Deepwater Wind proposes offshore wind, battery storage for MA RFP

Massachusetts energy regulators are reviewing bids to supply clean energy from new sources -- including a combined offshore wind and energy storage project proposed by developer Deepwater Wind.

Rhode Island-based Deepwater Wind is the developer of America's first commercial offshore wind project, the 30 MW Block Island Wind Farm which began commercial operations in December 2016. Other projects in early-stage development by the company include the 90 MW South Fork Wind Farm serving Long Island and the 120 MW Skipjack Wind Farm serving Maryland.

Earlier this year, prompted by 2016 state legislation, the Massachusetts electric distribution companies, in coordination with the Massachusetts Department of Energy Resources, issued a Request for Proposals for Long-term Contracts for Clean Energy Projects pursuant to Section 83D.  Through the RFP, the Massachusetts utilities solicited proposals for clean energy generation in an amount roughly equal to 9,450,000 MWh.

According to Deepwater Wind, it responded to the Massachusetts clean energy RFP by proposing the Revolution Wind farm, paired with a battery storage system.  The company's prime proposal features 144 MW of wind generation, coupled with a 40 MWh battery system, which it says will "help to defer the need to construct costly new peaking generating facilities and controversial transmission lines."  The project would be sited on the Outer Continental Shelf off Massachusetts, about 30 miles from the mainland and about 12 miles off Martha's Vineyard, under a lease from the federal government.  It would be adjacent to Deepwater Wind’s South Fork Wind Farm.  Emphasizing flexibility and scalability, as well as the ability to complete construction in one season, alternative bids submitted by the company envisioned a larger 288 MW version of Revolution Wind and a smaller 96 MW version.

Deepwater Wind says it also intends to submit an offshore wind proposal under a separate solicitation process under way in under Section 83C of Massachusetts law, with bids due by December 2018.

Massachusetts offshore wind RFP

Massachusetts' investor-owned electric distribution companies have issued a joint Request for Proposals for offshore wind energy projects.  Through the RFP, the utilities seek proposals for 400 megawatts (or more) of qualifying offshore wind energy generation and associated transmission, with winning bidders earning 15- to 20-year long-term contracts to sell project power.   This Massachusetts offshore wind RFP is designed as the first step in a staggered procurement schedule for compliance with a 2016 state law requiring the utilities to contract for 1,600 MW of aggregate nameplate capacity of offshore renewable generation by June 30, 2027.

In 2016, the Massachusetts legislature enacted the Energy Diversity Act, adding a new Section 83C to the Green Communities Act.  Section 83C provides in relevant part, "In order to facilitate the financing of offshore wind energy generation resources in the commonwealth, not later than June 30, 2017, every distribution company shall jointly and competitively solicit proposals for offshore wind energy generation; and, provided, that reasonable proposals have been received, shall enter into cost-effective long-term contracts."

The pending RFP is the first joint solicitation under Section 83C.   Through the RFP, the distribution companies are seeking to procure a total of approximately 400 MW of Offshore Wind Energy Generation.  The RFP defines this term as:

offshore electric generating resources derived from wind that: (1) are Class I renewable energy generating sources, as defined in Section 11F of Chapter 25A of the General Laws; (2) have a commercial operations date on or after January 1, 2018, that has been verified by the Department of Energy Resources; and (3) operate in a designated wind energy area for which an initial federal lease was issued on a competitive basis after January 1, 2012.

Bids are due by noon EDT on December 20, 2017.  The RFP prescribes a three-stage review process, including an initial eligibility and threshold screening, subsequent qualitative and quantitative review, and finally "further evaluation of remaining proposals to ensure selection of viable projects that provide cost -effective, reliable Offshore Wind Energy Generation with limited risk."

Pursuant to the Department of Public Utilities order approving the solicitation process, projects will be selected for negotiation by April 23, 2018, with contracts submitted for Department approval no later than July 31, 2018.

New England regional renewables procurement

As states enact and pursue energy policy goals such as sourcing power from solar, offshore wind, or other "clean energy" resources, here's a quick look at some of the regional renewable procurement activity ongoing in New England: 

New England Clean Energy RFP: This "three-State Clean Energy RFP" focused on Massachusetts, Connecticut, and Rhode Island.  Although each state enacted its own statutory framework for procurement, soliciting parties including the Connecticut Department of Energy and Environmental Policy and utilities in Massachusetts and Rhode Island released a joint Request for Proposals in September 2015.  Bids were due by January 28, 2016.  Following an evaluation period, bidders were selected for contract negotiation and notified on October 24, 2016.  The states collectively selected the following proposals representing approximately 460 megawatts in total:

Massachusetts/Connecticut/RI
Antrim Wind
Ranger Solar
Cassadaga Wind
RES Americas – Both Submissions(1 and 2)
Massachusetts/RI
Deepwater Wind
Ameresco

Massachusetts Section 83C RFP for Long-term Contracts for Offshore Wind Energy: A 2016 state law requires utilities to competitively solicit and contract for approximately 1,600 megawatts of offshore wind, starting by June 30, 2017.  On April 28, 2017, submitted their proposed RFP to the Massachusetts Department of Public Utilities for review and approval.  Through the RFP, the utilities will seek proposals for “Offshore Wind Energy Generation” and associated transmission necessary to deliver such generation to the mainland ISO New England, Inc. grid.  According to the proposed timeline, bids would be due in December 2017, with project selection in May 2018.

