Energy Policy Update Energy and Environmental News November 13, 2012

This newsletter is published by the Governor’s Office of Energy Policy and is provided free of charge to the public. It contains verbatim excerpts from international and domestic energy and environment-related publications reviewed by the Education and Community Outreach personnel. For inquiries, call (602) 771-1143 or toll free (800) 352-5499. Compiled and edited by Gloria Castro, Special Projects Coordinator. To register to receive this newsletter electronically or to unsubscribe, email Gloria Castro.

CONTENTS

ARIZONA–RELATED ALTERNATIVE ENERGY AND EFFICIENCY ENERGY/GENERAL INDUSTRIES AND TECHNOLOGIES LEGISLATION AND REGULATION WESTERN POWER STATE INCENTIVES/POLICIES GRANTS EVENTS

For your convenience, Arizona-related titles are highlighted in blue.

ARIZONA

Mesa Now Home to 8 Public Electric Vehicle Charging Stations [East Valley Tribune, Nov. 12] Mesa drivers now have access to eight electric vehicle charging stations in the city. The new Blink chargers were installed in October and are located at three city facilities including the Main Public Library, 64 E. 1st St.; Mesa Arts Center, 1 E. Main St.; and Mesa Convention Center, 263 N. Center St. “We believe it’s important to provide infrastructure that might encourage people to invest in technology like electric vehicles,” Mesa Mayor Scott Smith said in a release. The new charger installation is part of the national EV Project, a $230 million public-private partnership to install electric vehicle charging infrastructure in test markets throughout the country. ECOtality, Inc. has been contracted by the U.S. Department of Energy to install the charging stations. Each station can recharge a fully depleted electric vehicle battery in four to six hours.

Planners OK More Time to Build State's Largest Wind Farm [The Daily Courier, Nov. 8] PRESCOTT – The Yavapai County Planning and Zoning Commission granted the Yavapai Ranch several time extensions Wednesday to build the largest wind farm in Arizona. Two days earlier, the Board of Supervisors approved Yavapai Ranch owner Fred Ruskin's request for a zoning change for 12,500 homes and 96 acres of commercial development along Williamson Valley Road about 35 miles north of Prescott. Ruskin told the planning commission Wednesday that the wind farm and a possible astronomical observatory are the "highest priority" for him and his family over the housing development. Ruskin and NextEra Energy Resources, one of the largest wind farm builders in the country, never submitted a final site plan for the wind farm within the one-year deadline, after originally getting approval for the plan in September 2011. The planning commission recommended approval for Ruskin's request for four years to submit a final site plan instead of the current one year; five years instead of two years to get building permits; and eight years to get a certificate of compliance instead of five years. The 51,000-acre ranch is located about 35 miles north of Prescott. The wind farm proposal consists of a series of 81 lighted wind turbines that are 436 feet tall across a

Governor’s Office of Energy Policy November 13, 2012 - 1 - 37,000-acre swath of the land that the Prescott National Forest was supposed to acquire through a land exchange that Ruskin cancelled this year.

Science Park Moves Forward [Arizona Daily Sun, Nov. 13] First came the business "incubator" and its estimated 233 new jobs. Now comes the proposed "accelerator" and 300 additional jobs. But the latter won't have the support of Flagstaff City Councilmember Jeff Oravits, who was the lone dissenter on a 6-1 vote to accept a $4 million federal grant to construct a science and technology building next to the incubator on McMillan Mesa. "I am not convinced of all these numbers being used," he said, without citing specifics. A parade of economic development officials and community leaders said the new facility is desperately needed to help businesses grow and keep jobs here in Flagstaff.

Slowly Greening Up [Arizona Daily Sun, Nov. 3] The city of Flagstaff is inching closer to its goal of getting 15 percent of its total energy from renewable sources. Construction crews are expected to finish work by the end of this month on solar panel arrays at Flagstaff City Hall and the Flagstaff Aquaplex. Both installations have no up-front costs to taxpayers, with the city using a similar power purchasing agreement it had with a third party to install 2,000 solar photovoltaic panels at the Wildcat Wastewater Treatment Plant in east Flagstaff. The array built in the west parking lot of City Hall is expected to generate enough energy to meet 38 percent of the annual energy needs for the two-story facility in downtown Flagstaff. The smaller Aquaplex project will meet 11 percent of the annual energy needs for the recreational facility, generating 135,000 kilowatt hours a year.

Winners Announced for Arizona Technology Council's 2012 Governor's Celebration of Innovation Gary Tooker, former Chairman and CEO of Motorola Inc. honored with Lifetime Achievement Award alongside innovative individual, company, education and legislative award winners [PR Newswire, Nov. 9] Phoenix, AZ – At a prestigious annual gala awards ceremony held at the Phoenix Convention Center, the Arizona Technology Council in conjunction with the Arizona Commerce Authority, announced the winners of the 2012 Governor's Celebration of Innovation (GCOI) Awards presented by Avnet, Inc. The annual event spotlights how innovations in science and technology are applied to build a sustainable economy for Arizona's future.

