IRS Approves 610 Clean Renewable Energy Bond Applications

Last week, the Internal Revenue Service (IRS) announced that 610 projects have been given the authority to issue Clean Renewable Energy Bonds (CREBs) to help finance renewable energy development across the country. State and local governments and municipal and cooperative utilities were eligible to apply.

Rules prohibiting the IRS from disclosing taxpayer specific information prevents the IRS from providing a listing the successful projects. Applicants are currently being notified about the results.

General information regarding the allocations of the CREBs volume cap is as follows: Projects for the governmental borrowers will receive allocations in 24 states and projects for the cooperative borrowers will receive allocations in 22 states. The allocations for the governmental borrowers range from $23,000 to about $3.2 million and for the cooperatives ranged from $120,548 to $31 million.

Of the approved projects for the governmental borrowers, 401 are for solar facilities, 99 for wind facilities, 23 for landfill gas facilities, eight for hydropower facilities and one for an open loop biomass facility. Of the projects approved for the cooperatives, 33 are for solar facilities, 13 for wind facilities, 13 for landfill gas facilities, 12 for open-loop biomass facilities, six for hydropower facilities and one for a refined coal production facility.

Overall, there were 709 total applications from 40 different states and the District of Columbia requesting allocations for authority to issue approximately $2.6 billion in CREBs to finance 786 projects. There were 231 proposed projects in California, 67 in New Mexico, 64 in Minnesota, 41 in New Jersey, 38 in Montana, 27 in Colorado, 24 in Massachusetts, 13 in New York and 12 in Ohio. The size of the proposed projects in the applications ranged from $23,000 to $80 million.

Governmental borrowers submitted applications for about $2 billion of CREBs to finance 701 projects with an average project size of about $2.9 million. Cooperative borrowers submitted applications for about $554 million of CREBs to finance 85 projects with an average project size of about $6.5 million.

The CREBs program was created under the Energy Tax Incentives Act of 2005. Internal Revenue Code Section 54 authorizes the Secretary of the Treasury to allocate an $800 million volume cap in tax credit bonds to fund projects that can generate clean renewable energy.

The large number of approved projects is encouraging. The reason for this is that the IRS determined early on that they planned on allocating CREB authority based on a “smallest-to-largest” project amount methodology beginning with the project requesting the smallest dollar amount and proceeding thereafter to projects for successively larger dollar amounts until the total national volume cap is consumed. It was an excellent methodology and provides a model for running similar programs in the future.

Whatcom County Uses Savings from Energy Efficiency and Purchases 100 Percent Renewable Energy

In September 2006, the Whatcom County Council (Washington) voted to use $62,000 out of $85,000 in projected energy efficiency savings for purchasing a block of renewable energy for a $0.01 per kWh premium. The renewable energy credits from Puget Sound Energy will cover 100 percent of the electricity used in county operations in 2007.

The County Council resolution (2006-58) is straightforward and outlines the dangers of global warming and the impact that renewable energy can play in limiting emissions. The resolution states that "energy conservation efforts in Whatcom County facilities over the past six years have yielded substantial savings in energy costs and these annual savings exceed the cost of buying renewable energy credits for 100% of the electricity used in Whatcom's County government owned and operated facilities."

Whatcom County hopes that their initiative inspires other counties and local governments to adopt similar actions. The renewable energy purchase will effectively reduce GHG emissions from county operations by about one-third.

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Update: Voters Decide State and Local Energy Initiatives

Last night, across the county, citizens' cast their votes on ballot initiatives ranging from renewable energy portfolio requirements to increasing taxes to fund global warming programs. The results were mixed. Note: Most of the vote totals below are those that I found on the morning after the election on the respective Secretary of State web sites. The vote totals could change but the results are not expected to change.

For more details on the original proposals below see our previous story in Democratic Energy.

