T H E GEORGE WA SHI NGTON U N I V ER SIT Y L AW SCHOOL
ENVIRONMENTAL AND ENERGY LAW
PROGRAM ESTABLISHED 1970
California’s Reverse Auction Mechanism (RAM): A Promising Procurement Tool for Renewable Distributed Generation Jessica Wentz, Environmental Program Fellow and Visiting Associate Professor of Law This discussion is excerpted from the forthcoming article, “Balancing Economic and Environmental Goals in Renewable Energy Procurement: A Critical Analysis of California’s Renewable Energy Mechanism” to be published in the George Washington Journal of Energy and Environmental Law.
SPRING 2014 ISSUE PERSPECTIVES 1 WHAT’S NEW 1–3 RECENT EVENTS 4–5 UPCOMING EVENTS 6 STUDENT AND ALUMNI PROFILES 7–9 STUDENT NEWS 10 IN PRINT 11
Emily Hammond to Join GW Law
n 2010 Governor Jerry Brown proposed an ambitious plan to promote renewable energy development in California. One of the key objectives in Governor Brown’s “Clean Energy Jobs Plan” is the construction of 12,000 megawatts (MW) of distributed renewable energy generation by 2020.1 This objective complements California’s other energy-related goals, including the state’s greenhouse gas (GHG) reduction targets, 2 and its Renewable Portfolio Standard (RPS).3 In order to expedite the deployment of distributed generation (DG)
resources, the California Public Utilities Commission (CPUC) recently introduced an innovative market-based approach to wholesale DG procurement. The “Renewable Auction Mechanism” (RAM) is a reverse auction, in which developers can submit bids for proposed DG projects between 3 and 20 MW in capacity. California’s three large investor-owned utilities (IOUs) are then required to procure a specified capacity of renewable DG in each auction, by selecting the lowest-cost bids up until they have reached their capacity targets. The CPUC continued on page 13
rofessor Emily Hammond will join the GW faculty in the fall of 2014, bringing additional expertise in energy, environmental, and administrative law to GW’s Environmental and Emily Hammond Energy Law Program. A former civil engineer who practiced in the environmental field prior to attending law school, Professor Hammond’s expertise is informed by technical realities and shaped by a systems approach to legal and continued on page 3
GW Law’s Sustainable Energy Initiative
W Law’s new Sustainable Energy Initiative (SEI) is up and running! Three projects, the Community of Practice on Legal Aspects of Sustainable Energy for All (SE4All), the Energy for the 21st Century (e21) Project, and a nuclear clean air project have launched. SEI is now initiating a fourth project that will look at the role of integrated resource planning and its adaptation to a changing electric sector, all of which are described in more detail. Over the past seven months, LeRoy C. (Lee) Paddock, Associate Dean for Environmental Studies, and Donna Attanasio, Senior Advisor for Energy Law Programs, also have been building SEI’s advisory board, forming alliances with other organizations and programs, and working with the law school’s Communications Office on a new website, which should be up and running soon. Together with Professor Emily Hammond, who will be joining the GW Law faculty later this year (see story on page 1), the SEI leadership team is also working on further developing and expanding its research agenda and obtaining outside funding. During the fall semester students engaged in a multitude of course-related projects that included working with the
American Council on Renewable Energy (ACORE) on a smart grid survey and the Virginia Coastal Energy Research Consortium on Jones Act issues related to offshore wind development. SEI also hosted a discussion and book signing with Jigar Shah, founder of SunEdison and author of Creating Climate Wealth. Other fall 2013 SEI work products included a paper by Ms. Attanasio on the application of the Public Utility Regulatory Policies Act of 1978 (PURPA) to the newest generation of renewable power on public power utility systems, which was presented at American Public Power Association’s fall legal meeting in Seattle and will be published in the spring 2014 edition of GW’s Journal of Energy and Environmental Law. For the spring semester, one student is working with ACORE on a study of the use of microgrids to support renewable power, and another student is working with the North American Electric Reliability Corp. on removing barriers to transmission investments. SEI is also continuing to collaborate with the Energy Bar Association (EBA). In October GW Law co-sponsored the EBA’s 2013 Mid-Year Meeting, at which Ms. Attanasio moderated a panel titled “A PURPA Renaissance?” in Washington, D.C., and it will co-sponsor and host EBA’s March 5 conference on enforcement. Ms. Attanasio is also chairing an EBA ad hoc committee on energy legal education. While SEI’s current research focus is primarily the U.S. electric sector, it
anticipates becoming more technologically and geographically diverse as resources become available. Questions, suggestions, and offers to participate can be directed to Ms. Attanasio or Associate Dean Paddock.
SEI’s Projects SEI has four significant research projects underway: SEI is involved in the United Nation’s SE4ALL initiative, which seeks to extend modern energy services to the more than one billion people who still lack such services while improving energy efficiency and increasing the use of renewable energy. Associate Dean Paddock is a founder and co-chair of the Community of Practice (CoP) on Legal Aspects of SE4ALL, which supports SE4All projects by enhancing the understanding of how legal systems can either hinder or enhance SE4ALL efforts and providing educational opportunities and assistance to advance SE4ALL projects. Throughout fall 2013, LLM candidate Chiara Pappalardo researched and began building a resource library for the CoP, which is now being moved to a GW-hosted website under the supervision of Visiting Associate Professor and Environmental Law Fellow Jessica Wentz. Colleagues from the University of Groningen, the Netherlands, and the International Development Law organization also assisted with the research. On November 21, 2013, the Community of Practice held is first in-person meeting at the World Bank during the Bank’s Law, Justice, and Development week. Speakers at the meeting included CoP co-chair Professor Thoko Kaime of the University of Leicester in England, who also made a presentation at the law school regarding his research on barriers to energy access in southern Africa (see page 3). Professor Kaime, who is from Malawi, spent last semester conducting research in South Africa and other southern African countries. GW faculty and students also expect to present papers related to SE4ALL legal issues at the IUCN Academy of Environmental Law annual continued on page 12
2 THE GEORGE WASHINGTON UNIVERSITY LAW SCHOOL
Sustainability Upgrades at GW Law
s part of the University’s commitment to a sustainable campus, GW Law has taken a number of steps to improve the sustainability of its facilities. This effort has been spearheaded by Meghan ChappelBrown, Director of George Washington University’s Office of Sustainability, and Hank Molinego, Associate Dean for Administrative Affairs at the law school. Some of the campus retrofits that have taken place over the past year include: • Water faucets and filters aimed at reducing the amount of bottled water purchased by the university for events and encouraging students to use refillable water bottles on campus. • Energy efficient lighting and motion sensors in many offices and hallways to reduce the amount of electricity consumed in law school buildings. • Additional bicycle racks (33 percent increase) to encourage students to commute to campus on their bikes.