ALTERNATIVE ENERGY AND EFFICIENCY

Construction of Biomass Plant Moves Ahead [AgriNews.com, Nov. 8] Sioux Falls, S.D. – Construction of the commercial-scale cellulosic bio-ethanol plant at Emmetsburg is "going fantastic," a company official said last week. Project Liberty, a 20-million-gallon cellulosic bio-ethanol plant, is expected to begin production late next year. It will convert corn cobs, leaves, husk and stalks into a biofuel. POET-DSM announced Oct. 24 that it has contracted with ANDRITZ to supply a two-step biomass treatment process for the commercial-scale cellulosic bio-ethanol plant under construction at Emmetsburg. The ANDRITZ technology is a two-stage process that includes a vertical reactor, an interstage washer and continuous steam explosion technology to draw out available sugars from the cellulose material. Those sugars are then converted into ethanol. The process is unique for this feedstock and this chemistry, said Jay Miele, vice president and general manager of ANDRITZ. All of the equipment has been used in other industries earlier, but it is arranged in a different way to convert biomass into sugars. ANDRITZ is a machinery and system supplier to many industries throughout the world, Miele said. They often work in the pulp and paper industry and the hydroelectric industry.

Cooling Challenge Spurs More Energy-Efficient Air Conditioner [R&D Magazine, Nov. 8] University of California, Davis challenge to build more energy-efficient air conditioning has spurred a major global manufacturer to build a rooftop air conditioner that is 40% more energy efficient than conventional units. Trane, a provider of heating, ventilating, and air conditioning systems, is the second manufacturer to achieve Western Cooling Challenge certification. The challenge, established in 2008 by the UC Davis Western Cooling Efficiency Center, is the most demanding certification of its kind. It aims to help manufacturers develop more efficient cooling technologies, particularly for hot, arid climates, such as in California. The program also helps building owners install and use those products. Trane achieved UC Davis certification for the Voyager DC, a hybrid rooftop air conditioner that uses indirect, evaporative cooling to increase cooling capacity and reduce peak electrical demand. Following laboratory testing, the equipment was verified by the UC Davis Western Cooling Efficiency Center. "Since air conditioning is the largest portion of electricity used during hot weather, the potential for 40% savings is enormous," says UC Davis Western

Governor’s Office of Energy Policy November 13, 2012 - 2 - Cooling Efficiency Center associate engineer Jonathan Woolley. "Many are not yet aware that new electric utility rates will saddle commercial building owners with large additional charges for power used during peak periods. Trane’s Voyager DC met our performance goals on the mark, and promises to be one of the most cost effective, climate-appropriate cooling technologies available for commercial buildings."

Energy Star Reaches High Penetration Rates for Homes, Appliances [SustainableBusiness.com News, Nov. 8] Energy efficiency is making great gains in both home construction and appliances, according to date from the US Energy Information Agency. Last year, 26% of all the new single-family homes in the US met voluntary Energy Star standards. When the stats are in for 2012, those numbers will be higher. This year, 400 of the biggest US home builders pledged to use newly upgraded Energy Star standards for all new construction and new multifamily high-rise residential buildings are eligible as well, for the first time. Earlier this year, EPA updated standards for home construction. To receive Energy Star designation, homes must use at least 15% less energy than those built to the 2009 International Energy Conservation Code. Green-rated homes have a sales price that's 9% higher than average similar homes and 80% of builders say energy efficient features are now pervasive in new homes. And more than 10,000 high performance homes have been built that use 40% less energy than their conventional counterparts.

Farmers Grow Profits with A New Crop: Solar Panels [CharlotteObserver.com, Nov. 8] Rowland, N.C. Just off a country road is a sight few people ever imagined in this corner of southeastern North Carolina. Solar panels cover a 35-acre field that once produced corn, tobacco and other crops. When the sun shines, the panels generate enough electricity for hundreds of homes. “I initially thought this was a pipe dream,” said farmer Billy Dean Hunt, recalling discussions with a solar company about using his cornfield for a sun farm. “But I started talking to them. They convinced me they would honor what they said. So I did it.” The scene near Rowland – about 115 miles southeast of Charlotte – is found increasingly across North Carolina. Solar farms dot the landscape from the Blue Ridge mountains to the sandy coastal plain – the result of an emerging renewable energy industry. In many cases, solar farms are replacing cropland that doesn’t generate enough income from traditional farming. Other times, solar farms are being placed on vacant industrial sites or land that hasn’t grown crops in years. Unlike many other Southern states, North Carolina has encouraged the development of solar power through generous tax incentives and a state law requiring electric utilities to use some renewable energy. These policies are a key reason North Carolina often rates high in national rankings of solar-friendly states – and why solar farms are growing steadily.

