2019 in review

Here's a roundup of some of the items published on this blog in 2019 that have drawn significant interest:

• The enactment of a portfolio of Maine energy legislation that significant reformed the state's electricity renewable portfolio standard, long-term contracting programs, net energy billing program, and climate policy.
• Increasing public recognition that most of Maine's greenhouse gas emissions arise from the direct combustion of fossil fuels in the transportation and heating sectors, and the need to reduce transportation- and heating-related efforts through "beneficial electrification" or other means.
• Action by the United States to withdraw from the United Nations' Paris Climate Agreement.
• A federal proposal to "reform PURPA" or amend regulations adopted in implementation of a federal law designed to encourage cogeneration and renewable power production.
• Offshore wind procurement processes in Massachusetts and elsewhere.
• Growth in deployment of electric energy storage, following federal regulators' adoption of rules and state legislatures' enactment of incentive programs.
• Federal regulation and enforcement of market manipulation and mandatory reliability standards for the bulk electric system.
• A federal appellate court ruling, Hoopa Valley Tribe v. Federal Energy Regulatory Commission, reshaping a common practice in hydropower licensing by holding that the states and applicants for water quality certifications cannot indefinitely stall federal time limits for state action by repeatedly withdrawing and resubmitting their applications.

Will these trends continue in 2020?

Maine regulators approve long-term contract

Maine utility regulators have approved a long-term contract to purchase the output of a 72.6-megawatt wind power project under development by Weaver Wind, LLC in Hancock County, Maine. The 20-year contract bears a price of 3.5 cents per kilowatt-hour, escalating at 2.5 percent per year.

A Maine statute enacted in 2006 authorizes the Public Utilities Commission to direct investor-owned transmission and distribution utilities to enter into long-term contracts, to the degree necessary to ensure reliability, meet energy efficiency program requirements, or reduce customer costs. In 2008, the Commission used this law to order a contract with the Rollins Wind project. After three subsequent procurement rounds, in 2017 the Commission approved a contract to buy 75 megawatts from Dirigo Solar, LLC, at a price of 3.4 cents/kWh escalating at 2.5% annually for 20 years.

In response to its most recent solicitation, earlier this year the Commission approved a term sheet for a contract to buy 100 megawatts from Three Rivers Solar Power, LLC’s solar project, with a price of 3.5 cents/kWh escalating at 2.5% annually for 10 years. Most recently, on July 12, 2019, the Commission approved a contract to buy the output of the Weaver Wind project, also at a price of 3.5 cents/kWh escalating at 2.5% annually for 10 years.

In addition to this existing law, in 2019 the Maine state legislature enacted several additional long-term contracting programs. One new law creates a new "Class IA" renewable portfolio standard, and requires the procurement by December 31, 2020 of energy or renewable energy credits from Class IA resources sufficient to cover between 7 and 10 percent of Maine's retail electricity sales, with a second round bringing the total procurement to 14 percent of Maine's retail electricity sales. Another new law requires the procurement of 375 megawatts from distributed generation resources between 2020 and 2024, with each project sized at less than 5 megawatts, and specific requirements for participation by non-residential and "community" or shared-ownership projects.

Collectively, these laws create a variety of opportunities for electric power generation projects to compete for and win long-term contracts to sell their output to Maine utilities.

Maine Climate Change Council legislation unveiled

Maine Governor Janet Mills has introduced proposed legislation to create a Maine Climate Change Council. While the bill had not been formally printed by the legislature's Office of the Revisor of Statutes as of May 1, the Governor's office posted a copy of the bill captioned, LR2478, An Act to Create the Maine Climate Council to Assist Maine to Mitigate, Prepare for and Adapt to Climate Change.

The draft bill includes a variety of provisions designed to advance clean energy goals:

• It includes language requiring the inclusion of more renewable resources in the state's electricity supply -- 80 percent by 2030, and 100 percent by 2050. (Current law requires 40 percent of electricity sold at retail to come from renewable resources. According to the U.S. Energy Information Administration, in 2017, about three-quarters of Maine's net electricity generation came from renewable energy resources, with 30% from hydroelectricity, 26% from wood and other biomass, and 20% from wind.)
• It repeals the existing law setting Maine's goals for reduction of greenhouse gases (which currently calls for a reduction to 1990 levels by 2010, to 10 percent below 1990 levels by 2020, and in the long term "reduction sufficient to eliminate any dangerous threat to the climate. According to the most recent report of the Maine Department of Environmental Protection, in 2015 Maine's greenhouse gas emissions were 11.7 percent below 1990 levels.) It replaces this section with a new section, requiring reduction to 45 percent below 1990 levels by 2030, and 80 percent below 1990 levels by 2050. The bill requires the Department of Environmental Protection to adopt rules to ensure compliance with these new levels.
• It creates the Maine Climate Change Council to advise the Governor and Legislature on ways to mitigate the causes of, prepare for and adapt to the consequences of climate change. The council would be composed of up to about 40 people filling specific roles prescribed in the legislation such as business, youth, and science. The structure would include a scientific and technical subcommittee, plus working groups on transportation, coastal and marine issues, buildings, infrastructure and housing, working lands and ecosystems, and energy topics.
• It requires the Maine Climate Change Council to update the state climate action plan by December 2020, with further updates to the plan every 4 years thereafter. (The Maine Department of Environmental Protection released the current version of the climate action plan in 2004.) The bill also requires the council to report on progress toward implementing the climate action plan by December 2022, and every 2 years thereafter.

In a statement, Governor Mills said that the bill represents a step in combating the threat of climate change by "expanding our clean energy economy, and investing in our future by creating the Maine Climate Council and marshaling experts across the state to take urgent action." The bill's lead sponsor, Senator David Woodsome, is a Republican co-chair of the legislature's energy committee. Procedurally, next steps include the formal printing of the bill by the Revisor, followed by its reference to legislative committee for a public hearing to be scheduled in the coming weeks.

New Mexico legislature passes 100 percent renewable power law

The New Mexico state legislature has passed a bill that requires public utilities other than rural electric cooperatives and municipalities to supply all retail sales of electricity in New Mexico with zero carbon resources by 2045.

The bill is SB 489, also known as the Energy Transition Act. Much of the Energy Transition Act focuses on procedures allowing utilities to obtain approval to abandon generating facilities which obtaining financing orders from the New Mexico Public Regulation Commission allowing the utilities to recover all of their energy transition costs through securitization -- issuing energy transition bonds whose costs the utilities pay by collecting an "energy transition charge" from their customers. The act creates funds to provide training and economic development in communities within 100 miles of abandoned facilities.

