On April 1, 2013, the Army Energy Initiatives Task Force (“EITF”) and the U.S. Army Mission and Installation Contracting Command at Fort Sam Houston in Texas published a template Renewable Energy Service Agreement Performance Work Statement (the “PWS”) for comment by interested stakeholders.
The proposed scope of the PWS is broad, covering everything from insurance and OSHA requirements to interconnection responsibilities and power prices. Thus, the PWS purports to be part power purchase agreement, part EPC agreement, and part operations and maintenance agreement. As discussed in my previous entry, this comment opportunity is important to all renewable energy developers that intend to contract with the Army. However, it should be of particular interest to teams that responded to the Army’s Multi-Award Task Order Contract (“MATOC”) last fall because the final PWS will likely be incorporated into each base-level RFP issued under the MATOC.
It is important to note that the template is not a “one-size-fits-all” document and contemplates quite a bit of input from individual bases at the time RFPs are issued. Thus, the PWS is malleable and the comments the Army receives through this request for information will not result in a final form of PWS that will be incorporated into every contract issued. Rather, the Army is looking for input to create a “clear, concise and understandable” PWS template that will reduce the need for discussion and clarification of provisions common to all contracts down the line.
For more information, attend the EITF webinar on April 11, 2013 from 1:00-2:00 p.m. EST. see Solicitation No. W9124J13EITF1, which can be found on the FedBizOpps website. To register for the webinar, go to https://www4.gotomeeting.com/register/518667447. Registration is limited to the first 500 participants.
As was the case with the MATOC, comments and questions must be submitted via Bidder Inquiry on the ProjNet website (https://www.projnet.org). Comments must be submitted no later than 5:00 p.m. EST on May 29, 2013.
On February 12, 2013, the U.S. Army Contracting Command announced that the Army Energy Initiatives Task Force ("EITF") is developing a standardized Utility Service Contract Performance Work Statement ("PWS") to be used for contracts executed under its long-term power procurement authority (10 U.S.C. 2922a). The intent is to have a PWS that is clear and understandable to both the renewable energy industry and the government. The EITF intends to publish a draft utility service contract solicitation at the end of this month-i.e., on or about March 29. Once published, they will accept comments for 60 days.
This comment opportunity will be important to all renewable energy developers that intend to contract with the Army, but it will be especially important for teams that responded to the Army's Multi-Award Task Order Contract ("MATOC") last fall. The comments received through this solicitation will likely be incorporated into the PWS that is included in base-level RFPs issued under the MATOC. And interestingly, the timing lines up pretty well. Assuming that the draft PWS is issued at the end of March (like the EITF anticipates), then comments will be due at the end of May. Last year, the Army was saying that it would announce awardees under the MATOC at (or near) the end of Q2 2013. If that goal becomes a reality, then the comment period on the draft PWS will close one month prior to awards under the MATOC, which would ostensibly give the Army enough time to incorporate the revised language into any base-level RFPs that would follow quickly on the heels of the MATOC awards.
For more information, see Solicitation No. W9124J13EITF1, which can be found on the FedBizOpps website.
News reports have already alerted people to the fact that Congress has extended the Production Tax Credit ("PTC") for wind as part of its agreement to avoid the fiscal cliff. The bill - named the American Tax Relief Act of 2012 - extended the sunset date for wind through December 31, 2013. This extension gives wind parity with all other renewable resources covered by the PTC.
What hasn't been as widely reported, however, is that Congress also made a significant modification to the PTC as part of the same provision.
Previously, whether a facility qualified for the PTC depended on when the facility was placed in service for federal income tax purposes. That provision has now been changed so that a facility will qualify for the PTC if construction with respect to the facility begins on or before January 1, 2014. This change applies to all renewables (biomass, marine and hydrokinetic, landfill gas, trash, hydropower) to which the PTC applies (not just wind), with the exception of refined coal and Indian coal. In other words, there is no longer a placed in service deadline for purposes of the PTC if construction begins before January 1, 2014.
For those of you acquainted with the 1603 grant, this "begun construction" requirement will seem very familiar. However, caution is required. First, the 1603 grant was administered by Treasury Department whereas the PTC will be administered by the IRS. The Treasury Department was generally viewed as favorably disposed to 1603 applicants. Second, we do not yet know how the IRS will interpret the term "begun construction." There is no requirement that the IRS interpret it consistently with section 1603. We do know, however, that the IRS included a 10% safe harbor as part of the bonus depreciation regulations (Treas. Reg. 1.168(k)-1(b)(4)(iii)(B)(2)), so it is possible that they may provide a safe harbor for the PTC as well.
It is also important to note that, along with extension and modification of the PTC, the legislation extended for one year the ability of taxpayers to elect the ITC in lieu of the PTC.
The modification of the PTC will likely make 2013 an interesting year, particularly as developers attempt to meet the "begun construction" requirements (however that term is eventually defined). If the IRS gives developers a safe harbor of some sort, it will be essential that they avoid the last minute, year-end rush we experienced in 2011 as we worked to qualify projects (mostly solar) for the “begun construction” requirements of the 1603 grant. A key gating item may well be the extent to which utilities seek to procure wind and other renewable energy is Qs1-2, 2013.
We will keep you apprised of further developments and insights.
The Kenya Electricity Generating Company (KenGen) has issued an invitation for pre-qualification for selection of developers for a 560 megawatt geothermal project pipeline. The government of Kenya has granted KenGen a license to develop geothermal power plants in the Olkaria geothermal field located in the Rift Valley in Kenya. KenGen is embarking on a program to develop up to 560 MW of new generation in 140MW phases.
To meet this objective, KenGen is seeking to partner with developers through either (1) a joint venture, whereby KenGen and the developer will jointly develop and own the power plant, or (2) a tolling arrangement whereby the developer will build, own and operate the plant and KenGen will provide the steam.
Interested parties may submit an application for pre-qualififcation on or before November 2, 2012. Applicants must specify which option (JV or tolling agreement) they wish to pursue and meet other qualifications (experience, balance sheet, etc.) that are set forth in the KenGen tender available here.
TerraPass Inc., recently issued a Request for Information (RFI) on behalf of a client that is interested in ownership, investment and/or long-term bundled renewable energy offtake opportunities within PG&E territory. The RFI seeks information from firms with renewable energy projects that are currently under development or construction in California and have projected online dates in 2014 or 2015. TerraPass' client will consider a project or portfolio of projects with expected generating capacity of up to 230 million kilowatt-hours per year.
TerraPass' contact for this RFI is Erin Craig, who can be reached at 415-644-578. We understand that the deadline for the RFI response is October 26.
On August 22, 2012, the U.S. Army Engineering & Support Center in Huntsville, AL held a pre-proposal conference to discuss the final multi-award task order contract that was issued on August 7, 2012 (the “Final RFP” or “MATOC”). My colleague, Lane Tucker, and I attended to hear the Army’s presentations and to engage directly with renewable energy developers, consultants, seasoned government contractors, large energy service contractors (ESCOs), and others. The conference provided attendees a great opportunity to explore the field of potential contractors and subcontractors and start (or continue) conversations about potential teaming arrangements that could result in both a MATOC award and one or more base task order awards.
For those who could not attend, fear not; all of the presentation materials will soon be available on the Army EITF website and the Huntsville team will post all of the questions presented, along with the Army’s formal responses, to the ProjNet website. Also important is that Tonju Butler, the Procuring Contracting Officer, indicated that the deadline for questions on the Final RFP would be extended from today until September 7, 2012, so that individuals and teams can have additional time to formulate and posit questions that may be important to their proposals. However, that change has not yet been posted to the FedBizOpps website as an amendment. It is too early to tell whether this extension foreshadows an extension of the October 5, 2012 proposal deadline. Right now, the Army is holding firm to that date, so individuals and teams that intend to respond should plan accordingly. Keep an eye out for other amendments to the Final RFP, too. Conference attendees were assured that more would be forthcoming to clarify small technical issues and, hopefully, to flush out the structure for proposing prices. All amendments will be posted to the FedBizOpps website for the MATOC.
Here are a few takeaways and a short discussion about some important issues. Be sure to check the Q&A on the ProjNet website for any official responses from the Army on these topics.Continue Reading...
Southwestern Public Service Company (“SPS”), a subsidiary of Xcel, has issued a request for proposals to diversify its existing renewable energy portfolio in New Mexico. SPS is seeking, on an annual basis, approximately 88,705 MWh of “Other” renewable energy generation as defined by the New Mexico Public Regulation Commission Rule 572 NMAC (i.e., other than solar and wind) or an equivalent amount of biogas of approximately 665,300 MMBtu to be in commercial operation no later than January 1st, 2015.
Bidders that intend to submit a proposal are REQUIRED to submit a Notice of Intent to Bid no later than Friday August 31st, 2012. The submission deadline is 5:00 P.M. Mountain Time on Monday, October 1st, 2012. More information can be found here on Xcel Energy's web site.
A surprise to no one involved in renewable energy, the DOE (via NREL) has just issued a report concluding 1603 created tens of thousands of new jobs.
See the report at http://www.nrel.gov/docs/fy12osti/52739.pdf
Oregon Governor John Kitzhaber announced today that he has named Margi Hoffman to serve as his Energy Policy Advisor. She will join the Governor's office on April 2.
Ms. Hoffman has served as Senior Vice President and Director of Oregon Operations with Strategies360, a strategic consulting firm, and has also worked closely with Renewable Northwest Project (RNP) . The news release from the Governor's office can be found here.
On Friday February 24, 2012, the U.S. Army Engineering & Support Center in Huntsville, Alabama issued a draft request for proposals (Solicitation No. W912DY-11-R-0036, the “Draft RFP”) titled “Large Scale Renewable Energy Production for Federal Installations.”
The objective of the solicitation, in its current form, is to procure renewable and alternative energy through power purchase agreements (“PPAs”) or contractual equivalents for terms of up to 30 years. The government does not want to acquire generation assets, only energy. Projects may be located on or near any federal property located within the United States, including Alaska, Hawaii, territories, provinces or other property under the control of the United States. “The intent is to award contracts to all qualified and responsible offerors, both large and small businesses.” As stated in the Draft RFP, the proposed categorization of projects is as follows:
|Energy Production||Task Order Competition||Caveats|
|Greater than 12 MW||Unrestricted competition|
|4 MW up to 12 MW||The Contracting Officer will first consider reserving the Task Order for small businesses. The determination will examine the size of the project, the complexity of the project, and the level of financing required.||Before making the determination on a particular project, the Contracting Officer will request a letter of interest from all small business firms. If fewer than two responses are received, the Task Order will open for unrestricted competition.|
|Less than 4 MW||Reserved for small businesses||If no proposals are received, or if all proposals are technically unacceptable and/or unreasonably priced, the Task Order will open for unrestricted competition.|
Technologies that will be considered include solar, wind, biomass, and geothermal. The estimated maximum value of all contracts awarded pursuant to the Draft RFP is $7 billion over a period of 10 years.
