Articles, Alerts & Perspectives

Washington, DC

EmTech Law Blog

(by Gina Falaschi)

The United States is experiencing a wave of state-led clean transportation initiatives that are gaining substantial momentum. Faced with insufficient federal action, states started focusing their efforts on the sector that produces the largest percentage of greenhouse gas: transportation. On November 10, 2020, the Environmental Law Institute and Babst Calland co-hosted a webinar that explored these initiatives, their potential impact, and funding sources. Click here for a transcript of the discussion, which has been edited for style, clarity, and space considerations.

Tags: Transportation, Vehicles

Babst Calland has been named to this year’s Pennsylvania Business Central’s “Top 100 Organizations” list and profiled in its Signature Top 100 issue. Nominations were taken throughout the publication’s 23-county coverage area, and the final organizations were selected by an editorial committee due to their positive impacts in the business community of central Pennsylvania.

For the full list, click here.

Environmental Law Reporter

The United States is experiencing a wave of state-led clean transportation initiatives that are gaining substantial momentum. Faced with insufficient federal action, states started focusing their efforts on the sector that produces the largest percentage of greenhouse gas: transportation. On November 10, 2020, the Environmental Law Institute and Babst Calland co-hosted a webinar that explored these initiatives, their potential impact, and funding sources. Click here for a transcript of the discussion, which has been edited for style, clarity, and space considerations.

Copyright © 2021 Environmental Law Institute®, Washington, DC. Reprinted with permission from ELR®, http://www.eli.org, 1-800-433-5120.

Pittsburgh, PA

Renewables Law Blog

(By Bruce Rudoy)

In another sign of various sectors of the energy industry coming together to advance decarbonization, Enterprise Products Partners LP, a company focused on pipeline, storage and natural gas processing, among other services and products to the energy industry, signed a virtual power purchase agreement for solar energy from the Space City Solar project located in Wharton County, Texas. “We are committed to being a responsible steward of the environment, including using energy sustainably across our footprint,” A.J. “Jim” Teague, co-CEO of the Houston-based midstream company’s general partner, said in a statement on March 1. The PPA made with EDF Renewables North America is the result, Teague said, of an initiative launched by Enterprise Products in 2020 to expand solar power purchasing and/or installations across its system. “We estimate that by 2025, approximately 25% of our power will be from renewable resources.” The Space City Solar project is expected to commence construction in Summer 2021 and begin delivery of clean electricity in Summer 2022. The power purchase agreement between EDF Renewables and an affiliate of Enterprise Products was for a second tranche of the project for 100 MWac/132 MWdc. The project’s total capacity is up to 345 MWac/455 MWdc.  Approximately 300 jobs are expected to be created during the construction phase with more than $30 million generated in new tax revenue over the operating life for Wharton County taxing entities, according to a joint release from Enterprise and EDF.

EDF Renewables North America Signs Virtual Power Purchase Agreement with Enterprise Products for Solar Energy | Business Wire

Tags: Enterprise Products Partners LP, renewable, solar, Virtual Power Purchase Agreement

Charleston, WV

Renewables Law Blog

(By Robert Stonestreet)

Democratic Senators from West Virginia (Joe Manchin) and Michigan (Debbie Stabenow) have introduced legislation to make billions of dollars available to promote manufacturing related to energy efficiency and renewable energy.  According to a press release, the proposed “American Jobs in Energy Manufacturing Act of 2021” would provide up to $8 billion in tax credits to “manufacturers and other industrial users to retool, expand, or build new facilities that make or recycle energy-related products.”  Half of those credits are designated for communities adversely affected by closures of coal mines or power plants that have not previously received similar tax credits.  Under the proposed bill, credits are available for new construction or retrofitting of existing facilities to produce or recycle a range of energy products including:

• advance electric grid, energy storage, and fuel cell equipment;
• equipment for production of low-carbon, low emission fuels, chemicals and other products;
• renewable energy and energy efficiency equipment;
• products or technologies that capture, remove, use, or store carbon dioxide; and
• advanced vehicles, components, and related infrastructure.

The bill is intended to promote creation of domestic jobs that draw on skills possessed by individuals formerly employed in manufacturing, coal mining, or power plant operation.  The bill also seeks to promote investment in communities experiencing high unemployment due to coal mine or power plant closures.

Tags: energy, Energy Manufacturing Act of 2021, Manufacturing, tax credits

Smart Business

(by Sue Ostrowski featuring Julie Domike and Gina Falaschi)

As vehicle emissions continue to represent the largest contributor to air pollution, the Environmental Protection Agency is becoming more vigilant about prosecuting manufacturers of the parts designed to decrease the effectiveness of emissions controls, and those who use them. And if your business has these parts installed on your vehicles or other equipment, you could be at risk of fines, or jail time — even if you’re not aware that tampering has occurred.