The law also revises New Mexico's renewable portfolio standard. It requires distribution cooperatives to sell at least 40 percent renewable energy by 2025 and at least 50 percent renewable energy by 2030, and sets a "zero carbon resource standard" target for distribution cooperatives by 2050, composed of at least 80 percent renewable energy, if feasible from technical, reliability, and affordability perspectives. For public utilities other than rural electric cooperatives and municipalities, the law requires similarly increasing percentages of renewable power, including 80 percent renewable energy resources by 2040 and 100 percent zero carbon resources by 2045. It allows public utilities to ask the Commission to provide financial or other incentives in excess of these amounts.

The bill passed the state senate with a vote of 32-9, and the state house with a vote of 43-22. It now goes to Governor Michelle Lujan Grisham for her signature. According to a statement Governor Lujan Grisham issued on March 12, "The Energy Transition Act is a promise to future generations of New Mexicans."

Other states are considering changes to their renewable portfolio standards, carbon emission limits, and other legal requirements affecting the electric power sector. If SB 489 is enacted into law, New Mexico will join California and Hawaii in having a future commitment or goal of 100 percent carbon-free electricity.

Energy issues in Maine's 2019 legislative requests

With the 129th Maine Legislature convened for its first regular session, the Office of the Revisor of Statutes has released a list of the titles of proposed legislation timely submitted by legislators. While the text of most of these legislative requests has not yet been publicly released, the preliminary list of working titles of over 2,000 precloture legislator bills suggests the scope of issues that will come before the Maine State Legislature in 2019. On energy matters, themes emerging from this list include reforms to Maine's renewable portfolio standard; efforts to reduce greenhouse gas emissions; incentives for microgrids, renewable energy and electric vehicles; and changes to energy efficiency standards for most newly constructed buildings.

Based on the working titles and legislative committee assignments, a number of bills will propose changes to Maine's renewable portfolio standard or other laws regarding renewable energy. Among others, these bills could include:

• LR 26, An Act To Update Maine's Renewable Energy Policy (Spkr. Gideon of Freeport)
• LR 82, An Act To Update the State's Renewable Energy Goals (Rep. Berry of Bowdoinham)
• LR 119, Resolve, To Establish a Working Group To Develop a Stand-alone Renewable Energy Certificate Program for the Biomass Industry (Sen. Carpenter of Aroostook)
• LR 403, An Act To Diversify Maine's Energy Portfolio with Renewable Energy (Rep. Hubbell of Bar Harbor)
• LR 845, An Act To Encourage the Use of Renewable Energy (Sen. Lawrence of York)
• LR 872, An Act To Extend to December 31, 2020 the Deadline for Community-based Renewable Energy Projects To Become Operational (Rep. Higgins of Dover-Foxcroft)
• LR 1034, An Act To Establish a Green New Deal for Maine (Rep. Maxmin of Nobleboro)
• LR 1123, An Act To Repeal the 100 Megawatt Limit on Power Generation (Rep. Hanley of Pittston)
• LR 1405, An Act To Clarify the Definition of "Renewable Capacity Resource" (Rep. Babine of Scarborough)
• LR 1431, An Act To Study Transmission Solutions To Enable Renewable Energy Investment in the State (Rep. Berry of Bowdoinham)
• LR 1470, An Act To Modernize Maine's Renewable Portfolio Standard (Sen. Lawrence of York)
• LR 1558, An Act To Increase Maine-based Energy Sources (Pres. Jackson of Aroostook)
• LR 1616, An Act To Reform Maine's Renewable Portfolio Standard (Sen. Vitelli of Sagadahoc)
• LR 1803, An Act To Benefit Maine Consumers, Businesses and Communities through Expanded Renewable Energy (Sen. Dow of Lincoln)

Other bill titles suggest possible proposed changes to other aspects of Maine's renewable policy, such as Maine's version of net metering or rules governing community solar projects:

• LR 15, An Act To Eliminate Gross Metering (Rep. Berry of Bowdoinham)
• LR 299, An Act To Replace Net Energy Billing with a Market-based Mechanism (Rep. O'Connor of Berwick)
• LR 404, An Act To Protect Ratepayers from Gross-metering Costs (Rep. Hubbell of Bar Harbor)
• LR 535, An Act To Eliminate the Cap on Solar Energy Generation Farms (Sen. Miramant of Knox)
• LR 536, An Act To Require Transmission and Distribution Utilities To Purchase Electricity from Renewable Resources at Certain Prices (Sen. Miramant of Knox) 
• LR 1259, An Act To Eliminate Restrictions on Community Solar Projects (Rep. Higgins of Dover-Foxcroft)
• LR 1621, An Act To Expand Community-based Solar Energy in Maine (Sen. Sanborn of Cumberland)

Several more bill titles appear designed to expand opportunities for microgrids or other local private sales of electricity:

• LR 18, An Act To Allow Microgrids That Are in the Public Interest (Rep. Devin of Newcastle)
• LR 213, An Act To Authorize Businesses Located Adjacent to Electric Power Generators To Obtain Power Directly (Rep. Campbell of Orrington)
• LR 1464, An Act To Allow the Direct Sale of Electricity (Sen. Woodsome of York)

Beyond a direct focus on renewable energy, several bill titles address Maine's participation in the Regional Greenhouse Gas Initiative or efforts to reduce fossil fuel use:

• LR 254, An Act To Develop a State Energy Plan To Provide a Pathway to a Fossil-free Energy Portfolio (Rep. Devin of Newcastle)
• LR 1493, An Act To Ensure the Regional Greenhouse Gas Initiative Trust Fund Continues To Promote Energy Efficiency and Benefit Maine Ratepayers (Rep. Wadsworth of Hiram)

At least three bill titles call for increased incentives for electric vehicles:

• LR 862, An Act To Provide Purchase Rebates for Battery Electric Vehicles and Fuel Cell Electric Vehicles (Rep. Ingwersen of Arundel)
• LR 1380, An Act To Encourage Municipalities, State Agencies, Colleges and Universities To Adopt Electric Vehicles (Rep. Ingwersen of Arundel)
• LR 1687, An Act To Create an Electric Vehicle Tax Credit (Sen. Chenette of York) 

At least five bill titles address the Maine Uniform Building and Energy Code:

• LR 561, An Act To Amend the Maine Uniform Building and Energy Code (Rep. Kessler of South Portland)
• LR 537, An Act To Strengthen the Maine Uniform Building and Energy Code (Rep. Caiazzo of Scarborough)
• LR 619, An Act Regarding the Maine Uniform Building and Energy Code (Rep. Ingwersen of Arundel)
• LR 866, An Act To Amend the Laws Governing the Maine Uniform Building and Energy Code (Rep. Rykerson of Kittery)
• LR 1743, An Act Regarding the Application and Administration of the Maine Uniform Building and Energy Code (Rep. Fecteau of Biddeford) 

Experience suggests that most of these legislative requests will result in printed bills, and will be given public hearings before legislative committees before votes by the House and Senate.