Massachusetts Section 83D RFP for Long-term Contracts for Clean Energy: On March 31, 2017, the Massachusetts Electric Distribution companies, in coordination with the Massachusetts Department of Energy Resources, issued a Request for Proposals for Long-term Contracts for Clean Energy Projects pursuant to Section 83D of Chapter 169 of the Acts of 2008, as amended by chapter 188 of the Acts of 2016, An Act to Promote Energy Diversity.  Bids are due by July 27, 2017, with project selection expected in January 2018.

Massachusetts community microgrid projects solicited

A Massachusetts economic development agency focused on clean energy has launched a program seeking to catalyze the development of community microgrids throughout Massachusetts.

Generally speaking, a microgrid is a localized power grid that can disconnect from the traditional grid to operate autonomously.  According to the U.S. Department of Energy, a microgrid's ability to operate while the main grid is down means microgrids can strengthen grid resilience and mitigate disturbances, while enabling faster system response and recovery once reconnected to the main grid. Microgrids can also support flexibility and efficiency, by enabling the integration of growing deployments of renewable and distributed energy resources like solar, and by reducing energy losses in transmission and distribution.
 
A "community microgrid" could be defined in several ways, but a typical definition focuses on a multi-user microgrid providing electrical and/or thermal energy to multiple consumers, integrated with and supported by the local community, relevant utilities, and building or site owners.  As with other microgrids, a community microgrid implementation could reduce energy costs and reduce greenhouse gas emissions, while providing increased energy resilience.

While federal support for microgrids has existed for years, states are now becoming active in exploring how microgrids can help meet society's energy needs and policy goals. Massachusetts is one hotbed of interest in microgrids, and a recently announced program could help stimulate the microgrid industry. The Massachusetts Clean Energy Center’s (MassCEC) Community Microgrids Program anticipates providing about $75,000 in funding to support each of 3 to 5 prospective community microgrid projects with the following characteristics:

• Are community, multi-user microgrids (as opposed to single owner or campus-style microgrids) located in Massachusetts -- but MassCEC will consider proposals from Applicants with an existing campus wishing to extend the microgrid to additional parties outside of its borders;
• Demonstrate significant potential to reduce greenhouse gas emissions through the integration of energy efficiency, Combined Heat and Power (“CHP”), renewable energy systems, electric and/or thermal storage technologies, demand management, energy efficiency, and other relevant technologies;
• Have the active and engaged support of the local utility (either investor-owned or municipal light plants) and other relevant stakeholders;
• Encompass a public or private critical facility, including but not limited to schools, hospitals, shelters, libraries, grocery stores, service (gas) stations, fire/police stations or waste water treatment plants;
• Support the distribution system by addressing capacity concerns, providing black start capability, facilitating renewables integration, or providing other services that are meaningful to the local utility;
• Attract third party investment; and 
• Highlight Massachusetts-based clean energy/microgrid technology.

MassCEC is presently soliciting Expressions of Interest from groups interested in participating in feasibility assessments for community microgrid projects meeting its defined criteria.  According to MassCEC, respondents may include municipalities and their public works departments, electric distribution companies, municipal light plants, emergency services departments, owners of critical infrastructure such as hospitals and financial institutions, self-organized groups of commercial building owners, developers or any other actor that either owns property within a potential microgrid or can demonstrate that they represent stakeholders with the capability of developing a community microgrid.  Support from the local government and the relevant electric or gas distribution company is also required.

MassCEC says it intends its funding to support feasibility assessments to advance the selected microgrid projects through the early project origination stages, enabling them to attract third-party investment. Projects that produce a favorable feasibility assessment may then be eligible for additional technical assistance or grants for later stages of project development

Completed expressions of interest, including all required documentation, must be received by MassCEC by Friday, June 23, 2017 by 4:00pm. MassCEC anticipates awarding the first round of feasibility assessments in Q3 2017.

FERC declares QF rights

Federal energy regulators have issued an advisory opinion regarding the rights of Qualifying Facility electric generators to sell power to their local utility under the Public Utility Regulatory Policies Act (PURPA).  The Federal Energy Regulatory Commission's declaratory ruling illustrates how the Commission interprets PURPA and QF rights, in the context of state renewable energy portfolio standards and

PURPA was enacted by Congress in 1978 to promote goals including energy conservation and greater production of domestic and renewable energy.  It established a new class of generating facilities called QFs, to receive special rate and regulatory treatment. A chief benefit of QF status is the
right to sell energy and capacity to a utility, usually at either at the utility's avoided cost or at a negotiated rate.  By regulation, QFs generally have the option to sell energy either "as-available," or as part of a long-term contract or other legally enforceable obligation for delivery of energy or capacity over a specified term.