Germany's Solar Power Use Jumps 50% This Year [Associated Press, Nov. 5] BERLIN — German utilities say solar power production is up more than 50% this year over the first nine months of 2011, partly due to a boom in installations of photovoltaic panels. The German utilities' industry association BDEW said Monday that solar power output rose to 25,000 gigawatt hours in the January to September period, from 16,500 gigawatt hours a year earlier. It says solar power's share in the country's electricity production rose to 6.1% from 4.1% a year ago. Wind power gained slightly to 8.6% from 8.0%. Biomass plants accounted for almost 6%. It says all renewable energies combined accounted for about 26% of electricity production over the first nine months of the year.

Hyundai, Kia Overstated Gas Mileage, EPA Finds [Associated Press, Nov. 2] DETROIT – Hyundai and Kia overstated the gas mileage on 900,000 vehicles in the past three years, a discovery that could result in sanctions from the U.S. government and millions of dollars in payments to car owners. The inflated figures were uncovered by the Environmental Protection Agency in an audit of gas mileage tests by the two South Korean automakers. The agency, which monitors fuel economy, said Friday that it's investigating how the companies came up with their numbers. The EPA found inflated gas mileage on 13 models from the 2011 through 2013 model years, including Hyundai's Elantra and Tucson, and Kia's Sportage and Rio. The window sticker mileages were overstated on about one-third of the cars sold by the companies during the three years. As a result, Hyundai and Kia will have to knock one or two miles per gallon off the vehicle stickers of most of their models. Some models will lose three or four miles per gallon. The Kia Soul, a funky-looking boxy small SUV, will lose six from its highway figure, lowering it from 34 mpg to 28 mpg.

Mexico's Sunny Sonora State Fosters Solar PV Growth [RenewableEnergyWorld.com, Nov. 6] Hermosillo, Sonora -- Mexico's Sonora state, which has the highest insolation rate in North America, is working steadfastly to foster photovoltaic power research, generation and transmission lines for demand within the state and for export, say several state leaders. Last week in

Governor’s Office of Energy Policy November 13, 2012 - 3 - Hermosillo, Sonora State Governor Guillermo Padrés Elias announced that Sonora would host a new national solar research center, the Centro Mexicano de Innovación en Energía Solar, which would receive $25 million in funding. Padrés made the announcement here at the 19th Annual Border Energy Forum, organized by the Texas Land Office. The new center will engage collaboration among 49 educational institutions, private sector solar companies and government entities. At the same venue, Padrés confirmed a letter of intent with SunEdison for a 50-MW PV plant. He also noted that France's Heliotrop would soon install an $867 million concentrating solar facility within the state, commissioned by the national electricity agency, Comision Federal de Electricidad, CFE. Among other new PV projects being developed in the state is a $75 million, 22-MW solar park to be sited along the 60-mile road between the state capital Hermosillo and Bahía de Kino, on the Sea of Cortez. Similarly, "the state government is planning to build the City of Knowledge as an integrated and sustainable urban real estate development that will host universities, housing and a 10-MW solar park," according to State Secretary of Economic Development, Moisés Gómez Reyna.

NREL/DOE Launch New Alternative Transportation Web Tools Ways to reduce fleet petroleum use debut alongside a Web site makeover [NREL, Nov. 9] The U.S. Department of Energy’s (DOE) National Renewable Energy Laboratory (NREL) has launched a new tool and redesigned DOE’s Alternative Fuels Data Center Web site to help fleet managers, municipalities and consumers choose from a wide variety of alternative fuels and energy efficiency strategies for reducing petroleum use, vehicle emissions, and operating costs. The AFDC’s new Petroleum Reduction Planning Tool is an interactive Web application that allows fleet managers to evaluate the benefits associated with five alternative fuels – biodiesel, electricity, ethanol, natural gas and propane – along with a variety of efficiency measures, such as idle reduction and fuel economy improvements. “Fleets across the country are trying to reduce their vulnerability to spikes in oil prices and are finding themselves increasingly subject to greenhouse gas emissions limitations at the federal, state and local levels,” NREL Project Manager Witt Sparks said. “This tool provides valuable information on a variety of strategies that can help them reach their desired and even required outcomes. From a single web page, a fleet manager can explore multiple strategies and know what the energy and environmental impacts will likely be before making any substantial investments.”

SolarCity to Put Panels on Nearly 5,000 Fort Bliss Homes [Reuters, Nov. 12] SolarCity Corp said it will install solar panels on up to 4,700 U.S. military homes at Fort Bliss near El Paso, Texas, and the nearby White Sands Missile Range in New Mexico. The project is part of SolarCity's $1 billion SolarStrong initiative, which will put solar systems on up to 120,000 military homes over five years. The announcement represents the largest phase yet of SolarStrong, the solar panel installer said. The company will start construction in January, and plans to create 100 new installation, electrical and maintenance jobs for the project. SolarCity is the top U.S. installer of residential solar systems. It has grown rapidly, largely because it allows customers to lease its costly product by paying a monthly fee, avoiding hefty upfront costs of an outright purchase. SolarCity, which is expected to go public before year end, is also benefiting from the sliding price of solar panels that has walloped their manufacturers. The U.S. Department of Defense has designated Fort Bliss a "NetZero Installation," meaning it is expected to produce as much energy as it consumes.

