Maine community renewable energy project winds down

Maine energy regulators will soon act on proposals for community-based renewable energy projects, as legal authority for a community energy pilot program winds down.

In 2009, the Maine Legislature enacted An Act To Establish the Community-based Renewable Energy Pilot Program, P.L. 2009, ch. 329.  The Act established a pilot program to provide incentives for the development of community-based renewable projects.  To qualify, projects must be “locally owned electricity generating facilities” (51% or more of the facility must be owned by “qualifying local owners”) and must not exceed 10 MW.  The Maine Public Utilities Commission was charged with administering the program, including certifying qualifying facilities.  To a community renewable energy project developer, the program offered the opportunity to win a long-term contract to sell project power to a Maine utility at predictable prices.

A 2015 law amended the community-based renewable energy program.  Among other changes, it required the Commission to perform a "viability assessment" of all projects that have been certified under the program but have not yet reached commercial operations.  For any projects the Commission determines will not be viable by December 31, 2018, the Act states that the Commission must revoke any contract awarded, though the projects will remain certified.  In September 2015, the Commission completed its viability assessment and identified approximately 21 megawatts of capacity that is available for contract awards. 

The 2015 law effectively provides that the Commission's authority to order utilities to enter into community-based renewable energy projects expires on December 31, 2015.   In light of the 21 megawatts of program capacity identified as available, on September 30, the Commission issued a request for proposals for projects seeking the remaining contract awards.

Proposals were due by November 6, 2015. According to the RFP,  the Commission will complete its evaluation of proposals and accept or reject proposals no later than December 31.

Maine PUC considers community energy projects

The Maine Public Utilities Commission is evaluating the viability of proposed community-based renewable energy projects that remain under development.

Maine has run a community-based renewable energy program since 2009.  The program gives qualified wind, solar, and other renewable energy projects long-term contracting opportunities to sell the facility’s output to a Maine transmission and distribution utility at attractive rates.

In 2015, the Maine Legislature adopted P.L. 2015 ch. 232, An Act to Amend the Community-based Renewable Energy Program”.  Beyond minor revisions to the law, the act adds strict deadlines for key program milestones: the Public Utilities Commission has until December 31, 2015 to order or allow utilities to enter into long-term contracts under the program, and all projects selected for a contract must become operational and commence generating electricity by December 31, 2018.

Section 5 of the Act also created a new "viability assessment" process designed to make sure the program is as effective as possible.  The program size is capped at 50 megawatts statewide; all of this capacity was quickly claimed by certified projects.  But not all projects that have been certified are operational; some have yet to be built.  Some stakeholders expressed concern over "permit banking" -- developers obtaining and holding onto program capacity, without actively developing it, while other projects would move forward if they could get the capacity.

As a result, the Legislature directed the Commission to review all certified projects that have not yet reached commercial operations, to determine whether the projects are reasonably likely to achieve commercial operations within a 3-year period.   If the Commission determines a project will not be viable by December 31, 2018, the Act directs the Commission to revoke any contract awarded, but such projects will remain certified under the program.   If the removal of nonviable projects frees up program capacity for contracting, the law directs the Commission to conduct an expedited request for proposals to select community-based renewable energy projects to become program participants and enter into long-term contracts.

The Commission's viability assessment process is now ongoing.  A July 13, 2015 procedural order identified six projects as having been either certified or awarded a contract, but not been placed in commercial operation.  Project developers were invited to submit information related to the viability assessment by August 7. 

The Commission meets on September 22 to deliberate on the viability assessments.

Maine considers renewable feed-in tariff

The Maine legislature is set to consider a bill that would create a feed-in tariff for renewable energy.  Maine already has a renewable portfolio standard and other incentives for investment in renewable power production.  Will Maine add a feed-in tariff to the mix?

The Maine State House, home to a consideration of feed-in tariffs.

 A feed-in tariff is a policy tool intended to encourage investment in renewable energy technologies.  Feed-in tariffs typically offer long-term contracts under which utilities purchase power fromrenewable energy producers at predictable prices, often based on the cost of generation of each technology.  Where feed-in tariffs exist, developers of renewable energy projects gain certainty about the revenues their projects will create.  This certainty helps developers secure the financing they need to build projects.