The Federal Energy Regulatory Commission oversees this program, although state energy commissions play important roles.  Section 210 (H)(2)(A) and (B) of PURPA give the Commission discretionary power to enforce its PURPA rules, including the power to require state commissions and non-regulated utilities to comply.  But the Commission may also decline to initiate an enforcement action, on a case by case basis.

Earlier this year, a group of QFs filed a complaint to the Commission against the Connecticut Public Utilities Regulatory Authority.  Windham Solar LLC and Allco Finance Limited alleged that Connecticut law and PURA’s regulations violate the Commission's PURPA regulations regarding an electric utility’s mandatory purchase obligation and a QF’s ability to sell pursuant to a legally enforceable obligation. Complainants effectively alleged that they couldn’t get a long-term contract to sell energy and capacity at avoided cost rates on a forecasted basis, unless the energy and capacity were bundled with renewable energy certificates (RECs), or unless the energy and capacity were provided under a short-term contract not to exceed one year.

Some of those basic facts were contested by PURA and others, and the Commission noted a history of dispute and litigation among the complainants and Connecticut energy regulators. So the Commission declined to initiate an enforcement action on the complaint.

But the Commission did issue a declaratory ruling, reciting case law and interpretation on two points: the relationship between state RECs and PURPA, and QF opportunities to secure long-term contracts.  The Commission noted that RECs exist under state law and not PURPA, but that avoided cost contracts do not automatically include RECs.  It also noted that winning a competitive solicitation cannot be the only way a QF may be allowed to obtain long-term avoided cost rates.

The original comes with robust citations to precedent, omitted for convenience below:

4. The Commission has previously addressed issues regarding the relationship between state-created RECs and PURPA. The Commission has stated that the states have the authority to determine who owns RECs in the initial instance and how they are transferred, and has explained that the automatic transfer of RECs within a sale of power at wholesale must find its authority in state law, not PURPA. The Commission has also held, however, that a state regulatory authority may not assign ownership of RECs to utilities based on a logic that the avoided cost rates in PURPA contracts already compensate QFs for RECs in addition to compensating QFs for energy and capacity, because the avoided cost rates are, in fact, compensation just for energy and capacity. Moreover, while the Commission has made clear that states have the authority to regulate RECs, states cannot impede a QF’s ability to sell its output to an electric utility pursuant to PURPA. Thus, regardless of whether a QF has previously sold its RECs under a separate contract, that QF has the right to sell its output pursuant to a legally enforceable obligation.

5. The Commission has also held that “requiring a QF to win a competitive solicitation as a condition to obtaining a long-term contract imposes an unreasonable obstacle to obtaining a legally enforceable obligation.” The Commission likewise has determined a state regulation to be inconsistent with PURPA and the Commission’s PURPA regulations “to the extent that it offers the competitive solicitation process as the only means by which a QF . . . can obtain long-term avoided cost rates.” Accordingly, regardless of whether a QF has participated in a request for proposal, that QF has the right to obtain a legally enforceable obligation. 

As noted in the declaratory ruling, the Commission's "decision not to initiate an enforcement action means that Petitioners may themselves bring an enforcement action against the Connecticut Authority in the appropriate court."

Offshore wind in Massachusetts energy bill

The Massachusetts legislature has enacted an energy bill that will require utilities to purchase offshore wind energy by 2027.  The legislation, known as H. 4568, "An Act to promote energy diversity," has been laid before Governor Charlie Baker for signature.

Earlier this session, the Massachusetts House and Senate had passed two different bills calling for renewable energy procurement.  A conference committee reported out the final bill, H. 4568, on July 31.  Through the newly enacted law, the Massachusetts legislature has added a new program of offshore wind energy procurement. 

The final enacted bill adds a new section 83C to the state's 2008 Green Communities Act.  Among other provisions, section 83C provides, "In order to facilitate the financing of offshore wind energy generation resources in the commonwealth, not later than June 30, 2017, every distribution company shall jointly and competitively solicit proposals for offshore wind energy generation; and, provided, that reasonable proposals have been received, shall enter into cost-effective long-term contracts."

Much of the solicitation and contracting process will occur pursuant to regulations yet to be promulgated by the Department of Public Utilities.  The law provides a framework for developing and approving the competitive bidding process, and requires the schedule to "ensure that the distribution companies enter into cost-effective long-term contracts for offshore wind energy generation equal to approximately 1,600 megawatts of aggregate nameplate capacity not later than June 30, 2027."  Individual solicitations must be seek proposals for 400 megawatts or more, and may be conducted jointly with other states.