Emily Hammond from page 1
policy issues. “I am excited to join such a dynamic law school community,” says Professor Hammond. “The level of enthusiasm and engagement from students, faculty, and alumni alike is palpable and energizing. In addition, being a part of the Energy Initiative and reaching beyond the walls of the law school to the broader energy community holds special appeal.” Professor Hammond has taught tort, administrative, energy, environmental, oil and gas, and water law at Wake Forest University and the University of Oklahoma (where she also served as the Associate Dean for Academic Affairs). A dedicated and energetic classroom teacher, Professor Hammond takes her students’ education seriously. “It is an honor to be entrusted with the future of
The original Jacob Burns Community Legal Clinics building (right) was renovated and expanded with sustainability in mind
In addition to the improvements to its existing buildings, GW Law’s new facilities (the redesigned Community Legal Clinics and the new Law Learning Center) have also been designed with sustainability in mind. The Legal Clinics building is certified LEED Gold, due to the use of recycled and green building materials during construction, as well
as the installation of energy efficient lighting, water filters, insulated windows, and low-flow toilets. The Law Learning Center is awaiting certification for LEED Silver based on its energy-efficient and water-efficient design. n
our profession,” she says. “I want every minute in the classroom to count. But a teacher’s role is not limited to the classroom, and I treasure the many opportunities to engage with students in less formal ways.” Professor Hammond’s research expertise compliments her teaching experience. Her scholarship explores the dynamics among energy, environmental, and administrative law. Her current projects focus on nuclear power; the role of self-regulated organizations in energy law; and risk perception issues in shaping the Smart Grid. Her articles have been published in top law journals at Columbia, Michigan, Duke, and elsewhere. She is a co-author of the nation’s leading energy law casebook, and she will be joining colleague Robert L. Glicksman, J. B. and Maurice C. Shapiro
Professor of Environmental Law, and his co-authors on the forthcoming edition of their environmental law casebook. In addition to teaching and scholarship, Professor Hammond is active in the third prong of a professor’s work— service. She is an elected member of the American Law Institute, a member of the Energy Bar Association, and serves on the executive committee of the Association of American Law Schools’ Administrative Law Section. She has served as a state hearing examiner on water law matters and done work for the International Atomic Energy Agency. “I am looking forward to actively participating in the D.C. community,” Professor Hammond notes. “The opportunities to make a difference are unmatched.” n
ENVIRONMENTAL AND ENERGY LAW PERSPECTIVES 3
Recent Events Jigar Shah Visits GW Law
Shapiro Lecture by Thoko Kaime: Sustainable Energy Development in Southern Africa
ntrepreneur and visionary Jigar Shah visited the law school on November 11 to discuss his book Creating Climate Wealth. Mr. Shah’s presentation was the first in a series of discussions with energy sector thoughtleaders. The wide-ranging discussion covered the challenges of deploying proven technology on a commercial scale, including the importance of standardization and government guidance, the impact of changes in electric power delivery on consumers and incumbent utilities, and the potential for addressing many of the problems in developing nations through innovative business models that encourage and facilitate the investment of mainstream capital. Jigar Shah Highly engaged audience members, including participants from the law school and GW’s School of Public Health and Health Services and School of Engineering and Applied Sciences, raised questions and provided insights in a lively dialogue that bodes well for similar salontype events planned as part of GW Law’s new energy initiative. n
n November 21 Professor Thoko Kaime joined GW Law to discuss legal issues relating to access to energy in Southern Africa. Professor Kaime is a native of Malawi who is currently a faculty member at the University of Leicester in England. He has written extensively on human rights and sustainability governance. Professor Kaime’s presentation highlighted some of the key regulatory, technical, and social barriers to sustainable energy development in the region, as well as some of the main priorities of the World Bank’s Sustainable Energy For All (SE4All) initiative. He noted that smallscale renewable energy technologies hold great promise for remote communities that do not have access to the electric grid, but that the deployment of those
Dean Paddock Presents Papers in Brussels and Geneva
ssociate Dean Lee Paddock spent two weeks this past fall in Europe presenting two papers and working with our partner law school, the University of Groningen in the Netherlands. On November 15 he presented a paper in Brussels about regional enforcement associations in the United States. The presentation took place at an international conference on environmental enforcement networks sponsored by the Flemish High Council on Environmental Enforcement.
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Professor Robert Glicksman, Donna Attanasio, Professor Kaime, and Professor Kola Abimbola of Howard University
technologies will depend on the presence of enabling regulatory frameworks. When asked about the role of grassroots activism, Professor Kaime suggested that African citizens will become more involved in this movement as they continue to see the benefits associated with access to energy. He cited the example of a solar installation in a small village, which community members can use to charge their cell phones, as an excellent example of how sustainable energy can directly benefit local citizens. n
He then travelled to the University of Groningen to participate in the oral examination of a Phd student. For his last stop, Dean Paddock travelled to Geneva to present a paper at a joint conference of the American Society of International Law and the European Society of International Law that focused on the changing nature of international environmental law. Dean Paddock’s presentation addressed private environmental regulation and enforcement and the rapidly expanding area of supply chain environmental management. n
WRI Event: Public Administrative Fairness in Environmental Decision Making
Professor Dinah Shelton
n September 25, 2013, The Access Initiative (TAI) of the World Resources Institute (WRI), in association with GW Law, conducted a multi-stakeholder workshop in Washington, D.C., as part of TAI’s Public Administrative Fairness in Environmental Decision Making Project (Project). TAI is the largest network in the world dedicated to ensuring that citizens have the right and ability to influence decisions about the natural resources that sustain their communities. The purpose of TAI’s Administrative Fairness Project is to increase transparency, accountability, and public participation in environmental decision making by identifying a set of broadly applicable principles of administrative fairness. TAI hopes that these principles will provide a basic foundation for protecting the procedural rights of communities and individuals that may be subject to the environmental impacts of a particular administrative decision. The workshop at GW Law was part of TAI’s effort to develop and refine these
Lalanath de Silva, Director of the Access Initiative, World Resources Institute
principles. The participants consisted of academics, practitioners, high-level government officials, civil society representatives, international agencies, and administrative and procedural rights experts from the Washington, continued on page 6
Atomic Energy Class Visits the Nuclear Regulatory Commission
n September the Atomic Energy Law course held two classes in the Hearing Room of the Atomic Safety Licensing Board at the headquarters of the Nuclear Regulatory Commission (NRC) in White Flint, MD. The double class session, which was held at the invitation of Chief Administrative Judge E. Roy Hawkens, included presentations by NRC Commissioner William D. Magwood, members of the NRC General Counsel staff, the NRC documents department, and Chief Judge Hawkens. The final period was a Q&A session with three senior ASLB law clerks. n
From left: Professorial Lecturers in Law Larry Brown and Charles Abernathy; Regine Baus, JD ’15; Jasmine Story, JD ’15; Kevin Liu, JD ’14; Michael Ambinder, JD/MA ’15 ; Ramona Sladic, LLM ’14, Counsel at the Department of Justice Canada; Zachery Pilchen, LLM ’14; Andrew Orr, JD ’15; and Timothy Furdyna, LLM ’14. Behind the bench, from left: ASLB Law Clerks Carter Thurman, Nicole Picard, and Onika Williams, and Chief Judge Hawkens
ENVIRONMENTAL AND ENERGY LAW PERSPECTIVES 5
UPCOMING EVENTS • RECENT EVENTS
Upcoming Events 2014 J.B. and Maurice C. Shapiro Environmental Law Symposium: The Role of Planning in Federal Land Management March 13–14, 2014
n March GW Law, the University of Houston Law Center, and the Environmental Law Institute, along with GW’s Environmental Law Association and Journal of Energy and Environmental Law, are co-sponsoring a conference to examine the role of planning in federal land management. Each of the principal federal land management agencies is required to engage in planning under its organic statute, and federal agencies must also conduct planning to comply with requirements under cross cutting environmental laws such as the National Environmental Policy Act and the Endangered Species Act. Some of the critical issues that these agencies confront during the planning process include the future of oil and gas development on federal lands, the impact of climate change on land management, and
WRI Event from page 5
D.C., area. Some special guests included Dinah Shelton, Manatt/Ahn Professor of International Law at GW, David Hunter, Professor of Law at American University (AU) Washington College of Law, Steve Wolfson, Senior Attorney at EPA, and Carl Bruch, Senior Attorney and Co-Director, International Programs, at the Environmental Law Institute. Many students from AU and GW also attended the event.
the use of adaptive management in the context of federal lands and resources. This conference will bring together representatives from the Department of the Interior and other federal agencies, as well as experts from NGOs, private companies, and academic institutions to explore how successfully federal agencies have incorporated long-term planning practices into their resource management
strategies, and whether Congress’s vision of a management regime based on planning has improved protection and use of federal lands and resources. It will also identify opportunities for improvement and innovation in current planning practices. For more information, registration, and the agenda visit www.law.gwu.edu/ gwl/shapiro2014. n
The workshop began with several presentations and a group discussion focusing on the relationship between administrative procedure, human rights, and environmental justice. The participants then divided into smaller groups to critique TAI’s 13 draft principles of administrative fairness. At the end of the day, everyone came together to discuss their critiques and provide suggestions for refining the principles. They also discussed issues relating to
implementation of the project, and how these principles might become a global standard for administrative decision making. n
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STUDENT AND ALUMNI PROFILES
Student and Alumni Profiles Andrea Grossman, JD ’14
ndrea Grossman says she “always knew [she] was interested in environmental science.” Her mother was a teacher who kept educational materials around the house. When she was a toddler, she would fall asleep to a tape of children’s songs about environmental issues called “Nature Nuts” that covered topics such as recycling and biological niches. By the time she reached college, Andrea thought she wanted to be the next Jane-Goodall, living and researching in some remote jungle. But eventually she realized that the average botanist or zoologist spends most of their time in a lab, and thus Andrea’s interests shifted towards the policy realm. She ended up majoring in environmental science policy, with a focus on sustainability, agricultural issues, and soil and water science. Unsurprisingly, when Andrea was applying for law school, she knew that she wanted a strong environmental and energy law program. She says that “GW law stood out in these fields, and the location in the heart of D.C. was really the selling point. I knew that there was no better place to try to get involved in the world of environmental policy. I didn’t even visit the campus before applying. When I found out I had been accepted, I called my parents and told them that I’d be moving to D.C. It was a good decision on my part; I really love it here!” Andrea has also expressed great enthusiasm for the courses she has taken at GW Law, as well as her internships and
“I knew that there was no better place to try to get
involved in the world of environmental policy.”
