Florida Naturists for Energy Independence

Comment

Comment by Faye on January 22, 2009 at 9:05pm

Please forward this to anyone you can / see fit! THANK YOU!

CONFERENCE IN TALLAHASSEE FEBRUARY 3rd, 2009!

The Florida Alliance for Renewable Energy (FARE), with support from the Florida Municipal Electric Association (FMEA) and the Alliance for Renewable Energy (ARE) are pleased to invite you to join us for a discussion on:

Effective Renewable Energy Policies: Stimulating Job Creation, Long Term Investments, and Improving Energy Security

Featuring discussions on Feed in Tariffs, Net Metering, Rebates, and Gainesville, FL., the first municipality in the United States to introduce a Feed in Tariff policy.

Tuesday, February 3rd, 2009
12-7 pm in Tallahassee
Doubletree Hotel
101 South Adams Street
Tallahassee, FL 32301
(850) 224-5000

The focus of the conference is the deployment of renewable energy in Florida resulting in jobs and energy security. Experts from around the world and participants from various stakeholder organizations will discuss policies to stimulate vast investment in renewable energy to increase energy security and job creation in Florida. Building on Governor Crist’s vision of 20% renewables by 2020, this event will provide first hand experiences from Florida, other states and European countries on what policies are most effective in achieving renewable targets.

Solar on every rooftop!

Panels will include:
· ‘Lessons from Europe and US States’ – Deployment of successful renewable policies.
· Costs vs. Benefits – The potential opportunity if policies are right.
· What energy policies will drive the market and bring jobs to Florida?
· Florida based implementation.
· Legislative Roundtable.

Key objectives:
· Explore green jobs and long term investments.
· Discuss Renewable Energy Payments, also known as Feed in Tariffs, regarding their significant potential to address climate change, create new jobs and support the renewable energy industry
· Further develop policies that have driven the clean technology markets.
· Update on the Renewable Portfolio Standard rules from the PSC.
· Strengthen and Support legislative initiatives in Florida.
· Explore various levels of initiatives adopted by utilities.
· Build coalitions and network.
· The Gainesville Solar Feed in Tariff.

Who will attend: State legislators, environmental and energy advocates, renewable energy industry representatives,local and state utilities, local government officials interested in green job economic development, nonprofits and foundations committed to a renewable energy future.

Speakers will include: leading environmental organizations, Florida State legislators, investors, renewable energy industry organizations and leading energy companies.

Featuring:
· Gainesville Mayor Pegeen Hanrahan
· Florida State Representative Keith Fitzgerald
· Paul Gipe, Alliance for Renewable Energy
· Toby Couture, National Renewable Energy Laboratory
· Dr. Murray Cameron, Phoenix Solar
· Jerry Karnas, Environmental Defense Fund
· Barry Moline, Florida Municipal Electric Association
· Ed Regan, Gainesville Regional Utilities
· Christy Herig, Solar Electric Power Association
· Jerome Guillet, Head of Energy, Dexia

For registration and hotel info on this event please contact Faye Roller at faye@FAREnergy.org or visit www.FAREnergy.org

Comment by Richard R. Blake on December 14, 2008 at 9:44pm

It occurred to me that the auto bailout might present an opportunity to advance the Pickens Plan, especially in the area of conversion of automobiles to natural gas, here is the article, http://www.examiner.com/x-1863-Denver-City-Buzz-Examiner~y2008m12d13-What-the-auto-bailout-means-to-Denver > Perhaps we ought to begin contacting the next Congress and the Pres Elect

Comment by Roy R on November 18, 2008 at 11:18am

Florida Renewable Energy Freedom Act (or the Act Granting Priority to Renewable Energy Sources and Renewable Production Based Incentives)


Section 1
Act on granting priority to renewable energy sources
(Florida Renewable Energy Sources Act)
Article 1 Findings and Purpose

(1)The legislature finds that:

(a) the state has a vital interest in ensuring that its citizens have a reasonable opportunity to develop, own, and invest in renewable electricity/energy/energy generation;
(b) the economic benefits of local renewable energy development to Florida's economy are critical factors in state agency decision making regarding energy procurement and ratemaking;
(c) opportunities to own renewable electricity/energy/energy generation projects are particularly important to the future economic development and quality of life of the state's rural communities;
(d) the citizens of Florida have a vital interest in participating in the state's efforts to limit greenhouse gas emissions through the development and ownership of renewable electricity/energy/energy generation projects;
(e) the vast majority of Floridians are unable to benefit from the existing federal renewable energy tax credit and other financial incentives supporting renewable energy projects, and are therefore at a disadvantage relative to the large entities that are able to utilize these federal incentives; and
(f) development of renewable energy in Florida requires that the state provide
its citizens with an opportunity to sell power at a just and reasonable price to the utilities that serve them.

(2)The purpose of this act is to enable the rapid and sustainable development of Florida’s abundant renewable energy resources for the clean generation of electricity/energy.
(3)This act provides numerous benefits from the rapid development of renewable resources of electricity/energy generation for Florida citizens of today and those of tomorrow. These benefits include, but are not limited to

(a) Reducing the states reliance on imported energy for electricity/energy production,
(b) Improving the states energy security,
(c) Reducing the volatility of future electricity/energy prices,
(d) Reducing the long-term costs of electricity/energy,
(e) Opening electricity/energy generation from renewable resources to all citizens and encouraging competition,
(f) Providing equitable opportunity for all citizens to help increase the state’s renewable energy production levels,
(g) Protecting Florida’s atmosphere from air pollution and reducing the states greenhouse gas emissions,
(h) Protecting Florida’s natural resources,
(i) Placing Florida at the forefront of North America’s renewable energy revolution,
(j) Stimulating the development of new technologies, industry and jobs in Florida, and
(k) Creating a Florida marketplace for the development of renewable energy.

(4) This act is further intended to contribute to the increase in the percentage of renewable energy sources in electricity/energy supply to at least 5 per cent by 2011, at least 15% by 2015 and to at least 20 per cent by 2020. These are minimum targets and may be exceeded under this act.
(5) This act is further intended to simplify the awarding of contracts for the generation of electricity/energy with renewable resources and by doing so increase the transparency and equity of the electricity/energy generation system.

Article 2
Scope of application
(1) This act regulates
1. the priority of connections to the electricity/energy grid of plants generating electricity/energy from renewable energy sources, further providing that all such sources less than 50MW are considered an exempt wholesale generator and are as such exempt from regulation of the Florida Public Service Commission . and

2. the priority purchase and transmission of, and payment for, such electricity/energy by the grid operator or electricity/energy market regulator, and

3. a state-wide equalization system for distributing the cost of electricity/energy purchased by and paid for under the act among all electricity/energy consumers.

Article 3
Definitions
(1) Renewable energy sources shall mean hydropower, wind energy, solar energy, geothermal energy, energy from biomass including biogas, landfill gas, and sewage treatment plant gas as well as the biodegradable fraction of municipal and industrial waste as defined in section 366.91 Florida Statutes .

(2) Plant shall mean any independent technical facility generating electricity/energy from renewable energy sources. Several plants generating electricity/energy from equivalent renewable energy sources, if constructed within the application of this act and directly attached to building structures and commonly used installations technically required for operation shall be considered as one plant. This includes inverters, access ways, grid connections as well as measuring, administrative and control facilities in particular that are not technically required for such operation.

(3) Plant operator shall mean anyone who, notwithstanding the issue of ownership, uses the plant for the purpose of generating electricity/energy from renewable energy sources.

(4) Commissioning shall mean the first time a plant is put into operation, following establishment of operational readiness or its modernization, if modernization costs amount to at least 50 per cent of the investment costs required to build a completely new plant including all building structures and installations technically required for its operation.

(5) Capacity of a plant shall mean the effective electrical capacity that the plant may technically produce without time restrictions during regular operation irrespective of short-term deviations. When the relevant capacity is determined to calculate the PBIs paid under the act, the standby capacity shall not be considered.

(6) Grid system shall mean all the interconnected facilities used for the transmission and distribution of electricity/energy for general supply.

(7) Grid system operators shall mean the operators of all types of voltage systems for general electricity/energy supply.

