Global Power Law & Policy

Legal and Policy Developments Affecting the Global Power Industry.

 

1
DOE 2013 Wind Market Report – Lots of Wind Projects Coming!
2
IRS Attempts to Clear the Air with Additional Guidance on Renewable Energy Tax Credits
3
BOEM Defines Wind Energy Areas Offshore North Carolina
4
Renewable Energy Reform Pushing Ahead in Mexico
5
IRS Releases Guidance on the Wind Production Tax Credit
6
Washington UTC clarifies its authority to regulate third-party ownership of solar panels and requests further legislative direction
7
DOE Announces Loan Guarantee Solicitation
8
Australian Competition Tribunal authorises the acquisition of Macquarie Generation by AGL Energy Limited
9
Supreme Court “Not Willing to Stand on the Dock and Wave Goodbye” as EPA Explores How It Can Regulate Greenhouse Gases from Every Possible Source
10
U.S. Fish & Wildlife’s Double Take on Eagle Take Permits

DOE 2013 Wind Market Report – Lots of Wind Projects Coming!

The US Department of Energy (DOE) recently released its 2013 Wind Technologies Market Report summarizing the accomplishments of the U.S. wind energy industry.  The full report can be found here. Compared to the record-setting 13 GW of new operating wind projects in 2012, 2013 was clearly an off-year, with only a little over 1 GW of new wind energy capacity added. One of the major reasons for this dramatic fall-off was the expiration of the federal income tax production tax credit (PTC) at the end of 2012, which created a land rush of projects being placed in service at end of year 2012, depleting the project pipeline for 2013. The revival of the PTC in 2013 was too late to stimulate significant project completion in 2013. The good news is that because projects that commenced construction by the end of 2013 will qualify for the PTC, a flood of wind projects will be placed in service in 2014 and 2015. The boom and bust cycle of PTC driven wind project development continues.

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IRS Attempts to Clear the Air with Additional Guidance on Renewable Energy Tax Credits

On August 8, 2014, the IRS issued Notice 2014-46, which provides guidance on several issues relating to the implementation of recent changes to the renewable electricity production tax credit (PTC) under Section 45 of the Tax Code and the energy investment tax credit (ITC) in lieu of the PTC under Section 48. In particular, the Notice addresses the manner in which taxpayers can satisfy the “physical work” test and the effect of various types of transfers of ownership after the construction of a facility has begun. In addition, the Notice modifies the 5% safe harbor test included in previous notices. In light of the issuance of the Notice, the IRS says it will not issue private letter rulings on the topics addressed in the Notice.

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BOEM Defines Wind Energy Areas Offshore North Carolina

On Monday, the U.S. Department of the Interior announced that the Bureau of Ocean Energy Management (“BOEM”) has defined three Wind Energy Areas off the North Carolina coast for potential commercial wind energy development.

The three Wind Energy Areas cover approximately 307,590 acres, which is a reduction in the area initially considered by BOEM for commercial scale wind power development. The Wind Energy Areas announced Monday include about 122,405 acres off the coast of Kitty Hawk, North Carolina, and two areas of 51,595 acres and 133,590 acres off the coast of Wilmington, North Carolina. A map of the Wind Energy Areas can be found here.

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Renewable Energy Reform Pushing Ahead in Mexico

Yesterday in Mexico City President Enrique Peňa Nieto signed into law the much anticipated landmark reform of the energy sector, ending a 76 year state run monopoly and opening the sector to foreign investment.  The energy reform act is one of the key goals of his administration.  “This represents a historic change that will accelerate the economic growth and development of Mexico in the coming years,” the president told hundreds of guests at a ceremony in the capital.

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IRS Releases Guidance on the Wind Production Tax Credit

On August 8, 2014, the IRS released Notice 2014-46. The Notice provides guidance with respect to a number of issues. Specifically, the Notice (i) clarifies how to satisfy the “physical work” test under the begin construction requirement, (ii) clarifies the effect of various types of transfers of interests in a facility after construction has begun and (iii) modifies the application of the 5 percent safe harbor as it applies to a single project comprised of a number of facilities. The Notice can be found here. We will post a discussion of the Notice later this week.

