Legal & Regulatory

North Dakota garnered most of the Department of Energy’s earmarks in March’s omnibus appropriations bill.

It’s not easy being a regulator as the nation faces several daunting energy challenges—integrating renewables, carbon constraints, reliability, and security into an elderly grid that is barely able to keep up with its current mission of moving power from generator to load.

President Obama promoted "green energy" as a signature theme in his presidential campaign. During his first weeks, he reaffirmed his administration’s commitment to renewable resources. In a radio address, he promised to double the nation’s alternative energy capacity within three years and to construct a 3,000-mile transmission grid to "convey this new energy from coast to coast."

Power plant managers are familiar with selective catalytic reduction (SCR), a technology to reduce emissions of nitrogen oxides from fossil-fueled generating plants. Starting in 2010, SCR technology, using a urea reagent, will also be required on new diesel-powered vehicles in utility fleets, ranging from light-duty pickups to 18-wheelers.

With the U.S. economy currently in a free fall, some utility industry leaders and elected officials argue that carbon cap legislation should be put on hold while the country recovers financially. However, President Barack Obama has a different game plan.

A confluence of circumstances promised to make 2008 a transformative year for renewable energy in the U.S. States enacted additional, and more demanding, renewable portfolio standards, promoting accelerated and sustained development of "green" energy resources. Increasing concerns about global warming and climate change prompted some of this activity. However, the unprecedented escalation of oil prices to almost $150 a barrel (translating into prices at the pump in excess of $4) was the largest impetus for demands that this nation end its addiction to fossil fuels.

California Governor Arnold Schwarzenegger recently signed an executive order expanding the state’s renewables portfolio standard (RPS) requirement to 33% by 2020. The executive order formalizes what has been generally assumed for some time: A 33% RPS requirement will be needed for California to achieve its ambitious greenhouse gas (GHG) emissions reduction goals.

An attendee at a recent industry conference made the cynical observation that the dysfunctionality of our national and state energy policies can be attributed to the fact that implementation of any program is subject to institutional limitations akin to those imposed by the "Articles of Confederation." Readers may recall that the Articles preceded the Constitution as the governing compact for the 13 original states.

On Sept. 12, the California Public Utilities Commission (CPUC) and California Energy Commission (CEC) took the next step in the implementation of Assembly Bill (AB) 32, California’s ambitious greenhouse gas (GHG) emissions – reduction initiative, with the release of a 300-page proposed decision on GHG regulatory strategies.

How often do you get a clash between two great Lone Star icons?

This November, as part of California’s eclectic version of participatory democracy, its residents will vote on whether to amend the Solar and Clean Energy Act of 2008. Proposition No. 7 (Prop 7) promises to place the state on “the path to energy independence.” It would require all California electric utilities, including municipals, to procure 50% […]

The California Air Resources Board (ARB) recently issued its long-awaited draft Climate Change Scoping Plan (Draft Plan) for implementing Assembly Bill (AB) 32, California’s ambitious greenhouse gas (GHG) emissions-reduction initiative. AB 32 requires California to reduce GHG emissions to 1990 levels by 2020—roughly a 30% reduction in projected “business-as-usual” emissions levels or 168 million metric […]

By Steven F. Greenwald and Jeffrey P. Gray David Crane, the CEO of NRG Energy, was recently quoted in a widely disseminated publication as saying: “It is a moral imperative that we take steps to reduce CO2 concentration in the earth’s atmosphere.” One might expect those reacting to Crane’s comments (made in a February 2007 […]

By Steven F. Greenwald and Jeffrey P. Gray These should be good times for environmentalists who focus on “green” energy policy. More than half the U.S. states have adopted renewable portfolio standards (RPS) that require utilities to meet specific renewable generation targets, and many are considering additional actions to reduce greenhouse gas (GHG) emissions. Such […]

Until very recently, common wisdom held that the price of renewable energy would fall as legislative procurement mandates ensured its long-term demand. The resulting growth in supply and sales would spur investment in the field, create economies of scale, and accelerate progress down the technology learning curve. Something unexpected, however, happened along the way. Though […]

In early February, Western GeoPower (WGP) announced its termination of a 20-year geothermal power purchase agreement (PPA) with Pacific Gas and Electric Co. (PG&E). A WGP press release explains that the company terminated the agreement because a regulatory approval condition had not been obtained within a 180-day time period stipulated in the PPA. WGP’s CEO, […]