(8) Production Based Incentives (“PBIs”) shall mean the renewable energy tariff price paid to a producer for Renewable Energy Sources

Article 4
Obligation to purchase and transmit electricity/energy
(1) Grid system operators shall immediately and as a priority connect plants generating electricity/energy from renewable energy sources to their systems and guarantee priority purchase and transmission of all electricity/energy from renewable energy sources supplied by such plants. After establishment of a register of installations pursuant to Article 15(3), such obligation for the purchase pursuant to the first sentence above shall apply only if the plant operator has submitted an application for entry into the register. Notwithstanding Article 12(1), plant operators and grid system operators may agree by contract to digress from the priority of purchase, if the plant can thus be better integrated into the grid system. When determining the charges for use of the grid, grid system operators may add any costs incurred in accordance with a contractual agreement pursuant to the third sentence above, provided that such costs are substantiated.

(2) The obligation under paragraph (1) first sentence above shall apply to the grid system operator or load serving entity that is most closely located to the plant site and is in possession of a grid technically suitable to receive electricity/energy if there is no other grid with a technically and economically more suitable grid connection point. A grid shall be deemed to be technically suitable even if– notwithstanding the priority established under paragraph (1) first sentence above – feeding in the electricity/energy requires the grid system operator to upgrade its grid at a reasonable expense; in this case, the grid system operator shall upgrade its grid without undue delay, if so requested by a party interested in feeding in electricity/energy. If the plant must be licensed in accordance with any other legal provisions, the obligation to upgrade the grid in accordance with the second sentence above shall only apply if the plant operator submits either a license, a partial license or a preliminary decision. The obligation to upgrade the grid shall apply to all technical that or passed into the ownership of the grid system operator.

(3) The obligation for priority connection to the grid system pursuant to paragraph (1) first sentence above shall apply even if the capacity of the grid system or the area serviced by the grid system operator is temporarily entirely taken up by electricity/energy produced from renewable energy sources, unless the plant does not have a technical facility for reducing the feed-in in the event of grid overload. The obligation pursuant to paragraph (1) first sentence above for priority purchase of the electricity/energy produced in these plants shall apply only if the capacity of the grid system or the area serviced by the grid system operator is not already used up by electricity/energy produced in other plants generating electricity/energy from renewable energy sources which were connected prior to these plants; the obligation to upgrade the grid system without undue delay pursuant to paragraph (2) second sentence above shall remain unaffected. In the event of non-purchase of such electricity/energy, the grid system operator shall, if so requested by the plant operator, provide proof of fulfillment of the conditions set out in the second sentence above in writing within four weeks and produce verifiable calculations.

(4) The relevant data on the grid system and on the electricity/energy generation plants, which are required to test and verify the grid compatibility, shall be presented upon request within eight weeks where this is necessary for the grid system operator or the party interested in feeding in electricity/energy to do their planning and to determine the technical suitability of the grid.

(5) The obligation for priority purchase and transmission of electricity/energy in accordance with
paragraph (1) first sentence above shall also be applied, if the plant is connected to the grid of a plant operator or a third party who is not a grid system operator within the meaning of Article 3(7) and if the electricity/energy is offered to a grid system in accordance with Article 3(6) via a merely budgeted transit through this grid system.

(6) The upstream transmission system operator shall guarantee priority purchase and transmission of the quantity of energy purchased by the grid system operator in accordance with paragraph (1) or (5) above.

Article 5
Obligation to pay advanced renewable energy PBI
(1) Pursuant to Articles 6 to 12, the grid system operators shall pay PBIs for electricity/energy generated in plants exclusively using renewable energy sources and purchased in accordance with Article 4(1) or (5) and transmitted through the grid operators system. The obligation in accordance with the first sentence above shall apply to all plants producing electricity/energy or those plants producing hot water used to offset electrically heated water.

(2) Pursuant to Articles 6 to 12, the upstream transmission system operator shall pay for the quantity of energy that the grid system operator has purchased in accordance with Article 4(6) and paid for in accordance with paragraph (1) above.

Article 6
PBIs paid for electricity/energy produced from hydropower
(1) The PBIs paid for electricity/energy generated by run-of-the-river hydroelectric power plants shall be based on the price needed for development plus a reasonable profit, differentiated by project size, and no less than that below.
<500 kW, $0.10/kWh,

Article 7
PBIs paid for electricity/energy produced from landfill gas, sewage treatment plant gas
(1) The PBIs paid for electricity/energy from landfill gas, sewage treatment plant gas shall be based on the price needed for development plus a reasonable profit, differentiated by project size, and no less than that below.
<500 kW, $0.10/kWh, and
>500 kW, $0.085/kWh.

Article 8
PBIs paid for electricity/energy produced from biogas
(2) The PBIs paid for electricity/energy produced from biogas gas shall be based on the price needed for development plus a reasonable profit, differentiated by project size, and no less than that below.
<150 kW, $0.145/kWh
150 to 500 kW, $0.125/kWh,
500 kW to 5 MW, $0.115/kWh, and
5 MW to 50 MW, $0105/kWh.

Article 9
PBIs paid for electricity/energy produced from geothermal energy
(3) The PBIs paid for electricity/energy generated in geothermal energy plants shall be based on the price needed for development plus a reasonable profit, differentiated by project size, and no less than that below.
<5MW, $0.19/kWh,
5 MW to 10 MW, $0.18/kWh,
10 MW to 20 MW, $0.115/kWh, and
>20 MW, $0.09/kWh.

Article 10
PBIs paid for electricity/energy produced from wind energy
(4) The PBIs paid for electricity/energy generated by wind-powered plants gas shall be based on the price needed for development plus a reasonable profit, differentiated by average specific yield in kWh/m2/year of rotor swept area as described below.
Prices or PBIs will be determined using a fixed price for all wind generation from year one through year five. Subsequent PBIs for years six through year 20 will be determined based on the average specific yield in kilowatt-hours per square meter of rotor area on a sliding scale, otherwise known as the ADEME (Agence de l'Environnement et de la Maitrise de l'Energie) model. The average specific yield will be the average of the sum of the first five years of production in kWh, less the year of maximum and the year of minimum production, divided by the rotor swept area.

All wind turbines will be paid a tariff of $0.105/kWh for generation in years one through five.

All wind turbines with an average specific yield less than 700 kWh/m2/year will be paid a tariff of $0.105/kWh for years six through twenty.

All wind turbines with an average specific yield greater than 1,100 kWh/m2/year will be paid a tariff of 0.08/kWh for years six through twenty.

All wind turbines with an average specific yield between 700 and 1,100 kWh/m2/year will be paid a tariff that is a linear interpolation between the tariff at 700 kWh/m2/year and that for 1,100 kWh/m2/year.

All offshore wind turbines with an average specific yield less than 1,100 kWh/m2/year will be paid a tariff of $0.132/kWh
All offshore wind turbines with an average specific yield greater than 1,100 kWh/m2/year will be paid a tariff of $0.09/kWh

Article 11
PBIs paid for electricity/energy produced from solar energy
(1) The PBIs paid for electricity/energy generated by plants using solar energy from photovoltaic shall be based on the price needed for development plus a reasonable profit, differentiated by project size or location and no less than that below.

Freestanding or open field: 500kW – 50MW, $0.385/kWh,
Commercial: 100kW – 500kW, $0.445/kWh,
Residential: <100kW, $0.515/kWh,

(2) The PBIs paid for electricity/energy generated by plants using solar energy from concentrating solar power shall be based on the price needed for development plus a reasonable profit, differentiated by project size and no less than that below.

<50MW, $0.12c/kWh,

Projects larger than 50MW will require to be approved by the Florida Public Service Commission in the normal fashion.

(3) The PBIs paid for electricity/energy generated by plants using solar energy for solar thermal water heating shall be based on the price needed for development plus a reasonable profit, differentiated by project size and no less than that below.

Commercial: > 20 Kwh $0.30/kwh
Residential: < 20 kwh $0.36/kwh

Article 12
Common provisions for purchase, transmission and payment of PBIs
(1) Grid system operators shall offer a Standard Contract to all qualified participants. The Standard Contracts shall be approved by the Florida Public Service Commission for conciseness, clarity, ease of understanding, and transparency. The Standard Contracts must include the prices or PBIs paid for each kilowatt-hour generated, the duration of the contract, and any adjustments of the PBIs for inflation. The Florida Public Service must provide grid system operators and load serving entities with standardized contracts within three months after passage of the act.
(2) Where Articles 6 to 11 provide for different minimum PBIs depending on the plant’s capacity or average specific yield, the amount of the PBIs shall be determined according to the share of the plant’s capacity in relation to the threshold value to be applied. For the purpose of attribution to the threshold values referred to in Articles 6 to 9 and notwithstanding Article 3(5), capacity within the meaning of the first sentence above shall be understood as meaning the ratio of the total kilowatt-hours to be purchased in the calendar year in question pursuant to Article 4(1) or (5) to the total number of full hours for that calendar year less the number of full hours prior to commissioning and after final decommissioning of the plant.

