Clean Line Pitches Strategy to Go for 'Purple Wind' with HVDC Lines Midwest ISO Implements Its Unique New Designation for Wi

Volume 7 Issue 22 Friday, June 3, 2011 Clean Line pitches strategy to go for ‘purple wind’ with HVDC lines by Andrewmailto:[email protected] Engblom

Wind energy is inexpensive and will stay adding that wind would cost about 5 cents It is by accessing the best resources, which inexpensive, Michael Skelly, president of per kWh without the production tax credit. Clean Line Executive Vice President Jimmy independent transmission developer Clean “That is pretty good economic power. If you Glotfelty on an earlier panel called the “pur- Line Energy Partners, said, explaining that don’t have some in your portfolio, you are ple wind,” that the industry can ultimately his company’s proposed high-voltage direct- missing a good opportunity.” bring down the price of wind energy. current, or HVDC, transmission lines can get The wind energy industry may be in the “The wind industry grew up around an that cheap wind to market. doldrums — only 5,115 MW were installed in intersection of a good wind site and slack “Today wind in the really windy parts of 2010, and a panel of turbine manufacturers capacity of the grid. Now we are burning the country, with the [production tax credit], here predicted only modest growth for 2011 through all that slack capacity, so we have to is about 3 cents [per kWh],” Skelly said in an — but Skelly said part of the slowdown is the build more grid,” Skelly said. “We are looking interview during the American Wind Energy result of the constrained transmission grid. four or five years down the road. We think we Association’s Windpower 2011 conference, can help grow the industry.” Continued on p 22 In this Issue Click on headline to advance to story Midwest ISO implements ACORE: States’ renewable its unique new designation for wind energy policies remain by Marcymailto:[email protected] Crane strong Calling the move a “major step forward and thus be automatically dispatched up to … in addressing the operational challenges a forecast limit based on an offer price and BLM issues record of associated with the variable nature of renew- system conditions. decision for SoCalEd line to able energy resources such as wind power,” “For years the industry has grappled with support desert solar the Midwest ISO announced June 1 that how to fully reflect the value of renewable those resources can now participate fully in energy in the market and to enable renew- California approves plan for its real-time energy market by being desig- able resources to realize the financial ben- SDG&E transmission line lease, nated “dispatchable intermittent resources,” efits of operating flexibly and responding to sharing profits with poor or DIRs. market dispatch instructions,” Midwest ISO Under the initiative, DIRs will be treated Vice President of Operations Richard Doying much like any other generation resource in said in a news release. “This will ensure the Northwest Territories touts the markets to reflect their relatively new- resources are utilized most efficiently, pro- progress in transforming found ability to reduce output on demand ducing energy where and when needed.” electricity sector Continued on p 22

Ontario expects 2,500 MW Non-photovoltaic solar development to come online in next 18 months trends, outlook by Jessemailto:[email protected] Gilbert and Ashley mailto:[email protected] Pipkin-Jones Hold on NRG Bluewater Wind’s federal loan Discussions of renewable energy devel- offers a distinct advantage through its natu- application delays wind opment in the U.S. have largely centered ral thermal storage, allowing for a smoother on wind and photovoltaic technologies. generation profile. When combined with project off Delaware’s coast Concentrated solar power, or CSP, plants thermal storage capacity, CSP plants can offer certain advantages when compared to continue to produce electricity into the early Departments photovoltaic and wind technologies, which evening, when PV plants ramp down. Click on department for more info are increasingly making them an important The technology behind most concentrat- Projects Policy part of the nation’s renewable energy plans. ed solar plants is still in an emerging phase, Company News Technology Unlike wind, which typically sees higher and to date, there has been relatively little production during off-peak periods, CSP gen- deployment of these technologies in the U.S. Finance eration matches well with peak load profiles. There are only 17 operating CSP projects in While this is also true of PV solar plants, CSP the U.S., totaling 554 MW. Most of this capac-

© 2011, SNL Financial LC. All Rights Reserved. Friday, June 3, 2011 Page 2 ity, 400 MW, was added between 1984 and 1990. The period between 1991 and 2004 saw no installations of CSP capacity, but activity has picked up since, with 154 MW installed. 2010 saw the largest CSP installation in 20 years when NextEra Energy Inc. subsidiary Florida Power & Light Co.’s Martin gas combined-cycle plant added 75 MW of CSP capacity in a hybrid configuration. A confluence of factors is driving increased interest in non-PV solar projects. These factors include progression of state renewable portfolio standards; high population growth in states with large solar potential; and government incentives including U.S. Department of Energy loan guarantees and production credits as well as an initiative to spur growth in renewable energy development on government lands.

Market conditions also are setting the stage for solar build-out in the Southwest. Most of the states with ideal CSP conditions are expected to see strong population growth in the coming years, and with it the need for new power. In fact, of the top 10 states by projected population growth between 2010 and 2015, six of the seven states identified by NREL make the list. Utah leads all states, with a projected population change of 12.63% between 2010 and 2015, followed by Arizona with 9.71%, Nevada with 9.13% and Texas with 8.53%. Nevada, Arizona, New Mexico, Utah, Texas and Colorado — the states NREL cited, with the exception of California — are expected to exceed the projected average U.S. population change of 3.85% for this period. A total of 18,081 MW of CSP solar capacity is planned in the U.S. Renewable portfolio standards also are a factor in favor of solar The overwhelming majority of these projects were announced in development in the Southwest. Utah has a renewable portfolio goal, 2009 and 2010. Of that planned total capacity, the majority of it, but California, Nevada, Arizona, New Mexico, Texas and Colorado some 12,248 MW, is in the earliest announced phase of develop- have established renewable portfolio standards, helping to fuel solar ment. Many of these projects are proposed on U.S. Bureau of Land development in these states. Management property, and critics have argued that the BLM’s first- come, first-served land-leasing system has led to many speculative Eight states have planned CSP capacity, including Hawaii, Florida holds on land from companies with no firm project plans, making it and South Carolina. California leads all states, with 6,507 MW of unclear how much of the announced CSP capacity will materialize. planned CSP capacity from 24 plants. California also leads all states for installed CSP capacity, with 11 plants totaling 410 MW. The state While most projects are still in early development, nearly 5,130 has the most aggressive RPS in the U.S. On April 12, Gov. Jerry Brown MW are in advanced development, according to data from SNL signed S.B. 2X, requiring California utilities and other electric service Energy, which marks a project as under advanced development if it providers to procure 33% of the power they sell to retail customers meets at least two of the following criteria: signing a power purchase from renewable energy by 2020. The legislation also requires out-of- agreement; obtaining financing; obtaining siting permits; signing an state suppliers to be treated identically to generating sources within engineering, procurement and construction contractor; or securing the state, allowing neighboring states to supply renewable energy turbines. The capacity in advanced development is made up of 300 to meet the RPS. MW expected to come online in 2011, 276 MW in 2012, and nearly 2,900 MW in 2013 and beyond, with 1,675 MW with an unknown Nevada comes close behind California, with 5,990 MW of CSP online date. capacity planned coming from nine plants. The state has one operating plant with 64 MW. Nevada has an RPS in place that requires 25% To date, 677 MW of CSP capacity is under construction, comprising of energy sales to come from qualifying renewable energy sources 35 MW coming online in 2011 and 642 MW expected to come online by 2025, with interim targets. Nevada has a solar carve-out that in 2013. requires utilities to meet 6% of their portfolio requirement through The states solar energy starting in 2016. Development of large-scale CSP has largely been isolated to Arizona has 5,091 MW of CSP capacity planned from 19 proj- the southwestern U.S. CSP requires high levels of direct irradiance, ects. The state has relatively little experience with CSP, with only 2 which indicates areas with reliably clear skies, usually in hot, semi- MW installed between two plants. In November 2006, the Arizona arid regions. The National Renewable Energy Laboratory tracks CSP Corporation Commission adopted final rules to expand the state’s potential in the U.S., and it identifies seven states that have high lev- RPS to 15% by 2025. els of direct normal solar radiation ideal for CSP: California, Nevada, The other states with planned CSP capacity are Colorado with 445 Arizona, New Mexico, Utah, Texas and Colorado. MW, Texas with 27 MW, Hawaii with 16 MW, Florida with 5 MW and In addition to resource potential, the Southwest has a variety of South Carolina with one project totaling 1 MW. other attributes that make it ideal for CSP development. CSP requires Planned projects large tracts of land, roughly 2 hectares per MW, depending on the technology. The Southwest is home to millions of acres of govern- According to SNL Energy data, 60 announced non-photovoltaic ment land managed by the BLM that has been set aside for solar projects are planned in the U.S. These 60 projects have an average development. planned capacity of 301 MW, with 45 of the projects targeting at

least 100 MW. The number of planned non-PV plants is signifi- Planned projects by owner cantly lower than the number of planned PV plants. However, the Goldman Sachs is the largest owner of planned non-photovoltaic non-PV projects on average have greater planned capacity. Of the projects in the U.S. thanks to its three 1,400-MW CSP projects in Nye 499 planned PV projects in the U.S. that are at least 1 MW, 68 have County, Nev. Through its subsidiary Cogentrix, Goldman Sachs has planned capacity of at least 100 MW and have an average planned claims to almost half the U.S. lands offered for solar development in capacity of 49 MW. Nevada by the BLM. Goldman Sachs was one of the first applicants Goldman Sachs & Co. subsidiary Cogentrix Solar Services LLC lays when the agency began issuing the land leases on a first-come, claim to the three largest non-PV projects in the U.S.: Amargosa Nye first-served basis. Goldman Sachs owns two non-PV solar plants, County, Beatty Nye County and Big Dune Nye County. The three SEGS I and SEGS II. The 14-MW and 30-MW parabolic trough plants projects will each use concentrated solar power and have a planned were completed and placed in service in 1984 and 1985. Goldman capacity of 1,400 MW. Along with the three projects, Congentrix acquired the plants in 2009. owns two operating non-PV plants, both in California. BrightSource Energy Inc. follows Goldman with 3,091 MW of The fourth-largest planned non-PV project is Blythe Solar. The planned non-PV solar capacity. BrightSource has seven projects in four-phase, 968-MW project is jointly owned by Chevron Corp. and varied stages of development in Arizona, California and Nevada, Solar Trust of America LLC. Each phase is expected to cost $1.5 bil- with estimated construction costs of more than $14.6 billion. lion, with the earliest phase expected to come online in 2014. In BrightSource’s three Ivanpah projects in San Bernardino County, April, the DOE approved a $2.1 billion loan guarantee for units 1 Calif., are approved by the BLM and are listed as under construction and 2 of this project, totaling 484 MW. This project aims to be the by SNL Energy. These projects are scheduled to come online in 2013. first CSP parabolic trough plant to use an air-cooled condenser unit. BrightSource obtained site control for the 960-MW Coyote Springs This technology can reduce water use by up to 90% compared to a Solar through a lease option. The site is on privately owned land water-cooled CSP facility. Edison International subsidiary Southern approximately 50 miles from Las Vegas. BrightSource plans to have California Edison Co. holds a power purchase agreement for 484 MW the project connect directly to Southern California Edison’s Eldorado of capacity. Blythe is one of the few non-PV solar projects approved substation. by the BLM. The Imperial Valley Solar Project, rated at 709 MW; Solar Trust of America owns 1,226 MW of planned capacity, includ- the three Ivanpah projects, totaling 392 MW; Genesis Solar Energy ing the Blythe Solar Power project and Amargosa Farm, both of Project, 250 MW; and Amargosa Farm Road Solar and Amargosa which are approved by the BLM. Farm Road Solar 2, 500 MW, are some of the largest non-PV projects approved by the BLM.

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Operating plants by owner NextEra Energy is the largest owner of non-PV solar plants in the U.S. NextEra owns 167 MW of non-PV solar operating capacity, all from its ownership of seven of the SEGS plants. NextEra also owns 1,000 MW of planned non-PV solar capacity. Fortress Investment Group LLC owns 91 MW of operating non-PV solar plants. It owns a share of five SEGS plants, the only power plants Fortress owns.

