Climate Law Update: Climate Change & Sustainable Energy News : Thelen Reid Law Firm : Renewable Energy, Construction, Project Finance Lawyers & Attorneys

Strickland, a Democrat, also has backed an economic stimulus package for the state that includes $150 million to help make Ohio, which is both a big producer and consumer of coal,  "a powerhouse of renewable and advanced energy production such as wind, solar and clean coal (see Climate Law Update story here).

The Ohio measure, signed May 1, comes as other states are also making efforts to boost the renewable portfolios of their utilities. Maryland recently took similar action, and other states, including Vermont and Utah, have also moved to increase the share of renewable energy flowing to consumers (see Climate Law Update stories here and here). 

California remains among the most aggressive, with its mandate that private utilities achieve a 20 percent renewable goal by 2010, and it is considering upping that objective to require 33 percent renewables by 2020 (see background on California program here). California grants some flexibility, allowing utilities to come up short, for instance, if insufficient transmission facilities are available. But it also restricts the power sources that can comply with the standard to those defined as "renewable," including solar, wind, biomass, small hydro and other similar sources.

(Photo:  Ohio governor's office) 

Utah’s new law also places the 20 percent against a base of retail sales reduced by the amount of power generated by a nuclear plant or a coal plant using carbon sequestration. Additionally, it would only impose the requirement if it were “cost effective.” It also does not set interim targets. All of those qualifications drew skepticism from some observers.

“This bill is so fuzzy in terms of who it is really protecting,” Tim Wagner of the Utah Chapter of the Sierra Club told Climate Law Update. Wagner, who has followed the legislation closely,  said it accomplished little more than codifying what major Utah utilities, including Rocky Mountain Power had already planned to do. The club did not oppose the measure, although it supported a rival bill that would have established interim goals. Wagner noted, however, that the utility was not opposed to renewables, and that the state currently has neither a nuclear plant nor a coal plant using carbon sequestration.

Neither state Sen. Curt Bramble, the legislation's Republican sponsor, nor a spokesman for the utility could be reached for comment. Bramble, however, according to a least one Salt Lake Tribune report, has said he believes that mandatory goals are not necessary.

The Vermont legislation also nods toward boosting renewable energy by stating a a state goal of producing 25 percent of the energy consumed within its borders by 2025, “particularly from Vermont’s farms and forests.” Along those lines, the bill expands the concept of “net metering,” in which customers earn credit for electricity sent back onto the grid, for systems of up to 250 kilowatts. That’s an increase over the previous limit of 15 kilowatts. Only renewable systems or small “micro-combined heat and power systems” that meet air quality standards can qualify.

Provisions in that part of the bill allow customers who are within the service area of an individual electric company to combine into a “group net metering system.” That would include farms and various buildings owned by municipalities, including water districts, fire districts, school districts and towns. In addition, scattered or “noncontiguous” groups of customers, could be bundled together if that was found to “promote the general good.” A report on the legislation distributed by the U.S. Department of Energy’s division of energy efficiency and renewable energy said the bill would allow even individuals, including residents of apartment buildings or subdivisions, to be treated as a group.

“Such group net metering could encourage people to band together to install a large renewable energy system that will serve them all,” said the energy department account.

Among other provisions, the bill establishes a energy efficiency fund that Douglas pegged at $4 million, including $2.4 million from the state’s participation in RGGI. Money from the fund will be used to provide “energy efficiency services to Vermont heating and process fuel consumers,” according to the bill, as well as carrying out “cost-effective efficiency measures and reductions in greenhouse gas emissions from those sectors.”

Funding for such programs had been a sticking point for previous versions of the legislation and had led to a veto, according to news reports, including this dispatch from the Bennington Banner. In his public statement, Douglas did not directly address his earlier rejection of similar legislation but he noted it was important to protect the state’s taxpayers. He added:

“I am very proud of the fact that Vermont is the nation’s greenest state. Because we have made responsible decisions in recent years regarding our energy development and the preservation of our green space, Vermont absorbs more carbon than we produce. This puts us in a strong position to capitalize on our RGGI relationship to obtain new revenues to make sustainable [investments] in this energy efficiency and affordability.”

