Climate for Renewable Energy In Oregon

Transcription

1 In Oregon Environmental and Natural Resources Section Annual CLE David Van t Hof Lane Powell PC October 14, 2011

2 Oregon ranked #2 in the nation in clean tech jobs and policies in 2010 and 2011 Over $300 million in tax credits under the BETC program last biennum Several billion dollars invested in utility scale wind projects in past five years Residential solar projects on the rise

3 Overview of Primary Drivers for Renewables in Oregon Federal Investment Tax Credit (ITC), 1603 Cash Grant and Production Tax Credit (PTC) Renewable Portfolio Standards (RPS) Business Energy Tax Credit (BETC) Public Purpose Charge/Energy Trust of Oregon

4 Additional Drivers for Smaller Systems Solar Feed In Tariff Residential Energy Tax Credit (RETC) Property Tax Exemption Net Metering

5 ITC and 1603 Cash Grant Federal tax credit of 30 percent of project costs. Section 1603 Cash Grants of same amount were option for past two years in lieu of ITC. Cash Grants sunset at end of 2011 subject to Safe Harbor rules. Tax credit continues through Elimination of Cash Grants will adversely affect investment climate.

6 PTC Federal tax credit of 2.2 cents per kilowatt-hour produced for first ten years of project life. Prior to Cash Grant option was key incentive but largely ignored since Cash Grant option. Sunset at end of Limited use in 2012 due to Cash Grant Safe Harbor?

7 RPS Oregon Oregon Investor Owned Utilities required to meet 25 percent of their load with new sources of renewable energy by 2025 Smaller public utilities required to achieve either 5 or 10 percent by 2025 Phased schedule with 15 percent required by PGE and PacifiCorp both ahead of schedule so not a driver at present Increase requirement?

8 RPS California 33 percent of retail sales by 2020; 20% by 2014; 25% by Limit of 25% of utility requirement for tradable renewable energy credit (TREC) from out of state; reduces to 10% by Transmission constraints make this limited option for Oregon.

9 BETC Renewables In 2007, tax credit expanded to 50 percent on up to 20 million capital investment Over $300 million in tax credits last biennium Legislature drastically reduced incentives for large scale wind projects in 2009 and the entire renewables program in 2010 Legislature eliminated renewables program completely in 2011

10 BETC Cont. Program has been fully allocated and sunsets at the end of 2012 New program to replace it, but only $3 million appropriated for the biennium ODOE sells tax credits and creates discretionary grant fund Will Legislature increase funding in 2012 or 2013?

11 BETC Cont. Program for Manufacturing Projects of Renewable Energy Components still strong State income tax credit of up to $20 million (up to 50% of eligible costs for project) Program caps: $200 million for the biennium ending June 30, 2013; $50 million for the six month period starting July 1, 2013, and ending December 31, 2013

12 Energy Trust of Oregon (ETO) Public purpose charge on IOU customer bills result in roughly $30 million a year for investment in renewable energy ETO can only invest in projects up to 10 MW in size ETO buys down the above market costs

13 Feed in Tariff Requires IOUs to integrate 25 megawatts of small scale solar (up to 500 kilowatts per project) Very popular program; several allocation periods with declining payments from 69 cents to 37 cents per kilowatt hour Size is further limited to 90% of historic electricity use Ends in 2015 or once 25 MW have been built

14 RETC Tax Credit of up to $6000 ($2 per kw of generation over year) Used over four years ($1500 per year) Mostly used for solar; small amount of wind projects to date have received RETC Program capped only for third party systems ($10 million aggregate)

15 Property Tax Exemption Exempts Small Alternative Energy Systems from paying property tax Limited to net metered systems Expires in 2018

16 Net Metering Oregon larger utilities required to net meter for systems up to 2 MW for non-residential & 25 kw for residential; smaller utilities at 25 kw for nonresidential & 10 kw for residential Valued at avoided cost for the excess power. Annualized net metering Limited to offset part or all of a customer s electricity requirements

17 Project and Transmission Siting Utility Scale Projects and Transmission Lines are becoming increasingly difficult to site Sage Grouse and Migratory Bird Act particularly problematic issues for wind projects in Oregon and the Pacific Northwest US DOE recently created new categorical exclusions under NEPA for many types of renewable energy projects Faster track permitting for seven pilot transmission lines, including one in Oregon

18 Bonneville Power Authority (BPA) BPA position on Wind Energy Curtailment currently in litigation Chilling effect on new wind development in Pacific Northwest

19 Summary Where is Oregon headed? Oregon likely will lose its leadership position Drastic reduction in renewable energy projects in 2012 and 2013 Bright spots may be residential solar and bio-energy projects

20 Seattle Olympia Tacoma Portland Anchorage London