Sustainability Law Blog

The EPA notified Congress on March 27 that it will request public comment this spring on regulation of greenhouse gases under the federal Clean Air Act. Taking public comment is the first step toward formal regulatory action, which EPA is pursuing to comply with the Supreme Court's 2007 decision in Massachusetts v. EPA. In that case, the Court ruled that greenhouse gas emissions are "air pollutants" within the scope of the EPA's regulatory power under the Clean Air Act.

Congressional Democrats, some states and some environmental groups decried the public comment period as a stall tactic to what they view as an inevitable finding that greenhouse gas emissions endanger public health, a necessary precursor to regulation under the Act. The EPA responded that proceeding without public input would be irresponsible. Whatever your view on EPA's tactics, watch for a formal call for public comment later this year and be sure to participate.

Posted by David J. Petersen, partner practicing in the Sustainability and Real Estate & Land Use Practice Groups.

Posted by Tonkon Torp LLP | Permalink | Email This Post

Posted In: Legislation

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Federal energy law requires payment to public utilities of 1.5 cents per kilowatt-hour (adjusted for inflation) for renewable energy generation developed by those utilities. This "Renewable Energy Production Incentive" (REPI) was initially enacted in 1992 as the public counterpart to the private production tax credit (PTC). However, inconsistent payment from the feds has discouraged many public utilities from pursuing renewable projects on their own because they can't compete financially with private developers who benefit from the PTC. Also, the Bush Administration has reduced the REPI appropriation to zero in FY 2009.

Most recently, Energy Northwest put its 50 MW Reardan Twin Buttes Wind Project west of Spokane, WA up for sale, citing inconsistent REPI payments. The Washington legislature is considering taking up the slack, but any bill will be a stopgap solution and will of course only apply in Washington. With a change in administrations in Washington, D.C., hopefully we will see a renewed commitment to renewable energy development on a national scale, not only by fully funding the REPI but also by providing a long-term extension of the PTC. The need is great enough and the opportunities are broad enough that all who seek to develop renewable power, public or private, should be encouraged to do so.

Posted by David J. Petersen, partner practicing in the Sustainability and Real Estate & Land Use Practice Groups.

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Posted In: Legislation

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Three major U.S. banks -- Citigroup, JP Morgan-Chase, and Morgan Stanley – recently established new guidelines for assessing climate change risk when asked to fund power plant-related projects. The banks' "Carbon Principles" recognize the economic value of low carbon emissions and encourage clients to lower those emissions by investing in renewable energy and implementing low-emissions technologies. Also, potential borrowers will need to demonstrate their commitment to cleaner technologies and to evaluate more carbon-friendly alternatives when seeking financing for power plant projects. The principles were devised with input from both energy companies and environmental groups, and all involved seem satisfied with the outcome.

The principles are further evidence that the marketplace increasingly sees eventual regulation of carbon emissions as inevitable. Recognizing that their clients will eventually have to incorporate carbon emissions costs into their business models, the banks wisely have developed these guidelines to minimize the risks of investing in carbon-intensive projects. Nothing drives corporate behavior quite like the need to please those with the money, so these guidelines have a good chance of having a significant effect on the development of more carbon-friendly power plants.

Posted by David J. Petersen, partner practicing in the Sustainability and Real Estate & Land Use Practice Groups.

Posted by Tonkon Torp LLP | Permalink | Email This Post

Posted In: Sustainable Practices

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