The Master Limited Partnerships (MLP) Parity Act is designed to level the playing field by giving investors in renewable-energy projects access to a decades-old tax advantage now available only to investors in fossil fuel-based energy projects. IDEA supports the MLP Parity Act as a common-sense solution to enable stronger financial support for clean energy investments like combined heat and power.
The MLP Parity Act is a straightforward, 200-word bill that would allow investors in renewable and clean energy (CHP) projects to form master limited partnerships (MLPs), which combine the funding advantages of corporations and the tax advantages of partnerships. MLPs have worked effectively for fossil fuels like oil and gas exploration. The MLP Parity Act would allow additional forms of energy development to access this market tool through a tweak to the federal tax code that could unleash significant private capital into the energy market.
On Tuesday June 25, IDEA Legislative Director Mark Spurr provided testimony to the US Senate Committee on Energy & Natural Resources on a bill sponsored by Senator Al Franken (D-MN) - S.1205, the "Local Energy Supply and Resiliency Act" (LESRA).
Senate Bill 1205 is intended to reduce energy waste, strengthen energy system resiliency, increase industrial competitiveness, and promote local economic development by helping public and private entities to assess and implement energy systems that recover and use waste heat and local renewable energy resources.
This bill is being considered as an amendment to S. 761: "Energy Savings and Industrial Competitiveness Act of 2013", co-sponsored by Senator Jeanne Shaheen (D-NH) and Senator Rob Portman (R-OH).
On May 8, 2013, the Environmental and Energy Study Institute (EESI) held a Congressional briefing in Washington D.C., “Energy Efficient Infrastructure for More Resilient Local Economies: The Role of District Energy, CHP, and Microgrids.” Senator Al Franken (D-Minn.) and members of the International District Energy Association (IDEA) explained how District Energy, Combined Heat and Power (CHP) and Microgrids can make local energy supply more reliable and more resilient in the face of more frequent severe weather events that have caused electricity supply disruptions and serious economic losses....
The International District Energy Association commends U.S. legislators who have re-introduced the bipartisan Master Limited Partnerships (MLP) Parity Act (S. 795). The bill was originally introduced in 2012 and has since been expanded and improved, attracting additional bipartisan sponsorship in both the Senate and the House from Senators Chris Coons (D-Del.), Jerry Moran (R-Kan.), Debbie Stabenow (D-Mich.) and Lisa Murkowski (R-Alaska) and Representatives Ted Poe (R-TX-02), Mike Thompson (D-CA-05), Peter Welch (D-VT-AL) and Chris Gibson (R-NY-19).
The bill aims to level the energy playing field by giving investors in renewable and clean energy projects access to a decades-old business structure that is taxed as a partnership but traded like corporate stock on a market and whose tax advantage is available now only to investors in fossil fuel-based energy projects. (see also"Senators introduce S.795 Master Limited Partnerships Parity Act.)
||On August 30, 2012, President Obama signed Executive Order 13626, calling for action in the deployment of 40 gigawatts of new, cost-effective industrial Combined Heat and Power (CHP) capacity in the United States by 2020. For more information, please refer to the Executive Order and the corresponding report released by the Department of Energy and Environmental Protection Agency titled "Combined Heat and Power: A Clean Energy Solution."|
IDEA applauds a group of leading European organizations for issuing a joint statement in support of an ambitious heating and cooling policy as part of efforts to achieve aggressive carbon reduction goals across the European Union. IDEA strongly supports the sentiments expressed in the statement affirms the relevance of this message to the U.S. energy discussion.
Senator Bingaman released bill on March 1, 2012, favorable for CHP and district energy.
IDEA strongly supports the Clean Local Energy Efficiency and Renewables Act of 2011 (CLEER), a bi-partisan bill that properly recognizes the economic and environmental value of thermal energy and provides policies supportive of district energy and combined heat and power to help our nation's cities, communities and campuses increase energy security, create jobs, cut carbon emissions and keep energy dollars circulating in local economies.
IDEA strongly supported the Thermal Renewable Energy and Efficiency Act (TREEA), a bi-partisan bill that properly recognizes the economic and environmental value of thermal energy and provides policies supportive of district energy and combined heat and power to help our nation's cities, communities and campuses increase energy security, create jobs, cut carbon emissions and keep energy dollars circulating in local economies.
