Rezachek & Associates'
Energy & Environmental Resources

Energy Incentive Programs/Financing Alternatives

Production Incentives

APPA Resolution - Modification of the Renewable Energy Production Incentive (REPI) Needed The Energy Policy Act of 1992 makes available a 15 mill/kWhr tax credit for private utilities, and a 15 mill/kWhr payment for public utilities. The incentive is available for the first ten years of operation. Because the incentive to public utilities is a payment, it is subject to the annual appropriation process. Uncertainty of the availability of an annual appropriations nullifies its effectiveness as an incentive. See also: APPA Resolution In Support of Research, Development, and Demonstration

Locally-Owned Wind Energy Feasibility Project The purpose of the project was to determine the feasibility of farmer-initiated and owned wind energy developments in Minnesota. The project was done in collaboration with the Sustainable Energy for Economic Development project (SEED) and was carried out by staff of the Cooperative Development Services, the Minnesota Project, and the Union of Concerned Scientists.A Minnesota law passed in 1995 provided production incentive payments to small wind project of 2 MW or less owned by individuals or agricultural cooperatives. The law is important because farmers and other small investors do not have tax liabilities large enough to take full advantage of the federal tax credits offered for wind development. Research conducted through this project found that in most cases, a cooperative is an inappropriate legal structure for a wind business.

Minnesota's Renewable Energy Production Incentive Incentive payments shall be made according to this section to the owner or operator of a qualified hydropower facility or qualified wind energy conversion facility for electric energy generated and sold by the facility.

Renewables Program Overview The California Energy Commission, with the passage of Senate Bill 90 (Senator Sher), has the authority to administer funds collected from the state's investor-owned utilities to support renewable energy technologies. Assembly Bill 1890 (AB 1890), which also deregulated the electricity industry, established a new statewide renewables policy by providing $540 million collected from Southern California Edison, Pacific Gas and Electric Company, and San Diego Gas & Electric over four years beginning in 1998 to support existing, new and emerging renewable technologies from 1998 to 2001.Funds for new technologies will be distributed through a production incentive based on a competitive solicitation process, with a cap of 1.5 cents per kilowatt-hour, and be paid over a five-year period after a project begins generating electricity. No single project can receive more than 25 percent of these funds. The amount of funds may increase annually from January 1, 1998, to January 1, 2002.