12th Annual AREDAY Summit keynote presentation by Thomas R. Burton III, Mintz Levin's Energy Technology Practice Chair.

1. Mintz Levin. Not your standard practice.
Policy and Legal Implications of
Implementing Renewable Energy at Scale
Thomas R. Burton III, Chair, Energy Technology Practice
August 2015
12th Annual AREDAY Summit

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• Supply and Demand Geographic
Mismatch
• Finance Gap for Innovation Deployment
• To DG or Not to DG – That's the Question
• Intermittent Power Generation
Characteristics
Key Barriers to Adoption of Renewable Energy At Scale

3. Supply and Demand Geographic Mismatch
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• About 60% of wind energy is produced inland
• Extensive transmission networks necessary to
meet demand
Currently, the supply
of renewables is
inland, while demand
is on the coasts
• Federal Power Act's limitations
States and localities
have a say in
transmission
regulations
• CapX2020 – "Buy the Farm" Law
• Ohio revised setback distance last year to a
minimum of 1,125 ft. from property line,
immediately killed several proposed wind
farms
Regulatory
requirements vary
widely and change
drastically during
project development

4. Solution: Federal Preemption to Simplify the Process
• Congress can and should have a
comprehensive response
– On energy, the Supreme Court agrees
• Precedent: Telecommunications Act of
1996, 1980 Comprehensive Environmental
Response, Compensation, and Liability Act
(CERCLA)
• For more, read Ann Klee, Jeffrey Porter, and Katy
Ward's analysis in Gas Lines to Pipelines: The Case for
Comprehensive Federal Energy Legislation
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5. Solution: Clean Power Plan
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Overview
•Building Block 3
•Federal Implementation Plan
Challenges
•Increased Generation Costs
•Infrastructure Gap
Opportunities
•Regional Partnerships – RGGI
•Corporate Leadership

6. • U.S. offshore wind potential is > 1000 GW according to National
Renewable Energy Laboratory estimate
• Deepwater Wind: 30 MW project off Block Island, Rhode Island
• Atlantic Wind Connection
Solution: Deploy Offshore Wind to bring supply to
demand
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7. Finance Gap for Innovation Deployment
• Tremendous innovation, but shortfall in matching capital to
projects
• New U.S. CleanTech Investment peaked in Q4 2013, according
to Bloomberg New Energy Finance
• Need creative financial structures to accelerate adoption
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New Investment in Clean Energy in the U.S. ($BN)
Source: BNEF

8. Solution: Consistent Financial Policy
• Congress extends tax credits, but offers little certainty
– PTC: Senate approved extension July 21st through 2016
– ITC: Likely addressed via a tax reform negotiation in 2017
– Sustainable proposals to sunset may be a solution
• Grow More Green Banks
– Connecticut: Attracted $225 million last year
– New York: Initial commitment of over $800 million
– PACE
• For renewable solutions to scale, government must lead the way
as an early adopter, which can unlock financing
– Federal
– Local
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9. Solution: Matching Capital with Projects
• Aligned Intermediary (AI): a mechanism for helping long term investors
invest in the most promising resource innovation ventures, according to
Alicia Seiger's Energizing The US Resource Innovation Ecosystem report
• Structured as a non-profit, non-stock corporation organized and
operated for charitable, educational, and scientific purposes.
• Roles would include:
– Facilitator
– Buy-side Advisor
– Collaborator
– Finance Expert
– Syndicator
– Standardizer
– Anonymizer
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Source: Seiger's Energizing The U.S. Resource
Innovation Ecosystem

10. To DG or Not to DG – That's The Question
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Have to strike a balance that encourages DG and allows utilities to adapt to a
changing landscape
This creates a rate design issue
As DG customers pay less, non-DG
customers pay more to compensate
Massachusetts California
Rapid growth of DG over the past two years expected to continue
Criticism: DG users take advantage of utility infrastructure without paying full share into the system
Current battleground: utilities' traditionally centralized business models and
consumers employing DG

11. Striking the Right Balance Can Take Many Forms
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•Could increase cost protections or end
subsidies
•Example: Net Metering Changes in AZ,
CA, MN, MA
•Could increase cost protections or end
subsidies
•Example: Net Metering Changes in AZ,
CA, MN, MA
Policy and
Regulation
Reform
•NRG
•Issues for Entrepreneurs
•NRG
•Issues for Entrepreneurs
Utilities
Leveraging DG
•Access Charges
•Examples: NM and KS
•Access Charges
•Examples: NM and KS
Adjusting
Traditional
Business Models

12. Renewables Intermittent Power Generation
• Ramp up – generation
declines as demand
increases
– California ISO "duck curve"
• Ramp down – supply
overload on transmission
lines
– Vermont: ISO-NE renewable
energy cutbacks
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Source: CA ISO

13. Solution: Policies Supporting Energy Storage Deployment
• Current market compares to solar
5 – 7 years ago (Baird Equity
Research)
– Costs have dropped 72% since
2010 (Clean Energy Pipeline).
• Government Action – Carrots and
Sticks
– CA Self Generation Incentive
Program - Extended through 2019
– Massachusetts Energy Storage
Initiative
– CA Energy Storage Mandate
• Large utilities need 1.3 GW of storage
by 2020
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