  Renewable power proponents exuded great confidence as the U.S. Congress approached its near-annual end-of-year task of extending the production tax credit (PTC) for wind, solar, biomass, and geothermal power beyond its current December 2008 expiration. The debate promised to bypass the threshold issue of simply extending the PTC. It was expected to focus on […]

Given a chance to make a positive change in California’s wholesale generation market, the California Public Utilities Commission (CPUC) in December opted instead to maintain the state’s existing “hybrid” market model. That decision will further restrict meaningful opportunities for independent power producers (IPPs) and increase the likelihood that future generation will consist of utility ratebase […]

The U.S. Congress continues to debate proposals that would mandate that a set amount of the nation’s electricity come from renewable energy sources such as wind, the sun, or biomass. These discussions about adopting a nationwide renewable portfolio standard (RPS) raise significant concerns for power providers and customers alike. Backers of a one-size-fits-all federal RPS […]

A utility executive responsible for procuring renewable power recently lamented that, at the time of contract execution, renewable “projects” are typically at a very preliminary stage of development, offering scant information about project specifics. Regulatory or other objectives often cause the utility to require that the power purchase agreement be executed before critical permits have […]

This May, the Arizona Corporation Commission (ACC) rejected a proposal by Southern California Edison (SCE) to build Devers-Palo Verde No. 2 (DPV2)—a 230-mile-long, high-voltage transmission line connecting California and Arizona. The line, approved by the California Public Utilities Commission (CPUC) four months earlier, would enable SCE to import additional low-cost electricity from Arizona. The ACC’s rejection of DPV2 highlights a significant challenge for state and regional resource planners—weighing state interests against the regional benefits of interstate electricity commerce.

While elected officials in Washington debate the politics of climate change, state legislators and regulators have been busy putting in place programs to reduce greenhouse gas emissions. For the most part, the goals of the programs reflect desired changes to power supply and consumption: increasing the efficiency of electricity generation and delivery, using less fossil […]

Congress’s enactment of the Public Utility Regulatory Policies Act of 1978 (PURPA) triggered a revolution in the development and construction of power plants. PURPA’s creation of an independent class of generators—qualifying facilities (QFs)—exposed a century-old economic myth that had justified restricting ownership of generating facilities to governmental and investor-owned utilities (IOUs). The success of QFs […]

  Historically, states have delegated responsibility for establishing and implementing their energy policy to a public utilities commission (PUC). During most of the 20th century, state PUCs operated with relatively little interference from state legislators. In California, for example, the PUC, created by the state constitution, was vested with the broad authority to independently regulate […]

  State policy makers are characteristically reluctant to recognize that they have advanced a policy as far as they can, and that they must cede some control to fully realize its ultimate benefits. Ceding control often runs counter to policy makers’ political instinct to serve their constituents. Doing so is even harder when a new […]

  The debate over retail choice has resurfaced, triggering in the minds of many consumer advocates California’s failed deregulation attempt and its fallout—rolling blackouts, bankrupt utilities, and government bailouts with crippling long-term consequences. Before allowing a chorus of "oh no, not again" to cloud the debate, state policy makers should realize that allowing generators to […]

Almost half of U.S. states now insist that their investor-owned electric utilities serve a specified percentage of their load with electricity from renewable resources by a date certain. Utilities struggling to comply with their mandate increasingly warn that they will be unable to achieve the required level on time. Yet even as utilities express these […]

The financing of power generation projects increasingly depends on the execution of a long-term power-purchase agreement (PPA). A common prerequisite for considering a PPA to be "effective" is a "final and nonappealable" regulatory order approving it. Purchasing utilities justifiably insist on such certainty to immunize their PPAs from after-the-fact regulatory scrutiny and possible penalty. Unfortunately, […]

U.S. demand for natural gas is projected to increase by more than 50% by 2020. Companies are building—and the public is opposing—receiving terminals on three coasts that would increase imports of liquefied natural gas. The pros and cons of "opening up" Alaska, coastal waters, and federal lands to drilling are still being debated. These politically […]

  What’s in a name? Plenty, if the word is "renewable." Intuitively, most people outside the energy industry consider hydroelectric power "renewable." The dictionary defines the word as follows: "capable of being replaced by natural ecological cycles." Accordingly, rainwater should indisputably qualify as renewable. Yet since the early days of renewable portfolio objectives, most hydro […]