The California Independent System Operator Corp. (“CAISO”) is moving forward on a slate of proposals which are intended to enhance grid reliability. These proposals include addressing issues related to generation retirement, entering into a specific reliability must-run contract, modifications to incentives related to the resource adequacy program, as well as adjusting the compensation given to its Board of Governors (the “Board”). On November 2, 2017, the Board approved the four proposals, and CAISO will file any resulting tariff related changes with FERC at a later date. Continue Reading CAISO Board Approves Proposals to Enhance Grid Reliability
Yesterday the Joint Committee on Taxation released a description and revenue estimate of the Senate Finance Committee Chairman’s mark up of the Tax Cuts and Jobs Act. The Senate Finance Committee has not released bill language yet but may do so as early as next week. The Senate bill differs in significant respects from the House bill, which we summarized here.
PTC and ITC
Unlike the House bill, the Senate bill would not change the PTC or ITC.
Corporate Tax Rates
Like the House bill, the Senate bill would lower the highest corporate tax rate from 35% to 20%. However, the Senate bill would not reduce the rate until tax years beginning after 2018, one year later than the House bill. Continue Reading Impact of Senate Tax Reform Bill on Renewable Energy Projects
On Thursday, Representative Kevin Brady (R. Tex.), Chairman of the House Ways and Means Committee, introduced the Tax Cuts and Jobs Act (TCJA), the long-awaited and much-anticipated tax reform bill, along with a summary and FAQs . The TCJA contains several provisions of interest to the renewable energy industry. Continue Reading House Republicans Release Tax Reform Bill
Southern California Edison (SCE) released The Clean Power and Electrification Pathway, a blueprint for California to reduce greenhouse gas emissions and air pollutants. SCE explains that a clean power and electrification pathway is the best approach to meet California’s 2030 and 2050 climate goals, reducing 1990 levels of greenhouse gas emissions by 40 and 80 percent respectively. The plan largely revolves around three economic sectors: electricity, transportation and buildings. By 2030, the plan calls for California’s electric grid to be supplied by 80% carbon-free energy, at least 7 million electric vehicles in California and one-third of space and water heaters in California to be electric powered. Essentially, the plan proposes to produce an electric grid with more carbon-free energy that will supply high-polluting industries. Other pathways to decarbonization, including renewable natural gas and hydrogen, were also analyzed but were determined to be more expensive than the clean power and electrification pathway. For more information, see SCE’s full plan here.
The United States International Trade Commission (USITC) announced the remedy recommendations in its global safeguard investigation regarding imports of crystalline silicon photovoltaic cells (whether or not partially or fully assembled into other products). The USITC previously determined that increased imports of crystalline silicon photovoltaic cells are a substantial cause of serious injury to the domestic industry producing competing articles. The remedy recommendations, along with the injury determination, additional findings, and the basis for them, will be included in a report that will be sent to the President by November 13, 2017. For more information, please see the USITC news release here, and the statements of the Commissioners regarding their remedy recommendations here.
Originally posted on Troutman Sanders’ Washington Energy Report
On October 4, 2017, FERC issued two separate orders clarifying its jurisdiction under sections 203 and 205 of the Federal Power Act (“FPA”) related to certain project development activities. In Ad Hoc Renewable Energy Financing Group, FERC granted a petition for declaratory order and confirmed that certain tax equity interests in public utilities do not constitute “voting securities” for purposes of FPA section 203 and therefore do not require prior FERC approval. Separately, in ALLETE, Inc., FERC disclaimed jurisdiction under FPA section 205 over certain pre-construction activities and thereby found that ALLETE, Inc. did not need to file three pre-construction agreements with the agency. Continue Reading FERC Issues Orders Clarifying Jurisdiction Over Specific Project Development Activities
Originally posted on Troutman Sanders’ Washington Energy Report
On October 4, 2017, FERC issued two separate orders clarifying its jurisdiction under sections 203 and 205 of the Federal Power Act (“FPA”) related to certain project development activities. In Ad Hoc Renewable Energy Financing Group, FERC granted a petition for declaratory order and confirmed that certain tax equity interests in public utilities do not constitute “voting securities” for purposes of FPA section 203 and therefore do not require prior FERC approval. Separately, in ALLETE, Inc., FERC disclaimed jurisdiction under FPA section 205 over certain pre-construction activities and thereby found that ALLETE, Inc. did not need to file three pre-construction agreements with the agency.
