On June 7th, 2013, the U.S. Court of Appeals for the Seventh Circuit issued an opinion that could have significant impacts on transmission and renewable energy policies across the country. The decision, issued by Judge Richard Posner, one of the most influential legal scholars in the country, considers the propriety of two orders of the Federal Energy Regulatory Commission (“FERC”) pertaining to the allocation of the costs of new transmission projects that bring renewable energy (primarily wind) from remote locations in the Midwest to population centers.

As a brief overview, transmission projects in the United States are largely controlled by Regional Transmission Organizations (“RTOs”), which are regional non-profit organizations tasked with operating transmission facilities in an efficient and non-discriminatory manner. The activities of the RTOs by law, involving the cost of constructing and operating these transmission projects must be “just and reasonable” and must be apportioned to individual customers based, to some degree, on the customer’s role in creating such costs.

In 2010, the Midwest (now Midcontinent) Independent System Operator (“MISO”), one of the RTOs, sought FERC’s approval to implement a tariff allocating the cost of construction of new “multi-value projects” among its members. MISO proposed allocating the cost of these projects, consisting of a series of transmission lines designed primarily to bring wind power in the Midwest to market, among the various utilities based upon each utility’s share of the total power consumption. In effect, this places the majority of the costs of these new transmission lines on the urban population centers that consume the energy, rather than on the typically rural areas where the energy is generated.

FERC approved MISO’s proposed allocation in 2011, and the issue was brought before the Seventh Circuit Court of Appeals for review. In its June 7th, 2013 opinion, the U.S. Court of Appeals upheld FERC’s orders, thus approving MISO’s proposed allocation. Though the issues could be further appealed to the U.S. Supreme Court, for the time being the Court of Appeals’ decision will be controlling.

Potential Impacts

This decision could have several significant impacts for public utilities, transmission operators, renewable project developers, and retail customers throughout the region, but perhaps the two most pressing results are as follows:

Impact on State RPS Policies

In reaching its conclusion, the Court of Appeals considered the propriety of Michigan’s renewable portfolio standard, which requires Michigan utilities to obtain at least 10 percent of their generation from renewable sources by 2015 and mandates that, with certain exceptions, the renewable energy must come from projects located within the state. Because the law restricts the use of out-of-state renewable energy, Michigan argued that they would receive less benefit from the proposed multi-value projects, and thus should pay a lesser portion of the costs. Rejecting this argument, the Court of Appeals held that “Michigan cannot, without violating the commerce clause of Article I of the Constitution, discriminate against out-of-state renewable energy.” Most states in the U.S. have “geographic sourcing” requirements in their renewable energy standards (“RES”) or renewable portfolio standards (“RPS”) that favor in-state generation, and this precedent could encourage a surge of legal challenges to those provisions in the coming months. If successful, such challenges could open up numerous new markets for comparatively inexpensive Midwestern wind generation.

Impact on the Development of Transmission Projects

By approving MISO’s cost allocation methodology, this decision should help drive the continued development of transmission lines that bring remote renewable generation to market. Allocating the costs of constructing these lines based upon the total consumption of energy rather than by local region, MISO’s previous allocation method, effectively increases the economic viability of the lines for the transmission developers and Midwestern utilities that would construct the projects.

If you have any questions about the Court of Appeals decision or the impact of transmission projects generally, please contact myself or another member of the Polsinelli Energy Group. In addition to its established group of energy attorneys, Polsinelli is proud to have recently been joined by Kevin Gunn, the immediate past Chairman of the Missouri Public Service Commission (“MPSC”), who bring unique insights to these issues through his work with the MPSC, his service on the board of directors of the national Association of Regulatory Utilities Commissions, and his participation on the executive committee of the Eastern Interconnection States’ Planning Council.

 

 

 

 

 

 

 

 

 

 

As one of the final acts of the 2013 legislative session, on May 17th the Missouri legislature approved an amendment that will phase-out the Missouri solar rebate between 2014 and 2020. The approved amendment was based largely upon similar legislation that was supported by the Missouri solar industry trade group, MOSEIA, as well as the Missouri public utilities.

As background, pursuant to Proposition C, the voter intiative implementing Missouri’s Renewable Energy Standard, the state’s public utilities provide a rebate of $2.00 per watt for new or expanded solar systems on customers’ premises, up to a maximum of 25 kW per system (for a maximum total rebate of $50,000 per system), subject to a 1% annual cost cap for the utilities.

This rebate has been viewed as extremely effective in encouraging the development of the Missouri solar industry over the last few years. In light of this success, going into the 2013 legislative session both the solar industry and the public utilities believed that it was necessary to begin planning for the phase-out of the incentive over the next few years. To this end, a number of bills were introduced setting forth proposed phase-out schedules ranging from 4 to 6 years. Though none of the stand-alone bills garnered enough support to pass both chambers prior to the session end on Friday, an amendment to an existing utilities bill which included the phase-out language was successfully proposed and passed on the final day of the session.

