Global Power Law & Policy

Legal and Policy Developments Affecting the Global Power Industry.

 

1
Next Massachusetts Offshore Wind Solicitation Ready for DPU Review
2
The Energizer – Volume 41
3
The Energizer – Volume 40
4
Join K&L Gates at #ESACon19
5
The State of Blockchain In Energy? Buck Endemann Shares His Insights
6
Join Us for LSI’s Energy Storage Conference on June 13 & 14 In Seattle, WA
7
Integrating Renewables and Storage: Key Issues
8
Join K&L Gates at the Infocast Wind Power Finance & Investment Summit
9
K&L Gates Welcomes Sydney Energy and Infrastructure Partner
10
Executive Summary Available: RMI’s “A Corporate Purchaser’s Guide to Risk Mitigation”

Next Massachusetts Offshore Wind Solicitation Ready for DPU Review

By Elizabeth C. Crouse and Michael L. O’Neill

On March 27, 2019, Massachusetts’s three electric utilities submitted a draft of their second offshore wind request for proposals (“RFP”) to the state’s Department of Public Utilities (“DPU”) for review and comment. This second solicitation is a follow-up to the initial RFP under Section 83C of Massachusetts’s 2016 renewable energy mandate that directs its utilities to procure 1,600 megawatts (“MW”) of offshore wind nameplate capacity by June 2027.

The initial solicitation in 2017 resulted in the selection of the Vineyard Wind project to enter negotiations with the utilities. The utilities executed power purchase agreements (“PPAs”) totaling 800 MW of offshore wind capacity with Vineyard Wind. DPU is reviewing those PPAs currently. [1]

Even though DPU has not approved the PPAs for the initial solicitation yet, the utilities have moved forward with the second solicitation because Massachusetts law requires that the second solicitation be issued within 24 months of the first solicitation. The second solicitation contemplates procurement of at least 400 MW of offshore wind capacity, although the utilities will consider proposals ranging between 200-800 MW of capacity. According to this draft RFP, the utilities will consider a larger project proposal if it is “likely to produce more economic net benefits to customers based on the evaluation criteria in the RFP.”

Some of the key bidding requirements and evaluation criteria include:

  • Each bidder must be in possession of development rights for offshore wind generation in a designated federal wind energy area (not closer than 10 miles from an inhabited area) as leased after January 1, 2012;
  • Each bidder must submit at least one bid of a 400 MW project, or explain why it cannot, and can submit its projects in up to two phases;
  • Each bidder must propose a generator lead transmission line;
  • Each proposal for the energy generation and/or associated renewable energy certificates must be less than $84.23 per MW-hour on a nominal levelized basis as calculated based on the first solicitation; and
  • Proposals will be evaluated on direct contract prices and other costs and benefits, including:
    • Direct benefits of any applicable energy storage systems,
    • Impacts on Massachusetts’s greenhouse gas emission rates,
    • Specific investments in supply chain infrastructure, port facilities, workforce and the Offshore Wind Accelerator Fund, and
    • Demonstrated direct benefits to low-income ratepayers.

As proposed, the utilities plan to issue the RFP on May 17, 2019, and expect to receive confidential proposals by August 9, 2019 (with public redacted versions due by August 16, 2019). The utilities plan to select the winner(s) by November 8, 2019, and finalize the PPAs for DPU approval by January 10, 2020.

In comments on the second Section 83C solicitation, several wind developers raised concerns that a timeline that does not permit developers to demonstrate a construction start by the end of 2019 imperils the developers’ ability to qualify for the 12% federal investment tax credit (“ITC”). The production and investment tax credits are currently phasing out for wind, but wind projects that begin construction in accordance with IRS guidance in 2019 may still qualify for the credits at a reduced rate, specifically a 12% ITC or 40% of the maximum production tax credit rate applicable to electricity produced in a relevant year. Many of the commenters indicate that the 12% ITC is more valuable to their projects.

Although the utilities propose to select the winning bidder(s) before the end of 2019, the timeline in the solicitation does not suggest that the utilities and the winners will execute their PPAs and submit them for DPU approval by 2020. Any activity that the developers undertake to begin construction in 2019 based on the unapproved PPA may expose them to the risk that DPU will reject or modify the PPA after a developer has made some expenditures towards the project.

[1] See Offshore Wind Handbook, K&L GATES LLP AND SNC LAVALIN at 19 (2018), http://www.klgates.com/files/Upload/2018-08_OG_Offshore-Wind-brochure.pdf.

The Energizer – Volume 41

A biweekly update on blockchain technology applications, distributed energy resources, and other innovative technologies in the energy sector.

By: Buck B. Endemann, Benjamin L. Tejblum, Daniel S. Cohen, Toks A. Arowojolu, Olivia B. Mora, Abraham F. Johns

There is a lot of buzz around blockchain technology, distributed energy resources (“DERs”), microgrids, and other technological innovations in the energy industry. As these innovations develop, energy markets will undergo substantial changes to which consumer and industry participants alike will need to adapt and leverage. Every other week, K&L Gates’ The Energizer will highlight emerging issues or stories relating to the use of blockchain technology, DERs, and other innovations driving the energy industry forward.

To subscribe to The Energizer, please click here.

IN THIS ISSUE:

  • Ovo Invests in Electron’s Distributed Flexibility Marketplace; Saudi Aramco Launches Blockchain Pilot Program.
  • Puerto Rico Energy Commission Looks to Microgrids to Promote Electric Grid Resilience.
  • The Puerto Rico Energy Public Policy Act: 100% Renewable Energy Electric Grid by 2050

To view more information on these topics in Volume 41 of The Energizer, click here.

