Congress is poised to enact a one-year retroactive tax extenders package that would renew a variety of tax incentives—including the production tax credit (PTC) for wind—through the end of 2014. On Wednesday, December 3, the House passed the Tax Increase Prevention Act of 2014 (H.R. 5771) by a vote of 378-46, sending the bill to the Senate for its consideration before the end of the Lame Duck session. Read More
On Thursday, September 18, Rep. Earl Blumenauer (D-OR) led a group of 18 House Democrats in introducing the Bridge to a Clean Energy Future Act of 2014 (H.R. 5559). The bill would extend several energy tax incentives—many of which Congress allowed to expire at the end of 2013—through the end of 2015. The bill would also extend the production tax credit (PTC), as well as the election to receive an investment tax credit (ITC) in lieu of the PTC, for facilities producing energy from renewable resources through the end of 2016. Read More
The US Department of Energy (DOE) recently released its 2013 Wind Technologies Market Report summarizing the accomplishments of the U.S. wind energy industry. The full report can be found here. Compared to the record-setting 13 GW of new operating wind projects in 2012, 2013 was clearly an off-year, with only a little over 1 GW of new wind energy capacity added. One of the major reasons for this dramatic fall-off was the expiration of the federal income tax production tax credit (PTC) at the end of 2012, which created a land rush of projects being placed in service at end of year 2012, depleting the project pipeline for 2013. The revival of the PTC in 2013 was too late to stimulate significant project completion in 2013. The good news is that because projects that commenced construction by the end of 2013 will qualify for the PTC, a flood of wind projects will be placed in service in 2014 and 2015. The boom and bust cycle of PTC driven wind project development continues.
On August 8, 2014, the IRS issued Notice 2014-46, which provides guidance on several issues relating to the implementation of recent changes to the renewable electricity production tax credit (PTC) under Section 45 of the Tax Code and the energy investment tax credit (ITC) in lieu of the PTC under Section 48. In particular, the Notice addresses the manner in which taxpayers can satisfy the “physical work” test and the effect of various types of transfers of ownership after the construction of a facility has begun. In addition, the Notice modifies the 5% safe harbor test included in previous notices. In light of the issuance of the Notice, the IRS says it will not issue private letter rulings on the topics addressed in the Notice.
On August 8, 2014, the IRS released Notice 2014-46. The Notice provides guidance with respect to a number of issues. Specifically, the Notice (i) clarifies how to satisfy the “physical work” test under the begin construction requirement, (ii) clarifies the effect of various types of transfers of interests in a facility after construction has begun and (iii) modifies the application of the 5 percent safe harbor as it applies to a single project comprised of a number of facilities. The Notice can be found here. We will post a discussion of the Notice later this week.
If there wasn’t enough uncertainty about the process and standards for obtaining a programmatic eagle take permit, the U.S. Fish and Wildlife Service just made it more difficult. Since 2009, energy developers and operators – from oil & gas to wind & solar – have been able to apply for a permit for the incidental take of eagles. That permit program, which has evolved over the past several years through regulatory revisions and agency guidance, may be poised to change in dramatic fashion.
On June 19, 2014, the American Bird Conservancy and other individual plaintiffs (the “ABC Plaintiffs”) filed a lawsuit against the U.S. Fish and Wildlife Service (“USFWS”).[1] The ABC Plaintiffs are challenging the USFWS’ revision to its eagle take rule. Specifically, the ABC Plaintiffs are challenging the agency’s determination to extend the maximum term for an incidental eagle take permit (“ETP”) to 30 years on two ground: first, USFWS revised the eagle take rule without analyzing environmental impacts under the National Environmental Policy Act (“NEPA”); and second, the rule violates the Bald and Golden Eagle Protection Act (“BGEPA”) by subverting basic eagle protections and safeguards without adequate explanation. Read More
The Treasury Department and the Internal Revenue Service (IRS) are considering whether to release a third round of guidance on the production tax credit (PTC) for renewable electricity under Section 45 of the Tax Code and the investment tax credit (ITC) in lieu of the PTC under Section 48. The intent of the guidance would be to further clarify the changes in the PTC/ITC enacted as part of the American Taxpayer Relief Act of 2012 (ATRA) (Pub. L. No. 112-240). Read More
A team of K&L Gates attorneys will attend the AWEA WINDPOWER 2014 conference and exhibition in Las Vegas from May 5 to 8. This premier industry event brings together a diverse group of professionals with interest in wind power – project developers, suppliers, technicians, power purchasers, service providers, and others – to discuss trends, to hear from innovators and specialists, and to network and collaborate with colleagues. Our attorneys look forward to contributing to the conversation at the K&L Gates exhibit booth (no. 2977). Please be sure to stop by and say hello.