WASHINGTON, D.C., Sept 16, 2010—IDEA presented two briefings on District Energy on Capitol Hill in support of TREEA. The briefings were intended to inform congressional leaders and staff on the valuable economic and environmental advantages of efficient district energy systems delivering reliable, clean thermal energy to cities, communities and campuses.
HOUSE BRIEFING. Congresswoman Betty McCollum (D-MN) sponsored a House briefing, "District Energy: America's Best-Kept Secret for Clean, Affordable, Homegrown Energy". Presentations (click presenter names to download their presentations) were made by: Rob Thornton, President, IDEA;Ken Smith, President & CEO, District Energy St. Paul; Mark Spurr, Legislative Director, IDEA and Dr. Neal Elliott, Assoc. Dir. for Research, American Council for an Energy Efficient Economy.
SENATE BRIEFING. The office of Senator Al Franken (D-MN), sponsored a briefing for the Senate entitled " District Energy: How We Can Tap Renewable Thermal and Waste Heat" that was organized by the Environmental and Energy Study Institute (EESI).
IDEA has been working on Capitol Hill to develop legislation in support of expanding the market for district energy and combined heat and power. The Thermal Renewable Energy and Efficiency Act (TREEA) of 2010 is a bi-partisan bill submitted on Wednesday July 21, 2010, in the Senate by Sens. Al Franken (D-Minn.) and Kit Bond (R-Mo.), and in the House by Congresswoman Betty McCollum (D-Minn.). This Bill needs your support and the support of your Senators and Representatives.
Below for your downloading and review are: a feature article describing the economics and impacts of the Bill by Mark Spurr, IDEA Legislative Director, an IDEA white paper overview of the Bill, a 2-page summary description of the Bill and a copy of the Bill, along with a sample letter for IDEA members to use in contacting their respective Senate or House offices.
For more information, please see the following:
Summary of the Amendment:
Full Text of S. Amendment 1903 to H.R. 3183: download.
On May 13, 2010, the Environmental Protection Agency (EPA) finalized a rule addressing implementation of certain Clean Air Act permitting programs for stationary sources of greenhouse gas (GHG) emissions. This so-called "Tailoring Rule" establishes emissions thresholds and a phased timetable for permitting under the New Source Review Prevention of Significant Deterioration (PSD) and title V Operating Permit programs. Publication of the rule in the Federal Register.
The Tailoring Rule is the latest in a series of linked rulemaking actions by the EPA stemming from the Supreme Court's 2007 decision in Massachusetts v. EPA. In the Massachusetts decision, the Court held that GHGs are "pollutants" under the Clean Air Act, and ordered EPA to make a science-based determination as to whether GHG emissions from motor vehicles contribute to an endangerment of public health and welfare - or explain why the science is too uncertain for such a determination. (For more information, see April 2, 2007 Issue Alert.)
EPA responded to the Court's mandate in December 2009, finding that mobile source GHG emissions contribute to climate change that endangers public health and welfare. (For more information, see December 9, 2009 Issue Alert.) Under Section 202 of the CAA, this endangerment finding triggered an obligation for EPA to establish GHG emission standards for motor vehicles. EPA finalized the vehicle standards in April of this year; the standards first apply to 2012 model year vehicles. (For more information, see April 6, 2010 Issue Alert.)
EPA's promulgation of standards for vehicles also has implications for stationary sources. Under the structure of the Clean Air Act, when a pollutant becomes "subject to regulation," certain facilities that emit that pollutant must obtain permits under the PSD and title V programs. Accordingly, EPA's finalization of the vehicle standards required EPA to determine: (1) when GHGs become "subject to regulation"; and (2) which stationary sources of GHG emissions will become subject to PSD and title V requirements.
EPA addressed the first question in guidance that was finalized on March 29, 2010. Under the so-called "Johnson Memorandum" proceeding, EPA determined that GHGs would first become "subject to regulation" on January 2, 2011, reasoning that this is the earliest date that a 2012 model year vehicle meeting the new vehicle standards can be introduced into commerce. (For more information, see April 6, 2010 Issue Alert.)
The Tailoring Rule addresses the second question, i.e., which stationary sources are subject to the PSD and title V permitting requirements.
