William H. Holmes
Bill Holmes concentrates his practice in the area of energy law, with a special emphasis on wind, geothermal, biomass, tidal and ocean power, and other forms of renewable energy. Bill is the Energy and Telecommunications (ENTEL) practice group leader at Stoel Rives.
White Paper Explains New Advanced Renewable Fuel Standard/RFS2
My colleague Graham Noyes and Clayton McMartin of Clean Fuels Clearinghouse recently published a white paper on the massive and staggeringly complex revision of the federal Advanced Fuel Standard (RFS) issued by the U.S. Environmental Protection Agency on February 3, 2010. Graham and Clayton describe how this second generation renewable fuel initiative (RFS2) will bring industry and government together in ways never before experienced by the fuels industry.
With a view to helping market participants develop comprehensive cost/benefit and compliance strategies, Graham and Clayton structure their discussion according to the following key topics:
- Legal background and new statutory requirements of RFS2;
- Compliance implications of updates to the Renewable Identification Numbers (“RINS”) process; and
- Issues important to particular market participants, including producer obligations, new fuel pathways, importer issues and RIN trading economics.
Download a free copy of the Renewable Fuel Standard/RFS2 White Paper (PDF)
186 More Species to be Protected by the Migratory Bird Treaty Act (MBTA)
My colleagues Greg Corbin and Eric Martin report on an important development under the Migratory Bird Treaty Act that may affect the siting and permitting of wind projects
Yesterday the U.S. Fish and Wildlife Service (FWS) announced the addition of 186 migratory birds to its list of species protected by the MBTA. Effective at the end of this month, this is the first update to the MBTA list in 25 years and will bring the total number of species receiving federal protection under the MBTA to over 1,000. Because the MBTA protects the vast majority of birds in the country, it covers many species not covered by the Endangered Species Act (ESA) or other laws.
Similar in some respects to the ESA, the MBTA prohibits the “take” (e.g., wounding or killing) of migratory birds. However, unlike the ESA, the MBTA does not have a routine mechanism for permitting incidental take of migratory birds. Accordingly, there is no way to be completely free of legal liability if a wind project results in the take of a migratory bird. Project developers, though, can seek assurances from the FWS that it will exercise its enforcement discretion if the project developer implements measures to protect migratory birds, such those that might be contained in an Avian & Bat Protection Plan. The measures necessary to avoid or mitigate impacts to migratory birds are project specific and always result in some additional cost, whether through changes to project layout and operation, or supplying mitigation funds.
In light of this newly expanded list of species protected by the MBTA, developers and operators of wind project would be well advised to review their strategy for minimizing the risk of prosecution under the MBTA.
The complete list of birds that will be protected by the MBTA is available at http://www.fws.gov/migratorybirds/.
EPA Delays Regulation of GHGs as Stationary Source Emissions
From Stoel Rives partners Lee Smith and Krista McIntyre:
In response to a letter drafted by eight democratic senators and general industry adverse reactions, the EPA announced on February 22, 2010 that there would be delays to implementation of the regulation of green house gases as stationary source emissions under the Clean Air Act, and included additional conditions to the implementation. It is expected that the EPA will phase in permit requirements and regulation of GHG for large stationary sources beginning in calendar year 2011.
The additional conditions include only requiring facilities that are applying for air permits for non-greenhouse gas emissions to be permitted under the new GHG permitting system in the first half of 2011, and permitting at a level higher than the 25,000 ton level originally proposed, for the latter half of 2011 through 2013. The letter can be found here.
SEC Adopts Interpretive Guidance on Disclosure Regarding Climate Change
As described in a previous alert, the Securities and Exchange Commission ("SEC") voted on Wednesday, January 27, 2010 to adopt an interpretive release to provide guidance on existing public company disclosure requirements as they apply to business or legal developments relating to climate change. The SEC has now distributed the interpretive release itself, which can be found here. The interpretive release indicates that its purpose is to provide guidance on how to interpret existing SEC disclosure rules and requirements as applied to business and legal developments associated with climate change. For our detailed alert on the subject, click here.
