The solar financing market is maturing. You can tell because new money is crowding into the market, and the capital stacks are getting more complicated.
This Practice Note (i) considers what is meant by “structure” in the context of a project finance transaction and identifies key issues that inform the approach to structuring a project finance transaction, and (ii) looks closely at the Azura Edo independent power project in Nigeria (“Azura Edo IPP”) as a case study to help identify and explain a number of recent and innovative project finance structuring solutions that have been successfully implemented in order to overcome certain identified risks and challenges.
To read the full alert, please click here.
We are pleased to share a recording of our energy briefing that took place last week, “The Global Energy Industry 2018: A Look to the Year Ahead.” Speakers included Akin Gump tax partner Alison Chen, oil and gas partner John Goodgame, global project finance practice co-head John Marciano, along with oil and gas partner Christine LaFollette as moderator. The topics covered included:
- Tax reform: Impact on Energy Companies and Power Projects
- Shifting Focus from Production to Returns: Implications for the Exploration & Production Business
To view the recording, please click here.
In an opinion 1 issued January 8, 2018, the United States Court of Appeals for the 9th Circuit found that the Federal Energy Regulatory Commission (FERC) had acted arbitrarily and capriciously when it determined that Pacific Gas & Electric Company (PG&E) was eligible for an incentive adder to its transmission return on equity (ROE) for remaining a member of the California Independent System Operator (CAISO). The court reasoned that FERC had misinterpreted its own landmark orders—Orders No. 679 and 679-A2 —which provide that FERC will award incentive adders on a “case-by-case basis”3 on the presumption that membership in an independent system operator or regional transmission organization (each a “transmission organization”), such as CAISO, is voluntary.4 The California Public Utilities Commission (CPUC) challenged FERC’s decision to grant PG&E an incentive ROE adder on the grounds that PG&E’s membership in CAISO was not, in fact, voluntary, and that PG&E required authorization from CPUC to withdraw from CAISO.
One of the big Federal Energy Regulatory Commission (FERC) Enforcement litigation developments of the past two years has been the federal judiciary’s rejection of the agency’s “de novo review” position in electricity market manipulation cases. Briefly stated, FERC has argued that the Federal Power Act (FPA) should be interpreted to allow federal courts to adjudicate an enforcement action by reviewing FERC’s Order Assessing Penalties and underlying record, allowing supplementation of that record through additional discovery only as the court found necessary or useful. Courts, however, have held that there is no such FPA-mandated review action of that nature, but rather only a civil action that proceeds under the Federal Rules of Civil Procedure—including, most importantly, the civil discovery rules.1
The Federal Energy Regulatory Commission’s (FERC) Office of Enforcement (Enforcement) recently released its annual Report on Enforcement for the 2017 fiscal year. The Report takes a similar approach to prior annual reports in how it describes Enforcement’s work and priorities, provides statistics on Enforcement activities, and includes examples of non-public Enforcement matters that were closed without action. The Report reflects a busy year in Enforcement, with staff having opened 27 new investigations, worked on over 50, and litigated several market manipulation cases in federal district courts. This year’s Report also provides increased transparency into Enforcement’s market surveillance and analytics program, through which Enforcement conducts market screens and surveillance inquiries into possible market manipulation in electricity and natural gas markets. Many FERC Commissioners have urged market participants to study the annual report for guidance on how the Commission approaches compliance and enforcement.
For a more detailed summary of the Report and key highlights, please see our client alert, available here.
On November 13, 2017, the U.S. Court of Appeals for the 1st Circuit held in Allco Renewable Energy Ltd. v. Mass. Elec. Co.1 that a Qualifying Facility (QF) does not have a private right of action against a utility company under the Public Utility Regulatory Policies Act of 1978 (PURPA). Although the court’s finding is no surprise, it helps clarify PURPA’s complex enforcement mechanism.
On September 19, 2017, the Court of Appeals of North Carolina (“Court”) held that companies that install solar panels on customer rooftops are “public utilities” under state law, at least when they retain ownership of the panel and sell the output to the customer. The ruling represents a blow to potential solar providers, and a victory for North Carolina’s franchised utilities, which believe that rooftop solar will undermine their rate base, increasing expenses for other customers.