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Energy & Utilities : Newsstand
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Pennsylvania Commonwealth Court Upholds Fayette County Ordinance Affecting Oil and Gas Development, Oil & Gas Alert, by Jeremy A. Mercer, Walter A. Bunt, Jr.. July 28, 2010.
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Global Government Solutions 2010: Mid-Year Outlook, K&L Gates Publication, July 2010.
In response to the shifting business and economic relationships worldwide, governments around the globe are actively increasing their involvement in the private sector. Effectively navigating the dynamic relationship between government and business has become a significant concern for organizations large and small.
As a follow up to Global Government SolutionsSM 2010: The Year Ahead report, which published in January, members of the K&L Gates Global Government SolutionsSM initiative have issued a 2010 Mid-Year Outlook, highlighting significant developments over the first six months of the year, and providing further insight into government agendas in wide range of areas, including environmental and energy policies, the implementation of financial regulatory reform and healthcare initiatives, and the changing political landscape around the world.
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Are Some Pennsylvania Legislators Attempting to undo Kilmer?, Oil & Gas Alert, by George A. Bibikos. July 13, 2010.
House Bill 2214 is an aggressive piece of proposed legislation that would substantially rewrite the Pennsylvania Minimum Royalty Act ("MRA") and overrule the Pennsylvania Supreme Court's recent decision in Kilmer v. Elexco Land Services, Inc., 990 A.2d 1147 (Pa. 2010). In effect, the proposed legislation would preclude lessees from deducting any post-production costs from royalty payments as is currently authorized by the MRA and Kilmer, and it would give lessors the right to invalidate their lease for late royalty payments.
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It’s All About the Fuel: New Emissions Standards for Boilers and Process Heaters, Environment, Land and Natural Resources Alert, by Thomas R. Carey, David A. Franchina, Ashley A. Peck, Christopher S. Walker. July 7, 2010.
On June 4, 2010, EPA published four proposed rules related to its regulation of emissions of hazardous air pollutants from new and existing industrial, commercial, and institutional boilers and process heaters and commercial and industrial solid waste incinerators ("CISWI") under the Clean Air Act.
Of the four rules, the rule clarifying which fuel types are not “solid waste” under the Resource Conservation and Recovery Act ("RCRA") may prove to have the greatest regulatory effect because it will dictate whether a particular combustion unit will be regulated as a boiler or under the more-stringent CISWI Rule.
Thus, the type of fuel used in a facility’s combustion units can have a large impact on a facility’s environmental compliance costs and should be considered in project, operation, and budget decision-making. This client alert provides an overview of the proposed rules and focuses specifically on facilities that combust two fuel types—natural gas and biomass.
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Coal Mining Objections to Gas Development – Not a Seamless Relationship, Oil & Gas Alert, by Paul K. Stockman. June 15, 2010.
As gas drilling and exploration activity in Pennsylvania has mushroomed in the past few years, with the development of the Marcellus Shale's substantial reserves, oil and gas operators increasingly find themselves working in areas underlain by coal seams. As a result, oil and gas operators and coal mining operations increasingly find themselves in conflict over their respective rights. This conflict is not new - Pennsylvania's courts have wrestled with the challenge for over 100 years, and Pennsylvania has enacted laws intended to provide an optimal balance between the interests of coal mining operations and oil and gas operators. As is often the case, however, these laws can raise as many questions as they answer.
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PUC Conducts En Banc Hearing on Jurisdiction over Marcellus Shale Development but Questions Remain on the Proposed Legislation, Oil & Gas Alert, by Daniel P. Delaney. May 13, 2010.
The Public Utility Commission (PUC) circulated proposed legislation to the General Assembly in 2009 to expand its jurisdiction over non-public utility pipelines. At a recent en banc hearing on Marcellus Shale development, the PUC stated that its interest was primarily in extending its jurisdiction for purposes of ensuring pipeline safety. The 2009 draft legislation, however, incorporates significant portions of the Public Utility Code and would apply those provisions to gathering and intrastate pipelines which are not presently subject to PUC jurisdiction. The proposed legislation must be carefully monitored by producers, operators of gathering lines and pipelines, and other interested parties to ensure that any expanded jurisdiction focuses on the pipeline safety jurisdiction requested by the PUC but doesn't subject Marcellus Shale development to traditional public utility regulation.
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Boldly Going Where No One Has Gone Before: In the Face of Uncertainty, Power Plants May Want to Consider Preemptively Addressing their Greenhouse Gas Emissions, Climate Change & Sustainability Alert, by Thomas R. Carey, David A. Franchina, Ashley A. Peck, Christopher S. Walker. May 5, 2010.
The U.S. Environmental Protection Agency recently issued regulations confirming that it will not regulate emissions of greenhouse gases (“GHGs”) from stationary sources in 2010. However, barring court intervention or action from Congress, EPA will regulate GHGs under the Clean Air Act (“CAA”) starting in 2011 through the Prevention of Significant Deterioration (“PSD”) construction permit program and other sections of the CAA. Though it remains unclear what the practical effect of applying PSD for GHGs will ultimately be, power plants may want to address their GHG emissions sooner rather than later to prepare for eventual regulation and as a hedge against potential litigation. This client alert describes recent regulatory developments on GHG emissions, highlights actions underway to develop guidance for best available control technology (“BACT”) for GHGs under the PSD program, and suggests that power plants may want to consider addressing BACT for their GHG emissions prior to the onset of a legal mandate.
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K&L Gates Adds Portland Energy & Utilities Partner, April 5, 2010.
K&L Gates welcomes Carl Fink as an energy partner in its Portland office.
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DEP Officials Personally Hit With $6.5 Million Verdict, Oil & Gas Alert, by Walter A. Bunt, Jr., Mark D. Feczko, Brent W. Jacobson. March 26, 2010.
A federal jury recently rendered a $6.5 million verdict against four Pennsylvania DEP employees who allegedly used their power to retaliate against a regulated entity challenging their DEP related actions. The case is an important and rare example of a court stripping government officials of their immunity – a sacred shield that has generally precluded damage suits against government officials.
