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Court Puts EPA On
Notice Over CO2

In its June 23 decision, the U.S. Supreme Court reaffirmed a previous holding that greenhouse gases are a regulated pollutant. On the other hand, the ruling significantly curtails the Environmental Protection Agency (EPA) in its effort to apply a multitude of provisions in the Clean Air Act devised for other pollutants to regulate greenhouse gases.

Some observers think the decision will have major ramifications for how states implement the EPA’s proposal to limit carbon dioxide (CO2) emissions from existing power plants under Section 111 (d) of the Clean Air Act.

“I view it as a really serious clampdown on EPA,” says Tom Wood, a partner at Stoel Rives LLP. “The EPA’s spin is, ‘We got what we wanted.’ But I think that the Supreme Court’s decision calls into question whether the EPA was being too ambitious.”

The decision essentially prevents the EPA from using certain provisions of established regulations for the purpose of specifically regulating sources of greenhouse gases above set thresholds. In particular, the decision keeps the EPA from using the “prevention of significant deterioration” (PSD) provisions - which refer to nitrogen oxides, volatile organic compounds, sulfur dioxide, fine particulate, carbon monoxide, lead and other pollutants - from being rewritten to include carbon dioxide.

In effect, unless an existing source exceeds, or if a proposed source would exceed, the PSD thresholds for pollutants as specified, the provisions cannot be applied to such sources solely on the basis of their emissions of greenhouse gases.

To the extent that one is looking at it through the eyes of the coal-fired power plants, Wood says the Supreme Court ruling in this case gave the EPA all it wanted to be able to regulate such power facilities - one more tool to lock down the coal-fired electrical generation industry. And that is a major portion of the greenhouse gas inventory.

On the other hand, Wood says, the EPA cannot simply cherry-pick provisions that are on the books for other pollutants and repurpose them for greenhouse gases. In a practical sense, the EPA has been given a green light to devise rules for large emitters of CO2 under the Clean Air Act. However, the agency has been prevented from using lower thresholds under other provisions to regulate smaller emitters.

Given past history, the Supreme Court is telling the EPA that it needs to be more careful about what authority it claims. In other similar programs, the EPA started off really ambitious and then had to trim them back under legal challenges. Wood cites the regional haze program and mercury cap-and-trade programs as examples.

Although the EPA’s Section 111 (d) proposals cannot be legally challenged until they are finalized and enacted, such challenges are a certainty. Ultimately, Wood says, the Supreme Court’s decision seems to give more ammunition to those who want to challenge an expansive view of 111 (d). He also sees it as a rebuke to the EPA - a warning that in the coming legal battles, the agency should not presume that its efforts will have the Supreme Court’s backing.

“This is going to leave the EPA scratching its head as to whether it has bitten off a little bit more than it can chew right now,” Wood says.

- Michael Puttré

 

Calif. Bill To Streamline
Permitting Advances

In July, the California Senate’s Governance and Finance Committee approved a bill (AB.2188) establishing a streamlined permitting and inspection procedure for solar energy systems.

The bipartisan vote moved the bill on to the full Senate, which is expected to take it up after it returns from summer recess this month. In June, AB.2188 passed the state assembly by a vote of 45-5.

AB.2188 requires every city and county to adopt an ordinance - in consultation with fire and utility officials - “to streamline and expedite the permitting process for small, residential, rooftop solar energy systems” by Sept. 30, 2015. The bill is supported by a coalition of business associations, solar companies, environmental groups and local elected officials.

“Your typical home solar energy system is quite cookie-cutter,” says Bernadette Del Chiaro, executive director of the California Solar Energy Industries Association. “From Chico to Chula Vista, the exact same product, design and installation is being installed, yet many building departments require byzantine permits as if they are installing a nuclear power plant.”

Del Chiaro says she expects the bill to pass the Senate and move back to the assembly for concurrence and hopes to see it pass before the legislative session ends on Aug. 31.

Local groups in California, notably the East Bay Green Corridor, have tackled the streamlining of solar permitting on a regional basis. Such efforts are seen as key to reducing so-called “soft costs” in solar energy projects.

 

Illinois Law Taps
$30 Million For Solar

On June 28, Gov. Pat Quinn, D-Ill., signed legislation tasking an agency with spending millions of dollars to purchase solar-produced electricity in Illinois. The law, effective immediately, also emphasizes the development of distributed solar generation, such as the installation of solar panels on residential rooftops.

“These last days of June are some of the longest of the year, the perfect time to talk about getting more of our electricity from solar,” says Gov. Quinn. “Thousands of residents will soon get cheaper, cleaner energy, and we will create good-paying jobs for working families in the process. It’s this sort of innovation that has made Illinois a national leader in clean energy production.”

H.B.2427, sponsored by state Rep. Robyn Gabel, D-Evanston, and state Sen. Don Harmon, D-Oak Park, requires the Illinois Power Agency (IPA) to use up to $30 million to purchase solar power to meet a portion of the state’s electric power needs. The agency was established in 2007 to develop procurement plans at the lowest total cost for residential and small commercial customers of utilities Ameren and ComEd.

