Skip navigation.
Home
Aggregating Energy Since 2006
We focus on energy policy and issues relating to climate change. Anyone may comment on an item; all views solely reflect the opinion of the author. Please email us if you have comments or questions.

REO - Good Faith Effort

Minnesota's Renewable Energy Objective requires utilities to make a "good faith effort" to generate 1% of the electricity they sell in MN from renewable sources in 2005. Every year after that, they must add an additional 1% of capacity - capping out at 10% by 2015. This REO will be revised by bills currently under consideration in the legislature.

The 'objective' is unique among states. Many other states have renewable electricity standards. They require utilities to meet the requirements.

Depending on your point of view, the "good faith effort" language of the statute is either a weakness or strength. The 'strength' arguments lies in its flexibility - they are afraid complying with a standard may raise prices too quickly or hurt a utility that is struggling with already declining demand. Those who see it as a weakness are afraid utilities will be able to easily escape the requirements.

As the 'objective' is required for Xcel due to other provisions in the statute, some have incorrectly interpreted the language as meaning it is not required for other utilities. It is. However, interpreting 'good faith effort' is difficult. Until now. Sortof.

The Minnesota Department of Commerce recently released "The Next Generation Renewable Energy Objective" which doubles as the required DoC report on the REO and Governor Pawlenty's proposal for an energy plan. The DoC website now offers the Next Generation Report and I have a pdf of the page that explains the MPUC Criteria and Standards for REO Compliance.

To meet the 'good faith effort' objective, the utility must have:

  • Demonstrated commitment to a comprehensive and specific plan to meet the REO, which details the steps to be taken to reach the renewable energy objectives, with an accompanying timetable
  • Demonstrated financial commitments to build or to purchase energy to meet the renewable energy objective, including project financing; purchase and ordering of equipment; and expenditures to hire construction firms if needed
  • Demonstrated commitments to construction of physical infrastructure to meet the REO, including ordering equipment; hiring construction firms; and/or contracting for REO sites
  • Demonstrated legal and contractual commitments to purchase or build the facilities to meet the REO, including but not limited to contracts for sites on which to build; contracts for labor and equipment; arrangements for insurance and liability; or, in the case of contracts for purchases to meet the REO, a negotiated power purchase agreement
  • Demonstrated commitment to meet regulatory requirements in timely fashion, including all permitting and other regulatory obligations
  • Demonstrated commitment to transmission access for REO facilities, including the initiation or participation in transmission studies or provision of interconnection and transmission service for REO facilities
  • Demonstrated commitment to openness and transparency, including full public access to all non-proprietary information relating to meeting the REO
  • Demonstrated analysis of each project's technical feasibility and its potential for negative impacts on reliability and rates, including:
    • Maintaining or improving the adequacy and reliability of utility service
    • Keeping the customers' bills and utility's rates as low as practicable
    • Minimizing adverse socioeconomic effects and adverse effects upon the natural environment
    • Enhancing the utility's ability to respond to changes in the financial, social and technological factors affecting its operations
    • Limiting the risk of adverse effects on the utility and its customers from financial, social and technological factors the utility cannot control.

Clearly, this good faith objective is not quite as murky as many of us feared. Nonetheless, the question is how the these guidelines will be evaluated. There is still a substantive difference between good faith effort and actually meeting the requirement.

As of now, most utilities are complying with the REO - something that may change as more renewables are required. Afterall, it only currently requires 2% of energy to come from eligible sources.

The DoC report for 2006 noted that one company - Missouri River Energy Services (MRES) - was not in compliance with the 2% objective but had nonetheless met the 'good faith objective' requirement. The docket for this case is publicly available.

The Commission found:

The Commission finds that MRES is in compliance with the non-biomass portions of the renewable energy objectives in 2005, and MRES made a good faith effort to comply with the nonbiomass objective in 2006.

Compliance with the renewable energy objectives statute is an ongoing process, not an event, but at present MRES appears to be substantially on track to meet the statutory requirement that by 2015 it generate ten percent of retail sales with eligible renewable technologies

Given MRES's agreement to purchase biomass generated energy and/or green credits, the Commission also finds that, in 2005 and 2006. MRES made a good faith effort to comply with the biomass objective portion of the REO statute, although it was not able to meet the biomass objective.

The biomass stuff may be moot anyway because several bills under consideration will remove the biomass mandate portion of the objective. Regardless, this offers a window into the "good faith" language of the statute.