NJ approves offshore wind funding mechanism, rejects demonstration project

On December 18, the New Jersey Board of Public Utilities took two actions affecting offshore wind: approving the state’s Offshore Wind Renewable Energy Certificate (OREC) funding mechanism, but rejecting a petition by Nautilus Offshore Wind, LLC to install a 25 MW offshore wind demonstration project in state waters off the coast of Atlantic City. Meanwhile, developers have formed a new joint venture to develop offshore wind in federal waters farther offshore New Jersey.

New Jersey Governor Phil Murphy has set a goal of 3.5 gigawatts of offshore wind capacity by 2030, and in May 2018 he signed into law a renewable energy bill codifying that goal into statute. On September 17, 2018, the NJBPU opened the nation’s largest single-state solicitation to date, seeking 1,100 megawatts of offshore wind. Applications will be accepted through December 28, 2018. Winning projects will be compensated through the OREC mechanism approved this week, which requires electric companies to buy defined quantities of ORECs from offshore wind developers, much like a traditional renewable portfolio standard mechanism.

Also on December 18, the BPU rejected a 25 megawatt demonstration project proposed by Nautilus (under development by EDF Renewables and Fishermen’s Energy). The Nautilus project would feature three turbines in state waters about 2.8 miles offshore Atlantic City. But the BPU found the Nautilus project did not demonstrate the economic and environmental benefits required under the Offshore Wind Economic Development Act for the state to commit ratepayer funds. In particular, the BPU found that Nautilus didn’t provide sufficient information to substantiate claimed economic benefits, and further that Nautilus demanded a price that was too high given the unsubstantiated benefits.

But offshore wind development may soon occur farther offshore New Jersey. On December 19, 2018, EDF Renewables North America and Shell New Energies US LLC announced the formation of a 50/50 joint venture, Atlantic Shores Offshore Wind, LLC to co-develop offshore wind generation in federal waters offshore New Jersey. The site is about 8 miles offshore Atlantic City. At issue is the 183,353-acrea OCS-0499 lease area, the rights to which were initially auctioned by the federal Bureau of Ocean Energy Management in 2015. That auction was won by Toto Holding Group subsidiary US Wind Inc., with a winning bid of $1,006,240.

More recent federal auctions for offshore wind site leasing rights have brought much higher winning bids -- for example, a December 2018 auction for sites offshore Massachusetts brought in about $135 million for each of three lease areas, totaling over $405 million in winning bids for about 390,000 acres.

Maine PUC releases 2015 renewable report

Maine energy regulators have released a report on the state's electricity renewable portfolio standard, presenting data from 2015.  The Maine Public Utilities Commission's Annual Report on New Renewable Resource Portfolio Requirement - Report for 2015 Activity [PDF] provides a look at Maine's renewables law, now in its tenth year on the books.  It may also inform legislative discussions later this spring about the future of Maine's renewable portfolio standard.

In 2007, the Maine legislature enacted a law requiring that specified percentages of electricity that supply Maine’s consumers come from “new” or Class 1 renewable resources, ranging from 1% in 2008 to 10% in 2017.  The law also required the Commission to report annually to the legislative energy committee on the status of this requirement and related compliance matters.

According to the report, Maine suppliers sourced approximately 891,757 renewable energy certificates or RECs, from 30 facilities, to comply with the 2015 requirement.  Of these, 20 facilities were fueled by biomass, 4 by hydropower, 3 by wind and 1 by landfill gas.  25 out of the 30 facilities were located in Maine, with 2 in New York, and one each in Connecticut, Massachusetts, and Vermont.  By REC volume, 99% came from facilities located in Maine.

The report also estimates the cost to Maine ratepayers of Maine's new renewable resource portfolio requirement.  According to the report, the cost of RECs used for compliance in 2015 ranged from "approximately $2.00 per MWh to $42.50 per MWh, with an average cost of $13.16 per MWh and a total cost of $11,738,174."  Adding in $3,018 in alternative compliance payments by one supplier, the report estimates a total cost to ratepayers during 2015 of $11,741,192.  The report translates this total cost into "an average rate impact of about one-tenth of a cent per kWh. This is equivalent to about 55 cents per month, or 1%, for a typical residential customer; $50 per month for a medium commercial customer that uses 50,000 kWh per month; and $500 per month for a large commercial/industrial customer that uses 500,000 kWh per month."

Maine law also includes a Class 2 renewable portfolio standard, requiring an additional 30% of electricity come from existing renewables and other Class 2 resources.  According to the Commission's report, the average cost of a Class 2 REC in 2015 was $0.28 per MWh, with a total cost of $965,818.  The report notes that this is "equivalent to about 5 cents per month for a typical residential customer, and $4 and $40 per month for medium and large commercial/industrial customers with the usage levels described above, respectively."

This session, the 128th Maine Legislature is considering several bills that could affect Maine's renewable energy laws, including LD 532, An Act To Remove the 100-megawatt Limit on Hydroelectric Generators under the Renewable Resources Laws, as well as LD 1185, a concept draft which "proposes to enact measures designed to update Maine's renewable portfolio standards."

Vermont adopts Renewable Energy Standard

This summer Vermont energy regulators issued an order implementing a Renewable Energy Standard.  This standard, or RES, requires Vermont electric utilities to procure an increasing share of electricity from renewable sources. 

Under a 2015 law called Act 56 (formerly called bill H.40), the Vermont Legislature directed the Public Service Board to issue an order implementing the RES to take effect on January 1, 2017.  Act 56 set certain rules for the RES, but left other issues to the Board.  Following working group meetings, workshops, and opportunities for written comment, the Board adopted the RES by order dated June 28, 2016.

The RES sets targets for utility procurement of renewable energy, starting at 55% of the electricity sold to customers from renewable sources in 2017, increasing gradually to 75% in 2032.   Of these amounts, at least 1% must come from new, distributed renewable generators, such as net-metering systems, rising to l0% by 2032.

