SOLAR: Minnesota’s governor signs into law a 1.5 percent solar energy standard. But there are other provisions in the law that may have a bigger impact on the industry. (Midwest Energy News)

EFFICIENCY: An Ohio group creates a statewide energy efficiency fund where participants can pay for improvements with savings on their energy bills. (Cleveland Plain Dealer)

ALSO: Participants in the nationwide Better Buildings Challenge are saving $58 million a year on energy costs, and a Michigan county issues $1.5 million in bonds to finance major energy upgrades of public buildings. (Milwaukee Journal Sentinel, Alpena News)

OIL: The series of refinery outages and transportation issues that led to a spike in Midwest gasoline prices this week are not seen as indicators of a long-term trend., and activists fighting the Keystone XL pipeline shift to grassroots tactics. (EnergyWire, InsideClimate News)

CLIMATE: Senate Republicans warn President Obama not to combine Keystone XL approval with “wholly unrelated” climate policies, and Tesla CEO Elon Musk says climate advocates need to shift the burden of proof onto skeptics. (The Hill)

FRAC SAND: Towns along a scenic stretch of Mississippi River bluffs that “lives on tourism and retirement homes” hope to create a ten-mile zone where frac sand mining is prohibited. (Minneapolis Star Tribune)

NUCLEAR: Michigan lawmakers say a planned nuclear waste disposal site in Ontario “raises serious concerns” about the safety of Lake Huron water supplies. (Toronto Star)

TRANSPORTATION: GM hopes the mistakes of the 1980s don’t haunt the introduction of its new diesel-powered Chevy Cruze. (Detroit Free Press)

OHIO: As part of a high school exchange program, French students travel to a Cincinnati suburb to learn about renewable energy. (Cincinnati Enquirer)

COMMENTARY: Why we need competitive electricity markets, and are microgrids a utility’s best friend or worst enemy? (Grist, Greentech Media)

Solar panels at the Audubon Center of the North Woods near Sandstone, Minnesota. (Photo by CERTs via Creative Commons)

Minnesota Gov. Mark Dayton on Thursday signed into law an energy bill that’s projected to give the state a more than thirtyfold increase in solar generation by the end of the decade.

The Solar Energy Jobs Act was rolled into a larger, omnibus economic development bill and approved by the state’s legislature last week.

The section that’s drawn the most attention is a 1.5 percent by 2020 solar electricity standard for large utilities that is on top of the state’s existing 25 percent by 2025 renewable mandate.

But the bill has several other components that could rival the solar standard’s impact, from expanded incentives and net-metering reforms to the creation of shared, community “solar gardens.”

Solar standard

Clean energy supporters in Minnesota had high hopes going into this year’s legislative session, the first since an electoral sweep in November flipped control of both chambers back to Democrats.

A coalition of environmental groups announced in January that its top energy priority was a proposal to make utilities generate a tenth of their electricity from solar by 2030.

The coalition included members of RE-AMP, which also publishes Midwest Energy News. Fresh Energy, the organization where Midwest Energy News is based, had a role in developing the policy.

The bill was ultimately diluted to a 1.5 percent solar standard by 2020, with a non-mandatory goal of hitting 10 percent by 2030. It also exempts municipal utilities, rural electric co-ops and large industrial customers.

“It’s important for people to understand that while 1.5 percent seems like a low number, it’s in a relatively short timeframe and it’s actually a fairly significant amount of solar deployment,” said Lynn Hinkle, policy director for the Minnesota Solar Energy Industries Association.

Over the next seven years, investor-owned utilities in the state will need to add an estimated 450 megawatts of solar power to their systems — up from about 13 megawatts today.

Solar incentives

At least a tenth of that new solar generation will need to come from small systems of up to 20 kilowatts. To help finance those installations the bill extends an existing rebate program, with some changes.

Xcel Energy had sought to phase out its Solar Rewards rebate program at the end of 2013. The Minnesota Department of Commerce ordered Xcel to continue the program through 2015, and now the Legislature has mandated a similar incentive stay in place until 2018.

The bill allocates $5 million per year for the program from a state renewable development fund. The biggest change is that instead of upfront rebates, the incentives will be rewarded based on the amount of electricity produced.

The move from rebates to a production incentive is intended to make sure Minnesota is getting the most bang for its buck by discouraging people from installing systems in shady or low-performing locations.

“A production-based incentives gives the money to the best producers instead of just rewarding whoever puts up a system,” said Laura Cina, managing director for the Minnesota Renewable Energy Society.

The shift to production incentives also applied to the Made in Minnesota incentive, an additional subsidy for locally manufactured solar panels that was extended to include solar thermal systems.

Solar gardens

Most people today don’t have an opportunity to claim these incentives, though. Cina said only about a third of Minnesotans own a rooftop that’s sunny enough, strong enough and angled correctly for installing solar panels.

That’s why solar supporters are particularly excited about a new program created in the bill known as community “solar gardens.”

