution to increasing renewable energy generating capacity.”

The paper went on to say that “unless the purchase transaction actually enables the development of new renewable generation that would not otherwise have occurred, there is scant legitimacy to the claim of displacing fossil fuels or reducing greenhouse gas emissions.”

Weinrub said the two major problems with unbundled RECs is that they are underpriced and typically not purchased under long-term contracts.

Weisz said Marin Clean Energy pays $1 to $2 for its unbundled RECs, about a tenth of what it pays for RECs that come bundled with their original electricity.

According to a 2011 report by the National Renewable Energy Laboratory, long-term contracts for RECs need to be encouraged because they “can offer the security and certainty that many projects need to obtain financing.” Most of Marin Clean Energy’s unbundled REC contracts are for a single year, although some are for two or three years.

RELYING ON RECS

Beginning in 2012, unbundled RECs have accounted for nearly a third of Marin Clean Energy’s total electricity purchases. In calendar year 2012 unbundled RECs made up more than 35 percent of the agency’s power purchases; in 2013 the number dropped to 31 percent, and in 2014 it inched down to 30 percent. Weisz said that this year the number will be cut in half to 15 percent as more California generation projects come online.

Local 1245 asserts that Marin Clean Energy uses unbundled RECs to make it seem that its electricity is cleaner than it really is.

Marin Clean Energy computes the greenhouse gas emission rate of the electricity it sells per megawatt hour by dividing its estimated emissions by the total amount of electricity it buys and sells. Using this method, Marin Clean Energy calculated its 2013 emissions rate as 364 pounds per megawatt hour, 17 percent lower than PG&E’s reported 2013 emission factor of 427 pounds per megawatt hour.

Local 1245 says that procedure is unfair because 345,000 megawatt hours of Marin Clean Energy’s 1.1 million megawatt total in 2013 came through the purchase of unbundled RECs.

Brittany McKannay, a spokeswoman for PG&E, said unbundled RECs accounted for 0.13 percent of PG&E’s total electricity purchases in 2013, which amounts to about 106,000 megawatt hours. In 2013, more than half of PG&E’s electricity came from sources that emit no greenhouse gases; but 32 percent of them — nuclear, 22 percent and large hydroelectric, 10 percent — don’t qualify as being renewable.

Weisz said using unbundled RECs to calculate Marin Clean Energy’s emission factor “conforms to every regulation and voluntary reporting paradigm that exists.”

“We are buying those volumes,” Weisz said, “so they are part of our mix.”

RECS ARE ‘VALID’

The Climate Registry, a nonprofit registry of greenhouse gas emissions for North America that certifies PG&E’s emission factor, sanctions the use of unbundled RECs in calculating emission factors.

Peggy Kelley, director of policy at The Climate Registry, said, “Our position is that RECs represent the environmental attributes of green power whether they are bundled or unbundled. It’s as valid a claim to the greenhouse gas totals as anything else.”

Weinrub and Pinkel concluded their paper with a caveat. They said that because nascent community choice programs — such as Marin Clean Energy — must compete for survival against investor-owned utilities, procurement of unbundled RECs may be justified if it makes it possible for the community choice program to invest in the development of new local renewable energy resources.

Marin Clean Energy has committed nearly $516 million to 195 megawatts of new California renewable energy projects. Those include a 10.5-megawatt solar project in Richmond, a 4-megawatt landfill waste-to-energy project in Novato, a 1.5-megawatt solar project in Novato’s Cooley Quarry, a 1-megawatt solar project at San Rafael Airport and a 1-megawatt project at the Buck Institute for Research on Aging in Novato.

Weisz said Marin Clean Energy had no idea how many customers would stick with its program in the early years, and the unbundled, short-term RECs gave it the flexibility it needed.

SONOMA NOT BUYING RECS

Sonoma Clean Power, a community choice aggregator like Marin Clean Energy that began serving about 6,000 residential customers in the North Bay last year, has ceased its purchase of unbundled RECs.

“Back in 2013, before we started serving customers, we did make some purchases of unbundled RECs, thinking we would use them more than we did,” said Geof Syphers, CEO of Sonoma Clean Power. “We haven’t sold any of those, but we haven’t bought any more.

“Our decision was made based on a concern that RECs might be double-counted in their value, but we have subsequently been unable to find any evidence that has occurred in California,” Syphers said.

Marin Clean Energy’s REC purchases are certified by Green-e, a program of the Center for Resource Solutions in San Francisco, which ensures that unbundled RECs aren’t double-counted.