A bill proposed by Maine state senator Christopher Johnson would require the state Public Utilities Commission to establish a renewable energy resources feed-in tariff program.  An Act To Establish the Renewable Energy Feed-in Tariff, also known as LD 1085, has the stated purpose of encouraging the rapid and sustainable development of renewable energy resources and technology for environmentally healthy generation of electricity.  Like feed-in tariffs in other jurisdictions, it would require that utilities purchase renewably produced electricity from all qualified suppliers.  It would have the Public Utilities Commission set the rate that electric utilities must pay for such power at a level sufficient to provide revenues to operate and to attract necessary capital and investment for small renewable electric generators.

Qualified suppliers would be limited to certain small renewable electric generators.  As defined in the bill, such generators would be limited to systems up to 500 kilowatts in size, that are majority owned by a person or entity that owns less than 500 kilowatts of electricity generating capacity in Maine, and that use solar photovoltaic panels or solar thermal or concentrating solar systems, generators fueled by methane from sewage treatment facilities, landfills or agricultural waste, generators fueled by combustion of biomass, tidal power projects, or wind energy.

Existing Maine law provides incentives for the generation of electricity from renewable resources.  Like most states, Maine has a renewable portfolio standard which requires electricity suppliers to source a specified portion of their power from renewable generators.  Maine also has a community-based renewable energy pilot program which functions like a feed-in tariff for eligible projects.  A feed-in tariff would add another incentive to build relatively small (non-utility-scale) projects.

LD 1085 has not yet been scheduled for a public hearing.  It will likely come before the Joint Standing Committee on Energy, Utilities and Technology later this spring.

Farm waste anaerobic digestion

Yesterday I attended a celebration at Stonyvale Farm in Exeter, Maine, where an innovative anaerobic digester system is now producing renewable electricity from cow manure and other organic waste.  The project demonstrates both a promising technology and an opportunity for farms to produce and market new products.

Two anaerobic digesters at Stonyvale Farm in Exeter, Maine.

Stonyvale Farm is a fifth-generation family dairy farm.  Today the farm is home to 1,000 milk cows and 800 calves.  Several years ago, the family decided to explore the development of an anaerobic digestion system to convert manure and other farm waste to usable biogas.  This led to the creation of Exeter Agri-Energy, a renewable energy company that built and operates a 1-megawatt generator fueled by methane produced through anaerobic digestion at Stonyvale Farm.

Exeter Agri-Energy's digester and generator came online in late 2011.  Today the project converts cow manure and off-farm organic waste from a variety of sources into biogas.  EAE is permitted to accept a variety of food-based and organic wastes from off-farm for conversion into biogas.

The biogas is burned in a combustion engine to produce electricity (enough for about 800 homes) and heat.  I helped the company qualify the project for incentives under Maine's community-based renewable energy pilot program, which gives Exeter Agri-Energy a long-term contract to sell the facility’s output to its local transmission and distribution utility for up to 20 years at average prices up to $100 per MWh (equivalent to 10¢ per kWh).  This works much like a feed-in tariff for qualified projects, giving them a guaranteed buyer and price for the project's output.

Fuel production on the farm: dairy cows at Stonyvale Farm.

This on-farm energy project also enables the creation of additional products and revenue streams, as well as cutting the farm's costs.  Byproducts of the digestion process become organic fertilizer, organic soil additives, and animal bedding used on the farm, creating a variety of products with minimal waste.

Maine net energy billing

Maine's net energy billing program gives electricity consumers have the opportunity to offset their electric bill by generating electricity themselves.  This not only supports small-scale and some community-based renewable and efficient electric generation, but can provide customers a significant financial incentive.

Net energy billing is Maine's form of net metering, which allows electric customers with small-scale wind generators, solar panels or other renewable and efficient generation units to sell the power they produce to the utility grid.  In exchange, the utility banks credits that are used to offset the customer's bill for power purchased from the grid.  If the customer generates more electricity in a month than it uses, credits can be banked and carried forward for a 12-month period to offset future bills.

Net energy billing customers can not only sell their power to the grid and bank it for later, but also receive a favorable exchange rate.  Most electric generators who sell to the grid are paid a relatively low wholesale rate, but net energy billing customers are credited at the higher retail rate.  This can provide participating customers a significant financial edge, and could be used to enhance the value of existing community-scale renewable generation such as a small hydroelectric facility.