The RES also establishes a category of "energy transformation projects," to encourage utility investment in projects that directly reduce customers' fossil-fuel consumption.  Energy transformation projects might include measures like weatherization, biomass heating, cold-climate heat pumps, demand management, or clean vehicle technologies.  To satisfy this requirement, utilities must demonstrate fossil-fuel savings equivalent to 2% of their annual retail sales (increasing to 12% by 2032) or procure an equal amount of additional renewable generation.  The Board has described the energy transformation project program as the first of its kind in the U.S.

Most states have adopted binding renewable portfolio standards for electricity supply.  Before the enactment of Act 56 and the Board's adoption of the RES, Vermont had renewable goals under its Sustainably Priced Energy Enterprise Development or SPEED program, but no mandatory renewable portfolio standard.

Under the act, the Vermont Public Service Board order adopting the RES will take effect on January 1, 2017.

NY Clean Energy Standard adopted

The New York Public Service Commission has issued an order adopting a clean energy standard.  The standard will require 50% of New York’s electricity to be generated by renewable sources by 2030.  This so-called "50 by 30" mandate is consistent with the State Energy Plan's strategy to reduce statewide greenhouse gas emissions by 40% by 2030.  It will also provide support for existing nuclear power plants said to be at risk for closure without state support.  This is a time of change for the New York energy industry, as the Clean Energy Standard adds to the regulatory and retail market changes that the state is already pursuing under its Reforming the Energy Vision or REV program.

The New York commission noted that the state has adopted "strongly proactive policies to combat climate change and modernize the electric system to improve the efficiency, affordability, resiliency, and sustainability of the system." The state's 2015 State Energy Plan called for the "50 by 30" goal for renewable energy.

In the Commission's words, it determined "that a series of deliberate and mandatory actions to build upon and enhance opportunities for consumer choice are necessary to achieve State environmental, public health, climate policy and economic goals; to enhance and animate voluntary retail markets for energy efficiency, clean energy and renewable resources; to preserve existing zero-emissions nuclear generation resources as a bridge to the clean energy future; to ensure a modern and resilient energy system; and to accomplish its objectives in a fair and cost-effective manner."

As a result, the Commission adopted a Clean Energy Standard or CES consisting of a Renewable Energy Standard and a Zero-Emissions Credit Requirement program.  The Commission also adopted supporting structures, which it describes as including:

(a) program and market structures to encourage consumer-initiated clean energy purchases or investments; (b) obligations on load serving entities to financially support new renewable generation resources to serve their retail customers; (c) a requirement for regular renewable energy credit (REC) procurement solicitations; (d) obligations on distribution utilities on behalf of all retail customers to continue to financially support the maintenance of certain existing at-risk small hydro, wind and biomass generation attributes; (e) a program to maximize the value potential of new offshore wind resources; and (f) obligations on load serving entities to financially support the preservation of existing at- risk nuclear zero-emissions attributes to serve their retail customers.

As described by Governor Andrew Cuomo, the program will feature a ramp-up of renewable power sourcing.  Utilities and other energy suppliers will be initially required to procure 26.32 percent of the state's total electricity load from renewable sources in 2017, increasing to 30.54 percent by 2021.  The Commission described the 50 by 30 goal as "not only part of a larger greenhouse gas goal, it is part of the State’s sweeping initiative to transform the way energy is produced, delivered, and consumed" through the REV process.

The Clean Energy Standard order also creates a Zero-Emissions Credit or ZEC requirement, along with a process through which state energy agency NYSERDA will offer qualifying nuclear facilities a multi-year contract for the purchase of ZECs, at a price ultimately derived from the calculations of "social cost of carbon."  NYSERDA will ultimately resell the ZECs to New York load serving entities, who will recover costs from ratepayers through commodity charges on customer bills.  The Commission described the ZEC mechanism as "the best way for the State to preserve the nuclear units’ environmental attributes while staying within the State’s jurisdictional boundaries. "

As described in the order, the Renewable Energy Standard and ZEC components "are interrelated but the goals are additive," meaning efforts to comply with the RES will not count toward the ZEC requirement, even if the combination will "contribute toward the State's comprehensive greenhouse gas reduction goals."

Maine renewable energy report released

The Maine Public Utilities Commission has issued its latest annual report on Maine's use of renewable electricity, covering the 2014 calendar year.  The report shows the impact of Maine's renewable portfolio standard, a state law requiring electricity suppliers to source specified percentages of their electricity from renewable resources.  The report found that compliance costs have fallen nearly in half since 2013.

The Maine State House.

Since Maine's electric industry restructuring in 2000, state law has required competitive electricity providers -- retail suppliers -- to procure 30% of their load served from "eligible resources." These are generally defined in statute as renewable or cogeneration facilities.  A 2007 act of the Maine legislature added a mandate that specified percentages of electricity that supply Maine’s consumers be sourced from “new” renewable resources.  Generally, these are renewable facilities that have an in-service date, resumed operation or were refurbished after September 1, 2005.  This "Class I" renewable portfolio standard began at one percent of load in 2008, and increases in one percentage point each year until reaching ten percent in 2017.  The older "eligible resource" standard became known as "Class II."

The 2007 renewables law required the Public Utilities Commission to report annually to the legislature on the program and compliance.  Each year's report is based largely on the most recently filed Competitive Electricity Provider (CEP) annual compliance reports, which are filed each July, covering the prior calendar year.  So there is some lag between the events being tracked and the publication of the report.

The Commission has just released its report covering calendar year 2014. The report notes "approximately 75 certified facilities, with a total capacity of approximately 1220 MW," although some are not operating or are eligible for other states' renewable portfolio requirements.

In 2014, most suppliers complied with the Maine renewable portfolio requirement through the use of renewable energy certificates or RECs.  According to the report, RECs from 22 facilities were used by suppliers to comply with the 2014 new renewable resource requirement.  Of these, 18 are biomass, 3 are hydro, and 1 is a wind facility. 20 of the 22 facilities are located in Maine, one is located in Connecticut and one is located in Massachusetts. Maine facilities, mostly refurbished biomass plants, supplied 99% of the approximately 811,476 RECs purchased to meet the 2014 portfolio requirement.

For calendar year 2014, 78.05% of the Class I RPS requirement was satisfied through the purchase of RECs during that year, 0.0004 % was satisfied through an alternative compliance mechanism, 21.88% was satisfied using RECs banked from 2013 and 0.1130 % will be satisfied during a 2015 cure period allowed by rule. On top of this activity, 181,595 RECs were purchased in 2014 and banked for future use and an additional 8 RECs were purchased where the supplier did not indicate whether the certificates were to be banked or would not be used.

