Renewable generation

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By Sara Orr and Jennifer Roy

On September 4, 2015, the US Court of Appeals for the Fifth Circuit issued a ruling in United States v. CITGO that a “taking” subject to prosecution under the Migratory Bird Treaty Act (MBTA) does not include the unintentional take of migratory birds. Reversing a district court decision and joining the position of the Eighth and Ninth Circuits, the appellate court held that the MBTA’s take prohibition is limited to “deliberate acts done directly and intentionally to migratory birds,” effectively exempting take that occurs incidental to otherwise lawful activities. While such incidental take may still be subject to prosecution under other federal laws protecting birds, such as the Bald and Golden Protection Act or the Endangered Species Act, the Fifth Circuit concluded that unintentional acts are not subject to the strict liability penalties of the MBTA. This ruling may provide additional assurances to a wide variety of industries with operations in the Fifth, Eighth and Ninth Circuits that have the potential to impact migratory birds, particularly oil and gas, wind, and solar energy. Given the divide among the courts and the importance of the issue, however, it is possible that the U.S. Supreme Court will take up the issue in the future.

The Migratory Bird Treaty Act

Congress enacted the MBTA in 1918 to implement a treaty between the United States and Great Britain. The general policy of the MBTA is to provide for the “preservation, distribution, introduction, and restoration of game birds and other wild birds.” The MBTA prohibits the take of all listed birds, and the take of any migratory bird’s parts, nest, or eggs without a permit. The regulations define “take” as “to pursue, hunt, shoot, wound, kill, trap, capture, or collect” or to attempt any of these acts.

By Joshua T. Bledsoe, Marc T. Campopiano, and Max Friedman

As California begins to turn the page on the first chapter of its efforts to combat climate change through AB 32 and to prepare for greater emissions reductions over the coming decades, the California Energy Commission (CEC) and California Public Utilities Commission (CPUC) are considering what these changes will mean for electricity transmission infrastructure. To that end, CEC Chair Robert Weisenmiller and CPUC President Michael Picker sent a letter to Cal-ISO President and CEO Stephen Berberich on July 31, 2015 asking him to participate in the planning stages of the Renewable Energy Transmission Initiative (RETI) 2.0. Since 2008, the first iteration of RETI has served as a statewide initiative to identify and implement the energy transmission projects needed to accommodate California’s renewable energy requirements.

Now, with Governor Brown’s executive order to cut California’s greenhouse gas emissions by 2030 and a number of legislative proposals advancing to set further greenhouse gas emissions reductions targets for 2030 and beyond, as well as the US EPA’s federal Clean Power Plan encouraging regional coordination among states to increase renewable electricity production, the CEC and CPUC feel that the time has come to bring RETI up to date.

By Michael J. Gergen, Joshua T. Bledsoe, David E. Pettit and Tara L. Rice

President Obama recently announced that the Department of Energy (DOE) Loan Program Office (LPO) is expanding support for innovative “distributed energy projects” by adding $1 billion in available loan guarantees to support the deployment of these projects through the existing solicitations for Renewable Energy and Efficient Energy Projects and Advanced Fossil Energy Projects.  Eligible projects could include energy storage, smart grid technologies, cogeneration and methane capture for oil and natural gas wells, as well as roof-top solar and energy efficiency technologies that meet certain “innovation” requirements. For example, roof-top solar projects that are combined with storage may be eligible.

The LPO also is targeting distributed energy developers with special supplements to these two pending solicitations that make clear that existing program authority under Title XVII of the Energy Policy Act of 2005 and resources may be used to accelerate the deployment of distributed energy projects. The credit enhancement available through DOE’s LPO traditionally has been used to support utility-scale energy projects. In recognition of the important role of distributed energy in the future of US energy markets, the LPO is making a concerted effort to marshal program resources to support innovation in this growing segment.

By Michael Carroll, Marc Campopiano and Max Friedman

The California Energy Commission (CEC) has released an August 2015 report projecting local reliability shortfalls in the Los Angeles basin planning area as early as 2021. The deficits may require new natural gas power generation to maintain grid reliability.

This finding is part of the Integrated Energy Policy Report, a collaborative effort with the California Public Utilities Commission (CPUC), California Independent System Operator, and the California Air Resources Board.

