This is the first of three articles on the Solar Industry and Forced Labor. Here we focus on regulation. Articles in the coming weeks will focus on issues facing importers and their suppliers, and on investors and their requirements.

Continue Reading Clean Energy’s Messy Problem: The Solar Industry, the U.S. Government, and the Complex Task of Combatting Forced Labor

  • U.S. Customs halts the import of silica-based products from made by Hoshine Silicon Industry Co. because the products are suspected of being produced using forced labor.
  • For future imports of solar energy equipment sourced from Xinjiang, China, the United States may use Withhold Release Orders (WROs) to block entry into the United States if there is reasonable suspicion of forced labor in the supply chain.
  • The renewables industry is working together and with regulators to find ways to certify its supply chains are free of forced labor.


Continue Reading Anti-Forced Labor Measures Turn Up the Heat on Chinese Solar Equipment Suppliers

As Congress was completing final negotiations of the stimulus package dealing with the public health and economic impacts of the coronavirus pandemic, several key energy provisions made their way into the 5593-page omnibus spending bill passed by the House and Senate on December 21, 2020, particularly much needed extensions of several renewable energy and energy efficiency tax incentives. 
Continue Reading Congress Extends Renewable Energy Tax Credits in 2021 Omnibus Spending Bill

A September 17, 2020 Final Rule adopted by the Federal Energy Regulatory Commission (“Commission”) removes barriers to the participation of distributed energy resource aggregators in Regional Transmission Organization (“RTO”) and Independent System Operator (“ISO”) markets.[1]  The Commission’s modified regulations[2] require each RTO/ISO to revise its tariff to ensure that its market rules facilitate the participation of distributed energy resource aggregators.  Order No. 2222 is a positive development for distributed energy resources that would like to participate in wholesale electric markets but are unable to do so, and should encourage greater renewable energy resource development in the coming years.  However, the scope and implementation of each RTO’s/ISO’s participation model remains to be seen: distributed energy resources will need to keep an eye on RTOs’/ISOs’ proposed tariff revisions.  Moreover, maximizing the opportunity for distributed energy resources to contribute to markets will be affected by whether the Commission continues to reform Commission-jurisdictional markets to broaden participation of emerging technologies as it did in Order No. 2222, or adopt measures that bolster the viability of fossil and nuclear resources at the expense of emerging technologies as it has done in other proceedings.
Continue Reading Federal Energy Regulatory Commission Gives Distributed Energy Resource Aggregators a Boost; Implementation Will Present Challenges

The changes brought about by evolutions in renewable energy technologies, and in some cases aggravated by the impacts of COVID-19, are likely to up-end traditional relationships between different forms of energy and the customers that use them. These changes are significantly impacting not just competitors, but their contract counter-parties, the risks they face, their credit-worthiness and their customers.
Continue Reading How will Energy Market Participants Protect Themselves from Ongoing Shifts in the Sources of Energy?

On September 15, 2020, the Army Corps of Engineers published proposed revisions to a wide range of Nationwide Permits (NWP) issued under the Clean Water Act.  The revisions respond to Executive Order 13783, directing heads of federal agencies to review existing regulations that potentially burden development or use of domestically produced energy resources.  Accordingly, the proposed revisions affect NWPs commonly utilized by utility-scale wind and solar energy projects throughout the country.  The Corps will accept comments on the proposed revisions until November 16, 2020.  Here are highlights from the proposed revisions.
Continue Reading Army Corps of Engineers Proposes Revising Broad Range of Clean Water Act Nationwide Permits

On July 16, 2020, the Federal Energy Regulatory Commission (“FERC” or “Commission”) dismissed a petition filed by the New England Ratepayers Association (“NERA”) requesting that the Commission declare that certain sales of energy by net-metered, behind-the-meter generators are exclusively subject to federal jurisdiction.  If granted, the petition would have resulted in the rates for such sales being set at an avoided cost rate in accordance with the Public Utility Regulatory Policies Act of 1978 (“PURPA”) or wholesale market prices under the Federal Power Act (“FPA”), as applicable, rather than the interconnected utility’s retail rate.  The Commission declined to address the legal issues raised by the petition.  Instead, it determined that the issues presented in NERA’s petition do not warrant a generic statement from the Commission at this time because NERA failed to identify a specific controversy or harm that the Commission should address.  However, concurring opinions from two commissioners suggest that future fights may be imminent over the scope of FERC’s authority to regulate net metering transactions and the rates for such transactions.
Continue Reading FERC Rejects Net Metering Petition, But Fight Is Far From Over

On July 18, 2019, the Federal Energy Regulatory Commission issued Order No. 860.  The order requires entities with or seeking market-based rate authority (sellers) to submit certain data related to FERC’s market power analyses, including its indicative screens and asset appendices, into a “relational database” maintained by FERC.  The order also requires the submission of information associated with long-term firm sales.  When changes occur to data previously submitted, the relational database must be updated monthly by sellers.  The database will be used to, among other things, develop asset appendices and indicative screens for FERC filings that require a market power analysis.  Finally, Order No. 860 altered the deadline for “change in status” filings.  Beginning on January 1, 2021, sellers will need to comply with the order by making a baseline submission and using the “relational database” to make future market-based applications.
Continue Reading FERC Order No. 860 Mandates New Market-Based Rate Filing and Reporting Requirements for Sellers of Electric Energy

On May 1, 2020, President Trump issued Executive Order 13920 (“Executive Order”), which prohibited certain transactions involving bulk-power system electric equipment manufactured or supplied by persons owned by, controlled by, or subject to the jurisdiction of a foreign adversary that poses an undue risk of catastrophic effects on the security or resiliency of U.S. critical infrastructure or the national security of the U.S.  The Executive Order poses several potential problems for electric industry participants, particularly renewable generation owners, developers and investors, which will likely cause uncertainty in equipment procurement decisions.  The Executive Order and its potential issues are discussed below.
Continue Reading Securing the U.S. Bulk Power System: An Assessment of Executive Order 13920

On February 20, 2020, the California Energy Commission approved its first community solar system under the 2019 Energy Code, which allows developers of new homes within Sacramento Municipal Utility District (“SMUD”) to meet mandatory solar energy system requirements through solar agreements with SMUD instead of installation of solar panels on new homes.

Continue Reading California Mandatory Solar Update: First Community Solar Program Approved by California Energy Commission

Members of the Sheppard Mullin Energy, Infrastructure and Project Finance Team wrote an article published in the March 16, 2020 edition of Tax Notes Federal regarding the practical impacts on tax equity financing for renewable energy projects of a private letter ruling (“PLR”) published by the IRS in late 2019.  The PLR addressed normalization and loss disallowance rules applicable to public utilities.  These rules have posed significant challenges to public utilities that want to own renewable energy generation facilities, make efficient use of the tax benefits they provide (via the tax equity market) and recover their costs from ratepayers.

Continue Reading Walking the Path of Utilities’ Ownership of Wind and Solar