Tax equity investments, and potentially other passive investments, in renewable energy just became that much easier to make.  Today, in response to a petition for declaratory order filed in January 2017 by a coalition of investors and project sponsors, FERC ruled that tax equity investments in public utilities does not trigger section 203 of the Federal Power Act provided the interests acquired by investors are “passive” according to the test set forth in FERC’s AES Creative Resources order.  But other investments are equally passive, at least according to the AES Creative Resources standard, and so today’s decision would arguably relieve those transactions of having to seek FERC’s approval.

Today’s order is available here.  Ad Hoc Renewable Energy Financing Group