CLF Files Freedom of Information Requests Seeking to Bring Transparency to the Regional Energy Strategy of the New England Governors

Mar 19, 2014 by  | Bio |  2 Comment »

Today (March 19, 2014) CLF filed Public Records requests with State Agencies across New England and with the New England States Committee on Electricity (NESCOE) that is acting on behalf of the states.

The requests (PDFs) can be found here: Maine (Utility Commission, Governor’s Energy Office, Public Advocate), New HampshireVermont (attachment), Massachusetts (Utility Commission, Executive Office of Energy and Environmental Affairs), Rhode Island, Connecticut (Utility Commission, Department of Energy & Environmental Protection) and NESCOE, and are described fully in the press release below. Responses to these requests will be posted here as we receive them.

In an effort to bring transparency to the process through which the Governors of the six New England states are proposing billions of dollars in new publicly funded energy infrastructure, Conservation Law Foundation (CLF) today filed public records requests in each of the states under their respective freedom of information laws, seeking records from state agencies as well as the New England States Committee on Electricity (NESCOE) – a regional entity through which the states are advancing their plan.

Since the Governors of the New England states first proposed regional coordination of energy planning in December 2013, Conservation Law Foundation has supported the need to replace old, inefficient power plants—as long as the process is fully open and transparent to ensure that billions of dollars in electric utility customers’ money are committed wisely. To date, CLF’s and others’ requests for full disclosure from the Governors and NESCOE about their plans have gone unanswered.

“The Governors’ regional energy plan appears to be the product of backroom deal-making rather than sound public policy informed by open dialogue. Without vital public transparency, the resulting projects are sure to cost more than they should, in dollars as well as environmental impact,” said Seth Kaplan, Vice President of Policy and Climate Advocacy at CLF. “Conservation Law Foundation filed these records requests to shed light on the Governors’ actions and ensure that the public knows more about the projects they would be funding when they pay their gas and electric bills – in terms of types of energy resources, costs, siting, and other elements.”  

Governors and legislatures can and must play a role in establishing energy policy through publicly debated and adopted mechanisms, like the laws that have resulted in the launch of job-creating renewable energy and energy efficiency programs in the New England states. When Governors seek to commit public money to new energy resources, their actions must be consistent with the climate, environmental and customer protection laws and policies of the states—and the secretive planning process underway has not publicly demonstrated that it meets this test. Through NESCOE, the Governors have asked ISO New England to impose billions in costs on the public to pay for new gas pipelines and massive imports of Canadian hydropower, leading many to point out that the Governors’ focus on gas and Canadian hydro seems to be a “package deal” resulting from private negotiations between the Governors and energy industry representatives.

Freedom of information laws provide a critical check on the authority of Governors and their agencies by ensuring that backroom dealing can be exposed for public scrutiny. NESCOE, as an entity through which the Governors are acting to commit public resources – the money the public pays through utility bills – is likewise accountable to the public.

CLF intends to make the results of these records requests available on its website at www.clf.org/FOIA

Conservation Law Foundation (CLF) protects New England’s environment for the benefit of all people. Using the law, science and the market, CLF creates solutions that conserve our natural resources, build healthy communities, and sustain a vibrant economy region-wide. Founded in 1966, CLF is a nonprofit, member-supported organization with offices in Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.

 

A Big Day for Offshore Wind: Federal Court Overwhelmingly Rejects Cape Wind Opponents’ Claims

Mar 14, 2014 by  | Bio |  3 Comment »

In a sweeping decision issued today, a federal court in the nation’s capitol ruled against Bill Koch’s Alliance to Protect Nantucket Sound and other Cape Wind opponents on a series of claims they had brought against the nation’s first offshore wind project. The decision is a significant milestone for the 130-turbine Cape Wind project, which today took a huge leap forward after more than a decade of exhaustive reviews. It’s also a critical milestone for the United States, which lags many years behind other nations in tapping into abundant, clean, renewable offshore wind resources.

