Category: The Americas

1
United States Announces Intent to Withdraw From Paris Climate Accord: What is the Real Impact?
2
Energy Department Seeks Input on Regulatory Reform
3
CPUC Requires Additional 500 MW of Energy Storage from California IOUs
4
The Business of of Wind in the Northwest – Presented by The Seminar Group
5
Executive Order Directs Federal Agencies to Reconsider Federal Initiatives Focused on Greenhouse Gas Emissions and Climate Change
6
Oregon Lawmakers Consider Carbon Pricing Legislation
7
WUTC Proposes Changes to Planning Paradigms and IRP Models for Energy Storage Technologies
8
MassCEC Solicits Proposals for Innovative Energy Storage Uses Cases and Business Models
9
Avangrid Wins Latest BOEM Auction for Offshore North Carolina Lease and Moves Towards Full Commercial Lease
10
Developers Submit Unsolicited Requests for Wind Leases Offshore Massachusetts and New York

United States Announces Intent to Withdraw From Paris Climate Accord: What is the Real Impact?

By William M. Keyser, Laurie B. Purpuro, Cliff L. Rothenstein, Alyssa A. Moir, and Christina A. Elles

On June 1, President Trump declared that he would withdraw the United States from the Paris Climate Accord (the “Agreement”).  His announcement, though not unexpected, raises a host of questions on several legal, technical, and policy fronts.  And while the news and commentary on President Trump’s position continues to change, three fundamental questions are worth asking:

  1. How is the Agreement structured to handle withdrawal?
  2. What legal actions could potentially force the Trump administration to take actions to address climate change?
  3. What impact, if any, would a withdrawal have on U.S. state and private-side initiatives to address climate change?

We focus our analysis on these questions in this Legal Insight, which you can view on K&L Gates HUB.

Energy Department Seeks Input on Regulatory Reform

By Tim L. Peckinpaugh, David L. Wochner, David L. Benson and Kathleen L. Nicholas

On May 30, the Department of Energy (“DOE”) published a request for information (“RFI”) soliciting guidance on potential regulations that should be modified or repealed to reduce burdens and costs. This is part of a government-wide initiative to overhaul the federal government’s regulatory regime, set in motion with an executive order signed by President Trump just after his inauguration. This RFI also comes after President Trump signed an executive order, “Promoting Energy Independence and Economic Growth,” which seeks to review all regulatory actions that hamper the domestic production of fossil fuels and nuclear energy.

To read the full alert on K&L Gates HUB, click here.

CPUC Requires Additional 500 MW of Energy Storage from California IOUs

By Buck Endemann, William Holmes, Andrea Lucan

Under AB 2514, California’s landmark energy storage law passed in 2013, California’s three Investor-Owned Utilities (“IOUs”) (Southern California Edison (“SCE”), Pacific Gas & Electric (“PG&E”), and San Diego Gas & Electric (“SDG&E”)) are required to install 1,325 MW of energy storage by 2024.[1]  Recent California Public Utilities Commission (“CPUC”) decisionmaking under a later-passed energy storage law, however, has added an additional 500 MW to the IOUs’ procurement obligations. Read More

The Business of of Wind in the Northwest – Presented by The Seminar Group

How is big business putting wind to work? Why does it make financial sense? This event, presented by The Seminar Group, will explore answers to these questions and discuss the status of wind power development in the west, wind power siting, utility perspectives of renewables, Cal ISO expansion, and equity financial structures and tax considerations.

Portland partner Bill Holmes is serving as Program Chair for this progrm Thursday, May 4 at the World Trade Center in Portland, Oregon.

In addition, Seattle partner David Benson will serve as a faculty member for the program.

Bill will present on the Status of Wind Power Development in the West and David will speak on a panel covering Equity, Financial Structures and Tax Considerations.

To learn more about this event and register, click here.

Executive Order Directs Federal Agencies to Reconsider Federal Initiatives Focused on Greenhouse Gas Emissions and Climate Change

By William J. Moltz, David J. Raphael, Sandra E. Safro, Ankur K. Tohan, Michael L. O’Neill                     

President Donald Trump signed an Executive Order on March 28, 2017, entitled “Promoting Energy Independence and Economic Growth” (“Order”), which is designed to prompt reconsideration, and in some cases revocation, of the Obama Administration’s actions to address greenhouse gas emissions and climate change.  The Order directs several federal agencies to review, and possibly withdraw, specific policy initiatives like the Environmental Protection Agency (“EPA”) Clean Power Plan rulemaking and the U.S. Department of the Interior (“Interior”) 2015 and 2016 rules on oil and gas production on federal lands.  In addition, the Order directs the U.S. Council on Environmental Quality (“CEQ”) to rescind its 2016 final guidance document regarding the consideration of greenhouse gas emissions and climate change impacts in environmental reviews performed under the National Environmental Policy Act (“NEPA”).  More broadly, the Order also directs all federal agencies to review “all agency actions” that “potentially burden the development or use of domestically produced energy resources.”