Maine has offered various forms of net metering since 1987, making it an early leader in the practice.  Many other states have adopted net metering programs, and Congress has directed states to make net metering available to consumers.  Maine's net energy billing program has evolved over time, and now applies to a variety of technologies including solar photovoltaics, wind, biomass, small hydroelectric, hydrokinetic or tidal, geothermal electric, renewable-based fuel cells, and micro-combined heat and power (micro-CHP).

Maine's net energy billing program has several special features.  Generation projects don't have to be located at the same place as the net metering customer.  Maine allows virtual net metering, where a generator meter can be netted against its owner's meter no matter where each is located, as long as both are in the same utility's service territory.

Maine also allows customers to pool together to develop a net metering project.  This so-called "shared ownership billing" allows multiple customers with an ownership interest in a project to share in the benefits of net metering, and may enable more cost-effective projects through the economies of scale.

On top of all this, customers can combine the benefits of net metering with other incentives.  For example, such as grant and rebate funding for qualified projects through state-level energy offices or program support through several federal agencies.

Here are links to the net metering webpages of Maine's three large utilities: Central Maine Power, Bangor Hydro-Electric, and Maine Public Service.

Community-based renewable energy in Maine

An innovative program in Maine seeks to facilitate the development of community-based renewable energy projects.  The program offers significant incentives for the development of qualified electric generation projects of up to 10 MW in size.

In 2009, the Maine legislature enacted a law establishing the Community-Based Renewable Energy Pilot Program to encourage the sustainable development of community-based renewable energy.  By community-based, Maine's program targets locally-owned community-scale projects (as opposed to large-scale renewable projects owned primarily by out-of-state entities).

Under the program, qualified renewable energy projects can receive significant incentives including a long-term contract to sell the facility’s output to a Maine transmission and distribution utility for up to 20 years at average prices up to $100 per MWh (equivalent to 10¢ per kWh). This incentive is attractive because not only can the contract prices be above average market prices, but also the long-term power purchase agreement makes projects easier to finance by enhancing revenue certainty.

Eligible projects can apply to the Maine Public Utilities Commission for certification as community-based renewable energy projects. This process involves making public filings, negotiating with Commission staff, and demonstrating that the project meets the program’s qualification requirements. These include restrictions on resource type, nameplate capacity, and ownership.

Under the pilot program, eligible resources include:

• fuel cells
• tidal power
• solar energy
• wind systems
• geothermal systems
• hydroelectric generators
• generators fueled by landfill gas
• biomass generators whose fuel includes anaerobic digestion of agricultural products, byproducts or wastes.

Each individual project must not exceed 10 MW in nameplate capacity. Projects must also be primarily locally owned, meaning that 51% or more of the facility must be owned by Maine residents, governmental entities, businesses, or other qualifying local owners.

Once certified, a qualified project can choose either of two incentives: a long-term contract for the output of the facility with a transmission and distribution utility, or a renewable energy credit (REC) multiplier giving a 50% bonus in the amount of RECs produced.

To date, most have viewed the long-term contract as the more attractive option. Under this incentive, projects meeting the program’s requirements can obtain a contract at a fixed or variable price, provided that two criteria are met. First, the average price per kilowatt-hour must not exceed 10 cents. Second, the cost of the contract must not exceed the cost of the project plus a reasonable rate of return on investment as determined by the Commission. These contracts may be approved for up to 20 year terms.  Projects smaller than 1 MW can contract directly with the utility, while larger projects go through a competitive process held periodically by the Commission.

What will 2012 bring for Maine's community-based renewable energy pilot program?

Maine green power offer moves forward

Green power offers are one way to help connect electricity customers with renewable energy.  These voluntary programs are designed to make it easier for willing consumers to choose a greener energy mix for their home or business.  Green power offers are typically voluntary, meaning customers must affirmatively enroll in the program and select their product.  In many states, they create a mechanism for customers to buy renewable power over and above state renewable portfolio standards.  While customers in competitive markets are free to select their energy supplier, under the green power offer program one supplier is designated by regulators as the default green supplier at any given time.  This formal designation gives the default green supplier better marketing access to its customers and facilitates interactions with the transmission and distribution utility.

Maine’s green power offer will launch soon.  In December 2010, following on the state legislature’s enactment of a community-based renewable energy pilot program, the Maine Public Utilities Commission issued a request for proposals from suppliers to operate a green power offer for residential and small commercial electricity customers for a three year term.