Colorado Likely to Increase its RPS to 30% by 2010
From our colleague Adam Walters:
In January Colorado Governor Bill Ritter and State House Democrats announced the introduction of a bill that would increase Colorado’s Renewable Energy Standard (RES) from 20% to 30% by 2020. The Governor, who recently announced that he would not run for re-election, is putting the weight of his not insubstantial political capital behind the bill, HB-10 1001 as a cornerstone of his gubernatorial legacy. Consequently, the Bill was symbolically proposed as the first bill of the 2010 legislative session.
On February 11, HB-10 1001 passed the House on its second reading. The Bill, which is broadly supported by Democrats, conservation organizations (see, e.g. the Sierra Club, Environment Colorado and Colorado Conservation Voters) the renewable energy industry and organized labor (the Bill has been endorsed by the AFL-CIO), is widely expected to pass in time for Governor Ritter to sign it into law before the conclusion of his term. Opposition to the Bill (and to increasing Colorado’s RES generally) includes the State Republican Party (which sees the Bill as boon to labor unions because it requires certain distributed generation facilities to be installed by licensed and certified contractors) and the oil and natural gas industry, for obvious reasons. (See, e.g. the Colorado Mining Association).
The major Colorado utilities, such as Xcel Energy, appear to be taking a wait-and-see approach to the Bill, having neither endorsed nor opposed it. According to a spokesman for the Governor’s office, Xcel, Colorado’s largest utility, is expected to meet the current RES five years ahead of schedule. However, according to a recent editorial in the Denver Post, Xcel supports passage of the Bill provided that it enables Xcel to meet the RES requirement without exceeding the two percent surcharge billed to ratepayers for renewable energy development.
In addition to increasing the RES standard overall, the Bill places greater emphasis on distributed generation resources as a means of fulfilling the RES. For a decent summary of the bill, as well as updates on its progress, check out Colorado Capital Watch.
APS Announces Wind and Solar RFPs
On January 27, Arizona Public Service (APS) announced two requests for proposals (RFPs), one for new sources of photovoltaic (PV) solar energy and the other for Arizona-based wind.
The RFP for solar PV seeks proposals for projects that are between 15 and 50 megawatts and that employ commercially proven technology. APS's goal is to procure approximately 220,000 megawatt hours per year from this PV solicitation. Respondents are required to provide proposals for long-term power purchase agreements and/or "turn-key" agreements. The latter are sometimes called BTAs (Build-Transfer Agreements) or DBS (Design-Build-Sell) agreements--however named, APS anticipates that the agreement would require the developer to build the project and transfer it to APS when the project is completed. (As an aside, turn-key agreements that do not transfer the asset until commercial operation require very careful attention to "notice to proceed" clauses and conditions, lest defects in title, permits or some other matter thwart the closing and leave the developer's asset unsold or, worse, stranded.)
In its press release, APS encouraged parties to participate in the photovoltaic RFP bidder's conference on March 12, 2010. Additional information about the conference and the RFP is available online at www.aps.com/rfp. RFP submissions are due April 7, 2010.
On the wind side, APS is looking for wind projects between 15 and 100 megawatts located entirely within Arizona. Respondents are required to provide proposals for long-term power purchase and/or "turn-key" agreements. Interested parties are encouraged to participate in the Arizona-based wind RFP bidder's teleconference on March 17, 2010. Additional information about the conference and the RFP is available online at www.aps.com/rfp. RFP submissions are due April 14, 2010.
SEC Posts Climate Change Interpretive Release
Earlier today, the Securities Exchange Commission (SEC) posted its climate change interpretive release, which can be found at http://www.sec.gov/rules/interp/2010/33-9106.pdf. Our prior Blog on the subject is here, and our alert on the topic can be found here. Stoel Rives corporate securities partners Ron McFall and CJ Voss will be posting a follow up alert shortly.
If you'd like to sign up for our Energy Law Alerts, click here.
Stoel Rives LLP assists with first juwi-developed U.S. wind farm
The first wind farm developed by juwi in the U.S. will soon generate clean and safe electricity. Construction works at the Flat Water Wind Farm in Richardson County, Neb., have already started. By the beginning of 2011, 40 turbines will be up and running, thereby producing roughly 220 million kilowatt hours of carbon-dioxide-free power per year. The project will be constructed by Gallop Power LLC, a U.S.- based company established to develop, own, and operate clean energy projects. Gallop has acquired Flat Water Wind Farm from juwi's J.W. Prairie Wind Power LLC. Stoel Rives LLP represented juwi in the transaction.
