Report of the Renewable Energy Committee

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This report summarizes decisions and policy developments that have occurred in the area of renewable energy.1 The time frame covered by this report is January 2007 to December 2007.

I. INTRODUCTION

While, technically, the renewable energy movement is four decades old, dating from the 1970's energy crisis, few will dispute that certain of the hallmarks of the current renewable energy initiative are different in substance and kind. Among the notable differences are the dominant role Climate Change concerns play, the new breed of capital markets available for renewables initiatives and parallel regulatory initiatives, including renewable portfolio standards. For this reason, this year's report focuses on two measures that allow different perspectives. The first, the changes in state regulatory initiatives designed to foster renewables, identifies the rapidly evolving, still legal framework of the renewables sector. The second, federal and state court decisions, identifies the issues of importance to practicing attorneys in the renewables sector. For purposes of this report, renewable energy is defined broadly to include technologies such as large-scale hydro and waste-to-energy facilities which may not be included in all definitions of the term "renewable energy."

II. RECENT PROJECT DEVELOPMENT ACTIVITY INVOLVING RENEWABLE ENERGY

Renewable energy development, at the state and project level, has continued to see a surge in interest, and to a lesser degree, in project development in 2007. At the state level, mandatory renewable portfolio standards and associated aspirational goals are now commonplace, particularly among east coast and west coast states. Thus, for instance, at year end, Hawaii proposed to have 70% of its energy needs met by renewable technologies by 2030, through a partnership with the U.S. Department of Energy, although via a non-binding memorandum of understanding.

In addition, in 2007, fourteen other states adopted or amended laws relating to renewable portfolio standards (RPS), although often using a different descriptive term. Many either made formerly voluntary programs mandatory or heightened the in-place RPS standards, bringing to twenty-nine the number of states that have developed renewable energy portfolio programs, educational initiatives, or goals.2 Significant recent legislation includes the following:

Colorado (1) doubled the state's existing RPS, requiring certain qualifying retail utilities to obtain 20% of their electricity supplies from renewable sources by 2020 (4% of which must come from solar-electric technologies) under a stepped process, and (2) set a 10% RPS for certain of the state's municipal and cooperatives electric associations. Sources of energy that count toward the Colorado RPS standard include certain fuel cells, solar, wind, geothermal, certain biomass, certain recycled energy, new small-scale hydroelectric, and certain existing hydroelectric.3

Connecticut expanded the state's existing RPS, requiring approximately 25% of the state's electricity to come from renewable sources by 2020, with different standards for three classes of renewables, as follows: (1) 20% of the renewables must be from Class I (i.e., fuel cells, solar, wind, certain biomass, certain landfill gas, "low emission advanced biomass conversion technologies," ocean, hydrogen, and certain new small-scale hydroelectric); (2) 3% must be from Class I or II (i.e., certain trash-to-energy and biomass not included in Class I, and certain hydropower); and (3) 4% must be from Class III (i.e., customersited combined heat and power systems with a minimum operating efficiency of 50% installed at commercial or industrial facilities on or after January 1, 2006; electricity savings from conservation and load management programs that started on or after January 1, 2006; and systems that recover waste heat or pressure from commercial and industrial processes installed on or after April 1, 2007). …