Public Policy – Page 14 – Global Power Law & Policy

Australian Renewable Energy Target (RET) – Revised RET deal finalised

May 18 2015

A bipartisan agreement on the revised Renewable Energy Target (RET) was finally reached between the Australian Government (represented by Industry Minister, Ian Macfarlane and Environment Minister, Greg Hunt) and the Opposition (represented by Mark Butler and Gary Gray) on the morning of 18 May 2015 in Melbourne. There have been reports that the agreement was reached with intervention from the Prime Minister Tony Abbott’s office.

As contemplated by the in principle agreement reached between the Government and the Opposition on 8 May 2015, the existing target of 41,000 GWh of large scale renewable energy by 2020 will now be reduced to 33,000 GWh. This reduction will be effected by way of legislative amendment to the Renewable Energy (Electricity) Act 2000 (Cth).
Australia is the first developed country to formally reduce its renewable energy target. There are suggestions the reduced RET will cause investment in Australian renewable energy projects to fall from an expected AUD20.6 billion by 2020 to AUD14.7 billion.

The Government has agreed not to pursue its proposal to continue reviewing the target every two years. This alleviates concerns over the retention of the two-yearly reviews of the scheme. These reviews have arguably been the predominant cause of the current investment freeze in the renewable energy industry. In lieu of the two-yearly reviews, annual statements detailing achievement towards meeting the RET and impacts on electricity prices will be provided by the Clean Energy Regulator.

Despite lack of support from the Opposition, the Greens and the renewable energy industry, the Government’s plan to include native forest wood waste in the range of energy sources that are eligible to contribute to the RET will be included in the relevant amending legislation which is expected to be presented to Parliament next week. The Government intends to pass this proposal with support from the Senate crossbench.

It is expected the revised RET should be passed by both the House of Representatives and the Senate before the winter recess on 25 June 2015.

The Opposition has indicated that it would increase the 2020 target if it wins the next election, which is to be held on or before 14 January 2017.

North Carolina General Assembly Active on Renewable Energy Issues in 2015 Long Session

May 13 2015

Two bills with significant renewable energy provisions were among those that survived the North Carolina General Assembly’s self-imposed “crossover” deadline of April 30, 2015. Most substantive bills must pass at least one house of the legislature before the crossover deadline in order to remain eligible for consideration in the 2015-16 legislative biennium. However, some bills and portions of bills that do not make crossover can still be included in the budget or as amendments to bills that did beat the deadline.

The two energy bills that made it through crossover provide for (i) a very limited extension of North Carolina’s renewable energy tax credit, and (ii) a reduction of the only mandatory renewable energy portfolio standard in the southeast. The bill providing for a limited extension of the state renewable energy tax credit was signed into law by Governor Pat McCrory and went into effect immediately. The portfolio standard reduction has passed the House and is being debated in the Senate as of this writing. Both bills are described in this alert.

To read the full alert, click here.

Australian Renewable Energy Target (RET) – in principle agreement reached on a revised RET

May 10 2015

After months of negotiations, Industry Minister Ian Macfarlane has confirmed that on 8 May 2015 the Australian Government and the Opposition have agreed in principle a revised Renewable Energy Target (RET) of 33,000 gigawatt-hours (GWh) of large scale renewable energy by 2020. Read More

FERC Issues Rule to Reduce Regulatory Burdens for Generators That Own Generator Tie-Lines

Apr 30 2015

I. Introduction

Last month, the Federal Energy Regulatory Commission (“FERC”) issued its final rule on Open Access and Priority Rights on Interconnection Customer’s Interconnection Facilities (“Order No. 807” or “Final Rule”)[1]. Order No. 807 is intended to reduce the regulatory burdens for generators that own generation tie-lines (referred to in the Final Rule as “Interconnection Customer’s Interconnection Facilities” or “ICIF”)[2], and to promote the development of generation resources. The Final Rule makes three significant changes to the treatment of ICIF under FERC’s regulations. First, it establishes a blanket waiver of the Open Access Transmission Tariff (“OATT”), Open Access Same-Time Information System (“OASIS”) and the Standards of Conduct requirements for all ICIF owners who in the past were subject to such requirements solely as a result of their ownership of ICIF. Second, the Final Rule requires that all third-party requests for service on ICIF eligible for the blanket waiver be made pursuant to Sections 210, 211 and 212 of the Federal Power Act (“FPA”). Finally, the Final Rule establishes a five-year safe harbor period during which ICIF owners who are eligible for the blanket waiver will benefit from a rebuttable presumption that they or their affiliates have definitive plans to use any excess capacity available on the ICIF.

