Policy Drivers For Renewable Energy Development (00287740)

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Policy Drivers for Renewable Energy Development, The Future of Oregon’s Water Supply & Management
Portland, Oregon – March 17, 2011

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Policy Drivers For Renewable Energy Development (00287740)

  1. 1. Policy Drivers For Renewable Energy Development Dustin T. Till Marten Law www.martenlaw.com 503.243.2200 <ul><li>The Future of Oregon’s Water Supply & Management </li></ul><ul><li>Portland, Oregon – March 17, 2011 </li></ul>
  2. 2. Revenue Streams for Small Hydro Projects <ul><ul><li>Electricity – PURPA </li></ul></ul><ul><ul><ul><li>Requires utilities to purchase power if the cost is less than the utilities avoided cost of generation or acquisition </li></ul></ul></ul><ul><ul><li>Renewable Energy Credits (RECs) </li></ul></ul><ul><ul><ul><li>Commodity of Renewable Portfolio Standards (RPSs) / Clean Energy Standards (CESs) </li></ul></ul></ul>
  3. 3. Discussion Points <ul><li>Federal Climate Change Policy </li></ul><ul><li>Regional Cap-and-Trade Programs </li></ul><ul><li>Renewable Portfolio Standards / Clean Energy Standards </li></ul><ul><li>Treatment of Hydro Under West Coast RPSs </li></ul>
  4. 4. Federal Climate Policy – Cap and Trade is Dead <ul><li>American Clean Energy & Security Act </li></ul><ul><ul><li>Narrowly Passed House in June 2009 </li></ul></ul><ul><ul><li>Large Industrial Sources – 25,000 MtCO2e </li></ul></ul><ul><ul><li>17% Reduction in GHG Emissions by 2020 </li></ul></ul><ul><ul><li>Majority of Allowances Distributed for Free </li></ul></ul><ul><ul><li>15% RES </li></ul></ul><ul><li>Companion Bills in Senate </li></ul><ul><ul><li>Kerry - Lieberman </li></ul></ul>
  5. 5. What Cap and Trade Looks Like Courtesy of U.S. Chamber of Commerce
  6. 6. Federal Direct Regulation of GHGs <ul><li>EPA’s Clean Air Act Regulations </li></ul><ul><ul><li>Massachusetts v. EPA, 127 S. Ct. 1438 (2007) </li></ul></ul><ul><ul><li>Endangerment Finding </li></ul></ul><ul><ul><li>Mobile Source Emission Standards </li></ul></ul><ul><ul><li>Clean Air Act Tailoring Rule </li></ul></ul><ul><li>Legal Challenges </li></ul><ul><li>Congressional Challenges </li></ul>
  7. 7. Regional Climate Policy – Long Live Cap and Trade <ul><ul><li>23 states and four Canadian providences are participating in some capacity in the three regional GHG trading programs </li></ul></ul><ul><ul><li>Account for over half of the United States’ GDP and over 37 percent of the United States’ GHG </li></ul></ul><ul><ul><li>Regional Greenhouse Gas Initiative </li></ul></ul><ul><ul><ul><li>Only operative cap-and-trade program in U.S. </li></ul></ul></ul><ul><ul><ul><li>Applies to electric utilities </li></ul></ul></ul><ul><ul><ul><li>2009-2014 – stabilize emissions </li></ul></ul></ul><ul><ul><ul><li>2014-2018 – reduce emissions by 2.5% per year </li></ul></ul></ul><ul><ul><ul><li>Allowances trading at $1.89 </li></ul></ul></ul>
  8. 8. Western Climate Initiative <ul><li>7 States and 4 Provinces </li></ul><ul><li>15% below 2005 by 2020 </li></ul><ul><li>All economic sectors </li></ul><ul><li>25,000 MtCO2 Threshold </li></ul>
  9. 9. WCI – California and New Mexico <ul><li>Only 2 states ready to implement WCI in 2012 </li></ul><ul><li>California </li></ul><ul><ul><li>AB-32 </li></ul></ul><ul><ul><li>CARB Rules </li></ul></ul><ul><ul><li>25,000 MtCO2e threshold </li></ul></ul><ul><li>New Mexico </li></ul><ul><ul><li>Participation Contingent on California </li></ul></ul>
