Articles Posted in Energy

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For builders working in California—already one of the most expensive states for new construction—a new bill winding its way through the legislature could add yet more costs. For this reason, Senate Bill 71 (SB 71) should be on the radar of developers and construction companies that do business in California. SB 71 would require all “solar-ready buildings” constructed on or after January 1, 2018, to include a solar electric or solar thermal system on their roofs. “Solar-ready buildings” include single-family residences in subdivisions with 10 or more single-family residences with an approved subdivision map; low-rise multi-family buildings; high-rise multi-family buildings and hotel/motel occupancies; and all other non-residential buildings. The solar systems would be required to be installed during construction because, as the bill explains, installing systems at that stage is more cost effective.

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In Potentially Costly Nuclear Rulemaking Proposed, NRC targets include oil & gas industry, cancer treatment providers, sterilization facilities and radiographers, Pillsbury attorney Jay Silberg discusses the Nuclear Regulatory Commission (NRC) staff’s recent recommendation that the NRC undertake a rulemaking requiring licensees to provide financial assurance (or set aside funds) to cover the cost of the disposition of certain Category 1 & 2 sources.

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California Assembly Bill 2699 (Gonzalez) is a bill to watch if you are a home improvement contractor that solarinstalls solar energy systems or, for that matter, a contractor in California. AB 2699 would, among other things, require the Contractors State License Board (CSLB) to develop a “solar energy system disclosure document” and, in turn, require solar energy systems companies to provide this document to its customers prior to the completion of a sale, financing, or lease of a solar energy system.

AB 2699 would also require the CSLB to establish through regulation requirements for a contractor to maintain a blanket performance and payment bond for the purpose of solar installation work and, of particular note, even with this bond, the contractor will be subject to the down-payment restriction set forth in California Business & Professions Code § 7159.5(a)(8). If this bill is signed into law, this latter requirement will certainly translate into increased costs for contractors that currently do not have in place a blanket performance and payment bond. In turn, as a practical matter, this lIsley will translate into higher costs for consumers who want to install a solar system because such costs will trickle down to them. There may also be pressure put on others in the industry to reduce costs to make up for this increase in costs.

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In Sixth Circuit Rejects Clean Air Act Preemption of State Common Law Claims: Four Things to Know, Pillsbury attorneys Matt Morrison and Bryan Stockton explore the Six Circuit Court of Appeals recent rejection of Clean Air Act, 42 U.S.C. §§ 7401 et seq. (CAA), preemption of state common law claims in Merrick, et al. v. Diageo Americas Supply, Inc. and Little et al. v. Louisville Gas & Electric Company; PPL CorporationThe takeaway is that a facility that is otherwise in compliance with CAA emission requirements can still face lawsuits by neighboring landowners for traditional torts such as nuisance and trespass. Merrick and Little add to the foundation of precedent across the Second, Third, and Sixth Circuits, and Iowa Supreme Court.

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Today, Pillsbury attorneys Jim Glasgow and Elina Teplinsky posted their client advisory DOE Issues the Part 810 Final Rule: Summary and Compliance Steps for Industry. The Advisory discusses the U.S. Department of Energy’s (DOE) final rule amending its regulations at 10 C.F.R. Part 810 on “Assistance to Foreign Atomic Energy Activities” (“Part 810”). The rule takes effect on March 25, 2015. The rulemaking to amend Part 810, which the DOE has been undertaking since it published in the Federal Register a notice of proposed rulemaking (NOPR) seeking to amend Part 810 on September 7, 2011, constitutes the most substantial change to these foreign nuclear assistance regulations since 1986 and, arguably, in the history of Part 810.

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Today, Pillsbury attorneys Daryl Shapiro, Tim Walsh, Rebecca Carr Rizzo and Keith Hudolin posted their advisory titled The Ninth Circuit Provides Clarity on ERA Whistleblower Protections. The Advisory discusses the Ninth Circuit’s November 7, 2014 ruling in Tamosaitis v. URS Inc. In its Tamosaitis ruling, the Ninth Circuit provided clarity on three key aspects of the whistleblower protections afforded under the Energy Reorganization Act (ERA), 42 U.S.C. 5801 et. seq. This decision has important implications for employers facing ERA whistleblower claims.

If you have any questions about the content of this blog, please contact the Pillsbury attorney with whom you regularly work or Daryl Shapiro, Tim Walsh, Rebecca Carr Rizzo, or Keith Hudolin, the authors of this blog.