The decision was issued in connection with several cases that collectively embodied an “Everything-AND-the-Kitchen Sink” approach to challenging the project. The court rejected a variety of claims brought under the Coast Guard and Maritime Transportation Act of 2006, the Outer Continental Shelf Lands Act, the National Historic Preservation Act, the Administrative Procedure Act, the National Environmental Policy Act, the Endangered Species Act, the Migratory Bird Treaty Act, the Clean Water Act and the Rivers and Harbors Act. The Court also rejected plaintiffs’ efforts to pursue a fishing expedition for additional documents and information outside the scope of the federal government’s lengthy and detailed review.

Alliance-to-Protect-Nantucket-Sound

Will turbines similar to these soon be gracing New England waters?

While the court’s decision directs the federal government – specifically, US Fish & Wildlife Service and the National Marine Fisheries Service – to take additional procedural steps with respect to two limited issues, we are confident that these steps can be swiftly completed based on extensive information and analysis already on hand. And CLF will continue to support Cape Wind, together with our partners NRDC and Mass Audubon, who joined us in submitting “friend of the court” briefs in the federal litigation.

So, why is Bill Koch’s Alliance claiming victory and crowing that Cape Wind supposedly will be “sent back to the proverbial drawing board”? Good question. The Court found that the federal government’s review was thorough. The judge overwhelmingly rejected opponents’ broad array of claims. Today’s decision also essentially provides a roadmap for completing two limited additional procedural steps. So, the Koch-funded Alliance’s rallying cry rings more than a little hollow.  Kind of like more wishful thinking from opponents driven by a strategy of “delay, delay, delay…”  Thankfully, today’s decision propels Cape Wind forward and is good news for the nation’s clean energy future.

First Distributed Generation Public Hearing in Rhode Island a Success

Mar 12, 2014 by  | Bio |  1 Comment »

The first public hearing on the new Distributed Generation Bill, S-2690, was held today in the Senate Committee on the Environment and Agriculture; the hearing was an unalloyed success. You can see background information on the DG Bill in my February 28 blog post.

The hearing was held in one of the largest rooms in the State House, and the room was filled to overflowing. Every person who testified during a long hearing spoke in favor of the bill; not one person spoke against it.

Committee Chairwoman Susan Sosnowski started the hearing with a panel of the three principal authors of the bill: Ron Gerwatowski, of National Grid; Janet Besser, of the New England Clean Energy Council (NECEC); and me. Chairwoman Sosnowski thanked us for our work on the bill.  In turn, each of us spoke about the broad support that the bill has received across sectors, including Rhode Island’s dominant electricity utility, National Grid; renewable energy developers; and the environmental community. That remarkable cooperation was further emphasized by the fact sheet that we gave to the committee, highlighting the major provisions of the bill. As you can see, that fact sheet includes the logos of Grid, NECEC, and CLF.

In my testimony, I highlighted the degree to which the current DG bill builds on the considerable success of the earlier DG statute enacted in Rhode Island in 2011. You can read the text of my prepared remarks.

For me, the highlight of the hearing was the parade of renewable energy developers who spoke in favor of the bill. One developer told committee members that he has five DG projects in Rhode Island under construction now (under Rhode Island’s existing DG statute); that those projects are in West Greenwich, Middletown, Quonset, and Johnston; and that he has invested $12 million in those projects to date.  This developer then said that he plans to commit an additional $10 million to these projects in 2014. Finally, he said, the new DG bill under consideration would ramp up renewable energy development at a rate that has not been possible in Rhode Island up until now.  It was apparent to all that this testimony made a big impression on the committee members.

Successful renewable energy developers from Massachusetts and even New Hampshire attended the hearing to say that they look forward to developing local projects in Rhode Island when this bill is enacted.

A representative of the City of East Providence spoke, saying that his city has developed a large solar DG project on the site of a closed landfill, and the city looks forward to developing additional projects of the new DG bill is enacted.

I expect that the hearing in the House Environment Committee will be held later this month. After that, I hope the bill will be quickly passed and signed into law.

A Danish Lesson for New England about the Power of Wind

Mar 7, 2014 by  | Bio |  1 Comment »

There was a moment about ten years ago when the building of wind energy facilities, and in particular offshore wind farms, was just getting going in Europe and it appeared that the United States, and New England in particular, would not be far behind.  The Horns Rev project in Denmark was brand new and the folks at Cape Wind Associates were proposing to replicate that model of a successful offshore wind farm near a resort area here, giving Cape Cod the same opportunity that the vacation town of Blaavandshuk in Denmark has had to welcome tourists to a visitor center and museum with a wind-farm view.