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Pennsylvania Supreme Court Unanimously Holds that the Minimum Royalty Act Allows Post-Production Deductions, Oil & Gas Alert, by David R. Fine. March 25, 2010.
The Pennsylvania Supreme Court has interpreted Pennsylvania’s Minimum Royalty Act (“MRA”), 58 P.S. § 33, to allow natural-gas producers to calculate royalties by subtracting post-production expenses from sales prices. On March 24, 2010, the court handed down its much-anticipated decision in Kilmer v. Elexco Land Services Company, 63 MAP 2009, and it held that the royalty required by the MRA may be measured at the wellhead.
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The FCC’s Sweeping National Broadband Plan: How it Will Affect You, Telecom, Media and Technology Alert, by Marc S. Martin, Martin L. Stern, Peter W. Denton. March 22, 2010.
Last week, the U.S. Federal Communications Commission released its congressionally mandated National Broadband Plan, laying out an ambitious roadmap to meet the goals of improving access, speed, innovation and affordability of broadband services in the United States. The Plan's ambitious broadband-related goals and recommendations address such disparate topics as health care, energy utility and transportation infrastructure, education, green energy, a nationwide, interoperable public safety broadband network, ultra-high speed military broadband networks, and greater governmental transparency. A centerpiece policy initiative of the FCC and its new Chairman, and in places a decidedly controversial document, the Plan’s delivery has launched the largest undertaking of the FCC, including related Executive Branch and legislative activity, since the Telecommunications Act of 1996.
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K&L Gates Adds Prominent Public Policy Professional in Pittsburgh Office, March 10, 2010.
K&L Gates welcomes Terry Murphy as a government affairs counselor in the firm's Pittsburgh office.
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Municipal Mischief in the Marcellus: Challenging Restrictive Local Ordinances, Oil & Gas Alert, by Walter A. Bunt, Jr., Kenneth S. Komoroski, Pierce Richardson, Craig P. Wilson, Heather L. Lamparter. March 2010.
Pennsylvania has more than 2,500 municipalities; each with their own government structure and many with their own set of land use ordinances and regulations. Some municipalities rely on county-wide zoning ordinances in lieu of township-specific requirements. The authority for both municipal and county land use ordinances is provided by the Municipalities Planning Code – a Pennsylvania statute that authorizes a broad degree of local land use regulatory powers, but is subject to restrictions in some important areas, including those relating to oil and gas activities.
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Legislative, Regulatory and Enforcement Developments in the Commodities and Derivatives Markets, K&L Gates Webinar, by Barry M. Hartman, Charles R. Mills, Lawrence B. Patent, Donald S. Weiss, Daniel F.C. Crowley, Stephen J. Obie, Acting Director, Division of Enforcement, CFTC; Thomas W. Sexton, III, Senior Vice President, General Counsel, National Futures Association. February, 24, 2010.
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CFTC Proposes Energy Related Position Limits, Investment Management Alert, by Lawrence B. Patent, Charles R. Mills. February 2, 2010.
The Commodity Futures Trading Commission (CFTC) recently proposed regulations that would establish speculative position limits for futures and option contracts in four energy-related commodities. The limits would apply to a single trader or an affiliated group of traders, and positions would be aggregated at both the trading controller level and at the account owner level. Therefore, positions would be aggregated even where a single owner, such as a collective investment vehicle like a hedge fund or commodity pool, uses multiple independent trading advisors. Swap dealers would no longer be treated as hedgers, but could apply for a new swap dealer exemption. These limits would not apply directly to contracts not regulated by the CFTC, such as those on non-U.S. boards of trade or in the over-the-counter (OTC) swap market. However, the impact of these limits, if adopted, could cause trading to migrate from U.S. exchanges to those outside the U.S. or to the OTC market. The restrictions that would apply to swap dealers could also lead to higher costs and decreased liquidity in the OTC market.
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Are You Ready for the Smart Grid?, Outsourcing, Commercial Transactions, and Energy Alert., by Susan P. Altman. February 2, 2010.
The Smart Grid is coming. Commentators typically have focused on the interaction of the Smart Grid with alternative energy sources and its cost, but few have focused on the new legal issues that it presents. The arrival of the Smart Grid poses legal issues involving data use, security and control that will engage many parties, including electric utilities, service providers of electrical usage monitoring tools, technology standards organizations, utility regulators and other state and federal agencies.
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Global Government Solutions 2010 - The Year Ahead, K&L Gates Publication, January 2010.
2009 brought a further transformation in the relationship between business and government. Regardless of political systems or philosophies, governments around the world became more dynamic and intrusive in response to the financial crisis.
This 2010 Annual Report, prepared by members of the K&L Gates Global Government Solutions initiative, contains concise articles that seek to forecast likely government actions and priorities regarding a broad spectrum of topics.
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Just When You Thought Your E&S Approval Was Safe: The Crum Creek Case, Oil & Gas Alert, by R. Timothy Weston, George A. Bibikos. January 26, 2010.
A case currently on appeal before the Commonwealth Court raises issues of significance to all entities pursuing development activities in Pennsylvania's special protection watersheds. This case merits careful monitoring by the oil and gas industry, because although the case itself involved discharges subject to an NPDES permit, some of the issues presented have been raised in certain pending third-party challenges to ESCGP-1/E&S module approvals for gas operators.
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Regulation of the UAE Nuclear Industry – The “First Step”, by Paul de Cordova, Wadih El Riachi. January 4, 2010.
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Mitigating Change in Law Risks in Trading of Emissions Allowances and Renewable Energy Credits, Energy & Utilities Alert, by Eric E. Freedman, Gregory M. Luloff. December 21, 2009.
