By: Clare Frederick and Jason Engel
According to the joint EPO-IEA report summarizing patent trends in the hydrogen economy (summarized here), technologies related to storage, distribution, and transportation of hydrogen are among the most critical challenges for large-scale deployment. Standardized infrastructure for hydrogen trade is essential to allow the market to function and flow.
Read MoreBy: Buck B. Endemann, Molly K. Barker, Matthew P. Clark, Nathan C. Howe, Natalie J. Reid, Maeve C. Tibbetts, David Wang
There is a lot of buzz around clean technology, distributed energy resources (DERs), microgrids, and other technological innovations in the renewable energy and clean transport industries and how these developments can contribute to solving longstanding environmental justice issues. As these innovations develop, energy markets will undergo substantial changes to which consumers and industry participants alike will need to adapt and leverage. Every other week, K&L Gates’ The Energizer will highlight emerging issues or stories relating to the use of DERs, energy storage, emerging technologies, hydrogen, and other innovations driving the energy industry forward.
IN THIS ISSUE
By: Buck B. Endemann, Daniel S. Cohen, Molly K. Barker, Natalie J. Reid, Matthew P. Clark, Nathan C. Howe, Maeve C. Tibbetts, Oretha A. Manu
There is a lot of buzz around clean technology, distributed energy resources (DERs), microgrids, and other technological innovations in renewable energy and clean transport industries, and how these developments can contribute to solving longstanding environmental justice issues. As these innovations develop, energy markets will undergo substantial changes to which consumers and industry participants alike will need to adapt and leverage. Every other week, K&L Gates’ The Energizer will highlight emerging issues or stories relating to the use of DERs, energy storage, emerging technologies, hydrogen, and other innovations driving the energy industry forward.
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Tuesday
4 May 2021
12:00 p.m. – 1:00 p.m. ET
Please join us for the next conversation in our sustainability-focused Distinguished Speaker Series, where we sit down with leaders in the field of sustainable economy to discuss industry trends and opportunities.
The featured speaker for this webinar will be Dawn Weisz. Dawn is the CEO of MCE Clean Energy, a public agency and not-for-profit electricity provider that gives customers the choice of having 50% to 100% of their electricity supplied from clean, renewable sources such as solar, wind, bioenergy, and hydroelectric at competitive rates. As CEO, Dawn is responsible for the vision, strategy, and leadership of the company. Under her leadership, MCE became the first community choice program to earn an investment-grade credit rating and now provides service to more than 480,000 customers and over a million residents and businesses in 36 member communities across four Bay Area counties. Dawn has more than 25 years of experience developing and managing renewable energy and energy efficiency programs while working for leading public agencies in the field. Previously, she was a Principle Planner with the County of Marin, where she managed energy and sustainability initiatives. She also previously served as the Executive Director for Sustainable North Bay, and prior to that, worked as a labor and environmental justice organizer in Los Angeles. She has also received awards from the U.S. Environmental Protection Agency, the Power Association of Northern California and the U.S. Department of Energy. She currently serves as President of the California Community Choice Association.
The program will be moderated by Elizabeth Crouse, a Partner and Practice Group Coordinator for the Power Group at K&L Gates.
Please use the link below to RSVP by Monday, May 3, 2021.
By: Brody Garland, Cliff L. Rothenstein, Laurie B. Purpuro, Darrell L. Conner, Mark Ruge, and Elle M. Stuart
As the Biden Administration finds its stride in the first 100 days, we are starting to see movement on several of its key priorities. Chief among them: pivoting to a clean energy economy. A campaign that promised investments of up to $2 trillion in alternative energy saw progress this week, as House Democrats, led by Energy and Commerce Committee Chairman Frank Pallone, Jr. (D-NJ), Environment and Climate Change Subcommittee Chairman Paul Tonko (D-NY), and Energy Subcommittee Chairman Bobby Rush (D-IL), announced a down payment on those hopes with the introduction of the CLEAN Future Act. In our previous K&L Gates alert from January, our team discussed how the U.S. maritime industry should expect the issues of clean energy investment and climate resiliency to rise to the very top of the White House’s legislative agenda. This week’s rollout of the CLEAN Future Act further confirms the importance of these priorities, and the far-reaching implications of the reforms offered for the transportation and maritime sectors.