“California has robust systems in place to prevent double-counting from happening,” said Jennifer Martin, the Center for Resource Solutions’ executive director. “For years now, California has been using RECs as the sole basis to demonstrate ownership of renewable energy attributes. It’s enforced by regulation and the California Public Utilities Commission.”

GROUP BACKS AB 1110

Kelly Foley, who has worked as legal counsel to both PG&E and Sonoma Clean Power and now serves as director of regulatory affairs at California Clean Power, said community choice programs should avoid using unbundled RECs in their marketing.

“You can’t say your paper certificates are sucking carbon out of the air, because they’re not,” Foley said.

California Clean Power, a Santa Rosa-based startup that is substituting a for-profit business model for the nonprofit, public power approach pioneered by Marin Clean Energy, is an active supporter of Assemblyman Ting’s AB 1110.

Foley said that often unbundled RECs come from renewable energy projects that were created long ago or that required no special financial incentive to get built. She said the sale of the unbundled RECs from such projects is just gravy for builders.

A report on the role of RECs in developing new renewable energy projects written in June 2011 by the National Renewable Energy Laboratory stated, “there are situations in which REC revenues are essential to project economics, as well as some where REC revenues may have little impact.”

DEPENDS ON PERSPECTIVE

The report added that the importance of RECs often depends on one’s perspective.

“Project developers and owners welcome all revenue, large or small, because they wish to maximize profit, and they may not know for sure how profitable the project will be until its useful life is at an end,” the report stated.

“Certainly from our perspective as a renewable energy project developer, we’re counting on those revenues from REC sales going forward,” said Bill Eddie, president of One Energy Inc., which also buys and sells RECs.

One Energy has assisted Marin Clean Energy with some of its REC purchases. Eddie said prices for unbundled RECs fluctuate with demand.

“I’ve seen prices for unbundled RECs in California go as high as $20, although not for long,” Eddie said.

Power bill gets green makeover in CA Senate

With almost no public attention, the California Legislature took a significant step yesterday (May 28) that could help corporations and universities make a complete transition to renewable energy. The Senate Appropriations Committee voted to approve SB 286 with a major amendment requiring that all power sold under the bill to be 100 percent renewable.

Overall, the bill would allow large electricity users to contract with independent power providers through the state’s Direct Access (DA) program, circumventing their local utilities, for an additional statewide total of 8,000 GWh of all-renewable power.

The bill now does exactly what I’ve worked with others to advocate — in a Sacramento Bee op-ed (co-authored with Greg Staple, my colleague at the American Clean Skies Foundation), in the halls of the State Capitol and on this blog.

The text of the amended bill isn’t out yet, and I will post it as soon as it’s available. But the staff analysis published online today summarized the new amendment this way: “Require that all additional DA service be from renewable sources as defined in the RPS (Renewable Portfolio Standard) program.”

What does this really mean? No, it isn’t a complete game-changer. But yes, it will be an important addition to the state’s overall strategy. Consider that the extra 8,000 GWh would lead to greenhouse gas reductions equivalent to a 2 percent rise in the RPS, while renewables now comprise about 24 percent of the statewide power mix. Democratic leaders will need all the help they can get to reach their new goal of 50 percent by 2030.

Yesterday’s decision reflects complex legislative maneuvering. The Appropriations vote moved the bill off the committee’s suspense file and sent it to the Senate floor for a full vote. The suspense file is essentially a legislative black hole, in which the fate of all bills in the file is decided by the Senate leadership before the meeting with zero transparency. It’s the proverbial smoke-filled back room. Whether this process is good or bad is not my point here. But the decision to drastically amend SB 286 suggests that the bill was carefully evaluated by the Committee chair, Sen. Ricardo Lara, and his close ally, Senate President Pro Tem Kevin de León, according to its potential impact on de León’s top legislative priority this year: SB 350, his landmark bill on greenhouse gas emissions reduction. Their apparent conclusion was that any new Direct Access should give the maximum boost to SB 350 — i.e. by being all-renewable. The bill’s author, Sen. Robert Hertzberg (D-Los Angeles), had no choice but to go along.

The switch to 100 percent marks a sharp turnaround for Hertzberg. He introduced SB 286 in February as a mostly brown-power bill, supported by a conventional brown-power alliance of industry groups that simply want cheap electricity with only the legal minimum of renewables. It was a largely Republican, pro-deregulation coalition very similar to the backers of the state’s big deregulatory leap in the late 1990s — which crash-landed in the power crisis of 2000-01. The additional power sold under the bill’s initial version would only have to comply with the state’s RPS, which currently mandates about 24 percent renewables. Then in early May, Hertzberg raised the bar to 51 percent renewables after he ran into opposition in the Senate Energy Committee. The new move to 100 percent risks alienating some of the bill’s industry supporters, some of whom quickly indicated that they are unhappy and may withdraw their backing.