It is important to note that the final RFP "may significantly vary from this draft." The Army is accepting comments via the ProjNet website through March 21, 2012. The final RFP will be issued at some point after that date.
Through industry presentations and publications as well as through our blog, our energy attorneys are dedicated to helping you stay informed and knowledgeable about legal developments that affect your business.
Visit our website for the latest calendar of events. Upcoming highlights include:
Utah Solar Tour 2011
September 24 – Salt Lake City, UT
Join Stoel Rives attorney Julia Pettit for the Utah Solar Energy Association’s annual Solar Tour. This year’s tour features sites with geothermal heat pumps, small wind, passive solar design, solar shingles, and many energy efficiency design techniques. Stoel Rives is proud to be a Gold sponsor at this event.
In-Depth Tax Planning for Renewable Energy Projects
September 26 – Chicago, IL
Stoel Rives attorneys Greg Jenner, Adam Kobos, Carl Lewis and Kevin Pearson will serve as faculty for this course which will outline tax issues involved in developing renewable energy projects and negotiating tax equity incentives.
September 26-27 – San Francisco, CA
Join Duff Bryant, Julia Pettit, John McKinsey and over 400 senior executives and investors as they discuss opportunities for private equity and venture capital in clean tech energy companies. Review in detail the latest technologies moving the industry forward, and examine prospects for rapid renewable growth across the West Coast. Be sure to visit Stoel Rives in the exhibit hall!
National Hydropower Association Pumped Storage Workshop
October 3 – Bellevue, WA
Join Stoel Rives attorneys Bill Holmes, David Benson, Cherise Oram, and Michael O’Connell for this workshop intended for industry professionals with an interest in the development of new pumped storage projects. Bill Holmes will join the discussion panel What Would Energy Storage Asset/Revenue Modeling Look Like? from 4:00-5:00 p.m.
Independent Energy Producers Association Annual Meeting
October 3-5 – South Lake Tahoe, CA
John McKinsey and Seth Hilton will be in attendance at The IEP 30th Annual Meeting, featuring speakers from CPUC, CARB, CEC, and FERC. Stoel Rives is a proud sponsor at this event.
Developing Grid Storage Projects
October 5-6 – Dallas, TX
John Thompson, David Hattery and Bill Holmes are headed to Dallas to explore market opportunities, models, technologies and barriers to energy storage. Bill Holmes will Chair the conference, and instruct the pre-conference workshop, Developing the Business Case for Grid Storage on October 5. Other Stoel Rives presentations on October 5 include John Thompson, presenting Intellectual Property Protection for Grid Storage, and David Hattery, presenting Negotiating the Terms and Navigating the Risk of a Procurement Contract and Other Financial Documents.
Biogas USA West 2011
October 11-12 – San Francisco, CA
Visit with David Benson and Lee Smith, who will join the discussion panel Project Development Optimization on October 11. Be sure to attend the post-conference event reception, proudly hosted by Stoel Rives.
Solar Power International
October 17-20 – Dallas, TX
Stoel Rives attorneys David Benson, Kristen Castaños, Bill Clydesdale, David Hattery, Bill Holmes, Greg Jenner, Morten Lund, Jennifer Martin, Julia Pettit, David Quinby and Howard Susman are headed to Dallas! Julia Pettit will join the Financing Strategies for Utility-Scale Projects discussion panel, and Bill Holmes will moderate the discussion panel, Energy Storage Market and Policy Developments. Visit Stoel Rives at booth #3043 in the exhibit hall!
GEA Geothermal Energy Expo & GRC Annual Meeting
October 23-26 – San Diego, CA
Stoel Rives attorneys John McKinsey and Erin Anderson will be in attendance at the Geothermal Energy Association Energy Expo, co-located with the Geothermal Resources Council Annual Meeting. Erin Anderson will present during the pre-meeting workshop, held on Friday, October 21 from 8 a.m. – 5 p.m. While you’re there be sure to visit Stoel Rives in the exhibit hall!
CALIFORNIA RPS: Meeting the Mandate
October 24-25 – Los Angeles, CA
On Monday, October 24, Seth Hilton will present, In-State vs. Out-of-State Renewable Resources to Satisfy RPS Requirements from 10:30-11:15 a.m.
Green Energy M&A Outlook for 2012
November 15-16, 2011 – Santa Clara, CA
Stoel Rives’ Duff Bryant and Ed Einowski, will serve as Summit Co-Chairs, and on Tuesday, November 15, Julia Pettit will moderate the discussion panel, The Green Corporate M&A Landscape, from 8:45 - 9:45 a.m. Stoel Rives is proud to be a Platinum Sponsor of this event.
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With the end of 2011 drawing near, many renewable energy developers are seeking to qualify their projects for the Section 1603 cash grant. Developers continue to try to understand the complexities surrounding the grant requirements, especially the determination of when projects are considered to have met the “beginning construction” requirement.
On August 24, I'll moderate a Law Seminars International (LSI) Telebriefing on Section 1603, featuring Stoel Rives partner Greg Jenner and Victoria McDowell, the Compliance Program Manager, Section 1603 Program, U.S. Department of the Treasury.
The TeleBriefing will take place from 10 AM – 11 AM Pacific Time/ 1 PM -- 2 PM Eastern Time. During the briefing, attendees will learn how to meet the “beginning construction” test and receive clarification from the Treasury Department on project requirements. We'll also discuss the fate of projects that fail to qualify for the cash grant.
Registration is available online through Law Seminars International.
Puget Sound Energy (PSE) has filed with the Washington Utilities and Transportation Commission (WUTC) a Request for Proposals for All Generation Sources (the all-source RFP) and a Request for Proposals for Electric and Demand Side Resources (energy-efficiency RFP). PSE filed the draft all source RFP on August 1, 2011 and plans to issue a separate energy efficiency RFP later.
Under the all source RFP, PSE is seeking proposals for energy generation resources as capacity generation resources, as well as transmission products from BPA’s system to PSE's system. PSE is willing to consider both existing generation resources and resources that are under development but expected to achieve commercial operation no later than December 2015. According to PSE, a revised assessment of its portfolio needs and peak customer power requirements demonstrates a need for approximately 500 MW of capacity by the end of 2012. PSE would be willing to consider various commercial arrangements under the RFP, including power purchase agreements, temporal exchange agreements, ownership arrangements (e.g., a transfer of development assets, a build-transfer arrangement, or sale of an existing asset), as well as transmission-only products from BPA’s system.
PSE will be hosting an RFP Proposal Conference on August 16, 2011, in Bellevue, Washington, to discuss the all-source RFP. To register for the conference, email firstname.lastname@example.org. Public comments on the draft RFP are due on September 2, 2011, and PSE expects to receive WUTC approval by September 28. If the schedule holds, PSE plans to issue the final RFP solicitation on October 5, 2011. PSE expects to select a final short list and notify respondents in 1Q 2012.
PSE’s web page for the RFP (including its proposed schedule and the draft RFP itself) can be found here.
My collegue Michael O'Connell issued the legal alert below on a recent significant Interior Board of Land Appeals decision concerning the intersection of tribal cultural resources and a BLM geothermal lease application:
The Interior Board of Land Appeals (IBLA or Board) decision, Earth Power Resources, 181 IBLA 94 (May 12, 2011), deals with BLM action on a geothermal lease application in Nevada. Citing National Historic Preservation Act (NHPA) section 304, 16 U.S.C. § 470w-3, BLM withheld from a geothermal lease applicant an ethnographic study of Ruby Valley that identified a tribal traditional cultural property (TCP) important to an Indian Tribe and disapproved the lease application in order to protect the TCP. The Board overturned BLM’s decision and remanded the case for further action.Continue Reading...
Visit our website for the latest calendar of events. Upcoming highlights include:
Compressed Air Energy Storage (CAES): Lessons Learned from Natural Gas Tolling
July 21 – WEBINAR
Stoel Rives Partners Bill Holmes, Ed Einowski and Marcus Wood will serve as the exclusive faculty this 90-minute webinar, part of the “Law of Renewable Energy Series” presented by Stoel Rives and EUCI.
Renewable Energy in the Pacific Northwest
August 4-5 – Seattle, WA
Join partners Steve Hall, Tim McMahan (conference co-chair) and Michael O'Connell for sessions on "Getting Renewable Power to Market," “Working with Tribes: Lessons from Case Studies in Their Roles as Developers and Commercial Partners,” and “Best Practices for Engaging with Leasing and Permitting Agencies,” among others.
GEA National Geothermal Summit
August 16-17 – Reno, NV
Attorneys John McKinsey, Jennie Bricker, Tami Boeck, Michael O'Connell and Allison Smith are heading to Reno, Nevada for the first annual National Geothermal Summit, presented by the Geothermal Energy Association. Stoel Rives is proud to be a Gold Sponsor at this event.
Renewable Energy in the Midwest States: New Policy, Business and Legal Developments
August 25-26 – Minneapolis, MN
Join Minneapolis-based partners Mark Hanson and Greg Jenner for sessions on "Special Legal Issues for Biofuels Development," and "Commercialization and Financing Structures: What Will Future Deals Look Like?"
National Hydropower Association Alaska Regional Meeting
August 30-31 – Girdwood, AK
Greg Jenner will speak on tax incentives for development of renewable energy, development alternatives, and DOE funding.
Utility Scale Solar Summit 2011
September 13-15 – San Diego, CA
Stoel Rives is proud to be a Platinum Sponsor at this Infocast event, and serve as Chair of the “Solar Project Development Briefing.” Join attorneys Howard Susman, Morten Lund, Greg Jenner, Ed Einowski, Jennifer Martin, David Quinby and Seth Hilton in sunny San Diego. We are pleased to offer a 15% registration discount, use code 115321.
September 20-22 – Washington, DC
Visit Stoel partners Bill Holmes, Ed Einowski and Graham Noyes at booth #819 in the Exhibit Hall. We’ll also be participating in sessions covering wind and energy storage topics.
