REP Energy Policy & Regulatory Compliance 2 — Questions and Answers
Question 1: Which federal agency administers the Production Tax Credit (PTC) for renewable energy projects?
- Department of Energy (DOE)
- Internal Revenue Service (IRS) (Correct answer)
- Federal Energy Regulatory Commission (FERC)
- Environmental Protection Agency (EPA)
Correct answer: Internal Revenue Service (IRS)
The IRS administers the PTC, which provides a per-kilowatt-hour tax credit for electricity generated from qualified renewable sources.
Question 2: Under the Clean Air Act, which provision specifically requires power plants to obtain permits for greenhouse gas emissions above a certain threshold?
- New Source Review (NSR)
- Title V Operating Permits
- Prevention of Significant Deterioration (PSD) (Correct answer)
- National Ambient Air Quality Standards (NAAQS)
Correct answer: Prevention of Significant Deterioration (PSD)
The PSD program requires major new or modified stationary sources, including power plants, to obtain pre-construction permits and apply Best Available Control Technology.
Question 3: What is the primary purpose of a Renewable Portfolio Standard (RPS) with a 'carve-out' provision?
- To exempt large utilities from RPS compliance
- To set a minimum percentage requirement for a specific technology like solar (Correct answer)
- To allow utilities to bank excess renewable credits for future use
- To penalize utilities that exceed their renewable energy targets
Correct answer: To set a minimum percentage requirement for a specific technology like solar
A carve-out within an RPS mandates that a specific portion of the overall renewable requirement must be met by a particular technology, commonly solar.
Question 4: Which interconnection process under FERC Order 2003 applies to large generators seeking to connect to the transmission grid?
- Small Generator Interconnection Procedures (SGIP)
- Large Generator Interconnection Procedures (LGIP) (Correct answer)
- Distributed Energy Resource Interconnection (DERI)
- Expedited Interconnection Review (EIR)
Correct answer: Large Generator Interconnection Procedures (LGIP)
FERC Order 2003 established the LGIP for generators greater than 20 MW seeking transmission-level interconnection.
Question 5: A developer's wind project qualifies for the Investment Tax Credit (ITC). What does 'commence construction' typically require to lock in the credit rate?
- Full commissioning of the project
- Beginning physical work of a significant nature or incurring 5% of total project costs (Correct answer)
- Signing a power purchase agreement (PPA)
- Obtaining all local zoning permits
Correct answer: Beginning physical work of a significant nature or incurring 5% of total project costs
IRS guidance allows projects to lock in the ITC rate by either starting physical work of a significant nature or incurring at least 5% of total project costs.
Question 6: Which document must a utility typically file with FERC to propose changes to its transmission tariff rates?
- Environmental Impact Statement (EIS)
- Section 205 Filing (Correct answer)
- Integrated Resource Plan (IRP)
- Interconnection Service Agreement (ISA)
Correct answer: Section 205 Filing
Under Section 205 of the Federal Power Act, utilities must file proposed rate changes with FERC for approval before they take effect.
Question 7: When a state RPS allows Renewable Energy Certificate (REC) banking, what does this mean for utilities?
- Utilities must retire RECs within the year they are generated
- Utilities can store excess RECs from one compliance period to use in future periods (Correct answer)
- Utilities can sell RECs to other states without restriction
- Utilities receive double credit for RECs generated during peak demand
Correct answer: Utilities can store excess RECs from one compliance period to use in future periods
REC banking allows utilities to save surplus RECs from a current period to apply toward future compliance obligations, providing flexibility.
REP Energy Policy & Regulatory Compliance 2
Which federal agency administers the Production Tax Credit (PTC) for renewable energy projects?