Muskegon County Announces RFP for Wind Project Site

by Bruce Goodman, Energy Lawyer

Seeking proposals from utility-scale wind developers, the Muskegon County Wastewater Management System has published a request for proposal (RFP) for the leasing of its 11,000 acre property in Egelston and Moorland townships.  Less than fifteen miles from Lake Michigan, the site has aeration and settling basins, storage lagoons, and irrigated cropland on which wastewater is treated.  There are no homes on the site.  Wind measurements at the site were begun in April 2010.  Proposals are due by May 1, with selection of the successful bidder expected before the end of the year.

Questions About Detroit Edison Requiring a Buyout Provision

by Bruce Goodman, Energy Lawyer

The November RFP posted by Detroit Edison for capacity, energy and renewable energy credits from renewable energy systems is intended to fulfill the company’s obligations under the 2008 RPS statute.  Curiously, each party responding to the RFP is being required to include in its proposal an option for Detroit Edison to “acquire, own, and operate the entire Project at anytime two or more years after the Commercial Operation Date.”  A number of questions come to mind.  Why this requirement?  How will the various proposed buyout provisions be evaluated in awarding PPAs?  Is this Detroit Edison’s method for having developers build its projects?  How does this requirement square with Section 33(1)(b) of the statute which states, “At least 50% of the renewable energy credits shall be from renewable energy contracts that do not require transfer of ownership of the applicable renewable energy system to the electric provider…”?  Is the company reading a “mandatory option” as something different from “requiring transfer of ownership”?  Will this requirement “chill” the types of proposals that will be received?  Is this what the legislature intended when it led the nation in giving utilities the right to develop half the generation required by the RPS?  The MPSC needs to consider getting and giving public answers to these questions.

Detroit Edison Files Renewable Energy Cost Reconciliation Case

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.

Biomass Gasification Entity Gains Momentum

by Bruce Goodman

A few months ago I wrote about the potential for Michigan to become a leader in converting biomass to energy.  We now are reading a lot about the occupant of the new Renewable Energy Renaissance Zone in the City of Kentwood which has various projects underway to convert biomass to energy. Heat Transfer International, Inc. specializes in biomass gasification/electric power generation systems that convert solid and semisolid biomass, such as animal waste, municipal solid waste, and forestry residues, into a combustible gas that can be used to power generators, dryers, heating and cooling equipment.

One of its Michigan projects, converting turkey litter to steam and electricity, is set for commercial operation in mid-October.  An energy developer is negotiating to install the HTI technology at a Michigan landfill site to process municipal solid waste. 

A key element of the patented processes is powering a jet turbine engine with hot air to produce electricity. The MPSC has awarded HTI $2.3 Million in grants to establish testing operations to facilitate the gasification technology and measure emissions from various biomass feedstocks.  It can therefore provide all the information needed for air quality permitting prior to installation taking place.  It will simply run samples of the fuel to be used through its testing facilities and get a printout of the air emissions.  It is thinking and planning like that which will make this Michigan based engineering group a success in the already crowded biomass to energy field.

MPSC Establishes Rules of the RPS Game

by Bruce Goodman

In a series of orders, the Michigan Public Service Commission has approved the ground rules by which public utilities in the state will be implementing the RPS mandated by statute in 2008. Except for the competitive bid process for Detroit Edison, renewable energy plans, energy optimization plans, and surcharges were approved in late May. This utility has now submitted a more detailed description of the RFP and bid evaluation process for an expedited hearing. Under the various orders, the MPSC Staff will provide oversight and consultation to ensure competitive and fair RFP processes.