20 Percent Renewable Energy Portfolio Standard - Fargo and Grand Forks, ND
Voters have rejected an initiative requiring 20 percent renewable electricity standard by 2020 in Grand Forks and Fargo ND. The results were not very close with "no" votes winning by a 53-47 percent split in Grand Forks and 56-44 percent margin in Fargo. The Grand Forks Herald reports that despite the initiative's defeat, "the future of wind power in North Dakota is by no means bleak. At least 600 MW of wind power is in the development pipeline."

Climate Tax Assessment for Funding for GHG Reduction Projects - Boulder, CO
The referendum (Ballot issue 202) to establish of charge on electricity users to raise revenue to support Boulder's Climate Action Plan passed by a substantial margin last night. Boulder voters cast 21,866 votes for the measure (60.5 percent) and 14,281 against (39.5 percent).

Bridging the Gap Includes Funding for Greenhouse Gas Reduction Projects - Seattle, WA
Seattle announced their Climate Change Action plan this year and asked voters as part of their "Bridging the Gap" initiative (Proposition 1) to approve additional property tax revenues to fund programs to increase transit ridership and decrease driving in the city. Voters approved the initiative 52,480 (54 percent) to 44,722 (46 percent).

Oil Extraction Tax to Fund Clean Energy - California
This initiative (Proposition 87) would have established a tax on oil production in California to fund a $4 billion program to reduce oil and gasoline usage by 25%. Supporters and opponents of the measure spent more than $150 million to influence voters, with two-thirds of that amount coming from the oil industry that was opposed to the proposal. The vote tally (with 99.9 percent of precincts reporting) was 45.3 percent to 54.7 percent - 3,017,135 in favor and 3,631,509 votes against.

Renewable Energy 15-by-20 Plan - Washington
This renewable energy measure (Initiative I-937) requires investor-owned and consumer-owned electric utilities with 25,000 or more customers (17 out of 62 utilities statewide) to meet designated targets for energy conservation and use of eligible renewable energy resources. Voters in Washington decided that this was a good idea and the initiative passed by a close vote. As of late night November 9th, there were 758,697 (51.7 percent) in favor and 706,068 (48.2 percent) votes against.

More:

• Ballot Initiative Strategy Center - has listings of the state level initiatives around the country

Arizona Finalizes Renewable Energy Rules - Distributed Generation Will Meet 30 Percent

The Arizona Corporation Commission voted yesterday on the final rules for implementing a 15 percent renewable energy standard by 2025. The rules state that 30 percent of the renewable standard is to be derived from distributed energy resources – small-scale technologies located close to where energy is used, such as roof-top photovoltaic projects or solar hot water projects.

For more background on the proposed rules, see our March 2006 story in Democratic Energy.

The benchmarks for the renewable-energy production for the state's regulated utilities accelerate over time with 2.5 percent of the total by 2010 to 5 percent by 2015, 10 percent by 2020 and 15 percent by 2025. The percentage of distributed generation energy has been mapped out only through 2011. It would require distributed generation technologies meet 5 percent of each utility's RES obligation by next year and there would be 5 percent annual jumps through 2011 until the 30 percent is reached.

More:

• ACC Section on Renewable Energy Standard Developments

Selection of Energy Ballot Initiatives Will Greet Voters Next Tuesday

Citizens in cities and states across the country will be casting their votes on some interesting energy issues on November 7th. Ballot initiatives ranging from a renewable energy portfolio requirement in Grand Forks, ND to increasing taxes to fund global warming programs in Seattle, WA will give citizens an opportunity to decide directly which path their communities will take. Democratic energy in action!

Here is a sampling of the some of the ballot proposals:

20 Percent Renewable Energy Portfolio Standard - Fargo and Grand Forks, ND
Citizen activists garnered enough signatures to put a ballot question in each city that would establish a 20 percent renewable electricity standard by 2020 and 30 percent by 2030. The question in Fargo reads, "Shall Article 3(L) of the Home Rule Charter of the City of Fargo be amended to provide that franchise agreements require at least 20% of the electricity delivered into the City be derived from qualified renewable electricity generating sources beginning in 2020 and 30% by the year 2030, all as provided in the Notice of Proposed Home Rule Charter Amendment as published in The Forum on the 4th day of September, 2006?" Similar language is on the ballot in Grand Forks. The language in Grand Forks includes a provision that at least half of the renewable electricity come from North Dakota projects.