Tailoring the PSD and Title V Programs for GHGs
The PSD program requires that all new "major sources," and all major sources undertaking modifications that result in a "significant" increase in emissions, obtain preconstruction permits and install "best available control technology" (BACT) for all pollutants subject to regulation. Under the Clean Air Act, a "major source" is an entity that emits or has the potential to emit 100 or 250 tons per year (tpy) of a pollutant, depending upon the type of source, and the default "significance" threshold for modifications is any increase in pollutant emissions resulting from the modification. In addition, sources emitting over 100 tpy of a regulated pollutant are generally required to obtain an operating permit under title V of the Clean Air Act.
For conventional non-GHG pollutants, the 100 to 250 tpy threshold only captured very large facilities such as power plants and industrial installations. Because GHGs tend to be emitted in large quantities, even from smaller sources, EPA has determined that applying the Clean Air Act's 100 or 250 tpy thresholds to GHGs would result in substantial increases in the number of required permits, potentially causing the PSD program to expand to tens of thousands permits per year, and causing millions of new title V permits to be required. According to EPA, these permitting loads would overwhelm the resources of permitting authorities - impairing their ability to manage air quality.
In the Tailoring Rule, EPA argues that these results would be contrary to the intent of Congress. EPA therefore argues that the judicial doctrines of "absurd results" and "administrative necessity" justify at least a temporary departure from the statutory thresholds. In the final version of the rule, EPA also cites a third legal rationale - the "one-step-at-a-time" doctrine - under which an administering agency, under certain circumstances, has the discretion implement a statutory provision in phased approach.
On the basis of these rationales, the final Tailoring Rule outlines a three-step schedule for application of the PSD and title V program:
Step 1 (January 2, 2011 to June 30, 2011). During this period, the PSD permitting requirements would apply only to sources that: (1) making modifications resulting increases in GHG emissions of 75,000 tons carbon dioxide-equivalent (CO2e) per year or more; and (2) are already required to obtain PSD permits on account of emissions of pollutants other than GHGs. Sources that are already required to obtain, renew, or revise their title V permits as a result of non-GHG emissions would need to include GHG emissions in their permit applications.
Step 2 (July 1, 2011 to June 30, 2013). In this step, the PSD permitting requirements will apply to new sources emitting at least 100,000 tons CO2e per year, and to existing sources that undertake modifications that increase emissions by at least 75,000 tons CO2e per year. Title V permits would be required for facilities emitting over 100,000 tons CO2e per year.
Step 3. In the third step, EPA would commit to undertake additional rulemakings starting in 2011 to determine whether and how to phase in the PSD and title V permitting requirements for sources below the 75,000 and 100,000 ton thresholds. The third phase is expected to begin on July 1, 2013. However, the preamble declares that EPA will not apply the permitting requirements to sources with emissions below 50,000 tons prior to April 2016. In addition, EPA will consider various approaches for streamlining permit proceedings in the course of these rulemakings.
EPA asserts that, under its phased approach, "Emissions from small farms, restaurants, and all but the very largest commercial facilities will not be covered by these programs at this time."
Critical issues related to the implementation of the PSD and title V permitting programs for GHGs still lie ahead. For example, these permitting programs are carried out mostly by state agencies. Many states have codified the relevant Clean Air Act provisions into their statutes and regulations, which implies that some states may have to amend their rules to implement the phased approach in the Tailoring Rule. This process could slow the implementation of PSD and title V permitting for GHG sources.
In addition, looming over the implementation of the PSD program is the question of what will constitute BACT for GHGs at different kinds of facilities. Traditionally, BACT has taken the form of commercially available, end-of-pipe emission control technologies. However, such technologies generally are not available for controlling GHG emissions. Accordingly, EPA reportedly is considering providing guidance to state permitting authorities on alternative approaches, including approaches involving efficiency improvements.
Also, the fate of the Tailoring Rule could be affected by actions in the courts and in Congress. It seems likely that the Tailoring Rule itself will be subject to legal challenge. In addition, petitions for review of EPA's "endangerment finding," which is the legal basis for regulation of GHGs under the Clean Air Act, are currently pending in the United States Court of Appeals for the District of Columbia Circuit. A successful challenge to the endangerment finding would remove the basis of EPA's authority to regulate GHG emissions under the Clean Air Act altogether - with respect to both mobile sources and stationary sources.