Trend Shows Growth of Renewables on Contaminated Lands [PowerMag.com, Nov. 6] Renewable energy projects installed on potentially contaminated lands, landfills, and mine sites have increased by 40% since 2008, a new list released last week by the Environmental Protection Agency (EPA) shows. Solar photovoltaic (PV) systems make up the bulk of about 184.7 MW installed at 60 sites in 25 U.S. states. The list surveys progress resulting from the agency's "RE-Powering America's Land Initiative," a 2008-launched measure that promotes the reuse of potentially contaminated lands and landfills for renewable energy through agency-provided redevelopment tools for communities and developers and site- specific technical support. According to the EPA, the number renewable power projects on contaminated sites has grown from 16 projects with a total capacity of 47 MW to more than 60 with a total capacity of 184.7 MW. That growth marks a trend showing that the EPA-led land development strategy to remediate and reuse both private and public lands is "gaining momentum," the agency said.

Worldwide Power Generation Capacity from Biogas Will Double by 2022 [Pike Research, Nov. 5] Sometimes referred to as biomethane, waste gas, or renewable gas, biogas results from the anaerobic digestion of organic materials. It is one of most versatile energy carriers available, and has potential uses in a number of end-use applications. According to a recent report from Pike Research, a part of Navigant’s Energy Practice, biogas will play a key role in the emerging renewable energy market. Worldwide

Governor’s Office of Energy Policy November 13, 2012 - 4 - power generation capacity from commercial biogas facilities will more than double over the next decade, growing from 14.5 gigawatts (GW) in 2012 to 29.5 GW in 2022, the study concludes.

ENERGY GENERAL Kinder Morgan Pitches Oil Sands Pipeline Expansion to Skeptics on Both Sides of Border [Indian Country Today, Nov. 9] proposal to more than double a pipeline from Canada’s oil sands to tanker terminals in Burnaby, British Columbia, and Anacortes and Ferndale, Washington, is drawing fire from First Nations on both sides of the border who say the risks to traditional territories and waters are unacceptable. Amid the hubbub and controversy over TransCanada’s Keystone XL pipeline through the United States, and the Northern Gateway pipeline proposed by Enbridge Inc. across pristine indigenous territory and wilderness in British Columbia, a third company with existing pipelines has been quietly pushing an expansion plan. Energy giant Kinder Morgan insists that its plan to increase its existing TransMountain pipeline from 300,000 to 750,000 barrels a day by adding a second set of parallel pipelines is safe from oil spills or marine accidents. While the proposal has not yet been submitted to Canada’s National Energy Board for the 710-mile-long, $5 billion expansion, the firm is consulting with 100 Native communities along the route in hopes of drumming up support.

Many Coal-Fired Power Plants ‘Ripe for Retirement,’ Group Says [Bloomberg, Nov. 12] Southern Co. (SO) and other utilities could retire as many as 353 coal-fired electricity units as the costs of installing pollution controls on those plants won’t let them compete with cheaper natural gas and wind power, an environmental group said. The Union of Concerned Scientists said in a report released today that an additional 59 gigawatts of electric generating capacity from coal plants could be shuttered, representing more than 6 percent of all U.S. electricity used. Those changes are warranted because many of those rarely used plants have already outlived their 30-year lifespan and generate the most emissions of harmful pollutants and greenhouse gases, the report said. “Spending billions to upgrade old coal plants may simply be throwing good money after bad,” Steven Frenkel, director of the group’s Midwest office and a co- author of the report, said in a statement.

Oil Down as U.S. Economy Fears Re-Emerge [Associated Press, Nov. 7] Oil prices gave up a chunk of the previous session's gains to trade near $87 a barrel Wednesday as investor fears over the U.S. economy emerged despite the fairly easy re-election of President Barack Obama. By early afternoon in Europe, benchmark crude for December delivery was down $1.40 to $87.31 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $3.06, or 3.5 percent, to finish at $88.71 in New York. Domestic economic matters, not least over budgetary matters, will dominate the agenda of Obama, who won re-election earlier. An earlier rebound in stock markets ground to a halt as investors worried over Obama's ability to push through a much-needed budget deal with a divided Congress. Failure to reach a resolution would trigger spending cuts and tax increases — the so-called fiscal cliff — that could push the U.S. economy back into recession. A survey from the U.S. Energy Information Administration also highlighted the headwinds the world's largest economy still faces.