As passed, the amendment sets forth the following phase-out schedule for the solar rebate:

  • $2.00/watt before June 30, 2014;
  • $1.50/watt between July 1, 2014 and June 30, 2015;
  • $1.00/watt between July 1, 2015 and June 30, 2016;
  • $0.50/watt between July 1, 2016 and June 30, 2019; and
  • $0.25/watt between July 1, 2019 and June 30, 2020.

In addition to the phase-out, there are a number of other provisions included in the amendment that could potentially impact the Missouri solar industry and the public. If you have any questions about the solar rebate, this legislation, or the potential impacts on the solar industry or your company, please feel free to leave a comment or contact me at lhagedorn@polsinelli.com or (913)234-7416.

As part of our continuing efforts to provide current, topical information relating to renewable energy projects, RenewableEnergyLawInsider provides a series of posts from individuals with a wide range of experience and expertise. Today, Tracy Hammond from the Polsinelli Public Policy Group in Washington D.C. provides an update about the various energy industry tax policy options that are being considered by the Senate Finance Committee. Enjoy!

Last week, the Senate Finance Committee outlined a variety of options to overhaul many of the provisions of the tax code that relate to the energy industry.  Options included eliminating all existing incentives, replacing energy tax expenditures with a carbon tax or making narrower tweaks to credits, deductions and other preferences that apply to energy sources. The document is only an early indication of how comrehensive tax reform could impact the energy sector.

The white paper developed by Democratic and Republican committee staff serves as a menu of nearly all prominent energy tax reform ideas that have been put forth over the past several years. It is presented as a set of options—not recommendations.  None of the varied proposal have been endorsed by Finance Chairman Max Baucus (D-MT) or ranking member Orrin Hatch (R-UT).  Instead, it represents a non-exhaustive list of prominent tax reform options” for committee members to consider.

Suggested principles include:

  • providing certainty to energy firms
  • simplifying the tax code
  • making tax expenditures fair and efficient
  • encouraging energy independence
  • addressing externalities inherent in energy production

The document cites Congressional Budget Office estimates that this year alone energy-related tax expenditures will cost the government over $16 billion in unrealized revenue in addition to $3 billion in direct spending. Renewable energy companies will receive 45% of the benefits, with 29% going towards energy efficiency, 20% for fossil fuels and 7% for nuclear power.

Options for reform include eliminating all energy expenditures—including permanent oil and gas tax deductions and temporary renewable PTCs—to maintaining some incentives while tweaking others. The paper discusses a carbon tax, and considers expanding master limited partnership (MLP) treatment and extending accelerated depreciation to renewable energy companies.

The paper reflects a growing sentiment that may ultimately result in the elimination of temporary tax breaks targeted at wind and solar energy, biofuels, and electric vehicles; and replacing them with “one or more technology-neutral tax incentives.”

Upon release, Finance Committee members met for over an hour to discuss the paper, but did not disclose which options they might seek to enact into law.

Sen. Debbie Stabenow (D-MI), Chair of the Finance subcommittee on energy, said she had suggested the need to provide longer-term certainty for renewable energy companies, but admitted there was no consensus among committee members.

“It was a pretty good discussion,” Sen. Pat Roberts (R-KS) said after the meeting.  “But I think everybody agreed we need more information…then we can get into the weeds.”

As part of our continuing efforts to provide current, topical information relating to renewable energy projects, RenewableEnergyLawInsider provides a series of posts from  individuals with a wide range of experience and expertise.  Today, two representatives from the Polsinelli Public Policy Group in Washington D.C., Andy Wright and Tracy Hammond, provide an update on the Obama administrations efforts to extend Master Limited Partnerships and Real Estate Investment Trusts to renewable energy projects.  Enjoy!

Earlier this week, President Obama’s top climate and energy advisor Heather Zichal stated that the White House is working with Congress to open up new financing avenues for renewable energy projects that would help put them on more equal footing with their incumbent, fossil fuel counterparts.

Zichal indicated that the White House is reaching out to both Democrats and Republicans in both Chambers of Congress on several energy-related tax measures that could be included in a more comprehensive tax reform effort later this year. Specifically, the Administration is working with Members of Congress to “help get their heads around” two financial structures called Master Limited Partnerships (MLPs) and Real Estate Investment Trusts (REITs) that would allow renewable energy companies to leverage more equity financing for building new infrastructure.

“Because we view the tax code as an important way to actually affect energy policy, we’re doing a lot of groundwork right now to help provide technical assistance to some of the other Members on both sides of the aisle,” Zichal said.

MLPs allow a business to organize a partnership where ownership interests are traded in financial markets like common stock, allowing a broad pool of investors to put up needed capital. A REIT is a security that sells like a stock and invests in real estate property directly.