Operating plants The largest operating non-PV plants in the U.S. are the SEGS plants in California’s Mojave Desert. Totaling 400 MW of installed capacity, SEGS IX and VIII are the largest, totaling 88 MW each. The SEGS plants use parabolic trough systems with close to 1 million mirrors. Last Issues to watch year, SEGS had 840,000 MWh of generation, with SEGS IX (Harper There are several key issues to watch that will affect the build-out Lake) and SEGS VIII (Harper Lake) accounting for 384,000 MWh. of large-scale CSP in the U.S., including siting of projects on govern- Southern California Edison Co. holds a PPA for all of the SEGS plants. ment lands, the ending of several key federal incentive programs, the The third-largest individual non-PV plant is the 64-MW Nevada pace of CSP technology development to drive down project costs, Solar One. The CSP plant came online in 2007 and occupies 400 acres renewable transmission development, renewable project finance in Clark County, Nev. Nevada Power Co. has a power purchase agree- and the future of natural gas prices. ment expiring in April 2027 for 33 MW of the plant’s capacity. CSP technology is in an emerging phase, and there is significant The chart below excludes the 75 MW of operating capacity at FPL’s room for cost reductions. A 2009 report from Lazard compared the combined-cycle Martin plant in Martin County, Fla. levelized cost of energy, or LOE, for various renewable sources with conventional generation. In its base case, excluding factors such as RECs, carbon emissions costs and transmission costs, Lazard calcu- lated an LOE of $129/MWh to $206/MWh for CSP, with the low end representing solar tower technologies and the high end representing solar trough. This can be compared to an LOE of $78/MWh to

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$144/MWh for coal, $74/MWh to $102/MWh for gas combined-cycle making BLM approvals a significant factor in the near-term future of and $225/MWh to $342/MWh for gas peaking. The Lazard analysis CSP development. The past few years have seen a flood of applica- also noted significant sensitivities of LOE for renewable technolo- tions to hold this land for potential development, overwhelming gies to cost of capital, which is important given the environment of BLM staff. Progress of BLM approvals has thus been slow to date, but disrupted capital markets with reduced availability and increased some progress has been made over the past year. In 2010, the BLM costs. approved seven CSP projects and has set four CSP projects as priority CSP technologies require huge up-front investments, with very projects to focus on in 2011. To be a priority project, a company must low variable costs. Much of the plant costs, then, must be sup- demonstrate to the BLM that the project has progressed far enough ported through investment capital and not through plant cash flows. to formally start the environmental review and public participation According to NREL, access to debt and equity are two of the main process and has the potential to be cleared for approval by the end barriers to project development. of 2011. The economic downturn has placed a strain on traditional renew- Although the past year has headed toward a more predictable, able tax equity financing, and the pace of recovery in these markets expedient system of authorizations, opposition to solar develop- will be an area to watch. In response to the breakdown of tax equity ment by Native American tribes and other stakeholders is on the rise financing, the American Recovery and Reinvestment Act of 2009 and has turned litigious. The BLM, in conjunction with several other created a cash grant program that allows the owner of a commer- government agencies, is preparing a programmatic environmental cial solar property to receive a 30% grant in lieu of taking the solar impact statement, or PEIS, to evaluate solar energy development on investment tax credit. This grant is set to expire at the end of 2011. BLM lands and develop and implement agency-specific programs or guidance that would establish environmental policies and mitiga- Another program set to expire, on Sept. 30, is the DOE’s loan guar- tion strategies for solar projects. This would amend BLM land-use antee program, which has provided billions of dollars in loan guar- plans with the consideration of establishing a new BLM Solar Energy antees for solar projects. Combined with the loss of the cash grant Program. The PEIS could require BLM-required design features for program, this could have a significant effect on investors’ ability to CSP plants on these lands. CSP developers will want to closely watch finance solar projects in the coming years. these developments as they unfold. Outside of financing, another key issue to watch is progress in Overall, CSP has enormous potential, particularly in the Southwest, siting solar projects on BLM lands. Millions of acres of land in the where strong population growth is expected in the coming years Southwest has been set aside for solar development, but only within and strong state policies support renewables, though challenges the past year has ground been broken on any CSP projects there. common to renewables in general abound, as well as issues unique Many of the projects in the pipeline are proposed on these lands, to CSP technologies. It is unclear how much of the more than 18,000

© 2011, SNL Financial LC. Departments: Projects Policy Company News Technology Finance All Rights Reserved. ��Join the power industry’s most respected analysts as they lead discussions on the investment options flowing from current Federal initiatives.

� Engage� with corporate and finance leaders who are successfully implementing investment and growth strategies despite market uncertainty. Power, Policy and Investments: What are your options?

June 7, 2011 � T he Union League Club � New York, NY

Keynote speakers Join us as we look at these key issues: The Honorable Branko Terzic � Dodd-Frank, the CFTC and energy trading � Executive Director, Deloitte Center for Discussion leader: Joseph Engelhard, Senior VP, Energy Solutions , Deloitte Services Capital Alpha Partners � Former Commissioner, U.S. Federal Energy � Regulatory Commission (FERC) EPA’s current and future initiatives and the effect on generation investment Discussion leader: James Lucier, Managing Christine Todd Whitman Director, Capital Alpha Partners � President of The Whitman Strategy Group � The initiatives Congress is likely to fund or delay � Administrator of the Environmental that will prioritize your strategies Protection Agency (2001 – 2003) Discussion leader: Kevin Book, Managing � Governor of New Jersey (1994-2001) Director, Research, ClearView Energy Partners � How FERC’s proposals on primacy and cost The Honorable Ed Whitﬁeld allocation will impact transmission spend (invited) Discussion leader: Christine Tezak, Director, � Chairman, House Subcommittee on Senior Energy and Environmental Analyst, Energy and Power Robert W. Baird & Co.

MW of planned CSP capacity will come to fruition, and stakeholders ACORE’s report, “Renewable Energy in America: Markets, Economic will want to closely follow financial, legal and political developments Development and Policy in the 50 States.” in the coming months. “Speaking personally, having a renewable energy standard at the COMPANIES REFERENCED IN THIS ARTICLE: federal level would make a lot of sense,” she said. Acciona SA According to the report, which was released in March, state-level policy commitments remain strong, with 36 states and Washington, AEShttp://www.snl.com/interactivex/snapshot.aspx?id=4055465 Corp. AES D.C., having renewable portfolio standards. ArcLight Capital Partners LLC All of the states’ policies have contributed to an expansion of AREVA renewable energy, VanGenderen said. “Clearly, state renewable energy standards have been key platforms” and have been complemented BrightSourcehttp://www.snl.com/interactivex/snapshot.aspx?id=4171743 Energy Inc. by additional policies such as interconnection standards, she said. Chevron Corp. Investment strategies at the local, state and federal levels, includ- Cogentrix Solar Services LLC ing stimulus funds, are providing further leverage for new projects, VanGenderen noted. Constellationhttp://www.snl.com/interactivex/snapshot.aspx?id=4057042 Energy Group Inc. CEG Feed-in tariffs are an effective tool for renewable energy and are District Energy St. Paul being used around the world, with Germany a prime example of how Edisonhttp://www.snl.com/interactivex/snapshot.aspx?id=4056943 International EIX well that has worked. Vermont has a feed-in tariff, she said, adding that ACORE is working with several states and FERC to look at potential eSolar Inc. alternative routes for states to implement a feed-in tariff more easily. http://www.snl.com/interactivex/snapshot.aspx?id=4056997 Florida Power & Light Co. Most Southeastern states do not have renewable energy standards, Fortresshttp://www.snl.com/interactivex/snapshot.aspx?id=4147324 Investment Group LLC FIG VanGenderen said, noting that the first step for states without an RES is “to Global Infrastructure Partners learn about other states, what is working well, then emulating best prac- tices and determining a solution that works for that particular state.” Lazardhttp://www.snl.com/interactivex/snapshot.aspx?id=4097347 Ltd LAZ Some standardization could benefit everybody, she said. Nevadahttp://www.snl.com/interactivex/snapshot.aspx?id=4061726 Power Co. ACORE is working on a paper to identify a broader array of policies NextErahttp://www.snl.com/interactivex/snapshot.aspx?id=3010401 Energy Inc. NEE that would contribute to the scaling up of renewable energy financ- Pinnaclehttp://www.snl.com/interactivex/snapshot.aspx?id=4056951 West Capital Corp. PNW ing. “There’s no single silver bullet, of course,” she said. Siemens Concentrated Solar VanGenderen also said consistency in federal policies is essential. “The short-term nature of a lot of the policies that have supported renewables, Solar Pioneers Inc. the [Section 1603 investment tax credit], the [production tax credit], the Solar Trust of America LLC extension of the cash grant for single years or just a handful of years, has been highly problematic for utility-scale projects,” she said. Solargenix Energy LLC States still aggressively pursuing renewables Solel Inc ACORE said California has seen the most value from disclosed asset Sopogy Inc. finance transactions for newly built projects over the past two years, Southernhttp://www.snl.com/interactivex/snapshot.aspx?id=4009083 California Edison Co. while Texas and Illinois received the most funding from Recovery Act Sterling Energy Plc competitive grant and tax credit programs to fund renewable energy projects and manufacturing facilities. Sterling Energy Systems According to the group’s report, the total installed base of new Stirlinghttp://www.snl.com/interactivex/snapshot.aspx?id=4104506 Energy Systems Inc. renewable electricity in 2010 exceeded 50 GW in the U.S. While Texas, California and Iowa led in renewable energy generation capacity, http://www.snl.com/interactivex/doc.aspx?CDID=A-12839154-10294Feb 28, 09 Lazard Ltd Investor Presentation Iowa, Nebraska and Illinois led in renewable fuels capacity. http://www.snl.com/interactivex/doc.aspx?CDID=A-12839306-11570Full filing Texas has the largest wind market in the nation. Wind energy rep- resented 7.8% of the total energy in the Electric Reliability Council of http://www.snl.com/interactivex/feedback.aspx?Id=12838633&Action=estory E-mail this story. Texas Inc. in 2010, compared to 6.2% in 2009 and 4.9% in 2008. One of the main obstacles to the growth of renewable energy is the lack of transmission lines. Texas has developed the $5 billion Competitive ACORE: States’ renewable energy policies Renewable Energy Zones plan to expedite the process of identifying the best renewable energy resource zones and building transmission remain strong lines from these zones to population centers, ACORE noted. by Corinamailto:[email protected] Rivera California, meanwhile, has the largest market for solar photovoltaic applications in the U.S., with more than 212 MW of grid-tied PV In today’s global energy economy, implementing a federal renew- installed in 2009. Gov. Jerry Brown signed a law in April requiring able energy standard would produce significant benefits, but state ini- that utilities and other electric service providers get 33% of the tiatives are effectively filling the void until a national standard becomes power they sell to retail customers from renewable energy by 2020. a reality, according to Heidi VanGenderen, director of national and New Jersey follows California in installed solar capacity, ACORE regional outreach for the American Council on Renewable Energy. said. The state’s RPS calls for investor-owned utilities and retail elec- “The state renewable energy standards started in the absence tric suppliers to procure 22.5% of the electricity they sell from renew- of action at the federal level,” VanGenderen said June 1 during an able energy by 2021. Utilities may buy renewable energy credits, interview in which she discussed the 2011 update and redesign of solar RECs or offshore wind RECs for compliance.

ACORE also pointed out that Iowa is the leading ethanol producer Southern California Edison Co. wants to rebuild a 35-mile segment in the U.S. and second nationwide in installed wind capacity, with 879 of an existing 115-kV line in a double-circuit, 230-kV configuration to MW installed in 2009. Nebraska is second in the nation for ethanol support solar generation development in the Mojave Desert. The line production, with 27 operating ethanol plants, and at least two wind will run from a proposed substation in San Bernardino County, Calif., farms are expected to begin operation within the next year. Illinois to the Edison International subsidiary’s existing Eldorado substation follows Nebraska as the third-largest ethanol-producing state. near Boulder City, Nev. The part of the 115-kV line that runs west of the proposed Ivanpah station would remain unchanged. http://www.snl.com/interactivex/doc.aspx?CDID=A-12860447-12845Full filing The BLM has to issue a right of way for the federal lands the line http://www.snl.com/interactivex/feedback.aspx?Id=12860218&Action=estory E-mail this story. will cross, and the record of decision is the last agency step before issuing that right of way. A notice was published in the Federal Register on May 26 that the record of decision was available. BLM issues record of decision The proposed route is the best environmental alternative because for SoCalEd line to support desert solar it is the shortest and completely parallels existing lines, BLM said. The agency decided to adopt all recommended mitigation measures by Kerrymailto:[email protected] Bleskan from the environmental impact statement that the BLM and the California Public Utilities Commission prepared together. The U.S. Bureau of Land Management issued its voluminous record of decision approving the Eldorado-Ivanpah transmission project.

