Western Renewable Energy
Review of 2011
5 January 2012
In 2011, a number of
major new wind and solar projects came online in Interwest's
six-state region (Arizona, Colorado, Nevada, New Mexico, Utah and
Wyoming). With a nameplate capacity of over 682 megawatts, these new
power plants are generating more than just clean, cost-effective
electricity for the West: these projects generated hundreds of new
jobs, along with new jobs in manufacturing and supply chain
operations, along with new local and state tax revenues and economic
development. More new projects are in store for 2012 as the wind and
solar energy industries tap these energy resources that are abundant
in every western state.
However, federal policy
uncertainty is clouding future growth prospects in the wind and
solar energy industries, underscoring the fact that these relatively
newer technologies need the same kind of long-term policy certainty
that helped advance the growth of today's conventional and nuclear
energy industries. We head into 2012 with the hope that federal
policymakers will remain pro-active in maintaining their bipartisan
policy support that has enabled the West to become an international
leader in these critically important components of our national
energy security and economic future.
A Quick Review of 2011
New Governors take office
in four states
Four new governors took
office in Interwest's six-state region: John Hickenlooper (D) of
Colorado, Brian Sandoval (R) of Nevada, Susana Martinez (R) of New
Mexico and Matt Mead (R) of Wyoming. Governors Hickenlooper,
Sandoval and Mead discussed energy policies in each of their State
of the State speeches in January; click on the hyperlinked
governor's name for full text of each speech:
Gov. Hickenlooper:
"We
have made huge strides with renewable energy and have the potential
to grow more and greener jobs...Much attention has been devoted to a
debate about energy, the right balance between developing natural
gas, coal and renewable energies. But the natural resource that may,
in the end, have the greatest impact on Colorado's economic growth,
is water."
Gov. Sandoval:
"Our future lies in business sectors like
technology commercialization, bioscience, renewable energy asset
development, and defense sector expansion. Innovation will drive
tomorrow's economy, and so it must drive our decision-making as we
rebuild our economic development infrastructure...Nevada can
strengthen our leadership role in the renewable energy and energy
efficiency industries."
Gov. Mead:
"To create jobs, and to grow and diversify our economy, we should
build on Wyoming's natural advantages - our energy, ag, tourism, and
great workforce. We should not just extract and export our energy,
we should look for value-added projects that use some of our energy
here. For example, our superb wind resources partner well with
natural gas-fired turbines which fill out the energy stream during
lulls in the wind. We should develop both wind and gas-fired turbine
projects, where possible. I support current efforts for those
working on such projects. And, why not manufacture wind turbine
components here, too? Let's build the items needed to develop our
wind resources right here in Wyoming...We must continue to support
all our extractive industries...I am skeptical about man-made global
warming without more and better science; but I am not skeptical
about growing demand by our energy customers for cleaner coal and
gas..."
In 2011, Interwest
pursued initiatives in state legislatures, regulatory commissions,
transmission-planning organizations and in various other key venues
at the local, state and regional levels.
Legislative work
Interwest
had lobbying teams in four states in 2011: Colorado, Nevada, New
Mexico and Wyoming. In Colorado, perhaps the most notable
legislation to pass in the 2011 session was
SB 45, which empanelled
a state task force to examine Colorado's electric transmission
infrastructure and make legislative recommendations on the state's
siting and permitting framework with a particular focus on
transmission for renewable energy projects, such as wind and solar
energy.
Interwest's contract attorney
Lisa Hickey represented
renewable energy interests on this "SB 45 task force," which also
featured representation from leaders of most other key industry and
non-governmental sectors in the state. The task force's
final report
made three top-level policy recommendations:
- Increase local
government cooperation and collaboration
- Appeal of PUC Backstop
Decisions to the Court of Appeals
- Open a PUC docket to consider
improvements to the backstop process and consider establishing a
transmission siting and permitting resource center
Nevada held its
every-other-year legislative session in 2011, and the most notable
bill emanating from that session was
AB 416, which changed the NV
Energy Generations programs for distributed solar, wind and hydro
rebate programs. The legislation also made power purchase agreements
between developers and the utility confidential and allows the
utility to apply for rate recovery from installed transmission lines
that export energy. This legislation was vetoed by Gov. Brian
Sandoval, who expressed concern in his veto message about potential
rate impacts of this measure.
