Global Power Law & Policy – Page 36 – Legal and policy developments affecting the global power industry.

FERC Issues Notice of Inquiry on Income Tax Allowance Policy Statement and ROE Methodology

Dec 21 2016

By William M. Keyser, Sandra E. Safro, Michael L. O’Neill, and Benjamin L. Tejblum

On December 15, 2016, the Federal Energy Regulatory Commission (FERC) issued a Notice of Inquiry (NOI) seeking comment on how to address any double recovery resulting from income tax allowance policy set forth in its Income Tax Allowance Policy Statement and current policies regarding the derivation of return on equity (ROE). FERC’s existing Income Tax Allowance Policy Statement has been in place since 2005 and permits an income tax allowance for partnerships, or similar pass-through entities, to the extent that partners or members have actual or potential income tax obligations on the partnership entity’s income.

The NOI stems from the July 1, 2016 decision of the U.S. Court of Appeals for the District of Columbia Circuit (DC Circuit) in United Airlines Inc. v. Federal Energy Regulatory Commission, 827 F.3d 122 (D.C. Cir. 2016) (UAL v. FERC). In that decision, the DC Circuit held that FERC had not adequately demonstrated that the application of its Income Tax Allowance Policy Statement in combination with its use of a discounted cash flow (DCF) methodology to determine ROE does not result in double recovery of taxes for a pipeline organized as a partnership. The DC Circuit remanded the issue to FERC to develop a mechanism “for which the Commission can demonstrate that there is no double recovery” of partnership income tax costs. Among the potential options that the DC Circuit outlined was eliminating all income tax allowances and setting rates based on pre-tax returns. The NOI explicitly notes “the potentially significant and widespread effect of [the decision in UAL v. FERC] upon the oil pipelines, natural gas pipelines, and electric utilities subject to the Commission’s regulation.” NOI at P 2.

FERC Proposes Reforms to Large Generator Interconnection Procedures and Agreements

Dec 19 2016

By William M. Keyser and Elizabeth P. Trinkle

On December 15, 2016, the Federal Energy Regulatory Commission (“FERC”) issued a Notice of Proposed Rulemaking (“NOPR”) to revise Parts 35 and 37 of its regulations, as well as the pro forma Large Generator Interconnection Procedures (“LGIP”) and pro forma Large Generator Interconnection Agreement (“LGIA”). The proposed reforms are designed to improve certainty, promote more informed interconnection, and enhance interconnection processes.

The pro forma LGIP and LGIA establish the terms and conditions by which public utilities subject to the Federal Power Act must provide interconnection service to Large Generating Facilities. FERC defines “Large Generating Facilities” as facilities with generating capacity greater than 20 MW. While FERC has previously undertaken steps to reduce undue discrimination in the generator interconnection process, interconnection customers have continued to express concerns regarding inefficiencies and discriminatory practices. Moreover, FERC proposes that recent changes to the resource mix, the emergence of new technologies, changes to state and federal policies, and challenges with the interconnection study process warrant reforms. Based, in part, on input received from stakeholders following a 2015 technical conference on these issues, the NOPR identifies reforms to benefit both interconnection customers through timely and cost-effective interconnection and transmission providers by mitigating the potential for re-studies associated with late-stage interconnection request withdrawals.

Specifically, FERC proposes reforms that focus on improving aspects of the pro forma LGIP and LGIA, the pro forma Open Access Transmission Tariff, and the Commission’s regulations. These reforms fall into three broad categories: (1) reforms intended to improve certainty in the interconnection process; (2) reforms intended to improve transparency by providing more information to interconnection customers; and (3) reforms intended to enhance interconnection processes. FERC requests comment from interested stakeholders on specific issues related to development and implementation of each of the proposals within these three broad areas of reform. An overview of FERC’s proposals and request for comment on each area of reform are summarized below.

Comments on the NOPR will be due 60 days from publication in the Federal Register. A copy of the NOPR is available here.

FERC Proposes New Rules to Make Room for Storage in Wholesale Electricity Markets

Nov 21 2016

By Molly Suda and Elizabeth Trinkle

On November 17, 2016, the Federal Energy Regulatory Commission (“FERC”) issued a Notice of Proposed Rulemaking (“NOPR”) to amend Section 35.28 of its regulations. The proposed amendment would remove barriers to the participation by electric storage resources and distributed energy resource aggregations in the capacity, energy, and ancillary service markets operated by regional transmission organizations (“RTOs”) and independent system operators (“ISOs”). FERC defines “electric storages resources” as resources capable of receiving electric energy from the from the grid and storing it for later injection back to the grid regardless of where the resource is located on the electrical system. Electric storage resources include all types of electric storage technologies, such as batteries, flywheel, compressed air and hydro-pump. “Distributed energy resource aggregators” are defined as entities that aggregate one or more distributed energy resources (including electric storage resources, distributed generation, thermal storage and electric vehicles) for participation in the RTO/ISO wholesale markets.