The concept will let customers buy individual solar panels in shared, community solar installations. The electricity generated by a customer’s panels would be credited on their utility bill the same as if it were on their own rooftop.

“This opens up the door for a really large number of people to participate in solar,” Hinkle said.

Xcel Energy, the state’s largest utility, is required to file a plan with regulators by Sept. 30 for setting up and operating a community solar gardens programs, which will be optional for other investor-owned utilities.

The projects must have at least five subscribers each with no member owning more than a 40 percent interest. The size is capped at 1 megawatt, but there is no limit on the number of shared systems built.

One project has already been announced, a 40-kilowatt array to be developed by Applied Energy Innovations and Minnesota Community Solar on a Minneapolis warehouse rooftop.

Net metering 2.0

The bill will also make it easier for investor-owned utility customers to connect larger solar installations to the grid by lifting the state’s net-metering cap to 1,000 kilowatts.

Net-metering is a policy that standardizes utility payments and hook-ups for all solar and other customer-owned generation that fits the criteria, which until now was limited to systems under 40-kilowatt capacity.

Minnesota passed the nation’s first net-metering law in 1983, but in the 30 years since then the size limit became an artificial cap on commercial solar development, deterring companies from building larger systems.

The new legislation also opens the door for a possible successor to net metering known as “value of solar.”

Instead of paying customers the retail electricity rate for their unused solar power, as they do under net metering, utilities can choose to offer a different rate based on the value their customers’ solar panels offer to other ratepayers and the environment.

State energy officials will create an outline for how to calculate the value of solar, which must consider the value of the electricity, transmission and distribution benefits, and environmental benefits, and utility regulators would need to sign-off on the studies.

The process could help lend some clarity in the debate over whether customers who own their own generation are pushing costs onto other customers or creating benefits for the electricity grid.

Criticism of the law

Not everyone is happy with the new law, however. The bill, which passed the House by a narrow margin, included protections for the state’s mining and paper industries in order to gain the support of lawmakers from northern Minnesota. Critics say those carveouts prove the bill will create a financial burden for other energy users.

Utilities also opposed the measure, citing lack of demand for new generation and concerns about higher costs for ratepayers.

“We think that solar energy has a lot of promise, but we think that promise is in the future and we think that we need to go slow,” Rick Evans, Xcel Energy’s Director of Government Affairs, told a state Senate committee in April.

Backers of the new law acknowledge there will be a cost, but predict it will be outweighed by the economic benefits.

“This is an investment,” said John Farrell of the Institute for Local Self Reliance, in an interview with Greentech Media. “For every dollar of public money put in, Minnesota will get an enormous return in private capital. It is, essentially, private capital building power plants for the public utilities. That’s a really great deal, especially when it also accomplishes environmental and economic goals.”

Editor’s note: An earlier version of this article incorrectly stated the target year for Minnesota’s renewable energy standard. It is 25 percent by 2025, not 2020.

CLIMATE: Wal-Mart, which has already pledged to drastically cut CO2 emissions, extends its energy-efficiency efforts to its expansive supply chain. (ClimateWire)

***SPONSORED LINK: Connect with Renewable Energy business leaders, investors, technology innovators, government officials and university educators September 9-11 at RETECH 2013! Midwest Energy News readers receive 10% off with VIP code: MEN10 – register today! ***

CLIMATE: Secretary of Energy Ernest Moniz says he doesn’t want to spend his tenure debating climate science: “there is no ambiguity in terms of the scientific basis calling for a prudent response on climate change.” (The Hill)

ALSO: A Yale survey finds 70 percent of Americans think addressing climate change should be a priority, and a Congressional Budget Office report says a carbon tax could avert “catastrophic” climate impacts. (Los Angeles Times, The Hill)

OIL: The EIA says it’s not just North Dakota contributing to the increase in domestic production, and a Michigan congressman uses a vote on Keystone XL to draw attention to Detroit’s petroleum coke pile. (UPI, Michigan Radio)

FRACKING: Reflecting a broader lack of consensus on natural gas, grassroots environmental groups criticize the Environmental Defense Fund for collaborating with industry on fracking regulations. (Mother Jones)

SMART GRID: The Illinois Senate votes to override Gov. Pat Quinn’s veto of a bill authorizing $2.6 billion in rate increases to fund grid upgrades. (Chicago Tribune)

TRANSMISSION: Minnesota’s legislature approves changes to the state’s “Buy the Farm” law, providing additional compensation for landowners who move away from new transmission lines. (Belle Plaine Herald)

NUCLEAR: Environmental groups call for hearings over proposed upgrades to an Ohio nuclear plant. (Toledo Blade)

SECURITY: Lawmakers say utilities aren’t taking adequate steps to protect themselves from computer viruses. (The Hill)

STORAGE: Wisconsin companies partner with a Wyoming utility on a project to store energy from wind and solar installations. (Milwaukee Journal Sentinel)

TECHNOLOGY: A solar-powered airplane sets a distance record, and new technology could harness energy from waste heat at temperatures as low as 86 degrees. (NBC, Treehugger)

COMMENTARY: The economic benefits of Minnesota’s new solar law, and the democratizing effect of rooftop solar. (Greentech Media, AlterNet)

(Photo via Wal-Mart)

©2013 E&E Publishing, LLC
Republished with permission

By Julia Pyper

When Wal-Mart Stores Inc. took a magnifying glass to its business operations, the multinational retail corporation found numerous ways to save energy, cut costs and reduce its carbon footprint.

