Tag:Puget Sound Energy

Puget Sound Energy Solicits Proposals for Green-Powered Electricity Resources
Washington State Legislation May Facilitate Cost Recovery for Coal Plant Retirement

Puget Sound Energy Solicits Proposals for Green-Powered Electricity Resources

By David L. BensonWilliam H. HolmesDavid P. Hattery, and Kristen A. Berry

On August 18, 2017, Puget Sound Energy (PSE) issued a Request for Proposals for the supply of renewable energy. Washington law requires that all electric utilities provide to their retail customers the option to purchase “qualified alternative energy resources” (RCW 19.29A.090). “Qualified alternative energy resources” range from wind and solar to hydropower and biomass.

PSE offers the three programs under which its customers may purchase renewable energy: Green Power, Solar Choice, and Green Direct. While the first two programs involve purchases of renewable energy credits (RECs) by residential, small commercial, and municipal customers, the Green Direct program encompasses long-term partnerships for renewable energy between PSE and large, commercial customers. The resources that PSE procures under this RFP may also be used to support a community solar program, if PSE chooses to develop one. PSE’s customers have provided input on what they wish to purchase, identifying wind and solar as the primary resources of interest. However, in this RFP PSE is willing to consider other offerings, including certified low-impact hydropower and biogas/anaerobic methane projects, as provided for in RCW 19.29A.090. Resources procured under this RFP will be in addition to resources to be acquired under Washington’s Energy Independence Act, RCW 19.285.

RFP respondents should be prepared to offer generation options that complement one of these three programs. Green Direct’s project capacity is limited to an expected annual production of 33 aMW. Alternatively, resources devoted to the Green Power and Solar Choice programs must be both under 5MW and located in the states of Washington or Oregon.

PSE will also consider selecting solar projects of different scales to support a community solar program. With respect to community solar, projects that meet the definition provided for in SB 5939 are preferred, including that the project be located in PSE’s service territory and retain eligibility for state incentives both by maintaining a maximum metering increment of 1000 kW and by connecting directly to the PSE system. The individual project size is flexible as long as it does not exceed 10 MW. For these solar projects, PSE prefers an online date of June 30, 2018 or earlier.

PSE will acquire energy generation from respondents through either (1) ownership arrangements or (2) a power purchase agreement with a term of at least four years (including power bridging agreements). PSE will consider several approaches to acquiring ownership or ownership interests in renewable energy projects, such as:

  • Implementing co-ownership arrangements with respondent while retaining dispatchability and control rights;
  • Purchasing development rights from respondent;
  • Entering into joint development agreements;
  • Transferring the interests to itself while respondent remains in charge of the development; or
  • Dividing the process into steps, with PSE’s purchase of power preceding its eventual receipt of ownership interests.

For power purchase agreements, respondents may only propose power purchase agreements of four or more years that both specify the type of generation assets utilized and provide assurances of those assets’ commercial availability on or before a specified date.

Responses to PSE’s RFP are due to PSE by October 12, 2017, with intent to bid due on August 30.

Washington State Legislation May Facilitate Cost Recovery for Coal Plant Retirement

With a partial veto from Governor Inslee on April 1, 2016, Washington State has enacted legislation that may help Puget Sound Energy (PSE) recover costs associated with the decommissioning and remediation of its interest in the Colstrip coal-fired plant, which is located southwest of Billings, Montana. PSE owns half of the older two units of the Colstrip plant.  Engrossed Substitute Senate Bill (SB) 6248 expressly authorizes the Washington Utilities and Transportation Commission (WUTC), after a hearing, to allow a utility to “to place amounts from one or more regulatory liabilities into a retirement account” for decommissioning and remediation costs for the older two units.  Thus the WUTC now has the express authority to allow PSE to use certain tax credits to help cover decommissioning and remediation costs at the Colstrip plant instead of returning those tax credits to customers over time.

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