other activities. “So far, I’ve managed to find a new topic to be passionate about in every course I’ve taken here at GW. I wrote my journal note about coal power plant particulate emissions, and the concentrated health and property impacts they have in environmental justice communities. I also spent a semester at EPA, helping to craft consent decrees for municipal clean water act violations (a summer I refer to fondly as my foray into “sewage law”). Right now, I’m enjoying diving as deeply as I can into a wide variety of issues—I haven’t specialized in any one area of environmental law.” Andrea is a member of the Journal of Energy and Environmental Law, and the Environmental Law Association. She is also a senator with the Student Bar Association. In addition to her passion for environmental law, Andrea also loves theater. “The most fun thing I’ve done while in law school is participate in the Law Revue show, performing in skits and videos celebrating and poking fun at the law school experience.” After she graduates, Andrea hopes to work in a position where she has the opportunity to contribute to the
development of environmental policy. She already has completed internships with the D.C. District Department of the Environment, EPA, and the Sierra Club, where she has worked on a variety of issues relating to environmental enforcement and policy implementation. Andrea offers the following advice for other students who are interested in studying and practicing environmental law: “I think people should take the classes that interest them the most while they’re in law school. Most of us can study for the bar on our own, so take classes about subjects that you’re passionate about and that will inspire rather than bore you. Also, try to make your internships and class experiences as active as possible. Ask your professors and employers to talk to you if they hear of issues that would make good paper topics. I got my internship at the Sierra Club in part because I had written a paper for one of my classes on a topic they were interested in using as the theory of an upcoming lawsuit. You’d be surprised how much people are willing to delegate to you when they know you’re interested and passionate in the issue.” n
ENVIRONMENTAL AND ENERGY LAW PERSPECTIVES 7
STUDENT AND ALUMNI PROFILES
Ramona Sladic, LLM ’14
amona Sladic is a Canadian LLM student who came to GW Law from Yellowknife, Northwest Territories, at the 63rd parallel in Canada’s arctic region. Ramona is Ramona Sladic currently completing an LLM in Environmental Law. She has the honor of attending as a Fulbright student, in addition to having received a Thomas Buergenthal full tuition scholarship. Ramona completed an LLB with a specialization in marine law at Dalhousie University Law School on Canada’s east coast, where she graduated with highest honors. Prior to law school, she completed a BA (Honors) at Carleton University, where she received the University Medal in Arts. Following law school, Ramona
Chiara Pappalardo, LLM ’11, LLM ’14
efore coming to GW Law in 2010 to pursue an LLM degree in Energy and Environmental Law, Chiara Pappalardo practiced corporate and public law in Italy for several years. She Chiara Pappalardo developed an interest in energy and environmental law during a visiting foreign lawyer exchange program at Fulbright & Jaworski LLP (now Norton Rose Fulbright LLP). She was a junior associate at Dalla Vedova Studio Legale, a boutique firm in Rome, when the managing partner suggested that she spend some time overseas to look into
completed a judicial clerkship with Canada’s Federal Court. Ramona chose GW Law’s Environmental Program over the environmental law specializations at other schools for its extensive selection of courses and the opportunity to study with professors who influence the critical environmental law and policy matters being discussed and decided in endless forums in the city and country. Washington was also a natural fit for her family—as Ramona is completing her LLM while on maternity leave, her husband and infant daughter, who are frequently spotted in the green space outside the law school, were very excited about the chance to enjoy the infinite activities and attractions the city has to offer. Ramona’s main academic interests include environmental regulatory matters, the balancing of interests in natural resource development projects, and Aboriginal consultation and accommodation issues in the environmental and natural resource contexts. Her environmental law interests are very much informed by the arctic environment
in which, apart from her year at GW, she lives and practices. Yellowknife and the larger Northwest Territories have populations that are about half Aboriginal, with Aboriginal groups holding settled and unsettled land claims, self-government powers, treaties, and traditional land uses and ways of life. By and large the 114 million hectares land and 21 million hectares water that make up the Northwest Territories is pristine and uninhabited, with fragile ecosystems. The territory is also natural resourcerich, currently containing three operating diamond mines, historic or current gold, silver, copper, and tungsten mines (among others), and expanding energy industries. It is against this backdrop that Ramona practices environmental, natural resource, and Aboriginal law with Canada’s Department of Justice. On completion of her LLM program, she plans to continue working in these areas, integrating the new perspectives and the tools acquired through her LLM program to facilitate a stronger cross-jurisdictional understanding of environmental laws and policies. continued on page 10
the rapidly expanding energy field. At the time, she did not know anything about energy law but had a good foundation in both corporate and commercial law, so she decided to take on the challenge. Chiara says she had “the time of [her] life during the program at F&J,” getting to meet several partners and work on some renewable energy projects. She recalls that “while reading about solar, wind, and biofuels I thought to myself: this is too much fun and it is going to be the future!” Chiara’s experience at F&J made her realize that if she wanted to work in the energy field she would need to know all about the industry. When she returned to Italy, she began working for an energy services company developing solar and biomass power plants as a legal consultant. She then began to look for energy law programs where she could further develop her knowledge of this field. She says she chose GW Law’s LLM program in Energy and Environmental Law
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because of its international reputation and its “exceptional location” in the heart of the U.S. capital. Once she arrived at GW Law, Chiara says she wanted to be strategic about her education, pursuing courses and opportunities that would couple practical skills with strong theoretical foundations. She enrolled in classes such as Energy Law and Regulation, International Project Finance, and Foreign Direct Investment in order to develop a practical understanding of both the regulatory and financial aspects of renewable energy development. She also took advantage of the opportunity to participate in Environmental Law Association (ELA) meetings, and eventually signed up for a pro bono ELA project involving the Deepwater Horizon Oil Spill. For that project, she collaborated with two other students on a memorandum that explored the application of the collateral source continued on page 12
STUDENT AND ALUMNI PROFILES
Q&A with Ross Noland, LLM ’08
Operation) facilities, represented public interest groups to fight ill-advised water quality standards legislation, and fought a permit for a new discharge to an extraordinary resource water.
What led you to attend GW Law? My experience at the University of Arkansas School of Law was wonderful, but limited in the number of environmental law courses available. The environmental curriculum at GW was exactly what I was looking for, and D.C. had always interested me. In the space of two weeks, LLM program alum Tim Jones assisted me in securing a clerkship at EPA, a room in a house where several friends from Arkansas lived became available, and GW admitted me. It all came together so well, I had to go. I took the bar with the peace of mind of knowing what I was doing in the fall, went to Idaho to run the Middle Fork of the Salmon River, came home, packed everything, and drove to D.C. to start classes. Ross Noland
ince receiving an LLM from GW Law in 2008, Ross Noland has worked as a law clerk, legislative counsel, adjunct professor, and associate attorney in a private law firm.
How did you develop an interest in energy and environmental law? What issues are you passionate about? I grew up attending meetings and outings of conservation and recreation groups like the Arkansas Canoe Club and the Ozark Society. Outdoor sports, especially being on the river, have always been a big part of my life. This background led me to environmental law, but my current interests have expanded well beyond my enthusiasm for the great outdoors. I am convinced that environmental law and policy is an important career path. Few areas of law touch everyone on a daily basis—the air, water, food, and electricity we all consume are influenced by environmental law. I am particularly interested in water quality. I have recently served on a legislatively-created committee to examine public notice procedures for new CAFO (Concentrated Animal Feeding
What were some of your favorite activities or opportunities at GW? I was very active with the Environmental Law Society in Arkansas, so I jumped right in with GW’s Environmental Law Association (ELA) as an LLM student. The ELA hosted the National Association of Environmental Law Societies conference that year. I enjoyed working with the other students to plan and execute the conference. Our committee met Vice-President Gore, the keynote speaker for the conference.