Fast forward to the present and you can see a massive proliferation of clean, zero-polluting offshore wind farms in Europe.  The numbers and facts (PDF alert) are strong and clear: 418 new offshore wind turbines in 13 offshore wind farms in 2013, bringing the total (at the end of 2013) across Europe up to 2,080 turbines now installed and grid connected, a cumulative total of 6,562 MW, in 69 wind farms in eleven European countries.

The result of this expansion is striking and clear. As described by a blog post, and illustrated below, the nation of Denmark now sometimes produces more energy than they consume – a state of affairs that one can see play out in real time on the internet in images like this one from early in the morning of March 3, 2014. At that particular moment 3,893 MWs of energy was generated by wind turbines (the equivalent of more than three and half nuclear power plants like the one in Seabrook, New Hampshire, running all out) while the electricity consumption of Denmark at that moment was 3,875 MWs. (Note the European notation uses a decimal point instead of a comma between thousands and hundreds.)

wind-development

Screenshot of Danish electric system

This is not an isolated phenomena – a review of wind production and energy use in Denmark shows that it is not a rare occurrence, during any given hour, for wind-energy production to approach or exceed Danish nation energy use.

wind-development

This image tells a powerful story about a potent resource that can be an essential element in a clean-energy future. Of course this one resource alone can not carry our energy load – it will also need to work with other resources like energy efficiency, demand response, solar power and hydroelectricity. Indeed, in the short term, while other clean resources come online, it can also be supplemented by quick-start natural-gas-fired generation that is properly permitted and limited in its life and operations.

While we have a lot to be proud of here in New England, from the creation of a regional cap-and-trade program limiting greenhouse gas emissions from power plants, to tremendous investments in key states in energy efficiency and solar power, the reality of wind development in Denmark and Europe is a sharp contrast to the situation here.

Since that day more than a decade ago when the Cape Wind developers came to talk to CLF, a massive expansion of wind-energy development (and offshore wind development in particular) has played out in Europe generally and in coastal nations like Denmark in particular. In contrast, the pace of wind development here has been slow and we have yet to bring on-line a single commercial offshore wind project. While Cape Wind is finally moving towards reality it is hard not to look back over the last decade and consider the progress we could have made on this front.

Distributed Generation and Net Metering in Rhode Island: Poised for Growth

Mar 4, 2014 by  | Bio |  Leave a Comment

This post is the third in a series about a new distributed generation bill introduced in the Rhode Island General Assembly.

On Friday, February 28, a new renewable energy bill – H-7727 and S-2690 – was introduced into the Rhode Island General Assembly. The bill is designed to provide for a steep increase in the amount of so-called “Distributed Generation” (or DG) in Rhode Island. You can read general background about the new bill here. This blog post focuses on two specific, innovative aspects of the bill, both of which concern “net metering.”

What is Net Metering? As I explained in my prior post, net metering allows utilities and owners of small DG projects to track how much electricity is produced by these projects. Most people have electricity meters from the utility that only run one way – measuring (and then billing for) the electricity the ratepayer uses in a month. With net metering, the ratepayer gets a meter that runs both ways. When the ratepayer produces more electricity than she actually uses, the electricity meter literally runs backwards. In some cases, the utility will actually end up sending a check to the ratepayer at the end of the month for the excess electricity put back into the grid.

Designing New Rates for DG and Net Metering Rhode Island’s new DG bill provides that the Public Utilities Commission (PUC), which sets utility rates, must open a docket to re-examine electricity rates in light of the anticipated huge growth of DG and net metering (which this new bill is designed to make happen).

net-metering

photo credit: nocklebeast via photopin cc

Why this is important. Traditionally, all utilities have recovered their costs (and made their profits) on a volumetric basis – the more electricity (or gas) a utility sells, the more money it takes in. The growth of net metering and DG undermines that traditional revenue model, since this growth will mean the utility will sell less commodity. Thus, unless this problem is addressed, utilities will always be opposed to net metering and DG. Moreover, utilities have legitimate costs associated with running the electricity distribution system; and these costs will continue to have to be met, even in a new world where there are huge increases in net metering and DG. Creating a new rate design that provides appropriate compensation to the utility in the new world of widespread net metering and DG will remove an important disincentive to utility support for these programs. Importantly, the bill carefully sets forth what the PUC must consider, including reducing carbon emissions and properly accounting for the many benefits of distributed generation.

