Projects & Money 2011
As we approach the beginning of a new year, financing options for energy projects (both conventional and renewable) under the current economic conditions continue to be a challenge and a focal point for the energy industry. In order to gear up for financing opportunities in 2011, I, along with my colleagues Marcus Wood, Graham Noyes and Adam Kobos, will be heading to the Big Easy for Projects & Money 2011. Stoel Rives is proud to be a Gold Sponsor at this engaging conference, where Capital Providers, Project Developers and other dealmakers in the financing community will gather together to share information, discuss deal leads and capitalize on new market opportunities.
Projects & Money incorporates its comprehensive market updates with networking opportunities, introductions to new project developments, and interactive multimedia components. Presentations from industry professionals provide an inside look at some of the most ground-breaking deals of 2010, examine the trends they reveal, and provide a better understanding of what it takes to make deals happen.
Stoel Rives attorney Graham Noyes will present "DOE's Loan Guarantee Program: Crucial Financing Mechanism or a Costly Distraction?" on Tuesday, January 11, at 1:30 p.m. during the Pre-Summit Briefing.
On Wednesday, January 12, Partner Marcus Wood will moderate the discussion panel, "Transmission Outlook," at 2:15 p.m. during Track II: Project Sector Outlooks.
Hope to see you there!
To learn more about the conference or to register online, please visit: http://www.infocastinc.com/index.php/conference/416
Projects & Money
When: January 11-13, 2011
Where: Harrah's New Orleans – New Orleans, LA
This Week in Biofuels, A Patent Perspective
On December 7, 2010 the United States Patent Office published several new biofuels-related patents, including one to Amyris Biotechnologies relating to a jet fuel or diesel fuel including a bioengineered isoprenoid component.
- US Patent 7,846,712 (Alliance for Sustainable Energy, LLC) claims an isolated polynucleotide having an amino acid sequence that is at least 95% identical to the sequence of KmLAT1, an arabinose transporter gene cloned from Kluyveromyces marxianus. The specification relates more broadly to providing new yeast strains capable of using L-arabinose to produce ethanol at relatively high yield. According to the specification, this can be achieved: 1) by introducing two L-arabinose transporters, specifically introducing KmLAT1 and PgLAT2 (from Pichia guilliermondii), into yeast such as S. cerevisiae to improve arabinose transport kinetics; and 2) by cloning bacterial araA, araB and araD genes into yeast such as S. cerevisiae in which the aldose reductase gene is disrupted to enable making ethanol from L-arabinose.
- US Patent 7,846,323 (Syntroleum Corporation) claims a method of making an isoparaffinic product useful as a jet fuel, as well as a method of co-producing liquid petroleum gases (LPG), isoparaffinic naptha and jet fuel. The specification describes the method as involving a hydrotreating step, a hydroisomerizing step, and a fractionation step having recycle of the hydroisomerization products. More specifically, a renewable feedstock of triglycerides and/or free fatty acids such as from animal fats, animal oils, vegetable fats, vegetable oils, plant fats, plant oils, rendered fats, restaurant grease, waste industrial frying oils, and/or fish oil is hydrotreated to produce a hydrotreated heavy fraction including n-paraffins. In the case of the method for producing the isoparaffinic product, the hydrotreated heavy fraction is hydroisomerized to produce an isoparaffinic fraction and a heavy fraction, which are separated so that the heavy fraction can then be recycled back to the hydroisomerization step. In the case of the method of co-producing LPG, isparaffinic naptha and jet fuel, the hydrotreated heavy fraction is hydroisomerized to produce a hydroisomerized heavy fraction and isoparaffin. The hydroisomerized heavy fraction is recycled back through the hydroisomerizer and is then itself hydroisomerized to produce an isoparaffinic product, which is fractionated to produce LPG, isparaffinic naptha and jet fuel. According to the specification, the jet fuel has improved cold flow properties.
