This week, ML Strategies’s Director of Government Relations, Bryan Stockton, provides an update on the clean energy provisions in the Senate’s tax-extenders package and details scenarios for their extension as the midterm elections approach.
Now that summer is drawing to a close, let’s check in on one important bill that lost momentum just as the summer was beginning. Remember the Senate Finance Committee’s tax extenders package (S. 2260), which the committee marked up on a bipartisan basis in mid-May? The one that was poised to pass the Senate but that surprisingly failed to reach cloture after Senate leadership blocked Republican amendments on the bill? At the time, congressional staff and lobbyists—and even Majority Leader Harry Reid (D-NV) —suggested that the extenders package would come up again in the lame duck session after the November election. The House was not expected to vote on an extenders package before then anyway, so the Senate delay would not really impact the timing of final passage of this two-year extension of more than 50 tax provisions.
On behalf of our friends and partners at SURGE Accelerator, Mintz Levin is excited to share that the application for the Spring 2015 SURGE Program is now open for prospective enrollees.
ENERGY AND CLIMATE DEBATE
Congress is in recess for the remainder of August, but when it returns for just over two weeks in September, much of the focus will turn to crafting a continuing resolution to keep the government open while senators and representatives continue to negotiate a budget.
In addition to negotiating a continuing resolution, reauthorizing the Export-Import Bank and Department of Defense programs, and addressing internet taxation, Senate Majority Leader Harry Reid (D-NV) has identified several bills for debate prior to the November elections. Majority Leader Reid plans to hold votes on measures to raise the minimum wage, address pay equity issues and student loan rates, and guarantee access to contraception, as well as a constitutional amendment to limit campaign contributions and spending.
On the House side, House Majority Leader Kevin McCarthy (R-CA) told the House Republican conference August 8 that he plans to bring up two packages of jobs and energy legislation and an Obamacare bill in September. Though not finalized, the energy package would approve the Keystone XL pipeline (H.R. 3), limit environmental regulations (H.R. 1582), and open federal lands to energy extraction (H.R. 4899).
On August 8, 2014, the Internal Revenue Service (IRS) issued Notice 2014-46 in response to continued industry requests for clarification on several aspects of the renewable electricity Production Tax Credit (PTC) under section 45, or the energy Investment Tax Credit under section 48 in lieu of the PTC (ITC election).
The biggest policy development in the recent guidance is a reduction in the level of investment taxpayers must have committed before the end of 2013 from five percent to three percent of total project costs for a qualifying facility to remain eligible for the PTC/ITC under the IRS “Safe Harbor” test.
This week, ML Strategies’ Manager of Government Relations, Sarah Litke, highlights the Environmental Protection Agency’s 111(d) Proposed Rule:
The Environmental Protection Agency held public hearings in Atlanta, Denver, Washington, and Pittsburg the last week of July to consider the Clean Power Plan.
The June 2 proposed rule would require the nation’s fleet of existing power plants to reduce CO2 emissions 30 percent by 2030 from a 2005 baseline. Instead of establishing uniform targets for specific types of electric generating units, the Section 111(d) rule establishes state-specific targets for CO2 reductions based on a formula that takes into account the degree of emission reductions the agency has determined is achievable through the implementation of Best System of Emission Reduction at each of the states’ fossil-fueled power plants. The formula considers four potential carbon reduction building blocks:
The recent IPO surge is receiving significant attention. The year 2014 is on track to be the most active IPO market in the United States since 2000, with the mid-year total number of IPOs topping last year’s mid-year total by more than 60%. There were 222 US IPOs in 2013, with a total of $55 billion raised, and 2014 has already seen 151 US IPOs, for a total of $32 billion, completed by the mid-year mark. The year 2000 (over 400 IPOs) was the last year of a 10-year boom in US IPOs that reached its peak in 1996 (over 700 IPOs).
What does this mean for emerging energy technology and renewables companies that might be looking to the capital markets? As of mid-year 2014, there have been six cleantech/renewables IPOs, while there were a total of seven in all of 2013. In both years, these deals have represented a relatively small percentage of total IPOs and still do not match the level of activity in the more traditional energy and oil & gas sector. In 2014, IPOs were completed by a range of innovative companies, including Aspen Aerogels, TCP International and Opower.