Where did you work after you got your degree from GW, and how has your career progressed since then? I worked for adjunct faculty member Thomas Mounteer at Paul Hastings, LLP for about two years running an
“I am convinced that
environmental law and policy is an important
environmental compliance program for a national car rental company. I then moved home for a year to clerk for a state trial court judge before I returned to D.C. to work for Senator Blanche Lincoln and the Senate Agriculture Committee. I served the committee as Legislative Counsel, with an emphasis on conservation, energy, and environmental policy. Working in the Senate was an incredible experience, highlighted by the opportunity to represent the Committee at the 22nd annual Meeting of the Parties to the Montreal Protocol in Bangkok. I began working at McMath Woods P.A. three years ago.
What do you enjoy about your current job? Former governor Sid McMath, and future federal district court Judge Henry Woods, founded McMath Woods P.A. after Governor McMath left office in 1953. This firm has had an environmental practice for more than 30 years, generally representing plaintiffs. The diversity of practice areas is a great advantage of my current job, and something I enjoy. I represent small businesses and citizen groups in administrative matters, conservation groups in public interest litigation and energy dockets, and conduct due diligence and compliance work for several companies. The bread and butter of our firm’s environmental practice are environmental property damage cases. We represent communities, businesses, and individuals harmed by oil spills, leaking underground storage tanks, explosions, and groundwater plumes. It is rewarding to help people get back on their feet after an environmental disaster.
Do you have any advice for other students who are interested in environmental law? Meet as many people as you can and cast a wide net to find a job. There are many avenues to a career in environmental law, but most start with making personal connections. Additional opportunities will develop if you demonstrate the ability to apply yourself at your first job. n
ENVIRONMENTAL AND ENERGY LAW PERSPECTIVES 9
STUDENT NEWS • STUDENT AND ALUMNI PROFILES
Student News News from ELA
ntering its 44th year of connecting students with environmental law and with the outdoors, the GW Environmental Law Association (ELA) began fall 2013 with its annual kayaking trip on the Potomac River and apple picking in Poolesville, Maryland. The unseasonably warm weather in September and October proved perfect for new students, first-years and LLM students alike, to get to know the local D.C. landscape and each other. Other successful fall events included a revival of “Meet the Professors” night, and a well-attended panel on career paths in energy and environmental law. Turning to the spring, ELA has exciting plans to elevate the energy and environmental fields at GW Law. On February 5 the group will host an evening of “speed” networking at the law
school, highlighting practitioners with experience in public- and private-sector energy and environmental law, and providing a fun setting for students to learn about how best to secure a job or internship in these areas. ELA’s 2013– 2014 events culminate in the annual Sustainability Week during the week of March 10. This year’s Sustainability Week builds on last year’s emphasis on conservation tactics to bridge the gap between “law school” and “sustainability.” Programs will trace sustainability themes
from the origins of the conservation movement and the environmental decade, to current energy policy and the future of product life cycle benchmarking. Specific events will include a film screening, educational panels and tabling, and the sale of reusable “GW Law” water bottles. ELA is always looking for new ways to connect with practitioners in the areas of energy and environmental law and policy. If you are interested in staying tuned to ELA events during the year, please contact ELA at firstname.lastname@example.org. n
The Potomac River at sunset
Sladic from page 8
News from JEEL
his has been an exciting year for the Journal of Environmental and Energy Law! The editorial board has focused on continuing to grow JEEL and improve its members’ experience. To that end, JEEL is publishing three issues this year, up from two. JEEL continues to attract timely pieces from leaders in the energy and environmental legal fields, including a piece by an administrative law judge at the Federal Energy Regulatory Commission. JEEL is also experimenting with new ways to grow its membership at GW by taking the unprecedented step of launching an advertising campaign to inform and attract potential 1L members. Additionally, recognizing the trend away from print and toward digital media,
JEEL is updating its web presence and receives an average of 800 unique hits every month. Although still a relatively young journal, JEEL has already accomplished a great deal and is on track to accomplish a great deal more! n
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When not at school or at work, Ramona chairs both the Environmental Law and Membership sections of the Northwest Territories Branch of the Canadian Bar Association (CBA). She was Co-Chair of the 2013 CBA National Environmental, Energy, and Resources Law Summit, a legal conference addressing natural resource and energy legal developments across Canada and select international jurisdictions. Ramona is also an avid runner, running year-round in Yellowknife, braving the mosquitos and the cold, and encouraging others to give ice road running a try. Ramona is very much enjoying her studies, and spending (a warm) year in Washington, D.C., with her family. n
In Print LeRoy C. Paddock Paddock and Bowmar, “Multi-Layered Environmental Governance in the United States,” in Environmental Protection MultiLayered Systems: Comparative Lessons from the Water Sector 291–315 (Martinus Nijhoff 2012). Paddock, “Stepping up to Sustainability,” 81 UMKC Law Review 359 (Winter 2012). Paddock and Masterton, “An Integrated Framework for Governing Emerging Technologies such as Nanotechnology and Synthetic Biology” in Innovative Governance Models for Emerging Technologies 63–91 (Marchat, Abbot & Allenby eds., Edward Elgar Publishing 2014). Paddock and Colasuonno, “Water Management and Protection in the United States,” in Environmental Protection Multi-Layered Systems: Comparative Lessons from the Water Sector 33–54 (Martinus Nijhoff 2012). Paddock and Wentz, “Emerging Regulatory Frameworks for Hydraulic Fracturing and Shale Gas Development in the United States,” in Energy Underground (Academic Advisory Group of the Section on Energy, Environment, Resources and Infrastructural Law (SEERIL) of the International Bar Association, forthcoming 2014).
“Next Generation Environmental Compliance and Enforcement” (Environmental Law Institute) (forthcoming 2014, co-edited with Jessica Wentz).
Donna Attanasio “PURPA’s Public Power Impact (and what to do about it), 4(3) George Washington Journal of Energy and Environmental Law __ (forthcoming 2014).
Dinah L. Shelton “The InterAmerican Human Rights Law of Indigenous Peoples,” 35 The University of Hawai’i Law Review __ (2013). “Water Rights of Indigenous Peoples and Local Communities,” in International Law and Freshwater: The Multiple Challenges (Laurence Boisson de Chazournes, et al, eds., Edward Elgar Publishing—New Horizons in Environmental and Energy Law Series, 2013).
Robert L. Glicksman “Energy Transmission Across Wild and Scenic Rivers: Balancing Increased Access to Nontraditional Power Sources with Environmental
Protection Policies,” 34 Public Land and Natural Resources Law Review Pub. 1 (2013). Release # 18 to Public Natural Resources Law (2d ed.) (with George Coggins).
Steve Charnovitz “Trade and Environment” in Handbook of Trade Policy for Development 893–921 (Arvid Lukauskas, Robert M. Stern & Gianni Zanini eds., Oxford University Press, 2013). “International Trade and Investment Law and Carbon Management Technologies” (with Nigel Bankes, Anatole Boute, Shi-Ling Hsu, Sarah McCalla, Nicolas Rivers, and Elizabeth Whitsitt), Natural Resources Journal 285 (summer 2013).