You’ll see Stoel Rives sponsoring and/or speaking at Turbines, Towers & Vessels in Rhode Island, Northwest & Intermountain Power Producers Coalition (NIPPC) Annual Meeting in Washington, Transmission West Summit in San Diego, ACORE’s REFF West in San Francisco, CanWEA Annual Conference in Vancouver, Solar Power International in Dallas, and many more this fall.
Several requests for proposals ("RFPs") have been issued recently with July deadlines. Here's a brief summary of each:
- Progress Energy Carolinas is seeking proposals for energy and renewable energy certificates from newly constructed or existing wind projects of at least 5 MW to comply with North Carolina's renewable energy portfolio standard. Projects do not have to be located in North Carolina. The deadline for proposals is currently set at 5:00 p.m. EST, July 25. The utility anticipates shortlisting in August and executing final contracts in late October. More information can be found here.
- Tucson Electric Power and UniSource Energy Services are seeking up to 50 MW of Arizona-based wind generation. There will be a bidder teleconference at 1:30 p.m. PST on Monday July 18. Bids are currently due by 4:00 p.m. PPT on August 25 and the utilities expect to make a decision by September 30. Information about the joint request for proposals can be found here.
- The City of Roseville, California, through its electric department, Roseville Electric, seeks to procure eligible renewable energy resources from renewable electrical generation facilities as defined by California's SBX1-2. Targeted procurement is outlined on the request for offer document. The deadline to submit questions is July 22. Responses are currently due July 26 and the City anticipates shortlisting on or about September 30. More information is available here.
- National Grid has issued a second request for proposals for renewable energy in Rhode Island. The Narragansett Electric Company d/b/a National Grid is seeking proposals for capacity, energy, and renewable energy credits under 10-15 year contracts. A bidders conference will be held on July 15 in Rhode Island. Notices of Intent to Bid are currently due by 5:00 p.m. EPT on July 20, and proposals will be due by 5:00 p.m. EPT on August 4. Details can be found here.
The Department of Energy has selected eight projects to receive up to $11.3 million for the research and development of pioneering novel geothermal production technologies. The projects (listed below) will conduct Phase 1 feasibility studies, which will include technical and economic modeling and component design. The Department of Energy will choose the projects that will proceed to Phase II – proving out the designs in a real-world environment.
GeoTek Energy, LLC
up to 2.85 million
Gravity-driven downhole pump
up to $200,000
Single well geothermal system
Lawrence Berkeley National Laboratory
up to $4.99 million
Heat from superheated pressurized carbon dioxide in deep geothermal formations
Lawrence Livermore National Laboratory
up to $874,000
Integrated energy production with carbon capture and storage
Louisiana State University
Baton Rouge, Louisiana
up to $997,000
Circulation of reservoir fluids to increase heat extraction
Physical Optics Corporation
up to $200,000
Wellbore condenser converting hot vapor into cooler liquids
Terralog Technologies USA, Inc.
up to $541,000
Optimization of vertical and horizontal well systems
University of Utah
Salt Lake City, Utah
up to $671,000
Development of deep sedimentary and crystalline reservoirs
Having first reported to our readers in February that LexisNexis had nominated the Stoel Rives Renewable + Law Blog for its Top 50 Environmental Law & Climate Change Blogs for 2011 award, we are pleased to announce we made the list of winners! In publishing its Top 50 list, LexisNexis declared that our Renewable + Law bloggers’ “avowed passion for solar energy, wind energy, biofuels, ocean and hydrokinetic energy, biomass, waste-to-energy, geothermal and other clean technologies is evident in the care they take with this blog-the posts are frequent, the topics are interesting and cutting edge, and the writing is top notch.”
Thanks again to all our readers who make regular use of Renewable + Law Blog and those who wrote in to support us for this award. We're honored and inspired, and we plan to keep those Blogs and letters coming.
The current version of the budget compromise provides relatively good news for projects seeking DOE loan guarantees. During the past several months, renewable energy projects in the DOE’s Loan Guarantee pipeline have been exposed to substantial uncertainty as a result of the budget crisis in DC. The developers of these projects have previously invested substantial resources to apply to the program which would become wasted effort if the program funds evaporate as the projects wait for DOE approval. The Loan Guarantee Program Office led by Jonathan Silver was clearly aware of this issue and prudently allowed all open solicitations to expire in early 2011 without issuing any new ones. The renewable energy project developers’ concern has been that the budget deal would involve a substantial claw back of previously appropriated funds that have not yet been committed to projects.
The battle is not yet resolved but the current compromise is encouraging for these projects. There is a claw back of $18.183 billion in uncommitted funds but these were funds appropriated under provisions that required that the Credit Subsidy Cost to be paid by developers. The Credit Subsidy Cost was the bane of the Loan Guarantee Program as it essentially required the program applicant to cover the present value risk that the project would default on the loan. The Stimulus Bill solved this problem and greatly increased the attractiveness of the Loan Guarantee Program by appropriating funds to cover the Credit Subsidy Cost. Similarly, the current budget compromise appropriates an additional $1.183 billion in funds and allows these funds to be utilized to cover Credit Subsidy Costs. Thus, while the provision claws back funds, these are funds that were not attractive due to program limitations whereas new funds are appropriated to the preferred program. In addition, the proposed legislation imposes an Office of Management and Budget certification of compliance requirement as a control on the program.
The current bill is HR 1473 and is likely to be voted on later this week and thus is still subject to amendments. To obtain the latest details and access to the bill, see the Open Congress site at http://www.opencongress.org/bill/112-h1473/show
COMMISSIONER FLORIO NOTICES ALL-PARTY MEETING CONCERNING 2011 RENEWABLE PORTFOLIO STANDARD PROCUREMENT
On February 11, 2011, California Public Utilities Commission (CPUC) Administrative Law Judge Burton Mattson issued a Proposed Decision conditionally accepting the 2011 Renewables Portfolio Standard (RPS) Procurement Plans for Southern California Edison, Pacific Gas and Electric Company, and San Diego Gas and Electric Company. If adopted, the Decision would set a schedule for the utilities’ 2011 RPS solicitation. The Decision was on the agenda for the CPUC’s March 24, 2011 business meeting, but was held at Commissioner Florio’s request until the April 14 meeting.
On March 17, 2011, Commissioner Florio noticed an all-party meeting on the Proposed Decision for March 25, 2011. Yesterday, Commission Florio circulated an agenda for the meeting. Among the issues raised by the agenda is whether an RPS solicitation in 2011 is necessary and prudent.
Stoel Rives’ Partner Seth Hilton will be present at the all-party meeting, and will provide an update afterwards.
The Oregon Department of Fish and Wildlife (“ODFW”) posted the final draft rules and draft conservation strategy related to the greater sage-grouse. After years of negotiation and numerous public meetings on the ODFW’s approach, the final drafts are open for public comment. On April 22 they will be presented to the Fish and Wildlife Commission for consideration for adoption.
In March of last year the US Fish and Wildlife Service (“USFWS”) determined that protection of the greater sage-grouse was warranted under the federal Endangered Species Act (“ESA”) but was precluded from listing by the USFWS’s need to take action on species facing more immediate or severe threats. The species is now a candidate for listing, but it is uncertain if or when a formal ESA listing may occur. Oregon, through ODFW’s approach to sage-grouse conservation, joins other western states (e.g., Wyoming) in taking preventative state action, at least in part, to preclude the need for an eventual federal listing.
Both the USFWS determination and the ODFW’s conservation strategy identify energy, and renewable energy development specifically, as posing threats to the specie. The ODFW’s conservation strategy points out that there is great potential for geo-thermal, solar and wind energy in most sage-grouse regions in Oregon, but the same windswept ridges that make for great wind facility siting, for example, may also be important sources of accessible winter forage for sage-grouse.
Among other things, the draft rule would formally adopt the ODFW’s Core Area Approach to Conservation and directs the ODFW to maintain maps of sage-grouse core areas. The rule stops short of directly equating sage-grouse core areas with habitat categories under the Fish and Wildlife Habitat Mitigation Policy. By referencing the ODFW’s conservation strategy, the rule instead outlines micro-siting guidance for development projects (e.g. a wind facility) proposed in identified core areas. As part of the siting process, the ODFW recommends that sage-grouse habitat in core areas be classified as “irreplaceable, essential habitat” and impacts on such Habitat Category I areas avoided. In past iterations of the core area maps, much of eastern Oregon, and southeastern Oregon in particular, was identified as being home to sage-grouse core areas.
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
The United States and Iceland have signed a bilateral agreement aimed at increasing the world's understanding of advanced geothermal technologies and accelerating their deployment. The new agreement is designed to allow the US and Iceland to exchange researchers, establish joint projects, and create educational opportunities to accelerate advanced geothermal development, and to identify key obstacles to increasing the use of this renewable energy resource.
The signing of the bilateral agreement between the United States and Iceland is part of the international meetings on geothermal energy hosted this week by Iceland in Reykjavik (which you will remember was one of the few airports unaffected by Iceland's glacial eruption earlier this year).
On Friday, the US Department of Energy ("DOE") announved a $15 million funding opportunity for geothermal energy research and development projects that:
- Address the environmental risk factors associated with heat recovery from the earth's subsurface (earthquakes, water consumption and pollution);
- Add innovative methods for extracting heat from geotlogic formations, particularly permeable sedimentary formations; and
- Reduce financial risks.
Successful applications will address all three of the listed issues. Applicants should note that if the application does not address the first two elements listed above, it will be tossed out. Applicants must submit a pre-application concept paper by October 1, 2010, and will be informed by DOE if they are eligible to submit a full application (whihc will be due November 30, 2010).
The funds will divided between feasibility studies (Phase 1) and validation and proof (Phase 2) with the bulk of the funds being awarded for Phase 2 activities. The funds will be paid out over 3 years and there is a 20% cost share.
Eligible applicants include most domestic entities who are encouraged to form consortia to apply. Foreign entities or persons may participate as a subrecipient of the funds.
On August 12, 2010, Energy Secretary Steven Chu announced a new loan guarantee solicitation for renewable energy manufacturing projects. The Commercial Technology Renewable Energy Manufacturing Projects solicitation (the "Solicitation") is supported by the American Recovery and Reinvestment Act (the "Recovery Act") through Section 1705 of the Loan Guarantee Program and is focused primarily on providing new green energy jobs and the deployment of renewable energy technologies that reduce greenhouse gas emissions.
