Supreme Court Revives FERC Order No. 745; FERC Maintains its Role in a Distributed Energy World

The Supreme Court handed down a decision on Monday in Federal Energy Regulatory Commission v. Electric Power Supply Association affirming FERC’s Order No. 745.  Order No. 745 generally requires market operators to pay the locational marginal price (LMP) for demand response (offers to voluntarily curtail electricity use)—the same price paid to generators for producing electricity.  (Seth Jaffe previously posted on the decision.)  The Supreme Court’s decision reverses a May 2014 decision from the D.C. Circuit, which had held that FERC’s order impermissibly regulated retail sales of electricity (the exclusive domain of states) and arbitrarily selected the LMP… More

Massachusetts Updates Its Climate Song: I Can Get By With A Little Help From My (Canadian) Friends

Earlier this week, Massachusetts released its updated Massachusetts Clean Energy and Climate Plan for 2020.  The headline for the press release was “Massachusetts on Track to Meet 25% Greenhouse Gas Reduction Target for 2020”.  The slightly more nuanced version is that we can do it, but only with a large dose of Canadian hydropower.

While that’s the main take-away, it really is a useful report, with a lot of important information.  Here are some highlights:

The “dominant source of emissions reductions [to date] came from the electric sector.” Emissions from transportation have barely budged, because vehicle miles traveled… More

Supreme Court to Issue FERC Demand Response Decision in 2016

Supreme CourtWith the Supreme Court in recess until January 11, it seems that the year will close without a ruling on whether the Federal Energy Regulatory Commission (FERC) overstepped its authority in issuing Order 745, which directs ISOs and RTOs to incentivize demand reduction by compensating cost-effective demand response resources at the market price for energy.

The Supreme Court agreed to hear the case after the U.S. Court of Appeals for the D.C. Circuit, in a 2-1 decision, vacated Order 745… More

ERISA Fiduciaries May Factor Climate Change Issues Into Economic Analysis of Investments

New guidance from the US Department of Labor (“DOL”) clarifies the role of environmental, social and governance issues (referred to as “ESG factors”) in investment decisions by ERISA fiduciaries.  ERISA Interpretive Bulletin 2015-01 recognizes that ESG factors, which include climate change, may directly affect the economic value of an investment, and makes clear that ERISA fiduciaries should appropriately consider such factors in investment decisions.

This Bulletin, effective October 26, 2015, provides welcome guidance to ERISA fiduciaries who may have been reluctant… More

Solar and Wind Federal Tax Credits Extended for Five Years

Solar and wind tax credits aren’t going to ride off into the sunset just yet.

On December 18, 2015, Congress extended the Investment Tax Credit (ITC) and Production Tax Credit (PTC) for five years.

The Section 48 ITC for commercial installations had been set to decrease from 30% to 10% at the end of 2016 and the Section 25D individual tax credit would have disappeared altogether. Now, the Section 48 ITC will continue at 30% for facilities commencing construction before January 1, 2020 and will decline to 26% in 2020, 22% in 2021, leveling off at 10% in 2022. The… More

Massachusetts AG Releases Study Finding No Need for New Gas Pipelines

Last month the Massachusetts Attorney General’s Office released a study concluding that no new gas pipelines are needed for electric reliability in New England, as the region is expected to meet its energy needs through 2030.

The study arrives amid a debate regarding the role of gas pipelines in New England’s energy future. Recently, the Massachusetts Department of Public Utilities ruled that it had the authority to allow distribution companies to pass along the costs of firm pipeline capacity to ratepayers. That ruling is currently under appeal to the Supreme Judicial Court. (Foley Hoag is counsel to one of… More

Perhaps Massive Purchases of Canadian Hydropower Would Not Be a Panacea

Governor Baker recently submitted Senate Bill No. 1965 to the Legislature.  It calls for utilities to solicit long-term purchases of renewable energy.  We are talking about as much as 1/3 of Massachusetts’ annual electricity use over a 15-25 year period.  Two rationales are often provided to justify the large purchase of Canadian hydropower.  First, cheap hydropower will ameliorate the high cost of electricity.  Second, it will help Massachusetts attain its initial Global Warming Solutions Act goal of reducing GHG emissions by 25% below… More

IRS Issues Favorable PLR Allowing an Individual Panel Owner in an Offsite, Net-Metered Community-Shared Solar Project to Claim the Section 25D Tax Credit

The Internal Revenue Service has issued a private letter ruling to an individual owner of solar panels installed in an offsite net-metered community-shared solar project confirming the individual’s eligibility for the income tax credit under Section 25D of the Internal Revenue Code. A redacted copy of the PLR 201536017 is available from the IRS’s website here. This PLR provides significant insight into the IRS view on the application of Section 25D to community-shared solar projects. Foley Hoag attorneys Nicola Lemay and Adam Wade provided the legal work to obtain the PLR on behalf of its clients, the… More