Time To Consider a Thermal "System Benefits Charge"?

Well before most states and/or the federal government had enacted renewable electric or fuel mandates, many states imposed modest surcharges on electricity and natural gas, with the revenues used to finance efficiency programs. Often referred to as “system benefits charges” (SBCs), these programs have funded billions in efficiency and conservation programs for utility customers.

A defining characteristic of SBCs is that they are nearly universally imposed on customers of regulated electric and natural gas utilities, and conveniently collected through utility bills. The incentives made possible by these funds are limited to utility customers and generally do not fund programs that eliminate the customer’s use of the regulated energy. For example, SBC funds cannot be used to pay for fuel switching to a renewable technology that eliminates a customer’s use of electricity or natural gas. Instead they typically fund gas or electric efficiency or conservation measures while retaining the customers dependence on these non-renewable energy sources. It’s reasonable that those who pay should receive the benefit, but the inability to fund the switch to renewables greatly narrows the potential benefits, especially for heating.

Perhaps it is time we took a hard look at SBCs on unregulated fuels such as heating oil or propane, two expensive and often imported fuels. This is not a new idea, as some states have considered legislation imposing modest fees on these fuels, but with very restrictive uses for the funds. In Massachusetts, for example, a heating oil/propane SBC of $0.025/gallon is proposed to fund efficiency upgrades with the proceeds used to cost-share installation of more efficient oil or propane heating systems (ironically perpetuating dependence on these costly and non-renewable fuels). If the SBC were to be extended to include the funding of efficient bioenergy heating equipment that uses wood pellets or wood chips or include biodiesel used as a liquid heating fuel then perhaps a more comprehensive and fuel neutral program focused on thermal efficiency and renewables could be developed.

Implementation Concepts

A thermal SBC would take the form of a modest assessment administered at the state level on a diversity of unregulated heating fuels such as heating oil, propane, kerosene and wood pellets that have well established distribution systems. It is expected that the importers and distributors of these fuels would pass the assessment along to the consumer in the form of slightly higher energy costs.

The revenues derived would be deposited in a non-lapsing fund in each state. The fund would be administered by an appropriate state agency or quasi-public commission (with public and private oversight). The purposes of this fund would be to:

(a) Finance a comprehensive program of education, outreach and incentives to residential, commercial, municipal, and industrial consumers to encourage them to install thermal renewable energy technologies, combined heat & power technologies, or community-scale district heating (e.g. it could offer a one time upfront rebate against verified installed cost of such systems). Other possibilities include grants, incentives, low/no interest loans, administration of revolving loan funds, property tax credits, business tax credits etc.;

(b) Support the distributors and installers of conventional fossil heating fuels and systems in adopting alternative thermal renewable technologies and fuel distribution (this would help those businesses negatively impacted by the imposition and collection of the SBC fee to transition to new business opportunities in thermal renewable technologies), and in assisting their customers in replacing old inefficient oil and propane appliances with new systems that meet minimum efficiency requirements;

The size of the fee would decline over time as new renewable thermal energy business sectors reach critical mass and are able to flourish without support from the SBC; or, as the cost differential between fossil and renewable energy cost grows wider and free market economics are sufficient to drive the transition and meet state goals. Conceivably the fee could be phased out in as short a period as 5 years. In addition, the fee could be reduced or waived during periods of unusually high market pricing for fossil energy, and reinstated when market pricing drops – providing a so-called “price floor.”

This approach combines a traditional SBC on fossil fuels with a commodity “check-off” program on pellets or biodiesel, similar to those widely administered in support of marketing and R&D for agricultural commodities (examples include national promotional campaigns for milk, eggs, pork, beef, and more recently, softwood lumber). However, check off programs have generally been sanctioned by Congress and applied nationwide, not state by state.

Considerations

The implementation of the thermal SBC will be complex and challenging. There are many important considerations that must be addressed. Among these are:

Whether or not to tie the SBC to the achievement of measurable goals, such as many state RPS programs do.Who will provide monitoring and verification of progress toward meeting goals?How much of a thermal SBC fee would be necessary and acceptable to consumers?How to collect SBC fees on unregulated heating fuels such as cordwood?How to ensure the efficient implementation of state programs and incentives while keeping bureaucracy and administrative costs to a minimum.Fair and equitable access to funds by all sectors: residential, commercial, municipal, industrial.Use of funds based on broad public policy objectives without technology or fuel bias.

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Telvent select, implement distributed control for solar thermal power plant in Abu Dhabi

ROCKVILLE, MD, 27 May 2011 GLOBE NEWSWIRE)-Telvent (NASDAQ: TLVT), the leading real-time it solutions and information provider for a sustainable world, today announced that it has been selected to design, install and manage the distributed control system (DCS) for Shams power company Shams 1 solar thermal power plant in MadinatZayed75 km (120 km) southwest of Abu Dhabi in the United Arab Emirates. The joint venture of Masdar (60%), total (20%) and Abengoa (20%) Telvent's solution control and one of the world's largest concentrated solar energy projects and the first of its kind in the Middle East service chosen. Extending over an area of about 1.5 square miles (2.5 km2), the plant 100 megawatts generated output of 768 parabolic trough collectors.

With this solution Telvent have Shams power company operators the ability to control and monitor all solar system processes of in accordance with current technology, makes it possible, trough collectors manage the position of the solar energy to efficiently capture the energy of the Sun over the entire course of the day, Anticipation of weather conditions and improve the performance block issue.

According to Telvent's Chairman and CEO, Ignacio Gonzalez, helps "Telvent, through innovative technology and extensive know-how, solar systems optimum results in a safe and sustainable way to produce." "This project with Shams power company is one of the largest solar projects on the planet and continue our leadership in solar energy while further demonstrate our solutions for this sector."

Telvent was selected for the project, due to its reliability, flexibility and expertise in the field of solar energy. The company is a leader in the development and implementation of solutions for the provision of intelligent, to maximize solar energy production. This project marked the twelfth Abengoa owned power commercial station for Telvent has developed integrated control systems. Telvent has also installations with integrated solar systems in Spain, the United States, Morocco and Algeria.

About Telvent

Telvent (NASDAQ: TLVT) is a global IT solutions and business services information provider dedicated to help, improvement of the company for the world leading efficiency, safety and protection. Telvent serves markets that are for the sustainability of the planet, including energy, transport, agriculture and environment. (www.telvent.com)

The Telvent GIT S.A. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6852

Contact: Investor Relations contact Manuel Fernandez Maza Tel. + 1 301 354 5432 E-Mail: ir@telvent.com Tel. + 34 communication contact Patricia Malo de Molina 954 93 71 11 E-Mail: comunicacion@telvent.com

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