The solicitation specifically identified "Eligible Projects" to include renewable energy manufacturing projects or facilities located in the United States that:
- Manufactures Commercial Technology products that support the generation of electricity or thermal energy from renewable resources;
- Has Project Costs greater than seventy-five million dollars ($75,000,000);
- Is able to obtain a credit rating equivalent of "BB" or better from Standard & Poor's or Fitch, or "Ba2" or better from Moody's, as evaluated without the benefit of any DOE guarantee or any other credit support;
- Will create or retain jobs in the United States; and
- Otherwise meets all applicable requirements of Title XVII, including Section 1705, the Solicitation, including all attachments and all applicable requirements of the Recovery Act.
The Solicitation also provided, for illustrative purposes, examples of the types of Eligible Projects that may qualify, which include the following:
- wind energy component or systems manufacturing facilities;
- solar photovoltaic (PV) component or system manufacturing facilities;
- concentrated solar power component or system manufacturing facilities;
- hydropower component or system manufacturing facilities;
- geothermal component or system manufacturing facilities;
- other geothermal power cycle component or system manufacturing facilities; or
- ocean wave, tidal, and river current (e.g. hydrokinetic) component or system manufacturing facilities
On June 30, 2010, the U.S. Department of Energy ("DOE") launched its Technology Commercialization Portal (the "Portal"). The Portal is an online resource that provides a mechanism for investors, entrepreneurs and companies to identify new technologies coming out of DOE laboratories and other participating research institutions. Relevant technologies include:
- Advanced Materials
- Biomass and Biofuels
- Building Energy Efficiency
- Electricity Transmission and Distribution
- Energy Analysis Models, Tools and Software
- Energy Storage
- Hydrogen and Fuel Cell
- Hydropower, Wave and Tidal
- Industrial Technologies
- Solar Photovoltaic
- Solar Thermal
- Vehicles and Fuels
- Wind Energy
The Portal contains marketing summaries about the various DOE technologies that are available for licensing. Each marketing summary describes a technology's applications, advantages, benefits and state of development. Further, the Portal also provides access to information on patents and patent applications that have been created using DOE funding since 1992.
The Portal is located at http://techportal.eere.energy.gov/
The U.S. Treasury Department today released on its website additional guidance regarding the "begin construction" requirement for qualifying for the 30% ARRA cash grant. To qualify for the grant, a project either must be placed in service in 2009 or 2010 or, if construction begins on or before December 31, 2010, must be placed in service by a specified credit termination date (December 31, 2012 for large wind projects; December 31, 2013 for biomass, certain geothermal and other projects; and December 31, 2016 for solar and other projects). For the Stoel Rives Energy Tax Alert on the topic, click here.
U.S. Energy Secretary Steven Chu recently announced conditional commitments to provide loan guarantees in connection with two geothermal projects located in Oregon and Nevada. Specifically, on June 10, 2010, Secretary Chu announced that the Department of Energy offered a $102 million conditional commitment for a loan guarantee to U.S. Geothermal, Inc. to construct a 22 megawatt geothermal power project in Malheur County in southeastern Oregon. The project is slated to use an improved technology to extract energy from rock and fluids in the earth's crust more efficiently. In addition, U.S. Geothermal estimated that the planned project will create 150 jobs during the 20-month construction period and employ 10 skilled full-time workers when it begins operating in 2012.
On June 15, 2010, Secretary Chu announced that the Department of Energy offered a conditional commitment to provide a partial guarantee for a $98.5 million loan by John Hancock Financial Services to the Nevada Geothermal Power Company ("NGP") for a 49.5 megawatt geothermal project in Humboldt County in northwestern Nevada (the "Blue Mountain Project"). This conditional commitment is the first access to a loan guarantee through the Financial Institution Partnership Program ("FIPP"), which was launched by the Department of Energy on October 7, 2009. Under a FIPP financing, the Department of Energy provides a guarantee for up to 80 percent of a loan provided by qualified financial institutions to a renewable energy project utilizing commercial technologies. In connection with the loan guarantee for the Blue Mountain Project, John Hancock Financial Services was the lender-applicant and lead lender. The Blue Mountain Project "consists of a geothermal well field, fluid collection and injection systems that enable energy to be extracted from rock and fluid below the Earth's surface, and a power plant that converts geothermal energy into electricity." The electricity generated by the project will be sold to Nevada Power Company under a 20-year power purchase agreement.
The Washington State Department of Commerce (formerly the Department of Community, Trade and Economic Development or CTED) has announced that it is attempting to revise Washington’s comprehensive energy plan (the “State Energy Strategy”).
The State Energy Strategy was last revised in 2003, and it does not serve current energy realities and forecasts. Therefore, the Washington State Legislature has tasked the Department of Commerce with updating the State Energy Strategy while taking account the following three goals and nine principles:Continue Reading...
The U.S. Department of Energy (“DOE”) today announced up to $20 million for research, development, and demonstration of cutting-edge geothermal technologies. DOE want projects that demonstrate the technical and economic feasibility of certain non-conventional geothermal energy technologies, such as low-temperature fluids, geothermal fluids recovered from oil and gas wells, and highly pressurized geothermal fluids.
Specifically, the funds will be allocated to research in the following areas:
- Low-temperature geothermal fluids at temperatures up to 300° Fahrenheit (F) or approximately 150° Celsius (C).
- Geothermal fluids produced from productive, unproductive, or marginal oil and gas wells, mining operations or other hydrocarbon or mineral extraction processes.
- Highly pressurized or "geopressured" fluid resources that show potential for cost-effective recovery of heat, kinetic energy, and gas.
- Innovative cooling systems; systems with more efficient heat exchanging materials or systems that maximize energy output through a combination of electricity generation and direct-heat technologies.
All US entities are eligible including universities, nonprofit and for-profit private entities, State and local governments and federally funded contractors. The cost share is 20%. Applications are due July 9, 2010.
The complete funding opportunity announcement can be viewed here: https://www.fedconnect.net/FedConnect/PublicPages/PublicSearch/Public_Opportunities.aspx
On Thursday March 11, 2010, the California Public Utility Commission (the "CPUC") created a market for tradable renewable energy credits ("TRECs") in the state. That's big news. In its 149-page decision, the CPUC stated that investor-owned utilities ("IOUs"), energy service providers, and community choice aggregators may now use TRECs to comply with California's ambitious renewable portfolio standard ("RPS"). These entities are now permitted to purchase a portion of their RPS compliance from generation sources other than those they own (e.g., distributed solar generation facilities within the state and certain out-of-state facilities).
Proposed legislation in the Senate would greatly limit the effectiveness of the grant in lieu of tax credits for renewable energy projects under section 1603 of the American Recovery and Reinvestment Act.
The section 1603 grant currently applies to renewable energy projects, such as wind, solar, geothermal and biomass, that are placed in service before 2011 or for which construction begins in 2009 or 2010 (and that are placed in service by certain dates). In its current form, if a project qualifies for the grant, the Treasury Department is required to pay the grant.
Expressing concern that a significant portion of the grants paid so far have gone to non-U.S. companies, Senator Charles Schumer (NY) and three other Democratic senators have sponsored a bill that would make payment of the grant subject to the discretion of the Treasury Department. It also would make the grant subject to the Buy American requirements of the stimulus bill, and would require that Treasury conduct an analysis of the "domestic job preservation and creation provided by" a project for which a grant application is submitted.
Various trade associations involved in renewable energy (such as AWEA, GEA and SEIA) are taking immediate action to register their opposition. Their focus will be on the incorrect assumptions underlying the proposal (for example, that it does not create U.S. jobs) and that, if enacted, it likely would destroy the effectiveness of the program.
We encourage our readers to register their strong opposition with their members of Congress and with the trade associations with which they are associated. The more opposition that is registered, and the longer the proposal drags out, the less likely it is to be enacted.
Read the March 4, 2010 Stoel Rives Law Alert on this proposed legislation.
Stoel Rives would like to congratulate REC Silicon and SolarWorld on their awards of tax credits by the IRS and DOE. These two companies, combined, received over 10 percent of all the tax credits awarded nationwide under section 48C of the tax code.
On Friday, January 8, the Department of Energy awarded to 183 companies $2.3 billion in tax credits for projects designed to expand, re-equip or establish manufacturing facilities for the production of equipment used to produce renewable and other green energy. The $2.3 billion was the full amount authorized by Congress in the stimulus bill as part of new section 48C of the tax code.
Applications for the credit far exceeded the dollar amount of credits available. Stoel Rives is proud to have been directly involved with these companies in preparing the complex applications for the credit. REC Silicon received the largest award of any company -- $154.8 million. SolarWorld received the seventh largest award -- $82.2 million. These credits will provide these companies with a dollar-for-dollar offset against their federal income tax liability.
There is considerable discussion in Congress regarding adding additional funds to the section 48C program, which will permit another round of awards. Please contact your favorite Stoel Rives attorney if you have any questions about these awards or extension of the section 48C credit.
On January 14, the Geothermal Energy Association will host a one-day Geothermal Energy Finance Forum in New York. Almost 30 speakers are confirmed for the Forum, including heavy hitters from investment groups and banks, geothermal energy developers, and the DOE and Treasury. Senate Majority Leader Harry Reid (D-NV) will deliver the keynote address. My colleague, John McKinsey, will speak on federal and state legal and regulatory issues associated with the development of geothermal resources. The agenda for the Forum is jam-packed with panels and presentations on cost and financial modeling for geothermal projects; government finance and incentives, including under the American Recovery and Reinvestment Act; project development and design; and risk mitigation, along with myriad case studies from the likes of US Geothermal, Ormat, Ram Power, Raser Technologies, TAS, Vulcan Power, Nevada Geothermal Power, and Enel. Mayor Bloomberg has even proclaimed January 14, 2010 as "New York City Geothermal Energy Day."
The California Public Utilities Commission ("CPUC") issued a proposed decision on December 23, 2009 that would, if adopted, allow California investor-owned utilities, energy service providers, and community choice aggregators to purchase renewable energy credits alone, without the associated energy (sometimes referred to as "unbundled renewable energy credits ("RECs)" or "tradable RECs"), to satisfy their obligations under California's RPS. California's largest investor-owned utilities—Pacific Gas and Electric, Southern California Edison, and San Diego Gas and Electric—would be limited to meeting no more than 40% of their annual procurement targets under the RPS with tradable RECs, and a price cap of $50 would be imposed. The CPUC will revisit both the percentage cap and the cost cap and whether those caps should be revised within 24 months of the decision.