If anyone has the time to investigate this MRES case, you may find more interesting information. Thus far, I have only given the doc a cursory glance and could not tell if MRES changed its plan or convinced the commission that it would meet the mandate after the commissions expressed doubts.

More reason for cautious optimism...

Environmental Defense reports that ten major corporations have joined forces with four environmental groups to form the United States Climate Action Partnership (USCAP). The group is calling for a national cap on greenhouse gas emissions and more international cooperation by the US to address climate change. The corporations are: Alcoa, BP America, Caterpillar, Duke Energy, DuPont, Florida Power & Light, General Electric, Lehman Brothers, Pacific Gas & Electric, and PNM Resources. The environmental groups are Environmental Defense, the Pew Center on Global Climate Change, Natural Resources Defense Council and the World Resources Institute.

USCAP

RES Update

I have been meaning to write something about the 18 Jan, 2007 Senate Energy Committee meeting. Minutes are not posted as of now, but will be linked to from that page when they are available. I don't think they have made an audio version of the hearing available, but you can stream video of it (Real Media format or Windows Media Player format).

I previously analyzed two of the RES bills that are under discussion in the committee. There are two others. Committee Counseler John Fuller created a really handy spreadsheet that shows how each of the four bills differ and where they agree (pdf). I want to thank him for making that available to us.

For those unfamiliar with a Renewable Energy Standard or Renewable Energy Objective, both require utilities to generate a certain percentage of the electricity they sell within MN from renewable sources. The standard provides more stringent penalties for failing to meet the requirements; the objective requires a good faith effort to meet it.

Committee Chair Prettner Solon has suggested that these bills will be merged into a single bill based on stakeholder agreement. It would appear that they will delete-all of S.F. 4 (Anderson's bill) and create a new whole new RES or REO proposal based on the pieces of the existing four. They will use S.F. 4 out of deference to Senator Anderson who has worked on this issue for 6 years. A group of stakeholders is meeting to guide this process.

I'm not really sure how this all works; Senator Dibble was also a bit concerned and wanted to make sure the Committee would still discuss the big issues. I think the idea is for the stakeholders to work behind the scenes to make it easier for the committee to create a popular, effective bill.

The rest of this post will cover the discussion in the committee as the bills were officially introduced and my thoughts on the issues that each brings up. Don Davis wrote an article for The Forum news about these bills also.

Senator Anderson introduced S.F. 4 first. She noted that mandating renewable energy helps the economy, saying it creates 40% more jobs per unit of energy when compared to fossil fuels. Later she said Minnesota lost 1000 good jobs on the Iron Range because a wind company chose Pennsylvania instead because it had a more aggressive standard than us. Also, Minnesota imports more electricity than any other state (apparently 1000 MW from Canada (Manitoba Hydro) and 1000 MW from the Dakotas alone).

Anderson tackled the big question in front of the committee - objective or standard? Minnesota's current "objective" is unique; many other states have embraced the standard. She noted that her bill features an "offramp" which I'll quote:

The commission must delay or modify the standard for an electric utility if it finds that
compliance with a standard is not in the public interest because compliance will either
produce undesirable impacts on the reliability of the utility's system or on the utility's
ratepayers or if it finds that compliance is not technically feasible.

Those who say that a standard is too inflexible often fail to note that the PUC can excuse a utility which has good reasons for failing to meet the requirements. Anderson suggested that the "good faith effort" language of the REO is too lax and difficult to interpret. The Department of Commerce objects to this, saying they have defined what a good faith effort is - more on that debate in a later post.

Senator Anderson's last argument for the word 'standard' argued that the "word in law" matters. The very word 'standard' sends a clear signal to wind developers that Minnesota will be a reliable market for them.

One of Anderson's other changes with S.F. 4 is to limit eligible renewable facilities to those built after 1974. She justifies this, saying we need to reduce emissions, stimulate jobs, and avoid disadvantaging some utilities over others.

Senator Anderson finished by saying this will not cost ratepayers more. It will save them money in the long term because "we all know the cost of coal will go up." This relies upon Congress creating either a cap & trade program for carbon emissions or implementing a carbon tax. Though she didn't phrase it in these terms, she was basically saying that those the wind strength may be variable, its cost is not. The fuel for wind turbines will remain zero cost for the life of the turbine.

Anderson's bill was followed by S.F. 129, introduced by Senator Tomassoni. Because the committee is hearing only RES specific provisions now, they are only discussing sections 2-7.

