Puerto Rico: Whitefish energy grid deal to be scrapped

Puerto Rico's governor has called for the cancellation of a contract given to a tiny Montana firm to help rebuild the island's power grid.

The head of the US-controlled island's power authority said he accepted Ricardo Rossello's recommendation and intended to cancel the deal.

The contract was given to Whitefish Energy, which has little experience of work on such a scale, without a public bid process.

Several inquiries are under way.

More than 70% of people on Puerto Rico were without power as of Sunday morning - more than five weeks after the powerful hurricane devastated the power grid.

The governor said he had asked the board of governors of the Puerto Rican Electric Power Authority (Prepa) to cancel the Whitefish contract.

"There can be no distraction to alter the commitment to restore the power system as quickly as possible," he said.

In response, the Prepa Executive Director Ricardo Ramos said he was seeking the contract's cancellation.

The governor also said he had instructed Prepa to "immediately coordinate with the states of Florida and New York to reinforce brigades" that are currently rebuilding the grid on the island.

Concerns had also been raised about why Puerto Rican authorities had not requested "mutual aid" from other public power authorities, as is typical during disasters in the US.

In a statement reacting to the news, Whitefish Energy said it was "very disappointed in the decision" and that the decision would "only delay what the people of Puerto Rico want and deserve - to have the power restored quickly in the same manner their fellow citizens on the mainland experience after a natural disaster".

The White House and the Federal Emergency Management Agency (Fema) distanced themselves from the deal late last week.

The company has its headquarters in the town of Whitefish, the hometown of US Interior Secretary Ryan Zinke. Mr Zinke has denied any involvement or wrongdoing.

Earlier this week, Fema denied allegations by Prepa, the US territory's main utility, that it had reviewed the deal.

The contract states that "Prepa hereby represents and warrants that Fema has reviewed and approved of this Contract".

In a statement on Thursday, Fema said: "Any language in any contract between Prepa and Whitefish that states Fema approved that contract is inaccurate."

Fema also said it had "significant concerns" with how Prepa had procured the contract and had "not confirmed whether the contract prices [were] reasonable".

It is unclear what will happen to any outstanding costs.

Walt Green, a former director of the US National Center for Disaster Fraud, told BBC News earlier this week that it was "impossible" to say at this stage who was responsible for costs.

"Any dispute may result in appeals, administrative hearings and lawsuits," he added.

Puerto Rican authorities initially said Fema would pay for the deal.

They later said there was "nothing illegal" about the contract.

Prepa and the Puerto Rican government are saddled with massive debts. The power authority declared bankruptcy in July.

The US House of Representatives Natural Resources Committee, which has jurisdiction over the Caribbean island, is also scrutinising the contract.

On Friday, top Democrats from that panel and the Transportation and Infrastructure Committee sent a letter asking the Department of Homeland Security's inspector general to launch an investigation.

The correspondence follows similar requests from other members of Congress to the interior department's inspector general.

Oil trades roughly flat after report shows rising US crude stockpiles and output

Oil prices came under pressure on Thursday by an unexpected increase in U.S. crude inventories and high U.S. production and exports, but was supported near multi-month highs by tighter crude markets.

Brent crude was down 5 cents at $58.39 a barrel by 11:13 a.m. ET (1513 GMT). The global benchmark is not far below its 26-month high of $59.49 hit in late September. U.S. light crude was 1 cent higher at $52.19.

Markets have been supported by comments from Saudi Arabia's energy minister earlier this week reiterating the kingdom's determination to end a global supply glut that has weighed on prices for more than three years.

Crude oil for immediate lifting has moved to a premium over later futures prices, indicating that demand for oil is strong in many of the biggest consuming regions, including Europe.

Oil prices have been rising for weeks and some investors have begun to take profits, brokers say.

"The trend is up, but getting tired," said Robin Bieber, technical chart analyst and a director of London brokerage PVM Oil Associates.