As discussed in greater detail below, the Order may have far-reaching implications for U.S. policy on energy production, greenhouse gas regulation, and climate change that could have spillover impacts for energy infrastructure development.  A vigorous debate is certain to follow with interested stakeholders evaluating strategic options including notice and comment rulemaking, litigation, and legislative advocacy.

To read the full alert on K&L Gates HUB, click here.

Oregon Lawmakers Consider Carbon Pricing Legislation

By Ankur K. Tohan, Alyssa A. Moir, Buck B. Endemann, Christina A. Elles

This is the second installment in the West Coast Carbon Policy Update — Three Part Series, which will examine carbon policies along the West Coast in Washington, Oregon, and California.

On March 28, 2017 President Trump signed an executive order instructing the Environmental Protection Agency to withdraw and rewrite the Clean Power Plan, but lawmakers in Oregon are pushing ahead with statewide efforts to reduce greenhouse gas (“GHG”) emissions. Oregon lawmakers are currently considering several carbon pricing bills — including a cap-and-trade program, a carbon tax, a cap-and-fee program, and a GHG emission rule issued by the state’s environmental agency — that will add a pricing component to the state’s GHG goals.

To read the full alert on K&L Gates HUB, click here.

 

WUTC Proposes Changes to Planning Paradigms and IRP Models for Energy Storage Technologies

By Vanessa Pronovost, Eric Jay, Molly Suda, and William Holmes

The Washington State Utilities and Transportation Commission (the “WUTC”) has issued a Draft Report and Policy Statement on Treatment of Energy Storage Technologies in Integrated Resource Planning and Resource Acquisition (the “Draft Report”) in connection with two consolidated dockets, UE-151069 and U-161024 (the “Dockets”).  The Draft Report is intended to provide useful guidance regarding energy storage technologies to investor-owned utilities (“IOUs”), vendors seeking to promote energy storage for use by IOUs, and anyone interested in the use of energy storage on electric distribution systems.  The WUTC is seeking comments to the Draft Report by 5:00 pm on Monday, April 3, 2017 for the WUTC’s consideration in preparing its final policy statement on the Dockets.

Before issuing the Draft Report, the WUTC held two formal workshops and solicited two rounds of comments.  Commenters generally agreed that current integrated resource planning (“IRP”) models are inadequate for purposes of capturing the benefits of energy storage technologies.  The following is a summary of the WUTC’s conclusions and guidance with respect to investments in energy storage technologies.

Read More

MassCEC Solicits Proposals for Innovative Energy Storage Uses Cases and Business Models

By William H. Holmes, Molly Suda, and Michael L. O’Neill

On March 9, 2017, the Massachusetts Clean Energy Center (MassCEC) issued a Request for Proposals for the “Advancing Clean Energy Storage” (ACES) Program.  MassCEC is offering up to $10 million in funding for energy storage demonstration projects that “pilot innovative, broadly replicable energy storage use cases/business models with multiple value streams in order to prime Massachusetts for increased commercialization and deployment of storage technologies.”  The organization expects to make 10-15 awards of between $100,000 and $1,250,000 each. Applications are due to MassCEC by 4 pm Eastern Time on June 9, 2017.

Read More

Avangrid Wins Latest BOEM Auction for Offshore North Carolina Lease and Moves Towards Full Commercial Lease

By Stanford D. Baird, Joseph D. Condo, Ankur K. Tohan, David L. Wochner, Michael L. O’Neill

Following an auction on March 16, 2017, the U.S. Department of the Interior’s Bureau of Ocean Energy Management (BOEM) named Avangrid Renewables, LLC (Avangrid) the provisional winner of the auction.  Avangrid, majority owned by global energy firm Iberdrola, S.A., outbid three other auction participants to secure rights to a 122,405-acre area off the coast of Kitty Hawk, North Carolina.  Avangrid and BOEM will now work to finalize the provisional lease and continue to develop the project.