Currently neither MLPs nor REITs are open to renewable energy projects, forcing developers to partner with tax equity investors that provide financing in exchange for the benefits of the renewable energy tax credits. This arrangement increases financing costs and limits the universe of possible investors to about $3 billion to $5 billion by some estimates. However, the MLP and REIT products open up potential pools of $350 billion and $800 billion of market capitalization, respectively.

Senators Chris Coons (D-DE) and Jerry Moran (R-KS) introduced legislation last Congress that would extend MLPs to renewable projects and Coons has promised to reintroduce his legislation this year. REITs, meanwhile, could be extended to renewable energy through administrative action by the Treasury Department, or Congress could pass new legislation authorizing renewable developers to access the tax structure.

In addition to Zichal’s comments, Ernest Moniz, nominated to be the next Secretary of the Department of Energy (DOE), also spoke out in favor of “Green MLPs” in his confirmation hearing before the Senate Energy Committee on April 9th. DOE has already convened several workshops to explore how it can assist companies that want to organize MLPs or REITs to attract investment. These include ongoing efforts focusing on how to standardize power purchase contracts to make them easier to use as investment vehicles and on continuing DOE’s role as an information clearinghouse for the private sector.

While conservative Members in Congress have been widely critical of the Production Tax Credit (PTC) for renewable electricity generation, MLPs and REITs offer ways to support energy development with little cost to the federal government. Neither is a direct subsidy for the industry. Rather, they are designed to attract additional private investment in renewable projects. These financial vehicles can also help the renewable power sector avoid more boom-and-bust cycles that have plagued the industry’s reliance on tax credits.

In a time of hyper-partisanship inWashington, extending MLPs and REITs to the renewable energy sector offers a rare opportunity to enact meaningful, bipartisan public policy that can both increase domestic energy production and equal the playing field for energy technologies.

It’s been a busy few months here at RELI, with major projects taking up a substantial amount of my time.  Hopefully, I’ll be able to provide some details on that work in the next few days, but for the time being I wanted to pass along an article that I wrote for the March edition of the Missouri Municipal League‘s publication The Review.  Enjoy!

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There can be no doubt about it.  Electric vehicles are on the way.  In his 2011 State ofUnionaddress, President Obama put forth a firm challenge for theU.S.automotive industry when he called for theUnited Statesto “become the first country to have a million electric vehicles on the road by 2015.” 

Though President Obama’s goal of 1 million electric vehicles (“EVs”) by 2015 is probably overly optimistic, there are signs that the EV market in theUnitedStateis gaining momentum.  In the span of one year, the market for EVs tripled from approximately 17,500 EVs sold in 2011, to approximately 53,000 new EVs in 2012.  This growth is particularly impressive when you consider that even the most mainstream EV offerings such as the Chevrolet Volt, Nissan Leaf, and Toyota Prius Plug-in Hybrid have often only been available in limited quantities in major markets.  Additionally, it is unlikely that the market penetration of EVs will continue to grow at a slow, incremental pace.  Instead, it is likely that the number of EVs on the nation’s highways will increase dramatically as consumers become more exposed to EV technology and manufacturers release a broader selection of makes and models of EVs that appeal to a wider range of consumers.

Being the “Show-Me” State, it is perhaps unsurprising that many Missouricommunities have delayed planning the local infrastructure and procedural processes that will be necessary to support wide-spread EV adoption.  Fortunately, in 2011 the U.S. Department of Energy awarded a grant to the MetropolitanEnergyCenterin Kansas City, MOto produce a regional plan that can be implemented by municipalities in Kansasand Missourito prepare public resources and secure the economic and environmental benefits of EVs.  This plan, which will be accessible at www.electrifyheartland.org, compiles expert analysis from EV industry participants, local communities, public utilities, and subject matter experts such as Black & Veatch and the law firm of Polsinelli Shughart to provide guidance to communities that are seeking to lay the foundation for widespread EV adoption. 

Among the numerous findings detailed in the plan,Missouricommunities should perhaps benefit the most from the discussion of the unique planning and regulatory efforts that will likely be required to accommodate EV adoption.  While at face value EV usage may not appear to require much attention, local governments should strongly consider taking the following steps before EVs start appearing on city streets: 

  • First, an estimate should be prepared of exactly how many EVs might be purchased in the community in order to get a sense of the scope and timing of the planning efforts that should be undertaken. 
  • Second, the municipality should examine its existing building codes to determine what standards should be applied to the installation of EV charging stations in residential and non-residential settings. 
  • Third, the municipality should examine its current electrical permitting and inspection process to determine how it will ensure that EV charging stations installations are conducted in a safe and reliable manner without unduly burdening either the installers or the permitting office.
  • Finally, the municipality should examine its existing parking and signage ordinances to determine how it will treat parking spots with electrical vehicle charging stations.

Projections for Missouri EV Adoption

When talking about long-term national goals, it can be easy to lose perspective on local impacts.  If theUnited Stateswere to reach its goal of 1 million EVs on the road, how many EVs could be expected in the average community inMissouri? 