- US Patent 7,846,222 (Amyris Biotechnolgies) claims a fuel composition comprising one of a group of specified isoprenoid compounds such as farnesane, among other ingredients, and having a flash point of at least 38 degrees C. The specification is directed to a method of biologically manufacturing the isoprenoid compounds referenced in the claims. The specification exemplifies the production of alpha-farnesene and Beta-farnesene in bioengineered E.Coli and S. cerevisiae host strains, and the chemical hydrogenation of the microbially-derived Beta-farnesene to farnesane.
California Adopts its Cap-and-Trade Program for Greenhouse Gas Emissions
After a full day of testimony and deliberation on December 16, 2010, the California Air Resources Board (ARB) adopted the state’s Cap-and-Trade Program on a 9-to-1 vote. The Program is promulgated under the California Global Warming Solutions Act (A.B. 32) as a market-based compliance mechanism to help achieve reduction of the state’s greenhouse gas (GHG) emissions to 1990 levels by 2020. The 10-hour public hearing on the proposed regulation included more than six hours of public testimony, crisscrossing the broad spectrum of stakeholders with an interest in the Program. The large scope of comments made it clear that there were numerous details that still need to be resolved, and that litigation may be pending.
Indeed, even with the December 16 approval, there will be several modifications to the Cap-and-Trade regulation that was released in early November for public review, based on ARB staff-proposed changes presented at the hearing. These changes and other “conforming modifications” will be released for an abbreviated 15-day comment period. Staff will then continue to revise the fine points of the regulation that do not purportedly require further Board action, with a goal of having all the details of the Program confirmed by July 2011. ARB’s approval also included four protocols for creating offset credits. The Cap-and-Trade Program, which contains numerous convoluted provisions, consists of several major elements.
Click here to continue reading.
If you have any questions about the issues of this update, please contact:
Lee N. Smith at (916) 319-4651 or lnsmith@stoel.com
Allison C. Smith at (916) 319-4759 or acsmith@stoel.com
California Public Utilities Commission Approves Renewable Auction Mechanism
RAM will consist of two auctions per year. Twenty-five percent of the total program allocation will be offered in each auction; unsubscribed capacity and drop-out capacity is added to the next auction. Auctions for all three IOUs will be conducted simultaneously, and a project may bid into all three auctions. If a project is selected in more than one auction, however, it must notify all affected IOUs which one shortlist it will accept within 10 days of its notice that it was selected in multiple auctions.
To continue reading, click here.
If you have any questions about the issues of this update, please contact:
Seth Hilton at (916) 319-4749 or sdhilton@stoel.com
Morten Lund at (858) 794-4103 or malund@stoel.com
Brian Nese at (858) 794-4102 or bjnese@stoel.com
Stoel Rives Helps Launch Solar Industry's First EPC Contract Template
SolarTech, a non-profit private/public consortium, recently announced the solar industry’s first engineering procurement and construction (EPC) contract template for solar financing. Whereas a PPA (power purchase agreement), loan agreement or operating lease agreement handle the front-end financing relationship, the EPC agreement handles the execution phase of the project. The template was developed by the SolarTech Finance committee, with the support of my colleague Howard Susman, and is projected to reduce contract negotiations by 50 to 75 percent.
In SolarTech’s announcement, Howard said that “our guiding principles in developing this form were, first, to achieve sufficient balance in the allocation of risks that both contractor and owner would feel comfortable with the terms, and second, to include provisions typically acceptable to the financial community, without whose acceptance, there would be no projects at all.”
You can download a copy of the EPC contract template here (free for SolarTech members; $395 for non-members).
New Community Solar Guide Available
The U.S. Department of Energy’s Solar American Communities program released a community solar guide late last week. The guide presents detailed information about three project models: utility-sponsored projects, special purpose projects formed for producing community solar power and non-profit sponsored projects.
The guide outlines the legal and financial implications of each model, provides practical tools and tips for planning community solar projects, and outlines best practices. It is intended to provide an outline of hurdles community project organizers might incur. The guide also includes an appendix with information about the Interstate Renewable Energy Council's Model Community Renewables Program rules.
The guide was developed by Northwest Sustainable Energy for Economic Development, Keyes and Fox, Stoel Rives, and the Bonneville Environmental Foundation. My colleague Janet F. Jacobs and I contributed to the Community Solar Project Models chapter, the Tax Policies and Incentives chapter and the Securities Compliance chapter.