Washington UTC clarifies its authority to regulate third-party ownership of solar panels and requests further legislative direction

The Washington Utilities and Transportation Commission (WUTC) has issued an interpretive policy statement clarifying its jurisdiction to regulate third-party owners of solar panels and other net metering systems as “Public Service Companies.” Docket No. UE-112133 (July 30, 2014) (statement).  While the WUTC’s policy statement  provides useful guidance on the agency’s current position and the action it will likely take in the future, the statement is not binding on the agency. Read More

DOE Announces Loan Guarantee Solicitation

Last Thursday, July 3rd, the Department of Energy (DOE) issued its finalized loan guarantee solicitation for renewable energy and energy efficiency projects. DOE made $2.5 billion in loan guarantee authority directly available through the solicitation, but indicated that an expansion of this financing up to $4 billion is possible depending on how much it can stretch an appropriated credit subsidy on applications. This suite of loan guarantees has been a highly sought after item as Secretary Ernest Moniz and other DOE officials have repeatedly stressed the Department’s focus on renewable and energy efficiency research and financing. DOE support for research and investment in these areas can be seen as an extension of the President’s Climate Action Plan, as the Administration strives to cut carbon emissions. Read More

Australian Competition Tribunal authorises the acquisition of Macquarie Generation by AGL Energy Limited

The Australian Competition Tribunal (Tribunal) has recently handed down a decision authorising the acquisition of the electricity generation assets of Macquarie Generation (which are currently owned by the State of New South Wales) by AGL Energy Limited (AGL) (an entity which currently operates as a major electricity retailer in New South Wales).  Read More

Supreme Court “Not Willing to Stand on the Dock and Wave Goodbye” as EPA Explores How It Can Regulate Greenhouse Gases from Every Possible Source

In 2007, the Supreme Court told the U.S. Environmental Protection Agency (EPA) it was wrong to conclude that it lacked the authority to regulate greenhouse gases (GHGs) emitted from vehicles, because GHGs are an “air pollutant.” Since then, the energy and power industries in particular have watched as the EPA took that ruling and developed regulations focused on limiting GHG emissions from stationary sources. EPA not only regulated GHGs from utilities, but expanded the program to almost any source of GHGs (landfills, electronics manufacturers, office buildings), and then “tailored” the rule to limit what everyone agreed were onerous and unnecessary impacts. In a 5-4 decision, the Supreme Court again reversed the EPA, this time telling it that it cannot regulate entities’ GHG emissions if they do not otherwise need a Clean Air Act (CAA) permit. While the decision provides relief to building owners, hospitals, bakeries, dry cleaners, many manufacturers, and just about every other type of business that uses heating and air conditioning, the power industry itself (meaning those that need CAA permits anyway) did not fair as well because the Court upheld EPA’s authority to require them to implement “best available control technology” (BACT) to limit GHGs. This alert describes the decision, and addresses the question most relevant to the regulated community: How much will this decision matter? Read More

U.S. Fish & Wildlife’s Double Take on Eagle Take Permits

If there wasn’t enough uncertainty about the process and standards for obtaining a programmatic eagle take permit, the U.S. Fish and Wildlife Service just made it more difficult.  Since 2009, energy developers and operators – from oil & gas to wind & solar – have been able to apply for a permit for the incidental take of eagles.  That permit program, which has evolved over the past several years through regulatory revisions and agency guidance, may be poised to change in dramatic fashion. 

On June 19, 2014, the American Bird Conservancy and other individual plaintiffs (the “ABC Plaintiffs”) filed a lawsuit against the U.S. Fish and Wildlife Service (“USFWS”).[1]  The ABC Plaintiffs are challenging the USFWS’ revision to its eagle take rule.  Specifically, the ABC Plaintiffs are challenging the agency’s determination to extend the maximum term for an incidental eagle take permit (“ETP”) to 30 years on two ground: first, USFWS revised the eagle take rule without analyzing environmental impacts under the National Environmental Policy Act (“NEPA”); and second, the rule violates the Bald and Golden Eagle Protection Act (“BGEPA”) by subverting basic eagle protections and safeguards without adequate explanation. Read More

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