Proposed long-term contracts are subject to the review and approval of the Department of Public Utilities.  The law requires the department of public utilities to weigh the potential costs and benefits of the proposed long-term contract, and directs it to approve a proposed long-term contract "if the department finds that the proposed contract is a cost-effective mechanism for procuring reliable renewable energy on a long-term basis," taking into account factors like reliability, mitigation of price volatility, cost-effectiveness, mitigation of environmental impacts, and economic development.

The law requires the implementing regulations to be adopted by the Department of Public Utilities to "provide for an annual remuneration for the contracting distribution company up to 2.75 per cent of the annual payments under the contract to compensate the company for accepting the financial obligation of the long-term contract."  It also entitles distribution companies to cost recovery of payments made under an approved long-term contract.  Utilities may elect to to use any energy purchased under such contracts for sale to its customers and retain renewable energy certificates for their use, or may sell the energy and RECs into the market.  Any proceeds from such market re-sales will be netted against the cost of contract payments, resulting in a credit or charge to all distribution customers through a uniform fully reconciling annual factor in distribution rates.

The law also provides a variety of "outs" or circumstances under which contracts might not result, such as if a "proposal’s terms and conditions would require the contract obligation to place an unreasonable burden" on a distribution company’s balance sheet.

Notably, the law's definitions of “Offshore wind developer” and “Offshore wind energy generation” place a variety of restrictions on projects eligible for contracting.  The definitions effectively require that projects be located on the Outer Continental Shelf, in a designated wind energy area for which an initial federal lease was issued on a competitive basis after January 1, 2012, have no turbine located within 10 miles of any inhabited area, and have a commercial operations date on or after January 1, 2018, that has been verified by the department of energy resources.  This effectively limits projects to a subset of those winning recent (or future) federal Bureau of Ocean Energy Management lease auction sales.

To date, no commercial offshore wind projects operate in U.S. waters, although Deepwater Wind is currently constructing the Block Island Wind Farm off Rhode Island.   Federal programs, along with some state incentives, are available to support qualifying offshore wind projects.

Maine biomass commission to meet

A commission charged by the Maine legislature to study the state's biomass energy industry will hold its first meeting next month.  The study committee's work will result in a report to the legislature, and could include recommended changes to state law.

The Maine State House.

At the end of its 2016 session, the Maine legislature enacted a resolve establishing the Commission to Study the Economic, Environmental and Energy Benefits of the Maine Biomass Industry.  The resolve directed the commission to:

1. Review and evaluate the economic, environmental and energy benefits of Maine's biomass resources, as well as public policy and economic proposals to create and maintain a sustainable future for the Maine biomass industry;
2. Consider the interconnection of economic markets for biomass and forest products and the energy policy of the State;
3. Consider whether the environmental, economic and energy benefits of biomass support updating the State's energy policy to strengthen and increase the role that biomass and the forest products industry play throughout the State;
4. Consider the costs of implementing any recommendations and the effect of leaving current policies in place; and
5. Examine any other issues to further the purposes of the study. 

The Maine biomass commission has now been formed, and has scheduled its first meeting for August 2, 2016.  As prescribed by the resolve, its membership includes a mix of legislators and others interested in the state's biomass energy policy.

The resolve directed the biomass study commission to submit a report and any suggested implementing legislation for committee consideration by December 6, 2016.

Biomass was a hot topic in the past legislative session.  On a separate track, this spring the Maine legislature enacted a law establishing a long-term contracting program for biomass-fueled power plants.  The Maine Public Utilities Commission has issued a request for proposals under that program, with contract proposals due on or before July 29, 2016.

Maine biomass resource RFP issued

The Maine Public Utilities Commission has issued an order approving a Request for Proposals for biomass energy resources.  At stake are two-year contracts through which biomass resources may sell energy and related products to Maine transmission and distribution utilities.

Earlier this year, the Maine legislature enacted An Act to Establish a Process for the Procurement of Biomass Resources.  Originally proposed as LD 1676 and enacted as Public Law 2015, Chapter 483, that law requires the Public Utilities Commission to initiate a competitive solicitation for 2-year contracts for up to 80 megawatts of biomass resources. 

By order dated June 17, 2016, the Commission approved a Request for Proposals pursuant to its authority under the Act.  The RFP document -- formally styled a Request for Proposals for the Sale of Energy from Biomass Resources -- was released at the same time. It asks for proposals from Biomass Resources for the sale of energy under one or more two-year contracts; bidders may also offer to sell capacity and/or renewable energy attributes as part of the contract.

The RFP defines a Biomass Resource as "a source of electrical generation fueled by wood, wood waste or landfill gas that produces energy delivered to the ISO-NE or NMISA region."  Additional requirements and criteria apply, including minimum capacity factor thresholds and preferences for creating in-state benefits.  It is possible that no contracts will be awarded, or that there won't be money to pay under those contracts.  If the Commission concludes that this solicitation is not competitive, based either on the solicitation process or the resulting bids, no bidders may be selected.  By law, payments are also contingent on the availability of funding for any above-market portion of the contracts, from a Cost Recovery Fund established by the Act.