Jessica A. Wentz “Balancing Economic and Environmental Goals in Distributed Generation Procurement: A Critical Analysis of California’s Renewable Auction Mechanism,” 4(3) George Washington Journal of Energy and Environmental Law __ (forthcoming 2014). n
ENVIRONMENTAL AND ENERGY LAW PERSPECTIVES 1 1
WHAT’S NEW • STUDENT AND ALUMNI PROFILES
SEI from page 2
Colloquium scheduled for late June in Tarragona, Spain. The e21 Project is a new project through which SEI, The Great Plains Institute, and the Center for Energy and the Environment will examine the impact of changes in the electric industry on Xcel Energy and potentially other Minnesota utilities. The project aims to develop revised business and regulatory models that facilitate achievement of sustainability goals together with economic and reliable electric service goals. This collaborative effort will proceed in three phases: Phase I, which is currently underway, is primarily aimed at information gathering—through a stakeholder participation process, interviews with regulators and others, and surveys of similar work—and the development of an action plan. Implementation of the action plan would occur in Phase II. Phase III would seek to extrapolate and apply the lessons learned for use in other states. The first stakeholder meeting will be held on February 28 in the Twin Cities. SEI’s first self-initiated project is evaluating policy alternatives that address the role of nuclear power in achieving climate change goals. Existing nuclear plants in competitive markets are facing difficult economic times due to competition from low-cost natural gas generation and the
Pappalardo from page 5
rule in the states affected by the spill. The students made an oral presentation of the paper to Kenneth Feinberg, the administrator of the BP Claims Facility in fall 2010. Chiara says the LLM program made her realize how energy law and environmental law are inextricably intertwined. She also became more attracted to environmental law during her optional practical training, when she interned for an Italian manufacturing company based in Maryland that was engaged in the business of producing, manufacturing, and installing environmentally friendly solutions against soil erosion. After her practical training, Chiara decided to enroll in the law school’s
entry of renewable resources during a period of recession in which demand has nearly flattened. Two nuclear plants have announced plans to close for economic reasons (not operational issues, which have caused other closures) and others are rumored to be financially strained. At the same time, the existing nuclear units in the U.S. make a significant contribution toward meeting baseload power demands, providing approximately one-fifth of the total electric energy consumed, without the emission of greenhouse gases and other pollutants associated with the use of fossil fuels. Each loss of a nuclear plant makes greenhouse gas reduction goals for the electric generation sector harder to reach. The SEI project will examine whether policy changes are needed, and if so, evaluate possible policy options to facilitate the continued operation of existing plant—at least during an interim period while future strategies are better charted—and potentially address their long-term role in meeting GHG reduction goals. SEI’s newest project will look at the role of integrated resource planning in the U.S. and how it has evolved, and should further evolve, to meet current needs. The electric sector is marked by new competitive market participants that are having a profound effect on where and how growth and change are
general LLM program in order to broaden her understanding of environmental law and take additional classes to complement her first LLM degree. During her second year at GW, she had the opportunity to participate in an outside environmental placement with the World Bank’s Global Forum on Law, Justice, and Development, in the Thematic Working Group of Environment and Natural Resources Law. Her research focused on the legal barriers that may hinder or facilitate the implementation of clean energy projects in developing countries—one of the key issues for the United Nations and World Bank joint initiative “Sustainable Energy for All” (SE4All). She also participated in the 2013 Global Energy Writing Contest, during which time she proposed
1 2 THE GEORGE WASHINGTON UNIVERSITY LAW SCHOOL
“While SEI’s current
research focus is primarily the U.S. electric sector,
it anticipates becoming
more technologically and
geographically diverse as
resources become available.” occurring. Electric system planning not only requires regional and interregional coordination, in light of the interdependency of the system, but also has to take into consideration the growth of local resources such as rooftop solar, microgrids, and demand-side management. Technological advances, natural disasters (e.g., Superstorm Sandy), and social priorities (e.g., GHG reduction) have had, and may continue to have, a disruptive effect. In light of these many changes, utilities and public service commissions do not have the same power to direct or influence growth as in the past. Against this background, SEI proposes to address adaptation of IRP methodologies to meet the needs of a changing sector. n
three main recommendations to the U.N. Secretary General to make SE4All a reality. Her essay was among the top 15 selected by the Global Energy Initiative. Chiara is now working as a consultant for the Environmental Law Institute, researching reforms in Mexican water law since that country introduced the human right to water in its constitution. She is also completing her LLM thesis on water independent buildings as an innovative water management solution for a more sustainable future. In addition to these activities, Chiara is Vice-Chair for Social Media at the International Environmental Law and Resources Committee (IERLC) of the American Bar Association, Section of Energy and Natural Resources. n
California’s Reverse Auction Mechanism from page 1
originally directed the IOUs to procure a total of 1,000 MW (in four auctions taking place over a two-year period from 2011–2013. After the first auction, the CPUC increased that target to 1,299 MW and extended the RAM for an additional year to allow the IOUs to meet the new target. The fourth auction concluded in June 2013, and the fifth auction is scheduled for June 2014. The CPUC is currently in the process of reviewing the program to determine if reauthorization of the RAM is appropriate, where to set future targets, and whether any other elements of the program should be modified in light of past experience.
Background on Distributed Generation in California The CPUC has defined “distributed generation” (DG) as “small scale electric generating technologies installed at, or in close proximity to, the end-user’s location.”4 DG facilities are typically connected to the distribution network,5 and may be “installed on the end-user side of the meter, or on the grid side.”6 Although the California Public Utilities Code previously defined “distributed energy resources” as electric generation
technology that is “five megawatts or smaller in aggregate capacity,”7 the state has recently expanded its definition of DG systems. The California Energy Commission (CEC) now defines DG as systems that are less than 20 MW, 8 and similarly, the RAM program applies to projects that are between 3 MW and 20 MW. There are a number of benefits associated with incorporating DG resources into the electric system.9 These include: 1. Enhanced System Reliability—DG resources can enhance system reliability by providing or reducing the need for ancillary services, alleviating system congestion, and contributing to a diversified energy supply.10 In addition, DG systems can be used to provide emergency power during a system interruption to facilities such as hospitals. 2. Reduction or Deferral of Infrastructure Investments—DG systems can be “strategically deployed throughout the distribution system, pinpointing congested, high-cost areas,” thus reducing or delaying the need for distribution and transmission investments.11 3. Load Management and Peak Shaving—The additional energy generated by DG resources, particularly solar PV installations, can reduce peak power requirements. This peak load reduction can have a positive impact on electricity rates because it allows utilities to avoid operating the most expensive peaking generation units,12 and avoid or defer expensive investments in new power-plants and retrofits.13 4. Reduced Transmission Losses— Because DG systems can be strategically sited close to the loads that they serve, they can reduce transmission losses as compared with centralized facilities that are typically sited in more distant locations.14 5. Reduced Land Use Effects—DG systems occupy relatively small areas, and can be sited on rooftops
and other urban structures, thus reducing land-use effects.15 6. Faster Project Timelines—The average project timeline for a DG system is relatively short (as compared with a large, central generation facility), since such projects are subject to lower upfront capital costs, are easier to site, and can potentially use existing transmission and distribution infrastructure.16 Thus, DG resources can be deployed more rapidly, which is compatible with California’s ambitious renewable energy goals. 7. Lower Financial Risk and Enhanced Investment Flexibility—
The “combination of short lead time and small unit size” associated with DG projects may also allow utilities to “reduce financial risk by building capacity in increments more closely matched to changing customer demand, easily ramping investment up or down as new demand information unfolds.”17 8. Customer Empowerment—DG systems can be viewed as a “means of harnessing local sources of generation to let consumers bypass the centralized system of generation and dispatch and, in many cases, to meet their own electricity needs.”18 9. Transition to a More Flexible, Networked Electric System—“[t] he most ardent supporters of [DG systems] see them as holding the potential to revolutionize the U.S. power sector through the replacement of the existing power system with new local markets for electricity, based on networks of small-scale generation and informed consumption.”19 In addition, the installation of renewable DG resources (solar, wind, geothermal, biomass, etc.) can yield significant environmental benefits, including reductions in greenhouse gas (GHG) emissions as well as traditional air pollutants.
continued on page 14
ENVIRONMENTAL AND ENERGY LAW PERSPECTIVES 1 3
California’s Reverse Auction Mechanism from page 13
Utility of Wholesale DG “Wholesale DG” refers to system-side DG installations that are primarily intended to produce electricity that will be exported and sold in the wholesale market. This differs from “retail DG” or “customer-side DG,” which refers to DG systems that are located on the customer side of the meter and are often used to offset the customer’s electric consumption. 20 Wholesale DG projects can significantly contribute to California’s DG objectives for several reasons: (1) they generate more electricity per project than customer-side DG installations, thus contributing to California’s 12,000 MW goal; (2) there is an economic incentive for developers to invest in such projects, since they can potentially profit from the wholesale sale of DG electricity; 21 and, (3) mid-sized systems are viewed as more economically efficient than smaller systems because there are fewer transaction costs per MWh of electricity produced and they are generally large enough to achieve economies of scale. 22 Thus, the wholesale DG model represents a promising approach for the future of electric generation in California and elsewhere.