U.S. crude inventories rose by 856,000 barrels last week, U.S. Energy Information Administration (EIA) data showed. Analysts had expected a decrease of 2.6 million barrels.

U.S. gasoline and heating oil futures contracts rallied after the EIA data showed inventories of gasoline and distillate fuel, which includes heating oil and diesel, both fell by more than 5 million barrels. The fuel inventories dropped despite a rise in refining output.

U.S. crude production rose 1.1 million barrels per day (bpd) last week to 9.5 million bpd after a decline due to Hurricane Nate, while U.S. crude oil exports hit a new record four-week average of 1.7 million bpd.

But higher U.S. supply has been balanced by worries over crude exports from the Middle East.

Oil prices came under pressure on Thursday by an unexpected increase in U.S. crude inventories and high U.S. production and exports, but was supported near multi-month highs by tighter crude markets.

Brent crude was down 5 cents at $58.39 a barrel by 11:13 a.m. ET (1513 GMT). The global benchmark is not far below its 26-month high of $59.49 hit in late September. U.S. light crude was 1 cent higher at $52.19.

Markets have been supported by comments from Saudi Arabia's energy minister earlier this week reiterating the kingdom's determination to end a global supply glut that has weighed on prices for more than three years.

Crude oil for immediate lifting has moved to a premium over later futures prices, indicating that demand for oil is strong in many of the biggest consuming regions, including Europe.

Oil prices have been rising for weeks and some investors have begun to take profits, brokers say.

"The trend is up, but getting tired," said Robin Bieber, technical chart analyst and a director of London brokerage PVM Oil Associates.

U.S. crude inventories rose by 856,000 barrels last week, U.S. Energy Information Administration (EIA) data showed. Analysts had expected a decrease of 2.6 million barrels.

U.S. gasoline and heating oil futures contracts rallied after the EIA data showed inventories of gasoline and distillate fuel, which includes heating oil and diesel, both fell by more than 5 million barrels. The fuel inventories dropped despite a rise in refining output.

U.S. crude production rose 1.1 million barrels per day (bpd) last week to 9.5 million bpd after a decline due to Hurricane Nate, while U.S. crude oil exports hit a new record four-week average of 1.7 million bpd.

But higher U.S. supply has been balanced by worries over crude exports from the Middle East.

Crude shipments to Turkey from northern Iraq, the second-largest producer in the Organization of the Petroleum Exporting Countries, have declined after Iraqi government forces took back the city of Kirkuk last week after a Kurdish referendum on independence.

Some of the concern around oil exports from the northern part of Iraq eased after Kurdish authorities offered to suspend their independence referendum and proposed ceasefire.

Meanwhile, global oil demand keeps rising.

Southeast Asia's net crude oil imports will more than double to 5.5 million bpd by 2040 as the region adds new refining capacity to meet rising demand while regional oil output falls, according to the International Energy Agency (IEA).

Two-person energy firm's $300 million Puerto Rico contract raises eyebrows

A $300 million contract to help rebuild Puerto Rico's electrical infrastructure, which was awarded to a small, two-year-old Montana company that had only two employees when Hurricane Maria struck the U.S. territory, has sparked calls for an investigation from both Republicans and Democrats on Capitol Hill. 

In addition to its size and relative inexperience, the fact that Whitefish Energy Holdings is based in Interior Secretary Ryan Zinke's hometown of Whitefish, Mont., is fueling questions about how Whitefish Energy Holdings secured the lucrative contract. The former Montana congressman's son also had a summer job at a Whitefish construction site.

A spokesman for House Natural Resources Committee Chairman Rob Bishop, R-Utah, agreed that congressional review was needed. The committee has jurisdiction over Puerto Rico and other U.S. territories.

“The size and unknown details of this contract raise numerous questions. This is one of many things the committee is taking a close look at as it continues to work with the resident commissioner, governor’s office and oversight board to ensure Puerto Rico’s recovery is robust, effective and sustained,” said Parish Braden, a spokesman for Bishop.