"We were very pleased to have assisted juwi in accomplishing the transaction that will result in the construction and operation of their first wind farm in the United States. juwi, as an international player in the wind and solar energy with operating generation facilities in Europe and elsewhere, is the kind of company that we need active in the U.S. markets to help move our renewable energy sector forward," said Ed Einowski, Stoel Rives LLP partner who represented juwi in the transaction.
Continue Reading...Join us for a RETECH Side Event - February 4, 2010
2010 may be a cataclysmic year for the tax system. Virtually all the important tax cuts enacted in the Bush Administration expire at the end of this year. In addition, the pending health care reform legislation contains several significant revenue provisions. How will Congress deal with this fundamental shift? Further, the 1603 grant program will expire at the end of the year, except for projects for which construction began in 2009 or 2010. How will Treasury implement the standard for when construction begins, including the 5 percent safe harbor contained in the Treasury Guidance? Will Congress extend the grant program beyond 2010?
Stoel Rives LLP, a full-service U.S. law firm and recognized leader in the renewable energy industry, will host a panel discussion at RETECH 2010 with two key policymakers discussing changes coming for the tax system. Please plan to join Stoel Rives Partner Gregory F. Jenner, former Assistant Secretary of the Treasury for Tax Policy, as he moderates a discussion on these important upcoming developments. Greg will be joined by:
- Mark Prater, Chief Tax Counsel (R) of the Senate Finance Committee
- Victoria McDowell, Deputy Administrator of Treasury’s Tax and Trade Bureau
Mark has been involved in tax legislation for 20 years and Victoria has been assigned since early 2009 to head the Treasury 1603 grant program.
|
When: |
Thursday, February 4, 2010 |
|
Where: |
Washington D.C. Convention Center |
|
Cost: |
Complimentary |
|
RSVP: |
Please register by February 1, 2010. Register Here. |
As a proud sponsor of RETECH 2010, Stoel Rives will be providing complimentary copies of our “Law of ...” books at booth #811. Please stop by and visit us. Books will be available while supplies last. Click here to find our booth location.
To save $50 on an exhibit pass to RETECH 2010, enter VIP Promotional Code “ExpoPass” in the secure online form at http://www.retech2010.com/make-plans/register.
We look forward to seeing you!
SEC Issues Interpretive Guidance on Greenhouse Gases
My partner Tom Wood circulated this preliminary alert this afternoon:
"Earlier today the U.S. Securities & Exchange Commission (SEC) approved interpretive guidance intended to inform public companies how climate change must be taken into account when applying existing disclosure requirements. Specifically, the SEC's interpretative guidance highlights the following areas as examples of where climate change must be considered in crafting disclosures:
· The direct effects of existing and pending environmental regulation, legislation and international accords and treaties on the company’s business, its operations, risk factors and in Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A);
· The indirect effects of climate change legislation and regulation on a company’s business—this could include new opportunities or risks posed by legal, technological, political and scientific developments related to climate change; and
· The actual and potential effect on a company’s business and operations resulting from physical changes to the planet resulting from climate change.
"The interpretive guidance specifies that public companies must have adequate knowledge of their greenhouse gas emissions—a requirement that is consistent with recent EPA regulations requiring many (but not all) significant greenhouse gas emitters report their direct emissions starting in calendar year 2010. The SEC stated “management should ensure that it has sufficient information regarding the registrant’s greenhouse gas emissions and other operational matters to evaluate the likelihood of a material effect arising from the subject legislation or regulation.”
Unsurprisingly, the SEC said that registrants must weigh whether climate change related information is material or not. In doing so, they said that if it was a close question, the company should decide in favor of disclosure."
The complete language of the interpretive guidance has not yet been released. Corporate securities partners C. J. Voss and Ron McFall are reviewing the issue and will be issuing an Energy Law Alert on the topic. If you'd like to sign up for our Energy Law Alerts, click here.
