Colleagues in our tax practice have prepared a LawFlash discussing the recently released Internal Revenue Service (IRS) guidance for meeting the prevailing wage and apprenticeship (W&A) standards applicable to the investment tax credit (ITC), production tax credit (PTC), and carbon capture credit (Section 45Q), as enacted or amended by the Inflation Reduction Act (IRA).
Power & Pipes
FERC, CFTC, and State Energy Law Developments
On November 17, 2022, the Office of Enforcement (OE) of the Federal Energy Regulatory Commission (FERC or the Commission) released its annual report on enforcement activities (Report). The Report details the FY 2022 efforts of OE’s three divisions: Division of Investigations (DOI), Division of Audits and Accounting (DAA), and Division of Analytics and Surveillance (DAS).
The energy industry and market participants have provided a variety of comments on what role the Commodity Futures Trading Commission (CFTC) should play in the voluntary carbon markets, in response to a June 2022 request for information on how the CFTC can help enhance the integrity and transparency of the voluntary carbon markets and what aspects of the voluntary carbon markets are susceptible to fraud and manipulation.
In an article featured in our global energy industry newsletter, Empowered, partners Pam Wu and Levi McAllister discuss the factors preventing purchasers of carbon credits from having full confidence in the voluntary carbon markets. They also analyze efforts to establish standards to spur additional participation in these markets.
Hydrogen will play a key role in addressing the climate crisis, supporting a transition to net zero, and achieving a sustainable clean energy future. As a versatile energy carrier and chemical feedstock, hydrogen offers many advantages and an ability to leverage renewables, nuclear, and fossil fuels with carbon capture and storage. It can also be used as a fuel or feedstock for applications that do not have competitive and efficient clean alternatives.
The Commodity Futures Trading Commission (CFTC or the Commission) released its enforcement results for fiscal year 2022 on October 20, 2022. The enforcement results detail the 82 enforcement actions the CFTC filed in 2022 and show that orders secured by the Commission imposed more than $2.5 billion in restitution, disgorgement, and civil monetary penalties, either through settlement or litigation.
Indemnity clauses are an integral tool used regularly in energy contracts and master service agreements. Indemnity is an obligation by one party to make another whole for a loss or damage, and indemnity clauses are useful tools that allow companies to mitigate and allocate risk that can arise from numerous issues in producing, transporting, refining, and selling oil and gas and other energy resources.
If you’ve ever been involved in negotiating a contract, whether for the provision of services or a $200 million energy transaction, you’ve likely seen a merger clause. They are typically universal in their use and, while the language may differ, they generally state the same thing: the written contract represents the entire agreement between the parties. However, using boilerplate merger clauses versus customized merger clauses can create costly problems down the road if not drafted with enough specificity, particularly in energy transactions.
The Commodity Futures Trading Commission (CFTC) issued orders on September 27, 2022, filing and settling charges against various affiliates of financial institutions for failing to maintain, preserve, or produce records that were required to be kept under the CFTC’s recordkeeping requirements and failing to diligently supervise matters related to their businesses. As FERC also has record retention requirements, we discuss key takeaways on compliance and communication methods in light of the CFTC’s orders.
On September 22, the US Department of Energy’s (DOE) Office of Clean Energy Demonstrations issued a Funding Opportunity Announcement (FOA) to solicit applications for funding to establish regional clean hydrogen hubs (H2Hub) across the United States to improve clean hydrogen production, processing, delivery, storage, and end use.