(Photo: Gov. Jim Douglas, courtesy Vermont governor's office)

Backers of the Kansas bill had noted that it included other provisions that could have boosted other elements of the state’s renewable industry. Builders of the project also included plans for a bioenergy center that would capture some of the carbon dioxide and used it to grow algae for fuel.

But in her public statement and veto message, Sebelius cited not only the threat of climate change to her agricultural state but also the potential for federal legislation, which she did not specifically name, that would “have the net impact of taxing carbon.” That description could apply to proposals such as the Lieberman-Warner bill that would establish a cap-and-trade program for greenhouse emissions. Sebelius said the new plants permitted under the Kansas bill would have produced 11 million new tons of carbon every year. Building new coal plants “is likely to create a significant economic liability for Kansas in the future.”

She also had this to say about wind generation:

“I am encouraged that the Legislature made a modest attempt to address some of our alternative energy assets, but this bill fails to promote our wind assets and sends the wrong signal to potential investors for transmission lines and additional wind power.

“The new feature of net-metering does not include wind power which could have served as a powerful incentive to individuals and communities to embrace our most abundant natural resource.”

Sebelius also signed an executive order (see text) creating a new advisory group to explore strategies for reducing greenhouse emissions and protecting the economy. She named Jack Pelton, president of Cessna Aircraft Company, to head the group.

In a statement, Earl Watkins, president of Sunflower Electric Power Corporation, one of the companies that had hoped to build the 1,400-megawatt project, said the veto would “unnecessarily raise electric rates” for the state’s residents (see project description).

“We are experiencing significant growth on the Sunflower system, and we must add new coal generation to support our existing natural gas and wind generation assets,” Watkins said.

The Utah conflagration brewed up over the EPA's issuance last August of a permit allowing Deseret Power Electric Cooperative to add a 110-megawatt unit to its existing Bonanza power plant. Such "prevention of significant deterioration" permits are issued for larged stationary facilities. The decision came just months after the U.S. Supreme Court weighed in on the issue of the EPA’s authority to regulate greenhouse emissions in its Massachusetts v. EPA decision. Although the court held that greenhouse gases could be regulated as air pollutants, the EPA has yet to decide what to do.

Citing that ruling, which came in the context of a dispute over automobile emissions, the environmentalists including the Sierra Club appealed the decision through the agency’s internal processes. Those groups claim the EPA must establish new controls on carbon dioxide emissions for the project. From the Sierra Club brief (see text here):

“On April 2, 2007, the Supreme Court held that carbon dioxide and other greenhouse gases are ‘pollutants’ under the Clean Air Act. Massachusetts v. EPA, 127 S.Ct. at 1460. Now having been definitively ruled a pollutant, [carbon dioxide] is accordingly a regulated pollutant under the act and EPA is required to impose [carbon dioxide best available control technology] emission limits in the Bonanza [prevention of significant deterioration] permit.”

The EPA, however, has maintained that carbon dioxide “is not currently a pollutant regulated" under the federal Clean Air Act. In its response to the appeal, the agency cited a 1993 memorandum in which its attorneys concluded carbon dioxide was not subject to the EPA’s regulatory authority.

Last week, a coalition of trade groups representing a cross-section of energy and manufacturing, weighed in against the environmentalists’ position. In a brief (see text here) to the EPA the groups argued that the Supreme Court decision addressed only the government’s authority to regulate emissions from new motor vehicles. A finding requiring them to be covered for facilities such as Utah’s, they argued, would cause “a huge expansion of the number of sources and activities” that would require permits, which officials would not have the resources to process.

Quentin Riegel, deputy general counsel for the National Association of Manufacturers, one of the groups filing the brief, in a statement predicted “an impassable regulatory gridlock” would develop if the Sierra Club won.

But the environmental groups also had powerful allies. In another brief, eight states, including California, New York and Massachusetts, backed the environmental groups. They argued that the Supreme Court ruling “conclusively” established the EPA’s authority to regulate greenhouse emissions for the project and that the 1993 interpretation “did not survive” the court ruling.

See the EPA’s docket, with links to all the filings in the matter, here.

(Official press photo: Gov. Kathleen Sebelius)