“The EPA has been, and will continue to, look seriously at tampering with vehicle emissions controls and has issued guidance to clarify its approach and requirements,” says Julie Domike, shareholder at Babst Calland. “The transportation sector is a huge source of emissions, and the EPA is signaling it is working with the states to step up enforcement, taking a closer look at vehicles that have been tampered with for the purpose of increasing fuel economy and decreasing down time.”

Smart Business spoke with Domike and Gina Falaschi, an associate at Babst Calland, about the crackdown on the use of aftermarket defeat devices and how businesses can ensure they remain in compliance with the Clean Air Act.

Why is the EPA increasing its enforcement of tampering and the use of defeat devices?

The EPA reports that more than 550,000 diesel trucks have had emissions controls tampered within the last 10 years, increasing emissions equating to having 9 million additional diesel vehicles on the road. With a goal of reducing emissions, pursuing illegal tampering is much more palatable to states than limiting the use of vehicles. While the EPA has arguably the most robust enforcement authority for new vehicles and engines, it is looking to states and associations that deal with air quality issues to take on cases involving tampering with vehicles once they are in use. …

Washington, DC

Renewables Law Blog

(By Ashleigh Krick)

On February 17, 2021, the Biden Administration announced it will revoke amendments to the Desert Renewable Energy Conservation Plan (DRECP) filed during the last days of the Trump Administration.  The DRECP was a collaborative, interagency planning effort finalized in 2016 that was intended to balance renewable energy development and desert conservation across nearly 11 million acres of public lands in the deserts of California.  The DRECP carves out certain areas of the deserts for renewable energy development, and makes other areas off limits for reasons including conservation and recreation.  The Trump Administration’s amendments would have reduced the number of areas where renewable energy development was off limits, opening up an additional 800,000 acres for renewable energy development.  In a statement from the Bureau of Land Management, it was unnecessary to reopen and reconsider the DRECP, which had been developed after years of collaboration and stakeholder input.  Renewable energy development in the DRECP land area will continue on under the original plan.

Tags: Bureau of Land Management, Desert Renewable Energy Conservation Plan, DRECP, renewable

Pittsburgh, PA

Renewables Law Blog

(By Christopher Hall)

On February 11, 2021, FERC Chairman Richard Glick discussed plans to develop new incentives to support the buildout of transmission infrastructure to meet the ever-growing demand for electricity and the continued growth of renewable projects across the country.  As states issue long term net-zero and renewable energy policy goals, and in turn incentivize development of additional power generation facilities, upgrades and construction of new transmission infrastructure will be needed to carry forth that driving force.  Chairman Glick provided that “We do have a duty to figure out where the industry is going and recognize the fact that there is going to be a lot more demand for electricity.” “I think we have to figure out policies that will hopefully promote greater investment in the transmission grid to facilitate access to cleaner resources.” For additional information on Chairman Glick’s policy forecast, please click here.

Tags: electricity, FERC, renewable, transmission infrastructure

The PIOGA Press

(by Keith Coyle and Ashleigh Krick)

On January 11, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published a final rule amending the gas pipeline safety regulations at 49 C.F.R. Parts 191 and 192. Adopted as part of the Trump administration’s efforts to reduce or eliminate unnecessary regulatory burdens, PHMSA estimates the final rule will result in approximately $130 million in annualized cost savings for pipeline operators. Although the effective date of the final rule is March 12, the agency provided a deferred compliance date of October 1, 2021, for the new amendments.

Additional information about the final rule is provided below.

Distribution integrity management program exemptions and farm taps

• Consistent with the policy announced in PHMSA’s March 2019 Exercise of Enforcement Discretion, the final rule provides operators with the option to maintain pressure regulating devices on farm taps under either the distribution integrity management program (DIMP) requirements or 49 C.F.R. § 192.740. The final rule exempts farm taps originating from unregulated production and gathering pipelines from the DIMP requirements, the overpressure protection inspection requirements in § 192.740 and the annual reporting requirements in Part 191.
• The final rule does not amend PHMSA’s regulations to provide additional clarity in determining what qualifies as a farm tap or where production, gathering or transmission piping ends and distribution service line piping begins in farm tap configurations. The agency stated that these definitional issues will be addressed in a guidance document that remains under development or in a future rulemaking proceeding. In the preamble to the final rule, PHMSA emphasized that any portion of a farm tap originating from an unregulated pipeline that meets the definition of service line must still comply with all applicable Part 191 and 192 requirements.