As the Commission notes in its report, "the prices for Maine Class I RECs declined substantially over the two years leading up to 2014. This has occurred because Maine’s portfolio requirement includes, as an eligible resource, refurbished biomass facilities (which are not generally eligible in other New England states)."

One result is that the annual cost of Class I compliance fell roughly in half since the last report, with a total cost of $14,296,249 in 2014 compared to just $6,947,269 in 2013.  The report describes the cost of Class I RECs used for compliance in 2014 as ranging from approximately $1.72 per MWh to $22.33 per MWh, with an average cost of $8.56 per MWh.  Adding $198 for one supplier who satisfied a portion of the portfolio requirement through alternative compliance mechanism at the rate of $66.16 per MWh, the report describes a total Class I compliance cost to ratepayers during 2014 of $6,947,269.  The Commission translated this into "an average rate impact of about 0.06 cents per kWh (or about 30 to 35 cents monthly for a typical residential bill). In percentage terms, this translates to a residential customer bill impact of about one half of 1%."

The report also describes the cost of Class II RECs used to satisfy the eligible resource portfolio requirement as ranging from $0.00 per MWh (some RECs were provided for free as part of an energy transaction) to $1.80 per MWh, with an average cost of $0.52 per MWh and a total cost of $1,834,314. According to the Commission, this translates into less than ten cents per month on a typical residential bill.

MA solar policy faces change

Massachusetts solar energy faces uncertainty, as the two state policies most supportive of solar photovoltaic project development -- a solar project's right to produce solar renewable energy certificates and a customer's right to net meter -- reach their end.  With the Massachusetts SREC II and net metering programs ending, new solar energy projects face diminished and uncertain financial incentives.

Massachusetts has made a strong commitment to solar energy.  The Commonwealth met its original goal of 250 megawatts of solar power installations four years early, then set a new goal was set of 1,600 MW by 2020. As of May 2015, over 841 megawatts of solar capacity had been installed in Massachusetts.

As the Solar Energy Industries Association has noted, "The Massachusetts market is driven by net metering, a renewable portfolio standard with a solar goal along with an accompanying SREC market."  The Massachusetts Clean Energy Center seemingly agrees, listing net metering and SRECs as two key "production-based incentives and benefits" for solar system owners.
The Massachusetts Department of Energy Resources ran its Solar Carve-Out II, or SREC II, program from April 25, 2014 to February 5, 2016.  The DOER described the program as designed to support the market until 1,600 megawatts of photovoltaic capacity has been installed statewide.

But that limit has been reached, counting the 653.8 megawatts of PV capacity installed under the Department's SREC I program (which ran from 2010-2014), additional capacity installed under SREC II, and over 600 megawatts of additional projects having reservations filed for the remaining SREC II program capacity.  The practical effect is that new projects will not likely be able to participate in the SREC II program.  This removes a key incentive for Massachusetts solar development.

The other Massachusetts solar promotional program reaching its limit is the Commonwealth's net metering program.  Under net metering, customers of certain electric distribution companies who generate their own electricity may offset their electricity usage.  Effectively, the retail meter spins forward when the customer uses electricity from the utility grid, and it spins backward when the customer generates excess electricity.

Massachusetts law requires each distribution company to maintain net metering caps equal to 4% of the company’s highest historical peak load for private net metering customers, and another 5% for municipal or public entities.  Once an electric distribution company fills its net metering caps, it can no longer allow customers to take service under its net metering tariff.  National Grid has reached its cap in its service territory, with other service territories close to full.  If net metering is not available to Massachusetts customers, it will remove another incentive that has supported significant growth in the state's solar sector in recent years.

In 2015, several pieces of legislation were proposed to lift the net metering caps, but no bill respecting net metering passed both the House and Senate.  The House measure contained provisions including a shift from retail rate compensation for net metering to a wholesale rate for most systems after the 1,600 megawatt target is met, authority for utilities to impose a minimum bill charge on net metering customers after the target is reached, and increased opportunity for utility ownership of solar.  A 2014 effort to lift net metering caps and reform solar policy similarly died.

But with significant interest in solar, from citizens and communities to the Commonwealth, U.S., and even the United Nations following the 2015 Paris Climate Agreement, how will Massachusetts react to the end of its SREC II and net metering programs?  Will a third effort to increase net metering work?  What will the Department of Energy Resources offer as a successor to the Solar Carve-out II SREC program?

Report on Maine renewable portfolio standard in 2013

The Maine Public Utilities Commission has issued a report on Maine's use of renewable electricity in 2013.  The report shows the impact of Maine's renewable portfolio standard, a state law requiring electricity suppliers to source specified percentages of their electricity from “new” renewable resources.

Since 2000, Maine law has required electricity suppliers to include renewable energy in their portfolio of supply sources.  Maine’s original electric industry restructuring legislation included a 30% eligible resource portfolio requirement. The eligible resource portfolio requirement, now referred to as Class II, mandated that each retail competitive electricity supplier meet at least 30% of its retail load in Maine from “eligible resources.”  Eligible resources are defined in statute as either renewable resources or efficient resources.  Renewable resources are defined in statute as fuel cells, tidal power, solar arrays, wind power, geothermal installations, hydroelectric generators, biomass generators, and municipal solid waste facilities. Renewable resources may not exceed a production capacity of 100 megawatts. “Efficient” resources are cogeneration facilities that were constructed prior to 1997, meet a statutory efficient standard and may be fueled by fossil fuels.

During its 2007 session, the Maine Legislature enacted an Act to Stimulate Demand for Renewable Energy.  This Act established a new "Class I" standard, requiring Maine electricity suppliers to source specified percentages of their electricity from “new” renewable resources.  Generally, new renewable resources are renewable facilities that have an in-service date, resumed operation or were refurbished after September 1, 2005.  The Act set the initial renewable percentage requirement at 1% in 2008, increasing in annual one percentage point increments to 10% in 2017.  Pursuant to the Act, the renewable requirement will remain at 10% thereafter, unless the Commission suspends the requirement.

The Commission's March 31, 2015 report, Annual Report on New Renewable Resource Portfolio Requirement, reports on renewable portfolio standard compliance activity in calendar year 2013.  This lag between the study period and the report's issuance is driven by the timing of the most recently filed Competitive Electricity Provider (CEP) annual compliance reports, which were filed in July 2014 for calendar year 2013.  In 2013, the Act required suppliers to source 5% of their power from new renewable resources.  Suppliers can comply either by acquiring sufficient renewable energy certificates or RECs to cover their compliance obligation, or by paying an "alternative compliance payment".

