A View From the Bridge
By Sean O'Neill
Update on TC-114
As
many of you know, I have been involved in representing the ocean renewable
industry in the TC 114 International Standards committee, which has occupied my
attention for the past few weeks. That's
because this month, Washington, DC has been the host for several TC-114
Committee meetings including the Terminology Committee meeting hosted at the
Clean Energy States Alliance, the Design Committee Meeting hosted at the
offices of SMI, and the United States National Committee's Technical Advisory
Group. More information on TC-114 and how you can become involved in the
development of international standards for the marine and hydrokinetic
renewable energy industry is available on the website: www.TC114.us
With
so much happening since the midterm elections please make sure to review
·SMI's
Update on "What the New Congress means for MHK"
·Counsel's
Corner update on FERC's New "Un-FIT Ruling"
·Corps of Engineers to Create Nationwide Permit Process for
Small MHK and Other Renewable Projects
·Energy
International Quarterly's Issue Featuring MHK companies, including OREC
·Save
the Date for the next Global Marine Renewable Energy Conference
·National
Oceans Council..........and more
Counsel's Corner
FERC's New
"Un-FIT Ruling"
In many
European countries, the feed-in tariff (FIT) has been a successful tool for
incentivizing renewable development.
Benefits of a FIT include simplicity (no complex contracts to negotiate)
and rate certainty (incentive rates are typically locked in for a decade or
more). Here in the U.S., FITs are more
controversial. Some view them as an
unfunded mandate for renewables. But
there's also a legal hurdle as well: in
July 2010, FERC ruled in California Public Utilities Commission (Docket
Nos. EL10-64 and 10-66) that the Federal
Power Act (FPA) preempts states from setting feed-in tariffs. That's because FERC has exclusive authority
under the FPA to set wholesale power rates, leaving the states no power to set
rates through feed-in programs.
In October
2010, FERC reconsidered its ruling.
Though FERC continues to maintain that federal law preempts states from
setting feed-in tariffs, FERC opened an alternate path to more favorable
pricing for renewables. That path is
found in the Public Utilities Regulatory Policies Act (PURPA), which creates an
exception to the FPA and allows states to set wholesale rates for utility
purchases from qualified facilities (QF), so long as those rates do not exceed
the utility's avoided costs (i.e., cost of what it would have otherwise paid to
purchase energy, capacity or both from another source). Used to be that QF rates weren't much of a
bargain for renewables, since the availability of lower cost fossil fuel and
non-renewable resources depress a utility's avoided costs. But in its recent October decision, FERC has
said that where a state requires a utility to procure renewables, it can set
avoided costs based on the cost of renewables only. In addition, FERC also clarified that states
can include other verifiable costs in avoided cost rates, such as costs
associated with transmission or environmental savings. To view FERC's case and for a more in depth
analysis, see the coverage here.
Dear OREC Member:
Although there are a few races yet to be
determined, it is clear that the United States has just emerged from its third
straight "change" election. Following last
Tuesday's midterms, Republicans will hold a majority in the House of
Representatives with approximately 239 seats to the Democrats' 185 seats in the
112th Congress. Democrats
will maintain control of the Senate but with a smaller majority. The Democrats will need to garner support
from Republicans in the Senate in order to pass any major legislation. With regard to energy matters, Obama has
declared cap-and-trade dead but there is still hope, as well as a pathway, for
the two parties to work together on some aspects of energy policy.
The U.S.
Congress reports back to Washington, D.C. on November 15 to wrap up the 111th
Congress. It would seem that there is
little to no incentive for Republicans to cooperate with Democrats to pass any
major policy legislation, such as an energy bill or our Marine Renewable Energy
Promotion Act, in the lame duck session with the knowledge that they will hold
a majority in the House of Representatives in a few short months. Two priorities for Congress in the lame duck
session will be to complete action on the FY 11 appropriations bills, either
through an omnibus appropriations measure or a Continuing Resolution to keep
the government open and operating, and second will be to pass a tax extenders
bill. There are over 70 expiring or
expired tax credits pending before Congress, and the gridlock over how to move
forward is noticeably hurting the American economy. The urgency this creates offers some hope
that Congress may be able to reach a compromise in the next two months on tax
incentives that include the Production Tax Credit, DOE's Loan Guarantee
Program, and cash grants for Section 1603 of the Recovery Act.
Once the 112th Congress begins in
the first few days of the New Year with a Republican majority in the House, we
can expect to see more deference to the House Committee chairs in terms of
setting an agenda, as presumptive Speaker John Boehner (R-OH) is the first
Speaker to have held positions as Chair and/or Ranking Member on a full
committee. The greater role of committee chairmen and committee members
in drafting legislation will play a big role with the formation of legislation,
like an energy bill. This would be different
from the recent approach taken by Democrats where a significant amount of
policy was written by the Speaker's office after consultation with the White
House.