Understanding the RAM: Program Objectives and Mechanics In the decision adopting the RAM, the CPUC specified that it chose a reverse auction as the “primary contracting tool for this market segment” because doing so would “promote competition and elicit the lowest costs for ratepayers, encourage the development of resources that can use existing transmission and distribution infrastructure, and contribute to RPS goals in the near term.”23 The CPUC further noted that it expected the RAM to “complement the RPS Program by reducing transaction costs and providing a procurement opportunity for smaller RPS-eligible projects, which have not
been able to effectively participate in the annual RPS solicitations to date.”24 As illustrated in the statements above, the RAM is intended to achieve several key objectives. These include the following: 1. Contribute to RPS Goals by Promoting Renewable DG Development—The fundamental
objective of the RAM is to encourage investment in renewable DG projects in order to increase the electricity generated by such sources. 2. Streamline Procurement Process and Minimize Transaction Costs— In order to achieve the first goal, the RAM is intended to streamline the procurement process for developers, utilities, and regulators, and to minimize the transaction costs associated with this process. 25 3. Encourage Development of Projects with Fast Timelines—The RAM also is designed to promote “the procurement of projects that can come online quickly.”26 4. Promote Use of Existing Transmission and Distribution Infrastructure—The RAM is intended to promote the procurement of projects that can use the existing transmission and distribution structure to avoid or defer the need for additional infrastructure investment. 27 5. Support Resource Diversity—The RAM is designed to promote procurement of three different types of DG resources: baseload, peaking intermittent, and non-peaking intermittent. 28 6. Provide a Realistic, Efficient Pricing Mechanism— One advantage of an auction approach is that prices are set through a competitive bidding process that is “aimed at achieving economically efficient results without the need for an administrative process to develop prices based on predictions of future market conditions and technology evolution.”29 As such, the RAM is designed to lead to more efficient, flexible pricing, and also
1 4 THE GEORGE WASHINGTON UNIVERSITY LAW SCHOOL
to alleviate the burden on regulators who would otherwise have to establish prices.30 7. Ensure Economically Efficient Project Selection—Another key goal of the program is to ensure that the IOUs will procure electricity from the most economically efficient projects in order to minimize adverse impacts of the program on ratepayers.31 Whereas a FIT and other financial incentives do not necessarily discriminate between the more or less efficient projects, the competitive nature of an auction should “favor those developers with the greatest technological advantage and the lowest installation costs through expanded market share” while also weeding out less efficient developers.32 Thus, over time, the auction approach “should lead to economically efficient outcomes and meet renewable targets at the lowest possible costs to customers.”33 8. Promote Competition between DG Developers—The program also is intended to foster competition between different DG developers in order to encourage innovation and efficiency in this sector.34 9. Prevent Speculative Bidding—The program contains project viability requirements to deter speculators and ensure that utilities do not invest in unproductive or otherwise unsuccessful products.35 10. Develop Self-Sustaining Markets— The long-term goal of the program is to provide a pathway to the development of self-sustaining energy markets. Specifically, the RAM is intended to contribute to the identification of more realistic prices while also contributing to the growth of the overall DG industry.36 These objectives are closely interrelated, and they all relate to the basic purpose of the RAM program: to expedite the deployment of DG resources at the lowest possible cost. Given the inherent trade-off between expedited
renewable deployment and economic efficiency, there is an inevitable degree of tension between some of the specific program goals. For example, it has been difficult to reconcile the program’s focus on low-cost DG procurement with the goal of promoting DG resource diversity.37 The mechanics of the RAM reflect a careful balancing of these varied goals—in particular, California’s desire to achieve its environmental goals without significantly increasing the price of electricity for consumers. Some of the key program features include: Procurement Targets— CPUC’s original decision directed the IOUs to procure at least 1,000 MW in total. The CPUC selected this target because it was “sufficiently large to test the adopted program but sufficiently small to provide protection against adverse outcomes.”38 This target was subsequently revised to 1,299 MW, in response to requests from Southern California Edison (SCE) and San Diego Gas and Electric (SDG&E) to transfer some of their “Investor-Owned Utility Solar PV Program” capacity requirements to the RAM.39 Each IOU is required to procure its proportionate share of DG electricity at each auction, calculated based on each IOU’s relative electricity sales. However, there is some flexibility in the event that the IOU determines that bids are not cost-competitive. If the IOUs do not meet their targets for a particular auction, the remaining capacity is added to their target for the subsequent auction. Following the revision of the general procurement target, SCE’s target was 723.4 MW overall (180.9 MW per auction). Pacific Gas and Electric Company’s (PG&E) target was 420.9 MW overall (105.2 MW per auction). SDG&E’s target was 154.7 MW overall (38.7 MW per auction). These “per auction” targets were based on the original auction schedule, which consisted of only four auctions. However, because the IOUs failed to reach their procurement targets in the first three auctions, the CPUC added the fifth auction without adding any additional procurement obligations. The IOUs must now attempt to procure two-thirds of their remaining
capacity obligations in RAM 4, and one-third in RAM 5. 40 The RAM rules also direct the IOUs to specify how much electricity they intend to procure from each of the following categories: (1) baseload electricity (e.g., biomass, biogas, landfill gas, geothermal); (2) peaking electricity (e.g., solar PV, solar thermal); and (3) non-peaking intermittent (e.g., wind, small hydroelectric). 41 The CPUC has directed the IOUs to target a minimum of 3 MW in each product category. 42 Standard Contract—The RAM rules specify that each IOU should offer a standard contract that is “simple, streamlined, and has already been vetted by stakeholders through another CPUC program.”43 The price, terms, and conditions of these contracts are not negotiable. 44 The contracts also must incorporate certain requirements regarding project viability and developer commitment, as discussed below. In addition, the contracts must specify that projects will be online within 24 months of contract execution, with a 6-month extension available in the event of regulatory delays. 45 Bid Selection— Sellers compete for RAM contracts by developing a bid price that reflects the cost to build and operate the project, plus a reasonable return on their investment. Bids are then selected by lowest price until the auction capacity is met. 46 In the original decision, the CPUC stated that bid selection should be based exclusively on price. 47 In August of 2011 the CPUC modified this rule by requiring the IOUs to add estimated transmission network upgrade costs to the bids for ranking purposes (to be determined based on the bidder’s most recent interconnection study). 48 Following the first auction, the CPUC modified the rules again to allow the IOUs to account for the “resource adequacy” benefits 49 provided by a seller with full capacity deliverability status.50 Specifically, the CPUC now allows the IOUs to rank bids using the following formula: bid price + ratepayer funded transmission upgrade costs resource adequacy benefits.51 The IOUs may not use any additional criteria for the
“DG [distributed generation]
systems can be viewed as a “means of harnessing local sources of
generation to let consumers bypass
the centralized system of generation and dispatch and, in many cases, to meet their own electricity needs.” evaluation and selection of offers without CPUC approval.52 Project Eligibility—To be eligible for the RAM, projects must be sized between 3 and 20 MW.53 Projects also must comply with specific “viability requirements” to be eligible for a RAM contract. Specifically: (1) the project must be located in one of the IOU’s service territories; (2) the project developer must demonstrate 100 percent control over the site, either through direct ownership, lease, or an option to lease or purchase that may be exercised upon award of the RAM contract; (3) one member of the development team must have begun construction on or completed at least one project of a similar technology capacity; (4) the project must be based on commercialized technology; and, (5) the project’s interconnection application must have been filed, and the bidder must have received results from a System Impact Study or a Phase I Interconnection Study, or must have documentation establishing that the project has passed Fast Track screens.54 Cost Containment and Protection Against Speculative Bidding—As noted
above, the CPUC capped the program at 1,000 and later 1,299 MW in order to limit the potential program costs to ratepayers. The RAM rules also contain several additional provisions to ensure that the IOUs will only procure competitively priced products, and that the RAM market will not be overrun with speculative bids.55 continued on page 16
ENVIRONMENTAL AND ENERGY LAW PERSPECTIVES 1 5
California’s Reverse Auction Mechanism from page 15