The Guide to Community Solar can be accessed on and downloaded from the Solar America Communities Web site
California Adopts Cap-and-Trade
After a marathon 10-hour public hearing last Thursday, the California Air Resources Board voted 9-to-1 to adopt the state’s landmark Cap-and-Trade Program. My colleague, Lee Smith, and I spent the day at the packed California EPA auditorium, monitoring the hearing. Over 150 people strode up to the podium to give testimony during the public comment period, spanning the gambit from staunch environmentalists, to climate change skeptics, environmental justice advocates, and many, many a representative of soon-to-be regulated industries and businesses. The chain of testimony was broken up six hours into the hearing by a feel-good guest appearance by Governor Schwarzenegger, who waxed eloquent on the mission of A.B. 32, California’s green jobs revolution, and the momentous step that the state’s Cap-and-Trade Program represented. Indeed, there were many thank yous from commenters to ARB staff and the Board for their hard work on crafting the extraordinarily complex Program and trying to make it more palatable for those affected. Regulated entities noted the outstanding efforts that staff had taken to work with them during the development process.
It was clear, however, that many are still not satisfied with the Program, whether as a whole or with the details of its implementation that will affect various sectors. Environmental justice advocates, such as representatives from the Center for Race, Poverty and the Environment, are largely not in favor of the Cap-and-Trade Program as proposed, dissatisfied with the lack of guarantees that the Program will not disproportionately impact low income communities or communities of color. Most people testifying made pleas to have one aspect or another of the Program changed in some manner.
Lucky for those industries hoping to get some kinks ironed out to make the regulation less painful for their business, staff’s job is not done yet. Many details on implementing the Program remain to be worked out. At the hearing, staff presented several modifications to the Cap-and-Trade regulation that was released in early November for public review, and Board members, based on testimony or questions they had, gave staff a laundry list of additional points to further study. The changes to the regulation and other “conforming modifications” will be released for a 15-day comment period. Staff will then continue to tweak the fine points that do not require further Board action, hopefully having all the details of the Program firmed up by July 2011. Regulated entities certainly canvassed for the implementing details to be finalized as soon as possible before the regulation goes into effect on January 1, 2012, in order to have some certainty as to their compliance obligations.
The first hour or two of public comment was dedicated to testimony on the forest projects offset protocol that will allow certain forest projects that sequester carbon to create offset credits which emitters can buy to meet a percentage of their compliance obligations. Several foresters and forest industry representatives testified, but the bulk of the comment was an emotional plea from environmentalists and residents of the Sierras to prevent clearcutting and forest monoculture under the proposed protocol.
How can a program to reduce greenhouse gas emissions involve clearcutting? The protocol requires adherence to California forest management practices, even for out of state projects. These forest management practices may be more stringent or protective of the environment than those of other states, but California practices allow for clearcutting on areas of 40 acres or less and for even-aged stand management. Under the forest projects protocol, such practices could be utilized in connection with an offset project, but staff and members of the working group that developed the protocol emphasized that the overall carbon storage of a forest stand in a project must be maintained or increased in order for it to qualify under the protocol and generate offsets. Even with an overall net storage of carbon, however, environmental groups stridently objected to even-aged stand management because older or more diverse forest stands may be replaced with stands having less biodiversity and such stands may be managed with herbicides.
With the considerable objections to this protocol and the Board’s aversion to appearing to be ‘for’ clearcutting, ARB considered modification of the protocol at the hearing. Board Member D’Adamo pressed for an exclusion of any future forest project that involved clearcutting, with several other Members agreeing. However, in the end, the Board approved the protocol as it was presented. Chairman Nichols noted that it may be beyond the scope of the Board’s job under A.B. 32 to dictate different forest practices from those developed by the state’s agencies charged with forest management. The environmental protections embedded in the protocol and the overall requirement to have a net zero carbon loss within any given project seemed to satisfy the majority of the Board in the end.
Continue reading for an explanation of some the major points of the Cap-and-Trade Program.