I feel that this is the weakest bill by a considerable margin, despite being a standard rather than an objective. First, I'll summarize Tomassoni's comments.

He started by pushing for the IGCC coal plant, saying that even with renewables, we still need coal and IGCC lends itself well to sequestion (capturing the carbon dioxide emissions and storing them deep underground). Greg Oxley, from the Minnesota Municipal Utilities Association then argued that utilities cannot meet 25% by 2020. He said they don't have enough transmission or time to build the needed amount.

To those who say we cannot make 25% by 2020, I refer you to John Tuma's post on Loon Commons which essentially reminded the committee that no one thought we could hit the moon in 10 years when Kennedy told us we were going to.

Tomassoni's bill suffers from many weaknesses and I hope it is mostly ignored when the committee puts together the final RES/REO proposal. Weaknesses include:

  • Instead of a list of eligible renewable technologies, it says all renewable energy technologies may be counted. Thus, the PUC will have to decide if hydrogen produced by natural gas counts as being renewable or not (for example). This is not a good idea.
  • 20% by 2020 is too lax. If we are not going to push as hard as possible, let's use Governor Pawlenty's 25% by 2025.
  • My favorite: the penalty for noncompliance cannot be more than the amount the utility would have expended to meet the requirements. This is not an incentive to meet the requirements. Penalties should exceed the cost of compliance (though we need an offramp like the one proposed by Anderson).
  • Finally, this bill significantly limits what evidence the PUC can use when considering the offramp provision - giving a big advantage to the utilities.

Committee Chair Prettner Solon next introduced one of her bills, S.F. 145 and Mike Bull, Deputy Commissioner for the DoC discussed it. Like S.F. 129, this is an omnibus bill and the committee is only looking at sections 2-8 currently.

Bull noted that this is the most progressive energy package ever by a Minnesota Senator - something to which Anderson later agreed. She and Bull actually complimented each other several times as the committee exuded bipartisan vibes.

At any rate, Bull noted that the Governor would prefer signing an omnibus bill but recognizes the committee will do as the committee will do. This bill calls for a 25% objective by 2025 with a fine of $.05 per kilowatt/hour of unmet requirements when utiliies do not meet the good faith effort bar. The PUC may count large hydroelectric sources if absolutely necessary (large hydro is usually not counted due to the damage to surrounding ecosystems). Compliance fines would be used to fund renewable energy projects in Minnesota.

Senator Dibble questioned what new generation would be if the Governor's proposal is implemented because it counts renewable sources built before 1975. The committee is supposed to be informed how this breaks down - essentially, the question is how many renewable MW MN has from before 1975.

Chair Prettner Solon then introduced S.F. 74 - an objective with blank % to be met by blank. The idea is to figure out the max we can do and fill in the blank with those numbers. It also allows the PUC to increase the requirement for some utilities who are better poised to add renewable capacity than others. This is a unique idea though I wonder if the PUC would actually do that.

The other major unique provision for this bill is that it allows utilities that go above and beyond the required CIP (Conservation improvement programs - these are intended to reduce electricity demand) to get credit toward their objective requirement. This could be tricky in practice to measure.

Wow. That was fun. Another exciting Saturday night for me. If you read this far, thank you. There will be more coming eventually.

Ethanol's Next Hurdle

The Institute for Agriculture & Trade Policy's Ag Observatory blog has a post about ethanol delivery concerns. I have been concerned about this issue as we appear to be overbuilding ethanol.

The industry is counting on boosting the sales of a higher blend of ethanol, E85, a fuel that is 85 percent ethanol and 15 percent gasoline, and is looking for Congress to help increase its availability and use. One bill introduced by Sen. Barack Obama, D.-Ill., a possible presidential candidate, would create a new tax credit to cut the price of E85.

But finding an E85 pump will continue to be difficult. Wal-Mart and other major retailers won't offer the fuel until mid-2008, at the earliest.

Won't the coming glut of ethanol necessarily lower the price? Especially if there is more ethanol than there are pumps... Naturally, this is a poor way to encourage biofuels, but it points to the need for better policies to encourage biofuels so we don't have the fits and starts the wind industry has dealt with in the U.S.

Update: With excess ethanol, perhaps the United States will export it.

There appear to be more problems with creating E85 pumps than politicians are talking about.

A federal tax credit of up to $30,000 was enacted to help defray the cost of converting stations to sell the fuel.