In Ad Hoc Renewable Energy Financing Group, Petitioners filed a petition for a declaratory order requesting that FERC find that: (1) tax equity interests are not voting securities, but rather passive interests in accordance with FERC’s AES Creative Resources precedent; (2) assuming such interests are passive interests, the issuance or transfer of such interests does not require prior authorization under section 203 of the FPA; and (3) the acquisition of such interests by a holding company, therefore, qualifies for a blanket authorization under FERC’s regulations. In the AES Creative Resources case, FERC held that certain tax equity interests in public utilities do not constitute “voting securities” for purposes of FERC’s market-based rate regulations under FPA section 205. In granting the petition for declaratory order filed by Petitioners, FERC noted that its finding that tax equity interests were passive and did not require prior-approval under section 203 of the FPA was limited to the types of securities addressed in the AES Creative Resource proceeding.
In the ALLETE, Inc. proceeding, FERC found that three agreements governing pre-construction activities were not jurisdictional. On March 10, 2017, ALLETE filed, pursuant to FPA section 205, three agreements entered into with Manitoba Hydro and its subsidiary, Manitoba Limited, for the design, construction, and operation of the Great Northern Transmission Line. Specifically, the three agreements addressed the rights and obligations of the parties during the early stages of the project prior to energization of the transmission line. ALLETE contended that the agreements did not need to be filed with FERC because they concerned “preliminary scoping, study, pre-construction activities, and cost-sharing and, therefore, do not significantly affect rates and services” under FERC’s “rule of reason,” which allows FERC to exercise its discretion to allow utilities to forgo specific filings which deal with “practically insignificant” matters. FERC agreed with ALLETE and disclaimed jurisdiction over three agreements. FERC concluded that the matters within the agreements were only tangentially related to FERC’s jurisdiction under FPA section 205(c) and therefore, under FERC’s rule of reason, the agreements need not be filed.
From The Washington Energy Report
On September 29, 2017, United States Department of Energy (“DOE”) Secretary Rick Perry took the unusual step of proposing a rule for final action by the Federal Energy Regulatory Commission (“FERC”). Secretary Perry’s initiative, a DOE-issued Notice of Proposed Rulemaking (“NOPR”) under section 403 of the Department of Energy Organization Act (“DOE Act”) (42 U.S.C. § 7173), urges FERC to act extremely quickly to enact rules requiring regional transmission organizations and independent system operators (“RTOs/ISOs”) to provide just and reasonable rates for “fuel-secure” generation units (e.g., coal and nuclear units). See Grid Resiliency Pricing Rule, Docket No. RM17-3-000, at 4–5 (Sept. 29, 2017) (“DOE NOPR”). Continue Reading Department of Energy Proposes FERC-Authorized Full Cost Recovery for Certain Nuclear and Coal Power Generation
From The Washington Energy Report
On September 19, 2017, the Senate Committee on Energy and Natural Resources (“ENR Committee”) unanimously advanced FERC nominees Kevin McIntyre and Richard Glick to a full vote on the Senate floor. If confirmed by the Senate, Mr. McIntyre and Mr. Glick will join current FERC Commissioners Cheryl A. LaFleur, Robert F. Powelson, and Chairman Neil Chatterjee to fill all five seats at the Commission. Upon confirmation, Mr. McIntyre will become the new Chairman of FERC. Continue Reading Senate Energy and Natural Resources Committee Advances FERC Nominees for Confirmation
A National Renewable Energy Laboratory (NREL) report shows that utility-scale solar costs fell 29% last year to roughly $35/MWh on a levelized basis. Overall, prices for utility-scale solar power purchase agreements have dropped nearly 75% since 2009, according to the report. The cost decline is attributed to lower module and inverter prices, higher module efficiency, and lower labor costs, though the pace of decline appears to be slowing. The NREL study indicates that the U.S. Department of Energy’s SunShot Initiative has reached its 2020 cost target for utility-scale solar systems three years early. The U.S. Department of Energy Laboratory based its study on 189 PPAs totaling nearly 11,800 MW. The report warned that increasing rates of curtailment is reducing the wholesale market value of solar, but offered that battery storage projects attached to utility-scale solar is one way to restore value. For more information, see the NREL’s press release here, and the full report here.