BOEM has not scheduled any other lease auctions for offshore wind projects on the Outer Continental Shelf.  However, as this month’s unsolicited bids for offshore Massachusetts and New York demonstrate, businesses remain interested in developing offshore wind projects with or without an open lease application solicitation.  Therefore, in addition to submitting unsolicited lease applications, there is an opportunity to advocate at the federal level with the Trump Administration and BOEM to continue the leasing program on the Outer Continental Shelf and to continue advocating for state-level incentives for offshore wind projects.

The Auction Process and the Winning Bid
Following years of preparation, BOEM announced its plans to hold the North Carolina Outer Continental Shelf lease in January 2017.  Nine bidders pre-qualified as “eligible bidders” under BOEM’s auction rules.  Four companies participated in the March 16 auction:

  • Avangrid
  • Statoil Wind US LLC
  • Wind Future LLC
  • wpd offshore Alpha LLC (wpd offshore)

The bidding lasted 17 rounds, with Avangrid and wpd offshore both bidding more than $8 million in the 16th round.  Avangrid’s 17th round bid of $9,066,650 successfully secured the provisional win for Avangrid.

Next Steps for the North Carolina Lease and Beyond
Part 585 of the Code of Federal Regulations lays out the next steps for finalizing the lease for the offshore North Carolina block.  First, the U.S. Department of Justice and the Federal Trade Commission will review BOEM’s auction process.  Then Avangrid must execute the lease, file financial assurance, and pay the balance of the “bonus bid” (the difference between the winning bid and the applicable bid deposit) within 10 days of receiving the lease documents.

Once the lease is finalized, Avangrid will have one year to submit its Site Assessment Plan (SAP) to BOEM.  The SAP describes the initial activities the leaseholder will undertake to evaluate the lease site (federal guidance available here).  If approved, BOEM’s regulations allow Avangrid five years to develop and submit a Construction and Operations Plan for BOEM’s approval, although the plan must be filed at least six months prior to the end of this five-year period.  A Construction and Operations Plan outlines the facilities that the leaseholder plans to construct and use for its project, as well as construction activities, commercial operations, and decommissioning plans (additional federal guidance here).   Once the Construction and Operations Plan is filed, BOEM will evaluate the potential environmental impacts of the proposed project and reasonable alternatives, as well as solicit public comment.  If BOEM approves the Construction and Operations Plan, Avangrid would have a 25-year commercial lease term with the possibility of renewal.

More broadly, the North Carolina offshore wind lease auction was the last pending open auction.  BOEM has evaluated potential commercial leasing and received indications of commercial interest in other Outer Continental Shelf areas, such as offshore California, Hawaii, and South Carolina, but the agency has not set a timetable for announcing any further competitive lease auctions.  In the absence of an open auction, interested parties may submit unsolicited lease applications in accordance with 30 C.F.R. § 585.230.

There is also an opportunity to advocate for additional competitive Outer Continental Shelf lease auctions with the Trump Administration.  President Donald Trump’s “America First: A Budget Blueprint to Make America Great Again” proposes a 12 percent cut to the Department of the Interior’s budget, suggesting that agencies like BOEM within the Department may be de-emphasized under the new Trump Administration.  In contrast, Secretary of the Interior Ryan Zinke called the results of last week’s North Carolina auction a “big win for collaborative efforts with state, local, and private sector partners,” so the Trump Administration, as well as legislators in Congress, may be disposed to support continued offshore wind development as this year’s federal budget debate unfolds.

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Developers Submit Unsolicited Requests for Wind Leases Offshore Massachusetts and New York

By Stanford D. Baird, Joseph D. Condo, Ankur K. Tohan, David L. Wochner, and Michael L. O’Neill

On March 10, 2017, the U.S. Department of Interior’s Bureau of Ocean Energy Management (BOEM) posted four unsolicited applications for wind project leases on the Outer Continental Shelf.  PNE Wind U.S.A., Inc. has filed three lease applications, two for offshore Massachusetts and one for offshore New York.   Separately, Statoil Wind US LLC filed a lease application for offshore Massachusetts.

The developers’ lease requests, particularly the overlapping requests for offshore Massachusetts, indicate continued interest and growing competition in the U.S. offshore wind sector.  The quickening pace of activity in the U.S. offshore wind market, including completion of Deepwater Wind’s Block Island offshore wind farm and today’s auction process for offshore North Carolina, suggests that offshore wind projects may become a more important part of the U.S. power generation portfolio in the coming years.  In addition, the unsolicited application for offshore New York and the federal government’s response may provide an early indication as to the Trump Administration’s position on offshore wind development going forward.  Increased activity and a new administration in the White House present opportunities to engage on this issue and shape the policies that will govern the federal offshore leasing program for the next four or eight years, or beyond. Read More

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