But the opening of new stations was slowed considerably by the decision of Underwriters Laboratories last year to suspend its certification of E85 service-station dispensers. UL, an independent organization that certifies the safety of everything from toasters to gasoline pumps, has decided to develop standards for certifying the pumps but first will have to research the impact of alcohol fuel on pump parts.

Wal-Mart and other major retailers have put off installing E85 pumps at their filling stations until UL finishes the certification process, likely in the second quarter of 2008, said Phil Lampert, executive director of the ethanol vehicle coalition.

That being said, Pennsylvania is doing good work with biofuels, which includes targeting a specific corridor for E85 pumps.

The grant round also includes $75,000 for Greater Philadelphia Clean Cities' E85 Corridor project, which previously received $283,380 in federal funding. The project will convert at least 12 additional fueling stations to provide E85, a blend of 85 percent ethanol and 15 percent gasoline, along a 200-mile corridor stretching from central Pennsylvania to the Philadelphia suburbs.

This is a much better idea than simply incentivizing new pumps everywhere. However, consumers are starting to realize that E85 sharply reduces gas mileage. No one wants to fill up more often. I'm guessing that people will not want to fill up more often even if they were saving money in the process. The whole problem is perception - and we know how often it lines up with objective reality.

Question for the ethanol experts: would E100 cars have more efficiencies due to the higher octane rating possible? Or am I totally out of my element?

CERTs conference summary

The MN CERTs conference was held on Tuesday and Wednesday this week...

 

MN CERTs Local Energy / Local Opportunities

Article Photo

On January 17, 2007 the Minnesota Clean Energy Resource Teams (CERTs) held their annual conference, Local Energy/Local Opportunities, in St. Cloud. CERTs is a program that is funded by several state agencies, private foundations and the University of Minnesota. Here is a brief description of the program from the CERTs web site:

“The Clean Energy Resource Team project is your opportunity to play a role in shaping energy conservation and renewable energy implementation for your region of Minnesota. A growing number of Minnesotans envision an energy future built on using energy wisely and generating energy from local renewable resources like wind, solar, biomass, and even hydrogen from renewable sources. By relying more on community-scale renewable energy resources and energy conservation, communities can help prevent pollution and create local economic development opportunities.”

CONTINUED HERE

 

Accident at Monticello nuclear plant

The Star Tribune reports that a minor accident occurred recently at Xcel's Monticello nuclear plant. Apparently a control box broke lose from its support beams and fell about a foot onto a pipe carrying radioactive steam. No leaks were detected in the pipe as a result. Interestingly, the plant had been running for a record 637 consecutive days without a shutdown. Most plants run for 12 to 18 months before being shutdown for routine maintenance and refueling. Xcel officials deny that this created a risk.  

The Nuclear Regulatory Commission has notified managers at four other nuclear plants around the country of similar age and design to check for this problem.

George Crocker of the North American Water Office is quoted as saying market forces are pushing utilities to push their plants to the limit. That's an interesting question but I'm not cynical enough to buy it just yet. Utility officials must be wary of negative publicity as any small accident gets reported in the news - much more so than other industries that work with hazardous substances. It seems to me that they would avoid taking shortcuts that might jeopardize safety.

RES Thursday

The Senate Energy Committee is preparing to debate whether it will beef up the Renewable Energy Objective (requiring utilities to make good faith efforts toward providing x% of their power from renewable technologies) or a Renewable Energy Standard (mandating utilities provide x% of power from renewable energies).

These bills will be discussed in Room 123 of the Capitol at 3:00 on Thursday, 18 Jan, 2007.

According to the Senate Energy Committee schedule they will discuss S.F. 4 and S.F. 74 as well as S.F. 145 and S.F. 129. I have not had a chance to review the 2 latter bills, they appear to be more all-encompassing bills that will establish either a standard or objective while dealing with many other issues as well.

Currently, there are 3 RES/REO-only bills under consideration although 2 of them appear identical to me. I stared at S.F. 4 and S.F. 113 for a good 10 minutes and could not detect any difference between them. Both bills create a RES. The 3rd bill is S.F. 74 and that would beef up the REO.

The Senate bills each change the requirements on small hydro. Previously, hydroelectric generation had to be below 60MW in order to count toward the REO. The new REO or RES would change that to hydroelectric sources below 100MW. The REO and RES both do not count Xcel's mandates from the Prairie Island deals as progress toward the requirement. This remains a signficant additional burden on Xcel which is already the largest purchaser of wind power in the U.S.

The existing statute told the Public Utilities Commission (PUC) to weight different renewable energies (so 2 solar credits might equal 1 wind credit) but that will be scrapped in any impending legislation. The PUC found those instructions cumbersome and lacking proper direction.