The rapid growth of energy trading since the 1970s coupled with recent efforts to curb greenhouse gas (GHG) emissions has given rise to a robust and volatile emissions allowance and environmental attributes trading sector. Today, viable cash markets exist for carbon dioxide, sulfur dioxide, nitrogen oxide and other emissions allowances, renewable energy credits/renewable energy certificates (RECs), and other emissions-based and environmental products. Trading of emissions allowances and other environmental products has evolved into a major tool in global efforts to tackle climate change and achieve energy independence. While there is tremendous investment potential in emissions allowance and other environmental products trading, the markets for such products remain in their infancy, and thus are likely to be challenging and unpredictable in the near term. Energy trading itself has proven to be a risky business, as demonstrated by the recent failures of Amaranth Advisors LLC and MotherRock LP, and the emissions allowance and REC trading markets can present even greater price volatility. A central cause of this volatility is the uncertainty over the future of climate change legislation and regulation both in the near future and in the long term. Despite this uncertainty, there are steps that investors can take to mitigate the risks they face in this market.
Click here for the full text.
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Renewable Portfolio Standards Create Mandate, Energy & Utilities Alert, by Andrew B. Young, Kenneth J. Gish, Jr.. December 7, 2009.
A key driver for new renewable energy resources in the United States has been the adoption by over half of the states of renewable portfolio standards (RPS) (sometimes called renewable energy standards (RES)). The details RPS vary from state to state, but put simply, an RPS is a requirement that electric utilities obtain from qualifying renewable resources (meaning renewable resources that are deemed acceptable under the applicable state RPS statute for purposes of meeting the RPS mandate) not less than a certain percentage – a percentage that typically increases over time -- of the electricity that the utilities use to serve their retail customers in that state.
Click here for the full text.
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Solarbranche bedarf zur Bildung der Wettbewerbsfähigkeit der Förderung, Boersen-Zeitung, November 18, 2009.
German national newspaper Boersen-Zeitung interviewed Berlin partner Christian Hullmann for an analysis of Germany's solar industry after the Federal Elections held in September. Hullmann pointed out that the political back-up for subsidizing the industry by way of feed-in tariffs will sustain even under the new government: Over the past years the housing sector and other industrires had been subject to regulations requiring a use of renewable energies such as solar. Also, laws on the European level require to achieve a greater share of renewables in the energy mix and make further subsidies mandatory. The national solar industry is still in a process to adopt its production and cost structures to low-price products imported from Asia; however, major producers and developpers are confident with regard to the prospects of 2010 as there is an increasing demand for quality products in Germany. Posted with permission. German-language article.
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Cleantech Resource - New England Edition, by James P. O'Hare, Thomas A. Turano. November 2009.
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Cleantech Project Finance Trends: Power Purchase Agreement Basics, Presented to the German American Business Association, November 13, 2009.
This presentation details power purchase agreements and project finance in the context of the cleantech sector. It was presented at the German American Business Association's program entitled "Cleantech Financing for the Future."
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Emissions of Greenhouse Gases & Global Warming – Regulation through Litigation? Who is Liable for Damages Arising from Global Warming?, Environmental, Land and Natural Resources Alert, by William H. Hyatt, Jr., Mary Theresa S. Kenny. October 28, 2009.
Two recent United States Court of Appeals decisions may herald a new wave of litigation for damages arising from greenhouse gas emissions. Plaintiffs, relying on the federal and state common law of public and private nuisance, as well as other common law tort theories, and encouraged by the prospect of potentially substantial compensatory and punitive damage awards, may sue public sector and private industry defendants, contending that their emissions of greenhouse gases have caused or contributed to global warming, in turn, harming the plaintiffs. In the course of resolving those lawsuits, courts are likely to be called upon to make judgments that practitioners might expect would be made, at least in the first instance, by Congress or by regulatory agencies.
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K&L Gates’ Global Government Solutions Help Businesses Deal with Government’s Expanding Role, October 21, 2009.
K&L Gates has launched a Global Government Solutions initiative to assist clients in managing the threats and opportunities presented by government authorities around the world.
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NYSDEC Draft Supplemental Generic Environmental Impact Statement for Natural Gas Drilling Activities in the Marcellus Shale Formation, Oil & Gas Alert, by John F. Spinello, B. David Naidu, Christopher R. Nestor. October 20, 2009.
The New York State Department of Environmental Conservation (NYSDEC) recently published for public review and comment a draft Supplemental Generic Environmental Impact Statement (SGEIS) for horizontal drilling and high-volume fracturing activities in the Marcellus Shale, the Utica Shale and other deep, low permeable natural gas reservoirs. NYSDEC has scheduled public hearings to explain and take comments and questions on the draft SGEIS. The NYSDEC will consider and respond to the comments it receives and then issue a final SGEIS—after which the State will be able to issue permits to applicants for horizontal wells.
The draft SGEIS outlines safety measures, protection standards and mitigation strategies that drillers will need to comply with in order to satisfy the requirements of the State Environmental Quality Review Act (Environmental Conservation Law Article 8)—a prerequisite to obtaining a drilling permit—or otherwise, they will need to file a site-specific environmental impact statement for individual drilling projects. The safety measures will apply in addition to existing regulatory requirements, including those set forth in the Generic Environmental Impact Statement (GEIS) adopted in 1992. This article briefly summarizes the draft SGEIS and its significance to natural gas development in the Marcellus and Utica Shales.
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Reporting Rule and So Much More: Setting the Stage for Cap and Trade for U.S. and International Trading Transactions, Environmental, Land and Natural Resources Alert, by Elizabeth Thomas, Brianne P. Anderson, Gordon F. Peery, Maria Cull. October 15, 2009.
On September 22, 2009, the U.S. Environmental Protection Agency (EPA) issued a final rule pursuant to authority under the Clean Air Act, codified at 40 C.F.R. pts. 86, 87, 89, 90, 94, 98, 1033, 1039, 1042, 1045, 1048, 1051, 1054, and 1065, that requires industries across the U.S. economy to report greenhouse gas (GHG) emissions. One goal of this reporting rule is to better understand from where GHGs are coming, which is expected to guide the development of policies and programs focusing on the reduction of GHG emissions. This rule sets the stage both for Congressional action and further regulatory action to regulate emissions of GHGs.