(3) The minimum PBIs shall be paid from the date of commissioning for a period of
20 calendar years as well as for the year of commissioning.

(4) The set-off of payment claims by the plant operator in accordance with Article 5 against a claim by the grid system operator shall only be permissible where the claim is undisputed or has been legally established.

(5) Upon request of the plant operator, the court responsible for the principal case may, at its own discretion and in consideration of the merits of the individual case, order the debtor of the claims referred to in Articles 4 and 5 by way of a preliminary injunction to connect the plant temporarily and purchase the electricity/energy generated by it and make an advance payment of an equitable and fair amount of money.

(6) Electricity/energy fed in from several plants may be billed via a shared metering device. In this case, the capacity of each individual plant shall be deemed relevant for calculating the amount of differentiated minimum PBIs. If electricity/energy generated by several wind-powered plants to which different rates of minimum PBIs are applicable is billed via a common metering device, the quantities of electricity/energy are attributed to the wind-powered plants in proportion to their reference yields.

(7) The minimum PBIs in accordance with Articles 6 to 11 shall not be deemed to include sales tax. The PBIs shall not be subject to any Florida state corporation tax and the Plant shall be exempt from any Florida property taxes from the date of commissioning for a period of 10 calendar years and the

(8) PBIs paid for each kilowatt-hour generated by renewable resources and other terms of the act shall be reviewed two years after the first contracts are awarded under the act to determine the robustness of the act. PBIs shall be determined by public consultation of a select Assembly committee made up of academic and engineering expertise, renewable energy stakeholders, select members of Florida’s Legislative Assembly and others by invitation. PBIs will be determined on the price needed for profitable development. Profitable development will be defined as a Profitability Index of no less than 0.1 to ensure rapid deployment of renewable sources of generation, and no more than 0.3 to prevent excessive profits and unnecessary costs to ratepayers.

(9) PBIs in Articles 6 to 11 will be indexed to 60% of inflation, that is PBIs will increase annually with 60% of inflation to protect long-lived capital investments such as renewable sources of electricity/energy generation.

(10) PBIs in Articles 6 to 11 apply to only those generators not applying for or receiving federal subsidies or federal tax credits or other federal incentive payments.

(11) PBIs in Articles 6 to 11 may apply proportionally to those generators applying for or receiving federal subsidies or federal tax credits or other federal incentive payments as determined to deliver a Profitability Index of no less than 0.1 to ensure rapid deployment of renewable sources of generation, and no more than 0.3 to prevent excessive profits and unnecessary costs to ratepayers. A system of proportional PBIs will be determined by the Florida Public Service Commission in a prompt, open, and transparent manner within three months of passage of the act.


Article 13
Grid costs
(1) The costs associated with connecting plants generating electricity/energy from renewable energy sources to the technically and economically most suitable grid connection
point and with installing the necessary measuring devices for recording the quantity of electrical energy transmitted and received shall be borne by the plant operator. In the case of one or several plants with a total capacity of up to 30 kilowatts located on a plot of land which already has a connection to the grid, this plot’s grid connection point shall be deemed to be its most suitable connection point; if the grid system operator establishes a new connection point for the plants, he shall bear the resulting incremental cost. Implementation of this connection and the other installations required for the safety of the grid shall meet the plant operator’s technical requirements in a given case. The plant operator may have the connection and the installation and
operation of measuring devices implemented either by the grid system operator or by a
qualified third party.

(2) The costs associated with upgrading the grid in accordance with Article 4(2) that solely result from the need to accommodate new, reactivated, extended or otherwise modernized plants generating electricity/energy from renewable energy sources for the purchase and transmission of electricity/energy produced from renewable energy sources shall be borne by the grid system operator whose grid needs to be upgraded. He shall specify the required investment costs in detail. The grid system operator may add these costs when determining the charges for use of the grid.

Article 14
Statewide equalization of costs across all electricity/energy consumers
(1) The transmission system operators shall record the different volumes of and periods of generation of energy paid for in accordance with Article 5(2) as well as the PBIs paid, and provisionally equalize such differences amongst themselves without undue delay and settle the accounts with regard to the quantities of energy and the PBIs paid pursuant to paragraph (2) below.

(2) By 30 September of each year, the transmission system operators shall determine the quantity of energy purchased and paid for in the previous calendar year in accordance with Article 5 and provisionally equalized in accordance with paragraph (1) above, and the percentage share of this quantity in relation to the total quantity of energy delivered to final consumers by the utility companies in the area served by the individual transmission system operator in the previous calendar year. If transmission system operators have purchased quantities of energy that are greater than this average share, they shall be entitled to sell energy to and receive PBIs from the other transmission system operators in accordance with Articles 6 to 12, until the other grid system operators have purchased a quantity of energy
equal to the average share.

(3) Utility companies which deliver electricity/energy to final consumers shall purchase and pay for that share of the electricity/energy which their regular transmission system operator purchased pursuant to the provisions of paragraphs (1) and (2) above in accordance with a profile made available in due time and approximated to the actually purchased quantity of electricity/energy pursuant to Article 4 in conjunction with Article 5. The first sentence above shall not apply to utility companies which, of the total quantity of electricity/energy supplied by them, supply at least 50 per cent in accordance with the provisions of Articles 6 to 11. The share of the electricity/energy to be purchased by a utility company in accordance with the first sentence above shall be placed in relation to the quantity of electricity/energy delivered by the utility company concerned and shall be determined in such a way that each utility company will receive a relatively equal share. The compulsory quantity to be purchased (share) shall be calculated as the ratio
of the total quantity of electricity/energy paid for in accordance with Article 5(2) to the total quantity of electricity/energy sold to final consumers. The PBIs as specified in the first sentence above shall be calculated as the expected average PBIs per kilowatt-hour paid by all grid system operators combined two quarters earlier in accordance with Article 5, less the charges for use of the grid avoided pursuant to Article 5(2) second sentence. The transmission system operators shall assert claims held against the utility companies in accordance with the first sentence above that arise from equalization in accordance with paragraph (2) above by 31 October of the year following the feeding-in of electricity/energy. Equalization for the actual energy quantities purchased and the PBIs paid shall take place in monthly installments before 30 September of the following year. Electricity/energy purchased in accordance with the first sentence above may not be sold below the PBIs paid in accordance with the fifth sentence above if it is marketed as electricity/energy produced from renewable energy sources or as comparable electricity/energy.

(4) If a valid court decision in the principal case issued after a billing statement pursuant to paragraph (2) first sentence or paragraph (3) above leads to any changes regarding the quantities of energy to be billed or the payments of PBIs due, such changes shall be taken into account in the next billing statement.

(5) Monthly installments shall be paid on the expected equalization payments.

(6) Grid system operators that are not transmission system operators and utility companies shall without undue delay make available the data required to perform the calculations referred to in paragraphs (1) to (5) above and present their final accounts for the previous year by 30 April. Grid system operators and utility companies may request that final accounts pursuant to the first sentence above be certified by 30 June and final accounts pursuant to paragraph (2) above by 31 October by a chartered or certified accountant. Plant operators shall make the data required for the final accounts of the previous year available by 28 February of the following year.

(7) Final consumers who purchase electricity/energy not from a utility company but from a third
party are placed on an equal footing with utility companies as defined in paragraphs (2) and (3) above.

(8) The Florida Public Service Commission is authorized to issue a ruling setting out the provisions on

1. the organizational and temporal framework for equalization pursuant to paragraph (1)
above, in particular with a view to determining the responsible party and ensuring optimum and equal forecasting options with regard to the quantities of energy to be equalized and burden trends;

2. determining or identifying a uniform profile in accordance with paragraph (3) above, on the question of when, including the run-up period, and how such a profile and the underlying data are made available and on

3. the specification of the data required in accordance with paragraph (6) above and how such data are to be made available.