The bills revise Minnesota Statute 216B.1691. Let's look the beefed up REO first - S.F. 74.

The new REO requires 5% from eligible sources by 2010. From there, 11% is required by 2013, 15% by 2015, and 25% by 2020.

As before, the PUC has the authority to excuse a utility from meeting the REO if it would cause major problems (like increase rates too much).

The commission must delay or modify the standard for an electric utility if it finds that
compliance with a standard is not in the public interest because compliance will either
produce undesirable impacts on the reliability of the utility's system or on the utility's
ratepayers or if it finds that compliance is not technically feasible.

Subdivision 7 covers the compliance issue:

The commission must regularly investigate whether an
electric utility is in compliance with its standard obligation under subdivision 2a and if
it finds noncompliance must order the electric utility to construct facilities or purchase
credits to achieve compliance. If an electric utility fails to comply with an order under
this subdivision, the commission must impose a financial penalty on the electric utility
in an amount of five cents for each kilowatt hour the electric utility is out of compliance
with its standard obligation.

5 cents per kilowatt hour seems a fairly steep penalty. I could have sworn I heard 5 cents per megawatt hour in an energy committee meeting, but there it is in text. The difference between this new REO and an RES seems minimal given the financial penalty for not meeting. However, there is certainly more room to maneuver under the language of "good faith effort" rather than the RES demands.

The other major bill for consideration is S.F. 4, establishing a Renewable Energy Standard. If I am reading this correctly, it essentially maintains the REO until 2010, then uses the "thou shall" language instead of the "good faith effort" language after that to meet the same goals as above - 11% is required by 2013, 15% by 2015, and 25% by 2020.

As with the REO, the RES ends with a 5 cent per kilowatt hour penalty for each that it is out of compliance.

Given the similarity of the bills, I expect that the debate in the Senate Committee and later on the floor will be over why an RES is necessary when the current REO appears to be working and the new REO will nearly have the same penalties as the RES will.

Update: The RES thread continues with this post.

Coal rush runs into some hurdles

NPR had a story this morning talking about the rush to build coal plants in the U.S. and around the world. Apparently, costs have rapidly increased in recent months due to material and human resource shortages. Engineering firms with the knowhow to design new plants are maxed out at the moment, largely due to all the building going on in China. The article mentions one utility in Kansas that has seen the capital cost estimate for a new coal plant rising from $1 billion to $1.4 billion in just 18 months.

The article also discusses how the possibility of a future carbon tax is giving state regulators pause before approving new coal plants. All of this should at least give added incentive for utilities and regulators to consider renewable energy and conservation, which is good news.

Iowa and California

Jeff, from sustainablog has featured incoming Iowegian Governor Culver and his energy plan on the treehugger blog. Governor Pawlenty may have his work cut out for him if he wants Minnesota to beat Iowa for renewable energy innovation.

Newspapers around the state of Iowa on Sunday were reporting on or editorializing about governor-elect Chet Culver's proposed Iowa Power Fund, a $100 million investment by the state in renewable energy development. Culver proposed the Fund during his campaign, and made it one of the pillars of his economic development plan. Legislators on both sides of the aisle are considering Culver's proposal, but support for renewables seems solid across the board.

Energy issues appeared to be Culver's #1 focus in his campaign.

As Governor, I will make Iowa a national leader in job creation and new technology research and development with a, $100 million Iowa Power Fund ... Over the next four years, My Iowa Power Fund will attract more than three times this $100 million investment in new private sector funding for renewable and alternative energy industries in Iowa.

This will make the Iowa Power Fund the largest of its kind in the nation and will put Iowa on the map for the “Next Generation” power and fuel investors and entrepreneurs. The Iowa Power Fund will require that that the jobs created provide good wages and good benefits and that any company that misuses Iowa Power Funds or doesn’t provide the jobs promised will have to pay taxpayers back with penalties and interest.

In trend-setting California, the governer has signed an executive order mandating less GHG intensity from vehicle fuels.

California Governor Arnold Schwarzenegger is establishing by Executive Order a Low Carbon Fuel Standard (LCFS) that requires, as an initial goal, a 10% reduction in the greenhouse gas emissions (GHG) intensity of all passenger vehicle fuels sold in California by 2020.