There will be quite a shuffle among leadership positions with GOP
representatives assuming key chairmanships on House committees. Rep. Dave Camp (R-MI) is expected to assume
the Chair on the House Ways and Means Committee. He has traditionally been somewhat supportive
of renewable energy, though he has been critical of offsetting support for renewables
by taking away tax incentives for the oil and gas industry. Camp has strongly opposed EPA action on
greenhouse gases, which will be in line with the stance of the Republican conference.
Rep. Joe
Barton (R-TX) is jockeying to assume chairmanship of the Energy and Commerce
Committee, but he is subject to term limits on Chairmanships/Ranking Member
positions. Barton has said that he will
request a waiver of the rule, but many observers believe that he will be denied
as punishment for his comments about the BP oil spill. Next in line for Committee Chair is Rep. Fred
Upton (R-MI), current Ranking Member of the Energy and Environment
Subcommittee. He is viewed as a moderate
who is willing to work across the aisle, which may not be a popular position in
the Republican conference next year.
In the Senate,
current Energy and Natural Resources Committee Ranking Member Lisa Murkowski (R-AK)
may end up holding her seat, though the race has not yet been called. If she is announced the winner, she may have
an opportunity to remain as Ranking Member.
If not, Sen. Richard Burr (R-NC) is favored to take over that position.
On the House
Appropriations committee, Rep. Jerry Lewis (R-CA) and Rep. Hal Rogers (R-KY) are
actively campaigning to assume the Chairmanship. However, a dark horse candidate with close
ties to Speaker Boehner may emerge in the coming weeks. Rep. Norm Dicks (D-WA) is in line to be the
Ranking Member of the committee. On the
Energy and Water subcommittee, we expect that Rep. Rodney Frelinghuysen (R-NJ)
will become the Chairman and Rep. Peter Visclosky (D-IN) will be the Ranking
Member.
The likely
Chairman of the Energy and Water subcommittee, Rep. Frelinghuysen, will be
under great pressure by his leadership to cut spending at DOE and to pull back
funding from Recovery Act programs. However,
Rep. Frelinghuysen does have respect for the potential for offshore renewable
energy and may be a quiet champion moving forward.
On the Senate
side, we expect Sen. Daniel Inouye (D-HI) to remain Chairman of the Senate Appropriations
committee with Sen. Thad Cochran (R-MS) to continue as Ranking Member. On the Energy and Water subcommittee, there
are several possible replacements for Sen. Byron Dorgan (D-ND), who did not
seek reelection this year. Most likely is
Sen. Dianne Feinstein (D-CA), but it is possible that the Chair could go to
Sen. Mary Landrieu (D-LA) or Sen. Patty Murray (D-WA). The Ranking Member slot is also up in the air
with the primary defeat of Sen. Bob Bennett (R-UT) earlier this year. If Sen. Feinstein or Sen. Murray becomes
Chair, we should expect strong support for renewable energy and efficiency
programs and significantly less support for clean coal technologies and oil and
gas R&D funding.
National energy/climate change policy will be lower on the 112th
Congress' agenda, falling behind legislation to address U.S. jobs and taxes
(not to mention Rep. Boehner is from a coal-heavy state who has consistently
voted against cap-and-trade measures).
However, President Obama is not ready to give up on energy legislation,
and has stated that although cap-and-trade is dead, it was simply one way to
achieve limiting the emissions of greenhouse gases, not the only way. Obama holds the view that a bipartisan agreement
on broadening nuclear power use, natural gas exploitation and sales of electric
cars may be possible.
Obama also hinted that the accord the Administration forged with
the auto industry, unions and investors that raised fuel-efficiency standards
for cars and trucks could be a model for a deal with electric utilities over
carbon dioxide emissions at power plants. That type of agreement could be
implemented without legislation by Congress. Administration sources said
recently that they were already exploring such a deal. Piecemeal energy legislation would
potentially include a national renewable electricity standard as an alternative
to sweeping climate legislation that passed in the House but stalled in the
Senate during the 111th Congress.
White House Press Secretary Robert Gibbs said a mandate that requires
electric utilities to source a certain percentage of their electricity from
renewable sources has bipartisan support to move ahead in the short term.
In terms of support for funding the Water Power R&D program at
DOE, we should expect budgetary pressures to limit any substantial increases of
funding. Because the program is limited
in size and scope and there are R&D activities that support the
conventional hydropower industry, we can expect some level of stability for the
program.