Out-of-state renewable energy projects could be adversely impacted if the proposed order were adopted. The proposed decision would define all renewable generation purchased from out-of-state facilities1 as the purchase of unbundled or tradable RECs, making any out-of-state renewable energy sale subject to the cap that bars the large investor-owned utilities from using such sales to meet more than 40% of their overall RPS obligation. Although the proposed decision states that this classification would apply only to contracts signed on or after the effective date of the decision, contracts signed prior to the effective date would be considered REC-only contracts from the effective date forward, and would be "subject to the limits and rules applying to REC-only contracts" according to the proposed decision. Furthermore, although the purchase of tradable RECs from out-of-state facilities would be permitted, the delivery requirement in the RPS legislation would still have to be met, so a comparable amount of power would have to be imported into the state, along with the RECs. The jurisdiction to determine whether and how this delivery requirement is met, however, still remains with the California Energy Commission.
Comments on the proposed decision are due on January 19, 2010, and reply comments are due January 25, 2010.
For additional information about the history and effect of the proposed decision, see our Stoel Rives alert on the topic.
On December 2, House Ways & Means Chairman Rangel and Ranking Member Camp introduced a tax technical corrections bill (H.R. 4169). We will likely see an identical version introduced in the Senate very soon.
Included among the technicals are changes to the Grant in Lieu of ITC under section 1603 of ARRA. The most important change is one that allows the grant to be made to certain tax-exempt organizations.
Under current law, the grant may not be made to a governmental entity, tax-exempt entity, certain other entities (including Indian tribes and electric coops), or a pass-thru entity that includes any of the former as an equity owner. This provision has made it impossible for these organizations (or funds that include such organizations) to invest in renewables and receive the grant unless they establish a blocker (taxable) corporation to hold their interest in the project. Many entities are uncertain whether they have the authority to establish taxable corporations.
The technical, if enacted, would provide that a grant may be made to tax-exempt organizations, retirement funds, and to state colleges and universities (but not other governmental entities) if the income from the project is treated as income from an unrelated trade or business (“UBTI”). In most situations, this would be the case where power from the qualified facility was being sold. It is not clear whether this provision would apply if the power was being used for the entity’s own purposes (not sold). Where applicable, the technical will eliminate the need for a blocker corporation in cases where the tax exempt or retirement fund is an investor or where a college or university is selling the power. Note -- the technical does not eliminate the need for a blocker corporation in order for the entity to qualify for accelerated depreciation.
Nevertheless, this could be a major change, particularly for colleges and universities that are selling renewable power but which otherwise could not receive the grant.
A cautionary note: the technical has not yet been enacted and it is not clear when it will be. However, to even be introduced, a technical has to have been agreed upon by both tax writing committees, which means its enactment is virtually assured eventually.
Please contact your favorite Stoel Rives attorney with any questions.
Come Visit Us at E3, The Midwest's Premier Energy, Economic and Environmental Conference, on Nov. 17, 2009
As a proud Exhibit Hall sponsor of E3, the Midwest’s premier energy, economic and environmental conference, Stoel Rives LLP would like to encourage you to attend this annual event. Hosted by the University of Minnesota’s Initiative for Renewable Energy and the Environment, E3 will focus this year on the intersection of innovative technologies and policies, environmental benefits and emerging market opportunities across the renewable energy spectrum.
Stoel Rives attorneys Mark Hanson, Bill Holmes and Greg Jenner are part of the event faculty. Mark will moderate a panel presentation on the challenges and opportunities of converting carbon dioxide to fuels. Bill will moderate a panel discussing exactly how sophisticated smart power grids need to be in order to scale up renewables as a major U.S. energy contributor. Greg, meanwhile, will participate in a panel discussion on the most efficient and effective strategies for financing renewable energy projects.
For more information and to register, please visit the following link: http://bit.ly/XUUjJ. We hope to see you there, and encourage you to visit our booth (#24). In addition to our presenters, Debra Frimerman, Kevin Johnson, Kevin Prohaska, Katie Roek, Mary Sennes, Joe Thompson and Vicki Twogood will be available to discuss any questions you may have. Don’t forget to pick up complimentary copies of our Law of Series handbooks, including The Law of Solar, The Law of Wind, The Law of Biofuels, The Law of Building Green, Lava Law,and our most recent additions The Law of Algae and Show Me the Money: The Law of the Stimulus (2d ed).
The State of Minnesota’s Office of Energy Security (OES) is requesting proposals from organizations that are engaged in or will engage in the manufacture of renewable energy systems or fuels, energy storage systems, geothermal energy systems for heating and cooling, components of these systems, or equipment for the manufacture of these systems or components.
The maximum award is $1 million. Up to a total of $2 million is available to all recipients. OES anticipates that two to six projects will be selected for awards under this solicitation.
All work to be performed within a proposed scope of work must be completed no later than June 30, 2011. An applicant must provide at least 40 percent of the total cost of the proposed scope of work. Applicant’s match may be cash or in-kind.
Each applicant must submit a notice of intent no later than December 4, 2009 to be eligible. Final proposals are due on December 18, 2009. OES anticipates provisional notification of successful applicants no later than January 29, 2010. Final selection will be contingent on determination by U.S. Department of Energy of compliance with the National Environmental Policy Act.
For more information and to download a copy of the RFP, please visit www.energy.mn.gov and click on Active Request for Proposal (RFP).
Seeing how Stoel Rives is a Silver Sponsor of the Geothermal Energy Expo, held in Reno until October 7, 2009, it appears timely to talk about some geothermal energy news (click here for conference details, come by and see us at booth #520).
On October 2, 2009, the U.S. Department of Energy (DOE) announced the Geothermal Research Initiative, a program to demonstrate low temperature geothermal electrical power generation systems using oilfield fluids produced at the Rocky Mountain Oilfield Testing Center. This program is moving forward as a collaboration between the Office of Fossil Energy and the Office of Energy Efficiency and Renewable Energy’s Geothermal Technologies Program.
The Geothermal Research Initiative will demonstrate the versatility, reliability, and deployment opportunities which utilize the co-produced water from oilfield operations. These systems are designed to offset the electricity usage of the oilfield while also creating a second use for water which would otherwise be discarded. The DOE believes that the co-produced water can become a significant energy resource with an estimated 10 barrels of hot water being produced along with each barrel of oil in the United States.
The program will produce operational and performance data which will be freely available to the public. The goal of the program is to educate industry and the public about the potential for geothermal energy production from co-produced water and establish the best systems for particular climates.
Avista announced earlier this week that it is seeking proposals from suppliers of renewable energy. Avista wants to acquire roughly 35 average megawatts (aMW) of long-term qualified renewable energy, to be supplied by the end of 2012 . The company is looking for proposals from wind, solar, geothermal, biomass, qualified hydroelectric and other renewable resources that meet Washington's RPS standard.
Avista plans to host a conference call for potential bidders on September 30. Responses to the request for proposals are due by October 23, 2009. The full RFP and instructions for bidders can be found here.
In an earlier blog, my colleagues, Debra Frimerman and Janet Jacobs reported about the Rural Energy for America Program (“REAP”), in general and specifically in regards to small wind projects. REAP is a Department of Agriculture (“USDA”) program that provides grants and loan guarantees to agricultural producers and rural small businesses to purchase renewable energy systems, make energy efficiency improvements and conduct feasibility studies for renewable energy systems. Eligible renewable energy systems include those that generate heat, electricity or fuels from wind, solar, biomass, geothermal, hydro power, and hydrogen based feed stocks.
The USDA has announced that it has awarded more than $13 million in REAP funds for 233 renewable energy projects in 38 states. Examples of the awards include a $1.8 million guaranteed loan and $500,000 grant for Milford Wind Energy, LLC; a $435,271 guaranteed loan and $435,271 grant for Unaka Forest Products, Inc.; and a $15,000 grant to Pacifica Marine, Inc.
On a webinar yesterday, Michael Fraser, Senior Program Manager at the DOE, advised that the DOE plans to release a commercial solicitation for the loan guarantee program later this month or in early October. The current solicitation that is active for renewable energy projects requires that projects satisfy the innovative requirement. A project is defined as innovative only if it has not been employed in three or more similar applications in the US of five years duration. Thus many established renewable energy projects such as those utilizing wind or geothermal technology that is tested and proven, cannot apply under the current solicitation. The release of a commercial soliciation has been eagerly awaited by renewable energy project developers. These loans will be backed by private banks as well with DOE typically only guaranteeing 80-90% of the loan. DOE hopes that this structure will motivate private lenders to perform much of the due diligence necessary and only bring shovel-ready and bankable projects to the table. Interest rates on the loan are anticipated to run at Treasury plus 25 to 75 basis points. This is a very attractive interest rate but there are substantial fees associated with the program that will offset a portion of this value. The other key factor for projects to consider is whether they will be able to meet American Reinvestment and Recovery Act requirements and thus be eligible to have their credit subsidy costs covered by government funding. I am cautiously optimistic that DOE will be successful with these efforts and we will see a flurry of good projects moving forward Q1-Q2 2010 with the assistance of this program.
The University of Minnesota’s annual conference on Energy, Economics and the Environment – E3 – will be held in St. Paul on November 17. Hosted annually by the University of Minnesota’s Initiative for Renewable Energy and the Environment (IREE), this year’s conference will explore current technologies, environmental benefits and market opportunities in renewable energy.
Stoel Rives will be a sponsor of the E3 conference and will, as usual, host a booth at the event. Minneapolis tax partner Greg Jenner will join a panel to discuss “What’s the most efficient and effective strategy for financing renewable energy projects?” To review the agenda and register for the conference, click here.
The U.S. Department of Energy is hosting a free webinar on "How to Build a Strong Application" for the DOE Loan Guarantee Program on Tuesday, September 8, 2009 from 1:00 PM - 2:00 PM EST. The webinar is intended to explain the loan guarantee program and help lenders and applicants navigate the application process. DOE will also be providing suggestions on how to create a strong loan guarantee application.
DOE recently released two solicitations under the program for innovative energy efficiency, renewable energy and advanced transmission and distribution technologies and transmission infrastructure investment projects. DOE is particularly interested in wind, closed-loop biomass, open-loop biomass, geothermal, landfill gas, trash-to-energy, hydropower and solar projects that are able to commence construction before September 30, 2011.
DOE will be hosting a series of free webinars on the application process over the next few months.