…

Smart Business

(by Sue Ostrowski featuring Michael Fink)

For startup companies lacking the cash flow or liquid assets to obtain a traditional bank loan, venture debt could be the answer to help elevate them to the next level.

“Startups often lack many of the characteristics that would give traditional lenders comfort that a regular commercial loan would be a good deal for them,” says Michael Fink, attorney at Babst Calland. “Venture debt can be an alternative to help bridge the gap to a company’s next valuation.”

Smart Business spoke with Michael about how taking on venture debt can keep a business moving forward without decreasing its valuation.

What is venture debt, and how is it structured?

At its core, venture debt looks similar to other commercial debt a company may incur; it may be structured as a term loan or line of credit, or an option to draw on either. The startup generally may choose the facility it feels best fits its needs.

However, because it’s a riskier loan for lenders, venture debt terms are generally more favorable to the lender than those of traditional loans. Borrowers can expect an interest rate higher than the prime rate (5 to 15 percent being common), more lender control rights and expanded negative covenants, prohibiting, for example, making large purchases or divesting a line of business without the lender’s consent.

Venture debt’s availability is based primarily on a company’s ability to raise future equity rounds, so venture debt lenders often require a small equity component in exchange for the higher risk the lender is taking on. For example, the lender may receive a warrant to purchase either common equity or the preferred equity to be issued in the next fundraising round, typically at a discount. …

The Legal Intelligencer

(by Anna Jewart and Krista-Ann Staley)

Zoning regulations, although important, are not the sole restrictions on land use. Property owners and a variety of entities may agree to impose additional private restrictions on specific pieces of land. These private restrictions can create confusion regarding who, between the parties to the agreement and the municipality, has the authority to interpret and enforce their terms. The Pennsylvania Commonwealth Court recently issued a detailed, albeit nonprecedential, opinion addressing this type of scenario in Naylor v. Board of Supervisors of Charlestown Township, No. 659 C.D. 2018 (Pa. Cmwlth. Jan. 7, 2021). In Naylor, the court addressed a decades-long disagreement over the scope of a conservation easements. Among its holdings, the court concluded a township did not have standing to enforce a private conservation easement, even when it owned a separate parcel subject to the same easement. Naylor is a good reminder that municipal regulations and private agreements are distinct matters with independent enforcement mechanisms.

Easements are a common form of private land use restriction. An easement is a nonpossessory interest of a holder in real property, imposing limitations or affirmative obligations on property called the “servient” estate. Conservation easements are designed for certain “conservation” purposes, such as protecting the natural or scenic values of real property; assuring its availability for agricultural, or recreational use; protecting, or managing the use of natural resources; or maintaining land, air, or water quality.

In Pennsylvania, conservation easements receive certain statutory protections under the Conservation and Preservation Easement Act, 32 P.S. §§5051 et seq., (Easement Act). Enacted in 2001, the Easement Act sets forth requirements for the interpretation, construction and enforcement of conservation easements. …

Washington, DC

Renewables Law Blog

(By Ben Clapp)

A recently settled enforcement action against a solar project developer in Massachusetts underscores the importance of adhering to appropriate stormwater pollution prevention protocols when siting, designing and constructing a project. The Commonwealth of Massachusetts sued the project developer under state and federal environmental laws, alleging that they had constructed a solar array on a hillside parcel without designing or implementing the required stormwater controls.  Specifically, the Commonwealth alleged that the developer never properly analyzed the potential for harm from stormwater discharges resulting from construction of the solar array, failed to install necessary stormwater controls prior to conducting site clearing and grading activities, applied for a General Stormwater Permit for construction activities (Permit) without having first prepared a Stormwater Pollution Prevention Plan (SWPPP), and ultimately failed to comply with requirements of the Permit and SWPPP that are designed to prevent stormwater pollution.  As a result, the Commonwealth claimed, there was an extensive discharge of sediment-laden stormwater over several months into a downgradient river that adversely affected the river’s water quality, and also eroded the hillside, scoured out perennial and intermittent streams, uprooted trees, destroyed streambeds, and filled in wetlands with sediment.  The developer has agreed to pay more than $1 million to settle the claim, which includes the cost of restoring impacted natural resources, compensatory mitigation costs, the Commonwealth’s legal fees, and a $100,000 civil penalty.

The case is an important reminder that renewables projects face the same environmental compliance obligations as any other large-scale infrastructure project, and that such projects, while considered “green,” are not immune from environmental enforcement actions. While renewables projects are often scrutinized for potential impacts to protected species, a greater risk of liability may lie in a project’s failure to comply with more “run of the mill” permitting and compliance requirements.  …