But even as the largest private electricity consumer in the United States, it found that 90 percent of its emissions came from its chain of suppliers.

Wal-Mart partnered with the Carbon Disclosure Project (CDP) in 2005 to measure its greenhouse gas emissions. Two years later, the company started urging its network of now more than 100,000 suppliers to disclose their sustainability performance, too.

“That was the start of the supply chain program,” said Dexter Galvin, head of CDP’s supply chain initiative. “They started the trend.”

In 2010, Wal-Mart committed to cutting 20 million metric tons of greenhouse gas emissions — equal to taking 3.8 million cars off the road for a year — from its global supply chain by 2015.

Curbing pollution from suppliers “contributes directly to Wal-Mart’s business model and future-proofs our supply chain — like crime scene investigators, we follow [greenhouse gas] hot spots and clues to deliver cost efficiencies and sales growth,” Rob Kaplan, senior manager of sustainability, explained in an interview earlier this year.

Today, CDP has 65 member companies working with their suppliers on reducing carbon emissions and mitigating climate change. These multinational corporations collectively represent more than $1 trillion in spending power and span all sectors, including retail, information technology, consumer goods and automotive.

Some big-name companies have been working with CDP for years, including PepsiCo Inc., Dell Inc. and L’Oreal SA. Fifteen new companies have signed on since the beginning of this year, including General Motors Co., Pfizer Inc. and Cisco Systems Inc. Having analyzed their suppliers’ sustainability performance, some companies are now factoring that information into their procurement process, Galvin said.

“Traditionally, a lot of our members would make a 100 percent of decision on whether to work with a supplier based on price and quality,” he said. “What we’re seeing now is companies like Vodafone and Dell are actually reducing the amount [of consideration] they give to price and quality, and basing, say, 20 percent of the supplier’s score on sustainability issues.”

Extreme weather raises sense of vulnerability

With little coordinated action in effect to address climate change at the national and international level, greening the supply chain has become a significant way to reduce global greenhouse gas emissions, said Ryan Schuchard, manager of climate and energy at the international nonprofit group Business for Social Responsibility (BSR).

“Global agreements started to implode after Copenhagen and with the defeat on Capitol Hill of cap and trade,” he said of the 2009 climate negotiations and the Waxman-Markey climate bill that failed the same year. “Since then, there’s been a greater consciousness raised about the need and the opportunity for the private sector to play a greater role in greenhouse gas reduction.”

More companies are starting to acknowledge this opportunity as vital to their long-term survival. A recent CDP survey of 2,415 companies found that 51 percent see drought or extreme rain already having an impact on their operations, or expect it to within five years.

However, when it comes to climate change mitigation, there’s a performance gap between suppliers and their clients. The CDP survey found that 92 percent of purchasing companies have set emissions reductions targets, compared with only 38 percent of suppliers.

A key issue is that the process of calculating emissions in the supply chain is currently riddled with complexity, which could take momentum out of the entire initiative.

“Definitely here in the room today you hear that this is tiring,” said Schuchard, speaking last week at a workshop on supply chain emissions co-hosted by BSR and the World Resources Institute.

Tracking emissions is ‘a mess’

Tackling climate change through the supply chain often starts when a purchasing company like Wal-Mart decides to measure its Scope 3 emissions. Scope 3 emissions are all of a company’s indirect emissions excluding electricity consumption — things like the extraction and production of materials, waste disposal, and fuel consumption from vehicles not controlled by the reporting company.

To quantify these indirect emissions, a purchasing company will typically ask its top suppliers to measure all their emissions, both direct and indirect.

The problem is that it can take a company a lot of time to manage suppliers that have varying levels of interest and experience in emissions audits. It can also take suppliers a tremendous amount of time and capital to evaluate their carbon footprint. And there are logistics issues. For instance, many suppliers do not have any employees dedicated to sustainability.

“It’s a mess,” said Jennifer Woofter, president of Sustainability Consulting, whose clients are mostly tier-one suppliers to big companies.

Suppliers are suffering from survey fatigue, she said. One of the biggest challenges is that these companies have to develop a way to gather emissions data, not just with respect to their own operations but to their suppliers’, too. They have to aggregate the data and present it in a meaningful way. Then they are expected to act on it.