OREC will work hard when the new Congress is seated in January to
make sure the industry's voice is heard when future MHK funding issues are
deliberated. OREC will also renew its
efforts to have Congress reauthorize the DOE water power program based on
legislation recently introduced by Rep. Jay Inslee (D-WA) and Rep. Brian Baird
(D-WA), along with language included in the Senate energy bill. However, we will be challenged by a
Republican House conference that seems intent on reducing support mechanisms
for renewable energy R&D.
On the Senate side, we should have some stability working with our
traditional champions like Senators Patty Murray (D-WA), Olympia Snowe (R-ME), Ron
Wyden (D-OR) and Lisa Murkowski (R-AK), but we'll have to educate the new
Senators on our industry and the valuable role it can play in diversifying our
nation's energy supply.
We will make sure that you are kept apprised of new developments
related to our work with Congress over the next few months as we get ready for
the 112th Congress.
Dates to Watch:
· Nov. 15 Post-election session
of 111th Congress begins. Orientation sessions begin for incoming senators and
representatives.
· Nov. 16 Senate Democratic and
Republican leadership elections.
· Nov. 17 House Republican
leadership elections.
· Nov. 18 House Democratic leadership
elections.
· Week of Nov. 22 House and Senate in
recess for Thanksgiving.
· Dec. 3 The current continuing
appropriations law expires.
· Jan. 3, 2011 Terms of members of
the 112th Congress begin (per the U.S. Constitution). The swearing-in of House
and Senate members is likely to occur Jan. 4 or 5.
Sincerely,
Your
Ocean Renewable Team
Breaking
News: Corps of Engineers to Create Nationwide Permit Process for Small MHK and
Other Renewable Projects
Earlier
this month, the Corps of Engineers has released a draft of a proposed change to
its Nationwide Permit Program which would streamline the process by which
renewable developers obtain Section 404 dredge/fill permits. As relevant to MHK, the Corps proposes to
establish a nationwide permit for MHK projects (wave, tidal, OTEC) and land
based generation facilities that are one acre or less in size, and loss of no
more than 300 linear feet of streamed.
This is an enormous step towards breaking the gridlock in permitting
small demonstration projects and something that OREC has supported for years,
with little traction. Although the
regulation has not yet been published in the Federal Register, an advance copy
is circulating and is available below.
Watch for future OREC action to support this breakthrough!
View
Corps of Engineers Renewable Power Permits Here
National
Ocean Council Activities Officially Underway
On November 9, 2010, the White House Council on Environmental
Quality (CEQ) and the Office of Science and Technology Policy (OSTP) today
convened the first Principals meeting of the National Ocean Council in the
Roosevelt Room of the White House. The meeting, attended by
25 Cabinet Secretaries and Senior Officials from across the Federal
Government, focused on key steps to implement the National Policy for the
Stewardship of the Ocean, our Coasts, and Great Lakes. Additional information will be posted shortly
on www.whitehouse.gov/oceans.
As you recall, OREC was extensively involved in
the CMSP proceeding. We filed commentsand circulated a summary
following final action. Now, that CMSP is moving full speed ahead, we will
martial our resources to keep members abreast and to participate as much as
possible in the regional councils. The
West Coast Governors' Agreement on Ocean Health is leading regional efforts for
CMSP on the West Coast, and has initiated the process with release of this Scoping Document
and upcoming workshops in San Francisco (Nov. 12, 2010), Newport, Oregon (Nov.
15, 2010) and Olympia Washington (November 16, 2010). Details are available at the Website. Please contact Carolyn Elefant, carolyn.elefant@gmail.com with
further questions.
OREC News
Save the
Date: GMREC Conference
SAVE the DATE
www.globalmarinerenewable.com
Sponsorships
Exhibitors
Industry Development Day:
April 27 Expands Value
The 2011 GMREC IV brings
an extra day of problem solving and strategic
industry-wide action. Our topics, and their prominence in the agenda continue
to be driven by input from our participants in market research conducted at our
conferences, as well as ongoing e-mail and telephone research. Please help us in
our efforts to continually improve the substance, format, and style of the
Global Marine Renewable Energy Conference by providing candid feedback and
active participation.
E-mail your
suggestions to: info@globalmarinerenewable.com
or call +1 (301) 869-3790
Why you should attend:
Expand
your network of international experts and government leaders
Explore
and exchange knowledge on best management practices
Discuss
financing instruments and regulatory drivers
Learn
about U.S. and international policies supporting the growth of marine renewable
energy
Who should attend?