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“The selected alternative will achieve almost all of the beneficial line. At the end of the lease, the line segment capacity will revert impacts of the proposed project, including socioeconomic benefits back to SDG&E. of increases in employment and fiscal resources, and displacement The rent payment is the proportionate share of SDG&E’s actual cost of greenhouse gas and air pollutant emissions that are reduced and to develop, design, permit, engineer and construct the Border-East minimized with renewable energy generation,” the BLM said. Some segment of the Sunrise line. Citizens will recover its costs through of the required mitigation measures will be protections for the FERC-approved transmission rates, according to the PUC’s decision. endangered desert tortoise. Imperial County is an economically depressed agricultural area The BLM said the line conforms to a number of land-use plans and with many migrant workers. Citizens Energy estimated that distribu- policies governing the area. “The California Desert Conservation Area tions to low-income residents in the county would be $1 million per Plan recognized a system of [right-of-way] corridors as preferred year for 30 years, the PUC said in its decision. locations for future transmission projects and the proposed project replaces an existing transmission line in a designated corridor PUC President Michael Peevey said the involvement by Citizens with the new transmission line,” staff said. “The Las Vegas Resource Energy spurs the development of the line, alleviates a transmission Management Plan also designates [right-of-way] corridors and bottleneck and facilitates delivery of renewable energy to Southern allows for the authorization of transmission lines on a case-by-case California to help utilities reach their state-mandated renewables basis.” targets. The Ivanpah Valley is a popular place for solar developments Consumer protections are built into the rate Citizens Energy can and those generators need transmission somehow, the BLM said. charge because the 30-year, locked-in nature of the rate shields BrightSource Energy Inc.’s Ivanpah Solar Electric Generating System ratepayers from market fluctuations, he said. In addition to providing is under construction there, and First Solar Inc. is planning a 300-MW direct financial benefits to lower-income electricity consumers in the project called Stateline in San Bernardino County. First Solar or its Imperial Valley, the project will contribute to employment opportu- subsidiaries have a number of large solar projects planned in other nities and the tax base in Imperial County, Peevey said. southern California counties as well, plus a 150-MW project at the The commission unanimously adopted Peevey’s alternate decision other end of the rebuilt line, in Boulder City, Nev. A 1,205-MW First after he argued against an administrative law judge’s findings that Solar project in San Bernardino County, called Desert Opal, is on the arrangement could lead to higher transmission rates. Peevey hold. argued that the benefits far outweigh the possibility that the rates might be 1.5% to 1.8% higher than if SDG&E handled all the capacity, COMPANIES REFERENCED IN THIS ARTICLE: and he opined that those projections amounted to guesswork over Edisonhttp://www.snl.com/interactivex/snapshot.aspx?id=4056943 International EIX future costs. BrightSourcehttp://www.snl.com/interactivex/snapshot.aspx?id=4171743 Energy Inc. The lease would be executed under the terms of a development and coordination agreement SDG&E and Citizens Energy reached on Firsthttp://www.snl.com/interactivex/snapshot.aspx?id=4211343 Solar Inc. May 11, 2009. http://www.snl.com/interactivex/snapshot.aspx?id=4009083 Southern California Edison Co. The 120-mile Sunrise Powerlink is under construction between http://www.snl.com/interactivex/doc.aspx?CDID=A-12839719-11307Full filing the existing Imperial Valley and Sycamore Canyon substations and a proposed new Suncrest substation, which will be about two miles http://www.snl.com/interactivex/doc.aspx?CDID=A-12839727-11053Full filing south of Interstate 8 in San Diego County. SDG&E estimates the line will be in service by June 2012. The Imperial Valley substation is near http://www.snl.com/interactivex/feedback.aspx?Id=12840188&Action=estory E-mail this story. El Centro, Calif., and Sycamore Canyon is near Interstate 15 in coastal San Diego County at the project’s west end. The San Diego-based Utility Consumers’ Action Network protested California approves plan for SDG&E the arrangement with Citizens Energy, saying ratepayers may not transmission line lease, sharing profits with poor benefit from this transaction and might pay more than if SDG&E maintained complete control of the line. However, the PUC’s Division by Jeffmailto:[email protected] Stanfield of Ratepayer Advocates supported the transaction, noting Citizens’ commitment to local social programs. Also, the division said the Citizens Energy Corp. will be allowed to lease capacity on 30 miles arrangement will provide ratepayers with rate stability and protec- of San Diego Gas & Electric Co.’s 500-kV Sunrise Powerlink trans- tion against possible capital cost increases. mission line by pre-paying $83 million in rent for a 30-year period, California regulators decided. SDG&E argued that Citizens Energy will be an independent and new developer bringing competition to transmission development. The California Public Utilities Commission on May 26 approved the unusual leasing and profit-sharing arrangement between the COMPANIES REFERENCED IN THIS ARTICLE: Sempra Energy utility subsidiary and the nonprofit Massachusetts Sanhttp://www.snl.com/interactivex/snapshot.aspx?id=4057097 Diego Gas & Electric Co. corporation, which will take on the business as an independent transmission company. Citizens Energy, which is headed by Joseph Citizens Energy Corp. Kennedy II, eldest son of the late Sen. Robert F. Kennedy, will then Semprahttp://www.snl.com/interactivex/snapshot.aspx?id=4057062 Energy SRE spend 50% of its after-tax profits on programs serving low-income families in Imperial County, Calif., where the transmission line is http://www.snl.com/interactivex/doc.aspx?CDID=A-12837550-10806May 26, 11 San Diego Gas & Electric Co. Energy Regulatory Filing located. http://www.snl.com/interactivex/feedback.aspx?Id=12842939&Action=estory E-mail this story. Citizens Energy will have the option to lease half of its transfer capability rights along the Imperial Valley segment of the Sunrise

Northwest Territories touts progress Some transmission projects under consideration could link the existing Taltson transmission system, south of Great Slave Lake, in transforming electricity sector to mining operations northeast of the lake and, potentially, into by Susanmailto:[email protected] Nelson Nunavut.

Between 2007 and 2012, Canada’s Northwest Territories will have COMPANIES REFERENCED IN THIS ARTICLE: invested more than C$71 million to transform its energy supplies, ATCOhttp://www.snl.com/interactivex/snapshot.aspx?id=4086899 Ltd. ACO.X including new generating capacity and increased efforts at conser- Northland Utilities Enterprises vation and reducing consumption. The “Northwest Territories Energy Report,” issued earlier in May, Northwest Territories Power Corporation summarizes the progress made toward the objectives of several http://www.snl.com/interactivex/doc.aspx?CDID=A-12842485-11313Full filing energy policy initiatives undertaken since 2007. The latest report was released by the Ministerial Energy Coordinating Committee, http://www.snl.com/interactivex/doc.aspx?CDID=A-12842492-11060Full filing comprised of Premier Floyd Roland and the territories’ ministers of industry, environment and natural resources and public works. http://www.snl.com/interactivex/feedback.aspx?Id=12843352&Action=estory E-mail this story. “Energy conservation and efficiency programs have delivered significant energy savings to government and individual consumers around the [Northwest Territories],” the report said. “Decreasing Ontario expects 2,500 MW dependence on imported oil is a major success of the [ministry of to come online in next 18 months public works and services’] efforts to install biomass heat in [gov- mailto:[email protected] ernment-owned] facilities. Examination of hydro projects have not by Susan Nelson resulted in increased generation yet, but options are being explored. More communities in the South Slave and North Slave Regions, and Two refurbished units at Bruce Power’s Bruce A nuclear plant, a potentially communities in the Sahtu and Dehcho Regions should new natural gas-fired plant and wind energy facilities contracted have access to clean reliable hydro power in the future.” under Ontario’s feed-in tariff program will add 2,500 MW of additional generating capacity to the province’s grid over the next 18 About half of the territories’ electricity generation in 2010 came months. from diesel supplies, with 32% from hydro and 18% from natural gas. The bulk of the diesel-fueled generation, 85%, went to industrial Meanwhile, the Ontario Independent Electricity System Operator, consumption, the report said. or IESO, said May 24 in its latest “18-Month Outlook,” covering the period June 2011 to November 2012, about 1,000 MW of coal-fired Hydroelectricity serves eight communities in the Great Slave Lake generation will be shut down at the end of this year when two units area of the territories. natural gas-fired plants serve the communities at Ontario Power Generation Inc.’s Nanticoke plant are closed. of Inuvik and Norman Wells, and diesel generators serve the remaining 23 communities. Mines operating in the Northwest Territories all During the next 18-month period there should be sufficient use diesel generators for their electricity supplies. The territories are electricity supply in both normal and peak-demand periods, the served by three electric utilities, the government-owned Northwest IESO said. Reserve requirements will be met at all times except for a Territories Power Corp. and two divisions of ATCO Ltd. subsidiary week having extreme weather conditions. The normal weather peak Northland Utilities Enterprises, and are divided up into seven rate demand for this summer is projected to be 23,539 MW. zones. The two refurbished Bruce nuclear units will add 1,500 MW to Electricity generation is the biggest single source of greenhouse Ontario’s bulk power supply. Bruce A-2 is expected to come back gas emissions in the territories, accounting for about 36% of the into service in the first quarter of 2012, with Bruce A-1 coming in the 1,220 kilotonnes reported in a 2009-2010 review, the report said. third quarter of 2012. Transportation and space heating needs each accounted for about Also expected by the third quarter of 2012 is Veresen Inc. subsid- 30% of the territories’ greenhouse gas emissions. iary Pristine Power Inc.’s 393-MW York Energy Centre and 10 wind The report looked at a number of renewable energy sources as energy facilities. potential alternatives to diesel fuel. Wind speeds in the Northwest The wind supply will include 500 MW that were contracted under Territories aren’t as strong as elsewhere in Canada, but wind is not the feed-in tariff program and 200 MW from another solicitation, the being ruled out. Solar has some potential, and can be tied into a bat- Renewable Energy Supply III program. Under the feed-in tariff, proj- tery storage system, but is limited by seasonal availability. Biomass ect developers receive a 20-year, fixed-price contract for the output sources such as wood and wood pellets could be used, but the of their facilities. Northwest Territories do not have an existing forest industry to pro- “The IESO’s priority is to integrate renewables into its dispatch vide raw materials. Geothermal may offer some potential as well. processes and maintain efficient and reliable scheduling and com- Hydroelectric generation appears to have the greatest potential, mitment of Ontario’s generation resources,” IESO Vice President of with more than 11,000 MW of undeveloped potential, mostly along Resource Integration Bruce Campbell said in a news release. the Mackenzie River. The territories’ current hydroelectric capacity is Energy demand is expected to grow 0.5% in 2011 and 1.9% in 55 MW along three of eight rivers. 2012 thanks to improving economic conditions and some popula- One effort under way is the expansion of the 18-MW Taltson hydro tion growth. The modest growth in consumption would be greater facility by up to 56 MW, though the project is on hold. “The Taltson except that conservation efforts and embedded generation will be Hydro Expansion Project presents the single greatest opportunity offsetting increased use. in the NWT to significantly reduce imported fossil fuels and [green- The IESO reported it has adjusted the models used for demand house gas] emissions,” the report said. forecasting to reflect more accurately the relationships among