So the bill’s politics have changed along with its substance. A much greener support coalition needs to be organized to help push the bill through the remaining Senate and Assembly votes and to persuade Gov. Jerry Brown to sign it. This effort will be a key test of California’s clean-energy companies as well as the environmental organizationsthat have doggedly pushed the state’s tech firms to go green. Until now, California firms that have seen the light on renewables have found it surprisingly hard to green their in-state power sources, as I have written here and here. But if the amended SB 286 can become law, these firms can become real drivers of the state’s clean-energy transition. They will be able to demonstrate their environmental leadership where it counts most — at home in California.

California Set To Give Solar Panels To Low-Income Families For Free

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California is the best state in the country if you want to go solar – but only if you’re rich enough. Due to the steep upfront costs of around $15,000, only those from middle- to upper-income families can afford to install solar arrays. A novel initiative is, however, looking to change that. This new project hopes to help disadvantaged communities see the sun in a different light.

Using money raised by the government to help fight global warming, the Grid Alternativesproject aims to get polluting companies to pay for putting solar panels on the roofs of those who cannot afford them. According to the San Francisco Chronicle, the plan is to use the cap-and-trade money raised by the state from companies who have to pay per ton of carbon dioxide emitted. The cost to the disadvantaged families: nothing.

Grid Alternatives has been made project manager of the $162 million Single-family Affordable Solar Homes (SASH) project, the country’s first dedicated solar repayment system for low-income families. They want to install solar arrays to over 1,600 homes by the end of next year. Using job-training programs and donations from solar companies, they aim to keep the costs as low as possible. Whilst it is totally free for the families getting them installed on their houses, they do ask that the families either offer to feed the crew, or help them install the panels.

The state government in California will use $14.7 million raised through the cap-and-trade system, aimed at curbing greenhouse gas emissions, to use toward installing solar arrays. In total, the cap-and-trade system has totted up to an impressive $1.6 billion.

By ploughing at least 10% of this money back into solar, the project aims to kill two birds with one stone – saving lower income families money, whilst also making big fossil fuel polluting companies help cut energy emissions in the state even further.

Anyone who is currently living in a neighborhood in California that is classed as disadvantaged is qualified to apply to get the arrays installed. Grid Alternatives predicts that it could save individual families up to $1,000 a year, which they hope could then be spent on other essentials such as food. The sun sets on the initiative in 2021, so if you’re living in the state, you might want to jump on board soon.

 

AB 2145 Dead

AB 2145 Got Kicked to the Curb!

We are thrilled to report that AB 2145 has officially died, failing to make it off the Senate Floor when the final gavel of the 2014 legislative session came to rest just after 3:00 am Saturday morning.

 

This has been an intense and hard-fought battle and its outcome represents a significant victory for CCA in California and in Sacramento, where in a grand twist of irony, AB 2145 put CCA on the legislative map.

Huge thanks go out to the Statewide Coalition, Californians for Energy Choice, which sponsored the www.no2145.org campaign and fought the bill all the way to its demise.  And thanks to CREDO, Marin Clean Energy, Sonoma Clean Power and the hundreds of local governments and organizations who signed-on, wrote letters, sent e-mails, and placed phone calls along the way.  The grassroots effort was nothing short of inspiring. Thank you one and all!

 

But We Must Remain Vigilant…

While we can now take a breath and return to the business of expanding CCA around the State (and country), it’s reasonable to assume the utilities and their unions aren’t going away quietly. In addition, there are aspects of CCA that remain troublesome– most notably the cost recovery surcharge/PCIA fees and ongoing utility cost shifting. We will be strategizing in the coming weeks about the 2015 legislative session and what it may bring, including the potential to go on the offensive and sponsor our own bill. We will certainly keep you posted as this and other strategies are developed.

