On April 19th, a bipartisan group of lawmakers introduced the “Protecting Solar Jobs Act” (H.R. 5571) in the House Committee on Ways and Means.  The proposed bill is in response to President Trump’s imposition of a 30% tariff on imported crystalline-silicon solar cells and modules – his first major trade action of 2018.  The bipartisan group was made up of Representatives from Nevada, California and South Carolina with the bill being filed by Representative Jacky Rosen of Nevada.

In introducing the bill, Representative Rosen defended the move by stating that the “[s]olar energy’s success throughout Nevada has led to new jobs, cheaper power bills, and the growth of a new industry that is diversifying [the] state’s economy…[The] Administration directly threatened the stability and financial well-being of [Nevada’s] local solar industry when the President decided to impose a 30 percent tariff on imported panels….[The] new bill will reverse this damaging decision.”  Another supporter of the bill, Rep. Mark Sanford of South Carolina, noted that “[s]olar power is one of the cheapest and fastest-growing renewable energy sources, and if we are really focused on becoming energy independent, now is no time to slow its growth. … [O]ver 7,000 South Carolinians who work in the solar industry could lose their jobs because of these tariffs.  This bill is about sustaining solar as a renewable and key energy source toward jobs, clean energy, and energy independence.”

The House Committee on Ways and Means will now have to decide if the Protecting American Solar Jobs Act will be released to the floor for a vote.  If the bill passes a vote by a simple majority, then the bill will move on to the Senate and then to the President for approval.  If the President vetos the bill, it will then return to the Senate and Congress where it must pass by a two-thirds majority to override the President’s veto.

Hydropower partner Chuck Sensiba is published in the April 2018 edition of The Environmental Law Reporter for a byline he coauthored titled, “Deep Decarbonization and Hydropower.” The article is excerpted from a soon-to-be-published book, Legal Pathways to Deep Decarbonization in the United States, by Michael B. Gerrard & John C. Dernbach.

In his article, Sensiba writes about hydropower’s role in reducing the United States’ dependence on carbon and examines challenges that can be addressed through specific legal and policy reforms. He writes, “Realizing the full potential of hydropower and maintaining the current hydropower fleet will likely depend on overcoming a number of impediments, including lengthy and complex regulatory requirements, failure of electricity markets to adequately compensate hydropower generators for the grid benefits they provide, environmental opposition to new hydropower, and interest in dam removal.” Read the full article here.

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 9, 2018, a divided FERC approved the Competitive Auctions with Sponsored Policy Resources (“CASPR”) proposal submitted by the ISO New England Inc. (“ISO-NE”). Developed through an extensive stakeholder process that began in 2016, CASPR was promoted by ISO-NE as a mechanism to integrate out-of-market state resource policies that might otherwise suppress capacity market prices in ISO-NE’s capacity market. A divided FERC approved the proposal as a just and reasonable accommodation of state policies, with Commissioner Powelson dissenting, arguing that the proposal dilutes market signals and “threatens the viability” of ISO-NE’s capacity market. Commissioners LaFleur and Glick concurred with the outcome, but criticized the order’s guidance on adapting markets to state energy policies, and reliance on minimum offer pricing rules (“MOPRs”) as the “standard solution” to achieve that end. Continue Reading A Divided FERC Approves ISO-NE’s Capacity Market Changes to Accommodate State Subsidized Resources

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

As part of the Bipartisan Budget Act of 2018 (the “Act”), Congress extended and increased the 45Q tax credits for carbon capture and storage (“CCS”) projects. The Act increased credits for enhanced oil recovery from $10 per ton to $35 per ton and increased the credits for geological carbon storage from $20 per ton to $50 per ton. Raising capital for CCS projects has long been an issue, and developers of CCS projects often do not have the tax appetite to take full advantage of the tax credits available. The extension of the 45Q credits would allow large CCS projects to generate hundreds of millions of dollars a year, incentivizing tax equity investors to step in and provide funding for projects in order to reap the considerable tax benefits, similar to the tax equity deal structures seen in the renewable energy sector. While the 45Q credits makes CCS projects more viable, CCS technology is still very expensive and cost-cutting advances will likely need to be developed before a CCS project market is able to thrive.

 

 

Hayden Baker has joined Troutman Sanders LLP as a partner in the firm’s Capital Projects and Infrastructure Practice. Baker, who is based in the firm’s New York office, previously practiced at Sullivan & Worcester LLP. Baker assists clients in mergers and acquisitions, energy and infrastructure projects, real estate deals and financing transactions. He has represented companies, private equity investors and financial institutions in hundreds of transactions totaling more than $100 billion in investment and regularly advises clients in the energy, chemicals, technology and infrastructure sectors.

“Hayden’s broad transactional background and environmental expertise as well as his private equity relationships make him an ideal fit for the firm and our clients,” said Amie Colby, chair of the firm’s Energy and Regulatory Department.

“Hayden’s sophisticated yet practical approach to transactions will benefit our clients in New York and beyond,” said Craig Kline, New York managing partner. “He has significant experience in mergers and acquisitions within energy markets and is a welcome addition to our growing team.”

Troutman Sanders’ New York office now boasts nearly 100 attorneys and spans diverse practices. The firm’s Capital Projects and Infrastructure group represents investors, lenders, utilities, independent power producers and developers in energy and other infrastructure projects throughout the United States and around the world. The practice specializes in designing unique financing structures for the clean energy markets and is continually involved in some of the largest utility-scale solar projects in the nation.

“Troutman Sanders’ broad capabilities within the energy and infrastructure industries align well with my practice,” Baker said. “I look forward to working with the team to continue to deliver on behalf of my clients.”

Baker received his bachelor’s degree from Middlebury College and his J.D. from American University.

The Southern Alliance for Clean Energy (“SACE”) released its Solar in the Southeast 2017 Annual Report (the “2017 Report”) which projects the Southeast region of the United States (including Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina and Tennessee) to continue its exponential solar growth, reaching 15,000 MW of solar by 2021. In 2017, the Southeast had just under 6,000 MW of solar power. Currently, North Carolina leads the way with 2,699 MW of solar, followed by Georgia with 1,222 MW and Florida with 839 MW. According to the 2017 Report, Florida utilities are expected to invest heavily in solar power over the coming years, and Florida’s solar generation is expected to surpass Georgia’s generation by the end of 2018. While the rapid growth of solar in the Southeast is impressive, even if the Southeast reaches the projected 15,000 MW in 2021, solar generation would constitute less than 3% of retail sales. The 2017 Report explains that solar growth in the Southeast is dominated by utility-scale projects, and smaller residential and commercial solar projects are expected to comparatively lag due to the monopoly utility structure in place in most Southeastern states. SACE stresses that the region has immense solar potential, second only to the desert Southwest, and even more solar growth should be encouraged. For more information, see the 2017 Report here.

 

An ambitious bill introduced in the Massachusetts’ Senate proposes to accelerate expansion to the state’s renewable energy sector. Along with implementing a market-based system to reduce emissions, the bill also aims to increase the required growth rate of the state’s renewable portfolio from 1% to 3% per year. Specific goals and proposals for solar, wind and energy storage are included in the bill. Continue Reading Massachusetts Bill Aims to Accelerate Renewable Energy Transition