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U.A.E. Passes Nuclear Energy Law, by Patricia Tiller, Paul de Cordova, Neal R. Brendel. October 13, 2009.
This alert is a description of the main elements of the law newly issued by the UAE regarding the peaceful uses of nuclear energy.
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Update on the Recovery Act for Cleantech Companies: Financing Incentives and Protecting Your IP, Sustainovation Breakfast Forum, by Fred M. Greguras. October 1, 2009.
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IRS Modifies Established Safe Harbor Requirements for Wind Energy Partnerships in Announcement 2009-69, Tax and Energy & Utilities Alert, by Charles H. Purcell, J. Stephen Barge, Eric E. Freedman, Darcie L. Christopher. October 1, 2009.
On September 21, 2009, the United States Internal Revenue Service ("IRS") published Announcement 2009-69 (the "Announcement"), which makes a number of changes to Revenue Procedure 2007-65. Revenue Procedure 2007-65 sets forth the safe harbor for wind energy partnerships using a so-called "partnership flip" structure. These changes should be viewed as providing useful flexibility to investors and developers, particularly in the greater flexibility that should now be available to structure repurchase options covering the wind facility. In short, these changes address in part the concern that wind energy partnerships should not be subject to more stringent tax requirements than other tax-enhanced investment structures.
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Germany - Doubtful Future For CCS Technology, by Dr. Christian Hullmann. September 30, 2009.
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EU Focuses on Carbon Capture and Storage, by Thomas Sibert. September 30, 2009.
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UK Low Carbon Industrial Strategy, by Tom R. Wallace. September 30, 2009.
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New England Cleantech Resource, by James P. O'Hare, Thomas A. Turano. September 2009.
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Cleantech Resource - European Edition, July/August/September 2009.
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Federal Appellate Court Eases Burdens of Design Basis Threat Rule, Nuclear Energy Alert, by David M. Shelton, John P. Englert. August 20, 2009.
In Public Citizen v. Nuclear Regulatory Commission, No.07-71868 (9th Cir. July 24, 2009), the United States Court of Appeals, Ninth Circuit held that the Nuclear Regulatory Commission ("NRC") reasonably determined that air-based threats were not within the scope of the Design Basis Threat ("DBT") rule. The petitioners in Public Citizen contended that the NRC acted arbitrarily and capriciously by excluding the threat of air attacks from the final revised version of the DBT rule, and that the NRC violated the National Environmental Policy Act ("NEPA") by not considering the risk of an airborne terrorist attack on a nuclear facility and its potential environmental impacts. The court rejected the petitioners’ contentions based on the NRC’s interpretation that air based threats were not within the purpose and scope of the DBT rule in that it encompassed "adversary characteristics against which a private security force can reasonably be expected to defend." Thus, the Ninth Circuit’s decision provided clarification to what is required of owners and operators of nuclear facilities under the DBT rule, and removes another impediment to the ongoing nuclear renaissance in the United States. The court’s deference to the NRC’s decision not to impose unnecessary and ineffective design requirements for both planned and existing nuclear facilities alleviates substantial economic concerns for the nuclear industry. The court also reaffirmed the NRC’s ability to rely on non-public information in its decisionmaking process, which further assists in the protection of nuclear facilities by preventing the release of classified information regarding security measures at the facilities to the public.
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Treasury Department Issues Guidance on Application Procedure for Grants in Lieu of Tax Credits for Specified Energy Property, Tax and Energy & Utilities Alert, by Charles H. Purcell, Eric E. Freedman, Dirk Michels, Darcie L. Christopher. July 31, 2009.
On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009 (the "2009 Recovery Act"). Section 1603 of the 2009 Recovery Act generally provides that certain taxpayers may, in lieu of claiming any available federal investment tax credit or production tax credit, apply to the Secretary of the Treasury ("Treasury") for a cash grant when they place "specified energy property" in service. "Specified energy property" generally includes wind facilities, closed- and open-loop biomass facilities, geothermal facilities, landfill gas facilities, trash facilities, certain hydropower facilities, marine and hydrokinetic renewable energy facilities, solar energy property, geothermal energy property, qualified fuel cell property, qualified microturbine property, combined heat and power system property, and geothermal heat pump property. The grant reimburses the taxpayer for a portion - from 10% to 30% - of the cost of such facilities. Although Treasury officials expect to make grants totaling approximately $3 billion under the grant program, Treasury is not limited in the amount of grants it may disburse to qualified applicants.
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Tax Incentives for Renewable Energy: Treasury Department Issues Guidance on Eligibility Requirements for Grants in Lieu of Tax Credits for Specified Energy Property, Tax and Energy & Utilities Alert, by Charles H. Purcell, Eric E. Freedman, Darcie L. Christopher, Dirk Michels. July 30, 2009.
On July 9, 2009, the Department of the Treasury ("Treasury") issued detailed guidance (the "Guidance") on the alternative energy grant program that was created by Section 1603 of the American Recovery and Reinvestment Act of 2009 (the "2009 Recovery Act"), which was signed by President Obama on February 17, 2009. Under the grant program, taxpayers may, in lieu of claiming any available federal investment tax credit or production tax credit, apply to the Secretary of the Treasury for a cash grant payable when "specified energy property" is placed in service. Generally, the term "specified energy property" includes wind facilities, closed- and open-loop biomass facilities, geothermal facilities, landfill gas facilities, trash facilities, certain hydropower facilities, marine and hydrokinetic renewable energy facilities, solar energy property, geothermal energy property, qualified fuel cell property, qualified microturbine property, combined heat and power system property, and geothermal heat pump property. The grant reimburses the taxpayer for a portion -- from 10% to 30% -- of the cost of such facilities. Although Treasury officials expect to make grants totaling approximately $3 billion under the grant program, Treasury is not limited in the amount of grants it may disburse to qualified applicants.
This alert summarizes the information included in the Guidance and describes generally the requirements for receiving a grant under the program. A full copy of the Guidance can be found at http://www.treasury.gov/recovery/docs/guidance.pdf.