© 2011, SNL Financial LC. Departments: Projects Policy Company News Technology Finance All Rights Reserved. Friday, June 3, 2011 Page 12 demand, the economy, conservation and embedded generation Projects since the last outlook published in February. With the planned closure of the two Nanticoke units, the total Hold on NRG Bluewater Wind’s federal loan coal-fired generation capacity in Ontario will be 3,504 MW. All coal- fired units are planned for closure by 2014. application delays wind project off Delaware’s coast Surplus baseload generation continues to concern the IESO, with by Corinamailto:[email protected] Rivera periods of surplus expected over the summer and into the fall and again in spring 2012. Exports, along with other options such as NRG Bluewater Wind’s application for a loan guarantee under minimum hydro dispatch and nuclear unit shutdown, will be used to Section 1705 of the American Recovery and Reinvestment Act has handle surplus that occurs when there is low Ontario demand, heavy been put on hold, delaying the company’s proposed offshore wind winds and high water flow. farm off Delaware’s coast. Because nuclear shutdowns are less than desirable as a way to Cape Wind Associates’ application involving its proposed offshore handle surplus, the IESO is looking at other approaches used by wind project in Massachusetts was also put on hold, the Energy other jurisdictions with large quantities of intermittent renewable Management Inc. subsidiary said earlier this month. resources to manage surplus power supplies. “We’re trying to keep momentum going but we’re slowing down The IESO has revised its chart on minimum demand and baseload the schedule until we have more clarity on the loan guarantee and generation to indicate better the potential for surplus baseload gen- tax incentives,” NRG Energy Inc. spokeswoman Lori Neuman said eration conditions with a range of weekly minimum demands rather May 26. than the absolute weekly demand. The U.S. Department of Energy said May 10 that it is beginning The transmission system is expected to be adequate to handle the process of winding down its loan guarantee program. Also on the demand over the next 18 months. Load growth is continuing in May 10, Ellen Neubauer, grants program manager with the U.S. the southwest greater Toronto area, but the growth is moderate and Treasury Department’s Office of the Fiscal Assistant Secretary, said supply margins are still available. Transmission constraints over the at an energy conference in Washington, D.C., that it remains unclear 230-kV lines in the Sarnia/Windsor to London area may bottle up whether the department’s Section 1603 cash grants in lieu of tax some generation in southwestern Ontario. credits program will be extended again. Interim measures such as additional reactive compensation are “The reduction of the DOE loan guarantee authority has injected being taken to handle the new renewables in the area, but the considerable uncertainty into the financing for and viability of all U.S. long-term solution is the planned 500-kV line from Bruce to Milton, offshore wind projects,” Neuman said. “In the face of that uncertainty, expected now to come online in late 2012. The new line will handle NRG has decided to revisit the timing of this project’s implementa- the supply from new renewables in that area as well as power from tion — including installation of the met tower, which was planned to the refurbished Bruce nuclear units. Bruce Power’s owners include be constructed this year — until we have a clearer picture of the loan TransCanada Corp. and Cameco Corp. guarantee program and tax incentives.” The Niagara transmission reinforcements continue to be delayed The company is in discussions with a number of banks, funds and transmission restraints in the west may constrain the gen- and other private investors, and is open to other opportunities that eration resources in southwestern Ontario. Supply to the northwest might help move the project forward, Neuman said. area remains a problem because of the lower demand in that area. NRG has $6 million currently posted in letters of credit for the Discussions have been held with IESO, transmission system operator power purchase agreement it has with Pepco Holdings Inc. subsid- Hydro One Inc. and the Ontario Power Authority on the problem and iary Delmarva Power & Light Co. “Of that, $4 million is refundable possible solutions. today if we cancel [the] project,” Neuman said. “After June 23, zero is COMPANIES REFERENCED IN THIS ARTICLE: refundable. However, there are several conditions where we would get all our money back.” Independent Electricity System Operator That PPA is for 200 MW, and NRG is in discussions with other Bruce Power potential off-takers for the rest of the project, she said. Cameco Corp. Delmarva Power spokeswoman Bridget Shelton said May 26: “We Hydrohttp://www.snl.com/interactivex/snapshot.aspx?id=4099427 One Inc. have not had discussions with NRG on this latest financial setback for the project. It’s still a valid contract and we’re just learning about this Ontariohttp://www.snl.com/interactivex/snapshot.aspx?id=4062060 Power Generation Inc. along with everyone else.” Pristine Power Inc. Brian Selander, adviser to Delaware Gov. Jack Markell, said May 26 TransCanadahttp://www.snl.com/interactivex/snapshot.aspx?id=4087757 Corp. TRP that the met tower delay raises questions about the project moving forward. “[Markell] understands NRG’s statement that [the current Veresenhttp://www.snl.com/interactivex/snapshot.aspx?id=4089109 Inc. VSN state of] the federal loan guarantee has caused them to put the http://www.snl.com/interactivex/doc.aspx?CDID=A-12832257-12082Full filing project on indefinite hold, but he also believes that the PPA that NRG holds with Delmarva Power is a document of considerable value and http://www.snl.com/interactivex/doc.aspx?CDID=A-12832266-11827Full filing that if NRG is not interested in building at this time, and it is going to wait for federal loan guarantees that may never materialize, there http://www.snl.com/interactivex/feedback.aspx?Id=12842092&Action=estory E-mail this story. could be real value in seeing if someone else would be willing to build,” Selander said.

NRG Bluewater Wind has offshore wind energy efforts under way Report: PNM dedicates 5-MW solar PV plant in other states, including New Jersey and Maryland. “[W]e continue to do early stage development in the Northeast and mid-Atlantic,” in New Mexico Neuman said. “We will explore whether private and/or bank financ- by Muhammadmailto:[email protected] Nadeem ing is available for these projects, but again, the withdrawal of the DOE loan guarantee adds considerable uncertainty to all offshore PNM Resources Inc. subsidiary Public Service Co. of New Mexico on wind projects.” May 31 dedicated its 5-MW Los Lunas Solar Energy solar photovol- Jim Lanard, president of the Offshore Wind Development Coalition, taic plant in Valencia County, N.M., the New Mexico Business Weekly expressed optimism in the continued development of the industry. reported June 1. The loan guarantee situation “is a setback for the industry,” he said The project consists of 78,000 solar panels spread across 50 acres May 26. “It’s one that we’re working hard to overcome and we have of land. PNM plans to build three more 5-MW solar PV facilities this a high degree of confidence that we can overcome it. The economic year as part of its renewable procurement plan, the publication development and job potential of the industry is so great that the reported. loan guarantee issue is not a partisan issue — it’s a bipartisan issue.” COMPANIES REFERENCED IN THIS ARTICLE: The industry has the support of Democrats and Republicans to PNMhttp://www.snl.com/interactivex/snapshot.aspx?id=4006880 Resources Inc. PNM create jobs and economic development opportunities along the coast, Lanard said. Publichttp://www.snl.com/interactivex/snapshot.aspx?id=4073320 Service Co. of New Mexico

COMPANIES REFERENCED IN THIS ARTICLE: http://www.snl.com/interactivex/feedback.aspx?Id=12864954&Action=estory E-mail this story. NRGhttp://www.snl.com/interactivex/snapshot.aspx?id=4057436 Energy Inc. NRG Cape Wind Associates Vestas to supply 149 MW of wind turbines http://www.snl.com/interactivex/snapshot.aspx?id=4057082 Delmarva Power & Light Co. for Canadian project Energy Management Inc. by Wijdanmailto:[email protected] Khaliq NRG Bluewater Wind Pepcohttp://www.snl.com/interactivex/snapshot.aspx?id=4078763 Holdings Inc. POM Vestas Wind Systems A/S has won a 149-MW contract to supply 83 V90-1.8 MW wind turbines to an undisclosed wind power project in http://www.snl.com/interactivex/feedback.aspx?Id=12839226&Action=estory E-mail this story. Canada, The Denver Post reported May 31. The contract includes delivery and commissioning of the turbines, along with a 10-year service and maintenance agreement. The com- Terra-Gen Power taps Vestas to supply 219 MW pany is set to deliver the turbines in fall 2012, the newspaper reported, of wind turbines for Calif. project adding that commissioning of the turbines is expected in late 2012. Vestas also did not disclose the site of the wind project. by Wijdanmailto:[email protected] Khaliq COMPANY REFERENCED IN THIS ARTICLE: Vestas Wind Systems A/S on May 27 said it has received a 219-MW Vestas Wind Systems A/S order for 73 of its V90-3.0 MW wind turbines for an expansion of Terra-Gen Power LLC subsidiary Alta Wind Holdings LLC’s Alta Wind http://www.snl.com/interactivex/feedback.aspx?Id=12861343&Action=estory E-mail this story. Energy Center near Tehachapi, Calif. The expansion project will use 100 V90-3.0 MW turbines to generate electricity, according to a news release. Alta Wind Holdings Dewind to supply 5 wind turbines purchased 27 turbines for the project in 2010. The contract includes delivery and commissioning, along with a five-year service and main- for Prince Edward Island wind farm tenance agreement for the 300-MW project. by Muhammadmailto:[email protected] Nadeem Delivery is scheduled for fall and commissioning is expected in late 2011, according to the release. Daewoo Shipbuilding and Marine Engineering Co. Ltd. subsidiary Terra-Gen Power is an affiliate of ArcLight Capital Partners LLC and Dewind Co. on May 24 said it received a contract to supply five wind Global Infrastructure Partners. turbines for Wind Energy Institute of Canada’s wind farm in Prince Edward Island, Canada. COMPANIES REFERENCED IN THIS ARTICLE: Under the agreement, DeWind will supply the five 2-MW D9.2 wind Vestas Wind Systems A/S turbines for the 10-MW Prince Edward Island Wind plant. The proposed facility is expected to be completed in the fourth quarter of 2011. ArcLight Capital Partners LLC Global Infrastructure Partners COMPANIES REFERENCED IN THIS ARTICLE: Terra-Gen Power LLC Dewind Co Wind Energy Institute of Canada http://www.snl.com/interactivex/doc.aspx?CDID=A-12841215-13363Full filing http://www.snl.com/interactivex/doc.aspx?CDID=A-12842105-13364May 24, 11 Dewind Co Press Release http://www.snl.com/interactivex/feedback.aspx?Id=12845845&Action=estory E-mail this story. http://www.snl.com/interactivex/feedback.aspx?Id=12842046&Action=estory E-mail this story.