Article 15
Transparency
(1) Grid system operators and utility companies, and any alliances formed by them, which deliver electricity/energy to final consumers shall be entitled to give notice to any third parties of the difference between the PBIs paid in accordance with Article 14(3) first and fifth sentences and their own average purchase costs per kilowatt-hour or the average purchase costs per kilowatt-hour incurred by the utility companies connected to their grid system during the last closed financial year (differential cost), where they provide proof of this by presenting a certificate by a chartered or certified accountant which will be published. When giving notice of the differential cost, the number of kilowatt-hours of electricity/energy produced from renewable energy sources and from mine gas on which the calculation pursuant to the first sentence above is based must also be stated. Costs that may be added to the charges for use of the grid shall not be shown separately.

(2) The grid system operators shall publish the data necessary to determine the energy quantities and the fee payments to be equalized in accordance with Article 14 by 30 September of the following year. Such data must show whether the grid system operators have purchased the energy quantities from a downstream grid and whether they have sold the electricity/energy to final consumers, grid system operators or utility companies delivering electricity/energy to final consumers or used it themselves. The Florida Public Service Commission is authorized to regulate the details of the publication requirements in a ruling.

(3) For the purpose of increasing transparency and simplifying the statewide equalization mechanism, a public register may be established through a ruling pursuant to the third sentence below in which installations for the generation of electricity/energy from renewable energy sources are to be registered (register of installations). Registration may be subject to a fee as defined in an ordinance pursuant to the third sentence below. The Florida Public Service Commission is authorized to issue a ruling that entrusts a subordinate state authority or a legal person under private law with the keeping of the register of installations and to determine any details regarding the register, the information to be registered, the registration procedure, data protection requirements, publication of data and the charging and level of PBIs.

Article 16
Special provision for energy intensive industries
(1) It is the intention of this act that energy intensive industries buying electricity/energy in the state of Florida may be excused from paying the equalization surcharge if such industries can prove hardship.
(2) The Florida Public Service Commission is authorized to begin a rule-making proceeding on the terms, transparency, and rationale for determining when an energy intensive industry has suffered hardship from the equalization surcharge upon passage of the act.
(3) The Florida Public Service Commission is to weigh similar provisions in other jurisdictions in North America and worldwide to maintain Florida’s competitive position.
(4) The Florida Public Service Commission is to weigh actual costs incurred and competitive positions eroded not to weigh proscriptive or future impacts.


Article 17
Guarantee of origin
(1) Plant operators may request a person or organization entitled to act as an environmental verifier or environmental verification organization in the field of electricity/energy production in accordance with an Environmental Audit to issue a guarantee of origin for electricity/energy produced from renewable energy sources.

(2) Such guarantee of origin must specify

1. the energy sources from which the electricity/energy was produced, listed according to type and major components, including the information to what extent the electricity/energy was produced from renewable energy sources

2. where biomass is used, whether it is exclusively biomass within the meaning of the ordinance pursuant to Article 8(7),

3. the name and address of the plant operator,

4. the quantity of electricity/energy generated in the plant, the period in which it was produced and to what extent it was paid for in accordance with Articles 5 to 12 and

5. the place, the capacity and the date of commissioning of the plant.

(3) Such guarantees of origin shall only be used if the information required in paragraph (2) above is complete.

Article 18
Prohibition of multiple sale
(1) Electricity/energy produced from renewable energy sources and from mine gas or landfill gas, sewage treatment gas, or gas from biomass fed into a gas network may not be sold or otherwise transferred more than once.

(2) Plant operators who received payment in accordance with Articles 5 to 12 shall not forward any guarantees for electricity/energy produced from renewable energy sources. If a plant operator forwards such a guarantee for electricity/energy produced from renewable
energy sources, the electricity/energy shall not be paid for in accordance with Articles
5 to 12.

Article 19
Clearing house
The Florida Public Service Commission may establish a clearing house to settle any disputes and issues of application arising under this act, which may involve the parties concerned.

Article 20
Progress report
(1) The Florida Public Service Commission shall every four years report on the state of affairs with regard to the introduction to the market of plants generating electricity/energy from renewable energy sources and from and the development of electricity/energy production costs in such plants and shall if necessary propose an adjustment of the amount of the PBIs to be paid in accordance with Articles 6 to 12. The progress report shall also assess the storage technologies and the ecological effects of the use of renewable energy sources on nature and landscapes.

(2) For the purpose of spot checks of electricity/energy production costs within the meaning of paragraph (1) above and in order to ensure the functioning of the equalization scheme pursuant to Article 14, plant operators whose plants were commissioned on or after 1 August 2006 and who have received payment of PBIs in accordance with Articles 5 to 12, and grid system operators shall, upon request, provide the Florida Public Service Commission and its authorised representatives with truthful and accurate
information about all facts that may be relevant for the assessment of electricity/energy production costs and of equalised energy quantities and payments of PBIs in accordance with Article 14. If the plant operators and grid system operators are traders within the meaning of the Commercial Code, the account books shall in addition be disclosed upon request where they may give information about facts that may be relevant for assessing the electricity/energy production costs and the equalized energy quantities and payments of PBIs. The principles of data protection shall be observed.

Article 21
Chief Executive for Renewables
(1) The Governor shall appoint a a Chief Executive Officer for Renewables reporting to the [Governor] whose office shall be established to promote the purpose and objectives of the Florida Renewable Energy Freedom Act and ensure that the various stakeholders, Public Service Commission and utilities collaborate to achieve its objectives

Section 2
Entry into Force, Expiry
This act shall enter into force on the day following the signature of the Governor of the State of Florida.

Comment by Eugene McLean on October 21, 2008 at 5:01pm

This is a "Letter To The Editor" I wrote a couple of year's ago and received some positive feedback to.
Having grown up in Texas, I am very sensitive to the concerns people have of offshore oil and gas drilling in Florida. I remember going to the beach as a child, you had suntan lotion in one hand, and WD40 in the other. The primary purpose of the tanning lotion wasn’t sun protection, but it made the tar balls less likely to stick to your skin. The petrochemical byproducts that did adhere to you, were removed by the WD40. Modern rigs are, fortunately, more environmentally safe.
The wars of the last fifteen years, Iraq I and II, and even the “War on Terrorism”, have as their basis America’s oil gluttony! Only through conservation and exploration of our own resources, while at the same time improving and building on alternative energy sources here at home, can we hope to secure our energy independence from socially and politically unstable parts of the world.
Florida’s short sighted worries about offshore drilling affecting tourism ring hollow to those who have lost sons and daughters in the “Oil Wars”. I look forward to the day when the lives of our children won’t be expended needlessly, just so Americans can tank up on cheap gas!

Comment by Andy Collazo on September 25, 2008 at 10:06pm

Folks, I’m so excited to announce Pickens U is finally here! Please feel free to contact me for details.

Pickens U is a new Pickens site specifically designed for students and alumni from colleges and universities across the United States who support energy independence for America.

Outreach on college campuses will be a critical component of our effort to build an Army of 1,000,000 supporters. We plan to mobilize students and alumni of colleges across America to support the Pickens Plan and prepare to take action during the first 100 days of the new Administration.

There are hundreds of college campuses across America, and we are interested in having Pickens Plan chapters on as many of them as possible – from small community colleges to liberal arts schools to prominent institutions to the largest state universities. The key is to find a motivated campus coordinator and an enthusiastic student population – with the right people in place, even the smallest of schools can make a big difference.

http://push.pickensplan.com/collegeMain.php

And best of all, we are in need of Campus Coordinators. This is an exceptional opportunity for a student or alumni to represent their College or University in a leadership role within Pickens Plan New Energy Army.

As a Campus Coordinator you will be responsible for the following:

o Be the public point of contact for their chapter of the Pickens Plan
o Recruit as many students as possible to be supporters of the Pickens Plan, with a particular focus on getting students to join our social networks on Facebook and/or Push.PickensPlan.com
o Host 1-2 events on campus between now and Inauguration Day to raise awareness for the Pickens Plan and recruit supporters
o Assist the New Energy Army regional leader with maintaining chapter webpages on Facebook and Push.PickensPlan.com
o Organize calls to action when we need Pickens Plan supporters from their chapter to contact their elected officials or take other action

The Pickens Plan is a bridge to the future — a blueprint to reduce foreign oil dependence by harnessing domestic energy alternatives, and buying us time to develop even greater new technologies.