Adding a Second Meter A second innovative provision of the new bill is that it will require renewable energy generators who net meter or receive a DG tariff to add a second electricity meter. Under the current system (in which generators have one meter), the utility only knows net flows for net metered and DG customers; the utility does not have any idea how much load is on site “behind the meter.” Installing a second meter will enable the utility to learn what is going on behind the meter, and understand how much electricity is flowing both ways.

Why this is important. This provision has broad implications for the electricity grid and ISO-NE, the company that runs New England’s electricity grid. (You can read more about CLF’s work with ISO-NE in a prior blog post of mine, here.) Historically, environmentalists have stressed to the public – and to state legislatures – the ratepayer benefits of net metering and DG by emphasizing the money that can be saved by ratepayers at times of peak load when the presence of DG means that the ISO does not need to dispatch (or “turn on”) the most expensive electricity generators on the system. However, the ISO estimates that 85% of the DG now on the system across New England is invisible to its Control Room in Holyoke, MA. Crucially, the ratepayer benefits of DG only occur if the ISO knows about it; if the DG actually on the system is invisible to the grid operator, then it unnecessarily dispatches generators that it doesn’t need – and ratepayers never see the benefits of the DG that is already on the system. This new system of metering will begin to address this problem, with all net metering and DG customers having two meters and making the energy visible to the ISO. The provisions for a rate-design docket at the PUC and for better monitoring of all renewable energy generators) are quite technical. But both are designed to remove disincentives and obstacles from the development of renewable energy. We believe that these innovations may well serve as a model for other states.

Distributed Generation in Rhode Island: Moving from Contracts to Tariffs

Mar 3, 2014 by  | Bio |  Leave a Comment

This post is the second in a series about a new distributed generation bill introduced in the Rhode Island General Assembly.

On Friday, February 28, a new renewable energy bill – H-7727 and S-2690 – was introduced into the Rhode Island General Assembly. The bill is designed to provide for a steep increase in the amount of so-called “Distributed Generation,” or DG, a particular kind of renewable energy, built in Rhode Island.

You can read general background about Rhode Island’s new DG Bill here. This blog post focuses on one specific, highly innovative aspect of the new DG Bill: the move from contracts to a tariff. A bit of background and explanation is in order. In order to build their projects, renewable energy developers usually need to get funding – a loan from a bank or other lender. Traditionally, developers have sought long-term contracts (LTCs) from utility companies to sell their renewable energy output. The developers then use these LTCs to collateralize a loan to get the money to build their project. Often developers will literally take their LTC to the bank and use it to obtain their financing. In 2009, Rhode Island passed a law requiring the state’s major electricity utility, National Grid, to enter into LTCs with renewable energy developers. (Some other states have similar laws; a Massachusetts statute regarding LTCs has been utilized by Cape Wind.) Then, in 2011, Rhode Island passed a separate statute designed to get Grid to sign up local DG projects for renewable energy in the state. Like the 2009 LTC Statute, the 2011 DG Statute required Grid to enter into contracts with renewable energy project developers or owners.

The Problem with Contracts
But a problem with these renewable energy contracts makes them undesirable for utilities. In fact, this problem has been one of the main reasons that utilities all over the country have been deeply reluctant to sign up renewable energy projects. The problem is this: when a utility has long-term contracts for renewable energy, the contract has adverse effects on the utility’s balance sheet, credit rating, and cost of borrowing. These adverse consequences are mandated by Generally Accepted Accounting Principles (GAAP). The contracts show up on the utility’s balance sheet as a liability; the additional liability affects the utility’s credit rating, and can raise the cost of borrowing for the utility. This costs the utility (and its stockholders) money – and, of course, affects the utility’s openness to renewable energy.