"Congress needs to understand why the Whitefish contract was awarded and whether other, more cost-effective options were available," Rep. Raúl M. Grijalva, D-Ariz., the senior Democrat on the Natural Resources Committee, said in a statement. 

Sen. Maria Cantwell, D-Wash., said she has asked the Government Accountability Office to investigate the contract award to Whitefish Energy, which she called a “brand-new company with two employees.”

Whitefish Energy announced the contract last week but Whitefish spokesman Ken Luce said the company has been on the ground in Puerto Rico since Oct. 2.

In that time, Whitefish Energy said it has put 300 people to work, mostly subcontractors, repairing the critical power lines that run through the Island's mountains. Twenty more workers are arriving each day, Luce said, and overall, the company plans to add 700 more. 

"Anybody in Washington who is critical of Whitefish Energy getting this contract should be asking why is nobody else getting any work done," Luce said. "We're getting work done every day."

Whitefish Energy is "a two-person firm with a business model to ramp up," Luce explained. "The majority of the industry operates the same way. You have a core group of people with expertise" who find the workers and subcontractors needed to get a given job done. 

"If you want to question the business model look at 300 people working there from October 2 to today," Luce said. 

Luce also said Zinke's friendship with CEO Andy Techmanski "had nothing whatsoever to do with the contract" and that Zinke didn't even know about it until the deal was already done. 

The Interior Department denied that Zinke played any role in the contract award.

“Neither the secretary nor anyone in his office have taken any meetings or action on behalf of this company,” the department said in a statement.

Zinke and Techmanskis know each other “because they both live in a small town where everyone knows everyone,” the statement said.

Maria hit the island on Sept. 20 as a Category 4 storm, killing more than 50 people and knocking out electricity to the whole island. More than a month later, only 30% of customers have power.

Luce said Whitefish had a team in Puerto Rico on Sept. 26  to meet with representatives of the beleaguered Puerto Rico Electric Power Authority. With the power still out, they poured over maps by smartphone light as the Whitefish Energy made its pitch.

Ricardo Ramos, PREPA's director, said Whitefish was one of two companies on the government’s shortlist. The other company wanted a $25 million down payment due to the risk of working with PREPA, which filed for bankruptcy in July.  

Luce agreed that PREPA's financial troubles drove many competitors away. He said Whitefish Energy's willingness to take the risk of dealing with the Island's troubled power authority, coupled with the Whitefish Energy's proficiency in rugged, mountain work landed them the deal.

Luce acknowledged that a relatively unestablished company landing this contract "would be highly unusual" were it not for those two deciding factors. He was confident that any congressional concerns about Whitefish Energy will be answered by the results on the ground. 

"We respect the governor's call for the island to be at 95% (power restored) by Christmas," Luce said. "We are doing everything we can to meet that goal for the island." 

Amazon Battles Google for Renewable Energy Crown

Clean-energy developers are finding plenty of interest in wind and solar power from businesses with sustainability targets, especially technology companies.

That was on display in a video tweeted Thursday by Amazon.com Inc. Chief Executive Officer Jeff Bezos, as he christened the 253-megawatt Amazon Wind Farm Texas in Scurry County. Amazon has bought more than 1.22 gigawatts of output to date from U.S. clean-energy projects, second only to Alphabet Inc.’s Google, with 1.85 gigawatts.

Corporations have agreed to buy 1.9 gigawatts of clean power in the U.S. this year, according to Bloomberg New Energy Finance, and are on pace to match the 2.6 gigawatts signed last year.

“Companies are declaring 100 percent renewable-energy targets,” said Kyle Harrison, a New York-based analyst at New Energy Finance. “This will drive new-build regardless of government subsidies. Sustainability is a primary driver.”

The Amazon Wind Farm Texas was built by Lincoln Clean Energy, an I Squared Capital Advisors company. It will deliver more than 1 million megawatt-hours of clean energy to the grid annually, Amazon said in a statementThursday. It’s among 18 Amazon wind and solar projects in operation, and the company has more than 35 projects in development.

Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw

Crude oil inventories are still coming down. The American Petroleum Institute (API) reported a huge draw of 7.130 million barrels in United States crude oil inventories, compared to an S&P Platts’ survey of analysts that expected inventories would draw down by 3.9 million barrels for the week ending October 13.

Gasoline inventories, according to the API, saw a surprise build of 1.941 million barrels for the week ending October 13, against an expected draw of 340,000 barrels.

Both WTI and Brent benchmarks were up on Monday on concerns that a US/Iran standoff could disrupt oil supplies, along with internal struggles in Iraqi Kirkuk oilfields as the referendum continues to pit Turkey, Iran, and Iraq governments against the Iraqi Kurds—a volatile situation that could spark a civil war. A further boost to oil prices came as Gulf Coast oil production continued to see significant disruptions through last week caused by Hurricane Nate.

But prices started to slip on Tuesday as reality set in as robust supply capacity from OPEC and US shale loomed large in skittish investor minds.

The WTI benchmark was still up .17% on the day to $51.96 at 3:00 pm EST, while Brent was trading up .43% on the day at $58.07. Both benchmarks are up week on week as well. Gasoline was trading up 0.99% on Tuesday at $1.62.

For the U.S., the total drawdown of crude oil in 2017 now stands at 30.6 million barrels, according to API data, although prices are still whipsawed from week to week on OPEC and geopolitical news.

Distillate inventories increased this week, up 1.644 million barrels. Analysts had expected a drop of 2.0 million barrels.

Inventories at the Cushing, Oklahoma, site decreased by 151,000 barrels this week.
 

Why Seaweed, may be the energy of tomorrow

SEAWEED ENERGY

The U.S. Department of Energy is investing in a novel source of future renewable energy in the form of seaweed. That’s right — seaweed energy. The Honolulu Star-Advertiser reports that the DOE is investing nearly $1.5 million in two projects that will help develop seaweed farms and explore harvesting methods.

Seaweed, in all its slimy glory, can be processed into a biofuel that could be used to power our homes and vehicles. The DOE’s Advanced Research Projects Agency-Energy (ARPA-E) program is funding projects across the country to make the large-scale cultivation of seaweed a reality, supporting another alternative to fossil fuel use.

Of the two latest projects funded, $995,978 went to Makai Ocean Engineering of Honolulu to help build an ocean simulating model that the will aid researchers in designing offshore seaweed farms, and $500,000 went to Kampachi Farms of Kailua-Kona to test harvesting methods for seaweed grown on these farms. Kampachi Farms will also develop an offshore seaweed farm.

MORE THAN SOLAR

Researchers are constantly perfecting renewable energy sources like wind, solar, tidal, among others to allow for greater accessibility. Innovators are looking at seaweed and far beyond to explore novel means of harvesting renewable energy.

A team of researchers from Fudan University in China has developed a power generator that will be able to convert blood flowing in your body into energy. The ability to use hydrogen as a fuel has also recently come back into focus with new ways to store hydrogen power and convert water, even seawater, into hydrogen fuel.

A fossil fuel free future is possible and each new technological discovery brings us closer to making that future a reality. Solar and wind power may have a large role to play in that clean energy landscape, but they will not be exclusive. Novel approaches like those listed above as well as many more that have been developed or are on their way could help to bridge gaps in coverage and lead to a true fossil fuel free planet.

China Remains EY’s Most Attractive Renewable Energy Country As US Stalls At #3

China has held on to its spot as EY’s most attractive renewable energy country after taking the top spot earlier this year, leaving room for India to step into second place as the United States stalled at third due to new political headwinds.

EY published its latest Renewable energy country attractiveness index (RECAI) report on Tuesday, revealing that China has held on to its position as the world’s most attractive renewable energy market. China and India both overtook the United States in May’s RECAI report, dropping the US out of top spot for the first time since 2015. China maintains its top spot with unsurprising constant focus on renewable energy development and energy efficiency policies, but India’s position at second is now viewed by EY as “increasingly precarious” due to cancelled wind energy Power Purchase Agreements and steep declines in tariffs bid in recent auctions which have placed doubt over India’s 2022 target of 100 GW of solar PV.