Climate Tax Assessment for Funding for GHG Reduction Projects - Boulder, CO
The referendum ballot question would establish of charge on electricity users based on how much energy they use. The money would go to support Boulder's Climate Action Plan to reduce global warming pollution. Officials in Boulder estimate that the climate tax would add $2 a month to the average household's bill and between $5 and $35 for businesses. The revenues would be earmarked for public-education campaigns to make people aware of energy- efficiency rebates and other incentives and to fund energy audits for businesses and homeowners and provide residents with easier access to energy-efficient products, such as compact fluorescent light bulbs.

The text of the Boulder ballot question reads, in part:

Shall city of Boulder taxes be increased $860,265 annually (in the first year), and up to $1,342,000 each year thereafter for the period of April 1, 2007 to March 31, 2013, by authorizing the city council to levy and collect a climate action plan tax as an excise tax upon persons consuming electricity as residential, commercial, or industrial customers, and providing an exemption for voluntary purchases of utility provided wind power. The tax shall be established with a first year rate of $0.0022 per kilowatt hour (kWh) for residential customers, $0.0004 per kWh for commercial customers, and $0.0002 per kWh for industrial customers. The tax shall take effect on April 1, 2007 and expire on March 31, 2013, and shall be for the purpose of funding a climate action plan to reduce greenhouse gas emissions. The measure would establish city council authority to increase the tax after the first year up to a maximum permitted tax rate of $0.0049 per kWh for residential customers; $0.0009 per kWh for commercial customers; an $0.0003 per kWh for industrial customers.

Bridging the Gap Includes Funding for Greenhouse Gas Reduction Projects - Seattle, WA
Seattle announced their Climate Change Action plan this year and are asking voters as part of their "Bridging the Gap" initiative to approve additional property tax revenues to be used in part to increase transit ridership and decrease driving in the city. The initiative would collect an additional tax levy of $36,650,000 in 2007 and up to $365,000,000 in additional taxes over the nine-year duration of the levy. The Mayor's office indicates that $34 million of the Bridging the Gap proposal will lead to:

- Substantial bicycle and pedestrian improvements, including new and extended bikeways, sidewalks and trails, and safety upgrades to crosswalks citywide.
- Increased public transportation service, including funding that leverages a two-for-one match from King County Metro’s Transit Now package.
- Investments in freight mobility that will reduce emissions by easing congestion for trucks.
- Renovation of King Street Station as a multi-modal transportation hub.

Oil Extraction Tax to Fund Clean Energy - California
This initiative would establish a $4 billion program to reduce oil and gasoline usage by 25%, with research and production incentives for alternative energy, alternative energy vehicles, energy efficient technologies, and for education and training. Funded by tax of 1.5% to 6%, depending on oil price per barrel, on producers of oil extracted in California. The proposal would prohibit producers from passing the tax on to consumers. The tax is expected to raise between $200-380 million.

- Proponent: Californians for Clean Alternative Energy www.yesoncleanenergy.com
- Opponent: No on 87 www.nooiltax.com

Renewable Energy 15-by-20 Plan - Washington
This renewable energy measure (I-937) would require investor-owned and consumer-owned electric utilities with 25,000 or more customers (17 out of 62 utilities statewide) to meet designated targets for energy conservation and use of eligible renewable energy resources. Renewable energy resource targets may also be met by purchasing renewabl energy resource credits. Utilities not meeting conservation and renewable energy resource targets would pay penalties to the state. To meet the goals in this initiative would result in most of the future load growth in Washington to be met primarily with renewable energy and conservation.

More:

• Ballot Initiative Strategy Center - has listings of the state level initiatives around the country