The following opinion is presented on-line for informational use only and does not replace the official version. (Mich. Dept. of Attorney General Web Site - http://www.ag.state.mi.us)
STATE OF MICHIGAN
MIKE COX, ATTORNEY GENERAL
CLEAN, RENEWABLE, AND EFFICIENT ENERGY ACT:
RENEWABLE ENERGY CREDITS:
PLASMA ARC GASIFICATION FACILITY:
Qualifications for renewable energy credits under the Clean, Renewable, and Efficient Energy Act
A gasification facility, including a plasma arc gasification facility, that uses municipal solid waste or biomass as feedstock may qualify as a renewable energy system eligible to receive renewable energy credits under Michigan's Clean, Renewable, and Efficient Energy Act, 2008 PA 295, MCL 460.1001 et seq, provided that the facility meets the other requirements of that Act.
Opinion No. 7248
May 26, 2010
Honorable Michael D. Bishop
You have asked whether the use of municipal solid waste or biomass as feedstock by a gasification facility may qualify the facility for renewable energy credits under Michigan's Clean, Renewable, and Efficient Energy Act (CREEA or Act), 2008 PA 295, MCL 460.1001 et seq.
Your request states that a company proposes to build a facility that will use "a high-tech, high-heat 'plasma torch' to create electricity by converting . . . municipal and bio waste" into electricity. Information obtained in connection with your request reveals that "gasification" is a thermochemical process that uses high heat that, when directed at a fuel source such as municipal solid waste or biomass, is so intense that it breaks the chemical bonds that hold the molecules of the fuel source together, and produces synthesis gas.1 A "plasma torch" is one type of device used to create the high heat necessary for gasification, and involves passing inert gases through an electric arc generated between two powerful electrodes. The plasma torch converts organic compounds instantaneously into a gas comprised of the elemental components of the original molecules, and inorganic compounds melt into a "slag" byproduct. The resulting gases are used to turn a gas turbine or to heat water to power a steam turbine and thereby generate electricity.
The CREEA specifically contemplates the use of "plasma torch" facilities and other related technologies within its regulatory scheme. Section 7(a) defines the term "gasification facility," providing:
"Gasification facility" means a facility located in this state that uses a thermochemical process that does not involve direct combustion to produce
synthesis gas, composed of carbon monoxide and hydrogen, from carbon-based feedstocks (such as coal, petroleum coke, wood, biomass, hazardous
waste, medical waste, industrial waste, and solid waste, including, but not limited to, municipal solid waste, electronic waste, and waste described in
section 11514 of the natural resources and environmental protection act, 1994 PA 451, MCL 324.11514) and that uses the synthesis gas or a mixture of
the synthesis gas and methane to generate electricity for commercial use. . . . Gasification facility includes . . . a plasma arc gasification facility.
[MCL 460.1007(a); emphasis added.]
Section 9(b) of the CREEA defines "plasma arc gasification facility" as "a gasification facility that uses a plasma torch to break substances down into their molecular structures." MCL 460.1009(b) (emphasis added).
In construing or applying the provisions of a statute, the first step is determining the Legislature's intent in adopting them. The intent, if possible, is determined by the words of the statute alone. "The words of a statute provide 'the most reliable evidence of its intent.'" Sun Valley Foods Co v Ward, 460 Mich 230, 236; 596 NW2d 119 (1999), quoting United States v Turkette, 452 US 576, 593; 101 S Ct 2524; 69 L Ed 2d 246 (1981). If the provisions are unambiguous, as written, there is no room for construction. Lake Carriers' Ass'n v Dep't of Nat'l Resources Director, 407 Mich 424, 429; 286 NW2d 416 (1979). The words and provisions are to be applied as enacted. Dewan v Khoury, 477 Mich 888, 889; 722 NW2d 215 (2006). Further, words and phrases must be read in context and a statute must be read in its entirety. Sweatt v Dep't of Corrections, 468 Mich 172, 179; 661 NW2d 201 (2003). "When a statute specifically defines a given term, that definition alone controls." Kuznar v Raksha Corp, 481 Mich 169, 176; 750 NW2d 121 (2008).
