Report of the Renewable Energy Committee

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This report covers events that occurred during calendar year 2010. The first part reviews federal and state legislative and regulatory developments that affect renewable energy in a broad sense. The second part deals with developments and issues in three technology-specific areas: offshore wind, solar, and energy storage.*

I. FEDERAL LEGISLATIVE AND REGULATORY DEVELOPMENTS

A. Federal Legislation and Its Implementation

In 2010, Congress extended1 certain timelines established in the American Recovery and Reinvestment Act of 2009 (ARRA).2 The ARRA itself had extended the Production Tax Credit (PTC) for electricity produced from renewable sources by making it available for wind projects in service by December 31, 2012 and for most other renewable projects through December 31, 2013.3 The ARRA also created an alternative Investment Tax Credit (ITC) and made it available for the same projects.4 The ARRA also included a separate section 1603 credit,5 and it established a $6 billion loan guarantee program under sections 1703 and 1705 to be managed by the Department of Energy (DOE).6

The section 1603 program has reportedly supported 1,386 different renewable projects through 2010 with an investment of $5.44 billion.7 The section 1603 program has been extended for two more years for construction begun prior to the end of 2011.8 The DOE loan guarantee program under sections 1703 and 1705 has reportedly supported eight fully negotiated and signed projects now under construction, with 32 additional "conditional commitments" to projects still in the process of due diligence review and final terms negotiation.9

By June 2010, the U.S. House of Representatives had passed its version of cap and trade legislation, while the U.S. Senate had a separate version under consideration.10 Additional draft energy legislation was introduced,11 but, except for the section 1603 program extension, neither cap and trade nor any of the new proposals were adopted. As 2010 came to a close, the renewable energy industry released a series of reports12 advocating a long-term and more comprehensive federal policy.13

B. Federal Regulatory Developments

In 2010, the Federal Energy Regulatory Commission (FERC) issued a series of rulemakings and orders addressed at identifying and removing potential barriers to the delivery of renewable energy.

1. FERC Notice of Proposed Rulemaking: Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities

On June 17, 2010, the FERC issued a Notice of Proposed Rulemaking on Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities.14 According to the NOPR,

[t]he proposed reforms are intended to correct deficiencies in transmission planning and cost allocation processes so that the transmission grid can better support wholesale power markets and thereby ensure that Commission-jurisdictional services are provided at rates, terms and conditions that are just and reasonable and not unduly discriminatory or preferential.15

The NOPR is also directed at examining how changes to the transmission planning process could facilitate the integration of renewable generation.16

a) Transmission Planning Reforms

The FERC proposed new regional transmission planning requirements to address "transmission needs driven by public policy requirements established by state or federal laws or regulations[,] . . . coordination between neighboring transmission planning regions . . . with respect to facilities that are proposed to be located in both regions, as well as interregional facilities,"17 and removal from FERC-jurisdictional transmission operating documents of a right of first refusal that, according to the FERC, may provide "an incumbent utility with an undue advantage over nonincumbent transmission project developers."18

i. Regional Planning Process

In the Transmission Planning and Cost Allocation NOPR, the FERC recognized that the current lack of a requirement for a regional transmission plan could hamper construction of needed new transmission facilities, and may prevent the identification of facilities required to meet the needs of a particular region. …