Friday, July 30, 2010


Announced - July 30th

Solar Reserve: 3,000-acre PowerTower, 200 MW Industrial Solar Plant, near Center, Colorado (image at left is a 10 MW PowerTower pilot built in Dagget, CA no longer in operation).

SolarReserve 1041 permit upcoming meetings:
(None scheduled at this time/TBA)
Saguache County Courthouse (at Cristy)
Saguache, Colorado

Download the SolarReserve Preliminary 1041 Application (under "Documents" left column, at top)

Project Proponent: SolarReserve development director Andrew Wang, Development manager Adam Green.

Technology: 200 MW, PowerTower, 24 X 28 x 25' high tracking mirrors with 656-foot tower in the center of each circle. Two circles eventually installed.
Heat storage from liquid molten salt solution kept in above ground tanks.

Location: Southern Saguache County, between Center and Hooper, County Road G and Highway 112, approx. 8-10 miles northeast of Center. The acreage belongs to several different landowners. Approximately 3,000-acres of a 6,200-acre site will be developed.

Water: approx. 1,200 Acre Feet per circle per year

Tuesday, July 20, 2010

A Better Deal for Saguache County: Resilient Energy Systems

Having just returned from a marathon session with our Commissioners reviewing Tessera's industrial solar application, the issue of building resilient energy systems seems salient. What we've been saying all along is nicely put in Byron Kennard's (excerpted) article below.

The massive, phased 1,525 to 6,525-acre industrial solar energy plant proposed by Tessera Solar is a continuation of the problematic, old energy model. Big, centralized, vulnerable and extremely destructive of the environment and our rural communities.  The project as currently designed poses too many unmitigatable risks to the health, safety and welfare of our communities (more details on this later). 

We urge the Commissioners to proactively seek a better deal for the citizens of Saguache County. One that's in keeping with the vision of its stakeholders, honors the principles of resiliency and preserves our rural sense of place values.

Let's send Tessera back to the drawing board to develop a proposal for five or six 9 MW distributed projects located on wasteland or brownfields near existing substations but far enough away from communities or residences to avoid a fuss. Get rid of those 8,000 to 35,000 noisy, finicky, untested hydrogen leaking SunCatchers and give us the quiet, low-profile high-concentration photovoltaic (HCPV) panels SES (their parent company supplying the hardward) just signed a contract with Boeing to manufacture.

Several distributed 9 MW solar plants about the size of the SunEdison plant in Mosca would fit very nicely into the "phased in" approach that Tessera suggested in today's meeting.  While we prefer a private/public partnership, if Tessera can meet these simple conditions, they would likely find us on their side.

Bouncing Back From the Disaster in the Gulf
Resiliency is the key to energy security; the key to resiliency is decentralized energy production

The Gulf oil spill is yet another grim reminder that our society's reliance on highly complex and centralized energy systems renders us highly vulnerable. In fact, there seems to be a correlation: the more complex and centralized a system, the more vulnerable it becomes. The Deep Horizon explosion, it appears, was caused by malfunctions in the incredibly complex technology that has been developed to enable us to extract oil from ever deeper and more hazardous locations -- an activity that obviously increases vulnerability.

This vulnerability matters tremendously because so many things can go wrong with such systems: human errors, technical malfunctions, natural disasters, terrorist attacks, and so on. And while the probability of any one thing going wrong may be small, the probability that something will is more likely. That means we are bound to take some hits. Shouldn't we seek protection that can minimize these dangers?

This protection can best be found in making our energy systems more resilient.

Resiliency, a concept drawn from ecology, means a lot more than simple survival. Resiliency is the capacity of an ecosystem to absorb disturbance, undergo change, and still retain essentially the same structure and identity. A resilient ecosystem can even rebuild itself when necessary. In nature, for example, forest fires serve to renew the forest's ecology by making room for new growth.

Resiliency has become a major focus of the Department of Homeland Security. In a recent speech, John Brennan, Assistant to the President for Homeland Security and Counter-terrorism, stated, "Instead of simply building defensive walls, we must bolster our ability at all levels, federal, state, local and the private sector to withstand disruptions, maintain operations and recover quickly."