Contract proposals are due on or before July 29, 2016. According to the Commission's materials, the RFP and all related documents and information will be available on the Commission's RFP website.

Maine biomass procurement competitive standards

As the Maine Public Utilities Commission prepares for its upcoming procurement of biomass power resources, the Commission has requested public comment on the standards and criteria to be used in evaluating whether the solicitation is "not competitive."

This spring, the Maine State Legislature enacted An Act To Establish a Process for the Procurement of Biomass Resources.  The law directs the Maine Public Utilities Commission to initiate a competitive solicitation as soon as practicable, seeking proposals for 2-year contracts for up to 80 megawatts of biomass resources.  

But largely due to fairness and cost-containment concerns, the legislature created a "safety valve" in case the solicitation turns out to be "not competitive."  The Act specifies that “If the commission concludes that the solicitation ... is not competitive, no bidders may be selected and the commission is not obligated to enter into a contract.”

On May 17, 2016, the Commission issued a request for comment in its Procurement of Biomass Resources docket.  That request describes the Commission's plans to initiate the procurement process "in the near future" through the issuance of a request for proposals or RFP.  But before issuing the RFP, the Commission has requested comment on the standards and criteria to be used to determine whether the solicitation is “not competitive” pursuant to the Act.

Comments are requested by May 30, 2016.

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 PUC solicits standard offer proposals

The Maine Public Utilities Commission has issued Requests for Proposals for retail electricity standard offer service.  At stake is the right to supply default electricity service to customers of Maine's two largest utilities -- as well as the price those customers will pay for power.

Maine restructured its electricity sector in the late 1990s.  Formerly, utilities owned both power plants and the wires and other infrastructure needed to supply consumers with electricity.  But as of March 1, 2000, investor-owned transmission and distribution utilities may own and operate wires, but generally cannot have a financial interest in or otherwise control generation or generation-related assets.  Power plants became "deregulated" from the perspective of state retail rate regulation, and were sold off by the utilities.  At the same time, Maine law created a new kind of entity called a "competitive electricity provider" to perform the role of supplying electricity as a commodity.

Customers can choose among supply offers from competitive electricity providers.  Suppliers can offer specific types of product (e.g. 100% renewable power, locally-sourced) or particular contract terms (e.g. pricing schedules, payment terms).  Most large industrial energy consumers choose competitive electricity supply under this option, as do many commercial accounts and some homes.

If a customer does not choose a competitive electricity provider, that customer is placed on "standard offer service" by default.  Maine law requires the Maine Public Utilities Commission to arrange for standard offer service though a competitive bid process, and to ensure that standard offer service is available to all customers in Maine.

The pending RFPs cover retail electricity standard offer service for calendar year 2016 for all customer classes in the territories of Central Maine Power (CMP) and Emera Maine-Bangor Hydro District.  Collectively, CMP and Emera Maine deliver approximately eleven million megawatt hours annually, of which about 45% currently comes from standard offer service.

The RFPs and related materials are available on the MPUC website.  Initial proposals are due on October 6, 2015. Following negotiation of non-price terms and a submission of final bid prices, the Commission is expected to select one or more proposals,  Service terms will begin on January 1, 2016.

Navy signs solar energy deal

The U.S. Department of the Navy has announced an agreement for the development of a 210 megawatt (DC) solar project to supply electricity to Navy and Marine Corps facilities in California.  The Navy described the deal as the largest purchase of renewable energy by a federal entity to date.

Solar photovoltaic panels in Utah - much smaller project than the Navy project.

The Navy has expressed interest in renewable and alternative energy for some time, buying biofuels and renewable electricity.  According to the website for Deputy Assistant Secretary of the Navy - Energy, Joseph Bryan:

The Navy's energy strategy takes the "long view" necessary to keep our Navy and our nation strong. Bottom line: incorporating energy initiatives now will allow us to more effectively carry out our mission in the future.

In 2009, Congress mandated that 25 percent of the energy used in Department of Defense facilities come from renewable sources by 2025.  Secretary of the Navy Ray Mabus then set an accelerated goal for his branch of the military: 1 gigawatt of renewable energy procurement by the end of 2015.  In the Navy's view, resources like solar power can help diversify its shore energy portfolio and provide long-term cost stability, which ultimately contributes to the Navy's overall energy security priorities.

In furtherance of this goal, last year the Western Area Power Administration issued a request for proposals for renewable energy projects to supply power to Navy facilities in California.  Through a competitive process, Sempra U.S. Gas & Power LLC was selected to develop the Mesquite 3 Solar project.  Sempra is a subsidiary of San Diego-based Sempra Energy, a major energy services holding company. It has developed a variety of solar and wind energy generation projects, including the existing Mesquite 1 Solar project about 60 miles west of Phoenix, Arizona.