Treasury Secretary Tim Geithner and Energy Secretary Steven Chu announced the first awards of cash grants in lieu of the investment tax credit (ITC) today. The total award value was over $502 million. Recipients include projects in Colorado, Connecticut, Maine, Minnesota, New York, Oregon, Pennsylvania and Texas. Click here for a detailed list of the awards announced today. Additional awards will be announced in the coming weeks.
For more information on this program and the application process, please see the Stoel Rives Energy Law Alert: Treasury Issues Guidance on Applications for Grants in Lieu of the ITC and PTC.
From my colleague Adam Walters:
On August 20 the Australian government announced the passage of a bill quadrupling its Renewable Energy Target (RET) to ensure that 20% (approximately 45,000 GWh) of Australia’s electricity is generated from renewable energy sources by 2020.
How does Australia’s RET Scheme Work?
The RET scheme is an expansion of Australia’s Mandatory RET scheme introduced in 2001, the first of its kind in the world. It works through the creation and sale of Renewable Energy Certificates (RECs) by renewable power generators to “liable parties” (mainly large-scale electricity utilities and consumers), who must provide a designated quantity of REC’s to Australia’s renewable energy regulator to demonstrate compliance and avoid having to pay charges for any shortfall. One of the changes brought about the new legislation is to increase from $40/MWh to $65/MWh.
Renewable energy sources eligible for accreditation under the RET scheme include: solar, wind, hydro, tidal, wave, biomass and geothermal, as well as solar water heaters and other smaller generation units. Hydro has historically dominated Australia’s renewable energy landscape, but recent project announcements and funding opportunities for wind and solar projects signal greater diversification of the industry, particularly for proven technologies.Continue Reading...
On August 21, NV Energy issued a press release reminding renewable energy developers of that it has issued a Request of Information (RFI) for renewable energy that can be provided on a short-term basis. This solicitation is separate from NV Energy's recently announced 2009 Renewable Energy Request for Proposals. NV Energy will consider proposals for solar, wind, geothermal, biomass and other resources eligible for portfolio energy credits under the Nevada renewable portfolio standard.
NV Energy is now looking for proposals from entities that can deliver renewable energy to its system on or after Oct. 1, 2009 and for a period of one month to three years.
Parties interested in submitting a response to the RFI, or those seeking more information related to the RFI or renewable energy laws can contact NV Energy at: ShortTermRFI@nvenergy.com . In addition, prospective bidders can email any questions to Ron Helbing, email@example.com.
Bidders must submit their responses to NV ENergy's short term renewables solicitaion by 9:00 AM (PPT) on Sept. 2, 2009.
Today, the Department of Energy (DOE) issued a notice of proposed rulemaking to amend 10 CFR Part 609, the rule regulating the loan guarantee program authorized by section 1703 of Title XVII of the Energy Policy Act of 2005. The two principal goals of section 1703 of Title XVII are to encourage commercial use of new or significantly improved energy-related technologies and to achieve substantial environmental benefits. (See these recent alerts regarding the DOE loan guarantee program and the related application process)
After reexamining Title XVII, the DOE has concluded that the statute does not require a first lien on all project assets. DOE has discovered that its current requirement that it be in lien position is in conflict with the financing structure of many energy projects. For example, many utility scale power plants are jointly owned by public power agencies, cooperative power systems and investor-owned utilities. In these cases, it may not be commercially feasible to obtain a lien on all project assets or the credit of a sponsor may be sufficient to support a more modest pledge of assets.
Furthermore, DOE has found that other parties are interested in participating as co-lenders, co-guarantors, or insurers of Title XVII loans. However, these other parties expect to share, on a pari passu basis, in any collateral securing such loans.
Consequently, DOE proposes two amendments to the current rules:
- Delete the requirement of a first priority lien on all project assets and leave to the Secretary (of DOE) the determination of an appropriate collateral package, as well as intercreditor arrangements; and
- Allow the Secretary (of DOE) to determine if pari passu lending is in the best interests of the United States
The Department of Energy (DOE) announced this week that up to $22 million from the Recovery Act would be allotted to up to 4 eligible communities nationwide in order to encourage utility-scale renewable energy systems that provide clean, reliable, and affordable energy supplies for their communities, while creating jobs and new economic development opportunities. The projects will demonstrate how multiple renewable energy technologies, including solar, wind, biomass, and geothermal systems, can be deployed at scale to supply clean energy to communities. Eligible applicants are local and state governments, Indian Tribes and Tribal Energy Resource Development Organizations or Groups.
Successful applicants will be awarded financial assistance to support the implementation of an integrated renewable energy deployment plan for a community, and the construction of renewable energy systems. DOE expects each project to also have substantial private sector investment in addition to the funds from DOE. Completed applications are due September 3, 2009 and the DOE will select awardees by the end of November 2009.
Washington previously received $60.9 million in Recovery Act funding for its State Energy Program (“SEP”). The Washington Legislature later provided $38.5 million to the Washington State Community, Trade and Economic Development (“CTED”) agency to administer a loan and grant program for eligible projects in the areas of energy efficiency, renewable energy and clean energy innovation (see our earlier blog entry here for more details). The deadline for submitting a notice of intent to apply is July 27, 2009 at 5:00 p.m. Pacific time, and the application is due August 17, 2009 at 5:00 p.m. Pacific time.
I attended an informational meeting held by CTED on July 13, 2009. The meeting provided an overview of the loan and grant program, as well as funding details, eligibility guidelines and evaluation criteria. Eligible projects can receive between $500,000 to $2 million in loans and grants in the first round, with the requirement that applicants provide other sources of funding at least equal to the amount of the loan or grant request. The non-SEP funding may include amounts spent or committed to the project since January 1, 2009. Projects will be evaluated based on the feasibility and quality of the project plan, the experience and qualifications of the project team, the ratio of matching funds to SEP funds, job creation, and energy savings/production. CTED intends to announce award decisions in September 2009.
The American Recovery and Reinvestment Act of 2009 (ARRA), which was enacted in February, permits an applicant to receive a grant from Treasury in lieu of claiming investment tax credits (ITCs) or production tax credits (PTCs).
Today the U.S. Treasury Department issued much-anticipated guidance concerning applications to receive cash grants in lieu of claiming income tax credits for certain renewable energy projects. Although the guidance includes a sample application form, the U.S. Treasury has stated that it will not accept applications until August 1.
If you have questions about today's Treasury Department guidance and grants in lieu of ITCs or PTCs, contact:
On July 1, 2009, Washington State’s Department of Community, Trade and Economic Development (“CTED”) issued application guidelines and forms for its State Energy Program (“SEP”) (available by clicking here). The American Recovery and Reinvestment Act of 2009 (the “Recovery Act”) provided $60.9 million in new funding for Washington’s SEP. Subsequently, the Washington Legislature allocated $38.5 million to CTED to administer a loan and grant program for energy efficiency and renewable energy program (see our client alert, available here, regarding the legislative action).Continue Reading...
We welcome energy attorneys Morten Lund and David Quinby to the firm’s San Diego office as members of the Energy and Telecommunications group. They join attorneys Howard Susman and Brian Nese. The San Diego office has relocated to a larger space at 12265 El Camino Real, Suite 303, to accommodate further expansion (new contact information below).
The California energy team's capabilities also include real estate, land use and permitting, equipment procurement and construction, state and federal regulation, environmental matters, and dispute resolution.
Stoel Rives has received a national ranking for its Renewables and Alternative Energy practice from Chambers USA: America's Leading Lawyers for Business (2009), rating among the top law firms in this category. The firm has been at the forefront of growth in renewables in recent years and represents many of the industry leaders in solar, wind energy, geothermal, biomass, hydroelectric, ocean, combined-cycle natural gas, carbon sequestration and biofuels project development in California, the United States, Canada and abroad.
For more information about the Stoel Rives Renewable Energy Group, visit www.stoel.com/renewableenergy or contact:
Show me the Money: Florida, Idaho, and Kansas State Energy Programs Received $77.1 Million from the Recovery Act
On June 24, 2009, the Department of Energy (“DOE”) announced more than $204 million in Recovery Act funding to ten states for their State Energy Programs ("SEPs").
Here is a summary of how the monies will be used in Florida, Idaho, and Kansas:
Florida's SEP will fund energy efficiency, renewable energy, and alternative fuels projects in the state. Florida will deploy these funds through several loan and grant programs to promote the commercialization of new clean technologies. Florida was awarded $50.4 million, and will receive an additional $63 million after demonstrating successful implementation of its SEP.
Idaho's SEP will launch a set up new programs, including the Renewable Energy Business Development Program, to further renewable energy development in the state while creating new jobs and stimulating the economy. Further, new zoning regulations will be created to attract renewable energy developers and projects. Idaho received $11.4 million and will receive more than $14 million in additional funding after demonstrating successful implementation of its SEP.
Kansas's SEP will launch several initiatives to boost energy efficiency in commercial buildings, increase financial options for renewable energy, and increase cost savings for individual homeowners in its state. A portion of the money will also be deployed to create a new utility rate price plan and to fund an energy audit rebate plan. Kansas received $15.3 million and expects to receive an additional $19 million after demonstrating successful implementation of its SEP.
My colleagues are blogging on the other states that received funds.
Labor unions are seeing a rare growth opportunity in green power. Despite the recession, there has been a building boom in green energy, in particular solar and wind projects. As reported recently in the New York Times, labor unions see something in green energy for them as well, and they're using intense political pressure to get it.
When a new solar or wind project is being built, a union will approach the builder and demand that it use only union labor on the project. If the builder agrees, the union then urges local regulators to quickly approve the project; if the builder refuses, however, the union then raises myriad environmental concerns with regulators in an attempt to stall or even completely derail the project. Apparently, a union-built solar installation won't have the same impact on the habitat of the short-nosed kangaroo rat or the ferruginous hawk as a non-union one. Right.
These tactics aren't new; labor unions have made aggressive use of the environmental laws for years to put pressure on traditional energy producers to use union labor. But, with union membership in an overall decline, unions are desperate to maintain relevance in the growing green economy.
Today, the Department of Energy (“DOE”) announced more than $204 million in Recovery Act funding to ten states for their State Energy Programs ("SEPs").
Here is a summary of how the monies will be used in Connecticut and Utah:
Connecticut will use its SEP funding to further a variety of programs. Examples include the deployment of alternative-fuel vehicles and in-home energy audits. In-home energy audits involve a specialist performing an energy assessment, weatherizing the home, and installing energy conservation devices. After demonstrating successful implementation of its plan, the state will receive an additional $19 million, for a total of $38 million.