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New England Cleantech Resource, by James P. O'Hare, Thomas A. Turano. July 2009.
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Treasury Department Issues Guidance on Federal Grants in Lieu of Tax Credits for Specified Energy Property, Energy & Utilities and Tax Alert, by Charles H. Purcell, Eric E. Freedman, Darcie L. Christopher. July 10, 2009.
On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009 (the "2009 Recovery Act"). Included in the 2009 Recovery Act is Section 1603, which provides that taxpayers may, in lieu of claiming any available federal investment tax credit or production tax credit, apply to the Treasury Secretary for a cash grant when they place "specified energy property" in service. Specified energy property includes most types of facilities used to generate electricity from alternative fuels. Generally, the term includes wind facilities, closed- and open-loop biomass facilities, geothermal facilities, landfill gas facilities, trash facilities, certain hydropower facilities, marine and hydrokinetic renewable energy facilities, solar energy property, geothermal energy property, qualified fuel cell property, qualified microturbine property, combined heat and power system property, and geothermal heat pump property.
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Can We All Get Along? – Administration Urges Futures and Securities Harmonization, Public Policy Alert, by Lawrence B. Patent, Edward G. Eisert. June 22, 2009.
On June 17, 2009, President Barack Obama unveiled his administration’s much-anticipated proposal for reforming regulation of the financial services industry. In response to the recent financial crisis, the proposal aims to "build a new foundation for financial regulation and supervision." The proposal has several implications for the Commodity Futures Trading Commission (CFTC). The proposal would not merge it into the Securities and Exchange Commission (SEC), as some have suggested. Instead, the proposal maintains the CFTC’s current responsibilities and authorities as a market regulator and calls for the harmonization of the statutory and regulatory regimes for futures and securities.
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Ninth Circuit Affirms Federal Energy Regulatory Commission’s Grant of Market-Based Rate Authority, Energy & Utilities Alert, by Donald A. Kaplan, John L. Longstreth, William M. Keyser. June 15, 2009.
The ability to sell power at market-based rates is a cornerstone to a competitive electric industry. In the first appellate decision reviewing revised guidelines of the Federal Energy Regulatory Commission (FERC) for granting market-based rate authority to a wholesale electricity seller, a panel of the Ninth Circuit U.S. Court of Appeals has rejected a challenge to FERC's grant of market-based rate authority to several affiliates of PPL Corporation (PPL Companies) in the control area covering most of Montana. Montana Consumer Counsel v. FERC, No. 07-73256 (June 8, 2009). The appeals court recognized the need to "afford great deference" to FERC's rate determinations and expressed reluctance to "second guess [FERC's] judgment on questions of policy within its expertise." Although the ruling is unpublished, it may offer insight into how the same court will approach its pending review of FERC's promulgation of its market-based rate policy contained in Order Nos. 697 and 697-A.
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IRS Issues Guidance on Electing the Investment Tax Credit in Lieu of Production Tax Credit – Notice 2009-52, Tax and Energy & Utilities Alert, by Charles H. Purcell, Dirk Michels, Eric E. Freedman, Roger S. Wise, Darcie L. Christopher. June 9, 2009.
Taxpayers wishing to elect to claim a 30% investment tax credit (“ITC”) in lieu of the production tax credit (“PTC”) for certain types of alternative energy facilities now have guidance from the Internal Revenue Service setting forth procedures for making the election and the documentation required to complete the election.
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European Cleantech Resource, May/June 2009.
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EU Focus on Biofuel Sustainability, by Thomas Sibert. May 27, 2009.
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Guaranteed Returns for Green Energy Producers in Germany, by Dr. Christian Hullmann. May 27, 2009.
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New England Cleantech Resource, by James P. O'Hare, Thomas A. Turano. May 2009.
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Renewable Energy Incentives for Early Stage Companies and Project Finance Under the Stimulus Package, Energy & Utilities Alert, by Fred M. Greguras, Stan Lewandowski, Aaron D. Schapiro, Lily M. Toy, Nancy T. Le. Catherine Matterson. March 3, 2009.
This Alert summarizes the key incentives under the American Recovery and Reinvestment Act of 2009 (also known as the Stimulus Package) for renewable energy companies. It discusses the key renewable energy provisions, and discusses how the Stimulus Package can be used to benefit start-ups, early-stage companies and companies in need of project finance.
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The Qualifying Energy Credit under the 2009 Recovery Act, Energy & Utilities and Tax Alert, by Eric E. Freedman, Dirk Michels, Charles H. Purcell, Roger S. Wise, Scott C. Nelson. March 2, 2009.
On February 13, 2009, the House and Senate passed, and on February 17, 2009, President Barack Obama signed, the American Recovery and Reinvestment Act of 2009 (the “2009 Recovery Act”). The 2009 Recovery Act added a new investment credit, the “qualifying energy credit,” under Section 46 of the Internal Revenue Code of 1986, as amended (the “Code”).
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Grants in Lieu of Investment Tax Credit or Production Tax Credit, Energy & Utilities and Tax Alert, by Eric E. Freedman, Dirk Michels, Charles H. Purcell, Roger S. Wise, Scott C. Nelson. February 27, 2009.
On February 13, 2009, the House and Senate passed, and on February 17, 2009, President Barack Obama signed, the American Recovery and Reinvestment Act of 2009 (the “2009 Recovery Act”). Included in the 2009 Recovery Act was Section 1603, which provides that taxpayers may, in lieu of claiming the investment tax credit or production tax credit, apply to the Treasury Secretary for a grant when they place “specified energy property” in service. The grant reimburses the taxpayer for a portion of the expense of such property.
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Alternative Energy Provisions Set Forth in the American Recovery and Reinvestment Act of 2009, Energy & Utilities and Tax Alert, by Eric E. Freedman, Dirk Michels, Charles H. Purcell, Roger S. Wise, Scott C. Nelson. February 26, 2009.
