klavens ssc energy workshop 4-29-2010

8/9/2019 Klavens SSC Energy Workshop 4-29-2010

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Community RenewableEnergy Projects: Financingand Public Procurement

Jonathan Klavens

Klavens Law Group, P.C.

April 29, 2010

KLAVENS LAW GROUP, P.C. 2010 Klavens Law Group, P.C.


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Small law firm focused on clean energy ventures andprojects

Help companies, investors, public entities and nonprofits

Provide start-up, outside general counsel, transactional,

project development and regulatory servicesBring the interdisciplinary approach this field needs bydrawing on experience in corporate, energy, land use,environmental, municipal and nonprofit law


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Financing



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Overview of Development Phase Incentives

Federal & Massachusetts Incentives:


SiteAssessment

FeasibilityStudy

Design Basics

MassCECCommunity-ScaleWind

100kW+Block 3 - $2M applications due 5/4/10

MassCECCommercial Wind

Over 2 MW and not net meteredRound 3 Expected soon

MA DOER GreenCommunities Grants

Apply for GC status by 5/14/10 and for GCgrant by 5/28/10 to be eligible for FY2010

grant programDOER to award up to $1M in FY2010

USDOE grants Watch funding opportunities

USDA grants/loans Watch funding opportunities


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Overview of Construction & OperationPhase Incentives (1)

Massachusetts Incentives:


Construction Operation Basics

MRET Community-ScaleWind

See above(Past round up to $570K for public projects 600 kW+with no required cost share)

MRET Commercial Wind See aboveLoan at Prime + 2% up to $250K with 25% cost share

MA Green CommunitiesGrants

See above

MA Net Metering

Details below

Comparable to selling excess power back to utility atnear retail rate (for any facility with public hostcustomer)

Long-term Utility PPA

Sale of power and/or RECs to utility at wholesale rate


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Financing: Resources

MA Clean Energy Center

MA DOER Green Communities Program

MassDevelopmentDatabase of Federal and State Incentivesfor Renewables and Efficiency

Windustry Website

http://www.masscec.com/http://www.massdevelopment.com/about/industry/renewable-energy/http://www.massdevelopment.com/about/industry/renewable-energy/http://www.dsireusa.org/http://www.dsireusa.org/http://www.windustry.org/http://www.windustry.org/http://www.dsireusa.org/http://www.dsireusa.org/http://www.mass.gov/?pageID=eoeeasubtopic&L=3&L0=Home&L1=Energy%2C+Utilities+%26+Clean+Technologies&L2=Green+Communities&sid=Eoeeahttp://www.massdevelopment.com/about/industry/renewable-energy/http://www.massdevelopment.com/about/industry/renewable-energy/http://www.massdevelopment.com/about/industry/renewable-energy/http://www.masscec.com/


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MA RE Policy Update



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Net Metering: Basic Benefits

Earn $-denominated net metering credits for eachmonths net electricity generatedCredit approaches retail rate for 60 kW to 1 MW facilitiesand for 1 MW 2 MW facilities where facility is behind apublic entitys meter

Facility limit is per unit for facilities that are owned oroperated by a public entity and effectively per utilitymeter in other casesCredit never expires and may be transferred to otheraccounts (virtual net metering)



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Net Metering: Advanced Benefits

For 1 MW 2 MW facilities, utility may (and likely will)exercise right to pay cash instead of allocatingeliminates hassle of having to sell credits you cant useCompatible with private third party ownership structuresLikely compatible with federal tax incentives (esp. ITC &cash grant)If better off-take arrangement comes along, can opt outof net metering



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Net Metering: Key Drawbacks

May need to sell credits you cant use Not a problem for towns with multiple utility accounts

and high load1% system cap on net metering facility capacity

No queue!Net metering credit value can fluctuate with rates andrate classification



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Net Metering: Resources

Massachusetts DG and Interconnectionwebsite

MA DPU net metering FAQs

http://sites.google.com/site/massdgic/http://sites.google.com/site/massdgic/http://www.mass.gov/?pageID=eoeeamodulechunk&L=5&L0=Home&L1=Grants+%26+Technical+Assistance&L2=Guidance+%26+Technical+Assistance&L3=Agencies+and+Divisions&L4=Department+of+Public+Utilities+%28DPU%29&sid=Eoeea&b=terminalcontent&f=dpu_electric_faq_net_meterihttp://www.mass.gov/?pageID=eoeeamodulechunk&L=5&L0=Home&L1=Grants+%26+Technical+Assistance&L2=Guidance+%26+Technical+Assistance&L3=Agencies+and+Divisions&L4=Department+of+Public+Utilities+%28DPU%29&sid=Eoeea&b=terminalcontent&f=dpu_electric_faq_net_meterihttp://sites.google.com/site/massdgic/http://sites.google.com/site/massdgic/