Utah will use its SEP funding to collect data about potential renewable energy resources in the state and to improve energy efficiency. The energy efficiency program will provide financial incentives to upgrade residential, commercial, public education, and government buildings. New construction developments will also qualify for rebates if they meet specific energy efficiency goals. After demonstrating successful implementation of its plan, the state will receive an additional $17 million, for a total of $35 million.
My colleagues are blogging on the other 8 states that received funds today.
In October 2008, the Department of Energy (“DOE”) agreed to provide $43.1 million for 21 research projects to research, develop and demonstrate enhanced Geothermal Systems (“EGS”) which are next-generation geothermal energy technologies capable of producing baseload electricity across the United States. DOE's geothermal technologies program works in partnership with U.S. industry to establish geothermal energy as an economically competitive contributor to the U.S. energy supply. With cost share by the applicants, the public-private investments came to approximately $78 million.
One of the recipients selected by the DOE was Stanford University in California whose proposal included the development of reservoir engineering approaches including nanotechnology. This week Stanford announced that it had developed a method to learn more about the fracture systems in geothermal reservoirs by using tiny particles (nanoparticles) as tracers to characterize fractured rocks. The ultimate goal of the Stanford project is to utilize the nanoparticles as sensors to characterize subsurface fractures.
You can learn more about the DOE’s geothermal program at http://www1.eere.energy.gov/geothermal/
The Naval Air Warfare Center has issued a presolicitation for geothermal investigations at Eastern Lava Mountains, Almond Mountain, and Southern Slate Range Naval Air Weapons Station China Lake, California.
The investigations shall be conducted in two phases. The first phase consists of a geologic field study, fault trenching, thermochonologic sampling and analysis, and geologic modeling. The second phase will be for resource refinement, drilling support, and other exploration.
The final request for proposal is expected to be issued on June 22, 2009. For more information, contact firstname.lastname@example.org and reference solicitation # N6893609R0076
The American Recovery and Reinvestment Act provides almost $94 billion dollars in direct and indirect spending to clean energy company and projects. See Show me the Money: A Guide to Sources of Funding through the American Recovery and Reinvestment Act.
On June 17, 2009, I will be speaking in Cle Elum, Washington about how to get your project "shovel ready" for Stimulus Funding. The seminar will also include sessions on identifying sources of funding and application mechanics.
On June 1, 2009, the Department of Energy ("DOE") announced plans to deploy $256 million from the American Recovery and Reinvestment Act ("Recovery Act") to be used to improve the energy efficiency of the American economy. Three recent DOE Funding Opportunity Announcements ("FOAs") have been issued in conjunction with this Recovery Act announcement. Additionally, a related FOA has been announced using funds appropriated outside of the Recovery Act. The recently announced funding will support projects in three areas: (1) sustainable energy infrastructure and energy efficient industrial technologies, (2) improved energy efficiency for information and communication technology and (3) advanced materials in support of clean energy technologies and energy-intensive processes.
On May 27, 2009, President Obama announced that the Department of Energy ("DOE") would deploy $350 million from the American Recovery and Reinvestment Act ("Recovery Act") to be used to expand development, deployment, and use of geothermal energy throughout the United States. Four recent DOE Funding Opportunity Announcements ("FOAs") have been issued in conjunction with this announcement. The recently announced Recovery Act funding will support projects in five areas: (1) geothermal demonstration projects, (2) enhanced geothermal systems ("EGS") research and development, (3) innovative exploration techniques, (4) the creation of a national geothermal data system and a resource assessment and classification system, and (5) ground source heat pumps.
For more specific information, see this alert
Renewable energy developers often use limited liability companies (LLCs) as project companies and to form entities for other purposes. My partner Doug Batey has started a new law blog that will likely be helpful to those charged with setting up, understand and maintaining these LLCs. Here's today's announcement:
Stoel Rives LLP is pleased to introduce its new LLC law blog, LLC Law Monitor, at www.llclawmonitor.com
The LLC Law Monitor focuses on the rapidly developing laws affecting limited liability companies. LLCs are a popular form of business entity and are a relatively new development in the law. LLC statutes vary from state to state, and cases of first impression are being decided by state courts every month.
In light of this new and evolving legal environment, Stoel Rives has launched LLC Law Monitor to provide business executives, attorneys, accountants and other professionals engaged in or working with LLCs with timely updates and insights on the new and developing laws shaping this burgeoning business sector.
LLC Law Monitorauthor Douglas L. Batey has nearly 30 years of experience advising executives on corporate and business legal matters. His experience includes counseling clients in a wide range of industries on company formation, mergers and acquisitions, and general corporate governance matters.
We hope that you will find the LLC Law Monitor helpful.
Douglas L. Batey
The USDA announced today that it is accepting applications under the Rural Energy for America Program (“REAP”). REAP provides grants and loan guarantees to agricultural producers and rural small businesses to purchase renewable energy systems, make energy efficiency improvements and conduct feasibility studies for renewable energy systems.
REAP funds are available in the following amounts:
- Grants for energy efficiency projects are available for up to the lesser of $250,000 or 25% of the project costs.
- Grants for renewable energy systems are available for up to the lesser of $500,000 or 25% of the project costs.
- Grants for feasibility studies for renewable energy systems are available for up to the lesser of $50,000 or 50% of the costs of the study.
- Loan guarantees are available for up to the lesser of $25 million or 75% of the project costs.
Applicants must be agricultural producers or rural small businesses. Agricultural producers are farmers or ranchers that obtain more than half of their gross income from agricultural operations. Small rural businesses are small businesses, as determined in accordance with the Small Business Administration's small business size standards, located in rural areas. Applications are due July 31, 2009.
My colleagues Michael O'Connell and Stephen Kelly, both of whom have a great deal of experience representing clients engaged in energy and natural resources transactions with Indian tribes, are putting on a webinar entitled "Doing Business with Indian Tribes." Since the best private lands are often already spoken for, renewable energy developers are looking more and more at developing projects on public lands and Tribal lands. The Webinar that Mike and Steve are presenting will discuss doing business with tribes generally, but their presentation will be relevant to those seeking to develop renewable energy projects in partnership with Indian tribes or on tribal lands.
Details are as follows:
Please join Stoel Rives attorneys Michael O’Connell and Stephen Kelly for a webinar on Doing Business with Indian Tribes on Wednesday, June 10, 2009. They will conduct a lively, interactive program that will cover:
There are over 550 federally recognized Indian tribes. Indian tribes engage in a broad range of business transactions governed by a complex array of federal, tribal and state laws. Stoel Rives is pleased to offer a webinar that will offer you tools to recognize the unique legal status of Indian tribes and how it affects business transactions with Indian tribes.
- Tribes and tribal business structures
- Contracting, sovereign immunity, and dispute resolution
- Leases, easements, and other agreements for use of tribal land
- Tribal and federal environmental reviews and approvals
- Taxation issues
Wednesday, June 10, 2009
Complimentary (lunch included)
Or at your computer. Information on how to access the webinar will be provide to those who register.
We will validate parking for most nearby parking garages.
Space is limited! Register online by Monday, June 8.
On May 11, the Washington Department of Community, Trade, and Economic Development (“CTED”) filed an application with the United States Department of Energy to receive American Recovery and Reinvestment Act (“ARRA”) funds for Washington’s State Energy Program (“SEP”). The application contains funding for renewable energy, energy efficiency, and farm energy assessments. Once the SEP is approved, funding will commence through CTED with advice from the Clean Energy Leadership Council.Continue Reading...
We announce the publication of a guide to federal clean energy funding opportunities under the $787 billion American Recovery and Reinvestment Act (“ARRA”). Titled “Show Me The Money,” the guide reviews the various programs and potential sources of federal funding for clean energy companies and projects. The guide addresses funding opportunities under the ARRA for each of the following energy industry areas: wind, solar, biofuels, biomass, smart grid, transmission, geothermal, marine and hydrokinetic, green building, energy efficiency, advanced battery and fuel cell technology, clean energy equipment manufacturing, green vehicles and clean coal. The guide also contains information about some of the funding opportunities and updates at the federal and state level which we will continue to track closely.
On March 20th, President Obama issued a directive to the heads of executive branch departments and agencies. The directive is aimed at achieving the laudable goal of ensuring merit based decision-making for grants and other forms of stimulus funds provided by the American Recovery and Reinvestment Act of 2009 (usually referred to as the Stimulus Bill). It seems that while candidate Obama promised repeatedly during his campaign to limit the influence of lobbyists in Washington DC, the passage of the Stimulus Bill has sent record numbers of lobbyists to D.C. to scramble for federal dollars.
In apparent response to this, President Obama has singled out registered lobbyists and regulated their contacts with the executive branch. His directive provides that “executive department or agency officials shall not consider the view of a lobbyist registered under the Lobbying Disclosure Act of 1995, concerning particular projects, applications, or applicants for funding under the Recovery Act unless such views are in writing.” Officials are directed to inquire regarding the possible presence of registered lobbyists both upon the scheduling and commencement of phone calls and in-person conversations “with any person or entity concerning particular projects, applications, or applicants for funding under the Recovery Act.” If any registered lobbyists are detected, the directive forbids them from attending the meeting or participating in the phone call.
Not surprisingly, the American League of Lobbyists (ALL) has objected to the Obama Administrations restrictions. In a demonstration that politics does indeed sometimes make strange bedfellow, ALL has been joined by the ACLU and the Citizens for Responsibility and Ethics in Washington (CREW). In a letter to the President released Tuesday, these three groups requested that President Obama rescind the constitutionally offensive provisions of the directive immediately.
As tempting a political target as they may be, registered lobbyists have a place in our political system and rights under our Constitution. The President should heed the groups’ advice and tailor his directive to enable transparency while not muzzling any voices--including those paid to advocate.
Among all the interesting presentations at this month's AWEA transmission and wind workshop, American Superconductor's presentation about developments with superconducting transmission lines was particularly noteworthy. Superconducting direct current lines offer greater efficiency, as well as siting and aesthetics benefits, but have historically fallen victim to much higher costs when compared to traditional overhead transmission lines. However, with talks of extra-high voltage "green superhighways" transmitting renewable energy from the nation's interior to load zones, it appears from American Superconductor that the costs of a 5 GW, 200 kV superconductor line are nearly equivalent to 765 kV overhead lines when built on a 1,000 mile scale. Perhaps we will see a superconducting pipeline instead of an extra-high voltage overlay.