The report recommends that the CPUC “[i]nclude in its 2016 [Long Term Procurement Plan (LTPP)] rulemaking an explicit focus on local capacity requirements. Further, the CPUC should not assume that such requirements in the intermediate period 5-8 years forward have been satisfied through decisions in the 2012 LTPP rulemaking and the procurement activities authorized by D.14-03-004.” This recommendation would represent a significant shift in the CPUC’s planning horizon because the 2016 LTPP is intended to evaluate the need for new power resources beginning in 2026, not as early as 2021. Now, it appears that new resources may be needed much faster than the CPUC had anticipated.

By Joshua T. Bledsoe and Douglas K. Porter

On June 10, 2015, the California Independent System Operator (“CAISO”) released a draft final proposal (the “Expanded Metering and Telemetry Options Phase 2, Distributed Energy Resource Provider”) that, if finalized, would represent an initial  step towards a regulatory structure that would result in distributed energy resources (“DERs”) competing in California wholesale energy markets.  DERs are resources that are physically connected to the distribution grid of an electric utility (e.g., rooftop solar, energy storage, plug-in electric vehicles, and demand response).  In order for DERs to sell into the CAISO wholesale markets, they would use the distribution grid of the electric utility to deliver power to or to take power from the transmission grid.  Currently, the vast majority of existing renewable resources sell their power to California’s electric utilities.  Those distributed resources are compensated by electric utilities for the electricity they generate at a rate far in excess of current CAISO market prices.  In addition, those resources do not have the right or the ability to sell power directly into the wholesale market.  Absent the California Public Utilities Commission (“CPUC”) adopting a substantially revised regulatory structure that sorts out the thorny jurisdictional, economic and technical issues (e.g., metering and compensation for resources located behind the retail meter), the immediate impact of CAISO’s proposal may be modest at best.

By Marc Campopiano, Joshua Bledsoe, Jennifer Roy, James Erselius

Phase I of the Desert Renewable Energy Conservation Plan (“DRECP”) is underway on the 9.8 million acres of public land managed by the Bureau of Land Management (“BLM”). As discussed in our previous post, the four lead agencies responsible for the plan introduced a phased approach to implementing the DRECP in March 2015 in response to public comments. Under Phase I of this approach, between 81,000 and…

By Marc Campopiano, Josh Bledsoe, Jennifer Roy, and James Erselius

Concerns from local agencies, industry, and environmental groups over the long-awaited Draft Environmental Impact Report (“EIR”)/Environmental Impact Statement (“EIS”) for the Desert Renewable Energy Conservation Plan (“DRECP”)—a renewable energy and conservation plan covering 22.5 million acres of desert located in seven Southern California counties—have caused the responsible state and federal agencies to shift to a more limited phased approach.  In a March 10 statement, the four lead…

By Michael J. Gergen and Marc T. Campopiano

On October 16, 2014, the Federal Energy Regulatory Commission (“FERC”) issued an Order on Tariff Revisions, FERC Docket No. ER14-2574, conditionally accepting, with two substantive modifications, tariff changes proposed by the California Independent System Operator (“CAISO”) to establish new flexible resource adequacy capacity (“FRAC”) and must-offer obligation (“MOO”) requirements intended to ensure that adequate flexible capacity is available to address the added variability and net load volatility associated with ongoing and expected future changes on the CAISO-controlled grid.  The FRAC-MOO requirements will be effective, subject to a compliance filing by the CAISO (due within 30 days of the date of the order), effective November 1, 2014, to allow load serving entities (“LSEs”) subject to the requirements time to make their first FRAC showings to the CAISO by November 15, 2014.

By Jennifer Roy, Marc Campopiano and Joshua T. Bledsoe

On September 23, 2014, the California Energy Commission (“CEC”), California Department of Fish and Wildlife (“CDFW”), US Bureau of Land Management (“BLM”), and US Fish and Wildlife Service (“FWS”) released the Draft Environmental Impact Report (“EIR”)/Environmental Impact Statement (EIS”) for the Desert Renewable Energy Conservation Plan (“DRECP”).  The DRECP would create a framework to streamline permitting for up to 20,000 megawatts of renewable energy projects on more than 22 million acres in the California Mojave and Colorado/Sonoran desert region.

By Michael J. Gergen, Marc T. Campopiano and Andrew H. Meyer

On September 5, 2014, San Diego Gas & Electric (“SDG&E”) issued a 2014 Energy Storage System (“ESS”) Request for Offers (“RFO”) soliciting at least 25 MW—and up to 800 MW—of energy storage (the “2014 ES RFO”).  SDG&E’s 2014 ES RFO is among the largest solicitations to date in the U.S. for grid-scale energy storage resources.