Building new wind generation facilities and better utilizing our natural gas resources can replace more than one-third of our foreign oil imports in 10 years. But it will take leadership.

On January 20th, 2009, a new President will take office.

We're organizing behind the Pickens Plan now to ensure our voices will be heard by the next administration.

Together we can raise a call for change and set a new course for America's energy future in the first hundred days of the new presidency — breaking the hammerlock of foreign oil and building a new domestic energy future for America with a focus on sustainability.

You can start changing America's future today by supporting the Pickens Plan. Visit our website at www.pickensplan.com to join us. Email me directly for more exciting news.

Comment by Roy R on August 30, 2008 at 10:34pm

BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION

IN RE: Establishment of Rule on Renewable DOCKET NO. 080503-EI
Portfolio Standard. Filed: August 20, 2008
_____________________________________/

COMMENTS OF THE FLORIDA ALLIANCE FOR RENEWABLE ENERGY

The Florida Alliance For Renewable Energy (FARE) files its comments on the Commission’s proposed Rules 25-17.400, 25-17.410, and 25-17.420 and states as follows:

On July 13, 2007, Governor Crist signed a suite of executive orders to reduce Florida’s greenhouse gas emissions, increase energy efficiency, and remove market barriers for renewable energy technologies such as solar and wind energy. Since the executive orders were signed, Florida has stepped onto the world stage as a major marketplace for advanced energy technologies. It is not at clear that the PSC ruling fulfills the objectives laid out by the Governor.


Summary


We are confident that the PSC and their staff are well informed on the issues of renewable energy policies including the problems associated with RECs versus the benefits of other policies such as Feed-In Tariffs (known as Renewable Energy Payments or “REPs”). Consequently, we are deeply concerned about the direction Florida will be heading with regard to the future of the renewable energy industry in Florida, as set out in this draft ruling.

We do not believe that the RECs policies will achieve the renewable objectives set out by the Governor, nor do we believe that the RECs are a fair and equitable policy allowing equal opportunity to develop renewable resources; nor are the best value for ratepayers – in fact study after study have shown that RECs are the most expensive policy option for ratepayers. They contrast especially poorly when compared side by side with REPs.

The real concern for the long term growth of the renewable energy industry in Florida is that the REC program will benefit a few large out of state companies at the expense of many small and mid-sized companies already operating in Florida, their future growth, and their employees. RECs are complex, opaque, administratively burdensome and unpredictable. Few organisations have the capability to fully assess the risks associated with RECs.

We believe that under a REC policy, market concentration and an oligopoly of REC providers will develop from out of state companies with experience of both lobbying for and drafting RECs policies in other states and then operating under the mechanisms that have been implemented. Indigenous Florida renewable companies do not have this learning curve advantage and will be disadvantaged accordingly.

We do not believe that Florida legislators or ratepayers want a renewable program like RECs that actually discriminate against existing Florida renewable companies.

Internationally, utility Feed-In Payments (known as REPs in the US) have become the incentive of choice for increasing the uptake of solar and other renewable energy technologies, being implemented in over 45 countries around the world. This proven policy option is gaining ground because it takes the state's fiscal role off the table. Indeed, many of the recent calls to Solar Energy Industry Associations like FlaSEIA and Mid-SEIA, for REP policies, have come from businesses concerned about REC dependent markets.

A REP — which most people know as the mechanism that started Germany's solar boom — offers anyone with a solar system (or any renewable energy system) a fixed payment for the electricity generated by that system. The incentive is designed to provide the system owner a “reasonable rate of return.” Instead of relying on the state, utility companies provide the incentives by charging all ratepayers the extra cost borne by purchasing renewable energy. REPs provide long-term stability, which in turn reduces capital costs and allows for a much more diverse group of companies and individuals to invest in renewable. REPs are a simple, stable, inclusive approach to developing renewables in Florida that does not pick technology winners.

We urge the PSC to revise its ruling and replace the RECs policy with a renewable energy payment program.

Concerns with Draft Ruling and RECs

The House Energy Bill required the PSC to investigate the best polices for the deployment of renewable energy, taking into account: analysis of the technical and economic viability, fuel diversity, investment in Florida, lessening the states 98% dependency on imported fossil fuels.

While the PSC in this ruling has clearly looked at and considered RECs, it does not appear that any analysis or study has been done on other policies that allow utilities to “procure” renewable energy as was instructed by both legislatures. Other policies, such as REPs or production based incentives have been proven to achieve much more significant investment, and with it jobs, than REC policies. Furthermore all of the most widely published studies from the European Union to Nicholas Stern [UK Economist] to Summit Blue’s analysis in New Jersey have all concluded that RECs are a high cost option for deploying renewables.

It would appear remiss of the PSC to enter into draft rules without having considered these policies in detail.

Has the PSC undertaken a review of policies outside the US which account for the majority of the worlds renewables. The US now has only 8% of the world’s solar capacity – whereas Germany has over 50%. Germany installed 1100MW of solar capacity in 2007 versus 20MW in New Jersey (a comparable REC market).

Did the PSC undertake a direct study of the Germany REP policies that are now in place in 45 countries and most recently were introduced in Switzerland after a 2 year review that included analysis of mandated quota REC systems?

Were field trips undertaken by the PSC and staff to Germany and other REP countries to review first hand the success of these REP policies and contrast them with the failure of REC policies in states that have implemented them already?

RECs are poor value for ratepayers and restrict renewable deployment

There appears to be recognition amongst many European countries with short-term tradable REC markets that REPs may be a more efficient way to achieve rapid deployment of renewables as cost effectively as possible. In the Stern Review on the Economics of Climate Change, Sir Nicholas Stern noted that both standard offer contract pricing and renewable portfolio standards have proved effective at spurring renewable development “but existing experience favors price-based support mechanisms. Comparisons between deployment support through tradable quotas and feed-in tariff price support suggest that feed-in mechanisms achieve larger deployment at lower costs”. A paper entitled Feed-In Systems in Germany, Spain and Slovenia: A Comparison stated that “Feed-in tariffs have been successful in triggering a considerable increase of [renewable energy] technologies in almost all the countries in which they have been introduced and where their effectiveness was not significantly hampered by major barriers (administrative barriers, grid access, etc.).”
The analysis by Summit Blue Consulting for the New Jersey Board of Public Utilities on how to most cost-effectively transition the New Jersey solar market from rebates to market-based incentives showed that the feed in tariff policy (15-year full tariff) would be more cost-effective for ratepayers than renewable energy credits (SREC only). The SREC policy cost 57% more than the feed in tariff 15 year contract. The SREC was the most expensive policy mechanism out of 7 policies that were reviewed, and therefore the least value for money for ratepayers.

Exhibit x. Ratepayer Impacts ($ millions)
from Different Renewable Energy Policies in New Jersey





Any banker can explain why that is, in one word - “risk”. RECs are more risky than long term fixed price contracts. The PSC ruling appears to ignore the concept of risk capital. RECs with fluctuating prices, no certainty about contracts or grid access will be priced accordingly. Equity costs in the renewable energy power sector currently run at from 8 -15% versus half this cost for debt financing. Creating a policy instrument that encourages significant leverage is therefore a key litmus test for two reasons:

 Cost of capital is much lower
 Availability of equity is more constrained than debt

RECs fail this litmus test: as they typically result in less than 30% debt financing, versus 80-90% on REP renewable programs in Europe, and consequently more equity per MWs of renewable capacity means less renewable projects

Why is the PSC embarking on a policy mechanism that many independent consultants have concluded is the “least” ratepayer friendly policy.


RECs are a poor return on jobs compared to REPs

First Solar, one of the leading solar manufacturers in the world recently announced a major new manufacturing plant in Germany – why; because Germany has a robust domestic solar market driven by REPs. The poor experience of REC markets has not resulting in a single new manufacturing plant being built in those states.

The REC programs in place in the US have largely failed to stimulate the renewable jobs that legislatures and voters want. RECs encourage utility scale projects like the FPL announced projects in Florida. Utility scale projects generate many less jobs per MWs of capacity than smaller scale commercial or residential projects do; they also can be built by sub contractors resulting in no permanent jobs in Florida.

