An Ignoble Experiment

2. MLPs under consideration to finance VT renewable energy

Eight utilities are being recognized for their environmental stewardship, economic performance and contributions to society.

Target Rock Advisors has identified these utilities for their performance and management of the classic pillars of sustainability in three categories -- large capitalization, mid-cap and small cap -- from a pool of 150 publicly traded energy utilities and related organizations.

The large cap leaders are Duke Energy Corporation, PG&E Corporation and the overall sustainability index leader, Sempra Energy. Mid-cap winners are Idaho Power subsidiary IDACORP, NV Energy, and Pinnacle West Capital Corporation. Small cap recipients are ALLETE, MGE Energy, and Unitil Corporation.

"All utilities are assessed using a common yardstick applied to publicly available and verifiable data, and the hard facts of actual historic performance, regardless of the reasons," said Target Rock managing partner Richard Rudden.

As a group, the stocks of utilities that most successfully managed their triple bottom lines over the last 10 years have significantly outperformed other utilities, as well as the broader market indexes, such as the S&P 500, according to Rudden.

"Sustainability is about the full range of interactions a company has with all of its stakeholders," he said. "It's not just about environmental awareness or reporting transparency, it is also about strong management teams that balance the many aspects of their utility operations."

For example, large cap winner PG&E, who has been recognized in Target Rock's Sustainable Utility Leaders Index for the second time, follows a holistic approach to sustainability. This approach includes strengthening the communities where its customers and employees live and work; adding locally manufactured, low-emission bucket trucks to its fleet; focused efforts on hiring and training veterans; and helping customers in underserved communities go solar and save money on their utility bills.

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- see this article
- see this graphic

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By Barbara Vergetis Lundin

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3. PSE recalculating 20-year energy needs in 2013 IRP

Vermont has introduced legislation intended to make renewable energy projects easier to finance.

Representative Peter Welch's Master Limited Partnership Parity Act would allow renewable energy companies to take advantage of master limited partnerships (MLP) -- a key financing tool used by the energy sector, which has driven investments in oil, gas, and coal projects for nearly 30 years.

An MLP is taxed as a partnership, but ownership interests are traded like corporate stock. Profit from publicly traded C corporations is taxed at both the corporate and shareholder levels, but because it is treated as a partnership for tax purposes, income from MLPs is taxed only at the shareholder level.

Currently, there are no laws under which renewable energy projects can take advantage of MLPs, but the bill will change that by expanding the definition of qualified projects.

"Expanding MLP financing to renewable energy projects will be a boost for the renewable industry and for a cleaner energy future. If oil, gas, and coal projects can take advantage of this important tool, there is no reason why renewable projects should be excluded," Welch said in a statement.

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- see this article

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By Barbara Vergetis Lundin

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4. Streamlining offshore wind development

Puget Sound Energy (PSE) has unveiled the latest draft of its Integrated Resource Plan (IRP), which must be updated every two years.

The 2013 IRP draft provides a 20-year forecast of PSE customers' energy requirements and focuses on promoting energy efficiency, acquiring additional power supply for periods of peak customer usage, and securing enough renewable-power resources to remain compliant with state law.

The draft IRP notes that development of vast North American shale-bed deposits of natural gas has steeply driven down the commodity's market price, which in turn has softened electricity prices. The draft plan notes that "… it is not realistic to expect natural gas prices to remain this low over the long term. The very affordability of this fuel means that usage is also increasing, especially in the transportation and utility [power-generation] sectors, and this will create upward pressure on prices over time."

The 20-year cost of securing PSE customers' electric supply is projected at $13.8 billion. While that figure is slightly above the 2011 IRP's forecast, it is far below the 20-year, $20 billion PSE predicted four years ago. The 2013 draft IRP predicts that PSE will need about 40 percent more natural gas supply 20 years from now -- about 380,000 more dekatherms per day -- to serve customers' peak, wintertime gas demand.

An additional 156,000 dekatherms per day will be needed by 2033 to fuel PSE's simple-cycle gas-fired power plants. This added supply capacity represents a 90 percent increase in the natural gas used by PSE's fleet of peaker plants.

PSE's gas infrastructure faces definite strain with the increased use of natural gas. By 2033, PSE must secure nearly 5,400 MW of additional power resources to meet customers' peak electricity demand. The draft IRP contends that the utility can shave nearly 1,000 MW by helping customers save energy through energy efficiency.

In addition, PSE will need ire another 300 MW of renewable energy by 2022 -- and 600 MW by 2033 -- to maintain compliance with the Washington Energy Independence Act (I-937), a voter-approved law requiring utilities to provide 15 percent of their customers' electricity from renewable sources by 2020.

For more:
- see the draft IRP summary

Read more about: natural gas, Puget Sound Energy PSE
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By Barbara Vergetis Lundin

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5. Ohio Edison investing nearly $3M to keep the power on

Renewable energy legislation has been introduced in Virginia that could simplify the process of testing and developing offshore wind.

Offshore wind energy is an important component to a renewable energy future. The bill would further develop offshore wind by making the process more efficient while protecting the integrity of the environment.

"Our nation is past due in efficiently developing a smart, forward-thinking energy strategy and our own sources of energy. The government must make it easier to move forward on renewable energy projects, instead of putting up bureaucratic red tape which stifles development and buries these projects in paperwork for years," Representative Rob Wittman, who submitted the legislation, said in a statement.

The Advancing Offshore Wind Production Act (HR 1398), would streamline the environmental review process by which the Bureau of Ocean Energy Management (BOEM) approves temporary infrastructure, such as towers or buoys, to test and develop offshore wind power in the U.S. Outer Continental Shelf -- a process that can be delayed for years by bureaucratic hurdles in the permitting process.

HR 1398 will speed the production of wind energy by setting a 30-day timeline for the Secretary of the Interior to act on permits for all weather testing and monitoring projects in the U.S. Outer Continental Shelf. The bill will also streamline the environmental review process needed to place temporary infrastructure based on this criteria: the project is removed within five years, causes less than one acre of disruption at the location of each tower or device, and causes no more than five acres of seafloor disruption within the proposed area for the project.

In 2012, the proposed legislation passed in the House as part of the Domestic Energy and Jobs Act (HR 4480).

For more:
- see this article

Read more about: renewable energy, wind energy
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By Barbara Vergetis Lundin

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