First, the IOUs have discretion to reject bids where there is evidence of market manipulation or where prices are not competitive with other RPS procurement options.56 If the IOU wishes to utilize this discretion, it must submit an advice letter to the CPUC explaining its decision to reject a contract. Second, the RAM rules require successful developers to post a development deposit57 as well as a performance deposit.58 The deposits are due upon execution of the contract with the IOU, and they will be refunded only when the project achieves commercial operation.59 The size of the deposits varies depending on the anticipated capacity of the project. 60 Third, the project viability requirements discussed above are also intended to prevent speculative bidding. 61 Specifically, they discourage participation from “concept-only” projects “that have not been sufficiently vetted for economic viability, permitting risks, interconnection costs, and development schedule[s].”62 For example, the 100 percent site control requirement is useful for “demonstrating that project development has advanced beyond the conceptual stage.”63 Similarly, the development experience requirement is useful, because “[d]evelopers who have experience developing successful, similar projects are more likely to submit realistic bids and meet contractual requirements.”64 And finally, the information that the bidders
must provide regarding project location, commercialized technology, developer experience, and interconnection studies should make it easier for IOUs to evaluate whether the bid price is realistic with respect to a particular project. Expedited Regulatory Review—
Expedited regulatory review of the winning contracts is facilitated by two key factors: (1) the CPUC pre-approves the content of each IOU’s standardized contract, and (2) the bidding projects must meet the eligibility requirements described above, and in particular, the interconnection requirements. 65 Project Timeline— Originally, the RAM rules specified that approved projects must come online within 18 months of contract execution, with a possible 6-month extension for regulatory delays. 66 Following the first auction, the CPUC extended this timeline: projects must now come online within 24 months of contract execution, and there is still a 6-month extension available for regulatory delays. 67 Preferred Interconnection Sites—
IOUs are required to provide “preferred location” maps to assist developers in identifying good interconnection sites. 68 The RAM rules specify that these maps should identify the available capacity at the substation and circuit level and should be updated on a monthly basis. 69 Process for Modifying the RAM—
Recognizing that the RAM is, in effect, a pilot program, the CPUC designed the program so that it could be modified
continually based on input from the IOUs and other stakeholders. The CPUC solicits comments from IOUs and project developers following each RAM, and the CPUC staff also can recommend program changes based on experience in prior auctions.70 In addition, the IOUs are required to hold a program forum each year to solicit feedback from participants and to submit annual reports on RAM outcomes.71 Relationship with the RPS—Electricity procured under the RAM is RPS-eligible and thus provides the IOUs with direct credit towards their 33 percent-by-2020 RPS requirements. Relationship with the FIT—Although there is no overlap in project eligibility between FIT-eligible projects (<3 MW) and RAM-eligible projects (3–20 MW), the RAM does have a direct bearing on the prices used in the FIT program. Specifically, in 2012 the CPUC decided to link FIT prices to the bid prices established at contemporaneous RAM auctions.72 The FIT prices are now linked to the weighted average of the highest priced executed contracts for each IOU resulting from the RAM auction held in November 2011. These prices are to be “adjusted based on time of delivery and then adjusted upward or downward every two months based on market responses.”73
Effectiveness of the RAM: Experience from the First Three Auctions Results from the first three auctions suggest that the RAM is an economically efficient mechanism for wholesale DG procurement. The IOUs executed contracts for approximately 730 MW of renewable DG at a relatively low cost,74 thus alleviating concerns about cost-competitiveness and impacts to ratepayers. However, the RAM has been less effective at achieving certain environmental goals. Specifically, there are three core concerns about the RAM: (1) in each auction, the IOUs have failed to fully meet their procurement targets; (2) the winning projects do not represent a diverse array of renewable energy resources (the vast majority of executed
1 6 THE GEORGE WASHINGTON UNIVERSITY LAW SCHOOL
contracts have been for Solar PV); and, (3) most of the winning projects are not sited close to load centers. These concerns raise questions about whether the RAM rules favor cost-competitiveness at the expense of other program goals, and whether the rules should be revised to achieve a better balance between economic and environmental objectives. Nonetheless, the RAM provides a promising model for the procurement of renewable DG at a relatively low cost to ratepayers. Arizona recently enacted a similar mechanism (the Arizona Public Service Company [APS] Small Generator Standard Offer Program),75 and other countries currently are experimenting with reverse auctions for renewable procurement.76 Reverse auctions also have been used by the U.S. General Services Administration (GSA) to procure renewable energy for federal agencies, and there has been at least one legislative proposal for a federal reverse auction that renewable project developers could use to compete for federal funding.77 Thus, there appears to be a growing recognition of the value of reverse auction mechanisms. Ideally, California’s success with the RAM will help motivate other states to adopt similar mechanisms for renewable wholesale DG procurement, and the state’s experience will provide useful information on how to effectively structure such programs.
Endnotes Governor Jerry Brown, Clean Energy Jobs Plan (2010), available at gov.ca.gov/ docs/Clean_Energy_Plan.pdf. See also, Jeremy Carl et al., Renewable and Distributed Power in California, Simplifying the Regulatory Maze— Making a Path for the Future, ShultzStephenson Task Force on Energy Policy, Hoover Institution, Stanford University (2012) at 26 (“this is the most ambitious target for local distributed generation anywhere”). 1
Assembly Bill 32 (2006) articulated a goal to reduce GHG emissions to 1990 levels by 2020. 2
Senate Bill X1-2 (2011) requires the state’s investor owned utilities (IOUs) to acquire 33 percent of electricity from renewable sources by 2020. 3
Order Instituting Rulemaking into Distributed Generation. CPUC OIR.9910-025 (October 21, 1999). The CPUC slightly modified this definition in a 2006 rulemaking: “Distributed Generation (DG) is a parallel or stand-alone electric generation unit generally located within the electric distribution system at or near the point of consumption.” OIR 04-03017. The California Energy Commission (CEC) adopted a similar definition of DG in its 2002 strategic plan for DG resources: “DG is electric generation connected to the distribution level of the transmission and distribution grid usually located at or near the intended place of use.” CEC, Distributed Generation Strategic Plan, P700-02-002, 2 ( June 2002). 4
Impacts of Distributed Generation, report prepared by Itron, Inc. for the California Public Utilities Commission Energy Division Staff, 3-2 ( January 2010). 5
CPUC OIR.99-10-025 (October 21, 1999), Section III-C. 6
California Public Utilities Code, § 353.1(c). 7
California Energy Commission (CEC), Distributed Generation and Cogeneration Policy Roadmap for California, CEC-500-2007-021, 1 (March 2007). 8
For additional information on the benefits associated with DG, see: Mark Rawson, Distributed Generation Costs and Benefits Issue Paper, Public Interest Energy Research, California Energy Commission ( July 2004); Impacts of Distributed Generation (2010). 9
Deployment of Distributed Generation for Grid Support and Distribution System Infrastructure: A Summary Analysis of DG Benefits and Case Studies, Report prepared for the New York State Energy Research and Development Authority (NYSERDA Report 11–23), 2, 5 (February 2011). 10
Amory Lovins, Reinventing Fire: Bold Business Solutions for the New Energy Era 207 (Rocky Mountain Institute 2011). See also U.S. Department of Energy (DOE), The Potential Benefits of Distributed Generation and Rate-Related Issues That May Impede Their Expansion 4–14 (2007) (DG can also be “used to provide ancillary services, particularly those that are needed locally such as reactive power, but also those that contribute to the reliable operation of the entire system, such as back-up supplies and supplemental reserves.”); California Energy Commission (CEC), 2011 Integrated Energy Policy Report, Publication # CEC-100-2011-001-CMF, 11 (February 2012). 11
NYSERDA (2011), supra note 10, at 5.
Id. at 15.
US DOE (2007), supra note 11, at 3–18.
Id. 6–8, 6–10. See also, Jeffrey Russell and Steven Weissman, California’s Transition to Local Renewable Energy: 12,000 Megawatts by 2020, A Report on the Governor’s Conference on Local Renewable Energy, UC Berkeley Center for Law, Energy & the Environment, 1 ( June 7, 2012) (“Because they are for the most part installed in the built environment, either directly or with or close to energy consumers, they do not impact sensitive habitats and species like many of the larger, remotely located projects do.”) 15
Vote Solar Initiative, Wholesale Distributed Generation (WDG): A Guide to Creating a Successful Solar WDG Program 6 (May 2012) (“WDG [Wholesale DG] projects sized below 20 MW generally can connect at distribution voltages (69 kV and below) and can potentially use existing transmission and distribution (“T&D”) infrastructure, thereby potentially reducing the need for complex transmission studies, queuing processes, and grid upgrades often associated with large-scale projects. Many solar WDG facilities additionally have flexible siting options, and can take advantage of locations such as rooftops, parking lots, and already disturbed land, 16
continued on page 18
ENVIRONMENTAL AND ENERGY LAW PERSPECTIVES 1 7
California’s Reverse Auction Mechanism from page 17
which helps to minimize environmental impacts and shorten permitting timelines. All of these factors generally speed the planning and deployment process for WDG projects.”). Lovins (2011), supra note 11, at 207 (“In contrast, coal and nuclear units require many years to build, have no convenient off-ramps that preserve value, and are justified using forecasts that must try to peer through the fog for decades. The small, fast units’ lower financial risk can increase their value by as much as several fold.”); see also, NYSERDA (2011), supra note 10, at 2 (“Utilities should recognize the option value that DG offers when it defers the need for T&D upgrades. Once made, large utility investments are irreversible. By reducing demand at congested locations in the T&D system, DG buys time for the utility to assess whether or not their growth projections materialize. This can save the utility by reducing the cost of overestimating demand.”). 17
Carl et al. (2011), supra note 1, at 31.
