FERC Removes Obstacles that Limit Distributed Renewable Energy in Colorado

July 10, 2015
 In a July 1 ruling FERC (the Federal Energy Regulatory Commission) cleared the way for Colorado’s Delta-Montrose Electric Association (DMEA), along with other electric co-ops, to step outside the bounds of a 40-year power supply contract with Tri-State Generation & Transmission Association and tap into local renewable energy supplies. FERC’s ruling, which was unanimous, clarifies what had been deemed unclear wording in PURPA (Public Utilities Regulatory Policies Act), as well as Tri-State’s regulatory status.

The contract DMEA and 43 other electric co-ops had signed with Tristate in 2001 required them to purchase 95 percent of their electricity from Tri-state. In short, FERC ruled that as per PURPA DMEA not only had the right butthe obligation to purchase electricity directly from “Qualifying Facilities” (QFs) over and above the five percent cap it’s limited to in its contract with Tri-State.

With the ruling, FERC opened the door for DMEA and other Tri-State electric co-op members to tap into cost-competitive renewable energy resources right in their backyards. DMEA intends to move forward and contract for electricity from a small-scale hydropower facility to be built on a local irrigation canal proposed by Percheron, DMEA’s Manager of Member Relations and Human Resources Virginia Harman said.

Greater Use Of Local Renewable Power

Enacted in 1978 as part of the National Energy Act, PURPA promotes development of cost-effective small-scale hydropower and other renewable energy resources, as well as energy conservation and energy efficiency, FERC explained on its website. Under PURPA, public utilities are obligated to purchase electricity generated by certified QF as long as they total no more 80-MW of electrical power capacity. PURPA QFs receive special rates and regulatory treatment.

“Community support for DMEA was overwhelming,” Harman pointed out. More than 70 individuals and organizations, including coal companies, as well as the NRDC (Natural Resources Defense Council) and the Aspen Skiing Company, supported DMEA’s FERC petition.

DMEA CEO Jasen Bronec said that FERC’s ruling “is a victory not just for DMEA and its members, but for people and communities throughout Delta and Montrose counties. Purchasing local renewable power will further DMEA’s long-term strategic goal of diversifying our power supply, which means more stable rates to our members and lesser impacts from any future power rate increases.

He added that the ruling “could also mean serious local economic development, as renewable facilities locate to the area to take advantage of our abundant renewable resources in Delta and Montrose counties.”

Good News

FERC’s green light “is clearly good news for the renewable energy world,” University of Denver Sturm College of Law Professor K.K. DuVivier commented in an interview. While FERC came down in favor of DMEA’s petition on two of three counts, it essentially sidestepped the issue of whether or not Tri-State should be regulated as a public utility and hence subject to direct oversight by FERC, which it is not at present, she pointed out.

The decision gives DMEA and other Tri-State electric co-op members much more flexibility to adapt to changing conditions and meet consumer and community needs by purchasing more electricity from renewable power producers, DuVivier noted. Its broader impact will be limited as there are very few co-ops as large as Tri-State nationwide, however.

Energy policy and regulatory oversight in the U.S. is moving renewable energy forward in some cases while holding it back in others, added Jack Jacobs, managing partner at Cleantech Law Partners. “It’s certainly a big part of what’s happening now with energy in the U.S.”

The lack of a strong, persistent commitment promoting renewable energy by federal lawmakers in particular remains an obstacle to growth and development, Jacobs continued. Vacillating Congressional support for renewable energy incentives, such as the wind power production and solar power investment tax credits, have resulted in stop-and-go development binges and hampered what would could have been even more rapid renewable energy development and growth, Jacobs said.

Nevertheless the DMEA FERC ruling is one step in the right direction.

 

IRS Update on Certification

Modification of Notice 2015-4

Notice 2015-51

SECTION 1: PURPOSE

On February 2, 2015, the Treasury Department and IRS published Notice 2015- 4, which provides guidance on the energy credit under section 48 of the Internal Revenue Code (Code). Specifically, that notice provides performance and quality standards that small wind energy property must meet to qualify for the energy credit under section 48. Notice 2015-4 is effective for small wind energy property acquired or placed in service (in the case of property constructed, reconstructed, or erected by the taxpayer) after February 2, 2015. This notice modifies Notice 2015-4 by providing a revised effective date for certain small wind energy property that meets the performance and quality standards of International Electrotechnical Commission 61400-1, 61400-12, and 61400-11. Except as otherwise specified in this notice, the guidance provided in Notice 2015-4 continues to apply.

