Creating A Greener Energy Future For the Commonwealth

Procurement of Renewable Energy

on Landfills

January 19, 2010

Courtney Feeley Karp, Esq.

Creating A Greener Energy Future For the Commonwealth

Disclaimer

• I intend to provide a general overview of the options that municipalities may avail themselves of to develop renewable energy facilities in their community.

• Please consult your counsel to determine your individual course of action.

2

Creating A Greener Energy Future For the Commonwealth

First Question

• My municipality wants to do renewables, what do I do?

• Does the municipality want to construct, own, and operate the facility?

• Does the municipality want a 3rd party to own and operate the facility but lease land and purchase power?

• Does the municipality want to just lease the land?

3

Creating A Greener Energy Future For the Commonwealth

Things to Think About

• To help answer that question, municipalities should think about: Renewable Energy Credits (RECs) Solar RECS Net metering credits Tax credits – including ARRA related programs

4

Creating A Greener Energy Future For the Commonwealth

RECs and SRECs

• Renewable Portfolio Standard • If a municipality owns and operates the facility it

will be able to use RECs/SRECs as additional revenue

• In a 3rd party model, the energy contract should address which party takes ownership of the RECs

• SRECs represents a new program administered by DOER for new solar installations – please see www.mass.gov/doer for more details

5

Creating A Greener Energy Future For the Commonwealth

Net Metering

• Allows eligible facilities to run meter backwards and accrue credits for that power from utility.

• Class I - up to 60kw• Class II - 60-kw- 1 MW (solar, wind, farms)• Class III – 1 -2 MW (solar, wind, farms)• Municipalities have special treatment, above caps

apply to unit not facility.• Can apply credits to any other electric bills in

service territory• Utility has option of cutting a check for Class III

6

Creating A Greener Energy Future For the Commonwealth

Tax Credits

• Federal investment and production tax credits (ITC and PTC)

• Not available to municipalities directly, but would be available in 3rd party ownership model

• ARRA provides an up-front grant in lieu of such tax credits (30%) – construction must begin by December 2010.

• Bill pending in Congress to extend timeline.

7

Creating A Greener Energy Future For the Commonwealth

What next?

• Taking into account these considerations, the municipality must answer the first question: Own and operate 3rd Party ownership Land lease

8

Creating A Greener Energy Future For the Commonwealth

Procurement Tool Box

• Chapter 30B – good and services Energy exemption Land lease

• Chapter 149 – public construction Design build phases

• Chapter 25A (s. 11C &11I) Energy Management Services

9

Creating A Greener Energy Future For the Commonwealth

Chapter 30B

• Bread and butter procurement Land lease under s. 16 (32) and (33) exemptions for energy and

energy related services Submit copies of contracts within 15 days of

signing to DPU, DOER, and IG with a report on process used

10

Creating A Greener Energy Future For the Commonwealth

Chapter 149

• Only for use when municipality is constructing the renewable energy facility

• State’s public construction statute including separate design and build processes

• Need to think about existing load profile, generation capacity – does the municipality have enough load to utilize energy? Net meter?

• Need contract for RECs

11

Creating A Greener Energy Future For the Commonwealth

Chapter 25A

• Two options – sections 11C and 11I• 11C is an RFP process that allows municipalities to

review energy management proposals based on price.

• 11I is an RFQ process that allows municipalities to review the qualifications of the bidders and conduct a non-price based review.

• Allow for one bid process for both design and build phases

• Need to think about how net metering and RECs are addressed by energy contract

12

Creating A Greener Energy Future For the Commonwealth

Answering the Question

• Regardless of what path a municipality chooses, it is important to consider all the financial implications that impact the economics of the project

• Also important to assess municipality’s energy profile, its ability to finance a project, and long term financial benefits.

• Any answer represents a long term solution to the municipality's energy needs.

13

Creating A Greener Energy Future For the Commonwealth

Green Communities Division

• As has been made clear throughout the day, the Green Communities Division is a tremendous resources to assist all municipalities that are struggling with questions about how to install renewables

• The Division to provide more comprehensive guidance on procurement in the coming months.

14

Creating A Greener Energy Future For the Commonwealth

Contact Information

• For more information please contact Green Communities staff, or myself at

• Courtney.karp@state.ma.us or (617) 626-7382

15