It is similarly unsurprising that the United States has remained in third spot — or, maybe, more surprising is the fact that the United States hasn’t fallen further.

One wonders what EY’s thoughts of the United States would be if it was to include this week’s news that the US Environmental Protection Agency (EPA) has decided to “withdraw” President Obama’s Clean Power Plan.

Overall, the United States has seen numerous rollbacks to Obama-era climate change policies — and EY has highlighted the decision made by the country’s International Trade Commission’s decision to rule in favor of Suniva and SolarWorld’s Section 201 trade complaint, which will likely lead to tariffs and price floors on solar PV technology imports.

Interestingly, this 50th edition of EY’s RECAI shows Middle Eastern and North African countries climbing the index due to a surge in renewable energy activity hand-in-hand with a series of policy developments in those regions, as well as financing deals and tenders. Specifically, the International Finance Corporation approved $635 million for 500 MW of solar projects in Egypt; Saudi Arabia has invited bids for its first utility-scale wind farm — a 400 MW project; and Algeria has entered the top 40 RECAI for the first time thanks to its 4 GW solar tender.

“The index highlights that government policy is pivotal in driving renewable energy development globally,” said Ben Warren, EY Global Power & Utilities Corporate Finance Leader and RECAI Chief Editor. “As it becomes increasingly clear that time is running out for legacy energy supply models, countries are vying for their place in a clean energy future. Collaboration with existing suppliers and innovative partners through partnerships and acquisitions holds the key to success in this new world.”

South Korea has also jumped up four places to 29th despite regional instability, thanks to national plans to increase its share of renewables from 6.6% today up to 20% by 2030. Further, France is stepping closer to the top five, jumping up into sixth position with the announcement of new tenders and acquisitions, backed up by strong political support for the renewable energy industry by French President Macron.

Hurricane Nate threatens U.S. Gulf Coast energy sites spared by Harvey

Hurricane Nate was heading on Saturday toward refineries, offshore oil platforms and other energy facilities in the central U.S. Gulf Coast that largely were spared by Hurricane Harvey’s wrath nearly six weeks ago.

The fast-moving storm has already curtailed production at more than 71 percent of U.S. Gulf of Mexico offshore platforms, nearly three times the number affected by Harvey, which packed more of a punch when it hit the Texas coast.

Nate could become a Category 2 storm, the second weakest on a five-category scale used by meteorologists, with winds of up to 110 miles per hour (177 km per hour) before landfall later on Saturday, the National Hurricane Center said.

Its track takes it closer to offshore production unlike Harvey, whose impact was greatest on refining centers.

Colby Goatley, a meteorologist at Weather Decision Technologies Inc, said his firm is helping about 10 drilling rig operators chart a course away from Nate, which is producing up to 30-foot (9.1-meter) waves near its center, he said.

“Rigs on the eastern side (of Nate) are racing westward to get on that more favorable side,” he said. A few rig operators are heading further east to avoid winds that are strongest to the east of the storm’s eye.

Weather Decision is expecting tropical storm-force winds to last about 12 hours, Goatley said, a relatively short period that will help offshore producers return to full operations quickly and rigs return to their drilling sites.

Nate is converging on refineries that remained in operation during Harvey, with Phillips 66’s Alliance plant, Valero Energy Corp’s Meraux facility, and PBF Energy’s Chalmette refinery closest to its current track. Chevron Corp’s Pascagoula, Miss., plant also is within the impact zone.

Phillips 66 confirmed that it shut its 247,000-barrel-per-day Alliance refinery on Saturday. Alliance, which is 25 miles (40 km) south of New Orleans, is close to the path Nate is forecast to take over southeastern Louisiana.

