Friday, August 13, 2010

The Feed-in Tariff Discussion Heats Up

The Gulf oil spill catastrophe is an ongoing tragedy. And while the well seems to be capped now, we will surely see the harm from the spilled oil unfold for many months and years to come. From all tragedy springs opportunity, however, and one positive outcome flowing from BP's unfortunate accident is a renewed focus on energy and climate change, at least among some of the saner segments of the American populace.

The federal climate change bill appears to be dead this session, the victim of partisan politics in defiance of good sense. Other efforts are more promising, including a growing national focus on feed-in tariffs as a key policy tool for promoting renewable energy. A feed-in tariff is a guaranteed price paid for renewable energy projects that meet certain criteria. Contrary to what many believe, a feed-in tariff doesn't have to be an "above-market" price. The key features of feed-in tariffs are what I just mentioned: a guaranteed price for those projects that meet defined criteria.

California, often the leader on energy policy, is not in fact in the lead on feed-in tariff policy. Rather, municipalities like Gainesville, Florida and Sacramento, and states such as Vermont, Washington state and Oregon, are leading the charge on feed-in tariffs. Further to our north, the province of Ontario has the most robust feed-in tariff program in North America, similar to the European model that has proven so successful in Germany, Italy, Spain, Czech Republic and many other countries.

California is, however, leading in one key area related to feed-in tariffs. The California Public Utilities Commission recently filed a declaratory order request with the Federal Energy Regulatory Commission (FERC). This kind of action asks FERC to decide on a legal dispute before it makes it to the courts, hopefully heading off legal action. The CPUC asked FERC to decide if a limited new feed-in tariff, applicable only to cogeneration facilities under 20 megawatts, was preempted by federal law.

See the rest at GreenTechMedia

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