Read my Mintz Levin Energy Technology Alert here to find out more.
 Please note that there will be some variance in the statistics for IPOs generally. This is because most data sets exclude extremely small initial public offerings and uniquely structured offerings that don’t match up with the more commonly understood public offering for operating companies. The data above is based on information from http://bear.warrington.ufl.edu/ritter/IPOs2012Statistics.pdf and Renaissance Capital www.renaissancecapital.com.
Last week, a bipartisan coalition in the House of Representatives voted in favor of HR 5120, the Department of Energy Laboratory Modernization and Technology Transfer Act of 2014. The Act, which seeks to reform the United States’ existing national laboratories system, focuses on improving the transmission of research and scientific findings from federal labs into the private sector and facilitating public-private partnerships between researchers and business entrepreneurs. Based, in part, on the Center for Clean Energy Innovation’s (CEEI) recent policy report on the state of the national lab system entitled Turning the Page, the House’s version of the Act would introduce a number of reforms. It would:
- Empower directors of the National Laboratories to enter into agreements (funding, or otherwise) with non-Federal entities regarding lab usage.
- Delegate “signature authority” to National Laboratory directors regarding cooperative research and development agreements costing less than $1,000,000, including public-private partnerships for commercialization.
- Allow directors to carry out early-stage and pre-commercial technology demonstration activities to remove technology barriers that limit private sector interest and demonstrate potential commercial applications of any research and technologies arising from National Laboratory activities.
Over the past week, support for the Lab Modernization Act came from members of both parties, including bill co-sponsors Rep. Randy Hultgren (R-IL) and Rep. Derek Kilmer (D-WA). “This bill will ensure,” said Hultgren, “that discoveries made in our national labs do not get stuck there.” Kilmer added: “This legislation makes it easier for entrepreneurs and business leaders to harness [national laboratory] research so start-ups with one or two employees can grow into companies that create hundreds of quality jobs.”
The Act awaits passage of the America INNOVATES Act (S. 1973), the Senate’s companion bill introduced earlier this year by Senators Chris Coons (D-DE) and Marco Rubio (R-FL).
For several years, solar arrays utilizing silicon photovoltaics have been central to driving the exponential growth of installed domestic solar capacity. However, an ongoing trade war spanning three continents and impacting the entire solar supply chain – from upstream polysilicon manufacturers to downstream installers – continues to present significant challenges as the growing number of tariffs imposed on imported solar components and systems may begin to dampen the solar industries’ incredible momentum.
On August 5, 2014, Mintz Levin is excited to be a part of the second annual NextWave Greentech Investing conference in Menlo Park, California for the second year in a row. Hosted by Greentech Media, the conference is an annual gathering of leading investors, entrepreneurs, and senior corporate decision-makers to chart a new way forward in the greentech market. Building on the success of the inaugural conference in 2013, the 2014 conference will not only discuss successful investing in clean energy technology and services, but will also delve deeper into active areas such as solar power, electric utility business, cleanweb, and clean energy project finance. Sahir Surmeli (Co-chair of Mintz Levin’s Energy Technology Practice) will be contributing as a panelist, discussing the energy IPO market during the session entitled “The NextWave Paths to Exit.”
The House Appropriations Committee approved July 15 a fiscal year 2015 spending bill for the Interior Department, the Environmental Protection Agency, and related agencies after Republicans opposed Democratic attempts to remove 24 legislative riders. The measure would increase Interior Department funding for oil and gas permitting and inspections on Bureau of Land Management land, as well as funding for fighting and preventing wildfires. The package would reduce the Environmental Protection Agency’s budget by $717 million, about nine percent. The overall bill would amount to $30.2 billion, a $162 million increase from the fiscal year 2014 enacted level. The riders are designed to halt some agency initiatives, including greenhouse gas regulations, a new definition of Clean Water Act jurisdiction, revised water pollution rules for surface coal mining, and the possibility of an Endangered Species Act listing next year of the greater sage grouse.