Valero and PBF Energy were planning to keep running during Nate’s passage, according to sources familiar with those operations. Those two plants and Alliance account for about 3 percent of U.S. refining capacity.

Chevron said it has made preliminary preparations for the storm, including securing loose equipment and positioning standby generators. A spokesman declined to comment further on the operation. The Pascagoula plant accounts for about 2 percent of U.S. refining capacity.

Harvey, which brought intense rains that flooded the Texas Gulf Coast, shut nearly a quarter of U.S. oil refining capacity. 

Russia denies that energy deals with Saudi Arabia are a threat to the US

The chief executive of Russia's sovereign wealth fund has denied that forming closer energy ties with Saudi Arabia is about politically sidelining Washington.

Russia and Saudi Arabia are set to sign $3 billion in joint investments this week, according to the Financial Times. This includes a $1.1 billion agreement for Russian petrochemical company Sibur to build a plant in Saudi Arabia.

Speaking to CNBC at the Russian Energy Week, Kirill Dmitriev, CEO of the Russian Direct Investment Fund (RDIF), said a deepening of ties with Saudi businesses posed no threat to the U.S.

"Well, I think Russia and Saudi Arabia have lots of things in common. We want to diversify our economies away from oil and frankly, there was not much going on before.

"So, of course we are not talking about Russia being a substitute for the U.S. The U.S. will remain a key partner for Saudi Arabia for hundreds of years to come."

Dmitriev also played down suggestions that working with new overseas investors was a sign that Western sanctions were hurting the Russian economy.

"We are indeed working a lot with Chinese, Asian and Middle Eastern investors and they are replacing lots of the capital that was coming in from Europe and the U.S.

"Frankly, the effect of sanctions have already been taken in by the market. We had good positive growth of 2 percent this year and, frankly, most companies just shrug those sanctions off because nothing in those sanctions precludes anyone investing in us (Russia)," he added.

Dmitriev said Russia believed that "sanity would prevail" and sanctions from the West would soon be removed.

U.S. Tax Reform Would Leave Renewable Energy Out in the Cold

The prospects for a broad tax reform with lower corporate rates has excited business leaders and boosted the stock market -- except for renewable energy.

Tax reform “will make renewables more expensive,” Keith Martin, a partner at law firm Norton Rose Fulbright, said in an interview Tuesday at Infocast’s Solar Connect conference in San Diego.

The reasons: reducing corporate taxes would threaten a key source of clean-power financing. A broad reform of the tax code may also lead to pricier debt for new power plants and lower savings from depreciation. And some developers are concerned about the future of two critical U.S. tax credits. President Donald Trump campaigned on tax reform, and the S&P 500 Index has gained more than 18 percent since the election, while the Bloomberg Global Large Solar Energy index of 16 companies has slumped 13 percent.

The framework the White House proposed Sept. 27 “would disrupt the economics of clean energy projects as a consequence of making profound changes to the U.S. tax code,” according to a research report Monday from Daniel Shurey, an analyst with Bloomberg New Energy Finance.

Lower corporate tax rates would threaten the supply of tax equity, an esoteric type of financing that often accounts for half the cost or more of wind and solar projects. In these deals, renewable-energy developers sell portions of their projects’ tax credits to corporations -- often banks and some insurance companies -- that can apply the credits to their own tax bills. Lower tax rates for businesses would mean they need fewer write-offs.

Tax Equity

“Will CFOs say this isn’t worth it and pull out of the market?” David Burton, a New York-based partner at Mayer Brown LLP, said in a phone interview.

Developers may raise about $12 billion in the tax-equity market this year, $7 billion for solar and $5 billion for wind, according to New Energy Finance. That would be down from about $14.8 billion last year.

Not everyone is concerned about the potential for disruption. 

“2016 proved that there’s a tremendous amount of tax equity appetite for renewable-energy projects,” Jigar Shah, president and co-founder of Generate Capital Inc., said in a phone interview Wednesday. “Even if tax rates come down, there will be plenty of tax appetite for the foreseeable future. We have enough tax-equity buyers.’’