This is rather interesting proposal. I was confused about it until I saw this:

The LCFS will use market-based mechanisms that allow providers to choose how they reduce emissions while responding to consumer demand. For example, providers may purchase and blend more lower-carbon ethanol (e.g., cellulosic ethanol rather than corn ethanol) into gasoline products, purchase credits from electric utilities supplying low-carbon electrons to electric passenger vehicles, diversify into low-carbon hydrogen as a product and more, including new strategies yet to be developed.

Watthead noted that this takes some of the responsibility for meeting the AB 32 targets away from the auto industry. This effectively undercuts their legal challenge that AB 32 (now more properly known as the Global Warming Solutions Act of 2006) is effectively a fuel efficiency requirement rather than a measure to reduce pollution. This act mandates all cars emit fewer GHGs per mile traveled ... there is a specific schedule somewhere with targets, but I cannot find it just this minute.

At any rate, I hope this will help California's case in the courts if the Supreme Court rules that the EPA cannot regulate carbon dioxide as a Clean Air Act pollutant. That ruling is expected in the next 6 months. I believe the challenge against California's Global Warming Solutions Act of 2006 is in a holding pattern until that ruling (but I could be wrong).

As for the other states, I hope to get more up here later. Until then, sustainablog has a roundup of some other states that are working on renewable issues as well.

Nuclear Storage in Doubt

Storage of nuclear waste remains my biggest concern with the technology. Now it looks like even our limited knowledge about how to store it moderately safely is in doubt. Nature is reporting that radiation degrades our storage containers more rapidly than we expected.

This is not to suggest that we have a problem with storage now or even in the near future. The question is what kind of a mess we are planning to leave for future generations.

Nuclear waste needs to be stored for hundreds of thousands of years. We thought we could store it safely for a couple of thousand but it looks like the technology is not there yet.

The problem is that the radioactive waste damages the matrix that contains it. Many of the waste substances, including plutonium-239, emit alpha radiation, which travels for only very short distances (barely a few hundredths of a millimetre) in the ceramic, but creates havoc along the way.

A fast-moving alpha particle knocks into hundreds of atoms in its path, scattering them like skittles. Worse still, the radioactive atom from which the particle comes is sent hurtling in the other direction by the recoil. Even though its path is even shorter than that of an alpha particle, the atom is much heavier, and can knock thousands of atoms out of place in the ceramic.

All this disrupts the crystalline structure of the ceramic matrix, jumbling it up and turning it into a glass. That can make the material swell and become a less secure trap. Farnan says that some zircons that have been heavily damaged in this way by radiation have been found to dissolve hundreds of times faster than undamaged ones. So if the ceramic gets wet, there could be trouble.

This does not make storing nuclear waste impossible, but it certainly suggests we have a lot more work to do. This strikes me as being a decent reason to wait for more research before adding more nuclear power plants.

Calendar

I have just added many events to the Energista calendar. The calendar covers many events around Minneapolis and St. Paul that focus on energy issues.

Many of the events I added are part of a series hosted by the Mechanical Engineering program at the University of Minnesota and are co-sponsored by the Initiative for Renewable Energy and the Environment (IREE). The full schedule of those events is available here. Many of the presentations are directly relating to energy and some directly focus on energy policy.

If you have events you would like to see listed in our calendar, please send them to us at calendar@energista.org.

Senate Energy Committee Meets

The Minnesota Senate Energy Committee (technically, Energy, Utilities, Technology and Communications Committee) met on Thursday for the first time. It will regularly meet on Tuesdays and Thursdays from 3:00 - 4:30 in Room 123 of Capitol.

The new chair is Yvonne Prettner Solon (DFL 07). Ellen Anderson, the previous DFL chair has moved to chair the Finance - Environment, Energy and Natural Resources Budget Division Committee. The meeting started with the requisite round of introductions. Several members admitted to being science geeks - something I was rather surprised by. Have we computer geeks so normalized 'geekhood'?

Chair Prettner Solon started with a number of the questions she expected to deal with in the future. The one I found most interesting was the question of the ideal amount of renewable generation we want in the system. I have focused for so long on getting more, I never really gave much thought to how much is enough...

At any rate, Chair Prettner Solon outlined a rough schedule for passing an REO or RES. Two bills are scheduled to be discussed on Thursday, 18 January. They will discuss S.F. 4 and S.F. 74. Both relate the RES/REO. If no one else checks them out in depth, I will do so before Thursday. Chair Prettner Solon hopes to vote on the bills by 25 January or earlier if possible.