On February 13, 2009, the House and Senate passed, and on February 17, 2009, President Barack Obama signed, the American Recovery and Reinvestment Act of 2009 (the “2009 Recovery Act”). The following provides a summary of the key alternative energy provisions in the 2009 Recovery Act.
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Opening Salvo Fired In Financial Market Reform Effort, But Many Battles Lie Ahead, Investment Management and Public Policy, by Lawrence B. Patent, Anthony R.G. Nolan, Daniel F. C. Crowley, Gordon F. Peery. February 19, 2009.
By voice vote on February 12, 2009, the House Committee on Agriculture approved H.R. 977, the “Derivatives Markets Transparency and Accountability Act of 2009.” Because of various provisions in this bill, portions of it will be referred to committees dealing with financial services, energy and justice, so there is not much chance that the bill will be enacted in its present form. Nevertheless, there is a great likelihood that legislation will be approved by this Congress that affects the way financial and energy markets and participants in those markets do business. Some of the most interesting and novel provisions of the bill, which covers topics ranging from clearing of credit default swaps to standards for trading of greenhouse gas emissions allowances, are described in the attached memorandum.
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New England Cleantech Resource – Stimulus Edition, by James P. O'Hare, Thomas A. Turano. February 2009.
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New England Cleantech Resource, by James P. O'Hare, Thomas A. Turano. January 2009.
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Junk Science Meets Hydraulic Fracturing: Unfounded Environmental Scare Threatens Energy Development, Toxic Tort and Energy & Utilities Alert, by Clifton T. Hutchinson. December 30, 2008.
Faced with volatile petroleum and gasoline prices, limitations in proven domestic reserves, and instability in key regions of hydrocarbon supply, Americans have a greater need for robust domestic energy development than ever before. America’s oil and gas industry has responded to this need, with the identification of new natural gas reservoirs, such as the Haynesville Shale in Louisiana and the Marcellus Shale under the Appalachians. Both resources have increased the nation’s potential gas reserves by trillions of cubic feet in just the last two years.
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What Lies Beneath The Surface Owners’ Protection Act?, Oil & Gas Alert, by George A. Bibikos. October 2, 2008.
Fresh off of summer recess, Pennsylvania lawmakers have introduced an ambitious piece of legislation designed to protect surface owners from the impact of oil and gas activities conducted on their lands. Sponsored by the Chair of the House Environmental Resources and Energy Committee, House Bill 2533 would establish a “Surface Owners’ Protection Act.” If enacted, this proposal would create a host of preconditions to accessing and using a surface owner’s land to develop natural resources owned by a well operator. The key aspect is a requirement that well operators and surface owners execute an agreement, before commencing operations, which must guarantee compensation for use of and damage to the surface. The proposed legislation, quite simply, rewrites over a century of Pennsylvania law.
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Significant Developments in Oil and Gas Drilling in New York State, Oil & Gas Alert, by John F. Spinello, B. David Naidu. September 4, 2008.
The summer of 2008 witnessed significant developments on the legislative and regulatory fronts regarding oil and gas drilling in New York State, particularly with respect to horizontal well sin the Marcellus Shale formation. The legislative efforts focused on amending spacing requirements because the existing statute had not addressed horizontal drilling. Ongoing regulatory efforts aim at developing permitting requirements that will be applicable to horizontal drilling. These regulatory efforts are in their infancy and will continue to evolve for the rest of 2008 and into 2009. This article will address both of these fronts, and where they may be headed.
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The Ninth Circuit Court of Appeals Decision in NRDC v. EPA and its Impact on Storm Water Permitting of Oil & Gas Activities in Pennsylvania, Oil & Gas Alert, by Kenneth S. Komoroski, Michael J.R. Schalk. June 30, 2008.
Recently, the U.S. Court of Appeals for the Ninth Circuit vacated a 2006 EPA rule which exempted construction activities at oil and gas facilities from the National Pollutant Discharge Elimination System (NPDES) permit program. In the 2006 rule, EPA had asserted that the amendment to the Federal Water Pollution Control Act created an absolute exemption for storm water discharge of sediment, whether or not such discharge resulted in a water quality violation. Although the Ninth Circuit seemingly agreed that uncontaminated storm water discharges from oil and gas construction activities are exempted, it held that the EPA’s claim that the Act established an absolute exemption was arbitrary and capricious.
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Supreme Court Reaffirms the "Mobile-Sierra" Presumption that Wholesale Electricity and Gas Contracts are Just and Reasonable, Energy and Appellate Alert, by John L. Longstreth, Donald A. Kaplan. June 27, 2008.
On June 26, 2008, the United States Supreme Court clarified in Morgan Stanley Capital Group Inc. v. Public Utility District No. 1 of Snohomish County the standards that the Federal Energy Regulatory Commission (FERC) must apply in determining whether to abrogate or revise contracts entered into by wholesale purchasers and sellers of natural gas or electricity. The case construed two Supreme Court decisions from 1956 that have come to be known as the “Mobile-Sierra” doctrine, and that recognize the importance of contract certainty under the Natural Gas Act (NGA) and the Federal Power Act (FPA). The Court rejected two limitations on the Mobile-Sierra doctrine that had been applied by a federal appeals court, holding that the doctrine applied: (1) to purchasers as well as sellers seeking relief from a contract, and (2) even if FERC had not reviewed the terms of the contract at the time it was made to determine if the terms were just and reasonable.
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Would You Pay an Extra Nickel to Help Save the Planet?, A Bell, Boyd & Lloyd alert, February 2008.
FTC Holds Initial Carbon Offset Credit Market Claim Workshop to Determine What "Bang" Consumers are Getting for Their Buck.
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Beyond the Hype: Insights into Market Myths for the Energy Investor, presented via webinar, by Sandy K. Feldman, Donald A. Kaplan, Richard S. Miller, Charles R. Mills, Andrew B. Young, Roger D. Stark. October 24, 2007.
This webinar examines current events, market trends and regulatory developments impacting the institutional investor in the electric power market.