The Solution to the Problem
The new DG Bill in Rhode Island addresses this problem in a way that we believe may prove to be a model for the rest of the country. It gives renewable energy developers a guaranteed 15- to 20-year tariff instead of a contract. Once a developer qualifies for the tariff, the bill stipulates that it cannot be rescinded or taken away. This new system for paying owners of renewable energy projects would (if enacted) be a classic win-win. The developer gets what she needs: a stream of payments, guaranteed by law, that can be used to collateralize a loan to build her project. The utility gets what it wants: no pesky contracts showing up on its books or hurting its credit rating. And, perhaps best of all, those of us who care about climate change and reducing our dependence on fossil fuels get something very important, too: a new model designed to remove one of the oldest, and longest-standing obstacles to building a robust renewable energy future.

Meeting Renewable Energy Goals in Innovative Ways
Rhode Island’s new DG Bill sets a very(!) ambitious goal: 160 MW of new DG renewable energy in five years. We believe that this ambitious goal is achievable thanks in part to this new model substituting tariffs for long-term contracts.

Major New Distributed Generation Bill Introduced in Rhode Island General Assembly

Feb 28, 2014 by  | Bio |  Leave a Comment

This post is the first in a series about the new Distributed Generation bill.

A significant new bill designed to dramatically increase the amount of clean renewable energy generated in Rhode Island has been introduced into the 2014 session of the General Assembly. The lead sponsor of Senate Bill-2690 is Chair of the Senate Environment Committee Susan Sosnowski; the lead sponsors of House Bill-7727 are Representatives Deborah Ruggiero and House Environment Chair Arthur B. Handy

I was pleased and honored to have worked over a period of months with the bill’s sponsors and with other collaborators – including National Grid and the New England Clean Energy Council – to craft the bill.

If this new bill passes, it will quadruple the size of Rhode Island’s existing Distributed Generation (DG) program. DG involves the development of projects that produce renewable energy – like solar panels on residential rooftops or a single wind turbine at a town hall or school – rather than utility-scale projects like Cape Wind or a large land-based wind farm. While both types of projects (large and small) are important to developing a renewable energy future, it often takes different laws, providing different financial incentives, to get each type of project built.

Rhode Island’s current DG program was enacted in 2011 as a pilot program designed to get 40 megawatts (MW) of DG projects up and running over a four-year period. The pilot program has worked exactly as it was intended; so far, 18 separate renewable energy projects have been approved and are under construction in Providence, East Providence, Portsmouth, Lincoln, Westerly, Bristol, West Greenwich, East Greenwich, Hopkinton, Middletown, Cumberland, North Kingstown, North Smithfield, and West Warwick.

Still, the pilot program was – well, a pilot program. As such, it was relatively small. In contrast, the newly introduced bill would ramp up DG development to an additional 160 MW over the next five years.

The bill is designed especially to facilitate rooftop solar projects for residences and small businesses by giving home and business owners a generous financial incentive for these smallest projects – and by making the process for getting that incentive very easy. Solar developers anticipate that these provisions will jump-start a strong and robust rooftop solar industry in Rhode Island.

Distributed-Generation-Bill-in-Rhode Island

photo credit: Greens MPs via photopin cc

The bill also has specific provisions designed to facilitate (and pay for) non-solar DG projects, like wind and small, local hydro. Like Rhode Island’s existing DG Statute, the new bill creates a mechanism for setting payments for DG owners – payments that are designed to be high enough to get projects actually built, yet low enough to still be competitive.

The new bill would also remove the aggregate statewide limit (currently at 3% of statewide electricity load) on net metering. Utilities and owners of small DG projects use net metering to track how much electricity these projects produce – and to make sure that the owner of the project gets properly paid. Most people have electricity meters from the utility that run one way – measuring and then billing a ratepayer based on how much electricity she uses in a month. With net metering, the ratepayer gets a meter that runs both ways. When the ratepayer produces more electricity than she actually uses, the electricity meter actually runs backwards. In all cases, the ratepayer won’t pay for that unused electricity, and, in some cases, the utility will end up sending the ratepayer a check at the end of the month for the excess electricity she put back into the grid.

Net metering provides an important way for individuals and businesses to pay for the renewable energy projects they own. Until now, Rhode Island – like most states – has capped how much net metering can be done in the state. This bill removes that cap – a goal that CLF has been fighting for in the State House for years. If passed, Rhode Island will become one of the first states in the country to remove all caps on net metering.