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Other Notable Developments

S-REC program (Solar RPS Carve-out & Solar CreditClearinghouse) emergency regs in place More info on DOER website - link

MA wind energy siting reform legislation passed by

Senate; pending in House More info on EOEEA website - link

MA PACE enabling legislation pending as part ofmunicipal relief bill

http://www.mass.gov/?pageID=eoeeasubtopic&L=5&L0=Home&L1=Energy%2c+Utilities+%26+Clean+Technologies&L2=Renewable+Energy&L3=Solar&L4=RPS+Solar+Carve-Out&sid=Eoeeahttp://www.mass.gov/?pageID=eoeeaterminal&L=4&L0=Home&L1=Energy%2C+Utilities+%26+Clean+Technologies&L2=Renewable+Energy&L3=Wind&sid=Eoeea&b=terminalcontent&f=doer_renewables_wind_siting-reform&csid=Eoeeahttp://www.mass.gov/?pageID=eoeeaterminal&L=4&L0=Home&L1=Energy%2C+Utilities+%26+Clean+Technologies&L2=Renewable+Energy&L3=Wind&sid=Eoeea&b=terminalcontent&f=doer_renewables_wind_siting-reform&csid=Eoeeahttp://www.mass.gov/?pageID=eoeeasubtopic&L=5&L0=Home&L1=Energy%2c+Utilities+%26+Clean+Technologies&L2=Renewable+Energy&L3=Solar&L4=RPS+Solar+Carve-Out&sid=Eoeea


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Public Procurement



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Public Procurement: Basics

Why comply?

Minimize risk of bid protests

Minimize risk of contract nullification & re-do

Minimize risk of penalties & other sanctions

Get good value



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Public Procurement: Advanced


Statute Basics

Energy procurementexemption MGL c. 30B,

1(B)(33)

Exemption from competitive procurement for procurement of energy andancillary services; not for services aloneOpen issue: Available for purchase of net metering credits?

General goods and servicesMGL c. 30B, 5 (ITB) or 6(RFP)

For procurement of any goods or services $25K and over (no requirements under$5K; 3 quotes needed for $5K to below $25K; cannot split bids to meet limits)

Lease of land MGL c. 30B,16

For lease (not mere license) of municipal land where value of lease is > $25KDetermination of value requires appraisal or other method

Public Buildings Statute MGLc. 149, 44A 44M

Governs contracts for construction, reconstruction, installation, demolition,maintenance, or repair of any building by a public agency

Public Works Statute MGL c.39M, 30

Governs $10K+ contracts for construction, reconstruction, alteration, remodeling,or repair of public improvements not involving work on a building

Energy management servicesRFP MGL c. 25A, 11C For energy efficiency services/projects and on-site renewable energyservices/projects; allows design/build integration; exemption from 30B andPublic Buildings Statute (but inadvertently? not the Public WorksStatute)

Energy management servicesRFQ MGL c. 25A, 11I

Similar to 11C but allows for initial selection of most qualified respondentbased on non-price qualifications followed by bilateral negotiations withthat party


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Public Procurement: Resources

OIG public procurement information - link

Helpful quick resource: OIG charts on localpublic procurement procedures

DOER energy management servicestechnical assistance - link

http://www.mass.gov/ig/publ/30bmanl.pdfhttp://www.mass.gov/ig/mcppo/charts_proc.pdfhttp://www.mass.gov/ig/mcppo/charts_proc.pdfhttp://www.mass.gov/?pageID=eoeeaterminal&L=3&L0=Home&L1=Energy%2c+Utilities+%26+Clean+Technologies&L2=Green+Communities&sid=Eoeea&b=terminalcontent&f=doer_green_communities_gc-ems&csid=Eoeeahttp://www.mass.gov/?pageID=eoeeaterminal&L=3&L0=Home&L1=Energy%2c+Utilities+%26+Clean+Technologies&L2=Green+Communities&sid=Eoeea&b=terminalcontent&f=doer_green_communities_gc-ems&csid=Eoeeahttp://www.mass.gov/ig/mcppo/charts_proc.pdfhttp://www.mass.gov/ig/mcppo/charts_proc.pdfhttp://www.mass.gov/ig/publ/30bmanl.pdf


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Contact

Jonathan Klavens


420 Boylston Street, 5th Floor

Boston, MA 02116

(617) 266-2879

[email protected]

http://www.klavenslawgroup.com

mailto:[email protected]://www.klavenslawgroup.com/http://www.klavenslawgroup.com/mailto:[email protected]


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Disclaimer

This document, which may be consideredadvertising under the ethical rules of certain

jurisdictions, is provided with the understandingthat it does not constitute the rendering of legaladvice or other professional advice by KlavensLaw Group, P.C. or its attorneys. Please seekthe services of a competent professional if youneed legal or other professional assistance.


klavens ssc energy workshop 4-29-2010

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