Eligible resources for the Maine program include fuel cells, tidal power, solar arrays, geothermal installations, hydroelectric generators that meet all state and federal fish passage requirements, biomass generators, and wind power installations.  In response to the Maine commission's request for proposals, suppliers submitted bids proposing to supply products consisting of sufficient renewable energy credits (RECs) to cover half or all of each customer’s load.

At Tuesday's deliberative session, the Maine Public Utilities Commission selected the state’s first green power offer supplier.  While many of the details of the winner’s offering remain confidential for the moment, the regulators expressed interest in a flexible product composed entirely of RECs from renewable energy facilities in Maine.  The product would remain resource-agnostic, meaning the supplier could provide RECs from any eligible Maine resource.  This flexibility contrasts with other offers to deliver RECs from a specific resource such as wind.  This product, which comes in addition to a customer’s underlying energy supply and local utility wires charges, is reported to cost 1.5 cents per kilowatt-hour.

With the winner selected, Maine’s green power offer will move forward.  The success of the program will depend on a number of factors including customers’ appetites, the economy, and the green supplier’s marketing practices.

June 15, 2011 - Nova Scotia feed-in tariff

Nova Scotia is poised to set favorable rates for community-scale renewable electricity projects.  This community-based feed-in tariff can help small projects get off the ground.

Back in April 2010, the Nova Scotia provincial government released its Renewable Electricity Plan (32-page PDF).  This document, subtitled “A path to good jobs, stable prices, and a cleaner environment”, sets forth a detailed plan “to move Nova Scotia away from carbon-based electricity towards greener, more local sources, and sets a commitment to reach 25% renewable electricity supply by 2015 – and a nonbinding goal of 40% by 2025.

While the plan envisions that most of the new renewable energy needed to meet these goals will come from “industrial-scale projects”, a key element of that plan targeted at smaller projects is the community-based feed-in tariff (COMFIT).  The COMFIT is designed to benefit 100 megawatts of qualified renewable projects connected to the grid at the distribution level.  To qualify for the COMFIT, a project must be developed or owned by municipalities, First Nations, co-ops, or non-profit groups, or be a small business operating through Community Economic Development Investment Funds.

Feed-in tariffs are widely used in the global renewable energy context.  As the Nova Scotia plan notes, “[m]ore than 45 jurisdictions around the world, including Spain, Germany, Ontario, and Vermont, have established feed-in tariffs (FITs) that support and encourage small-scale and community ownership.”

In Nova Scotia’s case, the feed-in tariff plan is designed to start small, with a limit of 100 MW of pilot projects.  The plan explains this cautious approach by noting that it is technically difficult to interconnect intermittent generation at the distribution level.  The plan also describes the balancing act between facilitating small-scale development while keeping ratepayer costs low:

Government has chosen not to extend the COMFIT to larger projects. Just as a commercial farm can produce vegetables cheaper than a garden patch, an industrial-scale wind farm can produce electricity cheaper than a backyard turbine. There are many economies of scale in renewable power production. Nevertheless, a conscious decision has been made to encourage small as well as larger renewable electricity projects. This is partly to ensure widely dispersed energy sources, and partly to encourage rural community economic development. A FIT will result in somewhat more expensive electricity than open competitive bidding, but it gives these smaller projects a degree of market certainty.

The plan continues:

Renewable electricity produced from small local projects will be slightly higher priced than electricity from large-scale projects. But since the total amount of power from COMFIT projects will start out small, the overall impact on rates is low—estimated at less than one percent on a typical consumer’s bill. Of course until the UARB sets the COMFIT rate, and we see how fully it is taken up, the precise impact can’t be calculated with certainty.

The Nova Scotia Utility and Review Board has held a public hearing on the COMFIT program rates, and is expected to issue an order finalizing tariffed rates early this summer.  Staff's consultant proposed the following tariff rates:

• $452 per MWh for wind projects ≤50 kW
• $139 per MWh for wind projects >50 kW
• $156 per MWh in year 2012 for biomass CHP projects, composed of a fixed component of $94 per MWh and an escalating component of $62 per MWh representing the cost of fuel
• $140 per MWh for run-of-river hydro projects
• $652 per MWh for in-stream tidal projects.