But if tax reform significantly reduces available tax-equity financing, chief financial officers might need to lean more on other -- potentially pricier -- sources of capital to make up the slack, Martin said.

Debt would be an obvious alternative. But some of the tax benefits of debt would be threatened if the deductibility of interest expense is revised, Shurey said. Power plants that are already financed may suffer if their deals include clauses on changes to the tax rate.

‘Calculations Don’t Work’

“If everything is priced according to the current tax rate, then your calculations don’t work,” Shurey said. “The economics of that project could be in trouble.”

The federal investment tax credit for solar and production tax credit for wind have been key growth drivers, and some clean-energy executives are concerned that Congress may terminate them to boost revenue to offset a tax cut. They were extended or revived in 2015, but with step-downs over the next few years.

“They’re going to look under every rock for revenue,” said Greg Jenner, a Washington-based attorney at Stoel Rives LLP, in a phone interview. “Even the possibility of that will have a chilling effect on the marketplace.”

Illinois Power Agency posts its renewable energy plan

The Illinois Power Agency (IPA) posted its “Draft Long-Term Renewable Resources Procurement Plan” on September 29 that describes how it will pay for solar, wind and other renewable energy projects, as well as outlining the renewable energy programs under the Future Energy Jobs Act (FEJA). The Plan is the first stand alone effort by the IPA for renewable energy, previous plans having been incorporated into overall annual procurements.

The IPA Plan incorporates FEJA to correct a long standing problem of fulfilling Illinois’ Renewable Portfolio Standard. The earlier legislation mandated percentages based on residential and small commercial retail customers of the three main electric utilities – ComEd, Ameren Illinois and MidAmerican. However, the growth of alternative retail electric suppliers and municipal aggregation programs reduced the eligible population by up to half, making attainment of RPS goals from a smaller pool much more difficult.

The legislative remedy, which now includes all customers in the three major utilities, makes the eventual goal of 25% renewable electricity, including 1.5% from solar, by 2025 much easier. In addition, the RPS goal now must be met by “forward procurements” from new projects, plus tightened requirements on qualifying projects in adjacent states that will give greater emphasis to Illinois-located systems. It should be noted that while the RPS is required only of the “big three” utility providers, qualifying renewable energy systems can also be located in Illinois rural co-op, municipal and small investor owned districts.

The Plan also shifts the pricing of the Adjustable Block Program more to an administratively determined price structure as opposed to bid competitive results. The process will also be ongoing as opposed to discrete procurement events. The Plan gives preliminary examples of SREC prices based on size (under 10kW, 10-100 kW, 100-200 kW, 200-500 kW, 500-2,000 kW), types of system (Distributive Generation or Community Solar), coverage under the low-income Illinois Solar For all Program and which utility district it is located in. For example, a 5kW distributed generation system could get $82.35 for an SREC in the Ameren or related block group, and $68.11 in the ComEd group. A 500kW community solar installation would get $21.61 in ComEd’s block or $56.06 from Ameren’s.

As stated, these price points are preliminary and would be subject to adjustments based on two sets of criteria. The first is if there is a lack of project applications. The second, and broader category, is policy considerations. The IPA stipulated in their Draft Plan that market and policy conditions could also result in changes in pricing, as well as other program considerations. The quantified example given is the decline in the Investment Tax Credit for projects starting construction in 2020, and the yet-to-be quantified example would be the impact of the Suniva-SolarWorld tariff case. There was also acknowledgement of possible problems of the legislatively “borrowed” funds from the Renewable Energy Resource Fund were to be returned within two years.

The Draft Plan included descriptions of the Community Renewable Generation Program, with an acknowledgement that most of the installations would be community solar, as well as the low-income Illinois Solar For All Program. At this juncture, the IPA details the responsibilities of the vendors (as developers are called) in the project developments. The specific processes of subscribers signing up, especially under Solar For All, have been left somewhat open for two reasons. The IPA will have the Program Administrators set the final rules on transactions and the role of community participation. Also, the agency wants to allow for flexibility and creativity to maximize community benefits and not be hobbled at the outset.