Policy strengthen and sustain the economic security and the manufacturing, industrial, energy, technological and competitive stature of the nation. Senate energy committee approves “We rely on minerals for everything from the smallest computer 5 energy policy bills chips to the tallest skyscrapers, and yet the United States somehow by Kathleenmailto:[email protected] Hart lacks clear policies to ensure an affordable and abundant domestic supply,” Murkowski said in a news release. “The Critical Minerals The Senate Energy and Natural Resources Committee on May 26 Policy Act will help solve that problem by modernizing our policies approved five energy policy bills that are now eligible for consider- for production, processing, environmental protection, manufactur- ation by the full Senate. ing and recycling. Through this act, we will ensure more opportunities for domestic jobs, technological innovation, increased national The committee passed S. 630, the Marine and Hydrokinetic security and greater competitiveness.” Renewable Energy Promotion Act, by a unanimous voice vote, a news release from committee Chairman Jeff Bingaman, D-N.M., noted. “If we want to compete with China, the country that controls more Introduced by Sen. Lisa Murkowski, R-Alaska, ranking Republican than 90 percent of the world’s known rare earth minerals, American on the committee, the bill is designed to speed the development of companies need access to American rare earth minerals. Expanding renewable ocean energy and wave, current and tidal energy. the development of domestic sources will expand American businesses, help us compete internationally and is key to our economic At a March 31 hearing on the bill, Murkowski said the Electric growth,” Sen. Mike Enzi, R-Wyo., said in the news release. Power Research Institute has estimated that the nation’s ocean resources could generate 252 million MWh of electricity, or 6.5% The issue of U.S. dependence on China for rare earth minerals, of the nation’s power generation needs. “To reach this potential, which are vital for military and renewable energy technologies, has though, ocean energy must gain the same financial and research generated the interest of lawmakers in the House of Representatives, incentives currently enjoyed by other forms of renewable energy,” as well. On May 24, the House Committee on Natural Resources she said at the March hearing. Subcommittee on Energy and Mineral Resources held a hearing to consider changes in the nation’s strategic and critical minerals policy. A second bill approved by the committee, S. 699, would authorize Rep. Doug Lamborn, R-Colo., chairman of the subcommittee, noted the secretary of energy to carry out a program to demonstrate the that in 1993, the U.S. attracted 20% of the worldwide minerals explo- commercial application of integrated systems for long-term geologi- ration budget, compared to about 8% today. He warned that without cal storage of carbon dioxide. The third bill reported by the commit- increased domestic exploration for rare earth elements and other tee, S. 757, would provide incentives to encourage the development metals and minerals, this country “will continue to ship American and implementation of technology to capture CO2 from dilute jobs overseas and forfeit our economic competitiveness.” sources on a significant scale using direct air capture technologies. The committee held a hearing on S. 699 and S. 757 on May 12. Both Rep. Mike Coffman, R-Colo., introduced H.R. 1388 in the House bills were previously introduced in the 111th Congress and success- on April 6 to promote U.S. production of rare earth minerals. Rep. fully passed out of the committee on a strong, bipartisan vote. Leonard Boswell, D-Iowa, introduced the Rare Earths and Critical Materials Revitalization Act of 2011 in the House in February. That The committee also approved a bill that provides for an analysis bill, H.R. 618, would establish in the U.S. Department of Energy a of the impact of energy development and production on the water research and development program aimed at providing a long-term, resources of the U.S. Finally, the committee approved a bill that secure and sustainable supply of rare earth materials to satisfy U.S. would amend the Federal Power Act to protect the bulk power national security and industrial production needs. system and electric infrastructure critical to the defense of the U.S. against cybersecurity and other threats and vulnerabilities. Under the bill introduced in the Senate on May 26, the president, acting through the Executive Office of the President, is directed to In addition, the committee considered, but did not complete coordinate the actions of federal agencies to “facilitate the avail- action on, a bill to promote the domestic development and deploy- ability, development, and environmentally responsible production ment of clean energy technologies. That bill is expected to receive of domestic resources to meet national critical minerals needs” and further consideration at a future business meeting, according to the “promote the development of economically stable and environmen- news release. tally responsible domestic critical mineral production and manufac- http://www.snl.com/interactivex/doc.aspx?CDID=A-12837408-12079Full filing turing.” The legislation would establish an analytical and forecasting http://www.snl.com/interactivex/feedback.aspx?Id=12837336&Action=estory  E-mail this story. capability for identifying critical mineral demand, supply and “other market dynamics relevant to policy formulation such that informed actions can be taken to avoid supply shortages, mitigate price vola- Senators sponsor bipartisan bill tility, and prepare for demand growth and other market shifts.” The to revitalize US critical minerals supply chain bill also is intended to promote the efficient production, use and recycling of critical minerals; develop alternatives to critical minerals; by Kathleenmailto:[email protected] Hart and establish contingencies for the production of, or access to, critical minerals for which viable sources do not exist within the U.S. Sen. Lisa Murkowski, R-Alaska, and 16 other senators on May 26 introduced legislation in the Senate aimed at revitalizing the U.S. In addition to Murkowski and Enzi, the bill was sponsored by Sens. critical minerals supply chain and reducing the nation’s dependence Ben Nelson, D-Neb.; Jim Webb, D-Va.; James Risch, R-Idaho; Kay on China and other foreign suppliers. Hagan, D-N.C.; Roy Blunt, R-Mo.; John Barrasso, R-Wyo.; Kent Conrad, D-N.D.; Thad Cochran, R-Miss.; Mark Begich, D-Alaska; Dean Heller, R- The Critical Minerals Policy Act states that it is U.S. policy to pro- Nev.; Mike Crapo, R-Idaho; Debbie Stabenow, D-Mich.; John Hoeven, mote an adequate, reliable, domestic and stable supply of critical R-N.D.; Claire McCaskill, D-Mo.; and Joe Manchin, D-W.Va. minerals, produced in an environmentally responsible manner, to

“Just fifteen years ago, more than two-thirds of our rare miner- House Oversight and Government Reform Committee Chairman als came from below U.S. soil, but today we are entirely dependent Darrell Issa, R-Calif., also voiced his opposition to Obama’s choice of on foreign imports. Our economic and energy security are national Bryson. “With gas prices at nearly four dollars a gallon, it’s certainly imperatives, therefore we must reclaim our mineral independence,” eye-catching that President Obama has nominated a founder of an Webb said. “This legislation is a practical approach to ensure the organization that opposes efforts to increase domestic oil production United States is able to meet its own mineral needs, remains a to serve as the nation’s key advocate for our economic interests.” leader in high-technology, and is another step toward a clean energy Calling the nomination of Bryson to lead the Department of future.” Commerce “deeply out-of-touch with our current energy challenge,” Added Hagan: “Our dependence on foreign sources for critical Issa added, “Another green evangelist pushing failed talking points minerals is unacceptable. The bipartisan Critical Minerals Policy Act on the cap-and-trade energy tax and European style gas prices is not ensures the American critical mineral supply is stable and affordable who most Americans want to have at the helm of efforts to expand to support next-generation manufacturing. The legislation includes trade and grow our economy.” my Powering America’s Lithium Production Act, which increases U.S. Chamber of Commerce President and CEO Thomas Donohue domestic production of advanced lithium products that will power praised Bryson’s business experience and expressed optimism that the cars and smart grid of the future.” he will be able to create U.S. jobs and help expand exports. To avoid duplication of authorities related to critical minerals, the “Once duly confirmed by the Senate, the U.S. Chamber looks for- legislation would repeal two previous laws, in whole or in part: the ward to working with Secretary-nominee John Bryson to fulfill the National Critical Minerals Act of 1984 and the National Materials and department’s mission of creating jobs, enhancing U.S. competitive- Minerals Policy, Research and Development Act of 1980. ness, and spurring American innovation. With our economy still on http://www.snl.com/interactivex/doc.aspx?CDID=A-12838165-10293Full filing the ropes, unemployment at 9.0%, and our competitiveness being challenged like never before, the Commerce Department must http://www.snl.com/interactivex/feedback.aspx?Id=12837910&Action=estory E-mail this story. remain focused like a laser beam on putting people back to work, expanding U.S. exports, and helping American businesses succeed in the 21st century,” Donahue said in a statement May 31. Inhofe vows to fight Bryson nomination Donahue added, “An agenda that jumpstarts passage of our as commerce secretary stalled trade agreements, weeds out needless regulations, leads to a more competitive tax code, and ensures small business access to by Kathleenmailto:[email protected] Hart capital would be strongly supported by the U.S. Chamber. With his extensive knowledge of the private sector and years of experience Sen. James Inhofe, R-Okla., ranking Republican on the Senate successfully running a major company, we hope Mr. Bryson will be a Committee on Environment and Public Works, has vowed to fight strong voice for American businesses.” President Barack Obama’s nomination of John Bryson to serve as the next secretary of commerce. COMPANIES REFERENCED IN THIS ARTICLE: “By selecting John Bryson to head the Department of Commerce, Edisonhttp://www.snl.com/interactivex/snapshot.aspx?id=4056943 International EIX President Obama is clearly demonstrating that he has no intention Edisonhttp://www.snl.com/interactivex/snapshot.aspx?id=4059780 Mission Energy of backing down from his job-killing agenda,” Inhofe said in a May 31 http://www.snl.com/interactivex/snapshot.aspx?id=4009083 statement. “I will be working actively to defeat this nomination.” Southern California Edison Co. Earlier on May 31, Obama nominated Bryson, former chairman, http://www.snl.com/interactivex/doc.aspx?CDID=A-12859924-11052Full filing president and CEO of Edison International, as his new commerce http://www.snl.com/interactivex/doc.aspx?CDID=A-12860029-13359Full filing secretary. If confirmed by the Senate, Bryson would replace current Commerce Secretary Gary Locke, who has been named U.S. ambas- http://www.snl.com/interactivex/feedback.aspx?Id=12859843&Action=estory sador to China.  E-mail this story. Bryson led Edison International, the parent company of regulated utility Southern California Edison Co. and competitive power plant developer and operator Edison Mission Energy, from 1990 until his Pa. legislator seeks to amend retirement in July 2008. He also served as president of the California state alternative energy portfolio standard Public Utilities Commission. Previously, Bryson was chairman of the by Corinamailto:[email protected] Rivera California State Water Resources Control Board and co-founded the Natural Resources Defense Council, a leading environmental advo- In light of solar power “oversupply,” a Pennsylvania lawmaker is cacy group. Bryson has been a long-standing supporter of plug-in looking to increase the solar renewable energy credits requirements electric vehicles to help reduce U.S. greenhouse gas emissions. under the state’s alternative energy portfolio standard. Obama praised Bryson for helping Edison International to become State Rep. Chris Ross said May 26 that H.B. 1580 intends to raise a “leader in solar and wind power, and innovative approaches to the requirements for SRECs over the next few years to bring the proving the profitability of clean energy.” credit requirements more in balance with current supply. Inhofe, meanwhile, called Bryson “a founder of a radical envi- As of now, 82 MW of solar power are available to meet the SREC ronmental organization and a member of a United Nations advi- requirements from June 1, 2011, to May 31, 2012, but the total state- sory group on climate change. Mr. Bryson once called the Waxman- wide requirement is only 44 MW, “so there is a tremendous oversup- Markey cap-and-trade bill ‘moderate.’ This is legislation that would ply,” Ross said. cost American taxpayers billions of dollars, destroy hundreds of thousands of jobs, and hurt families and workers by raising the price Under the bill, for the credit year June 1, 2012, to May 31, 2013, of gasoline and electricity.” the total percentage of electric energy sold by an electric distribu-

© 2011, SNL Financial LC. Departments: Projects Policy Company News Technology Finance All Rights Reserved. Friday, June 3, 2011 Page 16 tion or electric generation supplier to retail electric customers in Maine legislative panel rejects measure Pennsylvania from solar photovoltaic technologies would go from the current requirement of 0.051% to 0.15%, he said. to freeze RPS at current level mailto:[email protected] For June 1, 2013, to May 31, 2014, it would be raised from the cur- by Corina Rivera rent requirement of 0.084% to 0.17%, and for June 1, 2014, to May 31, 2015, the requirement would be raised from 0.144% to 0.2041%, A legislative committee has rejected a measure supported by he said. Maine Gov. Paul LePage that would freeze the state’s renewable portfolio standard at today’s level, which requires electricity providers to At a recent news conference, Ross said that in 2004, when the get 34% of their supply from renewable energy sources. original alternative energy portfolio standard bill was being developed, “we had no idea that today we would be in a position where Existing RPS regulations adopted in 1999 required providers to we had so many solar installations and so many people here in get 30% of their supply from renewable sources by 2000. Legislation Pennsylvania who are employed, either building or even in some passed in 2007 added a second requirement that by the end of 2017, cases, actually creating the solar panels and the elements within suppliers get 10% of their electricity from new renewable sources, those solar panels.” defined as those entering service after Sept. 1, 2005. According to Christina Simeone, director of PennFuture’s Energy Suppliers were supposed to get 1% of their resources from new, or Center for Enterprise and the Environment, since 2008, the amount “Class I,” sources in 2008, increasing by increments of 1 percentage of solar energy in the state has grown more than 20 times over. point each year through 2017. “We have over 3,000 high-paying jobs and more than 600 solar The measure, L.D. 1570, is sponsored by state Sen. Michael Thibodeau, businesses with over 4,000 solar energy installations in the state,” she who could not be immediately reached for comment May 31. said in a May 24 statement. “But now Pennsylvania’s solar businesses The Joint Standing Committee on Energy, Utilities and Technology and jobs — and the environmental benefits gained from cleaner voted unanimously the week of May 23 to amend the bill so that it energy — are in jeopardy unless we pass the solar jobs bill.” leaves the timeline of the RPS unchanged, state Rep. Jon Hinck, rank- The legislation will update Pennsylvania’s alternative energy port- ing minority member of the committee, said May 31. folio standard by adjusting it to be in line with other states, protect- The RPS allows Maine “to put homegrown energy sources into the ing Pennsylvania’s solar industry and continuing the growth in jobs power grid,” which has been a positive factor for ratepayers in the that this renewable energy brings, Simeone said. state, Hinck said. At the news conference, Ross said people in Pennsylvania and The committee heard “compelling testimony” from individuals other states and countries have expressed interest in the state’s solar working in the renewable energy industry, including in the ocean market, “but they’ve all told me the same thing, that the very success energy and land-based wind energy sectors, who said passage of the of our … program that was instituted over the last several years has bill “would be very disruptive” to the renewable energy industry and created an overhang in the supply and that is, from basic economics, related businesses. causing tremendous problems for people both now and probably for Hinck said there was little in the original bill that the committee the next three years if we do nothing.” did not change. For instance, the bill called for state regulators to The bill, according to PennFuture, will also require in 2012 that obtain the approval of the legislature before requiring an investor- only solar energy produced in Pennsylvania can be used to comply owned transmission and distribution utility to enter into a long-term with the law. contract for energy efficiency capacity resources. “We didn’t go for “It helps the distribution grid to have solar connected locally,” Ross that,” Hinck said. said at the news conference. “It takes strain off of the distribution He remains optimistic that the bill, as amended by the com- grid for that distribution company, and you have line losses if you mittee, will be approved by both the state Senate and House of bring electricity in from further away, so there’s a real advantage Representatives. The budgeted adjournment date for the first regu- to doing this. Plus, it also reinforces that we’re trying to create and lar legislative session of 2011 is June 8, and the statutory adjourn- stimulate jobs here in Pennsylvania.” ment date is June 15, according to the legislature’s website. It is important to promote solar energy in the state because it A representative for LePage could not be immediately reached for winds up being available in times of peak power demand, Ross said comment May 31. May 26. “Having solar as part of your overall energy portfolio in any state helps relieve ratepayers at those particular times,” he said. “In http://www.snl.com/interactivex/feedback.aspx?Id=12853166&Action=estory E-mail this story. the long run, after initial installation costs, solar power is a cheap source of power.” Ross said he is still seeking cosponsors for the bill, which may be Company News introduced in the next couple of weeks. http://www.snl.com/interactivex/doc.aspx?CDID=A-12844524-12337Full filing Calif. PUC approves PG&E wind power

http://www.snl.com/interactivex/doc.aspx?CDID=A-12844564-11313Full filing purchase agreement, decides on gas plants by Jeffmailto:[email protected] Stanfield http://www.snl.com/interactivex/feedback.aspx?Id=12844416&Action=estory E-mail this story. The California Public Utilities Commission unanimously approved cost recovery for Pacific Gas and Electric Co.’s 20-year power purchase agreement with Shiloh Wind Project LLC, a subsidiary of enXco Inc.