OPEC Acknowledges Shale Oil Supply May Be Significant * Shale oil will contribute to lower demand for OPEC crude * OPEC cuts medium, long-term global oil demand estimates * Assumes oil price will average $100 in medium term [Reuters, Nov. 8] LONDON – OPEC acknowledged for the first time on Thursday that technology for extracting oil and gas from shale is changing the global supply picture significantly, and said demand for crude will rise more slowly than it had previously expected. In its annual World Oil Outlook, OPEC cut its forecast of global oil demand to 2016 due to economic weakness and also increased its forecast of supplies from countries outside the 12-nation exporters' group. "Given recent significant increases in North American shale oil and shale gas production, it is now clear that these resources might play an increasingly important role in non-OPEC medium- and long-term supply prospects," the Organization of the Petroleum Exporting Countries said in the report. OPEC has been slower than some to acknowledge the impact that new technologies such as hydraulic fracturing - known as "fracking" - may have on supply. Conoco's Chief Executive Ryan Lance has gone so far as to predict North America could become self-sufficient in oil and gas by 2025. In OPEC's new forecast, shale oil will contribute 2 million barrels per day (bpd) to supply by 2020 and 3 million bpd by 2035. For comparison, 2 million bpd is equal to the current output of OPEC member Nigeria, which is Africa's top exporter.

Governor’s Office of Energy Policy November 13, 2012 - 5 - INDUSTRIES AND TECHNOLOGIES ABB Develops Hybrid Circuit Breaker [Electric Light & Power, Nov. 7] Cary, N.C. – ABB developed a circuit breaker for high voltage direct current that combines very fast mechanics with power electronics, and will be capable of interrupting power flows equivalent to the output of a large power station within five milliseconds — 30 times faster than the blink of a human eye. The breakthrough removes a 100-year-old barrier to the development of direct current transmission grids, which will enable the efficient integration and exchange of renewable energy. DC grids will also improve grid reliability and enhance the capability of existing AC (alternating current) networks. ABB is in discussions with power utilities to identify pilot projects for the new development.

Researchers Develop Effective Thermal Energy Storage System [R&D Magazine, Nov. 9] Engineering researchers at the University of Arkansas have developed a thermal energy storage system that will work as a viable alternative to current methods used for storing energy collected from solar panels. Incorporating the researchers' design into the operation of a concentrated solar power plant will dramatically increase annual energy production while significantly decreasing production costs. Current storage methods use molten salts, oils, or beds of packed rock as media to conduct heat inside thermal energy storage tanks. Although these methods do not lose much of the energy collected by the panels, they are either expensive or cause damage to tanks. Specifically, the use of a packed rock, currently the most efficient and least expensive method, leads to thermal "ratcheting," which is the stress caused to tank walls because of the expansion and contraction of storage tanks due to thermal cycling.

LEGISLATION AND REGULATION

Europe Intensifies Chinese Solar Panel Investigation [New York Times, Nov. 8] BRUSSELS — European Union regulators ramped up their investigation of the Chinese solar panel industry on Thursday by accusing the Chinese government of unfairly subsidizing manufacturers of the panels. The latest step in an increasingly acrimonious battle engulfing the clean-energy sector came a day after the United States made a final decision to impose duties on billions of dollars of solar products from China over the next five years to shield producers against lower-priced imports. It also came after the government in Beijing said Monday that it had filed a case with the World Trade Organization accusing some E.U. countries of violating free trade rules with policies that favored the purchase of solar energy equipment produced in Europe. The European Commission is already investigating whether Chinese manufacturers sold equipment for less than the cost of making it. That so-called anti-dumping investigation is the biggest case of its kind in terms of value, covering imports from China worth €21 billion, or $27 billion. The investigation announced on Thursday covers the same products but it focuses on whether the Chinese authorities have skewed competitiveness by providing products like silicon and glass at below market prices, by offering low cost loans, or by granting other funds or exemptions from regulations.

Greece Plans Revenue Tax for Solar Plants to Cut Deficit [Bloomberg, Nov. 7] Greece is planning to approve a tax on existing solar power plants of 25 percent to 35 percent of revenue to reduce a deficit related to clean energy. The government included the tax cutting the revenue for all photovoltaic plants in its bill of economic measures scheduled for a vote tonight in the parliament in Athens, a draft of the legislation shows. It covers all solar power plants bigger than 10 kilowatts during two years. Greece, which has spent about 370 million euros ($473 million) on clean energy subsidies, is joining Spain, the Czech Republic and Bulgaria in raising taxes on solar facilities already built. Plants with about 700 megawatts were completed in Greece this year, bringing to 1.3 gigawatts the total installed capacity.

Harsher Energy Regulations Seen in Obama's Second Term [Reuters, Nov. 7] Energy producers braced for tighter regulation in President Barack Obama's second term, with coal companies expecting more emissions restrictions and drillers anticipating less access to federal land even as his platform promotes energy independence. Opponents already believe that Obama has waged a "war on coal" through the administration's push for stricter regulation of greenhouse gas emissions by the Environmental Protection Agency (EPA). "Four more years of President Obama translates into additional pressure on the coal industry from the EPA and numerous environmental groups," energy investment bank Simmons & Co said in a note to investors on Wednesday. Analysts at ClearView Energy Partners in Washington expect Obama to "continue prosecuting energy policy through regulation and administrative action, with only the courts as a check on that agenda." The National Mining Association criticizes Obama for not living up to a 2008 promise to develop clean coal technology, arguing that his policies "virtually preclude"

Governor’s Office of Energy Policy November 13, 2012 - 6 - the construction of new coal plants and skew the market against coal.