Based upon motor vehicle registration data gathered by the U.S. Federal Highway Administration,Missourihad a total of just over 5 million vehicles registered in the state in 2011, or roughly 8 vehicles for every 10 people in the state.  As Figure 1 below illustrates, assuming that the 1,000,000 nation-wide EVs are distributed proportionally with population among the states, Missouri could expect a total of just over 20,500 EVs, or about one EV for every 300 people in the state. For a community of 10,000 people, this equals roughly 34 EVs, or roughly 340 EVs for a community of 100,000.

Of course, the real challenge for municipal governments lies not in the vehicles themselves, but with the infrastructure necessary to charge the vehicles, known as Electric Vehicle Supply Equipment (“EVSE”) or simply as “charging stations.” 

It is probably safe to assume that every person who purchases an EV will also purchase a charging station for their home, so they will be able to charge their vehicles overnight.  Additional charging stations will likely be installed by local businesses, by potential third-party suppliers of electricity, and by the municipalities themselves.  Taking these additional charging stations into account, it can be estimated that roughly 1.5 charging stations will need to be permitted, installed and inspected for every EV located within a community.  Figure 2 below extrapolates this estimate across the state to show the projected number of charging stations that will be required.

Updating Building Codes to Address Charging Stations

Once local planners have a sense of how many EVs can be expected in their jurisdiction, the question raised is what changes should be made in the local ordinances and policies to accommodate this influx of new vehicles and charging stations.  Because there is no state-wide authority for building codes inMissouri, it will be necessary for local communities to review their building codes to ensure that EV charging stations will be safely integrated into new and existing structures.  As with any revisions of building codes, the main goal of the process is to incorporate as much flexibility as possible while still maintaining the highest level of safety for installers and citizens.

Specifically, there are a number of revisions that communities can make to their building codes that will significantly improve the processing time and effectiveness of their planning efforts for EV charging stations, a few of which are described below:

  • To ensure safe and up-to-date practices are utilized during installations, adopt the most current version of the National Electrical Code (“NEC”), or at least Article 625 of the NEC which includes best practices for wiring methods, equipment construction, control and protection, and equipment locations for EV charging stations.
  • Require all new, reconstruction and renovation building projects to ensure that the electrical room and all conduits leading to the electrical room in new multi-unit, commercial or industrial developments are appropriately sized to accommodate future electrical equipment necessary for charging stations, as well as the voltage and amperage capabilities of the accompanying infrastructure.
  • Require that all newly permitted construction or renovation projects install sufficient conduits, junction boxes, wall space, electrical panels and circuitry capacity in locations that could potentially serve EVSE sites in the future, such as garages and parking facilities.

Update Electric Permitting Ordinances to Address Charging Station Installations

For most municipalities acrossMissouri, the primary logistical hurdle for EV adoption is how to design a permitting and inspection process for EV charging stations that will allow for safe and reliable installations without unduly burdening their administrative staff.  Currently, when faced with an electrical permit for the installation of an EV charging station, most municipalities default position is to either follow the pre-established procedure for miscellaneous electrical permits, or fail to permit the installations at all.  Both scenarios present unsatisfactory results and fail to consider the particular complexities of installing an EV charger.  This puts the public confidence in EVs and EVSE at risk unnecessarily.

When designing these inspection programs, one of the easiest ways to minimize the administrative burden while efficiently allocating resources is to recognize the fact that communities will face a wide spectrum of potential scenarios for charging station permits, and there is no single permitting process that would be appropriate for all occasions.  For example, significantly less regulatory scrutiny will be needed for installation of a small charging system in a residence than would be required for a large commercial entity that wants to install numerous charging stations for use by customers and employees. As discussed more thoroughly below, in order to accommodate these different needs and allocate resources appropriately, many communities across the country are adopting a multi-tiered process that applies different levels of scrutiny to projects based upon the project’s complexity. 

Single-Family Residential Installations

By far the easiest EV charging alternative for most consumers is to utilize an existing 120-volt outlet located in the garage.  Obviously, in these cases an electrical upgrade is not required, so no permit is needed.  In cases where a dedicated 120V or 240V receptacle and circuit is desired for a charging station, a minor electrical permit likely needs to be issued, though it can easily be handled under the city’s existing permitting requirements. 

However, in cases where the resident’s existing electrical panel cannot safely meet the increased electricity needs, then an additional permit will be required in order to either upgrade the electrical panel or install a new panel and meter.  In order to gather all of the information needed to properly assess the safety of the installation, many municipalities across the country are adopting a stand-alone permitting form for these installations.  Often, these permits are based in large part upon a form permit application that has been prepared by the U.S. Department of Energy’s Alternative Fuels and Advanced Vehicles Data Center, available at http://www.afdc.energy.gov/pdfs/EV_charging_template.pdf.