Several countries have seen a remarkable job return on their renewable policy programs. Direct jobs result from the use of local skilled workers in the development, manufacture, construction, installation and operation and maintenance of renewable generation. Manufacturing centers for solar thermal and solar PV components should be established in-state, as Germany has done, to maximize this benefit. Much of the financing can be done locally as well, stimulating jobs in banking. As of 2007, Germany has created 250,000 direct jobs across the whole renewable energy sector as a result of its significant growth of renewables. To date, Germany has employed nearly 50,000 in the solar industry alone.

These jobs were created by a feed in tariff or REP program NOT RECs.

RECs discriminate against distributed generation and Resource Diversity

RECs fail to take into account the benefits of distributed generation – delivery of renewable power at the point of consumption. The program design typically does not differentiate between different scales of projects – there is a one size fits all REC price – this clearly ignores the societal benefits and cost savings from distributed generation.

RECs with long-term contracts could reduce investment risk for developers and promote more renewables than RECs which rely solely on short-term markets. However, RECs still discourage smaller developers with greater transaction costs (such as legal costs) relative to larger developers , newer technologies relative to more mature technologies, and applications and locations which cost more to develop relative to applications and locations which cost less to develop.

RECs and Power Purchase Agreements

The ruling appears to focus solely on centralized generation by requiring PPAs. However, since most counterparties are reluctant to enter into a PPA unless the project size is 10MW or greater, PPAs will just put more barriers in the way of renewable energy.
Conversely, REPs appear to be more successful in allowing entry by smaller developers because they address both distributed and centralized generation and the tariffs obviate the need to negotiate power purchase contracts with a utility. REPs allow a wide range of resource sizes, applications and locations to develop simultaneously – which helps to explain the development rates that have been observed in Germany.

A key element to this is prioritizing renewable access to the transmission grid ahead of other non-renewable projects; transmission access should be monitored by the PSC and a mandate should require access to be provided within 60 days for projects below a maximum threshold (typically 20-50MW).

RECS – Poor Track Record especially for Solar

Let’s take the example of New Jersey and Maryland where REC programs have been operating.

New Jersey once had a vital and growing solar industry, developing thousands of new high paying jobs. Maryland in 2007 followed suite by passing legislation intended to create a market for both small and large solar companies. Under each of these states’ newly adopted REC-based incentive programs, these small to mid-sized companies quickly learned that REC policies are incapable of delivering adequate financial incentives for their client base.

RECs are seen by some larger companies as a low cost, market based policy that allow for broad based participation. However, there is evidence to show that REC based policies can be the most expensive incentive mechanism, requiring significantly more involvement and administration from the state. Additionally, the floating market mechanism feature of the REC is extremely volatile requiring that companies have large financial resources to navigate and master the complex nature of the commodity to truly benefit from this type of policy.


As Ted Middleton, President of a mid-sized, Maryland based solar company explained, “The ratepayer base thus foots the highest bill possible to fund ‘Big-Box’ style installations, and the little guys (farms, auto dealers) get a much lower cash benefit relative to each REC produced because they have little market leverage with remaining REC purchasers.” “The small systems just got completely left off the table,” says Middleton. “The state just said, '[The REC program is] too difficult, too risky for us to do, so we're not going to touch them.'”

“In New Jersey there's a lot of concern that the residential sector, while it may not be completely shut out, is in big trouble,” says Lyle Rawlings, secretary of the Mid-Atlantic Solar Energy Industries Association. “We need to do better at creating a system where small businesses and small projects can play the game. That's not the case right now.”

The current draft of the RPS with RECs appears primarily designed for only one or two large companies, in the same way that in Maryland one solar company was able to corner the market in solar RECs and contracted with a leading utility to supply it with 60% of the market. Pete DeNapoli of SolarWorld, a leading solar manufacturer says “Sure, the state of Florida will meet the RPS goals, but the bottom line is that the Governor’s goal of creating a vibrant renewable energy industry with thousands of new, high paying jobs will not be realized,” Pete adds. “With Feed-In Payment incentives, you get it all.”


FARE Preferred Policy – Renewable Energy Procurement through Renewable Energy Payments (“REPs)

As stated previously, we believe legislators intended the PSC to review policies that allow procurement of renewable power by utilities from 3rd party producers. It would appear remiss of the PSC to enter into draft rules without having considered these policies in detail.
Had the PSC undertaken a comprehensive review of policies outside the US which account for the majority of the worlds renewables, they would have seen that there is one clear policy winner.

The US now has only 8% of the world’s solar capacity – whereas Germany has over 50% - it also has ~ 20GW of wind capacity and one of the largest biomass industries. These all developed under a REP mechanism.

REP Policy
For the purposes of this filing, we define REPs as a set of renewable technology-specific fixed payments that electricity companies make to renewable energy generators based on renewable energy generation costs and a reasonable profit. Some countries, such as Spain and Slovenia, offer renewable energy generators an alternate calculation for their fixed payments – a premium on top of the spot market price for electricity. However, we do not view this as approach as best practice because it could 1) enable windfall profits due to the break of the link between payments and real generation costs and 2) increase investor risk due to the volatility in the price of electricity.
REP contract pricing is implemented through a charge added by the utility to consumers’ electric bills in proportion to their consumption. REPs provides set prices for renewable resources and leaves it to markets to provide the appropriate quantity of resources at those prices. Payments are guaranteed over a long time period (i.e., 20 years) to provide price certainty and market stability and thus reduce the initial investment risk for renewable energy developers. Best practice standard offer contract pricing policy designs have payment levels that are specific to the resource type and with further price differentiation by size and other important criteria (such as for stand alone vs. building integrated applications for solar PV). These payments generally accompany policies which require utilities to prioritize interconnection of renewable generation and procure a certain amount of renewable energy as part of their total resource portfolio.
The structure that Germany implemented is frequently referred to as a best practice and is being leveraged by other European countries such as Italy for solar PV as well as states that have recently proposed REPs such as Switzerland, France, Spain, India, California, Wisconsin and Ontario.

To summarize, Germany’s best practice design provides payments that:

• Prioritize grid access to renewable producers within 60 days
• adequately reflect generation costs and profit;
• are guaranteed for a long period of time (i.e., 10 or more years);
• are sustained over time once the generator is approved for admission into the program;
• decline each year for new generators that are being admitted into the program (this is referred to as tariff degression);
• differ by renewable resource (often depending on the stage of development that the technology is in); and
• are differentiated within each renewable resource to achieve specific goals (such as promotion of smaller installations, or building-integrated solar PV).


As of early 2007, approximately 70% of the countries in the European Union had some form of standard offer contract pricing. In comparison, approximately 20% had adopted renewable portfolio standards with RECs. Italy is the only European country to have both RECs and standard offer contract pricing.
However, Germany’s success with REPs has garnered recent interest by US states and European countries that have previously adopted RECs (such as the UK) as well as states and countries who have adopted neither to date. US states have acknowledged serious downsides associated with renewable portfolio standards implemented through RECs. New Jersey was one of the first states to note challenges associated with the development of renewable energy under renewable portfolio standards, such as the persistence of investment risk and price volatility. , Also, without specific set-asides for more expensive technologies, development has not occurred at a rapid rate.
Exhibit 1. Overview of Policies
to Promote Renewable Energy Development
Policy Name Definition Pros Cons Current Applications
Renewable Portfolio Standards (RPS) A policy to require utilities in the state to procure a certain amount or percentage of their load via renewable resources and to allow market mechanisms to determine prices. A best practice RPS should incorporate fixed long term contracts via RFPs and should have multiple markets for different resources especially for PV and clean distributed generation.. Provides certainty with regard to quantity Pricing can vary from year to year or from project to project to a large extent AZ, CA, CO, CT, DC, DE, HI, IA, IL, MA, MD, ME, MN, MO, MT, NC, ND, NH, NJ, NM, NV, NY, OH, OR, PA, RI, SD, TX, UT, VA, VT, WA, WI, Belgium , Italy, Poland, Romania, Sweden, United Kingdom
REPs (known in Europe as Feed-In Tariffs) A set of fixed, long-term incentive payments made to renewable energy generators Provides certainty with regard to pricing Quantity depends largely on adequate pricing In Place: CA, NJ, WA, Ontario, Austria, Bulgaria, Czech Republic, Denmark, Estonia, France, Germany, Greece, Hungary, Ireland, Italy, Lithuania, Luxembourg, Netherlands, Portugal, Slovenia, Slovakia, Spain, Switzerland
Proposed: IL, MI, MN, RI