While voting with the majority on May 26, Commissioner Michel Area, the PUC said in its decision. The units have once-through ocean Florio expressed concern over what he said was a very high price for cooling, which the state has ordered phased out. wind at well above the commission’s designated market price thresh- COMPANIES REFERENCED IN THIS ARTICLE: old for competitive generation, saying that wind power should be coming down with wind turbine prices. Pacifichttp://www.snl.com/interactivex/snapshot.aspx?id=4004218 Gas and Electric Co. The price for the 100-MW Shiloh III wind facility’s estimated output AEShttp://www.snl.com/interactivex/snapshot.aspx?id=4055465 Corp. AES of 345 GWh per year is kept confidential under state regulations and EdF Energies Nouvelles was negotiated bilaterally instead of through competitive bidding. The project was proposed a month after the close of PG&E’s 2009 Edisonhttp://www.snl.com/interactivex/snapshot.aspx?id=4056943 International EIX renewable portfolio standard bid solicitation, according to the PUC’s Edisonhttp://www.snl.com/interactivex/snapshot.aspx?id=4059780 Mission Energy contract approval decision. enXcohttp://www.snl.com/interactivex/snapshot.aspx?id=4072714 Inc. “I would not be inclined to vote for a price this high in the future, but they are ready to break ground and get it online,” Florio said, add- PG&Ehttp://www.snl.com/interactivex/snapshot.aspx?id=4057057 Corp. PCG ing that he wanted to send a message that “we better not be seeing Radback Energy Inc. wind prices this high in the future.” http://www.snl.com/interactivex/doc.aspx?CDID=A-12837568-10542May 26, 11 Pacific Gas and Electric Co. Misc The project will be developed in the Montezuma Hills region of Solano County, Calif., and the contract term begins May 31, 2012. http://www.snl.com/interactivex/doc.aspx?CDID=A-12837612-11827May 26, 11 AES Corp. Energy Regulatory Filing EnXco, a subsidiary of EdF Energies Nouvelles, also developed the nearby 150-MW Shiloh II wind facility, which delivers bundled energy http://www.snl.com/interactivex/doc.aspx?CDID=A-12842499-11053May 26, 11 Pacific Gas and Electric Co. Energy Regulatory Filing to the PG&E Corp. utility. http://www.snl.com/interactivex/doc.aspx?CDID=A-12843670-11316May 25, 11 Pacific Gas and Electric Co. Misc On the conventional generation side, the PUC voted 4-0 to deny rehearing on its earlier approval of Radback Energy Inc.’s gas-fired, http://www.snl.com/interactivex/feedback.aspx?Id=12843084&Action=estory E-mail this story. combined-cycle plant in Oakley, Calif. Florio was absent from the 4-0 vote. The plant is listed in the commission order as having a capacity of Mich. PSC approves revised renewable energy 586 MW, and SNL Energy has a capacity figure of 624 MW. surcharge for Consumers Energy Several local government officials and community leaders appeared mailto:[email protected] before the PUC to urge the commissioners to stand by their approval by Wijdan Khaliq of the project in eastern Contra Costa County for which Radback is due to start construction before July 1. The commission’s rehearing The Michigan Public Service Commission on May 26 approved a denial paves the way for construction to begin, according to an ex revised renewable energy surcharge for Consumers Energy Co. parte communication from PG&E. The approval lowers the monthly per-meter surcharge for resi- Californians for Renewable Energy Inc., Communities for a Better dential electric customers from $2.50 to 65 cents, effective with the Environment, the Sierra Club, The Utility Reform Network and the September billing month, according to a news release. PUC’s Division of Ratepayer Advocates applied for a rehearing of the The PSC on May 10 issued an order that conditionally approved PUC’s 2010 decision, saying due process was not followed when the the utility’s amended renewable energy plan, which reflected lower commission reversed an earlier decision denying the plant’s turnkey costs than originally forecast and expanded the company’s experi- contract with PG&E. The groups had contended the plant was not mental advanced renewable program. On May 20, the CMS Energy needed and would add to ratepayers’ expense. Corp. subsidiary submitted a revised set of surcharges and stated The PUC countered that its earlier denial was based only on capac- that a program similar to the EARP will be developed at a cost of ity needs through 2015 and that it subsequently approved the plant about $16.5 million and is expected to result in approximately 3 MW because a need was shown for capacity in future years. of additional solar installations. The California Energy Commission approved the project, also COMPANIES REFERENCED IN THIS ARTICLE: known as the Oakley Generating Station, on May 18. Consumershttp://www.snl.com/interactivex/snapshot.aspx?id=4057081 Energy Co. In another decision, the commissioners approved closure of CMShttp://www.snl.com/interactivex/snapshot.aspx?id=4004172 Energy Corp. CMS Huntington Beach units 3 and 4. On April 7, AES Huntington Beach LLC and Edison Mission Huntington Beach LLC, subsidiaries of AES http://www.snl.com/interactivex/doc.aspx?CDID=A-12859140-10552Full filing Corp. and Edison Mission Energy, respectively, filed notice of their intent to retire the units by late 2012. http://www.snl.com/interactivex/feedback.aspx?Id=12859027&Action=estory E-mail this story. Edison Mission Energy plans to build and operate the Walnut Creek Energy Park, a 500-MW gas turbine peaking unit, in City of Industry, Calif., but the Edison International merchant producer subsidiary FPL offering solar energy rebates through cannot operate Walnut Creek without first obtaining emission credits new pilot program to offset air pollution created by the new plant. The retirement of Huntington Beach 3 and 4 will provide needed offset credits needed by Amjadmailto:[email protected] Ali to run the new plant in the Los Angeles Basin West Local Reliability NextEra Energy Inc. subsidiary Florida Power & Light Co. on May 31 said its customers who are interested in installing solar-powered

© 2011, SNL Financial LC. Departments: Projects Policy Company News Technology Finance All Rights Reserved. Friday, June 3, 2011 Page 18 upgrades to their homes and businesses can apply for rebates start- To accomplish the energy efficiency goals, APS proposed an annu- ing June 21 through a new pilot program. ally adjusted mechanism based on a revenue-per-customer calcula- Rebates will be available on a first-come, first-served basis for tion to address the loss in fixed cost recovery. Further, APS wants to residential and business customers who install solar water heating or adjust on-peak and off-peak prices for its time-of-use rate schedules solar photovoltaic panels in 2011. The program is designed to help that it said will provide more accurate price signals to customers. reduce energy consumption and peak demand. Also, it wants to start an experimental peak time rebate program as an option to customers who reduce energy use during critical peak The new pilot program was approved by the Florida Public Service hours and implement a new optional rate for the largest commercial Commission. Roughly 1,100 of FPL’s 4.5 million customer accounts and industrial customers. operate their own solar generation, the company said. The rate request would also enable the company to provide cus- COMPANIES REFERENCED IN THIS ARTICLE: tomers more control over their energy use. APS said it has installed Floridahttp://www.snl.com/interactivex/snapshot.aspx?id=4056997 Power & Light Co. nearly 610,000 smart meters and is testing and implementing other smart grid technologies. The utility serves about 1.1 million custom- NextErahttp://www.snl.com/interactivex/snapshot.aspx?id=3010401 Energy Inc. NEE ers.

http://www.snl.com/interactivex/doc.aspx?CDID=A-12852717-13099May 31, 11 NextEra Energy Inc. Press Release APS also proposed to pay much of the cost of new customer line extensions to encourage new economic development. Individual http://www.snl.com/interactivex/feedback.aspx?Id=12858674&Action=estory E-mail this story. property owners and developers pay the entire cost of new connec- tions. A model for building consensus on energy issues emerged from APS seeks 6.6% base rate increase along the company’s 2009 rate case settlement, the handout said. For the with decoupling, new surcharges current rate case, APS said it intends to follow that model. In the settlement, APS said that it, the commission and 21 other parties, by Jeffmailto:[email protected] Stanfield including community groups, environmental organizations and business associations, assembled “a long-term, shared vision” for Arizona Public Service Co. on June 1 asked state regulators to Arizona’s energy future, including ambitious goals for renewable allow it to increase customer bills by 6.6%, effective July 1, 2012, energy and comprehensive customer energy efficiency programs. with a proposal including a rate structure to decouple energy sales “The settlement put APS on a two-phase rate case filing plan that volume from revenues to remove disincentives for adding and pro- lasts through Dec. 31, 2014,” APS said in its rate application, explain- moting energy efficiency programs. ing that the settlement called for a 2012 rate filing because the rates APS is counting on the Arizona Corporation Commission reaching set in 2009 do not produce a reasonable return for the property its decision by June 2012. APS devotes to service, including needed upgrades to the electric The rate increase is needed, the Pinnacle West Capital Corp. sub- system. sidiary said, for the utility to keep pace with the state renewable Removing customer credit to reduce rate hike energy standard that requires Arizona Public Service, or APS, and This increase will recover $1.5 billion in infrastructure investments other utilities to obtain 15% of the electricity used by their custom- that are or will be in service by mid-2012, APS said. The net base ers from renewable generation, particularly solar, by 2020. Today, rate increase proposed is $95.5 million, which includes a nonfuel APS obtains 304 MW from renewables, meeting 3% of its retail load. increase of $194.1 million, the transfer to base rates of $44.9 million APS is spending about $500 million to build 100 MW of photovol- for assets now or expected to be recovered through a renewable taic solar plants across Arizona that together are known as “AZ Sun,” energy surcharge, and the transfer of a negative balance of $143.5 the company said in a news release. However, only about $44.9 mil- million from the power supply adjustor into base rates, according to lion in the current rate case relates to AZ Sun expenditures. Future the rate application. phases of AZ Sun would be recovered through a renewable energy The transfer will allow the power surcharge to be reset at zero, standard surcharge and then incorporated into base rates in a future thereby removing a credit that currently reduces customer bills. As general rate case, the company said in its rate application. proposed with removal of the customer credit, base rates would The utility is also asking for an “environmental and reliability increase by a net 3.3%. The average residential customer using 1,100 account” mechanism to recover new or acquired generation capac- kWh per month would see a bill increase of $8.36. ity additions and plant investments required to meet environmental Also, APS proposes to remove the 90-10 cost sharing mechanism compliance standards, including investments in pollution control for the power supply adjustor under which the utility, as noted in the equipment, power plant efficiency projects and investments in application, has only been able to recover 90% of fuel and purchased new nonrenewable generation, the application said. This mecha- power expenses applied to the adjustor. Other power supply costs nism would replace APS’s existing environmental improvement are recovered in base rates. APS also wants to recover in the adjustor surcharge. the costs of chemicals needed to operate emissions controls on its Another goal is to meet 22% of the energy needs of the company’s power plants. customers through energy efficiency measures by 2020. The current APS President and COO Don Robinson said in the news release: level for APS customers is 3.6%, the utility said. “We are meeting those goals and spending about $1 billion each Over the next five years, APS said it plans to spend nearly $800 year to create a cleaner, reliable and more efficient energy future for million on customer energy efficiency programs, according to a util- Arizona. Now we are asking the [Arizona Corporation Commission] to ity handout on the rate case. These programs are expected to reduce continue its support of this plan.” energy demand by 2.7 million MWh. In 2010, APS said its energy Robinson said most APS customers could offset the impact of the efficiency programs saved 319 million kWh. rate increase by participating in energy efficiency programs, such as refrigerator recycling.