Specifically, FERC proposes in the NOPR that each RTO and ISO revise its tariff to (1) establish market rules that accommodate the participation of electric storage resources in the organized wholesale electric markets and (2) define distributed energy resource aggregators as a type of market participant that can transact in the organized wholesale electric markets.

The NOPR includes a number of high-level proposals, and FERC requests comment from interested stakeholders on specific issues related to development and implementation of these proposals. An overview of the NOPR and FERC’s key areas of interest for comment are summarized below.

Comments on the NOPR will be due 60 days from publication in the Federal Register. A copy of the NOPR is available here.

K&L Gates Welcomes Chicago Energy and Infrastructure Partner Joseph Condo

Nov 01 2016

The Chicago office of global law firm K&L Gates LLP welcomes Joseph Condo as a partner in the energy and infrastructure projects and transactions practice. He joins from global renewable energy firm Invenergy LLC, where he served more than a decade as senior vice president and general counsel.

Condo has broad experience in complex foreign and domestic commercial transactions, including debt and equity financing, M&A transactions, joint ventures, and complex commercial litigation management. As chief legal officer at Invenergy, which owns and operates large-scale renewable and clean energy generation and storage facilities around the world, Condo oversaw financial transactions and mergers and acquisitions totaling more than several billion dollars, key commercial transactions, employment and corporate governance practices, and litigation along with corporate formation- and IP/trademark-related matters. In addition, he closely managed the company’s state, federal, and international legislative and regulatory affairs, including working extensively on government affairs matters in the European Union. Condo served as an assistant corporation counsel for the City of Chicago from 1997-99 and was an assistant attorney general for the State of Iowa from 1992-95.

“We are thrilled to have Joe join the K&L Gates team,” said Michael Martinez, administrative partner of K&L Gates’ Chicago office. “Joe’s immersion in the energy sector and broad experience in renewable energy transactions and policy add tremendous depth to our energy practice and expands our client service offerings in Chicago and throughout the globe.”

Lawyers in K&L Gates’ global energy & infrastructure projects and transactions practice advise on projects across a broad range of sectors, including oil and gas, power, and renewables; transportation and social infrastructure; and waste management.

Condo is the fifth new partner or of counsel addition to K&L Gates’ Chicago office this year, following the arrivals of partners Joshua Yang (investment management), Sang-yul Lee (labor and employment), and Justin Weisberg (construction) and of counsel David Rieser (environmental).

Paris Agreement to Enter into Force: Implications for Enforcement in the United States and Internationally

Oct 26 2016

By Ankur K. Tohan, Alyssa A. Moir, David L. Wochner, Cliff L. Rothenstein, and Christina A. Elles, K&L Gates

Global policy on climate change and greenhouse gas regulation is poised to take a significant step forward as the Paris Agreement (“Agreement”) enters into force just before international climate negotiations resume in Morocco next month. The 22nd “conference of the parties” (“COP-22”) will be held in Marrakech, Morocco, November 7 through 18, 2016, and will be the first time that parties to the Agreement gather after its ratification. Signatories to the Agreement include 191 countries and represent 95 percent of global greenhouse gas emissions. Now the hard work of implementing the Agreement begins. Parties are expected to start to reduce emissions under the Agreement in 2020, with a long-term goal of holding global temperature increase well-below 2 degrees Celsius. Meeting this goal requires steep reductions in carbon—for the United States, this will impact sectors of the economy that have not yet seen significant carbon regulation, such as oil refineries, cement makers, paper processers, chemical companies, and other manufacturers and will require continued reductions via the deployment of renewable energy, energy efficiency, decreasing use of hydrofluorocarbons and methane, and motor vehicle emissions regulations.

To read the full alert of K&L Gates HUB, click here.

K&L Gates Distinguished Speaker Program – featuring A. Stanley Meiburg, Acting Deputy Administrator, EPA

Sep 16 2016

K&L Gates is pleased to invite you to our September 20th Distinguished Speaker Program breakfast featuring A. Stanley Meiburg, Acting Deputy Administrator of the Environmental Protection Agency (EPA).

Stan Meiburg serves as the Acting Deputy Administrator of EPA, continuing a career spanning over 39 years at EPA in locations around the country. He has broad experience in the management of the agency across the spectrum of EPA’s activities, and has received numerous awards, including recognition as a Distinguished Federal Executive in 2012 and as a Meritorious Federal Executive in 1997. He received EPA’s Gold Medal in 1990 for his work on the Clean Air Act Amendments, and Silver Medal in 1983 for work on state-federal relations.

Meiburg spent 18 years as Deputy Regional Administrator of EPA’s Region 4 office in Atlanta, Georgia, following service as Deputy Regional Administrator in EPA’s Region 6 office in Dallas, Texas. He is the second person in EPA history to serve as Deputy Regional Administrator in more than one region.