The CREEA was enacted, in part, to encourage energy producers to move toward producing energy using renewable resources. MCL 460.1001. To further that goal, the Act provides for the earning of "renewable energy credits," MCL 460.1039, that may be traded, transferred, or sold by the producers who earn the credits. MCL 460.1041. Section 39 of the Act provides:
1) Except as otherwise provided in section 35(1), 1 renewable energy credit shall be granted to the owner of a renewable energy system for each megawatt
hour of electricity generated from the renewable energy system, subject to all of the following:
(a) If a renewable energy system uses both a renewable energy resource and a nonrenewable energy resource to generate electricity, the number of
renewable energy credits granted shall be based on the percentage of the electricity generated from the renewable energy resource.
(b) Renewable energy credit shall not be granted for renewable energy generated from a municipal solid waste incinerator to the extent that the
renewable energy was generated by operating the incinerator in excess of the greater of the following, as applicable:
(i) The incinerator's nameplate capacity rating on January 1, 2008.
(ii) If the incinerator is expanded after the effective date of this act to an approximate continuous design rated capacity of not more than 950
tons per day pursuant to the terms of a final request for proposals issued not later than October 1986, the nameplate capacity rating required to
accommodate that expansion.
(c) A renewable energy credit shall not be granted for renewable energy the renewable attributes of which are used by an electric provider in a
commission-approved voluntary renewable energy program. [MCL 460.1039; emphasis added.]
Under this section, to earn a renewable energy credit, the electricity must be produced by a "renewable energy system." The CREEA defines a "renewable energy system" to mean "a facility, electric generation system, or set of electricity generation systems that use 1 or more renewable energy resources to generate electricity." MCL 460.1011(k) (emphasis added). Accordingly, to qualify as a renewable energy system, the facility must use "renewable energy resources" to generate electricity. The Act defines "renewable energy resource" to mean:
(i) [A] resource that naturally replenishes over a human, not a geological, time frame and that is ultimately derived from solar power, water power, or
wind power. Renewable energy resource does not include petroleum, nuclear, natural gas, or coal. A renewable energy resource comes from the sun or
from thermal inertia of the earth and minimizes the output of toxic material in the conversion of the energy and includes, but is not limited to, all of the following:
(ii) Solar and solar thermal energy.
(iii) Wind energy.
(iv) Kinetic energy of moving water . . . .
* * *
(v) Geothermal energy.
(vi) Municipal solid waste.
(vii) Landfill gas produced by municipal solid waste. [MCL 460.1011(i); emphasis added.]
Under section 11, biomass2 and municipal solid waste3 are identified as renewable energy resources.
Returning to your question and applying these statutory definitions, a facility that uses biomass or municipal solid waste to produce electricity falls within the definition of "renewable energy system," and may qualify for a "renewable energy credit" under section 39 of the CREEA, MCL 460.1039, provided that the facility meets any other requirement of the Act, and is not otherwise precluded from receiving the energy credits.
Section 11 of the Act does except certain facilities from qualifying as a renewable energy system:
(k) "Renewable energy system" . . . does not include any of the following:
(i) A hydroelectric pumped storage facility.
(ii) A hydroelectric facility that uses a dam constructed after the effective date of this act unless the dam is a repair or replacement of a dam in
existence on the effective date of this act or an upgrade of a dam in existence on the effective date of this act that increases its energy efficiency.
(iii) An incinerator unless the incinerator is a municipal solid waste incinerator as defined in section 11504 of the natural resources and environmental
protection act, 1994 PA 451, MCL 324.11504, that was brought into service before the effective date of this act, including the following:
(A) Any upgrade of such an incinerator that increases energy efficiency.
(B) Any expansion of such an incinerator before the effective date of this act.
(C) Any expansion of such an incinerator on or after the effective date of this act to an approximate design rated capacity of not more than 950 tons
per day pursuant to the terms of a final request for proposal issued on or before October 1, 1986. [MCL 460.1011(k); emphasis added.]
This section only excludes certain hydroelectric facilities and incinerators other than municipal solid waste incinerators that pre-exist the effective date of the CREEA, from qualifying as a renewable energy system. This raises the question regarding whether a plasma arc gasification facility is an "incinerator" for purposes of the prohibition in section 11.
Unlike the terms "gasification facility" and "plasma arc gasification facility," the CREEA does not define the term "incinerator." The Act does, however, incorporate the definition of "municipal solid waste incinerator" from Part 115 of the Natural Resources and Environmental Protection Act (NREPA). MCL 324.11504(7) provides that a "municipal solid waste incinerator" is a facility that "burns" waste, and defines "municipal solid waste incinerator ash" to mean "the substances remaining after combustion in a municipal solid waste incinerator." MCL 324.11504(8) (emphasis added).4 Thus, a municipal solid waste incinerator is a facility that burns or combusts waste reducing the waste to ashes.
