High-Voltage Lines Wouldn’t Need State Action Under Senate Plan

(Here is an update on legislation pertaining to the transmission corridors meant to bring renewable energy from the central U.S. to the coasts):

March 10 (Bloomberg) -- U.S. regulators would take from states the authority to approve certain high-voltage power lines in order to speed development of renewable energy, under draft legislation released by a Senate panel today.

The proposal by the Democratic staff of the Senate Energy and Natural Resources Committee, posted online, would give the Federal Energy Regulatory Commission authority to approve lines that would carry electricity such as wind and solar energy.

President Barack Obama has called for the U.S. to build 3,000 miles of new transmission lines and double renewable energy use by 2012. The proposed legislation would eliminate an obstacle to the goal that has been cited by builders of power lines: individual states blocking multi-state projects.

“This is only one step toward a truly comprehensive energy security bill, but it is an important one,” said Robbie Diamond, president of Securing America’s Future Energy, a nonpartisan group that supports reducing U.S. oil dependence.

The draft measure would increase the authority FERC gained under 2005 legislation, which let it approve power lines if states failed to act within a year of an application. Federal siting authority would apply to power-line projects of 345 kilovolts or higher that are included in a FERC-designated group’s regional transmission plan.

Economic stimulus legislation signed last month by the president includes $11 billion for new transmission lines and improving the nation’s power grid.

The energy committee, led by Democratic Senator Jeff Bingaman of New Mexico, plans to hold a hearing on March 12 to consider new transmission-line legislation.

“It’s not a Bingaman draft, necessarily,” David Marks, spokesman for the committee, said of the proposal in a telephone interview. “These are ideas that the committee staff has proposed.”

Reid’s Plan:
The committee will also consider transmission legislation offered by Senate Majority Leader Harry Reid. Reid, a Nevada Democrat, last week introduced legislation that would give FERC authority to step in to approve transmission projects in areas designated as “renewable energy zones.”

Rob Thormeyer, a spokesman for the Washington-based National Association of Regulatory Utility Commissioners, said in an e-mail his group is “still analyzing” the legislation.

Renewable-power supporters, including wind-power developer T. Boone Pickens, have called for greater federal authority over high-voltage transmission. Renewable-energy projects such as wind and solar power are often located in areas far from major urban centers, where the demand for power is greatest.

A study released last month by regional grid operators estimated that more than $80 billion in new transmission infrastructure spending would be needed to get 20 percent of the eastern U.S.’s electricity from wind by 2024.

Source: Bloomberg.com

Policy to Unclog the Renewable Energy Development Pipeline

Across the cleantech industry in 2008, the pain was evident. Commercial-scale renewable energy developers suffered as most tax equity players suffered financial losses, thereby losing their “tax appetite”. Seed-stage cleantech suffered as Venture Capitalist’s tightened their purse strings and shifted focus to keeping existing portfolio companies alive. Public equity, both IPOs and follow-on offerings also dried up, forcing many cleantech firms to delay much needed manufacturing scale-up strategies. The nail in the coffin was a massive sell-off in energy commodities due to the downturn in global consumption. Lower demand for coal and natural gas used for electricity generation caused a sell-off to ripple through power markets and the global carbon and emissions markets - dropping carbon allowance prices in the EU-ETS, RGGI, and offset credit prices in the CCX, CCAR, and CDM markets. Renewable Energy Credits (RECs) also sold-off in many U.S. states making electricity produced from renewable energy generation assets less competitive in the market.

According to New Energy Finance, the newly elected Obama administration is looking to appropriate about $78 billion of the still-in-the-works $825 billion economic stimulus package to clean energy, energy efficiency, and smart grid technologies. This impressive amount of funding illustrates the new administrations long-term commitment to energy security and desire to rejuvenate the clean energy industry after a very challenging 2008.

The remaining challenge is to see how effectively new policy out of the House and Senate can deploy this capital. Unfortunately, a critical element to the bill given the current economic conditions has already been tossed out of the Senate’s version.

In the House version, project developers may forgo the benefit of the Production Tax Credit (PTC/ITC) altogether and instead receive the equivalent benefit in the form of a cash grant from a program administered by the US Department of Energy. This component was aggressively lobbied by the wind and solar industry just before Obama’s inauguration.

But in the Senate version, these DOE grants were tossed out. “Appropriating $78 billion dollars to clean energy without the DOE grants is the equivalent of turning the water tap on but not unkinking the hose”, industry lobbyists argue (New Energy Finance, Week in Review, 1/27/2009). This is because the economic downturn has dried up the tax equity that developers need to complete the bottom layers of the capital structure in renewable energy projects. Without sufficient equity capital, the project financing stalls before debt capital can be raised. The option to receive the DOE grants instead of federal tax credits is a quick-thinking patch to the bill that solves for the lack of tax appetite in the market today.

Many industry fingers are crossed that the Senate will recognize the current and foreseeable tax equity shortfall and agree to an alternative incentive structure.

the other march madness... part 2

After reading David Wogan's post and the associated comment by John, I started to write a comment of my own. This "comment" became so long, that I decided to make it its own post.
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Nice post, David.

The comment by John brings up a question that I would really be interested in leaning the answer to (by the way, I really enjoyed the article that John suggested).

Which matters more, race or gender? Does the very fact that we're talking about this mean that this is an influential piece of this years Democratic primary?

This question has been asked throughout the Clinton-Obama race. Would you rather have a female President, or a black President? Does it make any difference in your vote? In the decades since the Civil Rights Act, has the mentality surrounding gender and race truly changed?

Polls that I have read indicate that these are not the first thing that people consider when they are in the voting booth. In Nashville last weekend, I watched a local news station report on the top ten words that come to mind when people speak of the candidates. Included were the following:

For Obama - young, inexperienced, hope

For Clinton - experienced, solutions, *rhymes with witch*

McCain - old, veteran, experienced

With the exception of (potentially) one (the expletive I don’t care to repeat here), none of these words referred to the race or gender of the candidates. Does this mean that race and gender are not deciding factors in the Presidential race?

If this is true, then I am very proud of our country. The issues are what should matter... not the race or gender of the candidate. We should be talking about climate change, energy policy, national security, and economic prosperity for this country. To quote J.T. marsh “I care about who will be a better leader for this country. Race and gender are not a factor.”

I hope that citizens of this country agree with the Marsh perspective. However, despite this hopeful view, I still wonder how much male vs. female, black vs. white will influence the vote today here in Texas.