In future blog posts, I will discuss two additional features of Rhode Island’s new DG Bill. Both are important, because they are designed to remove major, existing disincentives to utility company support for developing a robust renewable energy future. One provision moves payment for DG projects away from contracts and to tariffs. The other creates a new method for compensating utilities, which will allow for rapid growth of renewable energy distributed generation.

Rhode Island is now poised for rapid growth of renewable DG. The newly introduced bill – H-7727 – represents a major step forward for Rhode Island.

Dismantling the Latest Legal Delays in the Fight for Cape Wind

Jan 28, 2014 by  | Bio |  Leave a Comment

WindThe new year has brought more of the same when it comes to the decade-long battle over the Cape Wind offshore wind energy project proposed to be built in federal waters off the coast of Massachusetts. While Europe continues to leap forward with deployment of offshore wind – tapping into this resource’s unparalleled capacity to deliver tremendous quantities of clean electricity – yet another dubious lawsuit has been filed in an effort to further delay America’s first offshore wind project. In a week that saw Cape Wind again successfully beat back its opponents’ legal claims, this time winning a favorable decision from a federal appellate court , longtime Bill Koch–backed Cape Wind opponents filed yet another new lawsuit in federal court in Boston.

The case is called Town of Barnstable v. Berwick; however, no one should be fooled as to who’s really driving this new case. As detailed in press reports and earlier posts, we have good reason to believe that it’s Mr. Koch’s Alliance, not the Town, that is continuing to pay the bills in the ongoing pursuit of a longstanding strategy of “delay, delay, delay.” This is expected to be the first of two posts that will focus on the new lawsuit’s fatal flaws.

Latest Legal Claims Fail to Stand Up to Scrutiny
We will set aside, for now, the new lawsuit’s fundamental errors of fact and instead focus on explaining why the new legal claims are wrong. Basically, this new lawsuit alleges that the Cape Wind project violates the United States Constitution in two ways: first, that Cape Wind allegedly violates the Supremacy Clause (because federal law governs interstate electricity markets); and, second, that Cape Wind supposedly violates the Commerce Clause (on the claimed basis that Massachusetts is impermissibly favoring an in-state developer over possible out-of-state developers, even though most of the Cape Wind project will be built in federal, not state, waters).

Two recently decided federal lawsuits in Maryland and New Jersey are instructive in understanding that both of the anti-Cape Wind arguments in this new lawsuit are without merit. In fact, these two legal arguments are so weak that they would reveal the real purpose of this newest anti-Cape Wind lawsuit – i.e., delay through endless, meritless litigation – even if Mr. Koch had not publicly confessed to such a strategy.

Let’s look at both of the new lawsuit’s central arguments separately.

The “Supremacy Clause” Does Not Apply
The “Supremacy Clause” of the U. S. Constitution says that federal law generally trumps state law; in areas where the federal government has pervasive, all-encompassing laws and regulations, states are not allowed to enact laws or policies that directly contradict the existing federal laws. Wholesale, interstate electricity markets are an area that the federal government regulates, through a federal agency called the Federal Energy Regulatory Commission (FERC).

In many parts of the country, FERC has created independent companies to manage and run the regional electricity grid. Here in New England, FERC has licensed the Independent System Operator-New England (ISO) to manage and run central aspects of New England’s electricity grid. For Pennsylvania, New Jersey, Maryland, and several other states, FERC has licensed a company called PJM to play a similar role with respect to that region’s electricity grid. Because PJM and ISO are very similar to each other, these two recently decided cases I referred to above may have some legal bearing on the recently filed lawsuit against Cape Wind. (For those who are interested, the names of the two lawsuits I am discussing are: PPL Energyplus, LLC v. Nazarian, the Maryland case; and PPL Energyplus v. Hanna, the New Jersey case. I’ll refer to them here as Nazarian and Hanna.)

PJM and ISO are concerned with making sure that their respective geographic regions always have enough electricity to keep the lights on for electricity customers. One thing that they do to ensure this is to run a so-called “Forward Capacity Auction” three years ahead of time. Electricity generators bid into this auction, in effect offering to sell electricity in the geographical area three years in the future. These Forward Capacity Auctions are a principal means by which these operators of the electricity grid ensure that they will have enough electricity in the future. The procedures used to run these auctions are approved in advance by FERC; the auctions themselves are monitored by FERC; and FERC has to approve the results of the auctions. In short, federal law governs every aspect of the ways these auctions are run.