Powers of Regulators Brought Into the Spotlight by High Court Decision

Apr 14 2015

Recently the High Court of Australia handed down its unanimous decision in Australian Communications and Media Authority v Today FM (Sydney) Pty Ltd [2015] HCA 7 (HCA Decision) which relates to the powers of the Australian Communications and Media Authority (Authority).

The HCA Decision accepts that the Authority was permitted to make a finding of fact that a licensee committed a criminal offence and in doing so had breached a licence condition, despite the fact that no proceedings in relation to the criminal offence had been commenced or successfully prosecuted.

Security of Payment Legislation and Set-Off Under Commonwealth Insolvency Laws

Apr 14 2015

A recent Victorian Supreme Court case[1] has clarified the impact of Commonwealth insolvency set-off provisions on State-based security of payments legislation.

The case demonstrates that although a principal is generally precluded from relying on a set-off or counterclaim in certain contexts under the Building and Construction Industry Security of Payment Act 2002 (Vic) (BCISP Act), this general preclusion does not apply if the claimant is in liquidation, due to the operation of section 553C of the Corporations Act 2001 (Cth) (Corporations Act).

The case also provides useful commentary on what is considered a ‘payment schedule’ for the purposes of the BCISP Act.

If you would like to read more about this case, please click here.

[1] Façade Treatment Engineering Limited v Brookfield Multiplex Construction Pty Ltd [2015] VSC 41.

The Australian Energy Market Commission releases a draft report recommending against the implementation of optional firm access

Mar 18 2015

On 12 March 2015 the Australian Energy Market Commission (AEMC) released its draft report about a model for optional firm access to electricity transmission networks.

The report follows the development, testing and assessment of the optional firm access model by the AEMC at the request of the Council of Australian Governments’ Energy Council.

Amendments to the Australian Corporations Regulations: carbon abatement contracts not financial products

Mar 17 2015

The Emissions Reduction Fund (ERF) forms a key part of the Australian Federal Government’s Direct Action Plan to address climate change. Under the model, successful bidders in an ERF auction enter into “carbon abatement contracts” with the Clean Energy Regulator. These contracts require the bidder to provide carbon abatement to the Regulator according to an agreed schedule.

Previously, carbon abatement contracts may have been considered “derivatives” and “financial products” for the purposes of the Corporations Act 2001 (Cth) (the Act) and Corporations Regulations 2001 (Cth) (Regulations). This characterisation would have subjected ERF participants to onerous regulatory burdens under the Act and Regulations (such as the requirement to hold an Australian Financial Services Licence).

To ensure that persons are not burdened by these regulatory obligations simply because they regularly enter into contracts with the Clean Energy Regulator, the Corporations Amendment (Emissions Reduction Fund Participants) Regulation 2015 (the Amendments) exempt carbon abatement contracts from the definitions of “derivative” and “financial product”.

The Amendments will commence the day after they are registered on the Australian Federal Register of Legislative Instruments.

Solar Sukuk Lights the Way to Alternative Funding Sources: Australia, Indonesia and Malaysia Working Together

Mar 13 2015

SGI-Mitabu, a joint venture of two Australian solar companies, The Solar Guys International and Mitabu Australia, has revived its plans to fund its Indonesian 250 megawatt solar project with Islamic compliant funding. The solar project will require up to A$550 million of financing. Commencing in July 2015, the first phase of the project will be funded through an offer of A$150 million of sukuk (a type of Islamic investment instrument, similar to a bond).

Oregon Considers Energy Storage Legislation

Mar 13 2015

The Oregon legislature is considering a bill that would require the state’s large electric utilities to procure one or more “qualifying energy storage systems” by January 1, 2020. H.B. 2193 would apply to any entity that is engaged in the business of distributing electricity to retail electricity consumers in Oregon (not including a consumer-owned utility) if the entity makes sales of electricity to retail customers in an amount that equals 3 percent or more of all electricity sold to retail electricity customers in Oregon. An energy storage system is deemed to be “qualifying” if it is “cost-effective,” and the legislation contemplates that each electric company would procure one or more such systems having the capacity to store not less than 5 megawatts of electricity but not more than an amount of electricity that is equal to one percent of the company’s peak load for 2014. H.B. 2193 would allow an electric company to recover in its rates all costs prudently incurred in procuring one or more cost-effective energy storage systems, “including any above-market costs associated with procurement.”

Catagory:Public Policy