Public hearings on the Plan will be held on October 26, 3pm in Springfield, October 31, 10AM in Chicago and November 3, 3pm in Moline. The Plan has a 45 day comment period ending November 13. Afterwards, the IPA has until December 4 to revise the Draft Plan and file it with the Illinois Commerce Commission (ICC). Objections could be made to the ICC by December 18, with the Commission deciding by December 26 whether hearings are necessary. The deadline for the ICC to enter its order confirming or modifying the Plan is April 3, 2018, which would launch the programs.

One of the first orders of business would be the retaining of one or more program administrators to enable the first projects to be operative in 2018 . Developers are already at work getting projects ready to go with hundreds of megawatts of interconnection applications in the utility queues.

U.S. energy head seeks help for coal, nuclear power plants

U.S. Secretary of Energy Rick Perry has asked federal regulators to attempt to keep the nation’s struggling coal and nuclear power plants open by rewarding them for contributing to the resilience of the electric grid, the Department of Energy said on Friday.

The move drew praise from the coal and nuclear power industries. But it raised alarm bells among renewable energy groups and environmentalists concerned that such incentives were unfair and could lead to an increase in emissions from coal plants linked to global warming and more toxic waste from nuclear plants before a permanent repository is built for the country.

“The continued closure of traditional baseload power plants calls for a comprehensive strategy for long-term reliability and resilience,” Perry said in a Sept. 28 letter to the Federal Energy Regulatory Commission (FERC).

“States and regions are accepting increased risks that could affect the future reliability and resilience of electricity delivery,” he wrote.

Perry asked FERC to issue a rule within 60 days to allow certain baseload plants that maintain at least 90 days of fuel supply on site to recover their full costs through regulated pricing.

A FERC official did not immediately respond to a request for comment.

The Trump administration has previously said the retirement of hundreds of coal-fired power plants and some nuclear reactors in recent years had undermined the ability of the grid to stand up to peak-demand periods, including during severe cold winter weather. It has also criticized wind and solar power, both expanding rapidly, as being too heavily dependent on weather.

Perry commissioned a study in April to evaluate whether “regulatory burdens” imposed by past administrations, including that of former President Barack Obama, had hurt the grid by forcing shutdowns of baseload plants.

That report, released last month, urged that incentives be used to boost coal-fired and nuclear plants, and blamed recent closures on competition with cheaper natural gas and growth of solar and wind power.

Maria Korsnick, head of the Nuclear Energy Institute, praised Perry’s request. “In the wake of the incredible disruptions caused by extreme weather events in recent years, including multiple hurricanes and polar vortices, the urgency to act in support of the resiliency of the electric grid has never been clearer,” she said.

But powerful natural gas and renewable power interests warned the proposal may go too far. The American Wind Energy Association blasted the effort, saying it would “upend competitive markets.”

“The best way to guarantee a resilient and reliable electric grid is through market-based compensation for performance, not guaranteed payments for some, based on a government-prescribed definition,” AWEA spokeswoman Amy Farrell said.

Marty Durbin, the executive vice president and chief strategy officer at the American Petroleum Institute, which counts natural gas drillers among its members, said Perry’s proposal appears to suggest that more regulation is the answer, when markets have already made the grid stronger.

”We need to be careful that government doesn’t put its thumb on the scale,“ Durbin said. ”It’s better to let markets choose, which is what the United States is seeing with the growth of natural gas as the United States’ leading energy source for electricity in 2016.”

The proposal was blasted by New York’s Attorney General Eric Schneiderman as a “head-in-the-sand approach” that would undermine grid resiliency while promoting climate change.

The Trump administration is expected to soon take additional steps to help struggling coal plants. As soon as next week, the Environmental Protection Agency is expected to release a revised Clean Power Plan that would be softer on emissions from coal.