With 2022 having just come to an end, we wanted to take the opportunity to spotlight some of the most impactful climate change legislative and regulatory actions taken in California.
Paul Kaufman is a partner of the Real Estate, Energy, Land Use & Environmental Practice Group in the firm's San Diego (Del Mar) office.
The dust has settled on the Bureau of Ocean Energy Management’s (BOEM) first west coast auction for federal offshore wind lease areas. The California auction for the Morro Bay and Humboldt Call Areas brought an aggregate $757,100,000 to federal coffers at a $2,028 per acre value (with variances between the areas discussed below). This per acre value is well below the results of the other BOEM auctions of 2022, New York Bight (approximately $9,000 per acre, the highwater mark in the U.S.) and Carolina Long Bay (approximately $2,800 per acre). The final figure places the final result firmly within, but on the low end of, BOEM’s pre-auction estimate of $400M – $1.6B.…
One of the most noteworthy features of the October 18th Final Sale Notice (FSN) for the PACW-1 offshore lease auction – which will be the first west coast auction held by the Bureau of Ocean Energy Management (BOEM) – is the availability of “multi-factor” bid credits. The multi-factor approach will allow bidders to earn credits for activities BOEM hopes to stimulate, including making commitments to domestic workforce training and supply chain development as well as entrance into community benefit agreements (CBAs) addressing the impacts of offshore development on local stakeholders. Up to 30% of the cash value of their bid is available to bidders in the form of bid credits, a not insignificant figure given both government and market estimates of potential lease values.…
Continued commitments to renewable generation in 2021 mean that corporate purchasers remain major drivers in the development of new wind and solar power generation projects in the United States. Megawatt numbers vary depending on the source; however, there is no dispute about the significant role played by corporates. While corporate offtakers were initially focused on wind generation, corporate offtakers now regularly contract for solar generation as well.
Continue Reading Corporate Offtake Agreements are a Driving Force Behind the Shift Toward Renewable Energy in the United States
Offshore Wind Goes West. On May 25, the Biden administration and the State of California announced an effort to develop areas off of the coast of California for up to 4.6 GW of offshore wind generation. While Northeastern states and project developers are poised to begin bringing commercial scale offshore projects to market, this announcement represents the first concrete step to open up the West coast to offshore wind development. Wind generation in the waters off the West coast will face some unique challenges (such as water depths that will force the use of floating wind turbines that are still in pre-commercial stages of development), but will also face some of the same challenges that we have been working through on the East coast (such as constrained transmission corridors, undeveloped onshore interconnection and transmission infrastructure and the need for Jones Act-qualified vessels). Here are six key things to be aware of in the development of floating offshore wind in California.
Continue Reading Six Key Things to be Aware of in the Development of Floating Offshore Wind in California
With the change in administration in Washington, D.C., President Biden elevated Federal Energy Regulatory Commission (“FERC”) Commissioner Richard Glick to the position of Chairman. A Democrat, Commissioner Glick now assumes…
Continue Reading Six Key Items to be Aware of Today Concerning FERC Carbon Pricing Policy
Recently, the New York Independent System Operator (“NYISO”) implemented new rules to integrate storage resources, including battery resources, into wholesale electricity markets. NYISO’s rules come in response to FERC Order No. 841. Here are six key regulatory and transactional items from the new rules.
Continue Reading NYISO Battery Storage Rules
Faced with the onset of another wildfire season, and seeking to avoid both the prospect of utility-caused wildfires and the impacts of utilities’ Public Safety Power Shutoffs (PSPS) to avoid them, the California Public Utilities Commission (CPUC) recently took wide-ranging actions to expand the penetration of microgrids in California and enhance reliability and resilience of electric service. The decision partially implements Senate Bill 1339 (SB 1339) and the CPUC’s related three part rulemaking (Rulemaking 19-09-009). The CPUC’s decision focuses on behind the meter applications and directs California’s large Investor Owned Utilities (IOUs) to, among other things, develop standardized pre-approved system designs for interconnections, create methodologies to simplify utility inspections of proposed projects, and remove electric energy storage size restrictions from IOUs’ net metering tariffs.
Continue Reading CPUC Issues Order Promoting the Development and Interconnection of Microgrids
In a recent opinion, the Ninth Circuit held that the California Public Utilities Commission’s (CPUC) Renewable Market Adjusting Tariff (Re-MAT) program and alternative Qualifying Facility (QF) standard offer contract (Standard Contract) were preempted by federal law. The Re-MAT program and Standard Contract required California utilities to purchase energy from certain QFs with capacities up to three and twenty megawatts (MWs), respectively. The court found that the program and the contract violated the Public Utility Regulatory Policies Act of 1978’s (PURPA) pricing requirements. The decision, Winding Creek Solar LLC v. Peterman, USCA Case Nos. 17-17531 and 17-17532 (9th Cir. 2019) demonstrates that PURPA continues to maintain a floor from which state regulatory programs must encourage the development of renewable energy from small producers. In 2018 and prior to Winding Creek, the CPUC instituted a rulemaking to consider adoption of a new Standard Contract but has not yet taken action. Winding Creek reemphasizes the importance of that proceeding for ensuring that California has a PURPA-compliant program in place for utilities to purchase QF-produced energy.
Continue Reading 9th Circuit Says CPUC’s Standard Contract and Re-MAT Program for Certain Renewable Generators are not PURPA Compliant