The U.S. Fish and Wildlife Service (the “Service”) published a proposed rule listing the tricolored bat as an endangered species under the Endangered Species Act (“ESA”). The tricolored bat occurs in portions of 39 states, including Texas, Iowa, and Oklahoma, which contain a significant concentration of utility-scale wind projects. In combination with the Service’s proposed “endangered” designation for the northern long-eared bat, the new proposed rule could complicate wind energy project permitting across the country.
Offshore wind development off the California coast took another step closer to reality on August 10, 2022 with the California Energy Commission’s release of a report setting maximum feasible capacity and megawatt goals for 2030 and 2045. The report constitutes a milestone in the planning process prescribed by AB 525, which requires that the Commission “evaluate and quantify the maximum feasible capacity of offshore wind to achieve reliability, ratepayer, employment, and decarbonization benefits” for 2030 and 2045.…
On March 11, 2022, the Department of Labor (“DOL”) proposed reverting the definition of “prevailing wage” under the Davis-Bacon Act to a definition used over 40 years ago. According to the DOL, the proposal is meant to modernize the law and “reflect better the needs of workers in the construction industry and planned federal construction investments.”…
Continue Reading Turning Back the Clock: DOL Proposes Previous Davis-Bacon Prevailing Wage Definition
As current supply chain issues continue to threaten the U.S. photovoltaic solar industry, solar module suppliers, manufacturers, renewable energy developers and utilities alike face great uncertainty surrounding the immediate future of the solar module supply market. The bottom-line is that supply chain issues are increasing shipping and equipment costs for solar cells and panels, however, there are several independent factors that are working together to drive this surge in pricing and constrained market. These factors include the following:
Continue Reading Making Sense of the Solar Supply Chain Issues
Pipeline development continues to be highly contested in Federal Energy Regulatory Commission (FERC) certificate proceedings and before trial and appellate courts. Please see our discussion of six key topics for pipeline developers to be aware of.
Continue Reading Natural Gas Pipeline Development
The Federal Energy Regulatory Commission (“FERC” or “Commission”) issued on April 16, 2020 two orders largely denying requests for rehearing of its prior decisions that, among other things, subjected to minimum offer price thresholds energy resources participating in PJM Interconnection, L.L.C.’s (“PJM”) capacity market which receive so-called “State Subsidies”. FERC reaffirmed that a resource within broadly-defined categories (e.g., renewable resources) receiving State Subsidies must offer capacity in PJM’s forward capacity market at or above an administratively-established price floor (i.e., the minimum offer price rule, or “MOPR”), regardless of such a resource’s actual incremental costs. Potential and likely ramifications of the Commission’s actions, arguments opponents of the April 16 Orders are likely to raise and potential paths forward for industry market participants are set forth below. Additionally, the most promising arguments that could be used to invalidate the April 16 Orders, some of which are discussed below, have not been raised before or addressed by FERC.
Continue Reading FERC Reaffirms Controversial Energy Capacity Decisions: Insights and Analysis
Members of the Sheppard Mullin Energy, Infrastructure and Project Finance Team wrote an article published in the March 16, 2020 edition of Tax Notes Federal regarding the practical impacts on tax equity financing for renewable energy projects of a private letter ruling (“PLR”) published by the IRS in late 2019. The PLR addressed normalization and loss disallowance rules applicable to public utilities. These rules have posed significant challenges to public utilities that want to own renewable energy generation facilities, make efficient use of the tax benefits they provide (via the tax equity market) and recover their costs from ratepayers.
Continue Reading Walking the Path of Utilities’ Ownership of Wind and Solar
Last week the Federal Energy Regulatory Commission (“FERC”) continued to issue orders, notices, and guidance related to the current novel coronavirus pandemic, the health and safety of FERC and energy industry employees, and the continued reliability of the U.S. energy sector. A summary of FERC’s relevant actions are provided below, including information regarding FERC’s operating status, extensions for filing deadlines and efforts to ease regulatory burdens during this crisis.
Continue Reading FERC Orders, Notices, and Other Guidance Regarding the Novel Coronavirus
A Washington state federal court recently addressed claims relating to rates that cryptocurrency mining companies pay for electricity in Grant County, Washington. The court rejected all of the miner’s legal claims. The dispute focused on the rate classification that this utility applied to crypto miners as explained below. Due to various risks, the electric utility assigned the miners to a newly created rate class referred to as “Evolving Industries,” resulting in a higher rate class for the miners. The miners were I-“rate” with this decision.
Continue Reading Cryptocurrency Miners I“rate” At Energy Rate Decision
On Thursday, March 26, the United States Environmental Protection Agency (“EPA”) announced and issued a Memo establishing an agency-wide temporary enforcement policy suspending or staying a broad array of enforcement efforts for certain environmental regulations and requirements in response to the COVID-19 pandemic. The Memo states that EPA recognizes that “the pandemic may affect facility operations and the availability of key staff and contractors and the ability of laboratories to timely analyze samples and provide results.” In light of this, the Memo states that EPA will “focus its resources largely on situations that may create an acute risk or imminent threat to public health or the environment.” The Memo establishes certain limits on the policy as well as procedures that must be followed – which are different in different circumstances – in order for an impacted regulated entity to qualify for relief under the Policy.
Continue Reading U.S. EPA’s Temporary COVID-19 Enforcement Discretion Policy
On February 20, 2020, the Federal Energy Regulatory Commission (“Commission” or “FERC”) issued several orders narrowing New York Independent System Operator, Inc.’s (“NYISO”) buyer-side market power mitigation rules in its mitigated capacity zones, including NYISO’s proposal to exempt up to 1,000 megawatts (“MW”) of renewable resources from NYISO’s buyer-side market mitigation rules in a capacity auction year (“NYISO Renewable Exemption Order”). The Commission’s actions will significantly impact renewable resources in NYISO, PJM Interconnection, L.L.C. (“PJM”), and potentially other organized markets. Rejection of the proposed MW exemption will hinder renewable resources’ participation in NYISO’s capacity auction by: (i) requiring them to bid no lower than an established price floor, regardless of their actual incremental costs; and (ii) tightening currently-available mitigation exemptions. …
Continue Reading FERC Continues to Squeeze Renewable Resources Participating in Wholesale Electric Capacity Markets