SECTION 2: SMALL WIND ENERGY PROPERTY STANDARDS

.01 Section 3.01 of Notice 2015-4 provides that to qualify as small wind energy property under section 48, the property must use a wind turbine that has a nameplate capacity of not more than 100 kW and meets the performance and quality standards as set forth in either of the following: – 2 – (1) American Wind Energy Association Small Wind Turbine Performance and Safety Standard 9.1-2009 (AWEA); or (2) International Electrotechnical Commission 61400-1, 61400-12, and 61400-11 (IEC). .02 The performance and quality standards under AWEA apply only to wind turbines having a rotor swept area of 200m2 or less. All other wind turbines having a rotor swept area of more than 200m2 must meet the performance and quality standards as set forth in IEC.

SECTION 3: MODIFICATION OF NOTICE

2015-4 In response to information that has come to the attention of Treasury and the IRS about the ability of manufacturers of certain property to immediately complete the certification process relating to the performance and quality standards as set forth in IEC, this Notice delays the effective date in Notice 2015-4 with respect to such property. Accordingly, this notice modifies Notice 2015-4 by replacing section 5 of the notice with the following language: This notice is effective for small wind energy property acquired or placed in service (in the case of property constructed, reconstructed, or erected by the taxpayer) after February 2, 2015, if the small wind energy property uses a wind turbine having a rotor swept area of 200m2 or less, and after December 31, 2015, if the small wind energy property uses a wind turbine having a rotor swept area of more than 200m2 .

SECTION 4: DRAFTING INFORMATION

-The principal author of this notice is Martha M. Garcia of the Office of Associate Chief Counsel (Passthroughs and Special Industries). For further information regarding this notice, contact Ms. Garcia on 202-317-6853 (not a toll-free call).

World’s Leading Manufacturer of Small Wind Turbines Enters the Japanese Market

World’s Leading Manufacturer of Small Wind Turbines Enters the Japanese Market

Contact: Ben Finzel

RENEWPR

Phone: 202-277-6286

ben@renewpr.com

 

Press Release

World’s Leading Manufacturer of Small Wind Turbines Enters the Japanese Market

Three-Year Effort to Gain First-Ever Complete Certifications of Small Wind Turbines Yields First Installations in the Newest “Mega-Market” for Small Wind

Norman, Oklahoma, July 8, 2015:  After a three year effort to gain first-ever separate product certifications for its wind turbine, electronics and towers, Bergey Windpower has seen the first installations of its best-selling 10 kW wind turbines in Japan. Two Bergey Excel 10 turbines were installed on 100 ft (30m) towers near Nagata in western Japan in May and connected to the grid in early June.

With their full certification – the first of its kind in Japan for a turbine and tower – by ClassNK (Japan’s certification body for small wind turbines), the Bergey 10 kW turbines qualify for a Japanese federal incentive program (J-FIT) that pays the turbine owner ¥55 (approximately 44 cents) per kilowatt-hour produced. The J-FIT program has helped spur a boom in solar installations in Japan. The new J-FIT certification program for small wind turbines is expected to have the same impact on the small wind market over the next several years.

“We are proud that our 10 kW turbines – which are already the best-selling turbines in the world in the 5 kW – 20kW range – are now the first in Japan with a certified tower,” explained Mike Bergey, president and CEO of Bergey Windpower. “As the first and so far only manufacturer to use the J-FIT program to certify both a small wind turbine and tower, we are well positioned to capitalize on the expected growth in the Japanese market. In fact, we are already seeing a dramatic increase in orders and expect to begin shipping several hundred more units to Japan over the next twelve months.”

The Bergey 10 kW is proving popular in Japan because it has only four moving parts, doesn’t require scheduled maintenance, and carries the longest warranty (10 years) in the wind industry. Bergey went the extra distance to certify a 100 ft tower for its 10 kW turbines, double the height of towers being offered with other small wind turbines in the market.

“The shorter towers offered by competitors in the market – which don’t have to be certified due to their height – will cause their turbines to suffer reduced performance and more wear and tear because of higher turbulence closer to the ground,” noted Bergey. “Our pre-approved taller towers will provide an important market advantage as more small wind turbine models become certified and enter the Japanese market.”

Japan is one of the few markets that offer higher incentives for small wind compared to solar.  Solar prices have dropped so much in recent years that Japan has been able to reduce its incentives while maintaining growth.  It has the potential to be the largest market in the world for small wind turbines up to 20 kW over the next few years.

Bergey Windpower is the world’s leading supplier of small wind turbines, with installations in all 50 states and over 100 countries. Bergey Windpower, located in Norman, OK, is a 38-year old family-owned small business.  All of its products are manufactured in the USA and the company buys goods and services from over 200 vendors in 27 states.

NOTE TO EDITORS: A high-resolution photo of the installed turbines is available upon request from Ben Finzel, ben@renewpr.com.

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