A Comparison of Strengths and Weaknesses of Renewable Energy Payments and RECs
The exhibit below summarizes the strengths and weaknesses of REPs and RECs. The discussion of advantages and disadvantages is organized into following key characteristics: resource development and cost.
Exhibit 2. The Strengths and Weaknesses of REPs
and RECs with Regard to Resource Development

Characteristics REPS RECs
Provides Investment Certainty/
Price Certainty (also known as static efficiency) The price is certain with REPS. Pricing is clearly defined for the current year, as well as for future years. Less price certainty than with REPS. The purchase price of RECs change annually according to the level of the annual goals, as well as the definition of eligible resources and the availability of eligible resources.
Provides Supply Certainty Less supply certainty than with an RPS. There are no firm goals for supply. Also, there are no entities held responsible for not developing enough renewable resources, and no monetary penalty for under-achievement relative to development expectations. The only way to achieve greater supply is to modify the price. The supply is specified with an RPS, but compliance needs to be enforced in order for supply to be certain. Penalties for non-compliance help to ensure that the goal is met if the level of penalties is high. Additionally, supply goals can be set by resource to ensure a certain amount of development for a particular resource and/or type of resource (i.e., solar PV, distributed generation).
Allows for Resource Diversity Technology
Allows for faster development of resources that are not least cost due to differentiation of payment levels by resource.
RPSs without resource-specific goals tend to encourage the least cost technologies and maximize the development of these technologies.
Size
Allows for development of smaller-sized resources by differentiating the payment level for these resources. This levels the playing field for smaller resources with greater transaction costs.
Most RPSs do not have goals that are broken out by resource size. As a result, higher transaction costs for smaller resources make it easier for larger sized resources to offer lower pricing.
Application
Allows for development of different applications by differentiating the payment level for these applications. This encourages a greater variety of applications and the development of each application can be tailored based on policy goals.
Most RPSs do not have goals that are broken out by application (i.e., stand alone vs. building-integrated solar). As a result, the least cost application of the resource will be the one that is most commonly developed, despite the fact that other applications may be desired.
Location
Likely to drive more local development than an RPS. As REPS is likely to apply to states rather than regions, the majority of the benefits of renewable development remain in-state.
Likely to drive more out-of-state or regional development than REPS. Out-of-state and/or regional trading is often an integral component of an RPS. However, a state can design its RPS to promote in-state resources, thereby stimulating the local economy.

The Relationship between Project Financing, Profitability and Achievement of Development Goals

Renewable investment requires management of risk and uncertainty with regard to bank financing as well as project profitability. A paper entitled “Prices Versus Quantities: Choosing Policies for Promoting the Development of Renewable Energy” by Phillippe Menanteau provides the following more detailed explanation of the motivation developers need in order to participate in renewable energy markets projects:
“On the supply side, a supplier wishing to enter the market must be able to anticipate future prices and make his project ‘bankable’ in order to secure a loan to enable him to invest in new production capacity…. Project developers see [fixed prices] as ensuring a safe investment with better predictability and a stable incentives framework, as well as by the lower transaction costs for each project”.
The higher development levels that have been observed with REPs are likely due to the reduced risk and uncertainty relative to other policy options.

As discussed above, power and/or RECs associated with renewable energy projects under renewable portfolio standards in deregulated states have been sold though short-term contracts (especially in the Northeast). The use of short-term contracts is a significant barrier for new renewable projects with high capital costs. Renewable portfolio standards could require the use of long-term contracts just as practiced in the regulated states and some deregulated states. This would reduce uncertainty about profitability which would lead to reduced project financing costs. However, the bi-lateral, long-term contract pricing under renewable portfolio standards would likely remain private. REPs that determine and publicly provide the current as well as future payment levels for different renewable projects provide clearer, more stable signals to project developers. Profits are known upfront with REPs. Ensuring a reasonable level of profit can drive manufacturer efficiency and innovation because funds can consistently be made available for further research and development.
The Impact of the Use of Out-of-State Resources
A renewable portfolio standard is better equipped to meet some of the state’s renewable energy development goals using out-of-state renewable energy resources. The main reason for developing and/or purchasing power from out-of state resources is that they can be more cost-effective than in-state resources. Conversely, in states where in-state resources are more costly than out-of-state resources, REPs are more effective at promoting development of these in-state resources. Given the fact that Florida has in-state resources that may cost more to develop than resources in other states, careful consideration needs to be given to the use of out-of-state resources as this may compromise the state’s ability to meet goals related to jobs and stimulation of local manufacturing.


Exhibit x. The Strengths and Weaknesses of Standard Offer Contract Pricing
and Renewable Portfolio Standards with Regard to Cost

Characteristics REPS RPS
Administrative
Costs It is overall less time consuming to implement than an RPS, as setting the prices in the first year and any degression over time are the main components that need to be established. Pricing differentiation beyond resource, resource size, and resource application is less time consuming. Generally more time consuming to implement than REPS, as the following needs to be established; quotas, geographic eligibility, REC trading rules, methods and verification, alternative compliance payments and procedures. As a result, there are administrative limits to the number of development goals (i.e., markets) that can be established and maintained.
Investment Costs Lower than RPS since banks can lower the interest rate for loans due to greater price certainty. Higher than REPS due to lesser price certainty.
Bill Impact Certainty Less certainty around ratepayers' electric bill impacts than with an RPS. This is due to the fact that the proportion of development via each resource is unknown. However, REPS tends to ensure more homogenous costs over time and avoids sudden price spikes. Greater certainty of ratepayers' electric bill impacts as compared to REPS. An RPS has a set development goals for each resource. However, this is only true if the price of these resources do not change greatly from year to year.
Short-Term Cost Minimization Geographic Participation/Eligibility
Since REPS applies to in-state resources only, the cost of the resource is directly tied to in-state development costs. When in-state resources are limited and/or costly, the overall cost impacts could be high.
Costs could be lower as compared to REPS in the short-term as many RPS policies grant eligibility to out-of-state resources that are lower cost than in-state resources. Trading with other states or regions enables the use of lower cost renewable resources to meet requirements.
Overpayment Minimization
Due to the high level of price differentiation and degression that can be implemented, REPSs may be better than RPSs at preventing overpayment to solar applications with lower costs than others.
As it is more time consuming to implement different goals for different types of solar applications, for example, less expensive solar applications could realize windfall profits under an RPS.
Fosters Innovation to Minimize Long-Term Costs Costs could be lower as compared to an RPS in the longer-term. Since REPS is sometimes set up to decrease the prices received by new installations each year, manufacturers have the incentive to reduce costs quickly. Costs could be higher as compared to REPS in the longer-term. While there will be competition between developers for business, there is little incentive for manufacturers to bring down the cost of new technology quickly.

Competition and Costs over the Life of the Policy

A renewable portfolio standard “encourages competition among renewable developers to meet the targets in a least-cost fashion”. However, due to the lack of a firm payment structure that provides insight into future payments, there is less of a longer-term price signal to developers. In years where there is lower supply of renewable resources paired with high demand and prices remain high, there is less motivation for developers to consult with manufacturers about bringing the costs of these resources down. Several studies comparing the potential costs of renewable portfolio standards to standard offer contract pricing have suggest that renewable portfolio standards provide greater opportunity for collusion amongst larger players who want to the keep the prices of renewable resources high. , This is not a concern with standard offer contract pricing because payments are determined by the PSC.

With REPs, developers know their payments in the first year. They also have a general idea of what their payments will be 3-5 years out. REPs sends a clear, predictable, long-term price signal, and a degression structure motivates developers and subsequently manufacturers to reduce costs because they know that the payments will be lower in future years than what they are in the first year. , Also, clear signals can enable manufacturers to better allocate funding to research and development in order to lower capital costs. In other words, competition amongst manufacturers to quickly bring down the cost of their products may be more desirable than competition amongst developers. Since REPs are better positioned to provide price signals that will reach manufacturers, REPs will result in lower costs over the life of the policy compared to RECs.

Comment by Getulio Bastos on August 28, 2008 at 3:35pm

Gentlemen,

This is a letter I just sent to Congressman Ron Klein of West Palm Beach and Florida Senator Bill Nelson. I suggest that all of our members do something similar to provoke some reaction from our politicians.