The Energizer – Volume 40

A biweekly update on blockchain technology applications, distributed energy resources, and other innovative technologies in the energy sector.

By: Buck B. Endemann, Benjamin L. Tejblum, Daniel S. Cohen, Toks A. Arowojolu, Olivia B. Mora, Abraham F. Johns

K&L Gates is pleased to announce that the Blockchain Energizer has returned from a period of rest and reflection! Recognizing the variety of important emerging technological innovations and structural changes affecting energy markets, we have decided to expand our focus beyond Blockchain to include distributed energy resources, microgrids, and other emerging energy trends — all the technological innovations driving toward a more efficient, more reliable energy system.

To reflect our broader scope, the Blockchain Energizer will be now known as The Energizer. We have expanded the team to include additional K&L Gates attorneys tracking these important developments. The Energizer will still be published about twice a month and the subscription is the same. We appreciate your support and have enjoyed hearing from the many readers who rely on the Energizer for a periodic dose of energy tech! We look forward to continuing to provide timely coverage of increasingly important developments.

To subscribe to The Energizer, please click here.

IN THIS ISSUE:

  • Growing Blockchain Interest in the Oil and Gas Industry.
  • California Mudslides Prompt Push for Montecito Community Microgrid Initiative.
  • New Rules in EV Charging in Pennsylvania.

To view more information on these topics in Volume 40 of The Energizer, click here.

Join K&L Gates at #ESACon19

K&L Gates is proud to sponsor the Energy Storage Association’s 29th Annual Conference and Expo

K&L Gates welcomes you to join us at #ESACon19. We are excited to have the opportunity to meet with you at this renowned conference and expo. The conference will be held on April 16-18, 2019 at the Phoenix Convention Center in Phoenix, AZ.

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The State of Blockchain In Energy? Buck Endemann Shares His Insights

By Sam Mire of the Disruptor Daily

It’s been more than 150 years since the first modern solar power plant was established in Algiers, but we still haven’t effectively harnessed the sun’s energy. Fundamental changes in the energy sector take time.

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Join Us for LSI’s Energy Storage Conference on June 13 & 14 In Seattle, WA

K&L Gates is pleased to participate in Law Seminars International’s upcoming Energy Storage Conference.  K&L Gates’ Portland partner, Bill Holmes, will act as event Co-Chair. Washington DC partner William Keyser will present on “Federal level: FERC Order 841 implementation and other developments in Congress, at the FERC, and at the DOE” and Seattle partner David Hattery will present on “Equipment procurement and construction contracts: Structuring warranties for battery life and performance over time; performance factors for other storage mediums.”

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Integrating Renewables and Storage: Key Issues

American Bar Association – Section on Environment, Energy, and Resources Telephonic Program Call

Register here.

As the importance of renewable energy in the power generation mix grows, there are an increasing number of contexts in which its deployment in conjunction with storage will enhance the number and character of services, the potential number of active parties, and the possibilities for enhancement of distributed energy applications. Major issues related to the exercise of federal and state jurisdiction under existing and proposed laws have arisen, which will be of increasing importance as the capabilities of storage technology management and the possibilities for its integration with renewable energy resources continues to accelerate. This program will highlight three key areas currently illustrative of this point: federal and state initiatives to encourage energy storage; RTO implementation of FERC order no. 841: energy storage development issues; the challenges and opportunities for utilities presented by energy storage integration.

Moderators:
Roger Feldman, Co-Chair, SEER Renewable, Alternative, and Distributed Energy Resources Committee
Aaron Levine, Co-Chair, SEER Renewable, Alternative, and Distributed Energy Resources Committee

Speakers:
Judy Chang, Principal, The Brattle Group
Joy Ditto, President and CEO, Utilities Technology Council (UTC)
Bill Holmes, Partner, K&L Gates

Sponsoring SEER Committees: the Renewable, Alternative, and Distributed Energy Resources Committee, the Energy Infrastructure, Siting, and Reliability Committee, the Energy Markets and Finance Committee, and the Science and Technology Committee

Register here!

You must pre-register to participate.

Registrants may include members of co-sponsoring Section Committees, other Section members, and others who are not currently Section members. Upon registration, you will receive more detailed information about the location and dial-in information.
This program will not offer CLE.

Join K&L Gates at the Infocast Wind Power Finance & Investment Summit

K&L Gates welcomes you to join us at the Infocast Wind Power Finance & Investment Summit.  As a Gold Sponsor for the Summit, we are excited to have the opportunity to meet with you!  The conference will be held on February 5-7 at the Omni La Costa Resort and Spa in San Diego, CA.

K&L Gates Highlights

We look forward to seeing you!

Executive Summary Available: RMI’s “A Corporate Purchaser’s Guide to Risk Mitigation”

As more corporations with different risk tolerances seek to procure renewable energy, the standard power purchase agreement does not suit them all. RMI’s new report details risk mitigation strategies for corporate buyers of clean energy that give them a new menu of options for managing risk in long-term deals.

K&L Gates Portland partners Bill Holmes and Teresa Hill provided insights on the development of this report. 

“Copyright 2019, Rocky Mountain Institute. Originally published on RMI Outlet. Republished with permission.”

Copyright © 2019, K&L Gates LLP. All Rights Reserved.