OREC Offers Support, and Constructive Comments on FERC’s Conditional License Policy

In November 2007, the Federal Energy Regulatory Commission issued a Policy Statement announcing the Commission’s intent to issue conditional licenses for certain wave, tidal and hydrokinetic projects. The conditional license would enable FERC to approve the license, without waiting for other state and federal agencies to issue necessary authorizations. But the conditional license does not authorize any construction until the licensee obtains final approvals from other state and federal agencies. FERC anticipates that the conditional license will facilitate financing and allow licensees to move forward with other, non-construction related duties under the license, such as convening stakeholder meetings or developing monitoring plans.OREC generally supported the FERC’s efforts, in these comments.  However, OREC expressed some concerns about the potential for abuse of the conditional license without continuing oversight by FERC. And OREC asked FERC to clarify that developers who failed to meet the statutory deadline for commencement of construction would not lose the license where other agencies’ failure to grant necessary authorizations caused delay.

OREC Secures Some Benefits for Ocean Energy in New Energy Bill…But Tax Credits Must Wait Until Next Year

On December 19, 2007, President Bush signed into law the Energy Act 2007. OREC played an instrumental role in securing important benefits for the ocean and marine renewable energy industry, including:

* Authorizing $250 million for Research, Development, Demonstration and Commercial Application to Expand Marine and Hydrokinetic Renewable Energy Production.

* Authorizing the Secretary of the Department of Energy to Establish National Marine Renewable Energy Research, Development and Demonstration Centers.

* Directing the Department of Energy to Conduct a Report on Environmental Impacts and Recommendations to Mitigate Environmental Impacts.
While these provisions will help the marine renewables industry move forward, disappointingly, the Energy Act 2007 did not include other provisions which would have helped not just marine renewables, but all forms of renewable energy. For example, the Energy does not expand the Production Tax Credit (PTC) to include marine renewables (which currently do not qualify for the PTC), nor did the legislation extend the PTC, now due to expire at the end of 2008, for other renewables. Also missing from the bill was a national Renewable Portfolio Standard (RPS)that would have required utilities to obtain a mandatory percentage of their power supply from renewable energy sources.

Finally, one version of the bill would have resolved the ongoing jurisdictional spat between the Federal Energy Regulatory Commission and the Mineral Management Service. The final Energy Act did not include this provision, which means that MMS and FERC are likely to continue to work on the terms of an MOU that would delineate each agency’s role in authorizing marine renewable projects on the Outer Continental Shelf.

To read OREC’s official statement, visit this link.

Join OREC’s Facebook Group

As part of our continuing outreach program, OREC has set up a Facebook Group that we invite you to join. This is an ideal way to network with others who have an interest in marine renewables and to raise public awareness about the promise of marine renewable energy.

Two Important MMS Developments

On Monday, November 5, MMS held an invitation only conference call to announce two important initiatives. Both Sean O’Neill, OREC’s President and Carolyn Elefant, Legislative and Regulatory Counsel, participated in the call. First, MMS announced that it has issued the Final Programmatic EIS for alternative energy development on the OCS. Back in May, OREC filed draft comments on the DEIS (available here). Generally, we found that the DEIS would serve as a useful resource for offshore renewable developers, as well as for regulators involved in the permit process. In the coming weeks, OREC will review the final EIS and report back to members on its contents.

Second, MMS announced that it is initiating an interim program which would allow for placement of meterologic towers and marine renewable data collection testing facilities on the OCS. As indicated in this Federal Register Notice , MMS is accepting nominations for sites that developers would want to assess, as well as comments on these questions:

(1) Would you be interested in acquiring an alternative energy resource assessment lease or technology testing lease as proposed under the interim policy? If so, please identify the resource(s) you would want to assess (e.g., wind, wave, current) and the technology you would want to test and provide a general description of the type and number of installations or technologies you would use, prospective locations, and a project schedule for the activities you would propose to pursue. The MMS requests respondents to identify prospective locations by depicting them on Official Protraction Diagrams (Leasing Maps for areas off Texas and Louisiana) available from each MMS regional office and online at http://www.mms.gov/ld/Maps.htm. For areas such as those off Hawaii and Alaska that have nonexistent or incomplete Official Protraction Diagrams, please identify prospective locations by latitude and longitude (NAD 83). If you submit such nomination and application information, please provide the name, telephone number, and e-mail address of an individual for the MMS to contact. (2) Would you be willing to collaborate and enter into joint ventures with other prospective lessees who express interest in acquiring the same location for an alternative energy resource assessment or technology testing lease? (3) What would be an appropriate lease term (duration) for the authorization you are interested in acquiring? (4) Is the rental rate of $3.00 per acre appropriate? (5) How much acreage should be authorized for the types of activities proposed and how should leases for such activities be appropriately spaced (i.e., inclusion of buffers)? (6) How should the MMS define technology testing activities and what specific types of activities should be authorized by technology testing leases? Should technology testing leases accommodate projects that would require a transmission cable to connect to onshore interconnection points ?

