Report of the Renewable Energy and Demand-Side Management Committee
This report summarizes a selection of key legislative, regulatory and judicial developments in renewable energy and demand-side management, at both the federal and state level, during the January 2008, to December 2008, time frame.1
I. RENEWABLE ENERGY
A. Federal Government Activity
1. Enacted Legislation
The Energy Improvement and Extension Act of 2008 (2008 Act), embedded in the Emergency Economic Stabilization Act of 20082 that President Bush signed into law on October 3, 2008, provided an estimated seventeen billion dollars in various tax incentives for the renewable energy sector.3 Among the host of tax incentives offered by the 2008 Act for the renewable energy industry,4 wind and solar power sectors garnered the largest dollar-for-dollar share.5 Incentives provided under the 2008 Act for wind power included a brief extension of the production tax credit (PTC) as well as a variety of incentives or microturbines and residential-scale wind projects.6 For the solar industry, the 2008 Act extended the existing investment tax credit for solar energy facilities and eliminates the cap on an existing tax credit for investments in residential solar.7
Extension of the PTC for Electricity Produced by Certain Renewable Energy Facilities. The "renewable electricity production credit," or PTC, under Section 45 of the Tax Code provides a tax credit, based on the amount of kilowatt-hours of electricity produced, for "qualified facilities" that generate electricity from "qualified energy resources" placed in service before a specified date.8 The 2008 Act extended the PTC for a number of "qualified facilities,"9 including a one-year extension for wind facilities placed in service before January 1, 2010.1 The PTC extension alone is estimated to have a nearly six billion dollar tax effect.11
Residential Energy-Efficient Property Tax Credit. Section 25D of the Tax Code allows for a thirty percent credit for investments in residential solar and fuel cell properties.12 The 2008 Act extends through 2016 the credit available for solar property13 and adds residential small wind and geothermal heat pumps as qualifying property.14 Significantly, the 2008 Act also eliminated the $2,000 cap on the thirty percent tax credit available for solar facilities.15 Removal of this cap means the credit can now be applied to the total cost of photovoltaic solar facilities.16
2. FERC Actions
Interconnection Queue Issues. One of the most prominent issues directly impacting renewable energy on the Federal Energy Regulatory Commission's (FERC or Commission) 2008 agenda was generator interconnection procedures.
In late 2007, the Commission held a technical conference on interconnection queuing practices, where it heard concerns regarding the timeliness with which transmission providers were processing the requests for interconnection in their queue.17 Participants at that conference described significant increases in new generating projects entering the queue, particularly new wind plants and other renewable energy projects. This increase in demand for generator interconnection service created significant backlogs in the interconnection queue in some regions, particularly in Regional Transmission Organization and Independent System Operator (RTO/ISO) regions. Adding to the backlogs, interconnection requests often require several restudies as the proposed project changes or as other proposed generating projects drop out of the queue.
Following the technical conference, the FERC issued an order expressing concern over the reported delays in processing interconnection queues, and directing RTO/ISOs (where it found queue backlogs particularly significant) to report on their efforts to resolve interconnection queue processing issues.18 That order also provided guidance regarding some actions RTO/ISOs could take to address interconnection queue problems. The offered guidance ranged from hiring more staff to process interconnection requests, which would not require filing tariff changes at the FERC, to making tariff changes to require increased deposits to enter the interconnection queue, eliminate steps in the interconnection process (such as certain studies), or prioritize interconnection requests in a manner other than the "first-come, first-served" approach of Order No. …