In Congress, the Senate is expected to take up a "Resolution of Disapproval" of the endangerment finding, which has been introduced by Sen. Lisa Murkowski (R-AK). The procedural deadline for consideration of the resolution is June 7. Sen. George Voinovich (R-OH) has circulated draft language that would remove EPA's authority to regulate GHGs not only under the Clean Air Act, but also the National Environmental Policy Act and the Endangered Species Act. Sen. Jay Rockefeller (D-WV) has introduced a bill that would suspend EPA's authority to regulate GHG emissions from stationary sources for two years. Similar bills are pending in the House of Representatives.
In addition, both the Waxman-Markey climate change bill passed by the House of Representatives in June 2009 (H.R. 2454, the "American Clean Energy and Security Act"), and the Kerry-Lieberman discussion draft released this week (the "American Power Act"), would preempt EPA's authority to regulate GHG emissions under the PSD and title V programs.
The Honorable Lisa P. Jackson
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, N.W.
Washington, D.C. 20460
Dear Administrator Jackson:
We were dismayed to find that the final Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule (Tailoring Rule) would treat greenhouse gas emissions from the combustion of biomass the same as such emissions from the combustion of fossil fuels. This is a significant shift in federal policy, contrary to the country's renewable energy objectives, and lacks an adequate explanation in the record. Fortunately, the Environmental Protection Agency (EPA) has the opportunity to correct this development and realign the Tailoring Rule with federal renewable energy policy prior to the effective date of greenhouse gas regulation on January 2, 2011....[Signed by 163 organizations]
IDEA supports Senators Jeanne Shaheen (D-NH), Lisa Murkowski (R-AK), Mike Crapo (R-ID), and Mark Begich (D-AK) for introducing a bill that would help businesses across the country meet their heating needs with renewable biomass.
"We need to break our dependence on imported fossil fuels, and biomass, used effectively and sustainably, can help do that," said Senator Shaheen, the original sponsor of the bill. "The American Renewable Biomass Heating Act will help put highly efficient biomass on a level playing field with other renewable resources and create the incentives businesses need to invest in clean energy. There is no reason why the United States cannot and should not be a leader in clean energy technologies, including biomass."
The American Renewable Biomass Heating Act of 2010 (S. 3188) would establish a corporate tax credit equal to 30% of the installed cost of biomass-fueled heating (or cooling) systems for commercial or industrial applications. The credit would have no maximum and would be available for biomass thermal systems placed in service on or before December 31, 2013.
"This bipartisan bill will help create a market for commercial scale biomass thermal systems," said Charlie Niebling, Chairman of the Washington D.C.-based Biomass Thermal Energy Council. "It supports biomass thermal with the same incentive that already exists for every other renewable energy technology, including solar thermal and electric, wind, and geothermal. Businesses are some of our nation's biggest consumers of thermal energy, and S. 3188 will provide a powerful incentive to switch to biomass fuels that we produce here in America."
By offsetting fossil fuel use in heating sector with renewable biomass, this bill could reduce American consumption of foreign oil and other non-renewable fossil energy by millions of gallons and lower greenhouse gas emissions in the commercial and industrial sectors.
To qualify for the credit, biomass boilers and furnaces would be required to operate at greater than 75% efficiency and provide thermal energy for space heating, air conditioning, domestic hot water, or industrial process heat. Large scale biomass thermal systems have been widely deployed in Europe, where government incentives have played a vital role in helping reduce fossil energy and create new clean energy jobs.
Please call or write your Senators today to urge their support for this important legislation. Go to Find Your Senators for contact information for your state.
Van Ness Feldman closely monitors congressional and executive branch developments on climate change and energy policy, and is in a strong position to provide expert analysis and advice on emerging legislation and regulatory activity, the surrounding policy and political debate, and the implications for your organization. If you would like more information about climate change and energy being considered in Congress or related regulations being considered by federal agencies, please contact Kyle Danish, Stephen Fotis, or any member of the firm's Climate Change practice at (202) 298-1800. Those interested in on-going coverage of climate change policy developments may wish to subscribe to the weekly Climate Change Policy Update at http://www.vnf.com/KnowledgeCenter.aspx?SignUp=True .
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