Despite Gov. Sandoval's veto of AB
416, NV Energy vowed to press ahead just the same with its new
Renewable Transmission Initiative (RTI), which NV Energy explained
is its "process designed to engage renewable energy developers,
load-serving entities and others to assess their interest in
obtaining transmission service from specific zones in Nevada to
other markets, particularly California and the Desert Southwest."
The highlight of New Mexico's 60-day legislative session was
SB 549,
which affected the state's renewable energy standard's renewable
cost threshold (RCT) by allowing the Albuquerque Bernalillo County
Water Utility Authority to expend a maximum of 2.5% of its
electricity charges on developing its own renewable energy
generation. The bill also requires the customer to retire all
renewable energy certificates associated with the energy produced
from that expenditure.
Wyoming's legislative session dealt with
several issues of concern to the renewable energy industry,
including eminent domain, severability of wind energy rights from
surface rights and taxation issues.
The taxation issue proved to be
the most difficult, and the matter was referred for further
examination during the interim session to the Joint Revenue
Committee, which held hearings around the state in the summer and
fall. Some of the key topics of discussion surrounding this
legislation include sharing of tax revenues with counties as impact
payments and allowing sales taxes on renewable energy equipment to
be paid over a period of time. Currently, full sales tax is due
up-front on a project and a $1/MWh generation tax kicks in after a
project has accumulated a three-year generation history.
Regulatory
work
In the regulatory arena in 2011, Interwest took part in
regulatory work in the commissions of Arizona, Colorado, Nevada, New
Mexico and Wyoming with the goal of increasing utility acquisition
of clean, cost-stable renewable energy resources. In our regulatory
work, we sought to highlight how utilities can integrate
ever-increasing amounts of wind and solar into their systems by
using improved weather forecasting methodologies and assigning
accurate integration costs based on transparent, state of the art,
peer reviewed studies for the ramping of fossil-fueled power plants,
along with greater consideration of balancing area cooperation and
consolidation, and intra-hour scheduling, and access to regional
balancing resources through markets, among other policies that can
increase the use of renewable resources. Interwest promoted accurate
wind integration cost analysis, wind prices and avoided cost
calculations in Wyoming and Utah activities in coordination with the
Renewable Northwest Project (RNP).
Interwest promoted rules
governing
transmission planning and
increased transparency and
access to information in Colorado, including consistency in timing
of provision of transmission to make it available and predictable to
support bids. Interwest took on the challenge of
lower-cost natural
gas prices by proving the benefit of wind as a hedge against fuel
price increases and volatility and by eliminating discriminatory
policies which hamper acquisition of increased stable priced
renewables. Interwest is developing alternative business models and
incentives for utilities to offer wind projects to their large
customers to meet governmental and business environmental and
cost-reduction goals.
Interwest is a proponent of a proposed
Energy
Imbalance Market (EIM), which would enable greater and more
efficient sharing of electrical balancing resources between the
West's 38 Balancing Areas (BAs). Key features of an EIM include
efficient use of balancing resources between participating balancing
authorities, optimized use of transmission assets between balancing
areas, and the ability to efficiently accommodate Variable Energy
Resources (VERs) such as solar and wind resources. We joined with
other allied stakeholders in filing comments to the PUC of Nevada in
an
EIM investigatory docket, and briefed commission staff and are
preparing to take part in a
similar such docket in the Colorado PUC
in 2012.