Next Steps 

In addition to preparing for the 2015 legislative session, there is much to do on the electrical union/labor front.  CCA is too often painted as anti-labor without any facts to support that claim.  LEAN plans to sponsor a University of CA authored CCA Labor & Economic Impact Study that takes a deeper look into the issue.  In addition, we will support any effort that creates a set of “guiding principles” regarding the use of union labor and project labor agreements.  We will not, however, support legislative mandates or regulatory reqirements that make CCA operations more onerous or make it harder to compete in the California energy market.
In addition, there are a slew of regional CCA workshops upcoming in Northern California including the Business for Clean Energy workshop onOctober 23.  Discussions are also underway for a statewide CCA conference in early 2015, so stay tuned and let us know if you want to co-sponsor or be part of the planning commitee.
How Can You Help? 
There are several ways you can stay engaged and be part of the solution:
1) Share this email with other interested folks and encourage them to join our news list at www.LEANenergyus.org
2) Complete a brief education survey and let us know if you want to host a workshop or CCA study session in your community by CLICKING HERE
3) Consider a supporting membership in LEAN Energy to further our CCA efforts and,
4) Consider sponsorship of the CCA Labor & Economic Impact Study, the 2015 Statewide CCA conference, and/or a CCA educational webinar series.
THANK YOU so much for your support and participation. We look forward to working in partnership to advance Community Choice Energy for all Californians.
Shawn Marshall
Executive Director, LEAN Energy US415-786-9118 (cell)/415-888-8007 (office)

shawnmarshall@leanenergyus.org

LEAN Energy US is committed to the accelerated expansion and competitive success of clean energy CCA nationwide. As a member organization, LEAN (Local Energy Aggregation Network) serves a national network of community leaders, local governments, consumers, advocacy organizations, power suppliers and developers working toward the protection and establishment of CCAs in their States and cities. To learn more, please visit us atwww.LEANenergyus.org.

AB 2145 DEAD

 

2145

 

 

 

 

 

 

Assembly Bill 2145, the proposed law aimed at crushing Community Choice Energy programs in California, is officially dead. When Senator Steinberg brought down the gavel this morning at 3:00 a.m. with no vote from legislators for AB 2145, the bill died. The bill’s author, Assemblyman Steven Bradford, was unable to find a colleague to manage his bill on the senate side.
 
The victory over extremely powerful corporate forces in Sacramento resulted from the uprising of governments, businesses, and clean energy advocates from San Diego to Del Norte County. A statewide coalition, Californians for Energy Choice, fought the bill to the bitter end.
 
Community Choice energy is the most powerful tool to rapidly reduce greenhouse gas emissions at the local level. Large utilities have repeatedly tried to stop it. Pacific Gas & Electric spent nearly $50 million in 2010 pushing Proposition 16 that would have ended Community Choice in California. Voters roundly defeated this statewide ballot measure.
 
The Climate Protection Campaign played a central role in raising awareness and educating the public about the perils of AB 2145, which originally would have turned Community Choice law on its head and made the large corporate utilities the default service providers in the State.
 
“Regarding Community Choice, you know you are on to something good when the corporate utilities spend hundreds of thousands of dollars to try to stop it, said Ann Hancock, Executive Director of the Climate Protection Campaign. She added, “We recognized immediately the serious threat that AB 2145 posed, so we acted, and it has paid off. We are now very eager to continue helping to develop clean energy Community Choice programs across the State.”
 
More information: www.no2145.org andwww.climateprotection.org
Contact: Woody Hastings, 310-968-2757,woody@climateprotection.org
Ann Hancock, 415-298-1224ann@climateprotection.org

Tell President Obama that solar is ready!

By Rhone Resch, SEIA President and CEO

Yesterday, in his inaugural address, President Obama vowed to fight climate change and called for strengthening the clean energy economy.

“We, the people, still believe that our obligations as Americans are not just to ourselves, but to all posterity. We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations.

Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires, and crippling drought, and more powerful storms. The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition; we must lead it.

–President Barack Obama, January 21, 2013

Today, the solar industry employs more than 100,000 Americans at 5,600 companies, mostly small businesses, across all 50 states – this is more than double the number working in solar in 2009.  By nearly all measures, the solar energy industry has been one of the fastest growing industries over the last 5 years and we expect a record 2012 for installed solar capacity, despite a slow economic recovery.

We need all the people who support the industry to join us. Please take a moment and forward this email to 5 of your friends. They can join here.

The President can help lead the way to making a stronger solar industry. The new 113th U.S. Congress must also work together to make this become a reality. We need to maintain the ITC so that solar can compete on a level playing field with other energy sources. We need to streamline the permitting process and cut red tape for small businesses and homeowners. We need to defend net metering policies across the nation.

We need to tell policymakers that the solar industry is ready to lead. Heck, we’ve been ready.

We have a commitment to the generation that will build our future. Let’s make sure it’s one with a stable climate and clean, reliable energy sources.

Join us as we work to make sure this administration knows that the next four years is crucial to success of the solar industry. We need the President’s leadership to make that happen. We need Congress to work together to pass sensible policy. Most of all, we need your help us take a stand.

Tell your friends to join our advocacy list and get involved.

Sincerely,

Rhone

Rhone Resch, SEIA President and CEO