“The first place we always think about sustainability is within our own operations, and I think for companies that’s challenging enough,” Woofter said. “When you add on that, you also need to be looking at your suppliers and their suppliers and their suppliers, going all the way back to the beginning; that is really overwhelming.”

It also saves big money

The issue is made worse by the fact that big multinational corporations often aren’t clear about why they want a Scope 3 emissions assessment in the first place and how they’re going to engage in the cleanup effort, she said. If companies overwhelm their suppliers with survey requests without setting a larger goal and playing a part in helping them reduce emissions, the entire process could yield little besides more work.

“I think all companies before they start a supply chain initiative need to think carefully about the cost and benefits,” she said. “How is this going to build a better product? How will it improve the entire value chain?”

The benefits of a sustainability audit vary greatly between companies and their suppliers. CDP reports that of 52 multinational corporations it works with, 63 percent are seeing year-over-year emissions reductions. Of 2,363 suppliers surveyed by CDP, only 29 percent are experiencing emissions savings year over year. Similarly, 73 percent of CDP member companies are achieving monetary savings through avenues like energy savings and reduced waste, while only 29 percent of suppliers are enjoying such returns.

The returns are significant, however. The 29 percent of suppliers that reduced their emissions saw about $13.7 billion in savings as a result.

“There’s a huge opportunity here if all main suppliers were to reduce emissions,” Galvin said.

These suppliers may just have to dig to the depths of their business operations to find it.

OHIO: Utilities seek an amendment that would make consumers, rather than shareholders, responsible for the cost of cleaning up old coal gasification sites. (Columbus Dispatch)

WIND: How an Xcel-backed weather forecasting program will make it easier to integrate wind power into the grid, and tax breaks for wind farms move closer to approval by the Nebraska legislature. (Midwest Energy News, Associated Press)

EFFICIENCY: Energy Secretary Ernest Moniz backs a federal energy efficiency bill; and Consumers Energy awarded $4.3 million in efficiency funds in the first quarter of this year, netting an anticipating $5 million per year in energy savings. (The Hill, MLive.com)

OIL: After it was featured in the New York Times, Michigan Rep. John Conyers calls for an investigation of a large petroleum coke pile building up along the Detroit River; refinery outages send gasoline prices soaring in Minnesota; and President Obama threatens to veto a bill forcing approval of the Keystone XL pipeline, which is unlikely to reach his desk anyway. (Detroit Free Press, Minneapolis Star Tribune, The Hill)

ALSO: The oil industry says the EPA is unfairly limiting the comment period on new regulations for motor fuel. (The Hill)

FRAC SAND: The sand mining boom brings with it a sharp increase in political contributions to lawmakers in Wisconsin; meanwhile, Wisconsin’s DNR will likely get funding for two additional inspectors to keep up with the industry, instead of the 10 that it sought. (LaCrosse Tribune, Milwaukee Journal Sentinel)

ELECTRIC CARS: There are now 100,000 plug-in cars on U.S. roads; and for some buyers, taking advantage of lease deals and tax credits can make an electric car essentially free. (Green Car Reports, Wall Street Journal)

GEOTHERMAL: A suburban Chicago park district is expected to save as much as $2,000 per year after installing geothermal heating and cooling at an interpretive center. (Chicago Tribune)

COMMENTARY: The GOP turns a light shade of green, and how a “force field of tedium” limits public discussion of utility structures. (National Journal, Grist)

(Photo by Sharon Drummond via Creative Commons)

On the Great Plains, the gusts ahead of a strong cold front can deliver thunder, lightning, hail and downpours.

Also: A surge in electricity from wind farms big enough to make the power grid go haywire if it caught utilities off guard.

Utilities call it a “ramp event” — a sudden spike in wind power generation followed by an equally fast drop-off.

For Xcel Energy, which has more wind power on its system than any other utility, these swings can be as large at 800 megawatts, the equivalent of a large baseload power plant suddenly switching on.

The Minnesota utility is keenly interested in knowing as precisely as possible when these ramps are going to occur, not just to avoid overloading its system but also so it can make full use of all that wind power.

The company is funding new research at the National Center for Atmospheric Research (NCAR) in Boulder, Colorado, to improve weather forecasting for renewable energy facilities.

Xcel Energy partnered with NCAR in 2009 to begin developing wind power forecasting tools that are already saving ratepayers millions annually by allowing the utility to make better use of wind power.

A paper published by the Bulletin of American Meteorological Society in 2011 estimated that improved wind energy forecasts have the potential to trim the nation’s electricity bill between $1 billion and $4 billion annually.

Over the next two years, NCAR will be working on several improvements, including better ramp forecasts and new tools to predict ice build-up on turbine blades and estimate rooftop solar output.

Ramping up

This chart, via NCAR, shows how weather can impact wind farm output.

NCAR Program Director Sue Ellen Haupt said it’s challenging to predict the precise profile of a ramp event, such as the burst in speed and change in direction that happens as a cold front passes.