At the New Mexico Public Regulation Commission, Interwest
supported testimony by expert witness Tom Beach of Crossborder
Energy on the state's
Reasonable Cost Threshold (RCT), which limits
the amount that New Mexico utilities are required to spend each year
to procure renewable energy to meet the state's Renewable Portfolio
Standard (RPS). As a result of its RCT calculation, Public Service
Company of New Mexico (PNM) proposed not to acquire any new
renewable generation in 2012. Tom proposed an approach to the RCT
calculation that modifies the PNM proposal in ways that will make
PNM's approach more consistent both with the statutory basis for the
RCT and with the approaches that other utilities in New Mexico have
used. With the changes proposed by expert witness Beach, PNM would
not be limited by the RCT in 2012, and could make incremental
purchases of renewables to fully meet its RPS obligations for that
year. The New Mexico PRC held a hearing in this case in late
October, and briefs have been filed.
Transmission-related work
In
the transmission-planning arena, Interwest was represented by Craig
Cox on the
Scenario Planning Steering Group for WECC's Regional
Transmission Expansion Planning project, a first-time DOE-funded
effort for regional transmission planning that started in 2010 and
will be completed in 2014.
A first-ever regional WECC transmission
plan with over 5,000 miles of new transmission included was
published in 2011. Interwest participated in Westconnect's response
to
FERC Order 1000, which will recast utility transmission planning
to include more attention to stakeholders, regional planning
considerations, and cost allocations and recovery.
Interwest
monitored the
Colorado Coordinated Planning Group and Xcel Energy's
SB07-100 transmission planning and participated in the preparation
and release of a detailed legal and policy review supporting
transmission advocacy: "Enabling the Widespread Adoption of Wind
Energy in the West: the Case for Transmission, Operations and Market
Reforms."
Other activities and organizational developments
Interwest
hires first full-time staff member
Interwest was pleased to hire its
first full-time staff member, Ryan Schwartz, in June. Ryan is a
former high-school math teacher, recently completing a two-year
commitment with Teach For America in Denver. Prior to that, Ryan
worked on the policy staff of state senator Michael Johnston
(D-Denver), with a focus on energy and environmental policy after
graduating from Duke University with a degree in Public Policy. Ryan
has already begun to contribute significant value to our
organization, and we expect his work will become even more important
in 2012 as Interwest transitions to new leadership.
Interwest to
transition to new leadership in 2012
In late 2011, Interwest
executive director Craig Cox announced he would return to the
consulting world in 2012. Craig founded Interwest in 2002, and in
close collaboration with the West's leading industry and
non-governmental organizations grew it into a successful multi-state
trade association over the following decade. Craig will work for
Interwest on a consultative basis after leaving his full-time
position as executive director and will also work on behalf of other
clients in areas relating to clean-energy policy development and
outreach activities.
Applications for Interwest's new
executive
director will be received through 13 January 2012.
Interwest to
launch new website
Interwest will launch a revamped website in 2012
which will provide easier and faster access to updated information
for site visitors. Ranging from access to regulatory filings,
testimony and other public documents to updated information on wind,
solar and geothermal projects across our region, we hope this new
site will prove to be helpful and timely.
A brief look ahead at 2012
In 2012, Interwest will continue working in venues throughout the
West to advance new markets for renewable energy, along with the
transmission capacity that enables these beneficial markets to
thrive. We will work with regulators, legislators, utilities, the
conservation community, other allied stakeholders and many
additional constituencies as we seek to highlight the many benefits
of the West's abundant, affordable and inexhaustible clean energy
resources.
Policy certainty at all levels of government remains a
critical factor for all energy industries, and Interwest will
continue its support in 2012 for state and federal policies that
ensure the continued viability and competitiveness of America's
renewable energy industry. We look forward to working constructively
with a wide range of parties on policies to ensure that the West's
energy infrastructure enhances America's national energy security
and our economy.
The Interwest Energy Alliance is a trade
association representing the nation's leading renewable energy
industry companies, bringing them together with the West's
non-governmental advocacy community to advance new project and
transmission development. Interwest's states of operation are
Arizona, Colorado, Nevada, New Mexico, Utah and Wyoming.
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