Beyond adopting a specialized stand-alone permit, there are other steps that a community can take to streamline the permitting process.  For example, if the non-minor permit application has been submitted by a certified electrician that has received training in the installation of EV charging stations from an nationally-recognized training program, the local government can have some comfort that the installation is safe and therefore can adopt less stringent inspection processes, such as inspecting one out of ten installations or foregoing inspections altogether.  Where the installation was conducted by an electrician that has not been trained in EVSE, then many local governments have made it a priority to inspect the projects as soon as possible.  For example, many municipalities across the country have committed to conducting inspections within 24 hours of the installation of the charging station equipment.

Large Single-Family Residential, Multi-Family Residential and Commercial Installations

While small single-family residence installations likely present relatively few safety risks, charger installations in larger settings can be significantly more complex and thus require more significant oversight from local permitting bodies.  As an example, compare the installation of a new 120V / 1.8 kilowatt outlet in a residential garage to the installation of ten quick-charge stations outside of a movie theatre or grocery store, each of which are capable of handling 240V and up to 20 kilowatts of electricity.  For these more complex projects, communities should consider requiring applicants to fill-out a specialized permit and provide significantly more scrutiny to these types of installations.

EV Signage and Parking Marking Plans

Though we seldom stop and think about their impact, street signs can serve three important functions to facilitate the adoption of EVs in a community. First and most obviously, they can direct EV drivers to the nearest public charging stations.  Second, they serve to educate non-EV drivers about the availability of charging stations, and thus promote confidence that, should they decide to purchase an EV, there will always be a charging station readily-available.  Finally, they can publicize premium reserved parking spots, should the government choose to utilize the parking locations as an incentive for EV drivers.

Given the potential importance of signage to the public’s perception of EVs, it is perhaps not suprising that a significant amount of debate has occurred at the national level regarding the adoption of a uniform standard for EV charging station signs.  Currently, roadway signage is regulated by the U.S. Department of Transportation, Federal Highway Administration (“FHWA”).  Specifically, approved signage requirements are contained within the Manual of Uniform Traffic Control Devices (“MUTCD”).

In its current form, the MUTCD does not contain any requirements for EVSE signage.  However, there is a process by which state transportation agencies may submit a request for so-called “experimental” signage.  If approved, the experimental signs may be used within the state subject to certain requirements and restrictions.  By way of example, in 2011, the Departments of Transportation for the States of Washington andOregonsubmitted a request for the FHWA to consider an EV Charging General Service symbol, displayed as Figure 3 below. The FHWA granted those states an interim approval to use the signs to designate charging station locations.

In order to promote consistency,Missouricommunities should seriously consider adopting this FHWA-approved signage, and encourage the Missouri Department of Transportation to submit a request and obtain approval from the FHWA to utilize the symbols in the State.  These symbols have already been thoroughly evaluated by the FHWA and were found to be highly visible and comprehensible by a large segment of the population.  Additionally, adopting a symbol that is being utilized in other jurisdictions across the country increases the effectiveness of the symbols by promoting uniformity and recognizability.

While the FHWA approval process is being pursued, local communities can also begin to present this signage as an option for local businesses to utilize on private property, similar to what many businesses use currently for “Pregnant Mother” parking spaces.  Of course, such signage would be unofficial and entirely without the force of law, but its adoption would signal that the business recognizes and supports the needs of its EV-driving clientele.

Incentives or Penalties for EV Charging Station Parking

 

Finally, once the stations are installed and the signs are put up, public and private parking facility owners will need to determine whether, and to what extent, such signs will be enforced. 

InMissouri, the enforcement of street signs on public property is currently a prerogative of local governments, and thus each community will need to determine the level of enforcement that is appropriate for its populace.  However, when setting these enforcement policies, it is important that communities carefully weigh several competing interests.  First, during the early years of EV adoption, parking spots with EV charging stations may be vacant for large periods of time.  It is possible that a negative sentiment could develop if these spots are located in high-traffic areas and parking by non-EVs is prohibited and strictly enforced.   On the other hand, the availability of these charging locations is critically important for fostering range confidence for EV drivers.

To successfully balance these concerns, local communities might consider promoting the placement of EVSE in locations that are convenient and accessible, but not necessarily in the most desired or prominent parking locations.  Additionally, if the community is considering adopting punitive actions for non-EVs parked in an EV spot, the community might consider foregoing enforcement of those penalties until the level of EV adoption in the community is strong enough to ensure that the spots are filled a significant amount of the time.

Proper Planning Will Lead to a Smooth Transition to EVs

There can be no doubt about it, EVs are on the way.  By taking a few relatively minor steps to prepare for this influx of new vehicles and the infrastructure needed to support those vehicles, local communities will be able to minimize logistical and administrative burdens and ensure that local residents across the state are able to enjoy their new vehicles safely.

 

 

 

 

 

 

 

 

 

 

 

 

Photo Credit: Larry Downing, Reuters

The votes have been cast and the dust has settled, and it is now clear that Democrats were able to score some significant points in the 2012 election.  For the advocates of wind, solar, and biomass projects across the U.S., however, the key question is what this means for the future of federal renewable energy policy.