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Yesterday, Pillsbury attorneys Michael Hindus, Eric Save and John McNeece published their advisory titled Mexico’s Guidelines for Clean Energy Certificates Will Support Renewable Energy Development. The Advisory discusses, as part of a historic restructuring of its electrical power sector, Mexico’s creation of a market for tradable Clean Energy Certificates, which many industry participants will be required to obtain. Draft guidelines proposed by the Mexican Ministry of Energy set forth the criteria for granting these clean energy certificates, a framework for buying and selling them, and a procedure for establishing the obligations of market participants to obtain the certificates. Final guidelines will be issued shortly.

If you have any questions about the content of this blog, please contact the Pillsbury attorney with whom you regularly work or Michael Hindus, Eric Save or John McNeece, the authors of this blog.

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Four energy companies – Pathfinder Renewable Wind Energy, Duke-American Transmission, Dresser-Rand, and Magnum Energy – have jointly proposed an $8 billion plan to supply Los Angeles with more than twice the amount of electricity generated by the Hoover Dam. According to Duke Energy, the proposal would require construction of “one of America’s largest wind farms in Wyoming, one of the world’s biggest energy storage facilities in Utah, and a 525-mile electric transmission line connecting the two sites.” The compressed air storage facility in Utah – consisting of four vertical chambers, each approaching the size of the Empire State Building, carved from an underground salt formation – would yield 1,200 megawatts of electricity, which is enough to serve 1.2 million homes in the Los Angeles area.

Renewable energy producers have long struggled with how to deliver electricity when times of high demand do not coincide with times of peak energy production. For example, solar power typically peaks during midday, when energy demand is lower. The wind power proposal for Los Angeles, however, boasts the desirable pairing of energy storage with renewable energy. Under the proposal, when power demand is low and wind is high, the storage facility would use the excess electricity from the wind farm to compress and inject high-pressure air into the chambers for storage. During times of high power demand, the facility would use the stored, compressed air, combined with a small amount of natural gas, to drive eight generators to produce electricity.

The proposal will be formally submitted to the Southern California Public Power Authority by early 2015 in response to the agency’s request for proposals to provide renewable energy and electricity storage for the Los Angeles area. With energy demand in the area predicted to rise by as much as 18 percent by 2024, this proposal, which has a target in-service date of 2023, could provide a desirable green solution to Los Angeles’s impending energy crisis. But this is hardly a done deal. The proposal must first be selected from the many expected to be submitted to the agency, and its sponsors must then be able to clear regulatory hurdles and secure financing by entering into agreements for the sale of power.

A video with more information about the proposal can be found here.

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Yesterday, Pillsbury attorneys John McNeece, Eric Save and Michael Hindus published their advisory titled Mexico’s Energy Reform Provides Significant Opportunities in Oil and Gas Exploration and Production. The Advisory discusses Mexico’s new energy legislation, which went into effect on August 12, 2014 and which will completely restructure the Mexican energy sector, including both hydrocarbons and electricity. This legislation opens up oil and gas exploration and production (“E&P”) to the private sector, through authorization of new contract arrangements with the Mexican State or with PEMEX, while reaffirming Mexico’s ownership of hydrocarbons in the ground. Mexico’s opening to the private sector will generate numerous opportunities for E&P operators, the E&P arms of international oil and gas companies, suppliers, and investors.

If you have any questions about the content of this blog, please contact the Pillsbury attorney with whom you regularly work or John McNeece, Eric Save or Michael Hindus, the authors of this blog.

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UPDATE: The Sacramento Bee, SPI Solar and KDC Solar Announce Joint Ownership of Mountain Creek Project (Feb. 21, 2014)

On January 8, 2014, SPI Solar announced that it has “executed agreements with KDC Solar and China Development Bank (CDB) to provide immediate financing for the previously announced Imclone [solar power] project,” securing its receipt of a $28.5 million cash payment, enabling it to remove $28.5 million of the Imclone project construction loan liability from its balance sheet, and paving the way for it to obtain funding for other solar projects. SPI Solar is a self-proclaimed “global turnkey [vertically integrated] developer and EPC contractor for large-scale solar energy facilities.” SPI Solar’s completed solar projects include the Staples Center and Nokia Theater located in Los Angeles, California, Aerojet located in Folsom, California, and Twentieth Century Fox Motion Picture Studios located in Los Angeles.

Other Sources: The Wall Street Journal; pv tech; The Sacramento Bee