Continue Reading...Energy Tax Law Alert: Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
Congress yesterday passed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the Act), which extends several expiring renewable energy and fuel tax incentives and includes some new incentives that could provide significant benefits to renewable energy projects. The President signed the Act earlier today. Among the more significant provisions in the Act are:
Section 1603 Grant
Bonus Depreciation
Fuels Credits
Click here to read the full alert.
Chris Heuer at (503) 294-9206 or ckheuer@stoel.com
Greg Jenner at (612) 373-8857 or gfjenner@stoel.com
Adam Kobos at (503) 294-9246 or ackobos@stoel.com
Carl Lewis at (206) 386-7688 or cslewis@stoel.com
Kevin Pearson at (503) 294-9622 or ktpearson@stoel.com
Renewable Energy Law Alert: The Upper Midwest Reopens to Renewable Energy Development
Yesterday, December 16, 2010, the Federal Energy Regulatory Commission (FERC) conditionally approved a proposal by the Midwest Independent Transmission System Operator (MISO) that significantly changes how large transmission upgrades are funded across the MISO region.
MISO’s proposal creates a new category of transmission projects called Multi-Value Projects (MVPs) for upgrades that are determined to enable reliable and economic delivery of energy in support of public policy mandates or laws that address transmission reliability and congestion across multiple transmission zones.
MISO’s proposal is effective as of July 16, 2010 and thus applies to transmission projects identified in Appendix A of 2010 MISO Transmission Expansion Plan (MTEP).
To continue reading, click here.
If you have any questions about the order, how it may affect your generation or transmission project, or wind energy development in the Midwest, please contact one of the following attorneys:
Minneapolis, MN
Mark Hanson at (612) 373-8823 or mjhanson@stoel.com
Kevin Johnson at (612) 373-8803 or kdjohnson@stoel.com
Kevin Prohaska at (612) 373-8805 or krprohaska@stoel.com
David Quinby at (612) 373-8825 or dtquinby@stoel.com
Joe Thompson at (612) 373-8822 or jrthompson@stoel.com
Sarah Johnson Phillips at (612) 373-8843 or sjphillips@stoel.com
Portland, OR
Jennifer Martin at (503) 294-9852 or jhmartin@stoel.com
Marcus Wood at (503) 294-9434 or mwood@stoel.com
Sara Bergan at (503) 294-9336 or sebergan@stoel.com
Jason Johns at (503) 294-9618 or jajohns@stoel.com
House Passes Senate tax bill
As many of you have heard, this morning the House of Representatives passed the Senate compromise tax bill by a vote of 277-148. The bill now goes to the President for his signature.
For the renewables industry, this is extremely good news. The bill extends the deadline for beginning construction for the section 1603 grant for one year, through December 31, 2011. The bill made no substantive changes to section 1603; it does not convert the grant into a refundable tax credit.
For renewable fuels, the bill extends the incentives for biodiesel, and alternative fuels and mixtures, retroactively for two years (through 2011), and extends the incentive for alcohol fuels (ethanol) for one year (through 2011).
In addition to these extensions (and many others), the bill also enacts "expensing" for certain assets (in general assets with a recovery period of 20 years or less). This means that instead of MACRS or bonus depreciation, the entire cost of an asset placed in service after September 8, 2010 and before January 1, 2012 may be deducted in the year it is placed in service. This is an extremely powerful incentive for those with the tax appetite to use the deduction.
One cautionary note: It is unclear how the new expensing provision will interact with section 1603. The Treasury Guidance for section 1603 states that costs that are deducted in the year in which they are paid or incurred are not includible in the basis on which the grant will be calculated. Treasury uses an example of costs deducted under section 179, which allows expensing for certain small businesses. Section 179 is not substantively different from the new expensing provision, which may mean that the section 1603 grant cannot be claimed by any taxpayer claiming expensing. Treasury is aware of this (I discussed it with them) and has indicated they will take it under advisement.
Stoel Rives will be putting out a more detailed alert on the tax bill.