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Commonwealth Court Invalidates Local Ordinances That Attempt To Regulate Oil And Gas Development, Oil & Gas Alert, by Walter A. Bunt, Jr., Kenneth S. Komoroski, Michael J. Ross, George A. Bibikos. August 13, 2007.
In two recent cases — Great Lakes Energy Partners v. Salem Township and Huntley & Huntley, Inc. v. Borough of Oakmont — the Commonwealth Court of Pennsylvania established binding case law which prevents local governments from regulating on a municipality-by-municipality basis the same “features” of oil and gas development that the Pennsylvania Oil and Gas Act regulates. The Court’s decisions are significant and timely, given the increase in attempts by local townships and municipalities over the past several years to regulate and require permits for natural gas and coalbed methane activities.
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West Virginia Court Enters $405 Million Judgment Against Natural Gas Company in Royalty Owner Class Action, Energy and Utilities Alert, by Walter A. Bunt, Jr., Theodore A. McConnell, Paul K. Stockman, Heather L. Lamparter. July 30, 2007.
gA $405 million dollar judgment in a Roane County, West Virginia class action could significantly impact the oil and gas industry and alter how royalties are calculated under mineral leases. This enormous verdict, in Estate ofGarrison Tawney, et al. v. Columbia Natural Resources, et al., was the result of a suit alleging that Columbia Natural Resources (“CNR”) had wrongfully calculated royalty payments owed to mineral owners. The verdict, which included $134.3 million in compensatory damages and $270 million in punitive damages, was recently upheld when Judge Thomas C. Evan, III denied the defendant’s post-trial motion (which had asked the Court to set aside the punitive damages).
This alert was also published in the September/October 2007 issue of Landman magazine.
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Supreme Court Finds Implied Antitrust Immunity for Certain Securities Industry Conduct: Implications for Other Regulated Industries, Antitrust & Trade Regulation Alert, by John L. Longstreth, Donald A. Kaplan, James R. Weiss. June 2007.
This alert discusses the implications of Credit Suisse v. Billing, No. 05-1157 (June 18, 2007) for regulated industries outside the securities sector. In Credit Suisse, the Supreme Court broadened the conditions under which extensive federal regulation of securities industry conduct impliedly immunizes that conduct from antitrust liability.
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Arrival of Washington Partner Boosts K&L Gates’ Energy Practice, May 29, 2007.
Andrew B. Young has joined K&L Gates as a partner in the firm's energy practice.
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Nanotechnology: An Update on Business Opportunities and Regulatory Challenges, Journal of Biolaw and Business, by Barry M. Hartman, B. David Naidu. Vol. 10, No.1, 2007.
Businesses already involved in nanotechnology products and those interested in getting involved, need to be aware of regulatory developments and should be willing to educate regulators to ensure that new and changing rules do not undermine the promise of this technology. Inevitably, concerns over the potential impacts of this new and largely unseen technology on human health and the environment have arisen. As with other scientific advances, this one may not fit neatly into current regulatory regimes designed to address these concerns. This Alert gives a snapshot of how agencies and the public are responding to this—and how nanotechnology is and may be regulated. Posted with permission.
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U.S. Supreme Court Opens Door to EPA Regulation of Greenhouse Gas Emissions, Environmental Alert, by Craig P. Wilson, Sandra Y. Snyder. April 2007.
On April 2, 2007, the United States Supreme Court issued its decision in Massachusetts, v. Environmental Protection Agency, No. 05-1120. This decision could have a significant and broad impact on the regulation of greenhouse gas (“GHG”) emissions in the United States, potentially requiring the regulation of such gases as “air pollutants” under the Clean Air Act (“CAA” or “Act”). The Court’s decision addressed three primary issues. First, the Court determined that the Commonwealth of Massachusetts had standing to challenge the Environmental Protection Agency’s decision not to regulate GHG emissions. Second, the Court determined that EPA is statutorily authorized to regulate GHG emissions under the Act. Third, the Court determined that EPA must regulate GHG emissions if it determines that they cause or contribute to air pollution in a manner that may reasonably be anticipated to endanger the public health and welfare.
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Coping with Carbon Dioxide, Energy Magazine, by John F. Spinello, Craig P. Wilson, Sandra Y. Snyder. Winter 2007.
2006 was a significant year for legal developments concerning global climate change that affect the energy sector in the United States and worldwide. This trend of increasing legal activity and policy debate surrounding the issue of climate change is a reflection of the ever-increasing attention focused on the issue by scientists, economists, advocacy and independent research groups, and policy makers here and abroad. This article discusses this evolving issue and the significant developments in this area. Posted with permission.
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Order 890: Framing the Costs of Transmission Access, K&L Gates Energy and Utilities Alert, by Harvard P. Spigal, Eric E. Freedman, Donald A. Kaplan, Lisa H. Tucker, Roger D. Stark. March 2007.
On February 16, 2007, the Federal Energy Regulatory Commission (the “Commission,” or “FERC”) adopted Order No. 890, Preventing Undue Discrimination and Preferences in Transmission Service (“Order 890”), which amends FERC’s regulations governing the provision of transmission service and requires revisions to the pro forma Open Access Transmission Tariff (“OATT”) adopted in Order Nos. 888 and 889.1 Transmission providers are required to submit filings revising their OATTs within two to seven months after the formal publication of Order 890 on March 15, 2007.
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Hughes & Luce Selected as “Go-To Law Firm” in Litigation Area, October 24, 2006.
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Where to Buy In, Energy, by Leib Orlanski. Fall 2006.
This article, the first part of a primer for venture capitalists on staking a claim in green energy, focuses on ethanol and biodiesel projects.
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Court of Appeals’ Hydropower Decision May Influence FERC Relicensing Process, Preston Gates & Ellis Energy and Utilities Alert, by John L. Longstreth, Elizabeth Thomas, Harvard P. Spigal, Kari L. Vander Stoep, Clothilde V. Hewlett. August 28, 2006.