As defined in the CREEA, a "gasification facility," including a "plasma arc gasification facility," uses a "thermochemical" process other than "direct combustion" to generate electricity. MCL 460.1007(a). In contrast to the definition of "municipal solid waste incinerator" adopted from Part 115 of the NREPA, MCL 324.11504(7), the definition of "gasification facility" does not refer to "incineration" or "burning." Based on these specific definitions, the Legislature distinguished gasification facilities from incinerators. Accordingly, gasification facilities, or more specifically plasma arc gasification facilities, are not expressly excluded from qualifying as a renewable energy system. See, e.g., Miller v Allstate Ins Co, 481 Mich 601, 611; 751 NW2d 463 (2008) (under the well-established rule of expressio unius est exclusio alterius, "the expression of one thing is the exclusion of another").
Had the Legislature intended to preclude gasification facilities from qualifying as a renewable energy system it could have done so. The Legislature did not. Moreover, section 43(1) of the CREEA expressly recognizes that gasification facilities may qualify as a renewable energy system eligible to receive renewable energy credits:
If a facility or system, such as a gasification facility using biomass as feedstock, qualifies as both an advanced cleaner energy system and a renewable
energy system, at the owner's option, either an advanced cleaner energy credit or a renewable energy credit, but not both, may be granted for any given
megawatt hour of electricity generated by the facility or system. [MCL 460.1043(1); emphasis added.]
In addition, the definition of "gasification facility" expressly contemplates that such a facility may use "municipal solid waste" and "biomass" as feedstock. MCL 460.1007(a). Reading all of the statutes together, and in harmony with one another, leads to the conclusion that a plasma arc gasification facility that uses municipal solid waste or biomass as feedstock may qualify as a "renewable energy system" eligible to receive "renewable energy credits" provided that it meets the remaining conditions set forth in section 39, MCL 460.1039, and elsewhere, in the Act.6
It is my opinion, therefore, that a gasification facility, including a plasma arc gasification facility, that uses municipal solid waste or biomass as feedstock may qualify as a renewable energy system eligible to receive renewable energy credits under Michigan's Clean, Renewable, and Efficient Energy Act, 2008 PA 295, MCL 460.1001 et seq, provided that the facility meets the other requirements of that Act.
1 The website for the United States Department of Energy, Office of Energy Efficiency & Renewable Energy, contains information on the process of gasification and other processes. See <http://www1.eere.energy.gov/biomass/thermochemical_processes.html> (accessed May 17, 2010).
2 The term "biomass" is defined in MCL 460.1003(f) as "any organic matter that is not derived from fossil fuels, that can be converted to usable fuel for the production of energy, and that replenishes over a human, not a geological, time frame," and includes a list of examples.
3 The CREEA does not specifically define the term "municipal solid waste." It does, however, define "municipal solid waste incinerator" in accord with the definition given in Part 115 of the Natural Resources and Environmental Protection Act (NREPA), Solid Waste Management, 1994 PA 451, MCL 324.11501 et seq. Part 115 defines the term "municipal solid waste incinerator," to mean an incinerator that "receives solid waste from off site and burns only household waste from single and multiple dwellings, hotels, motels, and other residential sources, or this household waste together with solid waste from commercial, institutional, municipal, county, or industrial sources that, if disposed of, would not be required to be placed in a disposal facility licensed under part 111." MCL 324.11504(7)(a). Part 115 further defines the term "solid waste" to mean "garbage, rubbish, ashes, incinerator ash, incinerator residue, street cleanings, municipal and industrial sludges, solid commercial and solid industrial waste, and animal waste other than organic waste generated in the production of livestock and poultry." MCL 324.11506(1).
4 Administrative rules promulgated under Part 115 of the NREPA define "incinerator" to mean "a device which is specifically designed for the destruction, by burning, of garbage or other combustible refuse or waste material, or both, and in which the products of combustion are emitted into the outer air by passing through a stack or chimney." 1999 AACS, R 299.4103(m) (emphasis added).
5 Notably, as indicated in section 43(1), gasification facilities may also qualify as "advanced cleaner energy systems," MCL 460.1003(c)(i), and may earn "advanced cleaner energy credits," MCL 460.1003(b), that may be traded, sold, or transferred. MCL 460.1043(3).
6 This opinion does not address other legal requirements regulating the construction and operation of a gasification facility, such as, permitting under Part 55 of the NREPA, Air Pollution Control, MCL 324.5501 et seq.