What happened in both the Nazarian and Hanna cases is that, after the capacity auction was run by PJM, Maryland and New Jersey were concerned that there would be a future shortage of electricity in their states. As a result, after the auction was run, and after the federal agency (FERC) approved the results of the auction, Maryland and New Jersey tried to do an impermissible end-run around the auction results by offering additional money – outside the auction – to anyone who would build a power plant in their states. In fact, in the Maryland case, the state actually said publicly that the reason for its action was specifically to do an end-run around federal law and regulations that were responsible for the PJM auction and its results! Not surprisingly, the courts in both cases ruled that state laws or policies could not directly contradict federal law in a specific area in which the federal government has exclusive jurisdiction. This violates the Supremacy Clause.

These two decisions simply have no applicability to Cape Wind. Neither the Commonwealth of Massachusetts nor the developers of Cape Wind nor the utilities that signed contracts with Cape Wind are trying to do an end run around the ISO’s Forward Capacity Auction – nor around any federal statute, regulation or rule. In fact, the Cape Wind project was well on its way to being permitted before the ISO ever held its first Forward Capacity Auction in February 2008.

State Interests Trump Commerce Clause Concerns
The second argument being advanced in the recently filed anti-Cape Wind lawsuit relates to the U. S. Constitution’s Commerce Clause. Basically, as a general rule, the Commerce Clause says that in the absence of a compelling justification no individual state can pass a law that benefits in-state residents and harms out-of-state residents. For example, Massachusetts cannot pass a law that says: “At all grocery stores in Massachusetts, in-state residents get a 10% discount on the prices shown, and all of-of-state residents must pay a 10% premium on the prices shown.” This (hypothetical) law would violate the Commerce Clause because it discriminates in favor of in-state residents and against out-of-state residents.

In both the Nazarian and Hanna cases, the plaintiffs claimed that the state laws that would encourage construction of in-state power plants violated the Commerce Clause because they were aimed at getting power plants built – but in state only. However, the courts in both cases ruled that this does not violate the Commerce Clause. That is, the holdings in both Nazarian and Hanna cut directly against the legal theory that the anti-Cape Wind lawyers are asserting in the newly filed case.

In both Nazarian and Hanna, the courts found that states have regulatory authority over many aspects of siting and permitting power plants. These include environmental concerns and legitimate concerns about getting enough electricity for their state’s electricity customers. In both Nazarian and Hanna, the courts found that these legitimate areas of state interest trump any Commerce Clause concerns.

In fact, the Judge in the Nazarian case wrote that individual states are allowed to facilitate the financing and construction of “certain types of power plants within its borders (such as environmental-related regulation)” without offending the commerce clause. Of course, that is what Massachusetts did when it established a requirement for electric utilities to enter long-term contracts to buy clean renewable energy – a requirement that ultimately resulted in two long-term contracts signed between utilities and Cape Wind, as well as a number of contracts with other projects. What’s more, most of the Cape Wind project isn’t even located within the borders of Massachusetts – it’s in federal waters. The judge in the Nazarian case also said that federal law specifically “preserve[s] states’ jurisdiction over certain direct regulation of physical generation facilities [including, specifically to] promote certain environmentally desired types of generation facilities.” Again, this holding shows why the new lawsuit against Cape Wind will fail.

New Day, Same Old Delays
We all know there is a climate-change emergency, and that it is crucial to develop non-carbon-emitting power plants to avoid the worst consequences of climate change. We all know that building Cape Wind is good public policy.

Based on a review of the latest weak, meritless claims advanced by opponents, we also know that their central strategy appears to be nothing more than the same old “delay, delay, delay.”

The Good, the Hopeful and the Ugly: Clean Energy in America and New England in the Fall of 2013

Sep 25, 2013 by  | Bio |  Leave a Comment

First, the good:  There’s some good news to report: The Commonwealth of Massachusetts and the State of Connecticut are well on the way to implementing key provisions in the clean energy laws that CLF helped craft. These provisions ensure that for years to come the residents of both states will enjoy the benefit of clean and cost-effective renewable energy generated by solar and wind power.