The Navy announced that it had signed the agreement on August 20, at a ceremony co-hosted by Western Area Power Administration and Sempra.  Under the Navy deal, Sempra will develop the Mesquite 3 project as an expansion of the existing Mesquite site.  Mesquite 3 will feature over 650,000 photovoltaic panels on ground-mounted, horizontal single-axis trackers.  Construction is scheduled to begin in August, with completion expected by the end of 2016.  While pricing terms have not been disclosed, the Navy reports that it will save at least $90 million over the life of the project.

Will other units of federal government follow the Navy's model in contracting for renewable energy in this manner?  How will solar project business structures change if federal entities start playing a larger role as buyers?

Maine explores non-transmission alternatives coordinator

Should Maine designate an entity to coordinate the development of lower-cost alternatives to new electric transmission lines?  The Maine Public Utilities Commission has opened an inquiry to obtain comments on the role of a non-transmission alternative (NTA) coordinator and the parameters for procuring the services of an NTA coordinator.

Modern society counts on electric utilities and power plants to supply consumers with electricity.  As consumer needs and plant economics change over time, utilities have traditionally looked to new infrastructure like transmission lines to meet new needs.  But in some cases, transmission development may not be the cheapest or best way to meet consumer needs; rather, "non-transmission alternatives" such as distributed generation, energy efficiency or microgrids may be able to achieve the same ends for a lower total cost.

Grid modernization -- and the tools needed to manage the process efficiently -- can be controversial.  By order dated May 11, 2015, the Maine Public Utilities Commission declined to designate a "Smart Grid Coordinator" to provide a broad array of services to the state, on the grounds that that the record before it did not support a finding that designate a coordinator to provide all these services was in the public interest.

But the Commission indicated interest in designating someone to provide the services of marketing, implementing, and possibly operating non-transmission alternatives.  To that end, the Commission found "there is the potential for benefits from an entity that has the relevant expertise and a commercial interest in the successful development and implementation of NTAs" -- provided that the entity can deliver its services in a way that provides value to ratepayers.

By a June 30 Notice of Inquiry, the Commission initiated the next phase of its exploration of designating an NTA coordinator.  The Commission requested comment on issues it had previously identified in its May 11 order as requiring further factual development to enable the Commission to determine whether it is in the public interest to designate an NTA coordinator:

1. What duties should be included in the scope of services offered by an NTA coordinator?
2. Should T&D utilities be allowed to bid on an NTA RFP and if so should such services be provided through an affiliate? 
3. If an RFP were seeking proposals for having a non-utility entity operate an NTA in a manner consistent with reliability and cyber security standards, how would the incremental costs to operate the NTA be determined?
4. What type of pricing structures should be considered in developing the RFP?
5. What factors should be considered in bid evaluation?
6. What should be the term of the NTA coordinator contract?
7. What entities should be the counterparties to the contract?
8. What enforcement mechanisms should be included in the contract?
9. What type/amount of financial security should be required?

The Commission also invited comment on any other issues relevant to its consideration of designating an NTA coordinator.  The Commission requests that comments be filed by July 21, 2015.  After comments are received, Commission staff will schedule a meeting to discuss the comments and discuss next steps in the development of a request for proposals.

Maine long-term contracting for electricity

Maine energy regulators have asked for public comment on the goals and objectives for a decade-old program supporting long-term contracts between utilities and independent power producers.  At stake is the future of Maine's long-term contracting program for electricity resources.

In 2006, the Maine State Legislature enacted an Act to Enhance Maine’s Energy Independence and Security, P.L. 2005, ch. 677.  Part C of that Act (codified at 35-A M.R.S. § 3210-C) authorizes the Maine Public Utilities Commission to direct transmission and distribution utilities to enter into long-term contracts for capacity and energy.  The statute directs the Commission to conduct a competitive solicitation for contracts at least every three years, and specifies the framework that the Commission must use in selectingcapacity resources for contracting, including a stated priority list of types of resources and a duty to select lowest price offers.

Since the Act's enactment, the Commission has conducted five solicitations under this program (including the current solicitation, under which proposals are due by May 1, 2015).  In each case, the Commission has hired an outside consultant to forecast relevant markets for energy, capacity, and renewable energy credits to be used in evaluating the value of the market products offered in responsive bids.

Today, the Commission issued a Notice of Inquiry into the goals and objectives for long-term contracting under the Act.  In the notice, the Commission asks for public comment on how long-term contracts can most effectively be used to support the development of increased generation from renewable resources, and reduce price volatility and greenhouse gas emissions; how the Commission should evaluate proposals' price reduction benefits; and how to best structure transactions.

The Commission also asked for comment on relatively novel potential uses of the program, including leveraging federal support for energy programs to benefit Maine ratepayers, increasing in-state generation capacity such that Maine would “separate” from the rest of New England in the regional forward capacity market to yield reduced in-state prices for capacity, and "geo-targeting" capacity resources to avoid transmission and distribution costs more effectively.

Finally, the Commission requested feedback on its long-term contracting process.  Should the Commission issue requests for proposal on a set schedule (e.g. every two years), or should it retain discretion as to when to issue an RFP?  Should the process include fixed dates for key milestones like submission of final bids or Commission decisions, or should it remain flexible and unfixed?