Michigan Turns Lights Out on Proposed Renewable Energy Mandate [The Detroit News, Nov. 6] Michigan voters pulled the plug on a proposed constitutional amendment that would have required Michigan's utilities to provide 25 percent of their electricity from renewable sources by 2025. With most precincts reporting, 63 percent of voters opposed the measure. "Obviously, we're pretty happy with what we're seeing," said Steve Transeth, the former head of the Michigan Public Service Commission who has worked to defeat the ballot measure. "As we've said all along, it's very important we move forward with clean energy and a clean environment. But this proposal was just not the way to go about it." Proposal 3 represented a doubling-down on renewable energy after state legislators voted in 2008 to reach a 15 percent standard by 2015. Those backing the ballot measure claimed the new standard would not only accelerate Michigan's move away from environmentally-damaging fossil fuels, but create jobs and investment from the construction and maintenance of wind turbines.

US Trade Panel Approves Five-Year Duties on China Solar Products [Reuters, Nov. 7] WASHINGTON – The United States gave final approval on Wednesday to duties on billions of dollars of solar-energy products from China for the next five years, protecting U.S. producers against lower- priced imports and raising fears of Chinese retaliation. The U.S. International Trade Commission voted 6-0 in favor of double- and triple-digit duties in a case filed last year by SolarWorld Industries America. Beijing has protested the case each step of the way, calling it a protectionist move that threatens the future of solar energy by driving up costs for consumers. SolarWorld, the largest U.S. solar-panel manufacturer, accused Chinese competitors such as Suntech Power Holdings of selling solar cells and panels in the United States at unfairly low prices and receiving government subsidies. SolarWorld's German parent, SolarWorld AG, is pressing the European Union for similar curbs on Chinese solar products.

WESTERN POWER Calif. to Officially Launch Greenhouse Gas System [Associated Press, Nov. 12] San Francisco, CA – California's largest greenhouse gas emitters will begin buying permits in a landmark "cap-and-trade" system designed to control emissions of heat-trapping gases and to spur investment in clean technologies. The program is the most wide-ranging of its kind in the nation and a key part of California's 2006 climate-change law that dictates standards for cleaner-burning fuels, more efficient automobiles, and increased use of renewable energy. Under the plan, the California Air Resources Board will auction off pollution permits on Wednesday called "allowances" to more than 350 businesses, including electric companies, food processors and refineries. In essence, the auction will put a price on carbon emissions.

Californians Vote in Favor of Renewable Energy [PowerEngineering.com, Nov. 7] During the Nov. 6 election, California voters passed one proposition that will have a direct effect on the growth of the state’s renewable energy industry, and another that could have an indirect effect. Proposition 39 changes corporate tax code to be based on sales rather than payroll in an effort to make California’s corporate tax structure consistent with most large states. This new structure is expected to generate an additional $1.1 billion each year in revenue. For the first five years after the initiative passes, 50 percent of the funds are set aside for solar, renewables and efficiency projects. After five years, 100 percent of the funds go to education and the general fund. Proposition 30, meanwhile, eliminates $6 billion in cuts to California colleges and schools, strengthens California competitiveness by maintaining educational funding, taxes high income-earners with more than $500,000 in earnings and provides funding for schools and public safety.

Construction Begins on 758 MW Natural Gas-Fired Power Plant [PowerEngineering.com, Nov. 8] Bechtel said it broke ground on the 758 MW Panda Sherman combined-cycle natural gas-fired power plant in Texas. Bechtel and Siemens (NYSE: SI) are designing and building the project for Panda Sherman Power LLC, an affiliate of Panda Power Funds. Engineering, procurement and manufacturing work is already under way. Commercial operations of the plant are expected to begin in 2014.

Fed Greenlights Biggest Electric Vehicle Charging Network [SustainableBusiness.com News, Nov. 9] California drivers will soon be able to easily find stations to quickly charge their electric vehicles. The federal government approved a settlement between NRG Energy and the California Public Utilities Commission (CPUC), clearing the way for a $100 million electric vehicle charging

Governor’s Office of Energy Policy November 13, 2012 - 7 - infrastructure that will stretch from San Francisco to San Diego. NRG's deal with CPUC lays to rest a decade- old dispute involving a subsidiary of Dynergy, a utility that was one of several power companies that overcharged California rate-payers during the state's energy crisis. NRG inherited the liability for the resolution in 2006 when it acquired 50% of Dynergy's assets. The settlement approved by the Federal Energy Regulatory Commission (FERC) calls for NRG to pay $20 million for rate-payer relief and most importantly, to invest $100 million in an EV charging network across California.