The key to energy resiliency is decentralization. There's a simple reason for this: the more centralized a system becomes, the bigger target it becomes. In terms of homeland security, it gives the bad guys something to aim at. But what if there is no center, no something to aim at?

This is why we are proponents of distributed generation, systems whereby energy is produced on-site for use on-site. Distributed generation relies on small-scale, micropower devices. When something goes wrong in a distributed generation system, the impact is small scale. No one is going to target the solar shingles on your roof or the small wind turbine on your cornice to take out a community's energy supply. What's more, we know how to fix micropower devices, so even if portions of a decentralized energy system are disabled or destroyed, they can be repaired or rebuilt quickly.

Although the family of renewable energy resources and technologies is very diverse and many can be scaled up in size, a wonderful attribute of small-scale renewable energy technologies is that they literally can be utilized in every part of our country, creating or expanding small businesses, adding considerable economic activity in every region,  encouraging new manufacturing capacity, decreasing reliance on fossil fuels and the harms they present, improving our overall resilience, and thus our overall security.

Carol Werner, Executive Director of the Environmental and Energy Study Institute, contributed to this post. The Environmental and Energy Study Institute, a non-profit organization located in Washington , DC, has presented dozens of Capitol Hill briefings on new technologies that can increase the resiliency of the nation's energy systems.

Monday, July 12, 2010

Will Fanny and Freddy Stop PACE?

What is PACE?

Cities, counties and now the State of Colorado has passed legislation establishing a special clean energy finance district capable of issuing low-interest bonds to finance loans for energy efficiency and clean energy. Participating homeowners can opt to use the bond money to pay for renewable energy and energy efficiency improvements, and then pay the loan back through a long-term assessment on their property taxes. This arrangement spreads the cost of a new solar energy system out across a 20-year payment plan that is easily transferable to the next property owner – a particular benefit to solar which can have longer payback periods. Only those who opt in pay, this is not a tax. The cost of that assessment is typically less than the power bill savings generated by the improvements. It’s a budget-friendly way that municipalities and counties (and now the whole state) can empower property-owners to invest in a local clean energy future.

This finance model can be used to finance a host of technologies: solar PV systems, solar hot water systems, energy efficiency installations, and even water conservation upgrades.

Just as Colorado was gearing up its PACE program, we started hearing about opposition from Fannie Mae and Freddie Mac.  Here's the latest update:

A national response over lender concerns about green retrofit programs

Cities and counties throughout the U.S. are developing new finance programs that support green retrofits in their communities. Called PACE, these programs represent one of the most promising tools available to local governments eager to bring new jobs, energy bill savings, and environmental benefits to their residents.

Last month, a rather cryptic letter issued by Fannie Mae and Freddie Mac suggested that property owners with mortgages from these lending giants would be prohibited from participating in PACE programs. The move attacks the constitutional right of local governments to assess property taxes and throws a massive wrench in American green job growth and investment. Now a broad coalition of industry, environment, and government groups is working hard to meet this challenge head on and get PACE back on track.

Local governments have the constitutional authority to assess property taxes and use those taxes to pay for projects that benefit the public good. For over a hundred years, cities and counties have been using a widely adopted mechanism of land-secured financing to make improvements to sewage systems, sidewalks, street lights and other projects that serve a public purpose.

PACE (Property Assessed Clean Energy) programs use that same authority to finance energy efficiency, solar, water conservation, and other green retrofits on private property. Under these innovative PACE programs, the taxes are only assessed on those properties that have voluntarily opted to participate. By allowing property owners to spread payments across this kind of long-term, line-item addition to their property tax bill, PACE helps Americans overcome the single greatest barrier to efficiency and renewable energy improvements: upfront costs.

By putting boots on roofs and hammers in hands, green retrofits create thousands of local jobs. Even modest estimates for national PACE implementation expect the creation of approximately 160,000 long-term, green jobs for our economy.