According to the report, in 2013 suppliers purchased 727,291 Class I RECs from 21 certified generating facilities to meet the portfolio requirement.  Nearly 97% of these RECs came from biomass facilities located in Maine.  According to the report, 17 of the 21 facilities are biomass, three are hydro, and one is a wind facility.  18 of the 21 facilities are located in Maine, one is located in Connecticut, one is located in Massachusetts and one is located in Vermont.

The Commission's report also documents the cost of compliance in 2013.  During 2013, the cost of RECs used for compliance with the Class I requirement ranged from approximately $1.50 per MWh to $60 per MWh, with an average cost of $19. 8 7 per MWh and a total cost of $14, 292,438.  As noted in the report, the cost of Maine Class I RECs has dropped substantially since 2013, with the report citing a current trading range of $3.00 to $5.00.  With minor use of the alternative compliance mechanism by two suppliers, the total cost to ratepayers during 2013 was $14,296,249, which the Commission's report translates into an average rate impact of about 0.12 cents per kWh (about 60 to 65 cents monthly for a typical residential bill, or a residential customer bill impact of about 1%).

The report also documents the 2013 costs of RECs used to satisfy the "Class II" eligible resource portfolio requirement as ranging from $0.00 per MWh (some RECs were included as part of an energy transaction at no specified extra cost) to $1.00 per MWh, with an average cost of $0.16 per MWh and a total cost of $589,386. This translates into less than three cents per month on a typical residential bill.

Questions about EPA regulation of power plant carbon emissions

This week the U.S. Environmental Protection Agency issued a public notice relating to its Clean Power Plan, the agency's proposed rule to reduce carbon emissions from the nation's existing power plants.  The notice reiterates questions raised by commenters about issues including the redispatch from coal- to natural gas-fired generation and near-term carbon reductions through 2029.

The Clean Power Plan imposes a federal carbon emissions rate (stated in pounds of carbon emitted per megawatt-hour of electric energy generated) for each state.  The rule is designed to offer states flexibility in developing plans to achieve that level of carbon intensity, and features four proposed "building block" elements that states may choose to include in their program design: increased coal plant efficiency, increased utilization of natural gas plants, increased renewable energy, and increased energy efficiency.  Collectively, EPA projects that by 2030 the Clean Power Plan's implementation will reduce power plant carbon emissions 30 percent below 2005 levels.

Since EPA published its proposal on June 18, 2014, the agency has held at least eight days of public hearings in four cities, attended by over 2,700 people, of whom nearly half spoke or otherwise weighed in.  The draft Clean Power Plan was originally scheduled for public comment through October 16, but EPA extended the comment period by 45 days (until December 1, 2014) in response to both the volume of comments and numerous requests for additional time. 

On October 28, EPA issued a notice of data availability related to the proposed Clean Power Plan.  EPA routinely issues such a notice, or NODA, to provide the public with a targeted opportunity to consider and comment on emerging technical issues and data related to an ongoing rulemaking.  EPA's Notice of Data Availability Related to the Proposed Clean Power Plan (PDF) provides additional information on several topics raised by stakeholders and solicits comment on the information presented.  The three topics covered in the notice are the emission reduction compliance trajectories created by the interim goal for 2020 to 2029, certain aspects of the building block methodology, and the way state-specific carbon dioxide goals are calculated.

EPA's interim goals govern emission reductions over the 2020-2029 period, as states transition to energy resources with lower carbon intensity.  Some stakeholders have expressed concern that, as proposed, the interim goals do not provide enough flexibility for some states which may be forced to rely heavily on re-dispatch from fossil steam generation (e.g., coal- , oil-, or gas-fired boilers) to natural gas combined cycle units to achieve the required reductions, and that this effect of the interim goals severely limits the opportunity to fully take advantage of the remaining asset value of existing coal-fired generation -- particularly challenging with the threat of a "polar vortex" or other disruptive weather event.  EPA requests comment on these interim goals and whether they afford suitable flexibility.

Stakeholders have also raised questions about the building blocks available to states as they design compliance programs.  In particular, building block 2 focuses on shifting utilization from coal- and other fossil-fired steam power plants to more carbon-efficient natural gas combined cycle plants.    Building block 3 focuses on renewable energy and nuclear power.  In response, EPA requests comment on ways that building block 2 could be expanded to include new natural gas combined cycle units and natural gas co-firing in existing coal-fired boilers and ways that state-level renewable energy targets could be set based on regional potential for renewable energy.

Stakeholders have also noted concerns with the way the state-specific carbon dioxide goals are calculated.  These include concerns that the numeric formula for calculating each state's goal is not consistent in its application of the best system of emission reduction (BSER) for each building block, and concerns with the use of data for the single year 2012.

EPA's Clean Power Plan is now open for public comment through December 1, 2014.

Voluntary renewable power markets small but growing

Electricity generated from renewable energy resources continues to grow its share of the U.S. market, according to a recent U.S. governmental report.  While most renewable energy sales are motivated by renewable portfolio standards -- state laws requiring utilities to source specified amounts of energy from renewable resources -- a small but growing amount of electricity is sold in voluntary green power markets.

Consumer demand for renewable-sourced electricity has led to voluntary markets in which consumers and institutions voluntarily purchase renewable energy to meet their electricity needs.  These markets include green power offers, competitive supplies, and over-the-counter renewable energy certificate (REC) sales.  According to the National Renewable Energy Laboratory's report, Status and Trends in the U.S. Voluntary Green Power Market, in 2012 voluntary retail sales of renewable energy represented approximately 1.3% of total U.S. electricity sales, or about 48 million megawatt-hours.  According to NREL, these sales represent the power produced by about 17,000 megawatts of installed renewable capacity.

While the voluntary renewable electricity market remains relatively small in absolute terms, it is growing rapidly.  NREL's report found that from 2010 to 2012, total green power market sales increased by 36%, for a compound annual growth rate of 1%.

In 2012, the resource mix supplying renewable energy to the voluntary renewable market was dominated by wind energy, at 80.1% of total green power sales.  Other resources in the mix include landfill gas and biomass (12.8%), hydropower (6.2%), solar (0.6%), and geothermal (0.3%). Like the entire voluntary market itself, solar power is a small but growing segment, experiencing a tripling of market share between 2010 and 2012.

For now, despite its recent growth, voluntary retail sales of renewable energy represent a small fraction of power sold.  The vast bulk of renewable energy is sold in compliance markets, established pursuant to state renewable portfolio standards or targets.  Will voluntary markets continue to grow?  How will proposals to increase state standards affect the voluntary markets?