In Massachusetts, the Boston Globe reports, the utilities are proposing to buy 565 Megawatts of wind power from six wind projects in Maine and New Hampshire.  At least two of those projects will be built by Boston based First Wind.

The Connecticut utilities, reports the Hartford Courant, are proposing to purchase 270 Megawatts of clean power, with 250 of those Megawatts coming from a wind farm in Aroostook County, Maine and 20 Megawatts from a solar project in Sprague and Lisbon, Connecticut.

For over a decade, Conservation Law Foundation has been advocating for states to encourage and require these kind of cost-effective long term contracts between utilities and renewable energy developers (in financial jargon, “going long”). These kinds of contracts are a smart and cost-effective way of managing the transition to a clean energy economy and are consistent with the restructured competitive electricity system and markets that CLF helped to create in our region in the 1990’s. CLF supported similar contracts to make the Cape Wind project possible and worked to shape the laws in both Massachusetts and Connecticut that enabled and mandated the contracts that have just been proposed in both states.

And from Washington, hopeful news: Environmental Protection Agency administrator (and wicked big Red Sox fan) Gina McCarthy announced that EPA is moving forward with the regulations required by the Clean Air Act to regulate emissions of Carbon Dioxide, the primary greenhouse gas causing global warming, from new power plants. As CLF noted in our statement hailing this move:

The emissions limits proposed by EPA are critical to reducing the climate pollution that is raising sea levels, increasing extreme weather events and imposing devastating consequences on people and countries around the globe . . . For the past ten years, actions by the northeast states and countless power plant owners in the region have demonstrated that reducing greenhouse emissions is not only good environmental policy, but also enhances the region’s economic prosperity by more efficiently and cost effectively making and using electricity. Our long experience in decreasing electric sector greenhouse gas emissions in New England, while also reducing energy costs, has blazed a path for EPA to follow in implementing the requirements of the Clean Air Act.

 In a moving and unusually personal essay, Ms. McCarthy explained the regulations and put them the context of her long career in Massachusetts that began with her work as a town public health agent:

I didn’t plan for a life built around protecting the environment. In fact, I started my career as a health agent in the town of Canton, Mass., and later worked for the Stoughton Board of Health. But at some point I realized that at its core, the issue of a clean environment is a matter of public health. The two are inextricably linked.

 This is the perspective that we need to embrace – focusing on the practical connection between reducing emissions and protecting the public health.  This perspective underlay the efforts to slash dangerous emissions in the Northeast and is a solid foundation for the work that EPA is now doing nationally.

And, sadly and unsurprisingly, the “Ugly” is found on Capitol Hill in Washington DC: Recently, I wrote here about what a great choice President Obama made when he nominated Ron Binz of Colorado to be a Commissioner (and the Chairman) of the Federal Energy Regulatory Commission. Mr. Binz is a reasonable and moderate man with an even temperament, a good sense of humor, deep knowledge of the energy world, the ability to see things from a range of perspectives (drawing on his broad experience as a consumer advocate, businessman and state energy regulator) and a clear sense of how to manage the difficult transition that the energy system is experiencing.

It is therefore very disappointing that his nomination is “in trouble.” Mr. Binz is being attacked for having had incidental contact with a lobbying firm hired by others to respond to the massive and unprecedented campaign against his nomination. The closest thing to a substantive complaint against Mr. Binz is this: he has stated that if the Federal government continues to move forward with the regulation of greenhouse gases that, unless carbon capture and sequestration (CCS) is perfected and made commercial for natural gas fired power plants so they can run without contributing to global warming, gas will no longer be usable as a major fuel at some point in the future.  In public remarks, that reflect very mainstream thinking in the energy industry, he noted this reality and said that absent CCS the move away from gas must begin before 2035, using the phrase “dead end” to describe the situation.  If you have an appetite for deep engagement of complex energy issues featuring Jim Rogers, the retiring CEO of Duke Energy and Mr. Binz check it out on Youtube – the “controversial” remarks used to create a phony controversy can be found around the 30 minute mark.

Given the current state of affairs on Capitol Hill it is possible, if not likely, that this excellent nomination will fail. That would be a shame indeed.

 

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