Rhode Island and Minnesota Craft Feed-in Tariff Legislation

In a week of state action on feed-in tariffs, Rhode Island legislators have become the first on the east coast to launch debate on the policy. The tiny state’s move could have a big impact on other states on America’s eastern seaboard.

Rhode Island Representative Raymond Sullivan, Jr. (D-District 29) introduced H 7616 to create the Rhode Island Renewable Energy Sources Act Tuesday, February 26, 2008. The bill is co-sponsored by Representatives Patrick O`Neill (D-District 59), David Segal (D-District 2), Arthur Handy (D-District 18), and Thomas Winfield (D-District 53). O’Neill is Deputy Majority Leader.

Representative Sullivan’s H 7616 follows a pattern that has now been replicated in several other states. The bill is based upon Michigan’s HB 5218 introduced by Representative Kathleen Law in the fall of 2007. Currently there are similar bills proposing a full system of feed-in tariffs in Michigan, Illinois, and Minnesota. There are also related bills in California though none following what has become known as the “Michigan Model”.

H 7616 Text

H7616 Status

In other renewable energy policy news, on Thursday, February 28, Minnesota State Representative David Bly, (DFL 25B) introduced HF 3537, which calls on the state to implement a system of renewable energy feed-in tariffs patterned after those in Germany.

Whether intentional or not, the action of Rhode Island representatives and their colleagues in Minnesota are building momentum toward the Washington International Renewable Energy Conference slated for March 4-6 in the nation’s capital.

Germany leads the world in wind and solar energy development as a result of its feed-in tariff policies. Recently, several states in America’s heartland have introduced bills to replicate Germany’s success. Minnesota has a long history of progressive public policy and HF 3537 follows that tradition. The bill requires electric utilities to accept generation from renewable power produces that is “fed into” the grid and pay for that generation. The price that will be paid for the renewable electricity is specified in the legislation.

Representative Bly was joined by five co-sponsors: Bill Hilty (DFL), Kate Knuth (DFL), Jeremy Kalin (DFL), Aaron Peterson (DFL), and Frank Hornstein (DFL). All are members of the Democratic-Farmer-Labor Party. Hilty is chair of the Energy Finance and Policy Division Committee. Knuth, Kalin, and Peterson, are also on the same committee. Significantly, Peterson is the Assistant Majority Leader in Minnesota’s House of Representatives. Peterson is the highest-ranking sponsor of any feed-in tariff bill currently on the legislative calendar in the US.

Unlike other states considering feed-in tariffs, Minnesota’s proposed law limits feed-in tariffs to “community-based” projects connected at distribution voltages. Nevertheless, the definition of what constitutes a community-based project is broad and can include projects with outside ownership up to 49% of the equity.

HF 3537 also restricts voluntary transfers of financial interests in projects with feed-in tariffs to other Minnesota residents. Like the bills in Michigan and Illinois, there are no project size caps, nor specific program caps in HF 3537. However, HF 3537 is intended to move the state toward fulfilling its renewable energy targets.

In 2007, Minnesota enacted its renewable energy standard calling for the state to supply 27.5% of its electricity with renewable energy by 2025, and instituted a goal of reducing greenhouse gas emissions 80% by 2050. Representative Bly’s HF 3537 directs the Public Utilities Commission to periodically adjust the feed-in tariffs to meet these targets.

Representative Bly’s HF 3537 is the third feed-in tariff bill introduced in the Midwest. Representative Kathleen Law introduced HB 5218 into the Michigan House of Representatives last fall, and Representative Karen May introduced HB 5855, the Illinois Renewable Energy Sources Act, earlier this month.

As in Michigan’s HB 5218, Representative Bly’s bill would create a full system of feed-in tariffs with prices for an array of renewable energy technologies. Currently, the only true feed-in tariff system in North America is the limited program offered in Ontario, Canada that pays $0.11 CAD/kWh for wind, hydro, and biomass, and $0.42/kWh for solar photovoltaic generation. The tariffs proposed in HF 3537 are equivalent to those in Germany and match those proposed in Michigan, and Illinois.

    * Hydro less than 500 kW: $0.10 USD/kWh
    * Biogas less than 150 kW: $0.145 USD/kWh
    * Geothermal less than 5 MW: $0.19 USD/kWh
    * Wind: $0.105 USD/kWh
    * Wind energy from small wind turbines: $0.25 USD/kWh
    * Rooftop solar less than 30 kW: $0.65 USD/kWh
    * Solar façade cladding less than 30 kW: $0.71 USD/kWh

Small wind turbines are defined as those with less than 1,000 square feet of rotor swept area. This limits the small wind turbine tariff to those wind turbines less than approximately 10 meters in diameter. HF 3537 also proposes wind tariffs differentiated by wind resource intensity as is used in France. These differentiated tariffs limit potentially excessive profit from commercial wind farms at windy sites while allowing profitable development in less windy areas. This is important in a state like Minnesota where farmers can profitably develop their own wind resources. Before becoming law, the bill must pass both the House and Senate and must be signed by Governor Tim Pawlenty (R).

HF 3537 Full Text

HF 3537 Bill Status

Michigan’s HB 5218

Illinois’ HB 5855

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Jennifer Runyon has been studying and reporting about the world's transition to clean energy since 2007. As editor of the world's largest renewable energy publication, Renewable Energy World, she observed, interviewed experts about, and reported on major clean energy milestones including Germany's explosive growth of solar PV, the formation and development of the U.S. onshore wind industry, the U.K. offshore wind boom, China's solar manufacturing dominance, the rise of energy storage, the changing landscape for utilities and grid operators and much, much, more. Today, in addition to managing content on POWERGRID International, she also serves as the conference advisory committee chair for DISTRIBUTECH, a globally recognized conference for the transmission and distribution industry. You can reach her at Jennifer.Runyon@ClarionEvents.com

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