On August 22, the D.C. Circuit Court of Appeals released a decision in the City of Tacoma’s Cushman Dam relicensing litigation that may have broad impacts on the Federal Energy Regulatory Commission’s ("FERC’s") hydropower relicensing process. In City of Tacoma v. FERC, No. 05-1054, Tacoma and the Skokomish Tribe sought judicial review of several provisions of FERC’s 1998 Cushman Dam license. The Cushman Dam project includes a portion of the Skokomish Tribe’s reservation lands. This deals with that decision.
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Preston Gates Ellis & Rouvelas Meeds 2005 Annual Highlights, Preston Gates & Ellis Publication, March 28, 2006.
Click above to download the Preston Gates Ellis & Rouvelas Meeds 2005 Annual Highlights brochure.
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The Compression of Natural Gas, Is It Production or Post Production? Is It Deductible From Royalties? If So, How Much?, by Jeffrey C. King. January 5, 2006.
In almost all gas fields, compression is, or will be, a necessary operation. The rising price of natural gas has caused the cost of moving the gas from the field to the consumer to significantly increase. One important reason for the cost accretion is that the equipment used for these operations burn natural gas as fuel. The higher the price of natural gas, consequently, the higher the cost of these ancillary activities. High costs also create another phenomenon – litigation between the lessor and lessee concerning who shoulders them and whether they are reasonable.
Natural gas post-production activities include dehydration, processing, gathering, transportation and compression. Depending upon the quality of the natural gas produced from a particular lease or field, the only guaranteed operations are gathering, transporting, and (later on) compression. This article published in the first issue of the Texas Journal of Oil, Gas, and Energy Law focuses upon compression as a post-production transportation operation and the proportionate sharing of the associated costs between working interest and royalty interest owners. The paper addresses four questions to be answered concerning compression:
- What is it?
- Is it production or post-production?
- How is it affected by the marketable condition rule?
- How much should be paid?
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Energy Policy Act of 2005, Energy Alert, by Jamie L. Burchianti Lopez, Renée Cavalovitch, Roger D. Stark, Steven J. Adelkoff. November 2005.
On August 8, 2005, President Bush signed the Energy Policy Act of 2005 into law (the "Act"). The Act is the first major energy legislation enacted since 1992, and it includes provisions affecting many aspects of the energy industry. Title XIII of the Act – entitled "Energy Policy Tax Incentives" – contains $14.5 billion in tax incentives designed to promote domestic energy production and conservation and improve the reliability of the nation’s energy infrastructure. This article summarizes certain key provisions of Title XIII.
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Uniform Environmental Covenants Act: Report to he Pennsylvania House Environmental Resources and Energy Committee Regarding House Bill 1249, Printer’s No. 1476, presented at the National Conference of Commissioners on Uniform State Laws, by Raymond P. Pepe. September 27, 2005.
The purpose of this Report is to provide to the members of the Environmental Resources and Energy Committee and other members of the Pennsylvania General Assembly information regarding the NCCUSL and the drafting and endorsement of the UECA. This report is also intended to introduce into the legislative record detailed commentary explaining the goals and objectives of the UECA published by the NCCUSL, together with an explanation of the modifications to the provisions of the UECA included in House Bill 1249 in order to conform the legislation to other Pennsylvania legal and administrative requirements. Posted with permission.
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Energy Policy Act of 2005, Preston Gates & Ellis Energy and Utilities Alert, by Tim L. Peckinpaugh, Elizabeth Thomas, Eric E. Freedman, Harvard P. Spigal. August 8, 2005.
On August 8, 2005, President Bush signed into law the Energy Policy Act of 2005 (the "Act")1. The Act is the most comprehensive energy legislation enacted in the United States in over a decade and contains provisions that affect all sectors of the U.S. energy industry. We have summarized below several provisions of the Act that may be of particular interest to our clients engaged in the electric power and liquefied natural gas industries.2
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Pennsylvania Enacts Alternative Energy Portfolio Standards Act, Energy Alert, by Renée Cavalovitch, Roger D. Stark, Steven J. Adelkoff. January 2005.
This article discusses the Alternative Energy Portfolio Standards Act, which establishes standards requiring that electric energy sold to retail customers in Pennsylvania include specified percentages of energy generated from "alternative energy sources." The portfolio standards in the Act will encourage the development of new alternative energy projects in Pennsylvania.
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American Jobs Creation Act Of 2004 - Summary of Major Energy Legislation, Preston Gates & Ellis Tax Alert, by Charles H. Purcell, Robert D. Starin, Eric E. Freedman, Andrew H. Zuccotti. November 11, 2004.
On October 22, 2004, the President signed the American Jobs Creation Act of 2004 (the "Act") into law. The Act incorporates several provisions of the energy tax bill and, together with other recently enacted legislation, enacts several new energy-related tax benefits.
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The Temperature's Rising: Business Law Considerations for Greenhouse Gas Regulation, Preston Gates & Ellis Publication, by Elizabeth Thomas, Sally Brick, Kari Vander Stoep, Kenneth J. Gish, Jr.. June 17, 2004.
Despite the opposition of the Bush Administration to ratification and enforcement of the Kyoto Protocol, emitters of greenhouse gases ("GHG") cannot afford to ignore the growing concern with global warming. Shareholders are beginning to demand corporate responsibility for GHG emissions. State Attorneys General are holding the feet of the Bush Administration to the fire, suing to force the Environmental Protection Agency ("EPA") to regulate GHG emissions. Members of Congress, including members of the President’s party, persist with legislation that would require mandatory reductions in GHG emissions.
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Bankruptcy Primer, Presentation to the Reliability Collaborative before the New York State Department of Public Service, by David A. Murdoch, Patrick Webster. March 13, 2002.
The intersection of bankruptcy and utilities law results in many complex legal interactions. This presentation will not address everything you ever wanted to know about bankruptcy and utility law, but will address several areas of bankruptcy law, including the automatic stay, the bankruptcy estate, initiation of the bankruptcy case, contracts used in the utility industry and their function under the executory contract provisions of the bankruptcy code, and claims and preferences, in the context of potential bankruptcies of natural gas marketers and suppliers.
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