Since the 2009 rate case, APS said it has cut operating costs by 75 people initially and possibly up to 200 if business expands across more than $37 million and its workforce by 3%. The U.S. Nuclear Canada, the firm said. Regulatory Commission’s recent approval of a request to extend the “While the scope of work and final details of future Canadian operating license of the Palo Verde nuclear plant by 20 years also operations is still in the early days, I am confident that with Hydro- saved $32.4 million on relicensing revenue requirements, the com- Québec’s support, we can and will make a positive local impact,” pany, which operates the nuclear plant, said in the rate application. Landis+Gyr North American CEO Richard Mora said. The company is COMPANIES REFERENCED IN THIS ARTICLE: headquartered in Switzerland, and earlier in May, it said it was going to be acquired by Toshiba Corp. Arizonahttp://www.snl.com/interactivex/snapshot.aspx?id=4056974 Public Service Co. Several other large utilities in Canada are deploying Landis+Gyr Pinnaclehttp://www.snl.com/interactivex/snapshot.aspx?id=4056951 West Capital Corp. PNW smart meters, including Fortis Inc. subsidiary FortisAlberta Inc. and Hydro One Inc. in Ontario, the firm said. http://www.snl.com/interactivex/doc.aspx?CDID=A-12855049-11568Jun 01, 11 Pinnacle West Capital Corp. Press Release The company will supply FOCUS AX meters for 80% of the meters http://www.snl.com/interactivex/doc.aspx?CDID=A-12857153-10805Jun 01, 11 Arizona Public Service Co. Energy Regulatory Filing that Hydro-Québec will be installing. It will also supply a data management system, related software, service and support. The installa- http://www.snl.com/interactivex/doc.aspx?CDID=A-12859079-9776May 31, 11 Arizona Public Service Co. Misc tion of the smart grid will eventually lead to a smart grid distribution network that will secure, protect and conserve Hydro-Québec’s http://www.snl.com/interactivex/feedback.aspx?Id=12859769&Action=estory E-mail this story. power supply, Landis+Gyr said. COMPANIES REFERENCED IN THIS ARTICLE: Hydro-Québec selects Landis+Gyr to provide, Hydro-Québechttp://www.snl.com/interactivex/snapshot.aspx?id=4060616 install 3 million smart meters Fortishttp://www.snl.com/interactivex/snapshot.aspx?id=4082871 Inc. FTS by Susanmailto:[email protected] Nelson FortisAlbertahttp://www.snl.com/interactivex/snapshot.aspx?id=4103468 Inc.

Hydro-Québec has awarded a C$350 million contract to Landis+Gyr, Hydrohttp://www.snl.com/interactivex/snapshot.aspx?id=4099427 One Inc. an energy management solutions company, for the installation of 3 Landis+Gyr million smart meters and smart meter infrastructure in the province, the companies announced May 25. http://www.snl.com/interactivex/doc.aspx?CDID=A-12833659-11820May 25, 11 Hydro-Québec Press Release Landis+Gyr will install a two-way communications system that will http://www.snl.com/interactivex/doc.aspx?CDID=A-12836578-10542Full filing allow Hydro-Québec to collect data on usage, voltage and power quality from customers and allow customers to track their energy http://www.snl.com/interactivex/feedback.aspx?Id=12836647&Action=estory E-mail this story. use in real time. Installation of an initial 27,000 smart meters will begin in June and run until May 2012, with three pilot projects in areas of Montreal Sky Harvest Windpower retains (19,000 meters), Boucherville (6,000 meters) and the regional coun- project acquisition consultant ty municipality of Memphremagog (2,000 meters). Installation at remaining Hydro-Québec customer sites will take place between by Muhammadmailto:[email protected] Nadeem 2012 and 2017. The effort must be approved by provincial regulators, and Hydro-Québec said it would submit an application within Sky Harvest Windpower Corp. said in a Form 8-K filed May 26 that a few weeks. it retained Kyle Loney as its project acquisition consultant. “The globally recognized firm Landis+Gyr will provide a com- Loney will be responsible for analyzing potential project acquisi- prehensive end-to-end solution, thus guaranteeing the integrity of tions in the renewable energy sector and providing recommenda- the entire metering system,” Hydro-Québec Distribution President tions to the board of directors, based on his capital budgeting Isabelle Courville said. “This advanced metering infrastructure will assessments, the company said. reduce our operating costs and thus benefit all our customers, while Loney was a founding partner and currently acts as vice president making it possible to gradually introduce new functions in response of business operations for the Ecogen Group of Cos. to their needs.” In addition, Sky Harvest said it agreed to grant incentive stock Hydro-Québec said it will have to invest an initial C$100 million to options to Loney. Under the option, he can acquire up to 200,000 set up the metering infrastructure, but that one it is in place, it will shares of the company’s common stock at 25 cents for a period of save C$300 million over 20 years. One result, however, is that the five years. The grant is pursuant to the company’s 2011 stock option provincial government-owned utility will eliminate 725 positions, plan. primarily meter readers, “whose services will no longer be required with the new technology.” Affected permanent staff will be reas- COMPANY REFERENCED IN THIS ARTICLE: signed within the utility unless they retire over the next five years, Sky Harvest Windpower Corp. Hydro-Québec said. http://www.snl.com/interactivex/doc.aspx?CDID=A-12835859-11306May 26, 11 Sky Harvest Windpower Corp. 8-K Landis+Gyr plans to set up a Center of Excellence to support the distribution of the meters with testing, calibration, inspection, meter http://www.snl.com/interactivex/feedback.aspx?Id=12836330&Action=estory assembly and network management. The center will employ up to  E-mail this story.

Finance NextEra Energy Resources is a subsidiary of NextEra Energy Inc. Iberdrola Renewables is a subsidiary of Iberdrola SA. NorthWestern Energy seeks approval to buy, COMPANIES REFERENCED IN THIS ARTICLE: operate Mont. wind project Salthttp://www.snl.com/interactivex/snapshot.aspx?id=4062755 River Project by Muhammadmailto:[email protected] Nadeem Iberdrola Renewables Inc. Iberdrola Renovables NorthWestern Corp. d/b/a NorthWestern Energy on June 2 said it is seeking approval from the Montana Public Service Commission to Iberdrolahttp://www.snl.com/interactivex/snapshot.aspx?id=4102079 SA purchase and operate Spion Kop Wind LLC’s planned 40-MW wind NextErahttp://www.snl.com/interactivex/snapshot.aspx?id=3010401 Energy Inc. NEE project in Judith Basin County, Mont. NextErahttp://www.snl.com/interactivex/snapshot.aspx?id=4060103 Energy Resources LLC If approved, the proposed $86.1 million project will be developed by Compass Wind LLC, the parent company of Spion Kop Wind LLC, http://www.snl.com/interactivex/doc.aspx?CDID=A-12840248-12848May 26, 11 Salt River Project Press Release and placed into the utility rate base for NorthWestern’s Montana electric retail customers. Both the energy and associated renewable http://www.snl.com/interactivex/feedback.aspx?Id=12840678&Action=estory E-mail this story. energy credits will be used to meet renewable portfolio standards obligations in Montana law. NorthWestern said the project represents a levelized price of Indiana Michigan Power signs 100-MW PPA $53.78 per MWh for a 25-year period. If the public service commis- with E.ON Climate sion fails to grant approval of the project on or before April 1, 2012, mailto:[email protected] then either party may terminate this agreement. by Amjad Ali Construction would begin upon commission approval, with com- American Electric Power Co. Inc. subsidiary Indiana Michigan mercial operation projected to start by the end of 2012. Power Co. has agreed to purchase 100 MW of wind power under a 20- COMPANY REFERENCED IN THIS ARTICLE: year power purchase agreement with E.ON Climate & Renewables. NorthWesternhttp://www.snl.com/interactivex/snapshot.aspx?id=4057053 Corp. NWE The agreement would result in the construction of Wildcat-1 wind farm in Madison, Grant, Howard and Tipton counties in Indiana. The http://www.snl.com/interactivex/doc.aspx?CDID=A-12864586-10797Jun 02, 11 NorthWestern Corp. Press Release proposed facility will be connected to the AEP transmission system to deliver power to Indiana Michigan Power customers in Michigan http://www.snl.com/interactivex/feedback.aspx?Id=12865011&Action=estory E-mail this story. and Indiana, according to a May 27 news release. The agreement is subject to approval from regulators in both states. Financial terms of the agreement were not disclosed. Salt River Project to buy full output Construction on the project is scheduled to begin before the end of NextEra’s Ariz. wind project of 2011, while the proposed facility is expected to enter commercial operations by the end of 2012. by Ziamailto:[email protected] Ullah Khan The agreement was a result of request for proposals issued by The Salt River Project on May 26 said it signed an agreement to Indiana Michigan Power to construct a wind farm within its service purchase 100% of the output of NextEra Energy Resources LLC’s pro- territory. Indiana Michigan Power said it considered having an own- posed 99.2-MW Yavapai Wind Project in Yavapai County, Ariz. ership stake in a wind project, but the competitive bid received from E.ON was a better deal for the utility and its customers. Under the 25-year contract, the proposed project will begin delivering electricity to Salt River by Dec. 31, 2012, pending the necessary E.ON Climate is a subsidiary of E.ON AG. approvals. The companies did not disclose financial details of the COMPANIES REFERENCED IN THIS ARTICLE: power purchase agreement, according to a news release. http://www.snl.com/interactivex/snapshot.aspx?id=4006321 Salt River said it also has the option to purchase at a later date American Electric Power Co. Inc. AEP about 20 MW of electricity from a planned solar photovoltaic facility E.ON AG that could be built near the wind project. E.ON Climate & Renewables Combined with the output of Iberdrola Renovables subsidiary Indianahttp://www.snl.com/interactivex/snapshot.aspx?id=4057003 Michigan Power Co. Iberdrola Renewables Inc.’s Dry Lake wind farm near Snowflake, Ariz., the Yavapai wind project will bring Salt River’s purchase of Arizona- http://www.snl.com/interactivex/doc.aspx?CDID=A-12846334-11571May 27, 11 Indiana Michigan Power Co. Press Release based wind energy to almost 225 MW, according to the release. http://www.snl.com/interactivex/feedback.aspx?Id=12847354&Action=estory The power purchase agreement comes on the heels of Salt River’s  E-mail this story. board of directors’ decision to have the utility meet 20% of its customers’ electricity needs from renewables and energy conservation and efficiency programs by 2020.