DOE to Fund up to $50 Million for Innovative, Cost-Competitive Solar Energy
Today, the Department of Energy issued a Notice of Intent regarding funding of up to $50 million to test and demonstrate innovative technologies that will lead to cost-competitive solar energy technologies. The Nevada National Security Site will be the test site for cutting-edge solar technologies which can be deployed in the Southwest areas of the United States where there is an abundance of solar energy.
The Funding Opportunity Announcement (Reference Number DE-FOA-0000233) won’t be issued until early next year but you can look at the Notice of Intent by going to https://www.fedconnect.net/FedConnect/ and plugging in the Reference Number. Stay tuned for more information via this blog or in a client alert.
FERC Decision Opens Door for New Wind Development in the Upper Midwest
The Federal Energy Regulatory Commission (FERC) opened the door today for new investment in transmission lines in the Upper Midwest that will deliver new wind energy to market. By establishing a methodology for sharing the cost of new transmission lines, FERC’s decision could provide a significant boost to wind development in the region. For more information, see our full alert.
$184 Million for Advanced Vehicle Research and Development
Today, the Department of Energy (“DOE”) announced that it is accepting applications for up to $184 million over three to five years to accelerate the development and deployment of new efficient vehicle technologies that will reduce U.S. dependence on foreign oil, save drivers money, and limit carbon pollution. Projects will span the broad spectrum of technology approaches, including advanced materials, combustion research, hybrid electric systems, fleet efficiency, and fuels technology.
The Funding Opportunity Announcement (Reference Number: DE-FOA-0000239) addresses the development of key technologies required to achieve large scale adoption of competitive, cost-effficient, advanced vehicles such as plug-in electric hybrids (PHEVs) and electric vehicles (EVs).
The FOA released today focuses on several approaches to improving vehicle efficiency, including:
- Advanced fuels and lubricants
- Use of lighter weight materials
- Advanced cells and design technology for electric drive batteries.
- Advanced power electronics and electric motor technology
- Efficient and emission-reducing engine technology.
The FOA can be found by entering the FOA reference number on the FedConnect Web site: https://www.fedconnect.net/FedConnect/PublicPages/PublicSearch/Public_Opportunities.aspx
Applications for the solicitation are due February 28, 2011. Applications must be submitted through Grants.gov to be considered for awards. The DOE expects to announce the awards by summer 2011
Tax bill update
As some of you may have heard, the Senate today passed its version of the tax compromise by a vote of 81-19. The bill includes an extension of the deadline in section 1603 for beginning construction through 2011. The size of the majority is a strong signal to the House that the Senate may not be open for negotiation.
Although not a certainty, the expectation here (yes, I am in the Devil’s Den) is that the House may take up the bill as early as tonight but most likely tomorrow. Procedurally, the way the House is likely to operate is to take up the Senate-passed bill, with the Democratic amendment being the only one in order. If the Democratic amendment passes, chaos will reign because the bill will have to go to conference. If the Democratic amendment fails, the House then will vote on final passage (agreeing to the Senate bill). This likely will happen immediately thereafter.
At this point, no one knows for certain what the House Democratic amendment will contain. Rumors are that it will focus on beefing up the estate tax, particularly increasing rates and decreasing exemptions. We will have to see. Of course, the House could take an entirely different procedural route. It’s what makes DC so much “fun!”
DOE Announces $30 Million for Next Generation Biofuels Research
DOE announced on December 14, 2010 that funds will be made available for small-scale process integration projects that support the development of advanced biofuels. The biofuels could replace gasoline or diesel without requiring special upgrades or changes to the vehicle or fueling infrastructure. The funding opportunity announcement, reference number DE-FOA-0000337 (the “FOA”) will provide up to $30 million over the next 3 to 4 years to support up to 5 projects.
Successful proposals will focus on optimizing and integrating processes that convert biomass into biofuels and bioproducts that can be used to support hydrocarbon fuels and chemicals. These process improvements could include, for example:
- Pretreatment methods that alter the biomass to improve the yield of sugars in subsequent process steps;
- More cost-efficient enzymes that produce sugars;
- Fermentation organisms and catalysts that convert the sugars into fuel and chemical intermediates.