Recognizing its tremendous implications for jobs and the environment, PACE has seen strong support at all levels of government. In early 2009, Congress passed legislation to make sure federal tax law doesn't stand in the way of PACE progress. The PACE model was a cornerstone of Vice President Biden's 'Recovery through Retrofit' policy recommendations. The Department of Energy has allocated over $100 million in Recovery Act dollars to help get PACE programs up and running. The White House and the Department of Energy have developed guidelines for emerging programs that mitigate risk for both homeowners and mortgage lenders. To date, at least 22 states and the District of Columbia have authorized their local governments to roll out PACE programs. And hundreds of cities and counties are quickly making good on their new authority to build local green economies. Thousands more have the opportunity to implement similar programs.

Unfortunately, on May 5th, Fannie Mae and Freddie Mac put this positive momentum at risk. The government-chartered entities, which collectively back around half of the mortgages in the US, issued "lender guidance letters" that seemed to suggest that PACE programs were incompatible with their mortgages.

The response was fast and furious. Letters of PACE support poured into the Federal Housing Finance Agency (FHFA), which oversees the two quasi-public lending entities. Governors including Schwarzenegger and Richardson, state attorneys general, mayors, officials from the Department of Energy, and representatives from across the PACE community all urged the FHFA to work with Fannie and Freddie to rescind or revise the lender guidance letters. Central to this effort was a call for a meaningful conversation with PACE stakeholders about specific criteria the financial regulatory community believes is necessary to enable PACE financing programs to proceed.

That decision is working its way through the halls of the FHFA and other regulators. Senior officials at FHFA have indicated that clarifications are forthcoming and that they are engaged in a thorough review of underwriting standards. Given the high level of political and business leadership directly involved in the discussion, we are optimistic that the regulators will encourage new lender policies that better reflect PACE's modest risks and significant returns.

In the meantime, the move from Fannie and Freddie has many asking why these financial institutions -- themselves the subject of intense scrutiny for their role in the mortgage crisis and ongoing federal bailout requests -- are standing in the way of real economic recovery?

Specifically, the lender guidance letters expressed concern about "new" debt negatively affecting the security of their mortgages - an assertion that we believe is misplaced. Federal guidance specifically stipulates that PACE-funded improvements need to be cash-flow positive within a small window of time. In other words, the property owner's utility bill savings must generally outweigh their increase in property tax payments. The money that a homeowner would use to pay for PACE improvements is already being used to pay his or her utility bills each month. There is no new debt created. If homeowners can't pay their utility bills, there is very little incentive to pay the mortgage on a powerless, waterless home. But reduce the cost of a property's monthly energy bills through PACE and you're putting money back in the pockets of the property owner, funds that actually reduce the risk of default on the mortgage.

The letters also call into question the century-old tool of local governments to finance projects through land-secured tax financing. In response, the top-notch legal team at Paul, Hastings, Janofsky and Walker LLP took a close look at land-based finance issues under both federal and California state law. Thoughtfully summarized in a white paper you'll find here (PDF), they concluded that PACE falls squarely within local governments' constitutional authority. If Fannie Mae and Freddie Mac are successful in stripping away these special financing districts for energy efficiency and renewable energy, it calls into question the other 37,000 special assessment districts allowing public improvements in communities across the country.

The stark truth is, PACE is part of a very limited set of policy options available to local governments for addressing the serious challenges of economic revitalization, energy security, and -- let's not forget -- climate change. This model is one of the best tools we've seen yet for chipping away at the carbon-intensity of our nation's built environment. As is true of any effort to address the formidable challenge of climate change, PACE can only be one piece of the solution. But as the months and years tick by without strong national or international carbon policy, it's becoming ever clearer that PACE -- a local tool for direct progress -- deserves to move forward.


What's next?

Once the Fannie Mae/Freddie Mac issue is resolved (soon we hope) our San Luis Valley Counties can begin to opt into the State sponsored program.  All that is needed is for our respective counties to pass a resolution opting into the state program.  The county tax assessor will be responsible for adding in the PACE portion of those homeowners who take advantage of PACE loans but GEO finance manager notified us that it shouldn't take more than a few minutes each day (on average) for county assessors to administer.

Check back for updates on our ENERGY page above.   We'll be following this closely and working to get Saguache up to PACE in leading the rest of the Valley in this exciting initiative. 

NOTE: PACE IS NOT A TAX, only those who opt into the program pay, those who do not opt in pay nothing.  There seems to be a great deal of misunderstanding about this point.


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