11/23/2011
by Bruce Goodman, Energy Lawyer
It is being reported that Governor Snyder intends on seeking a change in the transportation fuels taxing structure, shifting the application of the tax from the retail to the wholesale level. If true, is it time to consider a more general fossil fuel carbon tax? It has long been recognized that transportation fuels lead to “externalities” for which a tax is appropriate. These include the need to build and repair roads, bridges and other infrastructure. Gasoline and diesel tax revenues are intended to cover these costs. Similarly, fossil fuels used for electric generation also have externalities. For example, coal-fired generation has long-term health and environmental impacts (and the need for regulatory oversight) which ultimately costs the state and its citizens money. Without putting the Michigan economy at risk, the Governor could seek a modest carbon tax on coal and natural gas used to produce electricity that would reward the move toward 10 percent renewable, made-in-Michigan, energy. It would create a new economic rationale for increasing our dependence on locally-produced electrons and pursuing the cheapest form of energy—conservation. Let’s start the conversation.
11/4/2011
by Bruce Goodman, Energy Lawyer
Cliffs Natural Resources Inc. is selling its Renewafuel operations near Marquette and returning its $500,000 Community Development Block Grant to Marquette County. The plant has been up and running, producing high-energy, low emission biofuel cubes from wood and agricultural feed stocks designed to help meet renewable portfolio standards and/or air emission limits. Before shutting down, the plant delivered its first supply of biofuel cubes in July to the Marquette Board of Light and Power as a coal substitute.
10/14/2011
by Bruce Goodman, Energy Lawyer
The U.S. Department of Veterans Affairs Medical Center in Battle Creek has signed a contract with Nexterra Systems Corp. of Vancouver, British Columbia, to design and construct a biomass gasification system to provide heat and power. The 28 MMBtu/hour project will supply 14,000 pounds of steam per hour and 2 MW of electricity, with greenhouse gas emissions being reduced by 80 percent. The electrical production will furnish about 85 percent of the medical center’s demand. The combined heat and power unit will use locally-sourced residual biomass.
10/7/2011
by Bruce Goodman, Energy Lawyer
In 2010, Detroit Edison issued a request for proposal seeking up to 245 MW of renewable resources for a commercial operation date no later than December 31, 2014. The company received 146 proposals (from 46 prospective suppliers) that included wind, hydro, solar, landfill gas and biomass resources. Negotiations with three would-be suppliers ultimately led to a 120 MW power purchase agreement (PPA) with NextEra Renewable Resources LLC for its Tuscola Bay Wind LLC project in Tuscola and Bay Counties with deliveries to begin by December 31, 2012. Pricing is reported to be “up to $60.90 per megawatt-hour net energy delivered,” including RECs. The Michigan Public Service Commission staff found that the RFP process and the scoring procedures satisfied the Michigan Renewable Portfolio Standard guidelines, and the Michigan Public Service Commission (MPSC) has now approved the PPA.
1/24/2011
by Bruce Goodman, Energy Lawyer
Data released by the Michigan Public Service Commission (MPSC) shows that although only 3.63 percent of Michigan’s electricity was produced by renewable energy projects in 2009, the state’s electricity providers are on target to meet the 10 percent RPS requirement by the 2015 deadline. The measurement was made by comparing renewable energy credits to average retail sales. The report indicated:
- Consumers Energy has contracts for 396 MW of renewable energy: 8 MW already in commercial operation, with 388 MW more to be in commercial operation by the end of 2012.
- Detroit Edison has contracts for 252 MW of renewable energy: 44 MW already in commercial operation, with 208 MW more to be in commercial operation by the end of 2011.
11/26/2010
by Bruce Goodman
The Michigan Public Service Commission Staff has recently modified its published guidance on renewable and advanced clean energy credits. Responding to a recent Attorney General’s opinion on the classification of municipal solid waste and biomass feedstock under Michigan’s Clean, Renewable, and Efficient Energy Act, the FAQ memo expands the type of projects that can qualify for these two types of credits under Michigan law.
9/30/2010
by Bruce Goodman
On August 31, The Detroit Edison Company filed Case No. U-16356 with the Michigan Public Service Commission (MPSC) to reconcile its renewable energy costs with its approved plan. The filing consists of the testimony and exhibits of six witnesses. This annual proceeding is required by 2008 PA 295, the Michigan Clean, Renewable, and Efficient Energy Act. The filing seeks findings: • that the renewable cost reconciliation revenue recovery mechanism does not exceed the maximum retail rate impacts under the law; and • on the per mWh price for both renewable and advanced cleaner energy and capacity. The company reports it has a renewable energy capacity portfolio of 14 MW and that it has generated and/or purchased renewable energy, advanced cleaner energy, Renewable Energy Credits, Incentive Renewable Energy Credits and Advanced Cleaner Energy Credits in 2009 of 1,094,930. This includes generation from renewable and advanced cleaner energy fuels such as biodiesel, tall oil, wood chips and coke oven gas at Detroit Edison’s existing fossil-fueled plants.
8/9/2010
by Bruce Goodman
DTE Energy is seeking Michigan Public Service Commission (MPSC) approval of two 20-year power purchase agreements and the associated renewable energy credits. The weighted average price for the 3.2 MW landfill gas project in Orion and the 17 MW biomass project in L’Anse is $98.94/MWh. This price is below the level assumed in the DTE Renewable Resource Plan.
6/8/2010
by Bruce Goodman
In December 2008, Detroit Edison issued an RFP for renewable energy credit (REC) contracts from Michigan sources. It received 43 proposals from 11 suppliers. In April, the MPSC approved the third REC contract submitted by Detroit Edison, this one with Boyce Hydro Power, LLC. The average price for the seven-year sale covering four hydro facilities on the Tittabawassee River is $7.75 per REC, well below the $12.46 average price of the first two contracts. The Boyce contract calls for 210,000 RECs per year, with an additional purchase of 112,000 RECs depending on generation. Detroit Edison has previously projected REC prices for twenty-year contracts at $15.66 per REC.
6/4/2010
by Bruce Goodman
The Michigan Public Service Commission has announced it will hold a public hearing at 9 a.m. on June 22 for its proposed rules governing renewable energy plans and energy optimization plans. These rules may well set the tone and the future for energy projects in Michigan for the next decade. Provisions include defining the “Michigan content” needed for a 10 percent REC bonus and how to compute RECs for pumped storage and mixed biofuel facilities. Part 2 of the proposed rules contain the details of how utilities are to implement their RPS plans, including rules on the five factors a utility may use to limit participation by bidders in RFP solicitations. Any person may submit written comments (reference Case No. U-15900) which must be received no later than 5 p.m. on July 14. See proposed rules at: http://efile.mpsc.state.mi.us/efile/docs/15900/0001.pdf