Successful applicants will demonstrate the economics and efficiency of their proposed process.
This FOA is largely focused on agricultural residues but other feedstock sources can be proposed if the applicant can show compelling evidence that the feedstock will be sustainably available by 2015. However, certain feedstocks and processes are excluded from the scope of this FOA:
- Proposals that use pure sugar feeds and ‘model’ hydrolysates are not eligible for funding under this FOA
- Proposals that include thermochemical processes (example: fermentation of syngas from a gasification process).
- Early- and late-stage processes (i.e. prior to pretreatment and saccharification or after conversion to final product) will not be eligible for funding.
- If a catalytic conversion process is proposed, the hydrogenation process may not be included in the proposed process improvements to be funded under this FOA.
A complete description of the FOA solicitation, eligibility requirements, and application instructions can be found at https://www.fedconnect.net/FedConnect/PublicPages/PublicSearch/Public_Opportunities.aspx
Applications must be submitted through Grants.gov by no later than 11:59 p.m. EST on February 7, 2011. Applicants are requested (but not required) to submit a letter of intent by January 17, 2011.
Energy Law Alert: EPA Publishes CO2 Geologic Sequestration Rule in Federal Register
On Friday, December 10, 2010, EPA published in the Federal Register its final rule governing the underground injection of carbon dioxide (CO2) for geologic sequestration (GS) under the Safe Drinking Water Act (SDWA). EPA released a pre-publication version of this rule back on November 22, 2010. Stoel Rives previewed the pre-publication version on our Renewable Energy + Law Blog. This alert highlights some key deadlines included in final rule, as published last Friday.
Background: Last Friday's rule focuses on protecting underground sources of drinking water (USDW) from endangerment due to CO2 GS activities. The rule was promulgated pursuant to EPA’s SDWA authority. The rule, which becomes effective on January 10, 2011, resulted from a proposed rule issued by EPA on July 25, 2008 (73 FR 43492) and a notice of data availability and request for comment by EPA on August 31, 2009 (74 FR 44802).
For more information about how last Friday’s rule could affect your CO2 injection plans, feel free to contact one of the following Stoel Rives’ attorneys.
Geoffrey Tichenor at (503) 294-9389 or gbtichenor@stoel.com
Jerry Fish at (503) 294-9620 or jrfish@stoel.com
Thomas Wood at (503) 294-9396 or trwood@stoel.com
Sara Bergan at (503) 294-9336 or sebergan@stoel.com
Sarah Johnson Phillips at (612) 373-8843 or sjphillips@stoel.com
Eric Martin at (503) 294-9593 or elmartin@stoel.com
Update on Tax Bill Negotiations
For those of you interested in the machinations in Congress over the tax cut extensions, especially concerning renewable energy, here is the latest:
Yesterday, the Senate released what it termed a "final compromise" bill. That bill should be voted on in the Senate very soon. It reflects negotiations within the Senate and between the Senate and the White House. It does not reflect a final deal with the House.
The very good news is that the Senate compromise includes a one-year extension of the "beginning construction" requirement for the 1603 grant to December 31, 2011. This is a straight extension; it is not the complete revision of the program to a refundable tax credit that we blogged about previously.
The fate of 1603 still remains uncertain, however. The House is the principal advocate of the complete revision and may insist on its version.
The Senate compromise also includes 100% expensing, as agreed to between the White House and Republican leaders. This means for property placed in service after September 8, 2010 and before January 1, 2012, the entire cost of the property may be deducted in the year it is placed in service. In addition, bonus depreciation (50% immediate deduction plus normal depreciation for the balance) would apply to property placed in service in 2012.
For renewable fuels, more good news. The Senate compromise extends through 2011 the existing per-gallon credits and outlay payments for ethanol, as well as the $.50 per gallon alternative fuels credit (other than for black liquor). In addition, the $1.00 per gallon production tax credit for biodiesel and renewable diesel is also extended through 2011.
Activities are accelerating in Washington as Congress stumbles toward adjournment. Stay tuned for further developments and intrigue.