Landmark Water Pact with Mexico Could Boost Lake Mead [Las Vegas Review-Journal, Nov. 8] After years of negotiations, the United States and Mexico have struck a deal that could keep more water in Lake Mead and help improve water efficiency and the environment south of the border. The landmark five-year agreement would allow Mexico to store some of its annual Colorado River allotment in Lake Mead for future use. It also clears the way for the U.S. government and several municipal water agencies, including the Southern Nevada Water Authority, to invest in infrastructure improvements in Mexico in return for a share of the water such projects would save. It even includes provisions for restoring the flow of the Colorado River to the Gulf of California, albeit on a reduced, experimental scale. "It's a package that brings huge benefits to Mexico and huge benefits to the states on the Colorado River," water authority general manager Pat Mulroy said. "I think it can be a real game-changer on the river. Facilities in the U.S. will be used to benefit our neighbors, and they will become full partners on the system." Mexico was not included in recent pacts that spelled out how the seven U.S. states on the Colorado River divide surpluses in wet years and share shortages in dry ones. The nation now will be subject to the same criteria as the states, allowing Mexico for the first time to access additional water when it's available but reduce its deliveries when it's not. Mulroy said the new agreement provides certainty to the various groups that share the Colorado and should help foster cooperation as the notoriously fickle river comes under increasing strain from overuse, drought and climate change.

Nevada Solar Program Expands Reach [Electric-coop Today, Nov. 7] An electric cooperative in Nevada has expanded its nationally recognized solar water heater program to include homeowners using propane. Valley Electric Association in Pahrump is using a $5,000 grant recently awarded by the state’s energy office to help this group of residents switch to solar water heating. While only about an estimated 10 percent of the co-op’s nearly 17,000 members use propane for water heating, that group is in “tight economic circumstances,” and could use the financial help, said VEA’s Tom Polikalas. Fewer people using propane means that the co-op can add to an estimated 2.1 million pounds of carbon dioxide offset by the program so far.

ARIZONA STATE INCENTIVES/POLICIES ARIZONA COMMERCE AUTHORITY (ACA)

Angel Investment Tax Credit Program - The main objective of the Angel Investment program is to expand early stage investments in targeted Arizona small businesses. The program accomplishes this goal by providing tax credits to investors who make capital investment in small businesses certified by the Arizona Commerce Authority (ACA). To view the list of businesses that have been certified under this program please click here.

Income Tax Credit Provisions An investor seeking an income tax credit must document to the ACA the investment was made in either a qualified rural or bioscience company or any other qualified small business. For a qualified bioscience or rural company, the tax credit may total up to 35% of the investment amount over three years; for any other qualified business, the tax credit may total up to 30% over three years. If the tax credits exceed the investor’s income tax liability, any unused tax credit amount may be carried forward for up to three taxable years as long as the investor timely claims the credits with Revenue.

The ACA may authorize up to $20 million in tax credits to qualified investors beginning July 1, 2006 through June 30, 2016. The tax credits will be authorized on a first come, first served basis, which is established by the date and time the investor files an application with the ACA. Download the Angel Tax Credit Allocation Table Angel Tax Credit Allocation Table to view the remaining amount of tax credits available. For more detailed information please see below or direct questions to the Program Manager.

Governor’s Office of Energy Policy November 13, 2012 - 8 - Arizona Innovation Accelerator Fund - The Arizona Innovation Accelerator Fund Program is an $18.2 million loan participation program funded through the U.S. Department of Treasury’s SSBCI and managed by the Arizona Commerce Authority. The goal of this program is to stimulate financing to small businesses and manufacturers, in collaboration with private finance partners, to foster business expansion and job creation in Arizona.

Arizona Innovation Challenge - The Arizona Innovation Challenge is an investment in the minds of talented entrepreneurs in Arizona and around the world. The ACA will award $1.5 million to the most promising technology ventures that participate in the Challenge (awards may range from $100,000 to $250,000).

AZ Fast Grant - Technology Commercialization Assistance - Next round of grants opening in mid November. This competitive grant enables Arizona-based technology companies to initiate the commercialization process. The grant will pay up to $7,500 to provide one or more of the following professional consulting services: An expert review of the technology under development to determine if it already exists, is a good candidate for intellectual property protection and is likely to find an attractive market.

A commercialization feasibility study to identify showstoppers to commercialization before resources are spent commercializing a technology that is unlikely to succeed.

Other commercialization assistance such as training or preparation for the submission of a federal SBIR/STTR grant application or another acceptable means of technology commercialization.

AZ Step Grant - Grant funding from the U.S. Small Business Administration (SBA) with matching funds contributed by the Arizona Commerce Authority (ACA) offering a number of services and tools to Arizona small businesses as they go global for the first time with sales or enter new, international markets.

Commercial/Industrial Solar Energy Tax Credit Program - The primary goal of the Commercial/Industrial Solar Energy Tax Credit Program is to stimulate the production and use of solar energy in commercial and industrial applications by subsidizing the initial cost of solar energy devices. The program achieves this goal by providing an Arizona income tax credit for the installation of solar energy devices in Arizona business facilities. For more detailed information please see below or direct questions to the Program Manager.

Healthy Forest - Harvesters, initial processors and transporters of small diameter timber, may receive: Transaction Privilege Tax Exemptions, Use Tax Exemption and New Job Income Tax Credits.

