REP Energy Policy & Regulatory Compliance 5 — Questions and Answers
Question 1: What distinguishes a 'feed-in tariff' (FIT) from a 'net metering' policy for solar customers?
- FITs apply only to utility-scale projects while net metering applies only to residential
- Under a FIT, generators receive a fixed payment for all power exported; under net metering, excess generation offsets the customer's own bill at the retail rate (Correct answer)
- Net metering requires a separate meter while FITs do not
- FITs are federally mandated while net metering is a state option
Correct answer: Under a FIT, generators receive a fixed payment for all power exported; under net metering, excess generation offsets the customer's own bill at the retail rate
A FIT pays generators a set rate for each kWh exported to the grid, while net metering credits customers at the retail rate for surplus generation above their own consumption.
Question 2: Under the Endangered Species Act (ESA), what is required before a renewable energy project can proceed if it may affect a listed species?
- An automatic project denial if any listed species is present
- A Section 7 consultation with the U.S. Fish and Wildlife Service or NOAA Fisheries, or a Section 10 Incidental Take Permit (Correct answer)
- Payment of a mitigation fee to the U.S. Treasury
- An independent scientific review by a state university
Correct answer: A Section 7 consultation with the U.S. Fish and Wildlife Service or NOAA Fisheries, or a Section 10 Incidental Take Permit
Federal nexus projects must undergo Section 7 consultation, while non-federal projects can obtain a Section 10 Incidental Take Permit with a Habitat Conservation Plan to legally proceed.
Question 3: Which element is NOT typically included in a state Integrated Resource Plan (IRP) for an electric utility?
- Forecasts of future electricity demand
- Analysis of supply-side and demand-side resource options
- Identification of preferred resource portfolio over a planning horizon
- Setting of wholesale electricity market prices for the next 20 years (Correct answer)
Correct answer: Setting of wholesale electricity market prices for the next 20 years
IRPs analyze demand forecasts and resource options to select optimal portfolios, but wholesale market prices are set by market forces and RTOs, not by utility IRPs.
Question 4: A renewable energy developer seeks a Power Purchase Agreement (PPA) with a corporate buyer. Which regulatory issue most commonly determines whether the developer needs a state seller's license or utility authorization?
- Whether the project uses solar or wind technology
- Whether the PPA is structured as a physical delivery or a virtual/financial contract (VPPA)
- Whether the buyer is located in a regulated or deregulated state (Correct answer)
- Whether the project qualifies for federal tax credits
Correct answer: Whether the buyer is located in a regulated or deregulated state
In regulated states, physical PPAs may require the seller to obtain utility authorization, whereas in deregulated markets, competitive sellers can transact more freely under retail choice rules.
Question 5: What is the primary function of a Regional Transmission Organization (RTO) in the U.S. energy regulatory framework?
- Set retail electricity rates for consumers
- Independently operate the transmission grid and administer wholesale electricity markets in a region (Correct answer)
- Issue federal permits for new transmission lines
- Certify renewable energy projects as qualifying facilities under PURPA
Correct answer: Independently operate the transmission grid and administer wholesale electricity markets in a region
RTOs provide independent, non-discriminatory management of the bulk power transmission system and operate competitive wholesale energy, capacity, and ancillary services markets.
Question 6: Under the Energy Policy Act of 2005, which incentive was created specifically to encourage investment in advanced coal, nuclear, and renewable energy facilities?
- Renewable Fuel Standard (RFS)
- Section 1705 Loan Guarantee Program
- Advanced Energy Manufacturing Tax Credit (Section 48C)
- Section 1703 Loan Guarantee Program (Correct answer)
Correct answer: Section 1703 Loan Guarantee Program
The Energy Policy Act of 2005 established the Section 1703 loan guarantee program for innovative energy projects, including renewables, that reduce greenhouse gas emissions.
Question 7: What legal concept allows a state to set renewable energy standards more stringent than federal minimums under the doctrine of cooperative federalism?
- Federal preemption
- State police powers and the 'floor preemption' principle (Correct answer)
- Dormant Commerce Clause
- Supremacy Clause override
Correct answer: State police powers and the 'floor preemption' principle
Under cooperative federalism and floor preemption, federal standards set a minimum floor, and states may enact stricter environmental and energy standards using their police powers.
REP Energy Policy & Regulatory Compliance 5
What distinguishes a 'feed-in tariff' (FIT) from a 'net metering' policy for solar customers?