First Federally Coordinated Renewable Energy and Energy Efficiency Export Initiative
On Tuesday, December 7, 2010, U.S. Commerce Secretary Gary Locke, together with several other government agencies, announced a Renewable Energy and Energy Efficiency Export Initiative.
The Initiative brings together the Trade Promotion Coordinating Committee Working Group on Renewable Energy and Energy Efficiency, the Export-Import Bank of the United States, the Overseas Private Investment Corporation, the U.S. Trade and Development Agency, and the Office of the United States Trade Representative. This coordinated effort is the first of its kind.
The goal is to promote and increase renewable energy and energy efficiency exports as part of a cohesive program during the next five years. The U.S. Government plans to offer new financing products for exporters and facilitate market access, among other things.
See http://export.gov/reee for the report released on Tuesday by the Commerce Department.
This Week in Biofuels, A Patent Perspective
On December 2, 2010, the United States Patent Office published two Novozymes applications relating to bioethanol production from lignocellulosic biomass and an Iogen application relating to bioethanol production from lignocellulosic. On the same date, the World Intellectual Property Organization published a Solazyme application relating to biodiesel, renewable diesel and jet fuel production.
- US Patent Pub. No. 2010/0306879 (Novozymes) is directed to polypeptides having cellobiohydrolase activity useful for saccharifying cellulosic material in the production of ethanol. The patent application identifies two Family 6 Cellobiohydrolase polypeptides, one isolated from Thielavia hyrcaniae NN045097 and one isolated from Thielavia hyrcaniae NN045178.
- US Patent Pub. No. 2010/0304437 (Novozymes) is directed to polypeptides having cellulolytic enhancing activity and to saccharifying cellulosic material in the production of ethanol using an enzyme composition in the presence of a polypeptide having cellulolytic enhancing activity. According to the specification, ‘cellulolytic enhancing activity’ means a biological activity catalyzed by a GH61 polypeptide that enhances the hydrolysis of a cellulosic material by enzyme having cellulolytic activity. The specification provides a procedure for determining celluloytic enhancing activity and identifies an Aspergillus fumigatus gene encoding a Family 61 polypeptide having cellulolytic enhancing activity.
- US Patent Pub. No. 2010/0304438 (Iogen) is directed to modified beta-glucosidase enzymes that exhibit improvements in one or more kinetic parameters (i.e KG, KG2, kcat) relative the wild type beta-glucosidase. The application generically refers to modified Family 3 beta-glycosidases, which comprise genetically engineered amino acid substitutions selected from V43I, V43C, V101A, V101G, F260I, F260V, F260Q, F260D, 1543N, 1543A, 1543S, 1543G, and 1543L (TrCel3A numbering) and which have an amino acid sequence that is at least 80% identical to the amino acid sequence of the parental Family 3 beta-glycosidase from which it is derived. The application more specifically refers to modified beta-glucosidase enzymes derived from the Trichoderma reesei Cel3A beta-glucosidase and which have amino acid substitutions at one or more of positions 43, 101, 260 and 543, and optionally have further substitutions at least at one or more positions 66, 72, 96, 235, 248 and 369. According to the specification, the modified beta-glucosidases are useful in industrial process requiring efficient conversion of cellobiose to glucose, such as the hydrolysis of pretreated lignocellulosic feedstock.
- WO2010/138620 (Solazyme) relates to methods of extracting a lipid from a microorganism. The method involves: lysing a cultured microorganism to produce a lysate, wherein the microorganism has not been subjected to a drying step between culturing and lysing; treating the lysate with an organic solvent for a period of time sufficient to allow the lipid from the microorganism to become solubilized in the organic solvent; and separating the lysate into layers comprising a lipid:organic solvent layer and an aqueous layer. The specification exemplifies the use the microalgae as Chlorella protothecoides as the microorganism and coconut oil as the organic solvent. The specification also indicates that Prototheca moriformis can be preferably used and discusses methods of culturing and transforming Prototheca. The application also relates to methods for producing hydrocarbon or lipid compositions for production of biodiesel, renewable diesel, jet fuel, and lipid surfactants, the compositions having various carbon chain lengths, including C8, C10, C12, C14 and C18.
