Pennsylvania\'s Energy Landscape

Presented by:

Alexandra C. Chiaruttini, Esq.Stock and Leader, LLPachiaruttini@stockandleader.com717-718-6402

January 20, 2010

Energy LandscapeEnergy Landscape

Deregulation & LegislationDeregulation & Legislation

Current PA Energy PictureCurrent PA Energy PictureIn Pennsylvania• Close to 60% energy generated by coal; 20%

by natural gas

Electric Bills Contain:• Generation portion (75% bill)• Distribution portion (25% bill)

Tariffs Out• PPL --- 18%-36%• PECO 2011• MetEd 2011

Current PA Energy PictureCurrent PA Energy Picture1. Conservation

2. Efficiency

3. Alternatives

Measurement & ConservationMeasurement & Conservation

Measurement & ConservationMeasurement & ConservationEstablish a baseline – Energy Modeling

Need a starting pointBenchmark with similar facilities and users

Need a measure….is this the normFocus on outliers

Identify greatest opportunities and maximize ROI

AlternativesAlternatives

Drivers Toward AlternativesDrivers Toward AlternativesEconomic incentives – cost and funding

opportunitiesEnergy independence – National and local levelsEnvironmental awarenessAll manifested in the form of

International agreements and protocols (Kyoto & Montreal)

New legislation Utility mandates Renewable and alternative energy credits (Recs & Aecs) Climate initiatives

Technologies/ApproachesTechnologies/ApproachesFocus on Outliers – Buildings use 71% of

electrical energy in U.S. – HVAC systems use more than 50% of total building energy

GeothermalSolarWindBiomassOther

Cogeneration Back pressure turbines

FundingFunding

Drivers of FundingDrivers of FundingPA Alternative Energy Portfolio Standards

ActPA Alternative Energy Investment Act

(2008 Act 1 Special Session)House Bill 2200/ Act 129Economic Stimulus IncentivesClimate Change LegislationAct 80

Funding ToolsFunding ToolsLow Interest LoansGrantsTax CreditsREC (renewable) and AEC (alternative)Bonds

What are Energy Credits?What are Energy Credits?REC – wind, solar, geothermal 1 MWhr ~

$230/creditAEC – biomass, landfill, methaneWho will need them?How are they Measured & Exchanged? – PA PlatformPA Platform Vs. Federal PlatformWhat value do they have for a project?

Today In the Future

Carbon Credit Market

www.dsireusa.org

What Expenses are Covered?What Expenses are Covered?StudiesAuditsSite PreparationRetrofit equipment Architectural Efficiency ProjectsEngineered Efficiency ProjectsAdministrationDemand-Side ManagementEquipmentConstruction.

What Expenses are GenerallyWhat Expenses are GenerallyNot Covered?Not Covered?Work/Analysis for Larger ProjectAnalysis to Prepare ApplicationVery small energy-Saving Projects.

Existing Sources of MoneyExisting Sources of MoneyDEP

PEDA Energy Harvest grants (non-profits and schools) Growing Greener Small business programs and pollution prevention

loans

DCED Machinery and equipment loan fund PEDFA First industries Research and development tax credits

Fuels for Schools Focused on biomass

WebsitesWebsites

Newpa.comPEDAwww.depweb.state.pa.us

Economic Stabilization ActEconomic Stabilization ActExtended solar tax credit program

30% credit extended 8 yrsEliminated $2,000 maximum tax credit capAdded tax credit incentives to package for many

alternative energy projectsNew bond programs for energy conservationExtended tax credit for home efficiency and wind

projectsUSDA

Energy Conservation & EfficiencyAlternative EnergyLoans and Grants.

Keys to Applying for FundingKeys to Applying for FundingDon’t rely on retroactive paymentsDo your homework and research

Select the right projectsTell a storyJobs in PADevelop good technical analysis/informationBe prepared to go within window of opportunityImportant to Vet:

ConsultantsNew TechnologyExpected Energy Savings – Guarantees?

Other OpportunitiesOther Opportunities

Solar developersAct 57Procurement by auction

Need to know what to compare: Auditing Procurement Developers PARTNERS

Take AwaysTake AwaysConservation, Efficiency, AlternativesSound Analysis & Planning is Key to Selecting the Best

ProjectsTechnology in this sector is developing quickly – select

carefullyDollars and Incentives are plentiful & Varied, Include them in

your PlanConsider Layering the financial incentives for any one projectPlan to Spend Capital Up FrontBe Aware that programs Shift – the Project Has to Make SenseDon’t Rush.Evaluate needs and opportunitiesCompare thoughtfully

Role of CounselRole of CounselIdentify FundingIdentify good partnersAssist in grant writingIdentify tax incentive programsIdentify quality consultants for:

Auditing Alternative energy design

Identify procurement specialistsEvaluate and counsel on:

Energy contracts Alternative energy development projects & agreements Tax incentives Business structures REC/AEC sales

Questions?Questions?