NV Energy to purchase output range population growth — rises to about 4,200 MW two decades of planned US Geothermal project from now,” the statement said. According to Thompson, Puget Sound Energy has a “couple of mailto:[email protected] by Amjad Ali dozen” contracts that will expire mostly within the next decade. Some of the largest of these include an agreement, expiring at the U.S. Geothermal Inc. on June 1 said its subsidiary USG Nevada LLC end of the year, for 245 MW from the Tenaska Ferndale Cogen plant, and NV Energy Inc. signed a 25-year power purchase agreement, or majority-owned by Energy Investors Funds Group. Another example PPA, for the purchase of an annual average of up to 19.9 MW of net is a contract with the Douglas County, Wash., Public Utility District for output from the San Emidio geothermal project in Washoe County, 251 MW that expires in 2018. Nev. The company has about 5,300 MW of total capacity, Thompson The PPA, subject to approval from Public Utilities Commission of said, and of that about 2,900 MW is self-generated. Nevada, anticipates the development of two electric power generation units at San Emidio. The unit 1 power generation plant, sched- According to Puget Sound Energy’s March 10-K filing, as of Dec. 31, uled to achieve commercial operation during the fourth quarter of 2010, the company has 2,392 MW of purchased resources. 2011, is under construction and will replace the existing 3.6-MW The company has no set plans for potential retirements of aging plant at San Emidio. plants, Thompson said, but it is eyeing several peaker plants that Subject to successful production well development, the unit 2 “are getting up there in years.” These include the Frederickson and power generation plant is scheduled to go online during the second Whitehorn 2 and 3 gas plants, both 154 MW and in service since quarter of 2013. Two additional units are also planned at San Emidio 1981. after sufficient drilling has been completed to define additional res- Puget Sound Energy is evaluating whether to retire or upgrade ervoir production capacity, the company said. these plants, but it has no timeline for a decision. “It’s like an old car The PPA is expected to be submitted to the PUC by NV Energy … you just have to make a decision — is it time to send it out to within 100 days. USG Nevada is investigating remedies for certain pasture?” Thompson said. existing constraints related to transmission that may limit the total The price of the contract with Iberdrola is confidential, but the output of the project to 16 MW, according to U.S. Geothermal. terms were “the most favorable” out of over 60 replies to a 2010 request for proposals, according to the statement. Puget Sound COMPANIES REFERENCED IN THIS ARTICLE: Energy plans to issue a new power-supply request for proposals at U.S.http://www.snl.com/interactivex/snapshot.aspx?id=4095318 Geothermal Inc. HTM some point later this year. NVhttp://www.snl.com/interactivex/snapshot.aspx?id=4057063 Energy Inc. NVE COMPANIES REFERENCED IN THIS ARTICLE:

http://www.snl.com/interactivex/doc.aspx?CDID=A-12856806-12331Jun 01, 11 US Geothermal Inc Press Release Pugethttp://www.snl.com/interactivex/snapshot.aspx?id=4062485 Sound Energy Inc. Energyhttp://www.snl.com/interactivex/snapshot.aspx?id=4026976 Investors Funds Group http://www.snl.com/interactivex/feedback.aspx?Id=12857874&Action=estory E-mail this story. Iberdrola Renewables Inc. Iberdrolahttp://www.snl.com/interactivex/snapshot.aspx?id=4102079 SA Puget Sound Energy to buy 100 MW Pugethttp://www.snl.com/interactivex/snapshot.aspx?id=4200188 Holdings LLC from Iberdrola’s Klamath gas plant http://www.snl.com/interactivex/doc.aspx?CDID=A-12448197-10546Mar 07, 11 Puget Sound Energy Inc. 10-K by Matthewmailto:[email protected] Bandyk http://www.snl.com/interactivex/doc.aspx?CDID=A-12837721-11571May 26, 11 Iberdrola Renewables Inc Press Release Puget Sound Energy Inc. will buy 100 MW from Iberdrola Renewables Inc.’s 115.2-MW Klamath Generation Facility to help http://www.snl.com/interactivex/feedback.aspx?Id=12837699&Action=estory E-mail this story. meet wintertime peak demand under a winter-only power purchase agreement, the Iberdrola SA subsidiary said May 26. According to a statement from Iberdrola and the Puget Holdings Total extends tender offer LLC subsidiary, the 100 MW will come from the single-cycle natural to buy majority stake in SunPower gas-fired peaker plant in Klamath County, Ore., but Iberdrola will also mailto:[email protected] have the option to supply energy from the nearby 506-MW Klamath by Muhammad Nadeem Cogeneration Plant. Total SA on May 25 said it extended its all-cash tender offer to The power purchase comes into effect Jan. 1, 2012, and will expire purchase a majority stake in SunPower Corp. at the end of February 2016, Puget Sound Energy spokesman Roger The French oil giant said its cash offer will now expire at midnight Thompson said May 26. “There’s a possibility that we will extend the ET June 14. The offer was previously scheduled to expire May 31. contract,” he said. As of 5 p.m. ET May 23, about 614,975 shares of class A common Puget Sound Energy’s draft 2011 integrated resource plan shows stock and 284,774 shares of class B common stock, which represent a need to obtain 1,400 MW of capacity by 2016 to meet custom- about 1.1% of the shares of class A common stock and 0.7% of the ers’ demands. According to the statement, the utility will also need shares of class B common stock issued and outstanding as of April 2,600 MW of additional capacity by 2020 to meet peak wintertime 27, had been validly tendered and not properly withdrawn in the demand. offer, the company disclosed in a news release. “PSE’s capacity need — driven by expiring purchased-power Total in April said it will launch a “friendly tender offer” through a contracts, potential retirement of aging PSE power plants, and long- subsidiary to acquire up to 60% of the outstanding shares of class A

© 2011, SNL Financial LC. Departments: Projects Policy Company News Technology Finance All Rights Reserved. Friday, June 3, 2011 Page 22 common stock and 60% of the outstanding shares of class B com- Clean Line pitches strategy continued mon stock of SunPower for $23.25 per share. Clean Line Energy has proposed a fleet of four potential HVDC COMPANIES REFERENCED IN THIS ARTICLE: lines that would connect some of the best wind regions in the mid- Total SA dle of the United States to major load centers, both east and west. Each of the lines runs between 500 miles and 1,000 miles and would SunPower Corp. transport roughly 3,500 MW of generation: http://www.snl.com/interactivex/doc.aspx?CDID=A-12834351-11575May 25, 11 Total S A Press Release • The Plains & Eastern project would bring wind power from western Oklahoma, southwest Kansas and the Texas Panhandle to http://www.snl.com/interactivex/feedback.aspx?Id=12835794&Action=estory E-mail this story. the southeastern U.S. • The Rock Island project would connect wind resources in Iowa, Midwest ISO continued Nebraska, South Dakota and Minnesota to load centers in Illinois and other states to the east. Because wind resources are relatively uncontrollable due to weather and forecasting limitations, the Midwest ISO has had to • The Centennial West line would connect resources in northeast- manually curtail a wind generator’s output to manage congestion ern New Mexico to Southern California. and minimum load conditions. The resources therefore have not • The Grain Belt Express line would connect resources in western been allowed to set locational prices and have been ineligible for Kansas to communities in southeastern Missouri and farther the various make-whole provisions available to other generation east. resources. HVDC more than just efficient long-distance transmission However, wind technology has evolved so that wind resources Central to the company’s strategy is its proposal to use HVDC now can reduce output by changing the “pitch” of a wind turbine’s technology, a technology that is well-known for being more efficient blades or by curtailing selected individual turbines on a large wind at transporting power over long distances. It has rarely been used in farm. That prompted the Midwest ISO in November 2010 to file a the U.S., in part because it can be expensive to interconnect with the proposal (ER11-1991) at FERC to accommodate this new downward existing alternating-current grid. direction dispatchability. The commission mostly signed off on the initiative in March. But Skelly said the main reason why HVDC has not been used is that the country has not faced this kind of problem, at least not for Under the proposal, as approved by FERC, the Midwest ISO can a long time. designate wind generators as DIRs, but although those facilities are allowed to participate in the RTO’s markets in a manner more consis- “HVDC is a well-proven technology, but it hasn’t been deployed tent with other generation resources, certain important distinctions at scale that much in the past 20 years,” Skelly said. “We have this remain. problem of transporting energy from a resource-rich area to an area that needs power. We solved the energy transportation problem in For instance, DIRs are allowed to supply only energy, but not oper- other ways. For coal plants, we move coal by train. For natural gas, ating reserves or other services, and their bids are not subject to any we move it by pipe.” maximum limits. DIRs also are not required to submit their expected real-time capability on an hourly basis, but rather must indicate a Generally, generation has been built closer to load, making AC “forecast maximum limit” reflecting the maximum megawatt level lines more efficient, but Skelly said the country has used HVDC lines at which they could operate for each five-minute interval in the real- in the past, mainly to move the original renewable energy source, time energy market. Those limits can be updated up to 10 minutes hydro. before each interval to reflect forecast changes, allowing resources For example, HVDC lines were built to transport hydroelectric to be dispatched based on the most accurate forecast available. power from the Columbia River to Los Angeles and from Quebec into When FERC approved the DIR proposal, the agency allowed it to New England, Skelly said. take effect March 1 so that newly registered DIRs could begin par- The best hydroelectric resources were not always next to load, ticipating in the RTO’s markets June 1. Since then, more than 1,000 meaning that HVDC transmission was more attractive. Skelly said MW of wind capacity has been registered as DIRs, according to Joe his company has found that the technology can reduce line losses Gardner, the Midwest ISO’s executive director of real-time opera- for the 800-mile length lines that it is proposing from 15% to about tions. 5%. “Allowing the Midwest ISO’s real-time optimization software to This is not the only advantage, though. By connecting closer to determine an economic dispatch for these resources maximizes their load centers, Skelly said, wind projects reduce the variability of pric- utilization given the price and system conditions while minimizing ing that results from having large volumes of load out on the fringes the need for manual curtailments in real-time,” Gardner said. “This of the AC transmission system. enhances system wide operational and market efficiency.” “In the context of a [locational marginal price, or LMP,] market our COMPANY REFERENCED IN THIS ARTICLE: product will be very interesting,” Skelly said. “If you interconnect at the local AC grid, your economics may be damaged by more wind Midwesthttp://www.snl.com/interactivex/snapshot.aspx?id=4087542 ISO being produced next door to you. That may change the LMP of that http://www.snl.com/interactivex/doc.aspx?CDID=A-12858730-11058Jun 01, 11 MISO Press Release wind. With our transmission project we will be delivering you to an area where you are not changing the value of the electricity.” http://www.snl.com/interactivex/feedback.aspx?Id=12860034&Action=estory E-mail this story. Even with 3,500 MW of generation being collected on to one line, Skelly said the price variations would be minimal. “If we get you from western Iowa to Chicago, we are not going to move the price of Chicago power,” Skelly said.

Almost-firm transmission Skelly added, though, that he was confident that the Arkansas By participating in the transmission line projects, wind develop- situation could be resolved. “We think there is a way to work through ers also should be reasonably certain of their ability to deliver their the issues,” he said. power, Skelly said, adding that he expects Clean Line will sell only With regard to FERC, Skelly said the commission “isn’t resisting” partially firm transmission rights. Clean Line, but that the interconnection process is designed for gen- “One of the ways to get down to lower transmission costs is by erators and not really transmission. oversizing generation,” Skelly said. “You have a line that will over- “We have to go work with the RTOs to either change that or adapt build on the generation. There will be some flexibility among the to the process,” he said. “That is the different nature of independent generators so that everybody is better off for their per MWh cost.” transmission.” He estimated that Clean Line will sell firm transmission, “but it will And because the company’s projects cross multiple RTOs, there be like 98% firm.” He cautioned that the company’s offering has not is no current cost allocation for the project. Instead, the company’s been fully designed or finalized. model is to sell capacity to either generators or load. “We are taking That would allow a “significant” oversize of generation as com- the development risk, but we will need some contractual commit- pared to the transmission capability “while still protecting the eco- ments before we construct,” Skelly said. nomics of the project.” Once those commitments are found, Skelly said, the company For build stage, Clean Line likely would take partner would likely move to find new investors to fund the ultimate build- out of the transmission lines. Now firmly in the development stage, Clean Line is focused on siting, routing and permits as it works with landowners and regulators “There is a lot of interest in investing in transmission,” Skelly said. both at the federal and state levels, Skelly said. “We will likely take in additional investors at the building stage.” “It’s a lot of public outreach, a lot of [discussions] with RTOs. A lot Clean Line is backed by the Zilkha family in Houston and the ener- with state regulators and FERC,” he said. gy investment group ZBI Ventures, which manages energy investments for the Ziff family in New York. The Zilkha family founded This is true of any transmission project, but for a new entrant such Horizon Wind Energy LLC, where Skelly previously worked. as Clean Line, there are additional challenges. The company is seeking utility status in Arkansas, but it was denied after regulators deter- COMPANY REFERENCED IN THIS ARTICLE: mined that the company does not yet meet the state’s definition of Clean Line Energy a public utility. Similarly, the RTOs are also not familiar with handling transmission lines that cross their boundaries. http://www.snl.com/interactivex/feedback.aspx?Id=12845529&Action=estory E-mail this story. “We have all these laws that were designed without this new challenge in mind,” Skelly said. “We have arcane state laws that some- times do, but don’t always, facilitate interstate transmission.”

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