Mr. Bill Nelson,

Florida is one of the worst hit states in the Real Estate crisis. Our tourism industry is being hit tremendously by the gasoline price hikes. And our state is one of the least served with alternative forms of energy. But we can do something about it and one of the things we can do is to facilitate the creation of an infrastructure to sell, install conversion kits in our cars and distribute natural gas within our region.

There are entrepreneurs interested in creating this infrastructure, but the major obstacle is EPA, which has no scientific reason to keep their antique regulations for the conversion of our cars to use natural gas in our roads. There are no technology barriers at all.

It would save our taxpayers a lot of money in the near future while providing for a new source of employment for thousands of Floridians in a brand new industry. In training of new mechanics, installation of conversion kits, installation of natural gas filling stations, distribution of natural gas across the state and maintenance of it all.

There’s a Bill going through Congress now, entitled “THE DRIVE AMERICA ON NATURAL GAS ACT OF 2008” introduced by Senator James Inhofe of Oklahoma.

If you need to research more about it, please visit www.push.pickensplan.com. Please, click here if you want to see the reactions to my discussion Brazil is 100% oil independent. Why aren't we?.

While there you can also see several pictures and videos related to the usage of natural gas as a vehicle propulsion energy both in Brazil and the US.

As a citizen I urge you to support this Bill to pass and provide easier means for our people to expend less on their cars while creating a new industry for the state of Florida.

Your voter,

Getulio Bastos

Click here to send your message to Senator Bill Nelson
Click here to send your message to Congressman Ron Klein
...

Comment by Roy R on August 25, 2008 at 8:40am

Solar Monopolies in Florida! The REC Wrecking Ball – Coming to a State Near You


Florida’s electric utility system is a regulated monopoly. Now, with passage of the Florida Energy Bill this week, legislators in Tallahassee have set a course, that unless rectified, will most probably extend similar monopolies into the fastest growing energy markets – renewables and solar, and in doing so decimate the existing Florida solar industry in favor of larger Wall Street backed multinationals. It seems inconceivable that once policymakers and legislators fully comprehend the implications of the direction that they are heading in, that any true Floridian will actually support this – but stranger things have happened. Now is the time to speak out.

Buried in the Florida House and Senate Energy bill is language that would allow the state electricity Regulator, the Public Service Commission, to introduce policies known as renewable energy credits (or RECs) as a way to stimulate solar and other renewable energy electricity production. RECs are basically bought by utilities from renewable producers and certify that the utilities have acquired a unit of renewable energy, and as such can be used as a mechanism to force utilities to meet certain renewable targets. The problem is that there is growing evidence from other states that have introduced RECs, that these policies are radioactive. Maryland, introduced RECs earlier this year. Even before the policy was signed by the Governor, the largest utility announced it had signed a multi-year transaction to buy solar RECs from SunEdison, a major international solar company. That deal gave the 2 companies a 30% share of the market for 2008 and 60% for 2009 – a quasi monopoly. This crowds out the existing local solar industry since it leaves them with only 40% of the market to participate in. Job losses will follow.

New Jersey has an ill thought out solar RECs policy as well. Smaller residential solar companies are in decline and shedding people. Says Lyle Rawlings, CEO of a large NJ solar integrator “the market is in collapse right now, with projects being canceled and many of the solar businesses that grew under the rebate program now hanging on by their fingernails. The REC market literally is not working, except for a handful of companies who have been able to get long-term REC contracts - we know that the market concentration is very unhealthy, and we think it’s an improper way to deliver a solar incentive program”. Furthermore NJ will be missing its RPS target primarily because of these issues. So based on recent market evidence RECs are a wrecking ball for local renewable companies.

The problem stems from the fact that utilities retain the power to decide who they buy RECs from, and utilities quite naturally won’t want the hassle of buying small quantities of RECs bilaterally from household solar systems or small commercial providers – they would much prefer to deal with one or 2 large aggregators of the RECs doing the largest commercial renewable projects, so they arrange bilateral deals direct with them. Whats wrong with this?

Since the utilities prefer to buy in bulk they will pay more for these aggregated RECs – typically up to 80-90c in the $, whereas for residential or small commercial RECs the value is 50c or less (this is the figure the State of Maryland has proposed should they become the default residential aggregator). Consequently while the RECs incentive covers 70% or so of the build out cost of the larger commercial projects, thus providing a massive contribution to the companies least in need of it, they only provide 30% of the cost of the small systems that are the life blood to the local solar integrators. This leads to a curtain call for the local industry all done with rate payer and tax payer money that has effectively been laundered to the benefit of the larger commercial REC suppliers. And funnily enough who is supplying the policy language for the legislatures and PUCs? The answer is the very same solar companies that will benefit from them!

There are already strong indications in Florida that these same out of state large solar companies are lining up multi year contracts with Florida utilities in excess of 100MW that could sop up a majority of the RECs that would become available to the solar industry – leaving next to nothing for the local solar integrators to compete for.

As Ted Middleton, Managing Member of a Maryland solar company explained, “The ratepayer base thus foots the highest bill possible to fund Wal-Mart installations, and the little guys (houses) get a much lower cash benefit relative to each REC produced because they have little market leverage with remaining REC purchasers”

Florida legislators have just voted to approve renewable policies such as these – thankfully the energy bill both requires the PSC in Florida to fine tune these policies and then seek reaffirmation from the legislature in 2009. Maybe in the intervening months, the Governor’s office and Florida policy makers including the PSC should ask smaller NJ and Maryland solar companies as well as the Florida SEIA companies if they think these REC policies are working. They will likely hear a resounding NO!

“Unfortunately, the language that passed through the legislatures favors a REC based policy. Without any change, for the foreseeable future anyway, Florida could end up with renewable energy policy primarily designed for only one or two large companies, just like what has happened in Maryland and New Jersey,” comments Pete DeNapoli, FlaSEIA Director. “Sure, the state of Florida will meet the RPS goals, but the bottom line is that the Governor’s goal of creating a vibrant renewable energy industry with thousands of new, high paying jobs will not be realized,” Pete adds. “With Production Based Incentive or Feed-In Tariffs, you get it all.”

What legislators and policy makers instead need to do is look at the highly successful renewable policies that have been in place in Europe for years and resulted in both the rapid deployment of renewable electricity projects, a massive expansion in local jobs from it, all done with no taxpayer expense and minimal increases in electricity prices. Germany has 250,000 employed in renewables generating $30BN in sales. At the very least Florida policy makers and legislators should do what the utility solar association SEPA is doing, and undertake a trip to Germany to review first hand how Germany has a vibrant solar and renewable industry with ~ 4000MW of solar at the cost for ratepayers of “the price of a loaf of bread”. Both the Florida Solar Energy Industry Association (FlaSEIA), the Maryland, District of Columbia and Virginia SEIA, Environmental Defense Fund as well as several high profile manufacturers and solar integrators have publicly advocated introducing these feed in policies as the best public policy incentives for solar and renewables.

So for the sake of those desiring a vibrant renewables job market in Florida, I ask legislators and policymakers to reconsider these ill advised REC policies. Thanks to the efforts of the Governor, and his energy team, Florida has the opportunity to develop a clear energy policy that can get the state to 20% of electricity from renewable sources, create robust new industries employing thousands of people and improve the states energy security. However the state must be careful in what policy incentive mechanisms are introduced to get us there and avoid replicating ill conceived and dangerous policies that are already failing in other states. Other State SEIAs, such as in New York and Pennsylvania, need also to proactively participate in this growing debate and understand the full ramifications of what often is being foisted on them by other so called national industry mouthpieces with vested interests inconsistent with the local industry.

Comment by Chris Clement on August 21, 2008 at 1:17pm

Have you noticed that the oil interests are laughing off Obama's tire pressure suggestion? 3% is a LOT and we all can do this one.

Comment by Luna on July 30, 2008 at 2:04pm

I'm so glad Mikey B. started this group..we definitely need to develop alternative energy in the U.S. so we are not so dependent on foreign oil..I'm so happy to see that so many people have cut down on their driving with the high gas prices..hope it continues if the price of gas drops..nuclear is NOT the answer--much too dangerous..wind and solar are our best sources in my opinion.

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