President

Of course, the big news of the night was the re-election of President Barack Obama.  President Obama has been a consistent supporter of renewable energy of all types, and has publically endorsed an extension of the vitally important federal Production Tax Credit (“PTC”). 

Governor Romney, on the other hand, appeared to be less enthusiatic about the PTC.  As pointed out in an excellent article by Laura DiMugno in North American WindPower, Gov. Romney stated in July that he was in favor of letting the PTC expire, but then revised that opinion to support a phase-out of the credit at a late-October campaign event in Iowa.  “We will support nuclear and renewables but phase out subsidies once an industry is on its feet.” Romney said.

Fortunately, the uncertainty of the election is now behind us, and with voters showing strong support for Democrats across the board, it is much more likely that President Obama will have the political capital necessary to ensure continuing, consistent support of the various renewables industries.

Senate

With the imminent consideration of the wind energy Production Tax Credit on the immediate horizon, and a more broad evaluation of tax incentives for renewables likely to occur over the next legislative session, it is extremely important that the renewable industries continue to find strong support in the U.S. Senate. With this in mind, taking a broad look, the fact that the Democratic Party has maintained its majority should be excellent news for advocates of renewable energy.

More specifically, renewable project developers have been fortunate to find a number of staunch allies on the floor of the Senate, and for the most part this core of support appears to have remained largely in-tact through the election.  Of particular note, Republican Sen. Scott Brown of Massachusetts (who co-sponsored a bipartisan four-year PTC extension bill) appears likely to lose his bid for re-election, but he will be replaced by Democrat Elizabeth Warren who is likely to share his support for the PTC.  Many other stalwart advocates of renewables, such Sens. Chuck Grassley (IA), Mark Udall (CO), Al Franken (MN) and Ron Wyden (OR), were not up for re-election in 2012.

Additionally, as Ben German of The Hill’s Global Affairs Blog points out, the election also has a significant impact on key Senate committees relating to energy issues.  Of particular importance, Sen. Jeff Bingaman (D-N.M.) is retiring and will step down as Chairman of the Energy and Natural Resources Committee.  Because Democrats retained control of the Senate, the chairmanship will likely pass to Sen. Ron Wyden (D-Ore.), rather than passing to Sen. Lisa Murkowski (R-AK). Sen. Murkowski, who will likely be the ranking member of the Energy and Natural Resources Committee, has said in the past that she is in favor of a phase-out of the PTC.  As quoted by Nick Juliano, Sen. Murkowski has stated “I’m in the camp that says we need to figure out how we phase down, how we transition out, but I’m also not one that just wants to cut it off cold turkey.”

House

Leading up to the 2012 election, Democrats held 190 seats as compared to Republicans 240 seats in the U.S. House of Representatives.  Increasing, or at the very least maintaing, this number is extremely important for the renewable industries, as there are a number of Representatives who are willing to reach across the aisle in support of renewable energy. With this in mind, it is fortunate that voters in the 2012 election appear to have looked favorably upon Democrats.  With a number of races still too close to call as of the time of this writing, it appears very likely that the Democrats will manage to win a few additional seats in the House, but those gains will fall short of taking back control from the Republicans.

Of particular relevance to wind developers, however, is how the most vocal opponents of the federal Production Tax Credit have fared.  In September, 47 House Republicans signed a letter to House Speaker John Boehner asking that the PTC not be extended.  Using those signatories as a representative group of PTC opponents, it appears that the core group of PTC opponents in the House remains largely in-tact.  Specifically, 43 of the 47 signatories were reelected.  Of those four, one successfully ran for Senate (Jeff Flake of Arizona), and three were replaced by Republicans (Jeff Flake, Cliff Stearns of Florida, and Jeff Landry of Louisiana).  Only one signatory of the anti-PTC letter has been replaced by a Democrat, as Joe Walsh of Illinois lost to Tammy Duckworth.

Of course, not all of the excitement yesterday was at the federal level, as renewable project developers also had significant stake in a number of state-level races.  With the continued support key incentives and state Renewable Energy Standards hanging in the balance, these races also deserve some commentary, but that analysis will have to be left for another day.

As an avid follower of energy projects in the Midwest, I’m proud to be attending the 2012 Kansas Energy Conference in beautiful Manhattan, Kansas.  Have no fear if you aren’t able to attend, however, because I’ll be uploading lots of pictures and commentary from the exhibitors and presentations over the next few days.

For those of you that will be in attendance, please stop by the Polsinelli table and say hello.  I’ll be buzzing about the new collaboration between Polsinelli’s Energy Law Practice Group and the Kansas Energy Information Network.

Finally, as an added bonus for you, my loyal readers, here is a special preview of one of the many excellent handouts that we will be distributing at our table.  This is just a small example of the wonderful content that will be available, so stop by and take a look.