The money will come from the IPA’s Renewable Energy Resources Fund, which is made up of clean-energy fees paid by state power suppliers. According to Quinn, the law establishes a competitive procurement process to purchase energy from existing solar devices and from new solar installations, which could mean thousands of new solar panel installations on homes in Illinois. Existing and new utility-scale solar projects will benefit from the legislation as well, adds Quinn.

Sen. Harmon says, “Increasing our investment in clean energy creates jobs, protects the environment and reduces our dependence on fossil fuels. Over the past few years, we’ve seen wind energy take off in Illinois. I hope that this investment starts a similar revolution in solar energy.”

According to data from the Solar Energy Industries Association (SEIA), Illinois has about 52 MW of installed solar capacity. Meanwhile, figures from the American Wind Energy Association say the state is home to over 3.5 GW of installed wind power.

Howard Learner, president of the Environmental Law & Policy Center, has praised the new law, saying it will “jump-start the solar industry in Illinois.”

 

Nevada Net Metering Study Shows Upside

The Solar Energy Industries Association (SEIA) says a new independent study prepared for the Nevada Public Utilities Commission (PUC) estimates that the grid benefits of rooftop solar systems installed in the state through 2016 will outweigh costs by more than $36 million, confirming that solar energy can provide real savings for both solar and non-solar customers alike.

According to Energy + Environmental Economics (E3), which produced the report, the state’s net energy metering program that gives Nevada residents full credit on their energy bills for the clean electricity they deliver to the utility grid has “no substantial cost shift to nonparticipants … given the current and proposed reforms to the program.” What’s more, accounting for the cost savings of avoided distribution upgrades, E3 estimates a net benefit of $166 million over the lifetime of solar systems installed through 2016.

SEIA says these findings are critically important because the Nevada PUC is currently reviewing whether solar customers should be in a separate class for future rate-making decisions.

According to SEIA, the 476 MW of solar generating capacity currently installed in Nevada ranks the state fifth in the nation in installed solar capacity. In addition, average installed residential and commercial photovoltaic system prices in Nevada dropped by 25% last year.

 

NYSERDA Authorized To Boost Renewables Deals

The New York Public Service Commission (PSC) has authorized the New York State Energy Research and Development Authority (NYSERDA) to begin issuing 20-year contracts for renewable energy projects, increasing the term from the previous limit of 10 years. Additionally, the PSC directed NYSERDA to issue one main-tier solicitation this year and at least one additional solicitation in 2015.

According to the PSC, the change was made to encourage more renewable energy developers to develop utility-scale renewable projects, such as wind and solar, to help reach New York’s 30% by 2015 renewable portfolio standard (RPS). Approximately 10 million MWh are needed to reach New York’s 2015 RPS target date.

The RPS process works through renewable energy certificates (RECs), which are awarded to developers through NYSERDA, which administers the RPS program. Because New York is a deregulated market, developers can either sell their power to utilities via a power purchase agreement or on the wholesale electricity market with the RECs added on.

To date, NYSERDA has conducted eight main-tier solicitations resulting in contracts for the annual production of approximately 4.6 million MWh of renewable energy.

In making the change, the PSC says that it has responded to the needs of developers, which have consistently stated a preference for stable, longer-term contracts to hedge risk. Providing developers of large renewable energy projects with longer-term contracts provides greater certainty of future revenues and reduces the risks related to financing the project, notes the PSC.

 

WTO Seeks To Eliminate Tariffs On Cleantech Trade

Diplomats from 14 World Trade Organization (WTO) members have launched a set of plurilateral talks intended to eliminate tariffs on so-called “environmental goods” - products such as solar panels, wind turbines and other technologies that help reduce greenhouse gas emissions and promote the use of sustainable energy.

On July 8, the representatives met in Geneva to start ongoing negotiations for an Environmental Goods Agreement (EGA). Taking part in the talks are Australia, Canada, China, Chinese Taipei, Costa Rica, the European Union, Hong Kong, Japan, New Zealand, Norway, Singapore, the Republic of Korea, Switzerland and the U.S. The WTO says the participating members make up 86% of global environmental goods trade, and the negotiations are open to any WTO member.

Earlier this year, the 14 governments revealed their intention to launch international negotiations to eliminate the tariffs. The talks will build on a list of 54 environmental goods put together by the Asia-Pacific Economic Cooperation countries in 2012 to reduce import tariffs to 5% or less by the end of 2015.

According to U.S. Trade Representative Michael Froman, global trade in environmental goods totals nearly $1 trillion annually, and some WTO members currently apply tariffs as high as 35% on these products.

Negotiators will meet regularly in Geneva to discuss substance and product coverage. The WTO says the first phase of the negotiations will aim to eliminate tariffs or customs duties on a wide range of environmental goods. A second phase will address the bureaucratic or legal issues that could cause hindrances to trade - known as non-tariff barriers - and environmental services. R