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This workshop discusses the decommissioning process for retiring renewable energy facilities, including deactivation, defueling, dismantling, and site remediation. It explores decommissioning goals, requirements, and implementation at the state and federal level. The analysis shows the lack of correlation between decommissioning rules and funds for renewable and non-renewable generation, while offering recommendations for statewide regulations and financial assurance.
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Decommissioning Rules & Funds for Renewable Energy Facilities RenewElec Workshop October 21, 2010 Jonathan Voegele Research Associate Institute for Energy and the Environment Vermont Law School
What is Decommissioning? • Controlled process to safely retire an electric generation facility. • Deactivation • Defueling • Dismantling • Site Remediation
Decommissioning Goals • Restoration to original environment • Footprint reduction: removal of all structures • Hazardous materials remediation • Avoiding environmental disturbances • Noise, dust, water quality, impact on local wildlife and vegetation.
Decommissioning Requirements • Dedicated funds • Site-specific bonds or letters of credit • Regulatory requirement but no contribution • Local zoning ordinances with or without dedicated funds requirements • No requirement
Decommissioning Implementation • State Lands • Statute • PUC Approval Processes or Orders • Energy Facility Siting Evaluation Commissions (EFSECs) • Local Ordinances • Federal Lands • Controlling Agency Regulations
State Implementation: Statute • Specific statutes requiring PUC to adopt rules governing site restoration • Addresses specific renewable energy projects, typically large wind facilities. • Example: Minnesota • MN statute requires PUC to promulgate regs specifying decommissioning and restoration requirements for LWECS, including a valuation method mandating contribution levels.
State Implementation: PUCs • Utility commissions use approval processes and agency orders to impose requirements. • Certificates of Public Good • Siting Approval • Example: Vermont • VT PSB conditions Certificate of Public Good – a generation facility requirement – on decommissioning fund establishment.
State Implementation: EFSECs • One-stop licensing committees that provide centralized evaluation and oversight of large energy facilities and infrastructure. • Jurisdiction triggered by project capacity rating • Broad public interest authority with varying degrees of standards. • Decommissioning imposed through siting certificate conditions.
State Implementation: EFSECs • Example: Oregon • 35MW+ geothermal, solar or wind projects. • Must find that a site “can be restored adequately to a useful, non-hazardous condition following permanent cessation of construction or operation of the facility.” • Applicant must propose site restoration plan and expense estimate. • OREFSC reviews and imposes mandatory condition requiring bond or letter of credit prior to facility construction.
State Implementation: Zoning • Absent statewide requirements, local zoning ordinances regulate of decommissioning requirements (majority). • Also used when projects do not meet nameplate capacity for PUC jurisdiction. • Example: South Dakota • SDPUC jurisdiction for100 MW wind farms • Less than 100MW, SDPUC encourages local zoning boards to impose requirements • SDPUC “model ordinance” requires plan and financial assurance after tenth operating year.
Federal Implementation • Dept. of Interior: BOERME (MMS successor). • Projects in the outer-continental shelf (OCS) • All non-hydrokinetic facilities. • Hydrokinetic facilities prior to FERC licensing. • Case-by-case basis at amount based on anticipated costs of decommissioning. • Requires financial assurance through bond or letter of credit.
Federal Implementation • Bureau of Land Management • Renewable projects sited on public lands. • Requires decommissioning plan development & approval prior to right-of-way authorization. • $10,000 bond for each turbine on public lands, subject to periodic review for funds adequacy.
Analysis • No correlation between state decommissioning rules and funds for renewable and non-renewable generation. • Some states govern irrespective of resource. • Others impose contingent on facility type.
Recommendations • Statewide decommissioning regulations • Explicit PUC/EFSEC findings requirement that a site can be restored. • Requirement for decommissioning plans • Requirement for financial assurance for the plan’s total cost. • Objectives • Alleviate environmental and aesthetic considerations which hinder large-scale renewable development. • Offset risks for states with ambitious renewable portfolio standards.