Massachusetts solar power goal reached, expanded

Massachusetts has surpassed its goal of being home to 250 megawatts of installed solar energy capacity four years early.  Governor Deval Patrick's administration and the state legislature have adopted a series of policies favoring the development of solar energy, including a target of reaching 250 MW by 2017.  Last week the administration announced that this goal had already been reached, and established a new goal of 1,600 MW by 2020. 

Solar power in Massachusetts has grown significantly in recent years.  In 2007, the Commonwealth hosted just 3 MW of solar capacity.  Since then, Massachusetts has adopted a variety of incentives for renewable power production.  Chief among these is the Renewable Portfolio Standard (RPS) Solar Carve-Out program.  State law currently requires utilities to source up to 400 MW from in-state solar photovoltaic projects.  Utilities purchase solar renewable energy certificates, or SRECs, representing the environmental attributes of electricity produced by qualified projects.  These SRECs come in addition to the actual power produced by projects, and carry a premium value over other renewable attribute products.  State laws such as the 2008 Green Communities Act have provided additional incentives, including technical assistance and financial support for solar development.

Given current policies and market dynamics, solar power in Massachusetts will likely continue to grow.  While the bulk of newly installed capacity is likely to be in the form of distributed generation (as opposed to very large-scale utility installations as are under development in the desert Southwest), Massachusetts will continue to see projects ranging from residential rooftop-scale to close to 10 MW.  Reaching 1,600 MW within the next seven years will be a challenge, and may depend on continued policy support and market trends, but the recent rate of growth and relative enthusiasm suggest this may be possible.

Energy, environment, and the 2013 inauguration

This week U.S. President Barack Obama took the oath of office for his second term. The 57th presidential inauguration was celebrated in Washington, D.C. on January 21, 2013.  In his inaugural address, President Obama delivered calls for action on issues ranging from the federal budget to social policy.  His speech also offered a platform on environmental and energy issues.  What did the 2013 inaugural address say about environmental and energy policies?

The United States Capitol after the inauguration ceremonies on Martin Luther King Day, January 21, 2013.

Climate change featured prominently in President Obama's second inaugural address.  Drawing on the official transcript of the address provided by the White House:

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. (Applause.) 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.  

Exactly how he plans to address climate change remains to be seen.  Likely measures include further Environmental Protection Agency regulations covering emissions from coal plants, greater military use of renewable and alternative fuels and energy sources, and an emphasis on energy efficiency.

President Obama also advocated for greater use of sustainable energy resources:

The path towards sustainable energy sources will be long and sometimes difficult.  But America cannot resist this transition, we must lead it. We cannot cede to other nations the technology that will power new jobs and new industries, we must claim its promise. That’s how we will maintain our economic vitality and our national treasure -- our forests and waterways, our crop lands and snow-capped peaks. That is how we will preserve our planet, commanded to our care by God. That’s what will lend meaning to the creed our fathers once declared.

Because this paragraph immediately followed his remarks about the climate and natural disasters, the speech suggested greater reliance on renewable or sustainable energy as another response to climate change.  President Obama emphasized both the environmental and economic value of these alternative energy resources.

Left unsaid were the details on the path towards sustainable energy.  Will President Obama suggest a national program requiring the use of renewable electricity?  Congress enacted a renewable biofuels standard as part of the Energy Policy Act of 2005, and most states have enacted laws requiring utilities to source electricity from renewable sources.  To date, no proposed federal electric renewable portfolio standard has found traction in Congress.  What about federal tax credits and incentives for renewable energy, such as the renewable electricity production tax credit and investment tax credit?  Last year President Obama called for making the production tax credit permanent and refundable, meaning taxpayers would not need to have any income tax liability to benefit from the credit.

Based on President Obama's 2013 inaugural address, he will push for solutions with enthusiasm and vigor.  The ultimate proposals, and the paths towards their execution, may affect their chances of success.  Exactly what measures surface -- and which can either pass through Congress or, in the case of agency action, survive legal challenge -- will be revealed over the next four years. 

Election 2012 and energy recap

With yesterday's general election behind us, people across the United States are considering its impact on energy policy.  From President Obama's retention of the White House to state elections and ballot measures, voters have reshaped the energy landscape.  Here are some highlights:

• President Obama wins reelection.  Obama's win may mean "more of the same" when it comes to energy policy.  President Obama has indicated support for increased domestic production of natural gas and oil, as well as for programs to encourage the development of renewable electric generation.  While the U.S. Department of Energy remains under scrutiny for loan guarantees it offered companies like Solyndra, Obama's reelection likely means that the Department of Energy will not face as strong a shakeup as it would have under a President Romney.  Still, many observers expect Secretary of Energy Steven Chu to be replaced.  The U.S. Environmental Protection Agency will likely continue to develop regulations covering energy-related emissions such as ozone, coal ash, and sulfur from fuels.  These regulations have effectively been on hold pending the election.  EPA Administrator Lisa Jackson may continue to lead the agency.  Likewise, Interior Secretary Ken Salazar has indicated his desire to remain Secretary of the Interior; in Obama's second term, the Department of the Interior is likely to continue its current course in leasing land for oil and gas production as well as for renewable energy production.

• Congress remains divided.  At the federal level, Democrats held onto control of the Senate, while Republicans retained control in the House.  The chambers' partisan nature may lead to gridlock, or at least to consensus-based, relatively moderate measures as the only kind of legislation likely to meet the approval of both chambers of Congress.

• Michigan rejects constitutional amendment on renewable energy.  Michigan voters rejected a proposed amendment to the state constitution that would have increased the amount of renewable energy that utilities must buy to serve their customers.  Proposition 3 would have required electric utilities to generate at least 25 percent of their annual retail sales of electricity from renewable energy sources by 2025.  Only 36% voted in favor of the measure to increase the renewable portfolio standard, meaning the RPS initiative failed.

Other election results, ranging from congressional races to state governor contests, will also shape energy policy in 2013 and beyond.  People and businesses that can react quickly will be in a better position to capitalize on the election results.

How Election 2012 affects energy policy

Today voters across the United States cast ballots in the 2012 general election. At stake are a broad range of political offices, ranging from the presidency to local municipal roles. How will the election's outcomes affect energy policy, energy-related businesses, and consumers?