If you have any questions or comments about the Kansas Energy Conference or Kansas energy projects in general, please leave a comment or contact me directly at lhagedorn@polsinelli.com.

For all of you who are interested in renewable energy projects in the State of Kansas, I’m pleased to bring you some good news this Monday morning.  The Energy Law Practice Group of Polsinelli Shughart PC (a law firm that I am proud to be a part of) is announcing an ongoing collaboration with the Kansas Energy Information Network (KEIN), a phenomenal informational resource for energy projects in Kansas.  This collaboration is the result of significant work by Alan Claus Anderson and J. Britton Gibson of Polsinelli Shughart and Scott W. White of KEIN and Scott White Consulting.

What does this mean for you?  It means that KEIN will continue to provide the excellent content that has been its staple since 2001, but will also have access to additional resources and analysis from one of the nation’s leading energy law firms.  We are all extremely excited about the potential benefits of this collaboration for everyone involved.

Additional information from the Polsinelli press release is provided below.  If you have any questions or comments, please leave a comment, email me at lhagedorn@polsinelli.com, or seek me out at the Kansas Energy Conference being held this Tuesday and Wednesday in Manhattan, Kansas.

Polsinelli Shughart Energy Practice Group Partners with Kansas Energy Information Network

Press Releases – September 21, 2012

The Energy Practice Group of Polsinelli Shughart PC is proud to announce that it has teamed with the Kansas Energy Information Network (KEIN) to continue making useful energy information widely-available and easy to access. This collaboration will continue to provide an invaluable one-stop resource for the general public and energy professionals seeking information and analysis about energy projects in Kansas.

“We continue to be very active in energy projects and issues in Kansas and we’re excited to be able to work with Scott and the Kansas Energy Information Network on not only collecting information but providing analysis that can be used by people and companies interested in Kansas energy issues” said Alan Anderson, vice chair of the Energy Practice at Polsinelli Shughart.

Founded in 2001 by Scott White, the Kansas Energy Information Network (KEIN) has become the first stop for those who seek energy information related to Kansas and the surrounding region on the internet. The primary purpose of KEIN is to promote energy efficiency, renewable energy and a better understanding of energy issues by making reliable information available to the public.

“Polsinelli Shughart is one of the premier law firms for energy issues in the Midwest, and Kansas in particular. They have extensive knowledge and experience relating to Kansas energy issues, and their on-going involvement in the development of traditional and renewable energy resources in the state will undoubtedly continue to contribute to the success of these industries. It pleases us that Polsinelli is collaborating with KEIN and again demonstrating their commitment to the growth and strength of Kansas’ energy industries,” said Scott White, founder and executive director of KEIN.

“For years, we have followed and used the great information included on the Kansas Energy Information Network site. Scott has a great understanding of the issues and developments affecting energy projects in Kansas. We are very pleased to partner with him to build upon his solid work to continue making KEIN the preeminent source for information about Kansas energy projects,” said Britton Gibson, a shareholder in the Polsinelli Energy Practice Group.

Polsinelli Shughart’s Energy law practice is one of the leading energy practices in the Midwest and has widespread national experience representing energy companies, developers, lenders and investors in connection with the acquisition, development, finance and operation of a variety of energy facilities – including oil, gas and electric facilities and wind, solar, geothermal, biomass and biofuel renewable energy projects. The Polsinelli Energy group includes attorneys with a broad range of interdisciplinary experience and depth of knowledge. Polsinelli’s energy attorneys’ vast experience in real estate, environmental, construction, land use, finance, regulatory, business, and litigation issues is an invaluable resource for meeting energy clients’ objectives.

RELATED CONTACTS

Alan Anderson, T. 913.234.7464, aanderson@polsinelli.com

Scott W. White, T. 785.424.0090, Scott@KansasEnergy.org

About Polsinelli Shughart 

With more than 600 attorneys, Polsinelli Shughart (www.polsinelli.com) is a national law firm and recognized leader in the areas of health care, financial services, real estate, life sciences, energy and business litigation. Serving corporate, institutional and individual clients, the firm builds enduring relationships by creating value through our legal services – with passion, ingenuity and a sense of urgency. The firm has offices in Chicago; Dallas; Denver; Kansas City; Los Angeles; New York; Phoenix; St. Louis; Washington, D.C.; and Wilmington, DE. In California, Polsinelli Shughart LLP.

Love him or hate him, there is no denying that yesterday former President Bill Clinton delivered powerful advice for advocates of every renewable industry.

In his hour-long remarks at Solar Power International, President Clinton touched on a wide range of topics, from recent successes in the solar industry, the potential for solar to assist the poorest members of communities at home and abroad, the industry’s response to the Solyndra scandal, and, of course, the potential impact of the current presidential election on renewable policies in the U.S.  In particular, President Clinton gave one piece of advice that warrants a bit of additional commentary.

