The Biden administration earlier this year released a summary of its plans to invest in infrastructure, which included “direct-pay” options for the investment tax credit (ITC) and production tax credit (PTC) for clean energy generation and storage, as well as the Section 45Q credit for carbon capture and sequestration. The administration subsequently released the Green Book, its general explanations of the budget proposals for the fiscal year 2022, which contained more detailed information about the administration’s tax proposals but did not elaborate on the direct-pay options for the ITC, PTC, and Section 45Q credit. Congress has now passed a $3.5 trillion budget resolution, with proposed budget reconciliation legislation expected to include clean energy incentives. The applicable House and Senate committees will begin drafting the legislation later this month. In the absence of a draft budget reconciliation bill providing details on a direct-pay option, recent legislative proposals introduced in the current Congress can serve as helpful guideposts for considering how the direct-pay option will be structured.[1]

The recent proposals are consistent in many respects. All provide that the taxpayer may elect to be treated as if it has made a payment against income tax for the taxable year, thus making the taxpayer eligible for a refund of such payment if it exceeds its tax liability. The credit for which the taxpayer would otherwise be eligible is reduced, preventing a double benefit. Any payment received is excluded from gross income. Each proposal also provides that the Treasury secretary will determine the manner of making the election. However, the similarities generally end there. Below is a discussion of open questions based on the key variations between the recent proposals.
Continue Reading Direct-Pay Options: A Review of Recent Legislative Proposals

On January 20, 2021, President Joseph Biden issued Executive Order No. 13990 (“Executive Order”), which, among other things, suspended Executive Order 13920, “Securing the United States Bulk-Power System” (“Executive Order 13920”) until April 20, 2021 and directed all executive departments and agencies to review and take action to address all actions taken during former-President Donald Trump’s tenure in office that conflict with President Biden’s stated goals of improving public health, environmental protection, reducing greenhouse gas emissions, bolstering resilience to the impacts of climate change, and confronting the climate crisis.
Continue Reading President Biden Suspends Bulk Power System Executive Order; Directs Agencies to Address Public Health- and Climate-Related Rules

Power Finance & Risk recently brought together John LeontiKrish KoomarJavier Cavada Camino, Mike LorussoClaus Hertel and Santosh Raikar for a virtual discussion on one of the hottest topics in energy infrastructure today – storage.

Read the article here.

On May 27, 2020, the IRS issued Notice 2020-41, which provides much-anticipated relief for delays caused by the COVID-19 pandemic with respect to the “beginning of construction” requirements for renewable energy projects eligible for the production tax credit (“PTC”) or investment tax credit (“ITC”).
Continue Reading IRS Extends Continuity Safe Harbor and Provides Safe Harbor Delivery Deadline for Renewable Energy Projects

On Thursday, May 21, attorneys from our Capital Projects & Infrastructure and Energy practices hosted a webinar on the topic of build transfer agreements. During the hour-long discussion John Leonti, Justin Boose, Todd Coles and Vaughn Morrison discussed topics, including:

  • Origins of build-transfer for traditional generation assets
  • Application to different renewable technologies
  • Varying

On April 16, the Federal Energy Regulatory Commission (FERC) issued two orders in proceedings related to PJM Interconnection, L.L.C.’s (PJM) Minimum Offer Price Rule (MOPR). First, FERC denied requests for rehearing and granted limited clarification with respect to its June 29, 2018 order (2018 Paper Hearing Order) where it (i) found PJM’s then-existing tariff to be unjust and unreasonable because it failed to address the suppressive effect of resources receiving out-of-market payments on the capacity market, and (ii) implemented a paper hearing to establish a revised MOPR to apply to both new and existing resources receiving out-of-market payments, regardless of resource type (see July 11, 2018 edition of the WER).

Continue Reading FERC Grants Limited Rehearing and Provides Limited Clarification on PJM’s Minimum Offer Price Rule

As we help our clients navigate the impacts of the novel coronavirus (COVID-19), Troutman Sanders has authored two Frequently Asked Question summaries particularly relevant to energy and infrastructure projects: one on Renewable Energy and Infrastructure and another on Force Majeure.

As COVID-19 continues to spread, Pepper Hamilton LLP and Troutman Sanders LLP have developed