FERC Issues Proposal to Ease Regulation of Gen-Tie Lines

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FERC has issued a Notice of Proposed Rulemaking (NOPR) that would substantially reduce the regulatory burdens placed on energy project developers that construct generator lead lines (gen-tie lines) to interconnect their projects to the grid.

Currently, developers that own, operate or control a gen-tie line (referred to in the NOPR as “Interconnection Customer’s Interconnection Facilities” (ICIFs)) are subject to regulation by FERC as a public utility. Under the rules, absent an express waiver, owners of gen-tie lines are treated as common carriers that must file an Open Access Transmission Tariff (OATT) to provide access to third parties that wish to interconnect. However, even if FERC grants an OATT waiver, if a third party later requests service, the gen-tie owner must then file an OATT within 60-days, which subjects them to ongoing regulatory compliance obligations. If the gen-tie owner wishes to exclude the third party from interconnecting and maintain its priority interest on the line, it must affirmatively demonstrate its planned use of the line as well as establish and meet milestones for the construction of new generation to warrant reserving the additional capacity on the line. This is an onerous and often costly process which requires that the gen-tie owner perform interconnection feasibility studies to evaluate the third party’s interconnection. FERC’s policy to favor transmission access on a first-come first-serve basis sends the wrong signal to project developers that bear the risk of financing and constructing gen-tie lines only to have a portion of their line’s capacity potentially used by a competitor.   Continue reading this entry

IRS Issues Notice 2015-25 Extending Safe Harbor for Continuous Construction in Order to Take Advantage of Renewable Energy Tax Credits

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Yesterday, the IRS issued Notice 2015-25, which updates the guidance in Notices 2013-29,  2013-60, and 2014-46. These Notices provide that a taxpayer can show that it has “begun construction” of its qualified renewable energy facility by December 31, 2014 for purposes of taking advantage of the section 45 renewable electricity production tax credit (PTC) or the section 48 investment tax credit (ITC) in lieu of the PTC by either: (1) beginning physical construction of a significant nature and maintaining a continuous program of construction (the Physical Work and Continuous Construction Tests), or (2) incurring at least 5% of the total cost of the eligible facility and maintaining continuous efforts to advance towards the completion of the project (the 5% Safe Harbor and Continuous Efforts Test). Notice 2015-25 extends a safe harbor provided in Notice 2013-60 in which a taxpayer that places its renewable energy facility in service before January 1, 2016 will be deemed to satisfy the Continuous Construction and Continuous Efforts Tests under the Physical Work Test and the 5% Safe Harbor. The new notice extends this date. The extension is in response to the recent 1-year extension of the beginning of construction deadline to December 31, 2014. (See our prior blog post on that extension here.) Continue reading this entry

SCE Announces RAM 6 Program Forum

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Southern California Edison (SCE) announced a Program Forum for SCE’s 2015 Renewable Auction Mechanism (RAM) Program. The Program Forum will be held on Wednesday, March 4, 2015, from 1:00 p.m. to 3:00 p.m. (Pacific Standard Time).

The main purpose of the Program Forum is to discuss SCE’s upcoming RAM 6 Request for Offers (RFO) process. A significant portion of the Program Forum will be devoted to input from the participants, which may be taken into consideration when SCE submits an advice letter to the California Public Utilities Commission that proposes changes to the RAM standard power purchase agreement and the RFO instructions.

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IRS Releases Guidance on Performance and Quality Standards for Small Wind Energy Property

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The IRS recently released Notice 2015-4 (the Notice), which provides performance and quality standards that small wind energy property (defined under section 48(c)(4) of the Code as property utilizing a “qualifying small wind turbine” with a nameplate capacity of not more than 100 kilowatts (kW)) must meet to qualify for the section 48 investment tax credit (ITC).

ITC eligible small wind energy property acquired or placed in service after January 26, 2015, must now meet the performance and quality standards set forth in either:

(1) American Wind Energy Association Small Wind Turbine Performance and Safety Standard 9.1-2009 (AWEA); or

(2) International Electrotechnical Commission 61400-1, 61400-12, and 61400-11 (IEC).  Continue reading this entry

Department of Commerce Proposes New Solar Tariff on Chinese Panels

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On January 2, 2015, the Department of Commerce (“DOC”) announced its preliminary decision regarding crystalline silicon photovoltaic cells, whether or not assembled into modules, from the People’s Republic of China (“Chinese solar cells”). The decision relates to an administrative review by the DOC of Chinese solar cells imported from May 25, 2012 through November 30, 2013. The original antidumping case was brought by SolarWorld Americas Inc., a German-owned, Oregon-based company, as well as various exporters and U.S. importers. This administrative review covers two mandatory respondents, Yingli Energy Company Limited (“Yingli”) and Wuxi Suntech Power Co., Ltd. (“Wuxi Suntech”).

In determining what rates would apply to Yingli and Wuxi Suntech, the DOC first preliminarily determined that while Yingli would be eligible for its own separate rate, Wuxi Suntech would not be eligible for its own separate rate, and thus would be given the “China-wide” rate, that is, the rate given to all Chinese companies who were not mandatory respondents and either failed to apply or unsuccessfully applied for a separate rate. The DOC based its Wuxi Suntech decision on its determination that Wuxi Suntech is sufficiently controlled by the Chinese government, such that the Chinese government either controls or has the potential to control Wuxi Suntech.    

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