U.S. Public Policy and Law Alert
By: David J. Raphael, Sandra E. Safro, Cliff L. Rothenstein, Dean Brower
On 19 January 2021, the eve of inauguration for the Biden Administration, the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) struck down the Affordable Clean Energy Rule (ACE Rule). Issued under the Trump Administration’s Environmental Protection Agency (EPA), the ACE Rule repealed and replaced the formerly enacted Clean Power Plan (CPP) and sought to establish a more narrowly defined framework for the regulation of power plant greenhouse gas (GHG) emissions. As a premise for the ACE Rule, the Trump EPA argued that Section 111 of the Clean Air Act (CAA), codified at 42 U.S.C. § 7411, contains clear and unambiguous language limiting the EPA’s emission reduction measures to improvements “at” and “to” existing GHG emissions sources. However, the D.C. Circuit held that the CAA does not require the EPA to confine its GHG regulation in this way and, in fact, that the Trump EPA’s interpretation under the ACE Rule constituted a “fundamental misconstruction” of the statute. The D.C. Circuit also found that the ACE Rule’s extended compliance deadline requirements were arbitrary and capricious insofar as they relaxed the schedules for federal action and state compliance under Section 7411(d). The D.C. Circuit’s decision clears the way for the Biden EPA to establish a new regulatory framework for power plant GHG emissions.
Authors: Bart J. Freedman, Teresa A. Hill, and Benjamin A. Mayer
Demand for renewable energy projects has never been greater. The newest, latest trend is the push for renewable energy projects with positive social impacts and benefits to marginalized communities. Indeed, some of the most significant consumers and supporters of renewable and carbon-free power are now making environmental and economic justice a central focus and condition of their use of and investments in clean energy projects.1 Utility leaders have identified racial justice as a top concern in the transition to a clean energy economy.2 Key stakeholders and influential civil rights organizations, including the NAACP, have created toolkits and are advocating for just energy policies and practices.3 The Rocky Mountain Institute announced this summer that it will be launching a residential solar program to expand the use of solar in communities of color.4 At the same time, clean energy transition legislation throughout the country is accelerating the need for carbon-free resources, including wind, solar, and storage projects, to replace traditional fossil fuel resources, such as coal, oil, and natural gas, to power the grid.5
Read MoreAuthors: Rhys W. Hefta, Craig S. Trueblood, David L. Benson, Kari L. Larson
Commercial property owners in the state of Washington may soon have access to a new source of funding for energy efficiency, renewable energy, and resiliency improvements to their buildings. Washington’s C-PACER legislation (House Bill 2405), passed by the legislature during the 2020 regular session, went into effect 11 June 2020. The C-PACER program aims to address the significant needs for property owners to finance energy efficiency upgrades, renewable energy improvements, stormwater management, water conservation, and resiliency retrofits to address vulnerabilities to earthquakes and other natural disasters.
The state and many local governments across the country are imposing new requirements on the owners of existing buildings to reduce water and energy consumption, control stormwater runoff, minimize damage from earthquakes, and convert to renewable sources of energy. These types of building improvements often have high up-front capital costs and long cost-recovery periods. This combination has inhibited investment by property owners who may not plan on holding an asset long enough to see the benefit of these improvements.
With the enactment of the C-PACER program, Washington joins 36 other states that have enacted some form of property assessed clean energy legislation (20 of which have current active programs). Washington’s C-PACER program, like some other states, relies on private rather than public financing. Unlike traditional private financing models, C-PACER loans are not personal debt obligations. Rather, the C-PACER loan is repaid through a voluntary assessment on the improved property that runs with the land and is secured by a super-priority lien. Accordingly, the obligation to repay the C-PACER loan remains with the property regardless of any transfer of ownership. Because of this unique structure, C-PACER loans can allow for a much longer repayment period than traditional financing options. In addition, the super-priority of the lien allows for lower interest rates. In theory, the longer term and beneficial rate will improve the ability of the owner to repay the C-PACER loan, as the owner actually accrues the benefit of savings on utility bills, lower insurance premiums, and other operating cost reductions from the improvements.
The following is a brief summary of the key information to know about the C-PACER program.
Is the C-PACER Program Available Statewide?