For more information about the viability of superconducting transmission lines, look for American Superconductor's White Paper in the near future.
Stoel Rives LLP is teaming up with EUCI to present a series of webinar’s based on our series of “Law of” books about renewable energy. The Law of Renewable Energy web conferences will address the major legal issues associated with the development of renewable energy projects. The web conferences will include the following topics:
PPAs for Renewable Energy Projects
May 18, 2009
Siting and Permitting for Renewable Energy Projects
June 1, 2009
Please sign up here if you’d like to get your own copy of any book in our “Law of” series. We update the “Law of” books regularly, and we'll have copies of the Law of Wind (5th edition) at Booth No. 3148 at the AWEA conference in Chicago on May 4-7, 2009. In addition, please sign up here if you’d like to receive our Stoel Rives Energy Law Alerts and other periodic updates.
Although this blog is focused on renewable energy, manufacturers in the renewable space should be aware of a new tax credit included in the stimulus bill. The provisions is complicated and unlike most tax credits. Nevertheless, its benefits, especially for manufacturers on the cutting edge, may be too great to ignore.
Taxpayers who qualify are entitled to a 30 percent tax credit for investment in a “qualifying advanced energy project." A "QAEP" is defined as one that reequips, expands or establishes a manufacturing facility that produces:
1. property designed to produce energy from the sun, wind, geothermal, and other renewable resources,
2. fuel cells, microturbines, or an energy storage system for use with electric or hybrid-electric motor vehicles
3. electric grids to support the transmission of intermittent sources of renewable energy, including storage of such energy,
4. property designed to capture and sequester carbon dioxide emissions,
5. property designed to refine or blend renewable fuels or to produce energy conservation technologies, and
6. new qualified plug-in electric drive motor vehicles (and components),
The program is to be established by IRS, in consultation with Energy Department, on or before August 26, 2009.
Once the program is established, the Secretary of Treasury is to award certifications for tax credit. Applications must be submitted within 2 years, and applicants will have one year from the date their application is accepted to provide evidence that requirements for certification have been met. After certification awarded, an applicant has 3 years to place project in service.
The following are the criteria for certification:
-- Reasonable expectation of commercial viability
-- Greatest domestic job creation (both direct and indirect)
-- Greatest net impact in reducing air pollutants, greenhouse gases, etc.
-- Greatest potential for technical innovation and commercial deployment
-- Lowest levelized cost of energy generated or stored or of measured reduction in energy consumption or greenhouse gas emissions
-- Shortest project time from certification to completion.
The credit generally applies only to construction, etc. after February 17, 2009.
The credit is new and unlike anything IRS has ever administered before. Therefore, it is reasonable to expect that IRS will take some time to get the program fully functional. Nevertheless, it makes considerable sense to begin assembling materials that explain the company’s project and address the criteria for selection. In addition, it would be advisable to submit any applications as soon as possible after the program is established.
Stoel Rives would be pleased to assist in planning for and submitting applications for the credit.
Stimulus Bill Funding for Data Center and Telecom Technology Energy Efficiency, Smart Grid, Enhanced Geothermal Systems, and More
The American Recovery and Reinvestment Act of 2009, also known as the “Stimulus Bill,” allocated billions of dollars in funding for renewable energy, energy efficiency, energy storage, and other projects under the energy and climate change umbrella. Of the vast sums of money available for such projects, $16.8 billion goes to the U.S. Department of Energy’s (“DOE”) Office of Energy Efficiency and Renewable Energy (“EERE”). Another $4.5 billion in direct spending on smart grid demonstration projects will be overseen by DOE’s Office of Electricity Delivery and Energy Reliability.
On March 5th, DOE’s EERE Industrial Technologies Program (“ITP”) released a Notice of Intent to issue funding for technologies that increase the energy efficiency of server-based information and communication technology (“ICT”) systems housed in data centers and telecommunications central offices. The solicitation seeks proposals for projects that would increase the efficiency of IT equipment, software, power systems, and cooling systems. The solicitation also extends to the demonstration and field-testing of pre-commercial technologies in these areas, as well as in distributed generation or alternative power technologies used to power ICT systems. ITP intends to release the solicitation sometime this month.
DOE also recently announced its intention to issue a Funding Opportunity Announcement (“FOA”) for smart grid demonstrations. In addition, DOE issued two FOAs for enhanced geothermal systems (“EGS”). The EGS FOAs offer up to $84 million over six years, including $20 million for the 2009 fiscal year. Check out our recent Energy Law Alert for more information on DOE funding for smart grid demonstrations and enhanced geothermal systems.
Because of the relatively short window for responding to FOAs, DOE recommends that prospective applicants complete several one-time pre-application steps. Information on submitting applications is available at www.grants.gov.
Under California’s Renewable Portfolio Standard, investor-owned utilities only have until 2010 to procure 20% of their power from renewable sources (although certain flexible compliance measures do apply). There are concerns that the rapidly-approaching deadline is leading utilities to sign power purchase agreements with projects that are not viable and may never achieve commercial operation. To help prevent this going forward, the California Public Utilities Commission Energy Division has proposed project viability criteria to evaluate each project bidding into California’s RPS program. Utilities would be required to score potential RPS projects based on developer experience in project financing, RFOs, and facility ownership and operation; technical viability; and project-specific viability criteria such as equipment procurement, project development lead time, transmission lead time and cost of transmission interconnection, site control, permitting, and pricing structure. The project viability score could be taken into account in PPA approval by the CPUC and in gaging whether to excuse utilities that fail to meet RPS goals. Scoring projects based on viability criteria has the potential to affect who successfully participates in the RPS solicitation process and the types of technologies that are selected as RPS projects. Comments on the CPUC proposal are due on February 27, 2009. Read more about the proposal in my colleagues’ recent Renewable Energy Law Alert.
In a move that could have a significant impact on the energy sector (and create a buzz among political science departments) nationwide, Representative Henry Waxman (D-CA) has dethroned Representative John Dingell (D-MI) in his nearly 28-year post as chairman of the influential Committee on Energy and Commerce. The 137-122 secret vote has shaken up the seniority system that has driven the caucus for decades. It also replaces a long-time friend of the auto industry with someone who has been championed by environmentalists for his positions on clean air and global warming.
Waxman’s ascension to the Energy and Commerce Committee chairmanship is particularly significant because the committee shepherds legislation on climate change, energy, and health care—all of which are key priorities of the Obama Administration. Waxman (who also has a strong leadership record on health care issues) has pushed for aggressive targets for carbon emissions reductions, more stringent auto emissions standards, and a national cap-and-trade program. Although Dingell recently proposed legislation that would impose gradual reductions in greenhouse gas emissions, Waxman has put forth much more ambitious climate change legislation.
Also of note is Obama’s recent appointment of Philip Schiliro, a longtime aide to Waxman, as the new White House director of Congressional relations. This appointment is considered to be significant in that it provides Waxman with a direct channel to the White House. Congressional insiders have also noted that House Speaker Nancy Pelosi is a close ally of Waxman’s. This web of connections underscores the potential for the Obama Administration and Congress to work closely together to usher in major changes to U.S. climate change policy.
Governor Schwarzenegger Strikes Again: 33% RPS by 2020 and Streamlined Renewable Energy Permitting in California
Governor Schwarzenegger’s been keeping busy on California’s big-ticket environmental issues. Yesterday the Governor’s office issued Executive Order S-14-08, with the laudable goal of accelerating the development of renewable energy resources . . . not to mention bolstering California’s economy with clean-tech jobs. Governor Schwarzenegger announced the Order at what will be the largest solar panel manufacturing facility in North America. The Governor’s remarks on his Executive Order highlighted that investing in renewable energy projects will help us fight climate change, “while driving the state’s green economy.”
Executive Order S-14-08 calls for California to get 33% of our electric energy from renewable sources by 2020. The current Renewable Portfolio Standard (RPS), instituted in SB 107 in 2006, requires that 20% of California’s power come from renewable sources by 2010. Unlike the current RPS, the Governor's new target applies to both investor-owned utilities and public utilities. A recent ballot initiative in California, which would have applied California's RPS to public utilities, failed on November 7th, after being opposed by a broad coalition of environmental groups and renewable energy industry groups. The Governor says he will propose legislation that will codify the 33% RPS for all retail sellers of electricity.
The Order also implements an MOU signed yesterday by the California Energy Commission (CEC), the California Department of Fish and Game (DFG), the U.S. Bureau of Land Management (BLM), and U.S. Fish and Wildlife Service.
Starting in February 2009, renewable energy projects should enjoy a streamlined project approval process before a special joint unit of DFG and CEC. But exactly how will these two agencies “immediately create,” as the Order directs, a one-stop process for permitting renewable energy generation power plants? For thermal power plants over 50 MW, including geothermal and solar thermal facilities, the CEC already is, supposedly, the one-stop shop.Continue Reading...
In an email alert that we just sent out, my colleagues in the Stoel Rives Tax Section report:
Today the House passed, and President Bush signed into law, H.R. 1424, which includes the Energy Improvement and Extension Act of 2008 (the Act). The Act contains the much-anticipated extension of the production tax credit (PTC) and investment tax credit (ITC) sunset dates.
The Act extends the PTC placed-in-service sunset date for certain wind and refined coal facilities until December 31, 2009, and extends the PTC placed-in-service sunset date for certain other qualifying facilities until December 31, 2010. The Act also expands the PTC to include certain marine and hydrokinetic renewable energy facilities placed in service on or before December 31, 2011.
The Act extends the ITC placed-in-service sunset date for solar, fuel cell and microturbine property until December 31, 2016 and expands the ITC to include combined heat and power system property, qualified small wind energy property, and geothermal heat pump system property.
In addition, H.R. 1424 contains a variety of other renewable energy tax provisions, including provisions allowing the energy credit to offset alternative minimum tax liability; increasing the amount of the biodiesel and renewable diesel fuel credits and extending the sunset dates until December 31, 2009; authorizing new clean renewable energy bonds and qualified energy conservation bonds; and extending the energy efficient commercial buildings deduction and the new energy efficient home credit.
Our Tax Section is working on preparing a more detailed analysis of the tax aspects of HR 1424. If you'd like to receive updates concerning H.R. 1424 and other renewable energy and clean tech issues, please subscribe to our Renewable Energy Mailing List.
The Portland Business Journal is reporting that Portland General Electric Company received 38 offers in its April 2008 RFP totaling up to 3000 MW in renewable energy.Continue Reading...