The presidential contest has drawn the greatest attention over the past year. Whether President Obama will retain his office or Governor Romney will take the White House is the largest question. Based on the candidates' past actions and current campaign platforms, voters have some sense of how each would exercise his presidential powers. On energy issues, both candidates appear to favor increased domestic production of natural gas and oil. The candidates differ in their philosophies on the role of governmental incentives and subsidies -- whether for fossil fuel production or for renewable electricity generation -- and on emissions regulations for coal-fired and other power plants. The candidates also disagree on specific energy projects and programs ranging from the Keystone XL pipeline to the Navy's Great Green Fleet biofuels initiative.

Beyond the presidency, federal elections will determine the composition of Congress. While energy policy is more sensitive to presidential changes than to individual congressional elections, the makeup of Congress drives federal energy policy in the aggregate. All seats in the House of Representatives are up for grabs, as are a third of Senate seats. Of the 33 Senate seats, Democrats need to win 21 seats to retain their majority while Republicans need to win 14 seats to take control. The senators elected in 2012 will participate in setting any national energy policy.

State elections will also shape energy policy for the coming years. Voters will select governors in 11 states, and state legislative offices are widely contested. While federal energy policy draws the most attention, the U.S. federalist system leaves significant authority to individual states to set their own policies on energy issues. For example, states may establish electric renewable portfolio standards or otherwise regulate the resource mix used to produce usable energy. The outcomes of state elections will also affect policies on energy efficiency, smart meters and smart grid infrastructure.

Voters in some states will also cast ballots on measures directly affecting energy policy, such as the Michigan citizens' initiative seeking to increase utilities' use of electricity produced by renewable resources.

It may be some time until all the ballots are finally counted, but by tomorrow night we will have a better understanding of the results for most of the races and ballot questions. Those who can translate the election results into an understanding of future policies - and business opportunities - will have a leg up on the competition.

Will Michigan vote for renewable energy as a constitutional amendment?

Voters will decide a broad slate of issues in the upcoming U.S. elections on November 6, including many that address energy policy.  Questions range from who will serve as president to the role of government in managing the mix of energy resources used to power society.  In several states, voters will decide whether to increase renewable energy mandates.  One example of such a question is Michigan Proposal 3, a citizen-initiated ballot measure that would mandate that 25% of the state's electricity must come from renewable resources by 2025.
Under current law, Michigan's renewable portfolio standard requires electric suppliers to procure at least 10 percent of electricity from renewable sources such as wind, solar, hydro and biomass by 2015.  If enacted, Proposal 3 would increase this RPS requirement to 25% by 2025, and limit the impact of the requirement on electric rates to no more than a 1% annual increase.

The official text of Proposal 3 reads:

PROPOSAL 12-3
A PROPOSAL TO AMEND THE STATE CONSTITUTION TO ESTABLISH A STANDARD FOR RENEWABLE ENERGY
This proposal would:

• Require electric utilities to provide at least 25% of their annual retail sales of electricity from renewable energy sources, which are wind, solar, biomass, and hydropower, by 2025.
• Limit to not more than 1% per year electric utility rate increases charged to consumers only to achieve compliance with the renewable energy standard.
• Allow annual extensions of the deadline to meet the 25% standard in order to prevent rate increases over the 1% limit.
• Require the legislature to enact additional laws to encourage the use of Michigan made equipment and employment of Michigan residents.

Should this proposal be approved?
YES __
NO ____

The effort to place this question on the ballot has been led by a group called Michigan Energy, Michigan Jobs.  Supporters project that the amendment would help the local economy by creating over 40,000 jobs and attract $10 billion in new investments, as well as promoting public and environmental health.  Opponents, including a group called the Clean Affordable Renewable Energy for Michigan Coalition or (CARE) argue both that the increased renewable mandate would cost too much and that such a measure does not belong in the state constitution.

How will Michigan voters respond to this issue?  We will find out within the next week.

NY releases Energy Highway Blueprint

This week New York Governor Cuomo released the New York Energy Highway Blueprint (12 megabyte PDF), the state’s plan to “rebuild and rejuvenate New York State’s electric power system and enable the state to meet the needs of a 21st century economy and society.”

The Blueprint outlines 13 recommended actions in four focus areas, including:

• Expand and Strengthen the Energy Highway: building $1 billion of new electric transmission totaling over 1,000 MW of capacity, develop reliability contingency plans for power plant retirements (including energy efficiency and demand response), and support flexibility in public power authority contracting
• Accelerate Construction and Repair: advance up to $800 million of investments in electric generation, transmission, and distribution, and advance up to $500 million of investments in natural gas distribution to reduce costs to customers and enhance reliability, safety, and emission reductions
• Support Clean Energy: execute new contracts for up to $250 million within the next year with renewable energy developers under the Renewable Portfolio Standard to leverage an additional $425 million in private-sector investment to build up to 270 MW, study NY’s Atlantic offshore wind resource, and repower 750 MW of inefficient power plants on Long Island
• Drive Technology Innovation: facilitate smart grid initiatives with the investment of up to $250 million

Nothing in the Blueprint is mandatory, but it appears to have significant political force behind it.  What will the Blueprint likely lead to?

One likely result is significant transmission development.  If this happens, the new transmission lines could enhance reliability and create opportunities for energy produced upstate or in rural areas to be transmitted to load centers like New York City.  Transmission line development typically involves significant construction work and related employment, but can be expensive.  How this transmission development will be paid for remains to be seen, and may not be resolved for several years.

Another area of interest involves the development of reliability contingency plans for power plant retirements.  The Indian Point nuclear plant, located about 30 miles north of NYC, is currently undergoing a relicensing proceeding before the Nuclear Regulatory Commission.  It is unclear whether either or both of the two reactors at Indian Point will be relicensed, meaning New York may need to secure replacement power by 2016 (or sooner).  The Blueprint recommends that contingency plans for partial or full retirement of the Indian Point plant include energy efficiency and demand response.

The Blueprint also includes plans to increase the availability of natural gas, including for the purpose of switching customers from oil to gas. The NY Department of Public Service is slated to issue a notice on natural gas expansion policies by the end of 2012. It is unclear how the program will split its focus between residential, commercial, and industrial customers, but it could help reduce the cost and environmental impacts of oil use in New York.

Overall, the Blueprint could result in the addition of up to 3,200 megawatts of additional electric generation and transmission capacity through up to $5.7 billion in private investments.  Over the upcoming months, state agencies and the New York legislature will consider the Blueprint, and whether and how it can be implemented.  At the same time, businesses are evaluating the Blueprint to see if it can help them develop renewable and traditional generation, transmission lines, energy efficiency, demand response, and other energy projects.