IRS Releases 2017 PTC Amounts

U.S. Department of Commerce Sets Stage for New Countervailing Duties on Chinese Solar Panels

The IRS just published its annual notice that provides the inflation adjustment factors and reference prices used in determining the amount of the section 45 production tax credit (PTC) for the production of renewable energy and refined coal.

The credit for the production of renewable energy from wind, closed-loop biomass and geothermal facilities is 2.4 cents per kilowatt hour for 2017 (up from 2.3 cents in 2016). The credit for the production of renewable energy from open-loop biomass, small irrigation power, landfill gas, trash, qualified hydropower, and marine and hydrokinetic facilities remains at 1.2 cents per kilowatt hour. The credit for the production of refined coal is $6.909 per ton for 2017 (up from $6.810 in 2016). The credit for the production of Indian coal has expired for calendar year 2017. No phase-outs apply to the credits for these energy resources in 2017.

A copy of the notice is available here.

From ESA to Keystone to EPA, Changes Coming Fast

river

Few things are certain leading up to Donald Trump’s presidency. But there is no question that environmental and energy policy will take center stage in the days – perhaps hours – following his inauguration.

Much of President Obama’s environmental legacy, particularly the parts stemming from executive actions, will be rolled back – and, more broadly, Washington is about to become a friendlier place for the fossil-fuel sector.

Here are the top issues we are watching in the early days of the Trump presidency.

Continue reading this entry

MISO Updates Interconnection Rules

cellsturbines

FERC approved MISO’s proposed changes to its generator interconnection procedure (“GIP”) and generator interconnection agreement (“GIA”), designed to streamline MISO’s interconnection queue process. These changes will affect all interconnection requests made after January 4, 2017 and all prior requests that have not yet completed a system impact study.

The new provisions are largely designed to address delays in the Definitive Planning Phase (“DPP”) of the interconnection process caused by the need for unplanned restudies triggered when higher-queued projects leave the queue. The revised interconnection procedures contain the following changes:

Continue reading this entry

Supreme Court of Illinois Says Courts Can Decide ARES Rate Disputes

electricTower

Courts – not the ICC – have jurisdiction over rate cases involving an ARES, said the Supreme Court of Illinois.[1] In a unanimous opinion written by Chief Justice Karmeier, the Court in December answered the Seventh Circuit’s certified question whether rate claims against ARESs are under the jurisdiction of the ICC or the courts under the Illinois Public Utilities Act.

The case arose when a residential electricity customer signed up to receive her power from an alternative retail electric supplier (“ARES”) instead of her local public utility. She was attracted to low teaser rates that were to apply during her first month of service. The ARES’ advertisement warned that the “market based variable rate” that was to apply after the first month could be higher than the public utilities’ rates, however the ARES never applied the promotional rate to the first month. Each month the ratepayer paid around three times the rates of her local utility. The ratepayer filed a federal court class-action suit against the ARES in the Northern District of Illinois under diversity jurisdiction, bringing common-law claims as well as claims under the Illinois Consumer Fraud and Deceptive Business Practices Act. The ARES filed a motion to dismiss, claiming that the court did not have jurisdiction to hear the case because rate disputes are in the exclusive jurisdiction of the Illinois Commerce Commission (“ICC”).

Continue reading this entry

IRS Issus New Guidance on the Beginning of Construction Safe Harbor For Renewable Energy Projects

cellsWater

The IRS recently issued Notice 2017-4 (the “Notice”) which makes two important changes to its “beginning of construction” rules for taxpayers seeking to take advantage of the section 45 renewable electricity production tax credit (PTC) for wind and other renewable energy facilities including geothermal, biomass, landfill gas and certain hydropower and marine hydrokinetic energy projects. Under prior IRS guidance, including Notice 2016-31 discussed in our blog post here, taxpayers have two ways to establish that they started construction. They can either show that they began physical construction of a significant nature (the “Physical Work Test”), or incurred at least 5% of the total cost of the eligible facility (the “5% Safe Harbor”). However, once construction has begun or cost have been paid or incurred, the IRS requires taxpayers to make continuous progress towards completion to satisfy both the Physical Work Test and the 5% Safe Harbor (“Continuous Construction Requirement”). Taxpayers are deemed to satisfy the Continuous Construction Test provided they began construction on the facility prior to January 1, 2015, and place it in service prior to January 1, 2017 (the “Continuity Safe Harbor”).

The Notice now permits taxpayers to fall within the Continuity Safe Harbor provided that they place the facility in service by the later of (1) a calendar year that is no more than four calendar years after the construction of the facility began or (2) December 31, 2018. This provides additional time for developers that have satisfied the Physical Work Test or 5% Safe Harbor to complete construction and place the facility in service without having to demonstrate that the Continuous Construction Requirement was satisfied. For example, if construction begins on January 15, 2013, and the facility is placed in service by December 31, 2018, the facility will meet the Continuity Safe Harbor.

Continue reading this entry