The PUC representatives announced that the M-RETS (Midwest Renewable Energy Tracking System) request for proposals is due today and they hope to have the renewable credit tracking program running by July. As a software geek, I wish them well but never expect software to be delivered on time.

There was some talk about the recent WindLogics study of integrating wind power into the grid. While the costs are remarkably low for integrating up to 25%, the study did not include any costs resulting from increasing transmission capacity. Thus, the study is still good news for wind, but hard work remains.

Assistant Commissioner Mike Bull from the Department of Commerce reported on the current status of the renewable energy objective (REO) in Minnesota. Overall, the news is good but his study is incomplete. The DoC will release a report on 16 Jan that has the full results of who is complying.

The news on the REO is quite good overall as Bull reported that the utilities that provide more than 90% of power in Minnesota have been found to be in compliance and an additional 7% are in review. He also noted that there is a misconception that the REO is voluntary. He said it is required but also noted that some utilities have more difficulty that others based upon their changing demand (rate of increase or decrease).

Update: Loon Commons has a post discussing MEP's view on the Committee

Energy Challenge block leaders

Update: The contact person previously posted was for the Seward neighborhood only. Please contact MNCEE if you would like to have your neighborhood considered for this pilot program.

CEE is looking to get block clubs and neighborhood groups involved in the Energy Challenge. The paragraph below was included in an email sent out to my neighborhood group. I'm posting it here to help get the word out. I'm going to volunteer for my block. (Note: I do not work for CEE.)

 

Energy Challenge. The Minneapolis Center for Energy and Environment (MNCEE) would like to collaborate with neighborhood groups and block clubs to help Minnesotans fight global warming. They are asking for several neighborhoods’ help in developing and participating in a pilot project to work with block clubs to deliver energy saving equipment and information to their neighbors. They need your suggestions for ways to involve and empoweryour neighbors and for your help in contacting them. Would you be willing to?...convene block blub meetings to access the Energy Challenge website...pass out information, including free high efficiency lightbulbs or other energy saving equipment...urge your neighbors to encourage your legislators to take action on global warming...post a yard sign saying, for example: "Our block took the Energy Challenge to lower costs and curb climate change”...deliver coupons for products such as low flow shower heads and outdoor rated high efficiency bulbs. 

 

House Energy Committee Meets

The Minnesota House Energy Finance and Policy Division Committee met for the first time on Wednesday, 10 Jan. The minutes are not posted yet, but I attended the meeting and had a few notes.

Representative Hilty (DFL 08A) chairs the committee and suggested the committee will be meeting on promptly on time whether he is there or not. After a brief round of introductions, a man from House Research presented the recent history of energy legislation in Minnesota. I did not catch his name and it is not yet on the Committee website.

Deputy Commissioner Garvey from the Department of Commerce (of the combined Energy and Telecommunications Division) and Assistant Deputy Mike Bull then presented Governor Pawlenty's energy plan. They are making efficiency a cornerstone of the plan.

There are 3 broad parts of the plan. I tried to follow as best I could between the presentation and the questions but I may have confused a point or two.

The efficiency proposals include a 15% reduction in fossil fuel usage in Minnesota by 2015. After a question on how this would be measured, Deputy Commissioner Garvey suggested it would be measured on a per capita basis (rather than taking 15% off the fossil fuels we used this year).

I poked around a bit and I think the Minnesota population is expected to grow by about 500,000 people in that time. From what I can tell, this means we will be absolutely decreasing the amount of fossil fuels used by 2015 (if we meet the goal), but not by as much as we would expect from the 15% figure.

They want to change the CIP program (currently requiring utilities to spend x% on increased efficiency and load management) to requiring a 1.5% reduction in growth each year. I expect this will be quite difficult for the utilities operating in the sub and exurbs around the Twin Cities where growth is rapid. This cannot be popular among many utilities.

The third piece of efficiency is a massive increase in the number of energy star buildings in Minnesota.

Garvey went on to discuss the "Less Carbon" aspects of the Governor's plan. It includes working with other Governors in the region to achieve reductions, joining the Chicago Climate Exchange (or similar registry), requiring offsets for new fossil fuel generation facilities, and having the Center for Climate Strategies (I believe Garvey misidentified this group, saying it was from D.C., they are actually out of PA) develop a strategy. They have helped other governments create similar plans.

Finally, Mike Bull presented the Governor's proposal on strengthening the REO (Renewable Energy Objective - asks utilities to generate x% of their energy from renewable sources). The Governor wants to put a financial penalty into the REO and increase it to 25% by 2025.

