The IRS proposed a draft rule on May 28 covering the qualification for carbon capture and sequestration tax credits under Section 45Q of the Internal Revenue Code. The proposed regulations could provide financial benefits to energy projects that will enhance the spread of that technology and the reduced carbon release that it promises.
Power & Pipes
FERC, CFTC, and State Energy Law Developments
The Federal Energy Regulatory Commission (FERC) issued Order 569 A on May 21, significantly revising the methodology used to analyze the base return on equity (ROE) of a public utility’s rates under the Federal Power Act. Because the order remains subject to further legal challenge and FERC had last revised its guidance on acceptable methodologies six months earlier in Order 569, uncertainty in acceptable methodologies may continue for some time.
FERC issued a proposal on May 21 to modify its policy regarding requests for waiver of public utility tariff provisions that are subject to FERC’s review and approval under the Federal Power Act and the Natural Gas Act.
The Federal Energy Regulatory Commission (FERC) issued a notice on May 20 that it will convene a Commissioner-led technical conference to consider the ongoing, serious impacts that the emergency conditions caused by the coronavirus (COVID-19) pandemic are having on the energy industry. The conference will be free, open to the public, and held remotely on Wednesday and Thursday, July 8-9, 2020.
The US Department of the Treasury issued a letter on May 7 stating that it plans to modify the continuity safe harbor for both the production tax credit (PTC) and the energy investment tax credit (ITC). Under the current law, taxpayers seeking to claim a PTC for electricity produced from qualifying facilities or an ITC for qualifying energy property must generally begin construction on the qualifying facility or property by specified dates.
In response to President Donald Trump’s declaration of a national emergency due to the coronavirus (COVID-19) pandemic, the Pipeline Hazardous Materials Safety Administration (PHMSA) issued a notice that it does not intend to take enforcement action related to certain new gas pipeline safety regulations with which gas pipeline operators must comply by July 1, 2020.
The Commodity Futures Trading Commission (CFTC) indicated on April 24 that it is conducting a review of the $40-per-barrel plunge in the WTI crude price that occurred on April 20. The CFTC stated that it is conducting the review to understand why the pricing happened, to ensure that the market functioned properly, and to rule out foul play.
President Donald Trump signed an executive order on May 1 declaring that the use of bulk-power system equipment supplied by companies controlled by certain foreign nations poses an extraordinary threat to the US power grid. The order observes that the bulk-power system is a valuable target for malicious actors, and any attack on that system could pose serious risks to the economy, public health and safety, and national security.
Our colleagues in the environmental practice have published a LawFlash analyzing the implications of the recent US Supreme Court ruling that the Clean Water Act (CWA) requires a permit when there is a direct discharge (or the functional equivalent of a direct discharge) from a point source into navigable waters.
The US Department of Homeland Security’s Cybersecurity & Infrastructure Security Agency (CISA) issued Version 3.0 of its guidance on April 17 on identifying essential critical infrastructure workers amid the coronavirus (COVID-19) pandemic.