“That’s what we’re working hard to fine tune,” Haupt said. “We often know that it’s going to come, but perhaps we’re off by an hour or two.”

And with an 800-megawatt spike not out of the question, an hour or two matters. Grid operators need to be ready to adjust the system as it happens in case the timing or intensity of the forecast is off, Haupt said.

Generally, the sooner grid operators can be certain about a ramp event, the more options they have to cut back generation at more expensive fossil fuel power plants.

“If the wind comes up and they aren’t expecting it, they have to dump it,” she said, meaning the power produced by the wind farms would go to waste.

Icing impact

The center plans to borrow its own research on how ice accumulates on airplane wings and apply it to a new tool for alerting wind farm operators to potential icing conditions on turbine blades.

As ice accumulates on wind turbine blades, the added weight causes them to turn less efficiently, leading to a drop in electricity output. Heavy or rapid ice accumulation can actually damage the turbines if they continue operating.

Haupt said the tool NCAR is developing for Xcel Energy will pull in temperature, humidity and other weather data to predict when ice is likely to occur, how that accumulation will affect output, and whether turbines should be shut off to prevent ice damage.

The secret sauce will be technology NCAR developed over the last two decades for the Federal Aviation Administration (FAA) for forecasting icing conditions on airplane wings.

“The FAA needs to know when airplane wings are going to ice, and of course airplane wings are airfoils much like a wind turbine blade. So there’s a lot known about ice accretion on airplane wings that directly applies to wind turbine blades,” Haupt said.

The project will also conduct experiments at Penn State University, where researchers will observe how freezing rain and fog accumulates on blades and how it affects the turbine’s performance.

Solar load

The amount of solar power on the Midwest’s electricity grid today is still small enough that it’s inconsequential from a grid management perspective — a blip on the charts that easily falls within operators’ margin of error.

That’s likely to change in the years ahead, as solar prices decline and state policies encourage development, such as the 1.5 percent solar by 2020 standard recently passed by the Minnesota Legislature.

“This is an issue that has really hit in California already,” Haupt said. “Xcel doesn’t serve the parts of the country where solar is increasing as rapidly, but they see it coming.”

Unlike with wind farms, utilities don’t get a separate data stream for customers’ rooftop solar generation. “When the sun is shining, it will just look to Xcel like they’re using less energy,” Haupt said.

NCAR is building a tool for Xcel that will try to help it better understand how much of a load drop-off is due to customers turning down their air conditioners versus generating more of their own solar power.

That will hopefully lead to better forecasts on how weather conditions affect a region’s solar carve-out on sunny days.

Haupt said Xcel is being proactive in helping to develop the next generation of renewable energy forecasting tools, which will be more important as a larger percentage of our electricity comes from variable sources such as wind and solar.

“We need to know when they’re going to be [generating] so that we can use them well,” Haupt said.

OHIO: A new study finds Ohio’s 2008 efficiency mandate has saved consumers $170 million, more than offsetting a slight increase in costs related to the state’s renewable energy standard. (Columbus Dispatch)

***SPONSORED LINK: Connect with Renewable Energy business leaders, investors, technology innovators, government officials and university educators September 9-11 at RETECH 2013! Midwest Energy News readers receive 10% off with VIP code: MEN10 – register today! ***

BIOMASS: If the Midwest relies more on wood biomass for heating, are there adequate safeguards in place to ensure the wood is harvested sustainably? (Midwest Energy News)

COAL: A report predicts an uptick in U.S. coal use this year, but doesn’t project the trend will continue; and look inside the “complicated maze of a decisionmaking process” utilities go through as they decide whether to close or upgrade coal plants. (Platts, ClimateWire)

NATURAL GAS: A bill in the Illinois legislature seeks a rate surcharge to pay for $2.5 billion in natural gas pipeline upgrades. (Chicago Tribune)

FRACKING: As the sequel to the anti-fracking documentary “Gasland” premieres in Illinois, critics of the practice use the occasion to call for stronger safeguards. (Bloomington Pantagraph)

OIL: As U.S. production increases, the “energy security” argument for the Keystone XL pipeline weakens. (InsideClimate News)

WIND: A new study finds promising potential for using compressed air to store excess wind energy, and Nebraska Gov. Dave Heineman urges legislators to hold off on tax breaks for wind farms. (GigaOM, Lincoln Journal Star)

TRANSPORTATION: Despite controversy surrounding the company installing a network of charging stations, the outlook for electric cars in Chicago remains strong. (Chicago Tribune)

NUCLEAR: A plan is in place to repair a leaking water tank at the Palisades nuclear plant in Michigan, which remains shut down. (MLive.com)

EFFICIENCY: An energy audit finds the city of Decatur, Illinois, could save $24 million on energy costs over the next 17 years with a $16.8 million investment. (Decatur Herald-Review)

MEDIA: InsideClimate News publisher David Sassoon appears on the Colbert Report to talk about the Kalamazoo River oil spill and “filling the gaps that mainstream journalism is leaving uncovered.” (Comedy Central)

COMMENTARY: The two faces of the coal industry, and why wind energy’s impact on grid reliability is overstated. (EnergyBiz, Greentech Media)

A forest in north-central Minnesota. (Photo by Faruk Ates via Creative Commons)

As a Midwest biomass group promotes a goal of drawing 10 percent of the region’s heating energy from wood fuels by 2025, more questions are sure to arise about whether that amount of fuel could be harvested sustainably.