Comments are due to the Maine Public Utilities Commission by May 6, 2015.

Maine PUC declines to OK Statoil offshore wind term sheet

Today the Maine Public Utilities Commission declined to approve a term sheet offered by Statoil North America, Inc. for a long-term power purchase agreement from its proposed Hywind Maine floating offshore wind project.

Sutton Island, Maine, about 80 miles downeast of the proposed Hywind Maine project.

In 2010, Maine enacted a law designed to support the development of offshore wind and other marine renewable energy projects.  Among other features, that law required the state Public Utilities Commission to conduct a competitive solicitation for proposals for deep-water offshore wind energy pilot projects, meaning grid-tied floating wind projects at least 10 nautical miles offshore.  The statute gave the commission authority to direct mainland utilities to enter into power purchase agreements with one or more responding developers if certain minimum criteria were met.  This authority was discretionary, meaning the commission could choose not to order the utilities to sign a deal even if it met those criteria.

In September 2010, the commission issued its request for proposals under the program. Over the ensuing years, Statoil emerged as the apparent leading respondent, proposing the "Hywind Maine" project, a four-turbine, twelve megawatt project south of Boothbay Harbor.  Commission staff and Statoil negotiated the terms of a proposed power purchase agreement, which became public this summer.  Among those terms was a proposed energy price of between $290 and $320 per megawatt-hour, escalating annually, for the first 41 gigawatt-hours of energy produced each year.

That term sheet was the subject of deliberations by the Maine commission this morning.  After two hours of discussion, two of the three commissioners had stated that they would vote against approving the term sheet.  They expressed concerns about the cost of the contract, as well as uncertainty over the deal's benefit to Maine and Maine ratepayers.

The Maine commission's action bears some resemblance to that of the Rhode Island Public Utilities Commission in 2010 when it rejected a proposed contract between utility National Grid and offshore wind developer Deepwater Wind on the grounds that $244 per megawatt-hour was not a "commercially reasonable" price.  The Rhode Island commission ultimately approved a renegotiated deal with Deepwater Wind at a comparable price.  Similarly, the Maine commission invited Statoil to revise its proposal to offer more benefits to Maine, and to present a renegotiated deal for further deliberation.  Will Statoil be able to sweeten its offer and convince the commission that its contract is a good deal for Maine?

Maine regulators approve tidal energy PPA concept

Yesterday, the Maine Public Utilities Commission approved the terms of a power purchase agreement between three large utilities and a hydrokinetic tidal power project in Maine waters.

Low tide at Preble Cove, Great Cranberry Island, Maine.

Hydrokinetic energy projects produce electricity from moving water like tides, waves, ocean currents, or rivers, typically without dams.  As I noted yesterday, a 2010 Maine law required the PUC to conduct a competitive process to solicit proposals for long-term contracts for offshore wind and tidal projects.  The PUC received multiple submissions in response.  Commission staff have been negotiating with some of the bidders, and yesterday approved a proposal by Ocean Renewable Power Co. to sell the output of a small tidal project in Cobscook Bay to Maine's three largest utilities.

Under the terms approved the Commission, ORPC will receive a 20-year contract with utilities Central Maine Power Co., Bangor Hydro-Electric Co., and Maine Public Service Co. to sell the output of its underwater tidal power generation units.  ORPC plans to install the first of these units in Cobscook Bay this summer, and plans to expand its pilot project to include sites off Lubec and Eastport in the next 4 years.

While many of the terms of the resulting contract remain to be worked out, one piece appears firm: the price.  Utilities will pay 21.5 cents per kilowatt-hour for the tide-generated electricity in the first year; this base price of 21.5 cents will escalate at 2% per year, reaching a price of about 39 cents per kWh in the final contract year.  (By way of comparison, the Cape Wind offshore wind PPA approved in Massachusetts starts at 18.7 cents per kWh, with a 3.5% annual escalator over its 15 year term.  The ORPC initial rate is over twice the average rate currently paid by Maine utility customers on "standard offer" default service, or about 5 times higher than the current wholesale price in the New England market.)

For ORPC, the contract is a significant boon.  Securing a 20-year power purchase agreement should greatly assist the developer in securing financing for the project.  This project is designed as a demonstration or pilot project, but may be able to serve as a proof that ORPC's technology and installation systems will work on a larger scale.

For ratepayers, the volume of the contract is relatively low - as licensed by FERC, the Cobscook Project has a maximum capacity of 300 kW - meaning that its above-market costs will be diluted in the much larger pool of power consumed in Maine.  Nevertheless, if the contract volume grows as ORPC builds more of its scalable tidal generation units, those costs will become less and less dilute.  On the other hand, the contract itself - which still needs approval by the PUC once it is finally negotiated - may include other products or commodities such as capacity or renewable energy credits (RECs).  Developers typically prefer securing long-term contracts for as many commodities as possible, which helps solidify their future revenues, but it can make it harder to compare two contracts.

