The IRS and the Treasury Department issued proposed regulations under Section 48 on November 22, 2023 (Proposed Regulations), providing further guidance in determining whether property is energy property and eligible for the Section 48 credit (ITC). As part of this further guidance, the Proposed Regulations introduce a new framework for the definition of energy property, provide welcome clarification regarding the eligibility of energy property for multiple credits, and provide guidance on the Section 48(a)(10)(C) recapture rules applicable to failures to satisfy the prevailing wage and apprenticeship requirements (PWA requirements). Taxpayers must be aware of these energy property requirements and additional ITC eligibility guidance to ensure future eligibility for the ITC. The Proposed Regulations would amend Treasury Regulation Section 1.48-9, withdraw and replace Proposed Treasury Regulation 1.48-13 as it was proposed in REG-100908-23 (PWA Proposed Regulations), and introduce Proposed Regulation Section 1.48-14. The Proposed Regulations follow the passage of the Inflation Reduction Act of 2022 (IRA) and the publication of Notice 2022-49, 2022-43 I.R.B. 321, which requested comments on issues arising under Section 48.Continue Reading IRS Issues Proposed Regulations on Energy Property and Rules Applicable to Energy Credit Under Section 48
Bridging the Gap Between Planning and Permitting
In recent decades, the U.S. has not been able to construct the volume of high-voltage backbone transmission facilities needed to support the country’s move to a ‘greener’ power system. The inability to build sufficient transmission infrastructure thwarts customer demands for a greener power mix.
In this report, we offer perspectives from a range of transmission experts about where the major roadblocks exist, and the latest regulatory and legal changes that promise to bring greater unity between the divergent federal planning and state siting and permitting processes. These changes provide hope that the U.S. can bridge the gaps that have delayed much-needed upgrades to the transmission system.Continue Reading Unlocking U.S. Transmission Upgrades – Are We on the Cusp of Real Progress?
On November 16, 2023, FERC granted Virginia Electric and Power Company d/b/a Dominion Energy Virginia’s (“Dominion”) petition requesting the Commission declare that Dominion’s planned liquefied natural gas (“LNG”) production, storage, and regasification facility (“Back-up Fuel Project” or “Project”) in Greensville County, Virginia would be exempt from the Commission’s jurisdiction under section 7 of the Natural Gas Act (“NGA”). In so doing, FERC determined the Project satisfied the “Hinshaw Exemption” under NGA section 1(c).Continue Reading FERC Finds Dominion LNG Back-up Fuel Project Satisfies Hinshaw Exemption Under the NGA
On November 16, 2023, the U.S. Department of Energy (“DOE”) issued a Notice of Proposed Rulemaking (“NOPR”) to update its National Environmental Policy Act (“NEPA”) implementing regulations to add a categorical exclusion for specific energy storage systems and revising categorical exclusions for upgrading and rebuilding transmission lines and solar photovoltaic (“PV”) systems. Comments on the NOPR are due January 2, 2024.Continue Reading DOE Proposes to Limit NEPA Review for Transmission, Storage, and Solar
On November 16, 2023, FERC staff issued the 2023-2024 Winter Energy Market and Electric Reliability Assessment report, projecting trends and identifying considerations for energy markets and electric reliability for the upcoming winter (December through February). The report focuses on weather outlook, the state of the natural gas and electricity markets, and initiatives implemented in the wake of Winter Storm Elliott.Continue Reading FERC Staff Issues Winter Reliability Assessment Report
On September 29, 2023, FERC accepted part of Arizona Public Service Company’s (“APS”) proposed interconnection queue reforms to transition from a first come, first served cluster study process to a first ready, first served cluster study process. Generally, FERC accepted APS’s proposals that would prevent speculative projects from moving through the queue, while rejecting proposals that were not consistent with or superior to the pro forma Large Generator Interconnection Procedures (“LGIP”). APS’s interconnection queue reform proposal was submitted before FERC issued Order No. 2023; the approved reforms do not constitute APS’s Order No. 2023 compliance filing and are based on FERC’s currently effective pro forma LGIP.Continue Reading FERC Partially Accepts Arizona Public Service Company’s Proposed Interconnection Queue Reforms
On October 30, 2023, FERC accepted the California Independent System Operator Corporation’s (“CAISO”) revisions to its wheeling tariff provisions. The revised provisions allow external load serving entities to obtain, in advance, on a monthly and daily basis, rights to transmit electricity (also known as “wheeling”) through self-schedule priorities equal to the scheduling priority of CAISO demand. The revised provisions also update CAISO’s calculation of Available Transfer Capability (“ATC”).Continue Reading FERC Approves CAISO Revisions to Wheeling Through Priority Tariff Provisions, Amending ATC Calculations to Account for Transmission Capacity Needed to Serve Native Load
On October 13, 2023, PJM Interconnection, L.L.C. (“PJM”) submitted two filings with FERC proposing revisions to its Open Access Transmission Tariff (“Tariff”) and its “Reliability Assurance Agreement” (“RAA”) designed to improve resource adequacy and grid reliability. PJM requested the Commission to accept both filings concurrently, with an effective date of December 12, 2023, so that PJM may implement the proposed reforms for the upcoming Base Residual Auction (“BRA”) associated with the 2025/2026 Delivery Year.Continue Reading PJM Files Capacity Market Overhaul for Resource Adequacy and Grid Reliability
On October 20, 2023, the U.S. Department of Energy (“DOE”) released the National Transmission Needs Study, a triennial report that assesses electric transmission capacity constraints and congestion on a national scale. While similar to previously issued triennial reports, the 2021 Bipartisan Infrastructure Law expanded the study’s scope to also consider anticipated future transmission constraints and congestion. The study assessed needs through 2040 and revealed a pressing need for additional transmission infrastructure to promote reliability in the face of a shifting resource mix, with the largest benefits stemming from increases to interregional transfer capacity.Continue Reading Department of Energy Releases Triennial National Transmission Needs Study
On October 19, 2023, FERC issued a Notice of Proposed Rule Making (“NOPR”) proposing various changes to its Electric Quarterly Report (“EQR”) filing requirements. According to FERC, the proposed changes are designed to update the data collection process, improve data quality, increase market transparency, decrease costs of preparing necessary data for submission, and streamline compliance with future filing requirements. The following is a summary of the primary reforms proposed.Continue Reading FERC Proposes Changes to Filing Requirements and Data Collection for Electric Quarterly Report