Heating the Midwest, which announced the goal at its conference last month, estimates that the region has more than enough logging and agricultural residue to supply a tenth of its heating energy by the middle of the next decade.

Making sure that those feedstocks are collected in a way that doesn’t damage the environment will require a review and updating of state harvesting standards, the group says in its 2025 vision document.

Getting the rules right could mean the difference between developing a fuel source that helps address climate change and air pollution challenges versus one that ultimately does more harm than good.

Rules being updated

A few Midwest states have already revisited their forest harvesting policies to address potential new demand for biomass feedstocks. Minnesota created the nation’s first biomass harvesting guidelines in 2007, and Michigan and Wisconsin followed in 2008.

“When biomass started getting quite a bit more attention… folks started realizing that we need to be ahead of the game here.” said Anna Dirkswager, a biomass consultant with the Minnesota Department of Natural Resources (DNR).

In the mid-2000s, with natural gas prices climbing and three new biomass facilities coming online to meet a state biomass mandate, the Minnesota Legislature asked state forestry officials to create a set of sustainable biomass harvesting guidelines.

The DNR and the Minnesota Forest Resources Council convened a 17-member stakeholder group that included representatives from industry, academia, government, and environmental groups.

“Developing the guidelines was a very long, controversial process, as you can imagine,” Dirkswager said. “I think because that group had such a broad membership, what we came out with was really great.”

The 42-page addendum to the state’s existing forest management guidelines, in general, says biomass harvesters should leave behind about one-third of the debris that’s created during the collection of tree tops and limbs.

About 20 percent of the tops and limbs that are cut should be scattered across the site. That, combined with “incidental breakage” from a typical harvest will be enough to meet the goal of leaving one-third behind.

Stumps, roots and litter should be left on the forest floor, and biomass harvest should be avoided in areas that are prone to erosion or home to threatened or endangered species.

Leaving material behind can help preserve wildlife habitat, maintain soil nutrients, minimize erosion and protect water quality, among other benefits, according to the guidelines.

Carbon emissions aren’t specifically addressed in the guidelines, but Dirkswager said promoting healthy re-growth means a forest can store more carbon.

Strong oversight of forests

The rules are mandatory in state-owned forests and on most county land, but voluntary on private land. Companies with master logger certifications are also audited for compliance with the guidelines.

Even though the rules aren’t mandatory across the board, Dirkswager said Minnesota’s forests are well-protected by third-party certification programs, as well as by the current state of the forestry market.

Minnesota has more land that’s dual-certified by both the Forest Stewardship Council and Sustainable Forestry Initiative than any other state — more than 5.6 million acres, including hundreds of thousands of acres of county and private forests.

And the state sells wood very cheaply, especially since the housing crash, and until that changes she doesn’t expect much pressure for private wood sales. “We just don’t really see harvests on private land right now,” she said.

While Minnesota officials believe its biomass harvesting guidelines are sound, the reality is that they remain untested, and that more study and time is needed to see whether they work.

Almost as soon as the guidelines were published, the recession hit and domestic fracking took off, leading to a plunge in natural gas prices that sidelined several biomass projects.

The science is clear that removing biomass from a site inevitably removes nutrients, but questions remain about how much needs to be left behind in order to sustain a forest’s health and biodiversity.

“Although a certain amount of woody debris retention is essential for sustaining biodiversity and wildlife populations, science does not tell us how much woody debris can be sustainably removed from forest harvest sites,” the Minnesota guidelines state.

That said, studies have indicated that nutrient levels in most Minnesota soils are sufficient to tolerate “a large number of such harvest rotations without harmful effects,” it says.

Research continues

Tony D’Amato, an associate professor in the University of Minnesota’s Department of Forest Resources, currently has two ongoing studies evaluating Minnesota’s biomass harvesting guidelines.

One observation he’s made so far is that the amount of incidental breakage left behind varies a lot depending on the forest and soil type. In aspen forests, the amount of breakage left behind can be almost enough on its own to meet the guidelines, whereas harvests in conifer forests tend to be cleaner with less incidental breakage. One recommendation might be for states to offer more specific guidelines for different soil types.

“There is some evidence that suggests the impact of these removal treatments is really going to vary based on soils, but our guidelines for the state are kind of a one-size-fits-all,” D’Amato said.

Other questions, he said, include how different harvesting practices affect fungi. There’s some evidence that certain species decline after biomass harvesting, and it’s unclear how significant that is to the future health of the forest.