“Get the basic facts in front of the American people”

We live in a world of partisan talking heads and 10-second sound bites, and there is no one on the planet that understands that better than Bill Clinton. Unfortunately, as anyone who works in a energy industry knows, renewable energy is not always easy to discuss in short bursts of information.  A true description of an average project requires a decent grasp of engineering jargon, economic analyses, complicated business models, and a staggering variety of statutes and regulations.

However, thankfully, the results of this perfect storm of jargon are two concepts that (most) everyone can instinctively understand and appreciate:

1.)    Renewable energy helps the environment; and

2.)    Renewable energy can create jobs and bolster the economy.

Let’s not mince words…If these concepts are not the first thing that cross the average person’s mind when they hear about a solar, wind, or biomass project, then we have failed as advocates.  The fact that there is any debate about these points means that we are losing theBattleof the Sound Byte.

Fortunately, President Clinton provides us with the following suggestions for how we can begin to regain the public opinion.

You can be proud of yourself. . .

Get the positive facts out there. . .

Provide visible manifestations of progress.

Though these comments sound like they come from a self-help book, they perfectly capture a major obstacle for renewable energy industries.  President Clinton sums it up nicely…

Most Americans don’t know that the solar industry employs more than 100,000 people – more than the coal industry.  They don’t know that renewable energy sustained an eight percent growth rate through the worst years of the recession. . . . and they don’t know that  theUnited Statespays $22 in subsidies to oil, coal and nuclear power for every $1 invested in renewable energy. . . An enormous number of people don’t know that solar is affordable now.

In order to offer any sort of meaningful rebuttal to opponents of renewable energy, it is vital that we recognize and tout the overwhelming benefits that solar, wind and biomass projects can provide, and emphasize the numerous successes that have already been achieved.

For excellent recaps of President Clinton’s remarks, take a look at this PV Magazine post by Hans-Christoph Neidlein, and Anne Fischer’s excellent recap on the Solar Novus blog.

Thoughts, questions or comments?  Leave a comment or contact me at lhagedorn@polsinelli.com.

The legislature of the State of Colorado has been very active on renewable energy issues over the last few weeks.  Three bills have been making steady progress through the House and Senate in Denver, each of which could have a noticeable effect on the renewable industries in the state.

I.   Coal-Mine Methane as a Renewable Energy Source

House Bill 1160 seeks to amend Colorado’s renewable energy standard to include electricity generated by burning captured coal-mine methane.  The legislation has passed in the House, and is now being considered by the Senate Local Government Committee.  The bill faces strong opposition by many environmental and renewable energy advocacy groups, including Western Resource Advocates (“WRA”), based in Boulder, Colorado.  In a March 23, 2012 guest commentary in the Denver Post, John Nielsen, the Energy Program Director at WRA stated as follows:

By allowing coal-mine methane to qualify as “renewable energy,” something it is not, HB 1160 would diminish further investments in Colorado’s wind and solar resources. Those resources are sustainable, emission-free, use little or no water, provide important health and economic development benefits, and reduce greenhouse gases.

II.   Prohibition on Severance of Wind Rights

House Bill 12-1105 seeks to establish a non-severable wind energy right in real property.  Essentially, under this proposal a landowner would not be able to sell fee simple title to the wind rights on his or her property, but must instead execute a lease, license, easement or other agreement to develop or participate in the income from or the development of a wind project on the property.  The legislation has passed in the House, and is now being considered by the Senate Local Government Committee.  This proposal law is in-line with a national trend against severance of wind and solar rights, and effectively prohibits a landowner from selling the wind or solar rights to a project developer while retaining the ownership of the underlying property.  Interestingly, however, this legislation seems to expressly contemplate and allow for the transfer of the rights to receive the income from the wind project to a third-party, which could potentially lead to many of the same down-stream ownership concerns that commonly give rise to severance restrictions in the first place.  K.K. DuVivier, professor of law at the University of Denver Sturm College of Law and author of the excellent resource “The Renewable Energy Reader,” was recently interviewed by Colorado Public Radio about this legislation.

III.   Ending PUC’s Authority Over Transmission Siting Issues

House Bill 12-1312 seeks to modify the Colorado Public Utilities Commission’s approval process for transmission line certificates of convenience and necessity, so that the PUC no longer has jurisdiction over the land use rights or siting issues related to the location or alignment of the proposed transmission lines.  Instead, those issues would be left to the discretion of the county and local governments.  Ms. Becky Quintana, a representative of the PUC, recently testified before the House Committee on Transportation about this legislation and stated that the PUC neither supported nor opposed the legislation.  From the PUC’s perspective, the legislation does not restrict the authority of the PUC, but rather more clearly defines the jurisdiction of the PUC and local governments, though she noted that, under the proposal, any transmission project that spanned multiple counties would require inter-governmental agreements as each county’s jurisdiction would end at the county line.

Do you have any questions or comments about any of these bills or about developing renewable energy projects inColorado?  If so, leave a comment below or contact me directly at lhagedorn@polsinelli.com.