From 1990 to 1995, Meiburg was Director of Region 6’s Air, Pesticides and Toxics Division. From 1985 to 1990, he was Director of the Planning and Management Staff of EPA’s Office of Air Quality Planning and Standards in Durham, North Carolina, leading work on the 1990 Clean Air Act Amendments as well as planning and budgeting for the air program.

Meiburg joined EPA in 1977, serving in a variety of positions in Washington, D.C., Research Triangle Park, N.C., and Dallas, Texas, before coming to Atlanta. Meiburg holds a B.A. degree from Wake Forest University and M.A. and Ph.D. degrees in political science from The Johns Hopkins University.

RSVP:
To attend, please email Kristen Hughes or call +1.202.661.3795 by 5:00 p.m. EDT, Monday, September 19.

This event is not a fundraiser. To maintain the informality of this event, it is strictly off the record.

Building Bridges IV Bridging the Public-Private Divide: Financing Infrastructure Through Pooled Investment Platforms

Sep 16 2016

K&L Gates, SovereigNET, The Fletcher School’s Network for Sovereign Wealth and Global Capital, and the International Forum of Sovereign Wealth Funds are pleased to announce our fourth symposium on global infrastructure.

The central theme of the symposium will be Bridging the Public-Private Divide through Pooled Investment Platforms. The discussion will focus on the design of innovative financing platforms to narrow the global infrastructure investment gap.

Gathering representatives from the World Bank and the institutional investor community together with policy makers, development banks, service providers, academics, and public sector partners, the symposium will explore the role of investment fund structures – sovereign, multilateral and private – in mobilizing capital in scale to finance critical infrastructure needs in both developed and emerging economies.

The symposium will be organized into four discussion panels and several interactive lunch breakouts. All sessions will feature speakers who are actively involved in sponsoring, funding, managing, and governing global infrastructure and strategic investment funds.

Keynote Speaker: Adrian Orr, Chief Executive Officer, New Zealand Superannuation Fund; Chair of International Forum of Sovereign Wealth Funds

To RSVP for this program, please click here.

Event: Infocast’s Corporate Renewables 2016, K&L Gates Platinum Sponsor

Sep 01 2016

We invite you to join us for Infocast’s Corporate Renewables 2016 program on September26-28, 2016 in Washington, D.C. Portland partners Teresa A. Hill and William H. Holmes will be co-sponsors, along with faculty from Renewable Choice Energy, of a one-day, interactive Corporate Renewables 101 workshop on Monday, September 26. Topics discussed will include developing a procurement strategy, offsite renewable energy options, and executing on your renewable energy strategy. The workshop will help corporations, universities, non-profits and other non-utility purchasers of renewable energy build a strong foundation in renewable energy procurement.

Women in Power: Networking, Exploring and Fueling the Energy Economy

Aug 30 2016

We invite you to join the women of K&L Gates LLP and other women in the energy industry on Thursday, September 29th for a day of engaging discussion on hot topic issues. The tentative agenda can be found below.

We also invite the women attending this program to join us in the evening for K&L Gates LLP’s annual networking reception celebrating women in business and law. This year’s event will feature several leading female chefs and mixologists in the D.C. area who will showcase their culinary work ranging from savory dishes to delectable pastries and cocktails. The chefs will be available for discussions regarding their work as well as their businesses’ challenges and successes. The event also features a live painting exhibition by D.C.-based artist Maggie O’Neill, co-founder of SwatchRoom. The painting will be raffled off at the event, with all proceeds going to a local charity.

Another Step Toward North Carolina Offshore Wind: Proposed Offshore Wind Farm Lease Announced

Aug 18 2016

By Stanford D. Baird, David Wochner, Amy H. Fullbright and James L. Joyce

The U.S. Department of the Interior has just announced the next step in the years-long process toward the development of wind energy facilities off the coast of North Carolina. In a notice published in the Federal Register on August 16, 2016, the Bureau of Ocean Energy Management (“BOEM”) proposed the sale of commercial lease rights to develop wind energy facilities on the Outer Continental Shelf off the coast of northeastern North Carolina. The notice can be found at: https://federalregister.gov/a/2016-19552. The area proposed for lease encompasses approximately 122,400 acres, begins about 24 nautical miles off the Outer Banks of North Carolina, and contains 21.5 Outer Continental Shelf blocks. This area is known as the Kitty Hawk Wind Energy Area (“WEA”) and is situated in rough proximity to the Virginia WEA that was leased by BOEM pursuant to an auction process in 2013. A map of the proposed Kitty Hawk lease area can be found at: http://www.boem.gov/Map-Standard-Background/. Public comments to BOEM’s notice, as well as expressions of interest in the proposed lease for the Kitty Hawk WEA, may be submitted during the 60-day comment period that ends on October 17, 2016.

To read the full alert, click here.