“I recognize that as much as we like to focus on the details and research and science,” D’Amato said, “it’s hard to turn those details into a policy.”

FRACKING: North Dakota’s drilling boom leads to increased tension over water supplies, and Ohio’s oil and gas potential so far fails to live up to more optimistic projections. (Reuters, Columbus Dispatch)

NATURAL GAS: International companies back U.S. natural gas exports, and the approval of a recent project coincided with a 5 percent rise in the price of natural gas futures. (New York Times, Bloomberg)

OIL: Exxon still has no timetable for restarting a pipeline that spill oil into an Arkansas neighborhood in March, a pile of petroleum coke along the Detroit River continues to grow. (InsideClimate News, New York Times)

SOLAR: Goldman Sachs bets big on solar, announcing it will provide $500 million in financing for rooftop solar. (ClimateWire)

EFFICIENCY: Businesses in Illinois help lower demand when electricity is needed most, and see big financial benefits as a result, however, a grid reliability report shows that abundant power supplies mean those steps likely won’t be necessary this summer. (Chicago Tribune, Milwaukee Journal Sentinel)

CLIMATE: Democrats introduce a bill calling for a national strategy to deal with public health impacts from climate change. (The Hill)

WIND: The utility serving Lincoln, Nebraska plans to triple its wind power purchases, and a proposed local setback of two miles would scuttle an Indiana wind project. (Lincoln Journal Star, Muncie Star Press)

FRAC SAND: A bill in the Minnesota legislature would require frac sand mines to get approval from the state Department of Natural Resources. (Minnesota Public Radio)

ETHANOL: Minnesota ethanol producers hope to rebound after a year of high corn prices and plant shutdowns. (Minneapolis Star Tribune)

EMISSIONS: A report shows that as utilities shift from coal, reductions in CO2 emissions still lag behind those of other pollutants. (Greentech Media)

NUCLEAR: OSHA sides with an engineer who was fired for reporting unsafe conditions at a Kansas nuclear plant. (Topeka Capital Journal)

TRANSPORTATION: Ford, which popularized the V-8 engine in the 1930s, predicts two-thirds of cars sold in 2020 will have four-cylinder engines. (Detroit News)

WASTE-TO-ENERGY: A study finds a proposed Cleveland trash-to-energy plant would be “an economic lead balloon,” leading several city leaders to declare the project dead. (Cleveland Plain Dealer)

MEDIA: Mother Jones magazine tracks down its most prolific climate-denying Twitter troll for a face-to-face interview.

COMMENTARY: Solar power costs close in on wind, and the New York Times again calls on President Obama to take more aggressive action on climate change. (Reuters, New York Times)

Mendota Hills Wind Farm, Illinois. (Photo by Ron Zack via Creative Commons)

Support in the Illinois legislature is slowly growing for a proposal that backers say will save ratepayers millions while freeing up state renewable energy funds currently sitting unspent.

But the proposed bill faces an uphill political battle because of opposition from ComEd’s parent company Exelon, whose nuclear fleet could face competition and depressed power prices with more wind power on the market.

Illinois energy experts have for months been calling for reforms to the state’s renewable portfolio standard (RPS). The massive shift away from utilities to community aggregation and alternative electricity suppliers has exacerbated a quirk in the law that now means customers are paying millions of dollars into a fund for renewable energy that is languishing untapped.

Meanwhile, the state risks failing to meet mandatory benchmarks in the RPS; and even the renewable power that is being bought for Illinois customers is largely through short-term contracts for renewable energy credits that could come from wind farms in Texas or other states.

How the current law works

The Illinois utilities Ameren and ComEd and the alternative suppliers that now serve the majority of Illinois customers all channel a small fraction of customer payments toward renewable energy. These funds go into separate “buckets,” as energy experts describe it.

The Illinois Power Agency decides where ComEd and Ameren get their power and how they meet their obligations under the RPS, including through buying renewable credits.

Alternative suppliers purchase renewable energy credits and also pay into an Alternative Compliance Payment (ACP) fund to meet their RPS mandates. The fund currently has $15 million and is expected to mushroom to as much as $130 million in the next 18 months.

However, according to the language of existing law, that money cannot actually be used to buy power or renewable energy credits any time soon.

That’s because the law says the ACP money can only be used when the Illinois Power Agency is buying renewable energy or credits on behalf of ComEd and Ameren. But since ComEd’s and Ameren’s customer bases have shrunk so drastically due to aggregation, they have already purchased more than enough renewable energy to meet their RPS requirements.

Meanwhile, the fund can be swept by the state for other budgetary needs, a move experts say is likely given the state’s budget crunch.

Adding an additional wrinkle, the renewable energy charge paid by alternative supplier customers is pegged to the amount paid by ComEd and Ameren customers. And that charge is at the highest level allowed by law, because the utilities are struggling to recoup costs since aggregation slashed their customer base.