Minnesota Power Announces RFP for up to 100 MW of Wind
Minnesota Power has announced a request for proposals (RFP) seeking up to 100 MW of wind generation. Proposals must be for wind generation that is deliverable to Minnesota Power's service territory prior to the expiration of the Federal Production Tax Credit on December 31, 2012. Minnesota Power serves northeastern Minnesota.
Details about the RFP and a Model Power Purchase Agreement are available on Minnesota Power's website.
The deadline for submissions is 4:00 pm Central Standard Time on January 5, 2011.
Reid-Baucus Tax Bill
Today, Majority Leader Harry Reid and Senate Finance Committee Chair Max Baucus released their proposal for a middle class tax cut. Although far from the final product, the bill gives us some insight into thinking on the Senate side.
From a renewable energy standpoint, the most important proposal is a one-year extension of the ITC grant. Thus, the deadline for beginning construction would shift to December 31, 2011. The proposal is not a pure extension of section 1603, however. Instead, the proposal would convert section 1603 to a refundable tax credit. This proposal originated on the House side in HR 4599, introduced by Rep. Earl Blumenauer (D-OR). Here is a link to our previous blog on the Blumenauer proposal.
www.lawofrenewableenergy.com/2010/02/articles/tax-1/possible-restructuring-of-1603-grants/
The essential takeaway is that the program would shift to IRS from Treasury. Taxpayers would "apply" for their money by filing a tax return for the year in which the facility was placed in service, claiming that they had made a payment against taxes equal to 30% (10% in certain cases) of the qualified cost of the facility. They would then get a refund for that amount. This new deadline means that taxpayers will have to wait a minimum of 3 1/2 months (and perhaps as long as 15 months) to receive their refund.
There is some good news buried within the proposal. The outright ban on ownership by governmental entities and tax-exempts would be lifted. Instead, governments could receive the "credit" as could tax exempts (so long as they treated income from the facility as UBTI).
We will provide additional updates as the process moves forward.
Biofuels Law Alert: EPA Releases Final Renewable Fuel Standards for 2011
EPA has completed the roll out of the complex RFS2 program by setting renewable fuel quantity requirements for 2011. EPA severely curtailed the cellulosic biofuels standard from 250 million gallons to six million gallons based on limited industry growth. Looking forward to 2012, however, the agency identified a potential surge to 300 million gallons of production. EPA held firm on both the overall renewable fuel standard at 14 billion gallons and advanced biofuels at 1.35 billion gallons despite the cellulosic cut. Other contentious RFS2 issues including retroactive Renewable Identification Numbers (“RINs”) and foreign feedstock were also resolved.
For the full alert, please click here.
If you have additional questions regarding RFS2, please contact Graham Noyes at (206) 386-7615 or jgnoyes@stoel.com.
Energy Tax Law Alert: ODOE Issues Final Administrative Rules
On November 24, 2010, the Oregon Department of Energy (“ODOE”) issued final permanent administrative rules (the “Permanent Rules”) relating to the Business Energy Tax Credit (“BETC”). For a description of the BETC generally, see our previous alerts on November 5, 2009, February 27, 2008, and July 2, 2007.
The Permanent Rules finalize and make some changes to temporary rules that ODOE issued on May 21, 2010 (the “May Temporary Rules”). ODOE issued the May Temporary Rules after the Oregon legislature passed HB 3680 (2010), which made significant changes to the BETC and granted ODOE substantial rulemaking authority. For a complete description of HB 3680, see our previous alert on March 24, 2010. Prior to finalizing the Permanent Rules, ODOE held one public hearing as well as interactive public meetings.
Overall, the Permanent Rules are very similar to the May Temporary Rules. ODOE did, however, incorporate many of the changes requested during the public meetings. Notably, the Permanent Rules clarify when a final application is considered complete (which addresses a potential “disappearing BETC” issue of concern to some taxpayers), relax the rules for amending a preliminary certificate, and add a safe harbor deadline to file an application for final certification prior to the June 30, 2012 sunset of the program.