Many tidal projects today face high capital costs, let alone research and development expenses, but many believe that their fuel-free nature will ultimately enable tidal power to have a low fundamental cost of production of electricity in the future.  ORPC's project may shed some light on how that belief fares in the Gulf of Maine.

NY Great Lakes wind project ends

The Great Lakes of North America are home to significant potential for generating electricity from offshore wind.  As it turns out, Chicago is called the Windy City for a good reason, and the winds blow even more consistently over the lakes.  A study by the United States Department of Energy found 742.5 gigawatts of potential developable generation capacity in the Great Lakes.

In response to this potential, in 2009 the New York Power Authority announced plans to fund one or more offshore wind projects in the Great Lakes.  NYPA's Great Lakes Offshore Wind program (GLOW) issued a competitive solicitation for proposed projects, and received proposals from five potential developers.  As NYPA reviewed the bids, repeated delays in its announcement of winners and turnover within the Power Authority leadership pointed to increasing uncertainty about GLOW's future.

This week, the NYPA board voted to terminate the GLOW project.  As reported by the Elmira, NY-based Star Gazette, the trustees voted unanimously not to pursue the project at this time.  Reasons the board may have considered include local siting opposition and the size of the subsidies NYPA's consumers would have to pay project developers.  Under NYPA's model, a 150 megawatt offshore wind project would have received between $60 million and $100 million a year.  NYPA staff recommended that such an expenditure was not fiscally prudent at this time.

With GLOW dead in the water for now, offshore wind in New York's Great Lakes waters may not occur for some time.  Will other states or provinces be the first to try to capture the Great Lakes winds?

February 24, 2011 - Maine offshore wind research

Collaboration between academia and industry is key to tackling the significant technical and legal challenges associated with the development of offshore wind potential.  This symposium held this week by the University of Maine and the DeepCWind Consortium gives project developers the research results they will need to make more informed bids for offshore wind development in the Gulf of Maine.

The report gives key data useful to any developer of a successful offshore wind project in the Gulf of Maine: data on "met-ocean conditions" (wind and wave data, weather information), the results of seabed characterization studies, electric interconnection and grid data, and information about the impacts of a given project on both the physical environment and stakeholder interests.  The compilation of this information entailed a massive undertaking, performed by the University and its research partners through a federal Department of Energy-funded grant.

This report dovetails with the Maine Public Utilities Commission’s request for proposals for long term contracts for deep water offshore wind energy pilot projects.  That RFP calls for initial responses from interested developers by May 1, 2011. The RFP solicits proposals to sell renewable energy, capacity, and RECs from one or more floating deepwater offshore wind energy pilot projects, with a possible carveout for tidal projects.  Last year's Ocean Energy Task Force bill gives the Maine PUC authority to approve one or more long term contracts for up to 30 megawatts of installed capacity and associated renewable energy and renewable energy credits from such projects.

Who will bid in response to the RFP?  Will there be a truly competitive process?  What will the responsive projects cost?  Will the incentives for developing these pilot projects be sufficient to attract concrete proposals?

June 28, 2010 - federal grant money for ethanol R&D; Syncrude found guilty in oil sands duck kill

Here's a "do you know..." for you: do you know anyone doing biomass R&D, especially working with cellulosic ethanol? There's a round of federal grants for research and development of handling processes and feedstock logistics. Grants are expected to average $5.5 million each.

DOE, USDA issue funding opportunity for biomass R&D

Up to $33 million is available for biomass research and development projects through a joint funding opportunity from DOE and the U.S. Department of Agriculture (USDA). The funding opportunity aims to develop new technologies in biofuels, bioenergy and high-value bio-based products.

Pre-applications are due July 13. 
DOE is interested in developing systems to handle large amounts of biomass feedstocks, such as wood chips and wood wastes.

One goal of this funding opportunity is to develop logistics systems that can handle and deliver large amounts of feedstock year-round for cellulosic biofuels production.  DOE’s Biomass Program is focusing its R&D efforts on ensuring that cellulosic ethanol is cost competitive by 2012. For more information on the agencies’ biomass goals, see DOE’s multi-year program plan and the USDA’s Bio-preferred Program, which aims to create a market pull for new products and technologies.

In the news: a Canadian judge has found oil sands developer Syncrude Inc. guilty of quasi-criminal charges related to the death of 1,600 ducks that became mired in oily settling ponds.  Allegedly, Syncrude knew or should have known that a large flight of ducks was inbound (one source says Syncrude had 48 hours notice based on radar) at a time when most natural ponds were frozen.  Syncrude was found guilty of depositing materials hazardous to ducks without deploying its "duck protection systems" in time to prevent these ducks from landing on the settling ponds.  The federal charges could be as high as $300,000 per bird.

Tide power: Irving has walked away from its exclusive rights to evaluate tidal power at 11 Crown-owned sites in the Bay of Fundy.  With Irving's relinquishment, the government will likely issue another RFP for the sites.