IN THIS ISSUE

Disappearing tax equity

Tax equity is emerging as a potential major choke point for the US renewable energy market.

PURPA overhauled

Independent cogeneration and small renewable energy projects have lost key protections from merchant risks that they have relied on to help secure financing for the past 40 years.

Lessons learned from the PG&E bankruptcy

A group talked in late July about what effect the PG&E bankruptcy has had on the ability to finance renewable energy projects in California and more.

Pension plans pressured over ESG investments

A US Department of Labor proposal to bar retirement plan administrators from considering ESG factors when choosing investments could have a significant effect on the renewable energy sector.

Cap on interest deductions explained

The Internal Revenue Service filled in detail in July about how the cap works on interest deductions and what is considered interest for this purpose. Bumping up against the cap makes borrowing more expensive.

DFC window opens for domestic loans

A US government agency that makes loans to support international development is now making loans to domestic manufacturers to help the US respond to the COVID-19 outbreak.

California update

A California Public Utilities Commission decision this summer should lead to wider adoption of micro-grids in the state, at least in the service territories of the three large investor-owned utilities.

Surety bonds compared to LCs

Parties to project finance transactions are sometimes asked to accept surety bonds as security in place of letters of credit. There are key differences between the two instruments.

Floating solar

Floating solar – also known as floatvoltaics – is a small but growing segment in the solar energy industry.

Environmental update

The US Supreme Court reinstated a nationwide permit that allows pipeline and utility trenching and construction activity in, or adjacent to, wetlands and other waters regulated under the Clean Water Act.

IN OTHER NEWS

Slowdown in corporate PPAs

New corporate PPAs have become scarce. Brokers and lawyers report less interest among US companies in signing long-term corporate power purchase agreements due to uncertainty about the economy.

DOE starts implementing Trump bulk-power system order

A US Department of Energy request for information to help it implement the Trump bulk-power system order identifies six foreign adversaries against which the order is directed.

California moves to shield solar from split-roll initiative

The California legislature may shield nonresidential solar projects from a property tax increase that is on the state ballot this November.

SOFR too volatile?

Some analysts are questioning whether SOFR — the new base interest rate that will replace LIBOR in US contracts — is too volatile to serve as a good replacement.

US offshore wind set to overtake oil & gas

US offshore wind will come close to overtaking offshore oil and gas over the next 10 years in terms of new capital expenditures, according to consultancy Wood Mackenzie.

Banks and partnership flips

National banks have been given clearer guidelines by the US Comptroller of the Currency about when they can participate as tax equity investors in partnership-flip transactions.

Utility tax equity deal

A utility tax equity filing with the Public Service Commission of Wisconsin reveals interesting data points about the current tax equity market.

Renewables and public utility property

Utilities keep asking the IRS whether renewable energy projects they plan to own will be “public utility property.”

Valuation issues feature in pipeline dispute

The property tax assessment on a natural gas pipeline was more than 50% too high, an appeals court said in August.

Carried interests and Section 1061

Carried interests in partnerships earn income that is harder to report as long-term capital gain.

Powerex saga with Oregon

Oregon lost another round in a long battle with the BC Hydro trading arm, Powerex, over whether electricity and gas that the company sells to customers in California, but that pass through Oregon, can be taxed.

Virginia and retail choice

Virginia told Walmart that it could not enter into one or more corporate power purchase agreements to buy electricity for its 188 stores in the state.

Government relocation payments and Section 118

Government payments to induce a company to relocate had to be reported as taxable income, a US appeals court said in late July.

Taxes on Native Americans

American Indians are subject to US income taxes on gravel mined on the reservation, a US appeals court said in August.

Tax planning strategies as trade secrets

A tax planning strategy is not a trade secret, a US appeals court said in late July.

New sleep aid: US tax code

New sleep aid. TaxAct advertises on its website a new recording of a person reading the US tax code.