The comment period will be open for sixty days.  Naturally, OREC intends to file comments on this significant development.  We urge our members to let us know your position - and if you aren’t yet a member, we urge you to join up to participate in this important effort.

Update on FERC Pilot Project Process

On October 2, 2007, FERC held a public hearing and technical conference on a proposed expedited process for pilot projects. Carolyn Elefant, legislative and regulatory counsel for OREC, delivered an abbreviated version of these comments which will be filed with the Commission. In addition, you can view the full transcript of the FERC conference at this link.

We’ve quickly reviewed the dozen or so comments filed. Many commenters have asked FERC to undertake a formal rulemaking and issue regulations to govern the pilot process. Indeed, some commenters have even suggested that FERC must issue a formal rulemaking to comply with the requirements of laws such as the Administrative Procedure Act. Other commenters do not believe that a rulemaking is required, but have asked FERC to clarify certain matters, such as whether a pilot license would have priority over a permit or whether developers could seek sequential pilot license.

Here at OREC, we support FERC’s initiative. We hope that the other agencies involved in the licensing process will come on board with the effort so that we begin to test these new technologies which offer so much promise.

A Report on Our Website and Blog

OREC’s newly designed website and blog have been up and running since the spring, to rave reviews. Here are some things you should know about our site:

–We installed an open source Google based calendar on the front page which lists activities and conferences of interest to the marine renewables community on the front page. If you’d like to add an event, please let us know.

–We have stocked with website with a number of Reports and Papers that you won’t find elsewhere, and we continue to grow the list of resources. If you’re interested in other reports, you can also check out there reports (embedded in posts) from the FAQ section so that you can answer basic questions on wave and tidal energy.

–Our site is hosted by DreamHost, a carbon neutral company.

–We’ve been tracking website stats; we average about 50 visits per day. More interestingly, average time spent at our site is 2 minutes and 22 seconds, at least four times longer than the 50 seconds that is typical for most sites. That means that people coming to our site and finding value and staying around for it.

Member News

If you’re interested in an update on some of our members’ activities (specifically, Ocean Power Technologies and the Pelamis Wave Compay, f/k/a Ocean Power Delivery, visit this post from my Renewables Offshore Blog. Also in the news is one of our law firm members, Stoel Rives, which announced the release of The Law of Ocean Energy, that you can access online here.

President Sean O’Neill Gives Update on Legislative and Regulatory Developments

If you’d like to get a summary on what’s happening the wave and tidal industry, take a look at Sean O’Neill’s recent Ask the Expertscolumn that summarizes what’s been going on with wave and tidal energy over the past few months. There’s a run down on the status of tax incentives for the House and Senate, funding proposals for ocean renewables on the Hill and an overview of recent regulatory events, including FERC’s proposed pilot process and the jurisdictional conflict between FERC and MMS.

OREC Updates Events Calendar

At the home page of the OREC Website, we maintain a calendar of upcoming conferences of interest to the marine renewables, and broader renewables community. We’ve just stocked the calendar with upcoming events for the next twelve months, so take a look and see if anything interests you. And, if you know of an event that might interest OREC members, please submit it to us at carolyn.elefant@gmail.com

FERC Adopts OREC Recommendation for Short Term, Super-Expedited License

On July 19, 2007, the Commission issued this Press Release announcing that it will convene a technical conference to discuss a proposal for a process for new wave, tidal and hydrokinetic technologies that would allow them to complete licensing in as little as six months. The process would be available for projects 5 megawatts or smaller, removable on short notice and for the purpose of testing new technologies. The expedited licenses would issue for a term of five years.So where did FERC get this idea? OREC proposed the “supra-expedited” five year license for experimental and new commercial technologies back in February 2007 in our FERC Comments filed in response to the Notice of Inquiry on Preliminary Permits (see the comments at 10-13). Though many groups endorsed a speedy licensing process (a no brainer, after all), OREC was the sole entity to flesh out how the supra-expedited license process would work and to emphasize the need to allow projects to sell power during the five year experimental phase. And FERC listened. OREC will continue to represent the needs of the industry before FERC moving forward.

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