Additionally, K&L Gates attorneys Sam Hines and Lindsey Greer will present on the importance of worker status in the offshore wind environment during the poster presentations on Wednesday, May 6 from 4:30pm to 6:00pm in Bayside Hall D. Please join Sam and Lindsey to discuss the various legal statuses offshore workers hold under U.S. maritime law and the potential liabilities offshore employers can face in the event of a worker injury.
We look forward to seeing you at AWEA.
To learn more about the K&L Gates attorneys attending the event, please click on the names listed below:
On May 15, 2014, K&L Gates will host its annual event on investment in renewable energy in its Frankfurt office. The event is co-sponsored by Grontmij and Alexa Capital.
The program will address recent developments that shape the environment of investment in renewable energy, focusing on investment in the UK while also covering German and European trends.
As in previous years, the program will combine legal and commercial perspectives, and presents speakers with professional backgrounds in project development, M&A, finance and law, all widely experienced in the renewable energy sector.
This year, program and speakers include:
Gerard Reid, Partner, Alexa Capital
Anthony Fine, Partner, K&L Gates, London
Paul Tetlow, Partner, K&L Gates, London
Vijay Shinde, Head of UK Grid Services, Grontmij, Newcastle
Dr. Felix Grolman, CEO, Grundgrün Energie GmbH
Ian Nolan, Chief Investment Officer, Green Investment Bank
Mark Henderson, Partner, Greencoat Capital
Nick Boyle, CEO, Lightsource
Thomas Kercher, CEO, PFALZSOLAR GmbH
Oliver Christof & Constantin Windisch-Graetz, Christof AG
Anthony Fine, K&L Gates (Chair)
Vijay Shinde, Grontmij
Gerard Reid, Alexa Capital
Felix Groelman, Grundgrün Energie GmbH
Mark Henderson, Greencoat Capital
Nick Boyle, Lightsource
For more information: click here.
For registration: click here.
In March 2014, the German government presented the details of its plans for changes in the country’s renewable energy support scheme. The planned legislation (the “Draft”), which passed the cabinet on 8 April 2014, seeks to curb the increase of energy costs and to promote a stronger market integration of renewable energy production.
Under the Renewable Energies Act (“EEG”), renewable energy producers are entitled to fixed feed-in tariffs and to priority feed-in into the grids. The spread between the market price and the feed-in tariff is levied to electricity consumers by a renewable energy surcharge (“EEG Surcharge”) whereby energy-intensive industries benefit from a reduction.
Under the EEG support scheme, renewable energy sources have experienced a boom in Germany, now serving as a source for about 25 % of the country’s electricity consumption – four times as much as a decade ago. In turn, the system has increasingly been put under political pressure as energy costs (especially for households) continue to increase. In addition, the support scheme is held to produce a paradox effect: whereas consumer prices increase due to the EEG Surcharge that levies the feed-in tariffs, wholesale electricity prices plunge because the rapidly growing renewables are flooding the market. The effect of this price development is tangible: Germany’s second largest utility, RWE AG from Essen, whose core business is electricity delivery, has announced a net loss for the year 2013 of 2.8 billion Euros. It was RWE’s first loss-making year since the end of the Second World War. Read More
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