The proposed financial penalty was 5 cents/MWhour if the utility does not make a good faith effort toward meeeting the REO. I may have missed some of the details here because I'm not sure if that penalty was per day or not.

The Governor remains opposed to a more stringent Renewable Energy Standard (RES or RPS depending on who you ask). They fear it could hurt the economy and therefore want an REO with more flexibility.

Mike Bull suggested the DoC will be releasing a report next week that details the progress of utilities under the current REO.

Wal-Mart Thinks Solar

How is Wal-Mart doing, one year after initiating energy efficiency programs? (link to article on sustainablog) It has learned some interesting lessons and appears to be committed rather than attempting to greenwash.

Already, some of the experimental technologies are proving to be successful. LED lights installed in exterior signs and grocery-, freezer-, and jewelry- cases use less electricity, contribute less heat and have a longer lifespan. Wal-Mart has been using LED lights for all building-mounted exterior lit signs for the last two years and now after 16 months of testing in the experimental stores, Wal-Mart has decided to integrate these lights into freezer cases in new Wal-Mart and Sam’s Club stores nationwide beginning in January 2007. Other energy efficient lighting opportunities continue to be monitored at the experimental stores.

In a different sustainablog post, it notes that Wal-mart has a "'request for proposals' (RFP) for solar power generating systems for some stores in California, Colorado, Connecticut, Hawaii, and New Jersey."

I have to wonder about choosing those particular states. The only common denominator between them in my limited knowledge is that they all have strong policies to encourage PV investment. Regardless of where it invests, it could seriously boost the PV market.

Joel Makower's blog on sustainable business examined this Wal-Mart RFP also.

The confidential RFP document, which I recently reviewed, is part of the company's stated commitment "to reduce our overall greenhouse gas emissions by 20 percent over the next eight years" and to "design a store that will use 30% less energy and produce 30% fewer greenhouse gas emissions than our 2005 design within the next 3 years," according to the RFP.

He goes on to comment:

What's the impact of all this? Wal-Mart doesn't mention a specific purchase size, but my sources tell me that the company could put solar on as many as 340 stores in the next few years. Assuming that each store utilized about 300 kilowatts of solar panels (it could be as much as 500 kilowatts), we're talking roughly 100 megawatts of solar. To put that into perspective, the solar system currently being installed at Google headquarters in California -- the largest single corporate solar installation in history -- is 1.6 MW, about 1/60th the size.

Of course, it's unclear whether Wal-Mart will install solar in all of those locations. The company could look at the bidders' numbers and decide to install solar at only a handful of stores -- or none at all.

I have to assume that Wal-Mart will not dive too deeply into solar. It is too expensive for a company made famous by fiscally conversative focus.

Wal-Mart is really working both ends of the energy spectrum though - from generating renewably to encouraging its users to become more efficient. WCCO recently did a segment on Wal-Mart and its push for compact fluorescent lights, as did the NY Times. The following is from the NYT.

At the same time that it pressured suppliers, Wal-Mart began testing ways to better market the bulbs. In the past, Wal-Mart had sold them on the bottom shelf of the lighting aisle, so that shoppers had to bend down. In tests that started in February, it gave the lights prime real estate at eye level. Sales soared.

To show customers how versatile the bulbs could be, Wal-Mart began displaying them inside the lamps and hanging fans for sale in its stores. Sales nudged up further.

To explain the benefits of the energy-efficient bulbs, the retailer placed an education display case at the end of the aisle, where it occupied four feet of valuable selling space — an extravagance at Wal-Mart. Sales climbed even higher.

In August 2006, the chain sold 3.94 million, nearly twice the 1.65 million it sold in August 2005, according to a person briefed on the numbers.

But to reach 100 million, Wal-Mart has to do much more — and that, executives concede, is where the biggest challenges rest. In the fall, the company began reaching out to competing retailers, Internet companies and even filmmakers.

The goal was to turn its sales campaign into a broader cultural movement.

We need to keep an eye on Wal-Mart. These energy-saving moves are great but cannot make up for the downsides to Wal-Mart in terms of how it treats its employees. I think Joel Makower put it best in his post:

It's far from a done deal, and there are significant hurdles to overcome. Not the least of these will be to accommodate Wal-Mart's voracious appetite for renewables as well as its legendary cost-cutting pressure. The company's opportunity is to help bring the price of solar down to earth. The challenge will be to do it in a way that doesn't negatively exploit its suppliers, or those that toil for them.

Syndicate content