  10. 10. Renewable Portfolio Standards <ul><li>Principal driver of renewable energy development </li></ul><ul><li>30 states binding RPS requirements </li></ul><ul><li>7 States with RPS “goals” </li></ul><ul><li>Market-based compliance </li></ul><ul><li>RECs and TRECs </li></ul>
  11. 11. Renewable Portfolio Standards- Federal <ul><li>Currently, No Federal RPS </li></ul><ul><li>President Obama’s CES </li></ul><ul><ul><li>80% by 2035 </li></ul></ul><ul><ul><li>Would include traditional renewable resources, and “clean” energy resources like clean coal, nuclear, and natural gas </li></ul></ul><ul><ul><li>Consumer Price Protections & Regional Equity </li></ul></ul><ul><li>Prior Legislative Proposals </li></ul><ul><ul><li>ACES </li></ul></ul><ul><ul><li>ACELA </li></ul></ul><ul><ul><li>PECPA </li></ul></ul>
  12. 12. Renewable Portfolio Standards- States <ul><li>30 States with Mandatory RPS / 7 with RPS “Goals” </li></ul><ul><li>Oregon </li></ul><ul><ul><li>PGE, PacifiCorp, & EWEB </li></ul></ul><ul><ul><ul><li>5% 2011; 15% by 2015; 20% by 2020; 25% by 2025 </li></ul></ul></ul><ul><ul><li>Other Utilities – 5% or 10% in 2020 (depending on size) </li></ul></ul><ul><ul><li>Goal – 8% of RPS Compliance from Small-Scale Projects (<20 MW) by 2025 </li></ul></ul>
  13. 13. Oregon RPS (con’t) <ul><li>What Resources Qualify as “Renewable”? </li></ul><ul><ul><li>Wind, Solar, Tidal / Ocean, Geothermal, Some Biomass, Some Hydro </li></ul></ul><ul><li>Compliance </li></ul><ul><ul><li>20% through TRECs (50% for large COUs through 2020) </li></ul></ul>
  14. 14. California RPS <ul><li>Primary Driver of Western Renewable Energy Markets </li></ul><ul><li>2 RPS Standards </li></ul><ul><ul><li>Legislative – 20% by 2010 (IOUs Only) </li></ul></ul><ul><ul><li>Regulatory – 33% by 2020 (IOUs and COUs) </li></ul></ul><ul><li>Treatment of TRECS </li></ul><ul><ul><li>CPUC Lifted Moratorium on Use of TRECs In January 2011 </li></ul></ul><ul><ul><li>25% of Compliance Obligation </li></ul></ul><ul><li>Legislative Proposals </li></ul><ul><ul><li>Expand RPS to 33% and Incorporate COUs (Senate Bill 2X) </li></ul></ul>
  15. 15. Treatment of Hydro <ul><li>Oregon </li></ul><ul><ul><li>Pre-1995 Facilities </li></ul></ul><ul><ul><ul><li>Efficiency upgrades made after Jan. 1, 1995 </li></ul></ul></ul><ul><ul><ul><li>Certified Low-Impact Hydro (50 aMW per year) </li></ul></ul></ul><ul><ul><li>Post-1995 Facilities </li></ul></ul><ul><ul><ul><li>Located outside of certain state, federal, or NW Power & Conservation Council protected areas </li></ul></ul></ul>
  16. 16. Treatment of Hydro, con’t <ul><li>California </li></ul><ul><ul><li>Small Hydro </li></ul></ul><ul><ul><ul><li>Pre-2006: <30 MW, located in-state or satisfies out-of-state RPS standards </li></ul></ul></ul><ul><ul><ul><li>Post-2006: <30 MW, cannot “cause an adverse impact on instream beneficial uses or a change in the volume or timing of streamflow.” </li></ul></ul></ul><ul><ul><li>Separate standards for conduit and efficiency upgrades </li></ul></ul><ul><ul><li>Proposal – run-of-river hydro projects in B.C. </li></ul></ul>
  17. 17. Treatment of Hydro, con’t <ul><li>Washington </li></ul><ul><ul><li>Limited to efficiency upgrades without increased diversions and impoundments </li></ul></ul><ul><ul><li>New hydro facilities are not currently included in the Washington RPS </li></ul></ul>
  18. 18. Questions? <ul><li>Thank you for attending. </li></ul><ul><li>For additional information on </li></ul><ul><li>today’s topic, please contact: </li></ul><ul><li>Dustin T. Till </li></ul><ul><li>503.241.2641 </li></ul><ul><li>[email_address] </li></ul><ul><li>www.martenlaw.com </li></ul>
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