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<title>December 2001: Two States Take Steps To Redefine Renewable Energy
Requirements</title>
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<p align="left"><strong><small><font face="Arial">About The Author:</font></small></strong></p>
<p align="left"><font face="Arial" style="font-size: 9pt">Robert A. Olson is a partner in the law firm of
Brown, Olson & Gould, P.C. which maintains a nationwide practice in energy law,
public utility law and related commercial transactions.</font></p>
<p><small><font face="Arial"><font style="font-size: 9pt">He can be reached at:</font><br>
<br>
<b><font color="#0000FF">Brown, Olson & Gould, PC</font></b><br>
2 Delta Drive<br>
Suite 301<br>
Concord, NH 03301<br>
<a href="mailto:[email protected]">[email protected]</a><br>
(603) 225-9716<br>
<a href="mailto:[email protected]"></a></font></small></p>
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<img src="../images/statelin.gif" alt="STATELINE by Robert Olson" border="0" width="375" height="75">
</center><p align="left"><b><u><br>
December 2001</u>
<br>
<font size="6">Two States Take Steps To Redefine
Renewable Energy Resources<br>
</font>
</b><strong>by Robert Olson -- Brown, Olson and Wilson, P.C.<br>
</strong><font face="Arial" size="2">(<em>originally published by PMA OnLine Magazine:
200</em>2/01/19)</font></p><center>
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<p ALIGN="JUSTIFY">The states of Missouri and Arizona have taken steps
towards redefining renewable energy requirements as part of their
restructuring regulations. In Missouri, the governor-appointed energy policy
task force submitted its final report on recommendations for Missouri’s
energy policy. That report includes recommendations for the development of
renewable energy sources. Arizona’s renewable energy requirements have been
resolved via a settlement agreement between the Residential Utility Consumer
Office ("RUCO") and the Arizona Corporation Commission ("ACC").</p>
<font FACE="Palatino" SIZE="2">
<p ALIGN="JUSTIFY"></p>
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<p ALIGN="JUSTIFY">The Missouri energy policy task force was appointed by
Governor Holden in February 2001 to make recommendations for the State’s
energy policy. Missouri has not yet adopted electrical deregulation
legislation, although bills proposing limited restructuring have been
proposed in the 2001 legislative session. The Final Report of the Missouri
energy policy task force, presented to Governor Holden on October 16, 2001
(the "Report"), specifically discusses Missouri’s strengths in terms of
renewable energy and makes certain recommendations. The Report states that
Missouri is comparable to Florida in terms of the potential for use of solar
resources, and also notes that methane is available from landfills, animal
waste systems and wastewater treatment plants. The Report further notes
that, as a farm state, Missouri generates a significant amount of crop
waste. Biomass, in the form of cellulose fiber from sawmills, forest product
industries, urban tree residue sites and solid wastes is also identified as
an available resource which can be burned in small percentages with coal in
many existing boilers. The report notes that by utilizing biomass waste
products, costs associated with waste treatment are avoided and an economic
benefit is produced instead. "If one-half of the energy content of these
available biomass resources were used in technology that is as efficient as
the average American electric generation plant, the net energy delivered to
users annually would be 15.2 million MWh." </p>
<font FACE="Palatino" SIZE="2">
<p ALIGN="JUSTIFY"></p>
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<p ALIGN="JUSTIFY">The Report recommends that each electric utility should
be required to generate a portion of its electricity from renewable sources.
Specifically, 0.25% of retail sales of each utility after 2003 should
consist of electricity generated from renewable sources. After 2006, the
percentage should increase to 1.6%, 3% after 2009, and 6% after 2015. The
Report suggests that scheduling the increase in renewable energy
requirements will help drive the demand for the renewable equipment
manufacturing industry, which will result in the lowering of costs for such
equipment. </p>
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<p ALIGN="JUSTIFY"></p>
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<p ALIGN="JUSTIFY">The Report also recommends that Missouri pass legislation
to enable those generating less than 100 KW of electricity with renewable
fuel to participate in net metering and to enter into simplified
interconnection agreements without new fees. Financial incentives for the
installation of equipment for generating electricity from renewable sources
are also recommended. </p>
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<p ALIGN="JUSTIFY"></p>
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<p ALIGN="JUSTIFY">In Arizona, electric retail competition has been
implemented, but the implementation of the state’s environmental portfolio
standard ("EPS") has been delayed due to litigation between RUCO and the
ACC. The litigation challenged an order by the ACC which approved the EPS,
enacted rules which implemented the EPS, established a surcharge to finance
the EPS and required affected utilities to file tariffs to implement the
surcharges, called environmental portfolio tariffs. RUCO and the ACC settled
the suit November 27, 2001. The settlement agreement between RUCO and the
ACC grants RUCO the right to intervene in all environmental portfolio tariff
proceedings and to request relief from the ACC based on its analysis of the
filings and proceedings. In addition, the settlement agreement provides that
the proposed EPS surcharges are temporary until the ACC makes "fair-value"
findings in the environmental portfolio tariff proceedings. </p>
<font FACE="Palatino" SIZE="2">
<p ALIGN="JUSTIFY"></p>
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<p ALIGN="JUSTIFY">Arizona’s EPS requires load-serving entities to derive at
least .2% of the total retail electricity sold from renewable sources. The
required percentage will increase annually by .2% until 2006, when it will
increase to 1.05%, and to 1.1% after 2007. The EPS also requires that at
least half the required renewable sources must be derived from solar
electricity sources. By 2004, 60% of renewable energy sources must be solar
electricity sources.</p><center><center>
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<p align="left"><font face="Arial">
<small>Robert A. Olson is a partner in the law firm of Brown, Olson &
Gould P.C.
which maintains a nationwide practice in energy law, public utility law and related
commercial transactions. He can be reached at:</small></font><p align="center">
<font face="Arial"><small><font color="#0000FF"><b>Brown, Olson & Gould, PC</b></font><br>
2 Delta Drive, Suite 301<br>
Concord, NH 03301 <br>
<br>
<a href="mailto:[email protected]">[email protected]</a> | (603) 225-9716<a href="mailto:[email protected]"></a></small></font>
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