Job Training Program offers job specific reimbursable grants for employers creating new jobs or increasing the skill and wage level of their current employees. Deadline: Year Round

Renewable Energy Tax Incentive Program offers a refundable income tax credit and property tax reduction to companies in solar, wind, geothermal and other renewable energy industries who are expanding or locating a manufacturing or headquarters operation in Arizona. The tax credit is up to 10% of the total qualified investment amount and the property tax benefit can reduce a company’s property taxes by up to 75%. Deadline: Year Round

Research and Development Tax Credit is an Arizona income tax credit for increased research and development activities conducted in this state. Starting in 2010, a qualifying company may be eligible to claim a partial refund of its current year excess R&D credit. Applicants may apply at the end of their tax year but prior to filing a tax return with Revenue.

Quality Jobs Tax Credit Program - Beginning July 1, 2011, this new program provides Arizona income tax credits for companies creating new jobs and investing in Arizona. The credit is valued at up to $9,000 over a 3-year period per each new employee and offers a 5-year carry forward provision for any unused tax credits. Eligibility qualifications are different for rural and metro areas.

Bonds Administered by the Arizona Commerce Authority.

Governor’s Office of Energy Policy November 13, 2012 - 9 - Federal Programs ------Pollution Control Tax Credit - Provides a 10 percent income tax credit on the purchase price of real or personal property used to control or prevent pollution.

Renewable Energy Production Tax Credit - An income tax credit awarded to utility-scale generation systems based on the amount of electricity produced annually for a 10-year period using solar or wind energy. Questions can be directed to Georganna Meyer (602-716-6927) or Elaine Smith (602-716-6924).

Sales Tax Exemption for Machinery and Equipment - Exemptions are available for: 1. Machinery or equipment used directly in manufacturing, see ARS 42-5159(B)(1). 2. Machinery, equipment or transmission lines used directly in producing or transmitting electrical power, but not including distribution, see ARS 42-5159(B)(4). 3. Machinery or equipment used in research and development, see ARS 42-5159(B)(14). Questions can be directed to Christie Comanita (602-716-6791).

Solar Liquid Fuel Tax Credit - Income tax credits are available for research and development, production and delivery system costs associated with solar liquid fuel. Questions can be directed to Georganna Meyer (602-716-6927) or Elaine Smith (602-716-6924).

Database of State Incentives for Renewables and Efficiency (DSIRE) Arizona Incentives/Policies Federal Incentives/Policies Solar Policy News - DSIRE provides summaries of current solar policy developments and an archive of past solar policy developments. Current solar news appears below the news archive, which is searchable by several criteria.

GRANTS The following solicitations are now available:

National Science Foundation, Energy for Sustainability. This program supports fundamental research and education that will enable innovative processes for the sustainable production of electricity and transportation fuels. Processes for sustainable energy production must be environmentally benign, reduce greenhouse gas production, and utilize renewable resources. Current interest areas in sustainable energy technologies are biomass conversion, biofuels & bioenergy, photovoltaic solar energy, wind energy and advanced batteries for transportation. Expected Number of Awards, 42. Estimated total program funding, $9,200,000. Due dates, full proposal window: January 15, 2013 - February 19, 2013. For more information, visit http://www.nsf.gov/funding/pgm_summ.jsp?pims_id=501026\

U.S. Dept. of Agriculture Rural Energy for America Program - Renewable Energy System and Energy Efficiency Improvement Guaranteed Loan and Grant Program

ENERGY-RELATED EVENTS

AWEA Wind Energy Fall Symposium November 13 – 17, 2012 – Chandler, AZ

Greenbuild 2012 International Conference & Expo November 14 – 16, 2012 – San Francisco, CA

4th PV Power Plants Conference – USA 2012 November 28 – 29, 2012 – Phoenix AZ

Governor’s Office of Energy Policy November 13, 2012 - 10 - Governor’s Solar Energy Task Force (GSETF) Meeting November 29, 2012 – Phoenix, AZ

SRP Residential Solar Basics Workshop December 8, 2012 1:00pm-2:30pm. – Tempe, AZ

3rd Annual Electric Energy Storage Conference January 8 – 10, 2013 – Phoenix, AZ

Energy, Utilities & Environment Conference (EUEC) 2013 January 28 – 30, 2013 – Phoenix, AZ

Arizona SciTech Festival February 9 – March 13, 2013

SRP Residential Solar Basics Workshop February 27, 2012 6:30pm-8:00pm – Tempe, AZ

2013 ACI National Home Performance Conference & Home Energy Leadership Summit April 29 – May 3, 2013 – Denver, CO

XXII La Jolla Energy Conference May 20 - 22, 2013 – La Jolla, CA

PV America West 2013 May 14 – 16, 2013 – San Diego, CA

Energy Management Congress West, 31st June 19 – 20, 2013 – Las Vegas, NV

Green Building Lecture Series Granite Reef Senior Center – 1700 N. Granite Reef Road, Scottsdale, AZ

Governor’s Office of Energy Policy November 13, 2012 - 11 -