The C-PACER program is a voluntary program that is to be managed on a statewide basis by the Washington Department of Commerce (though a C-PACER program guidebook is not expected this year as a result of COVID-19). Once established, each county must opt into the program on a voluntary basis. However, counties are not required to wait for the statewide program. Each county is empowered to establish its own program in compliance with the requirements of the state legislation. Accordingly, availability will vary by jurisdiction. No counties have yet adopted a program.
What Properties Qualify?
Under the C-PACER program, owners of agricultural, commercial, and industrial properties are eligible to obtain financing for qualifying projects. The C-PACER program also applies to owners of multifamily residential properties with five or more dwelling units. Eligible property may be owned by any type of business, corporation, individual, or nonprofit organization permitted by state law. However, as noted above, individual counties have broad discretion to establish their own program within the parameters of the state legislation and could limit the types of properties that qualify.
What Projects Qualify?
C-PACER financing is available both for qualifying improvements to existing commercial buildings and new construction. Qualified improvements include, among others, solar panels, high-efficiency heating and cooling systems, insulation and other improvements that address safe drinking water, or those that decrease energy or water consumption or demand through efficiency technologies, products, or activities. Improvements that support the production of clean, renewable energy, including a product, device, or interacting group of products or devices on the customer’s side of the meter that generates electricity, provides thermal energy, or regulates temperature, would also be deemed qualifying improvements. Likewise, improvements that increase resilience are also qualified improvements. Examples of resilience improvements include seismic retrofits, flood mitigation, stormwater management, wildfire and wind resistance, energy storage, and microgrids. The inclusion of resiliency improvements is a feature of the Washington legislation that is not found in other jurisdictions and may be of particular interest for owners of unreinforced masonry buildings and other properties in need of seismic improvements.
How Is the C-PACER Loan Repaid?
As discussed above, C-PACER loans are repaid by a voluntary assessment on the improved property, secured by a lien in favor of the county, which is then immediately assigned to the C-PACER lender. The lien is second only in priority to the lien for unpaid taxes. Once a C-PACER loan is advanced, the administration of the C-PACER loan (including enforcement) is done by the private lender. After the adoption of a C-PACER program, a county’s role is limited to the approval of an assessment and recordation of a C-PACER lien, as well as to the administration of the C-PACER program (which may be contracted out to a private third party).
Who Makes the C-PACER Loans?
Subject to compliance with generally applicable licensing requirements, any private entity can make a C-PACER loan.
What Is the Impact for Holders of Mortgages on the Property?
Because the lien of a C-PACER loan is superior to all other debt obligations other than unpaid taxes, written consent of any existing mortgagee or other holder of a security interest in the real property is required before an owner can obtain a C-PACER loan. Note that the super-priority nature of C-PACER loans may be objectionable to mortgage lenders (and, in fact, some lenders expressly prohibit borrowers from obtaining any such loans).
How Is the C-PACER Lien Enforced?
The private lender is responsible for collection and enforcement of delinquent C-PACER liens or C-PACER loan installment payments. The C-PACER lien is enforced by the lender in the same manner that the collection of delinquent real property taxes is enforced by the county under chapter 84.64 RCW, including the provisions of RCW 84.64.040, with minor exceptions.
SFC ranking member Wyden and 25 other Democrats (including minority leader Schumer) introduced tech-neutral energy legislation this week. The bill includes energy storage provisions. Following is a summary followed by summaries pertaining to energy storage. The legislation would consolidate 44 energy incentives into three tech-neutral provisions to promote energy independence and a low-carbon economy. All of the original co-sponsors are Democrats. The roll out of the legislation was accompanied by supporting statements from about a dozen supporting organizations.
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There is a lot of buzz around blockchain technology and its potential to revolutionize a wide range of industries from finance and health care to real estate and supply chain management. Many institutions and companies are forming partnerships to explore how blockchain ledgers and smart contracts can be deployed to manage and share data, create transactional efficiencies, and reduce costs.
While virtual currencies and blockchain technology in the financial services industry have been the subject of significant debate and discussion, blockchain applications that could transform the energy industry have received comparatively less attention. Every other week, the K&L Gates’ Blockchain Energizer will highlight emerging issues or stories relating to the use of blockchain technology in the energy space.
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To view more information on theses topics in Volume 32 of the Blockchain Energizer, click here.
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