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Congress yesterday passed the American Taxpayer Relief Act of 2012 (the Act), which averted the so-called “fiscal cliff.” The President is expected to sign the Act shortly.

The Act includes a number of energy-related tax provisions, including a one-year extension and modification of the production tax credit under Section 45 of the Internal Revenue Code (the PTC) for certain renewable energy facilities. The energy-related provisions in the Act include:

  • PTC Extensions and Modifications – The PTC is extended and modified for certain types of facilities. These extensions and modifications include:
    • In the case of wind, geothermal, landfill gas, trash, marine, and hydrokinetic facilities and certain closed-loop biomass, open-loop biomass, and qualified hydropower facilities, the PTC will apply if construction begins before January 1, 2014 (rather than if the facilities are placed in service before January 1, 2014). The Act does not specify what it means to begin construction for this purpose, although there are analogous authorities that have been adopted for other purposes that may be applied. Note, however, that a facility to which this extension applies may qualify for the PTC even if it is not placed in service before January 1, 2014.

       

    • The PTC for municipal solid waste facilities is modified to exclude from the definition of municipal solid waste certain paper that is commonly recycled and that has been segregated from other solid waste.

       

    • The election to claim the investment tax credit rather than the PTC for certain facilities is extended to apply to certain facilities with respect to which construction begins prior to January 1, 2014.

       

    • The PTC for Indian coal production facilities is extended for one year, to apply to sales of qualified production during the eight-year period (rather than the previous seven-year period) beginning on January 1, 2006.
       

Continue Reading Fiscal Cliff Bill Includes PTC Extension and Other Energy-Related Provisions

In September 2012, all new electricity generation came from solar and wind projects, according to the Energy Infrastructure Update (PDF) issued by the Federal Energy Regulatory Commission’s Office of Energy Projects. Five wind projects totaling 300MW and 18 solar projects totaling 133MW came online during the month.

The Energy Infrastructure Update also noted that nearly…

From my partner Michael O’Connell:

Occasionally, we receive inquires regarding federal policies relating to actual, potential or alleged impacts of projects on bald and golden eagles and other migratory birds.

On October 12, 2012, Attorney General Holder issued a policy regarding Possession or Use of the Feathers or Other Parts of Federally Protected Birds…

Against the backdrop of election year politics and consideration of extension or elimination of the Production Tax Credits (PTCs), the Congressional Research Service (CRS) issued a report last week entitled, “U.S. Renewable Electricity: How Does the Production Tax Credit (PTC) Impact Wind Markets?” This report examines the possibility of an extension of the PTC, and the potential impacts such an extension (either long- or short-term) would have on the U.S. wind market. Not surprisingly, the conclusions are mixed and layered with uncertainty.

The report trumpets that 2012 will be a record year for the wind industry. Due in large part due to the pending expiration of the PTC, the U.S. wind sector deployed 10-12 GW of wind power this year—an unprecedented amount. However, all indications are that the expiration of the PTC will cause a severe market downturn in 2013 and beyond. No wonder the wind industry has been pushing Congress so hard for an extension. But does an extension make good economic sense?Continue Reading Economists Weigh in on the PTC Extension

California’s Pacific Gas and Electric Company (“PG&E”) announced today that it plans to issue an Energy Storage Request for Information (“RFI”) to obtain information on utility-scale, dispatchable, and operationally flexible storage resources through a solicitation of interest from technology providers, owners, and developers of energy storage resources.  PG&E said that it plans to issue the…

A law alert from our colleague Cherise Oram:

On August 24, 2012, the U.S. Fish and Wildlife Service and the National Marine Fisheries Service (collectively, the "Services") issued a proposed rule that would modify when and how the Services analyze economic impacts in critical habitat designations under the Endangered Species Act ("ESA"). Critical habitat designation is intended to provide special protection of essential habitat for species listed as endangered or threatened under the ESA. The ESA prohibits federal agencies from taking actions that are likely to destroy or adversely modify that critical habitat. Critical habitat designations are often controversial because they may discourage or impair private activities on private lands by requiring federal permits or otherwise devaluing the lands located within a designation.Continue Reading Proposed Changes to Critical Habitat Designations Would Gut Purpose of Economic Analysis

The Pacific Northwest Economic Region (PNWER) Energy Storage Coaliation (ESC) will be holding an important energy storage conference at the Portland Convention Center on October 8, 2012.  ESC has worked with the Oregon and Washington public utility commissions to bring together a diverse mix of developers, utilities and regulators to share their perspectives on opportunities and barriers…

My colleague Ed Einowski didn’t mince words in a recent article published by The Sindal Report. If the federal production tax credit (PTC) is allowed to expire at the end of this year, there will be a dramatic drop-off in wind installation starting in 2013. And these diminished opportunities will add up to significant…