Engineers
and researchers
Environmental
analysts, scientists, and biologists
Attorneys
and regulatory specialists
Innovators
and developers
Investors
and venture capitalists
Federal,
state, and local government policy makers and regulators,Non-governmental
organizations
**Correction: If you've received a Save the Date
e-mail prior to this newsletter, the date listed for Industry Development Day
was incorrect. Industry Development Day will be April 27, 2011, not April 13th
as stated in the e-mail.
OREC and
Members Featured in International Energy Quarterly Nov/Dec 2010
So, an
attorney, a lobbyist and a PR specialist walk into a conference...That's not the
start of a joke, rather it's the story of how OREC started, and also the start
of a terrific feature story on OREC in this month's issue of the Energy
International Quarterly, available online here. Even better, the issues also profiles several
OREC members, thus giving them exposure overseas.
As Thomas
Friedman has said, the world is flat.
Markets are no longer local, but global.
Nowhere is that more true than in the renewable energy industry where
international collaboration is key to building these nascent industries. For that reason, just as OREC has focused on
building visibility on a regional and national level, we are doing the same on
a global level as well. In fact, next
month, we'll have some exciting news to share about some new international
ventures. Stay tuned....
Last
Chance to Comment on Study on Recreational Impacts of MHK
Last year,
the Department of Energy (DOE) and National Park Service (NPS) commissioned the
Hydropower Reform Coalition to study the potential effects of MHK projects on
recreation. The report has now been
released in draft form, with comments due November 15, 2010. If you're a member of OREC, you've already
received the report along with our preliminary assessment. OREC plans to file comments by the November
15 due date. In particular, because the
report focuses largely on potential impacts, we're interested in hearing from
developers about any real data that's been gathered regarding recreational
effects. If you have any information,
please contact Carolyn Elefant at carolyn.elefant@gmail.com by November 12,
2010 to allow time to incorporate your feedback into the comments. You can view the draft report here.
Subsidies for Renewables Total $57 Billion, But
Still Not on Par With Fossil Fuel
Bloomberg
News is reporting on a recent study by the International Energy Agency
(IEA), which found that global subsidies for renewable energy totaled $57
billion in 2009. Of that, roughly $37
billion of support was given to renewable electricity and $20 billion to
biofuels. These numbers sound great, but
this support pales when compared to the $312 billion in subsidies for fossil
fuel in the same year, mainly in developing countries.
For more
on this story, see commentary at The
Energy Collective or the IEA Report Executive
Summary.
Wave,
Tidal, MHK and Offshore Wind Round Up
Marine and
Hydrokinetic
Lots of
OREC members have been in the news in the three brief weeks since our last
newsletter. Here's a sampling:
Ocean
Power Technologies
Ocean
Power Technologies is expanding its global scope, with the signing of a new
contract with Mitsui Engineering & Shipbuilding that provides for
development of an OPT Power Buoy in Japan.
More from Today's
Energy Solutions (11/10/2010)
Wavebob
and Secretary Chu's Ireland Trip
Energy
Secretary Dr. Steven Chu visited Ireland last week, and met with OREC member's
CEO Andrew Parish and his team. Dr.
Chu's visit to Ireland to reflects DOE's continued interest in, and commitment
to the MHK industry. For more, see this Press
Release. The Irish press covered
this story also, with the Irish
Energy News reporting that:
"During his visit, Dr. Chu said that "Ireland and the United
States both have significant offshore potential for wind and wave energy, and
we share an interest in developing and deploying these important clean energy
technologies. I look forward to continued partnership between the United
States and Ireland as we move toward a clean energy future."
BOEMR
Seeks Comments and Expression of Submission on Offshore Wind Off Maryland
Will
offshore wind come to Maryland anytime soon?
There's a good chance, now that the Bureau
of Ocean Energy Management, Regulation and Enforcement has issued an invitation for bids for leases
according to the Baltimore
Sun. Submissions of interests or
comments are due by January 10, 2010.
For the Federal Register Notice (November 9, 2010), click here.
OREC Gets
a Namesake
Seems that
in New Jersey, OREC, the Ocean Renewable Energy Coalition, now has a
namesake. Back in July, New Jersey passed
legislation which would set up a process for establishing
offshore renewable energy certificates (ORECs), which would be given to owners
of the wind farms for each megawatt of electricity the turbines generate. Now,
the New Jersey Board of Public Utilities is developing regulations to implement
the OREC program, as reported at New Jersey Spotlight. According to the bill, the BPU must complete
regulations by February 2011.
------------------
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last month's newsletter? Access the back
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in more news on Marine Renewable on a daily basis? Visit here to view and follow the Marine Renewables
Daily, an aggregation of news, videos and blog posts via Twitter. Also check out Carolyn's long running Renewables Offshore Blog.
From Your Ocean Renewable Team:
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Carolyn Elefant-
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