Archive for the ‘Government Contracts’ Category

The Challenges to Offshore Wind

Photo by Rob Farrow, some rights reserved.

Mother Jones has a succinct piece on the challenges facing offshore wind projects, challenges that explain why the U.S. still doesn’t have a single offshore wind turbine. The UK has 870, and Germany has 416, for comparison. Now that has Congress extended the wind Production Tax Credit (after a long battle detailed here and here) and outgoing Interior Secretary Ken Salazar said he is optimistic that the Cape Wind project in Nantucket Sound will begin construction in 2013, it is a good time to look at the roadblocks that remain.

Though offshore projects benefit from the Production Tax Credit, worth $1 billion a year, and the Incentive Tax Credit, which pays 30% of wind projects’ constructions, higher construction and transmission costs make electricity from offshore turbines twice the price of electricity from more traditional sources. While in the U.S., states and utilities are understandably hesitant to embrace it, Germany, for example, fully subsidizes the offshore wind system.

The opponents of offshore wind that have gotten the most press are “stakeholders” in areas near potential projects, those who organize groups like the Alliance for Nantucket Sound in opposition to the Cape Wind project, which to date has fought a dozen lawsuits over the turbines’ effect on interfering with boat traffic, desecrating sacred sites, and harming avian and marine life (the GM has covered this here and here). Not surprisingly, these wildlife worries have been hijacked by waterfront homeowners; meanwhile, the National Wildlife Federation, Greenpeace, and the Sierra Club are all in favor of the project.

The strangest problem offshore wind is facing is a 1920 law requiring ships sailing between ports in the U.S. to be U.S.-flagged. This is apparently a problem because the small fleet of ships capable of installing a 400-foot turbine in the ocean floor is based mostly in Europe – and once one of those ships installs the foundation for a turbine, it qualifies as a ‘port,’ and cannot proceed to dock in the U.S. A shipbuilder in New Jersey is building a turbine-installation ship, but until its completion at earliest in 2014, the cost of bringing in ships from abroad can be prohibitive.

Finally, our beloved federal system of government means that states award utility contracts, while the Interior Department manages the deep water where wind turbines can be built. Developers worry that even if they get a contract with a state to buy their power, Interior could award the ‘land’ rights to someone else.

Dear Agencies, May the Goods You Acquire Contractually Be Sustainable

Photo by lafa.pixellutions. Some rights reserved.

Sincerely, the President.

Last week law firm Pepper Hamilton threw a big wet blanket (though perhaps not undeservedly) on a new interim rule amending the Federal Acquisition Regulation (FAR) to promote sustainable choices in government contracts.

FAR is the set of rules (codified in Title 48 of the CFR) that govern government acquisition of goods and services. The interim rule – published in the Federal Register at the end of May – was intended to implement two separate Executive Orders dealing with environmental leadership and management (13423 and 13514) by requiring agencies to “leverage agency acquisitions to foster markets for sustainable technologies, materials, products, and services.”

Specifically, the new rule mandates that 95% of new contract actions for products and services (excepting weapon systems) are “energy-efficient,” “water-efficient,” “biobased,” “environmentally preferable,” “non-ozone depleting,” “contain recycled content,” or “non-toxic or less toxic alternatives.” Agencies are also required to “design, construct, maintain and operate high-performance sustainable buildings in sustainable locations.”

It’s clearly no small request.

And, unfortunately, Pepper Hamilton is able to poke a few holes in this seeming panacea for federal waste. According to the firm’s Alert, the interim rule fails to define terms like “non-toxic,” making it difficult for agencies to make well-informed decisions, and perhaps prompting manufacturers to roll out “difficult-to-prove” claims about the safety of their products.

Pepper Hamilton also calls into question one of the rules more sweeping proclamations that “[w]hen a policy in another part of the FAR is inconsistent with a policy in this part, this part […] shall take precedence for the acquisition of commercial items.” This policy preference, states Pepper Hamilton, “sweeps aside decades of carefully crafted, experience-based policies that were each developed to solve a particular government contracting problem.”

I’m so behind the spirit of the new rule that it’s hard not to bristle in its defense – I wouldn’t want to throw the sustainable baby out with the perhaps burdensome and complex regulatory bathwater. So I urge you to use the democratic process: if you have suggestions on how to make the Sustainable Acquisition amendments to FAR more air-tight, submit your comments by August 1, 2011. The interim rule went into effect May 31, 2011, but comments received will be considered in the formulation of a final rule.

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