On May 28, 2020, Treasury and the IRS issued Proposed Regulations under Section 45Q of the Code, which provides for a production tax credit for persons who physically or contractually ensure the capture and disposal of qualified carbon oxide. The Proposed Regulations address the requirements for capture and disposal, the use of qualified carbon oxide as a tertiary injectant in a qualified enhanced oil or natural gas recovery project, and the utilization of qualified carbon oxide in a manner that qualifies for the credit. The IRS previously requested comments on issues arising under Section 45Q in Notice 2019-32. On March 9, 2020, the IRS published Revenue Procedure 2020-12, which provides a safe harbor for allocating Section 45Q credits in a partnership flip structure and Notice 2020-12, which provides guidance on when construction of a carbon capture facility or carbon capture equipment has begun.
Continue Reading Treasury and IRS Issue Long-Awaited Proposed Regulations for Section 45Q Production Tax Credits for Qualified Carbon Sequestration

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

The COVID-19 pandemic has already created considerable uncertainty and has the potential to significantly disrupt renewable energy project EPC and supply chains worldwide.

Wind Energy

The wind industry is particularly susceptible to the effects of this disruption because project completion delays could preclude developers from qualifying for the full value of the production tax credit.

Infocast’s Wind Power Finance & Investment, February 4-6, brings together the industry’s leading developers, investors, lenders, turbine suppliers, EPCs and attorneys to gain valuable insights into industry trends, receive market updates on the finance and investment landscape, and efficiently network with industry leaders.

Troutman Sanders Capital Projects & Infrastructure Section Leader, John Leonti will serve

Infocast’s Projects & Money, January 14-16, brings together the project finance community to connect, share information about upcoming project opportunities, get the latest market intelligence on the trends in the markets and hear the best available perspectives on the financing and deal-making landscape.

Troutman Sanders Capital Projects & Infrastructure Section Leader, John Leonti will serve

Originally posted on Troutman Sanders’ Washington Energy Report 

On April 2, 2018, FERC denied a complaint alleging that the interconnection process under Midcontinent Independent System Operator, Inc.’s (“MISO”) tariff was unjust and unreasonable because certain wind generators were experiencing delays in the process, such that those customers would not receive a Generator Interconnection Agreement (“GIA”) in time to receive Federal Production Tax Credit (“PTC”) benefits.  In doing so, FERC found that there was no evidence that MISO was not making reasonable efforts to meet interconnection deadlines, as required by its tariff.  FERC added that prior precedent does not require MISO to ensure wind generators receive their GIA in time to receive full PTC benefits.
Continue Reading FERC Holds that MISO Interconnection Process Need Not Ensure that Interconnection Customers Receive PTC Benefits

Originally posted on Troutman Sanders’ Washington Energy Report

On March 13 and March 15, 2018, FERC took actions to address tax law changes resulting from the Tax Cuts and Jobs Act of 2017 for electricity, natural gas, and oil companies.  In addition, on March 15, 2018, in response to a federal court remand, FERC stated that master limited partnership (“MLP”) interstate natural gas and oil pipelines will no longer be allowed to receive an income tax allowance in cost of service rates.

The Tax Cuts and Jobs Act of 2017, among other things, lowered the federal corporate income tax rate from 35 percent to 21 percent, effective January 1, 2018.  FERC addressed this tax rate change by issuing separate orders for electricity, natural gas, and oil companies.  First, the Commission issued two show-cause orders, pursuant to section 206 of the Federal Power Act, for 48 electricity companies whose current transmission tariffs include fixed rates that may have been based on the outdated tax rate.  Both orders direct the electric companies to propose tariff revisions to adjust their transmission rates in accordance with the new tax rate or otherwise, show why they should not be required to do so.
Continue Reading FERC Addresses Impact of Tax Cuts on Rates for Energy Companies and Eliminates Income Tax Allowance for Master Limited Partnerships

Originally posted on Troutman Sanders’ Washington Energy Report

On March 8, 2018, President Donald Trump signed an order that enacts tariffs on steel and aluminum imports from all overseas countries, while exempting Canada and Mexico from such tariffs for now.  The proclamations signed by the President will institute a tariff of 25% on steel and 10% on aluminum imports.  The tariffs are expected to become effective March 23, 2018.

The Trump administration’s efforts to levy tariffs on steel and aluminum imports came after a nine month investigation under Section 232 of the Trade Expansion Act of 1962, led by the Secretary of Commerce Wilbur Ross (see March 5, 2018 edition of the WER).  The investigations were initiated in April 2017 and designed to determine whether such imports “threaten or impair the national security.”  When the Section 232 reports were finalized on March 1, 2018, the Commerce Department determined that import competition harms the domestic production of aluminum and steel, and tariffs would strengthen the economic footing of steel and aluminum corporations.
Continue Reading Trump Orders Steel and Aluminum Tariffs

The Bipartisan Budget Act of 2018 signed by President Trump on February 11th, included a package of tax credits that may be a boost for renewable energy development and storage projects. The deal extends tax credits for the so-called “orphan” renewable energy technologies along with nuclear power production.
Continue Reading “Orphaned” Energy Tax Credits Included in Budget Deal