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Five Takeaways: An In-Depth Look at the Federal Legislative Game Plan to Support Renewables

On Thursday May 14, McDermott was joined by Gregory Wetstone, president and chief executive officer of the American Council on Renewable Energy (ACORE) to discuss the latest market updates on the severe disruption and uncertainty brought on the renewables industry by COVID-19. Five takeaways from this week’s webinar: 1. There is no clear insight yet into what a congressional relief package regarding renewable energy might look like, despite the fact that congress is discussing its fifth COVID-19-related response bill. 2. Even though the outlook was already pessimistic, clean energy job loss has been worse than expected; there has been a loss of 94,000 jobs in the renewable sector between March and April and 600,000 additional unemployment claims across the clean energy sector. 3. Renewables have a great potential to continue to be part of the nation’s economic recovery; two of the fastest growing job categories in the nation have been wind turbine technicians...

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FERC Rejects Department of Energy Proposal Benefitting Coal and Nuclear

On January 8, 2018, the Federal Energy Regulatory Commission (FERC) rejected the Department of Energy’s (DOE) Proposed Rule, which would have required organized wholesale electricity markets run by independent system operators (ISOs) or regional transmission organizations (RTOs) to establish tariff mechanisms for purchasing energy from eligible “reliability and resilience resources” and mandated a recovery of costs plus a return on equity for such resources. Eligible reliability and resilience resources would have to be (1) located within an RTO/ISO, (2) able to provide essential reliability services, and (3) have a 90-day fuel supply on-site. Practically, these requirements would limit participation to coal and nuclear plants. After reiterating support for “pro-competition, market driven” regulation of wholesale electricity markets, FERC rejected the Proposed Rule. Under the Federal Power Act, FERC may require RTOs/ISOs to implement tariff changes if there...

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DOE Says Wind Power Creates Lots of Jobs!

According to the Department of Energy (DOE) renewable energy wind installations had explosive growth through 2016, and added approximately 32,000 jobs since 2015, to a total of 102,000! In the Wind Technologies Market Report, DOE says the Production Tax Credit (PTC) is directly responsible for the expansion. Congress, however, is phasing out the PTC, which DOE believes will lead to a slowing of the wind energy industry. The PTC is incrementally being phased out over a five year period, and ends completely in 2020. Read here for more information.

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IRS Rules (Again) That Taxpayers Are Not Entitled to Claimed Refined Coal Credits

In a highly-anticipated Technical Advice Memorandum (TAM) dated March 23, 2017 and released on July 21, 2017, the Internal Revenue Service (IRS) ruled that two taxpayers who had invested in a Limited Liability Company that owned and operated a refined coal facility (the LLC) were not entitled to refined coal production credits they had claimed because their investment in the LLC was structured “solely to facilitate the prohibited purchase of refined coal tax credits.” This analysis marks a departure from the position staked out by the IRS in a number of recent refined coal credit cases, which focused on whether taxpayers claiming refined coal credits were partners in a partnership that owned and operated a refined coal facility. Congress enacted the refined coal production tax credit under Internal Revenue Code (IRC) section 45(c)(7) and (e)(8) to encourage investment in the development of refined coal facilities and the use of refined coal, which would...

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D.C. Circuit Denies Rehearing on Nuclear Waste Fee Decision

The D.C. Circuit last week denied the Department of Energy’s (DOE) petition for en banc review of the court’s November decision holding that the DOE could not continue to collect nuclear waste fees from utilities.  The Nuclear Energy Institute (NEI) and National Association of Regulatory Utility Commissioners (NARUC) filed suit after the DOE’s termination of the Yucca Mountain repository program in 2010.  The organizations argued that the DOE could not continue to collect the fee from utilities if it did not have a waste management plan in place.  Last fall, the D.C. Circuit agreed and held that the DOE could not continue to collect the nuclear waste fee of one-tenth of a cent per kilowatt-hour. In January, Secretary Moniz sent a letter to the Senate requesting that the fee be reduced to zero, in accordance with the court’s mandate.  The Secretary expressed his discontent with the court’s decision stating that “this proposal, mandated by the Court of Appeals,...

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DOE Issues Guide For Developing Large-Scale Renewable Energy Projects on Federal Land

by Thomas Hefty Last month, the Department of Energy (DOE) issued its Large-Scale (>10 MW) Renewable Energy Guide, which is subtitled “A Practical Guide to Getting Large-Scale Renewable Energy Projects Financed with Private Capital” (Guide).   According to The Guide, its main purpose is to “provide a project development framework to allow the federal government, private developers and investors to work in a coordinated fashion on large-scale renewable energy projects.” The Guide aims to achieve this purpose by (a) developing a common language between federal agencies and developers; (b) describing a “best practice” large-scale renewable energy project development process; (c) giving government employees an understanding of what his or her responsibilities and roles are within the development process; and (d) outlining for developers a recognizable, reliable and predictable process in which it can engage...

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DOE Announces Grant Program for Bio-Oils Research to Produce Renewable Transportation Fuels

by Bethany K. Hatef The Department of Energy (DOE) announced that it has $15 million available to award for the development and demonstration of biomass-based oil supplements, or bio-oils.  The grants will go toward research and development projects aimed at speeding the development of thermochemical liquefaction technologies to produce bio-oil feedstock from high-impact feedstock biomass or algal biomass.  Successfully produced bio-oils could then be blended with petroleum to produce transportation fuels, including gasoline, diesel, and jet fuels, without significantly modifying oil refining processes for conventional transportation fuels, existing fuel distribution networks, or engines. DOE explained in the early April announcement that it expects to fund five to ten projects in 2012.  The projects will aim to produce bio-oil prototypes that can be used for testing in refineries and for research and development of bio-oil technologies and...

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