“A lot of the math that goes into estimating the cost of compliance isn’t connected to the market at all – it is based on this formula and the formula is wrong,” said Mark Pruitt, an energy consultant who formerly headed the Illinois Power Agency.

Pruitt did an analysis predicting that the proposed legislation, Senate Bill 103, would save Illinois ratepayers with alternative suppliers up to $280 million between 2014 and 2017, compared to the situation if the RPS is not “fixed.” Illinois Commerce Commission executive director Jonathan Feipel said the commission agrees with those findings.

The proposed fix

The bill would abolish the ACP fund and the “separate buckets” for renewable energy monies. Instead, it would allow the Illinois Power Agency to purchase renewable energy on behalf of all Illinois customers, regardless of whether they are with utilities or alternative suppliers.

The legislation would move the renewable energy charge from the generation side of the bill to the distribution side, streamlining things since all energy is delivered by the utilities regardless of who generates and procures it.

Pruitt noted that “that’s how energy efficiency is funded, that’s how the smart grid is funded, that’s how a lot of other types of policy initiatives in the state are funded – it’s not like it’s a foreign concept.”

Currently, alternative suppliers are only willing to enter short-term contracts with power providers, because they don’t know how long their customers will stick with them. Even though scores of communities have chosen aggregation with alternative suppliers in the past few years, many of those customers may go back to ComEd and Ameren in the future.

If the RPS fix bill passes, the Illinois Power Agency could confidently negotiate long-term contracts with renewable power producers, because it would not matter if customers were with the utilities or with the alternative suppliers – all Illinois customers would channel dollars for renewable energy into the same “bucket.”

“With all that churn you need to have more stability in the renewables market,” said Environmental Law and Policy Center co-legislative policy director Barry Matchett. “We’re trying to get the market back to the position where there is greater stability and less risk. If we’re able to get a more stable funding stream for renewables, it will result in a lower price for renewable compliance.”

Feipel said that in the current situation, it is as if the Illinois Power Agency’s “tool” for complying with the renewable portfolio standard is “a hammer split in half” – since the renewable energy funds are separated into different buckets, one of them essentially inaccessible.

“The current split system does cause problems,” Feipel said. “There’s no certainty. If you merge it all together and make it a single program, the power agency can do its job, and it helps meet the (RPS) mandate.”

Exelon: ‘The law is working as intended’

The senate bill passed the energy committee in March and currently has 12 co-sponsors. Governor Pat Quinn supports the legislation, with spokesman Grant Kinzman saying; “This is a common sense solution that will deliver lower energy prices for consumers and businesses; protect the environment; and drive more economic development and new jobs across Illinois.”

Clean energy proponents blame Exelon for the reluctance of many state lawmakers, including House Speaker Mike Madigan, to embrace an RPS fix. Exelon has been actively working to block renewable energy and natural gas development, because cheap electricity from these facilities are a threat to the company’s bottom line (a recent analysis by the Illinois Power Agency found that wind power drove down power prices by nearly $177 million in both 2011 and 2012).

An April study by the Better Government Association noted the company’s extensive lobbying muscle and political connections. People involved with the bill said negotiations involving Exelon representatives and other parties are ongoing, and the bill may change to reflect various interests.

Exelon spokesman Paul Adams offered this statement: “Exelon is a strong proponent of clean energy and supported the law that established the Illinois Renewable Portfolio Standard in 2007. The law is working as intended and, as a result, Illinois utilities and alternative retail energy suppliers are in full compliance, and the state’s wind energy industry is thriving.

“Since the RPS was established, Illinois has seen wind energy development accelerate and the state now ranks fourth for overall installed capacity in the U.S. Proposals to change the law are a solution in search of a problem.”

A ComEd spokesman referred questions about the bill to Exelon.

‘Obviously something has to change’

On May 15, the Clean Energy Trust and Advanced Energy Economy released a Zogby poll of 700 likely Illinois voters showing very strong support for renewable energy and for a fix to the RPS. More than 86 percent of respondents said it is important that Illinois “continue to get an increasing amount of its energy from secure and clean power sources,” according to the poll. And 77 percent supported legislation fixing the RPS, while only 8 percent opposed it.

It is unlikely respondents fully understood the extremely complicated components of the RPS dilemma or the fix. But advocates of the bill say public support for renewable energy in the state is clear, and the senate bill is a crucial starting point for ongoing efforts and negotiations.

Even if the bill passes, there is no guarantee contracts will be signed for actual new wind farms or other clean energy sources in Illinois. The RPS mandate could still be met with the purchase of credits, and there is also no guarantee the state would actually fulfill the RPS.

But Pruitt said, “It would definitely have a fighting chance to meet the goals. Right now we’re pretty much frozen.”

“It’s fairly obvious the current system is not delivering the way it’s supposed to be delivering,” Pruitt continued. “Obviously something has to change. If we’re going to change we might as well get to the point where we’re not only actually fulfilling the policy but reducing the cost of compliance.”