However, such electricity may be resold to the utilities under California’s net metering laws. 20
This is perhaps the most significant benefit associated with wholesale DG, since the opportunity for profit provides a basis for project financing. In contrast, project finance is a significant barrier to the installation of customer-side DG systems, which partially explains the numerous economic incentives that California offers for such systems. 21
Solar Energy Industries Association, Renewable Energy Deployment: Wholesale Distributed Generation, www.seia.org/ policy/renewable-energy-deployment/ wholesale-distributed-generation (last visited June 4, 2013). 22
CPUC D. 10-12-048 (December 16, 2010) at 1. 23
CPUC D. 10-12-048 (December 16, 2010) at 75. 26
Id. at 2, 46.
CPUC Resolution E-4414 (August 18, 2011) at 10. 28
Vote Solar Initiative (2012), supra note 16, at 13 (“In place of administrative comments and testimony, an auction or solicitation gets market participants’ assessment directly through competitive proposals. The competition to win an auction encourages efficient project siting and optimized energy production. Ongoing auctions will let prices adjust automatically to account for market changes and technological evolution, as bidders take these conditions into account in preparing bids and competing to win.”) 29
CPUC D. 10-12-048 (December 16, 2010) at 15 (“We also consider the regulatory cost of determining the appropriate fixed price to put in a published tariff. There are costs for data collection and analysis. IOUs, parties, and staff will incur costs to participate in Commission proceedings, the outcome of which may be appealed. The time and cost of an administrative process to set a fixed price is not zero, and could be the same as or more than the sum of all bid preparation costs. Accordingly, we find that the price as bid and standard contracting aspects of RAM would reduce transaction costs for the seller, utility, and regulator.”) 30
Id. at 14 (One goal of the program is “executing contract prices that are financeable for the developer but also not an overpayment from a ratepayer perspective.”). 31
Vote Solar Initiative (2012), supra note 16, at 13. 32
Vote Solar Initiative (2012), supra note 16, at 13. 33
CPUC D. 10-12-048 (December 16, 2010) at 17. 34
Id. at 54, 64-68. Id. at 14.
Id. at 37.
These trade-offs are discussed in more detail in Section IV.
1 8 THE GEORGE WASHINGTON UNIVERSITY LAW SCHOOL
CPUC D. 10-12-048 (December 16, 2010) at 82. 38
CPUC D. 12-02-002 (February 8, 2012); D.12-02-035 (February 23, 2012). 39
CPUC Resolution E-4582 (May 9, 2013) at 6-7. 40
CPUC D. 10-12-048 (December 16, 2010) at 35.
CPUC Resolution E-4414 (August 18, 2011) at 10. 42
CPUC Resolution E-4489 (April 19, 2012) at 30. 43
CPUC Resolution E-4489 (April 19, 2012) at 10. 45
CPUC D. 10-12-048 (December 16, 2010) at 2. 46
Id. at 35.
CPUC Resolution E-4414 (August 18, 2011) at 57. 48
IOUs in California are required to ensure that they will have adequate resources to serve all customers in real time. This “resource adequacy” requirement is explicitly integrated into planning procurement regulations. See CPUC, Resource Adequacy, www.cpuc.ca.gov/ PUC/energy/Procurement/RA/ (last visited June 3, 2013). 49
CPUC Resolution E-4489 (April 19, 2012) at 14. 50
CPUC, Renewable Auction Mechanism, www.cpuc.ca.gov/RAM (last visited June 3, 2013). 53
CPUC D. 10-12-048 (December 16, 2010) at 64–68.
Speculative bidding and market manipulation are a significant concern for auction-based procurement mechanisms. As noted by the U.S. Partnership for Renewable Energy Finance (US PREF), “Reverse auctions, similar to other price-focused procurement efforts, are known to generate speculative bids. Oftentimes in a ‘lowest price wins’ 55
environment where the supply of bidders significantly exceeds available contract demand, many inexperienced bidders use this opportunity to provide unreasonably low bids in order to win a contract, with no intention of following through and building out the facility. The high attrition rates of unviable projects within previous renewable procurement solicitations proves that maintaining a solely ‘price’ focused mechanism erodes the effectiveness of the efforts of all involved.” US PREF (2012), supra note 45, at 40. Id. at 3. The CPUC notes that the IOU’s ability to reject uncompetitive bids also brings the program into compliance with FERC rules re: market-based electricity prices. FERC has jurisdiction over the sale of electric energy at wholesale in interstate commerce, and this jurisdiction has been interpreted to extend to intrastate sales where the transmission system “is interconnected and capable of transmitting [electric] energy across the State boundary, even though the contracting parties and the electrical pathway between them are within one State.” Florida Power & Light Company, 29 FERC 61,140 at 61, 291–92. 56
CPUC D. 10-12-048 (December 16, 2010) at 52. 57
Id. at 55.
Id. at 90.
Specifically, the required development deposit is $20/kW hour for projects ≤ 5 MW; $60/kW for intermittent projects from 5–20 MW; and $90/kW for baseload projects from 5–20 MW. The performance deposit is equal to the development for projects less than 5 MW, and 5 percent of project revenues for projects 5 MW and larger. Id. 60
Id. at 85 (“A requirement that a project meet certain minimum project viability criteria to submit a bid provides an initial screen of more viable from less viable projects; simplifies bid review and selection; provides an incentive for bidders to submit realistic, competitive bids; complements the provision of limited time to commercial operation; assists with reasonable queue management; and 61
should reduce the number of extension requests.”)
generation projects ranging from 2 to 15 MW.
Vote Solar Initiative (2012), supra note 16, at 19–21 (“If a program has low barriers to entry, such as limited development security requirements and minimal project maturity demonstrations, program participants may have less commitment to or less experience with actual development of their projects and submit proposal with overly optimistic assumptions.”)
Id. at 21.
Id. at 22.
E.g., Italy and Brazil are in the process of replacing FIT provisions with reverse auction mechanisms. See Proposed Bill H.R. 909 (March 9, 2011) (calling for the establishment of a Federal Reverse Auction Authority (RAA), which would be a private sector nonprofit entity overseen by the U.S. Department of Energy (DOE), to initiate and conduct reverse auctions to support the development of domestic, renewable energy growth). n 77
CPUC D. 10-12-048 (December 16, 2010) at 38. 65
CPUC D. 10-12-048 (December 16, 2010) at 90. 66
CPUC Resolution E-4489 (April 19, 2012) at 10. 67
CPUC D. 10-12-048 (December 16, 2010) at 78. The interconnection maps are available at the RAM website, www. cpuc.ca.gov/RAM (last visited June 4, 2013). 68
Id. at 92.
Id. at 74.
Id. (“Regulator reports on the RAM program are also necessary and we require each IOU to provide an annual report on the RAM.”) 71
ENVIRONMENTAL AND ENERGY LAW PERSPECTIVES Environmental and Energy Law Perspectives is published biannually by the Environmental and Energy Law Program at The George Washington University Law School. Editor Lee Paddock, Associate Dean for Environmental Studies
Assistant Editor Jessica Wentz , Visiting Associate Professor of Law and Environmental Program Fellow
Russel and Weissman (2012), supra note 15, at 39.
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CPUC Rulemaking 11-05-005 (May 5, 2011). 73
For example, in RAM 1, the weighted average of the highest executed contract price from each of the three IOUs was approximately 8.9 cents/kWh). This price was well below 2011 retail electricity rates in California, which ranged from 12.6 to 16.8 cents/kWh. It is important to note, however, that the weighted average cost of the RAM contracts does not include transmission and distribution costs. 74
The APS program is a reverse auction procurement mechanism for renewable
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