Ninth Circuit Affirms Dismissal of Class Action Suit Associated with NERC Reliability Violations

On March 2, 2016, in an unpublished opinion , the U.S. Court of Appeals for the Ninth Circuit (“Ninth Circuit”) affirmed the judgement of the district court dismissing a class action suit brought by individuals and business entities located within the State of California (the “Plaintiffs”) against the Arizona Public Service Company (“APS”). Waldon v. Ariz. Pub. Serv. Co. , No. 14-55076 (9th Cir. Mar. 2, 2016). The Plaintiffs alleged that APS violated North American Electric Reliability Corporation (“NERC”) reliability standards adopted by the Federal Energy Regulatory Commission (“FERC”)...

Delaware Chancery Court Dismisses Challenge to MLP Drop Down Transaction

The Delaware Chancery Court recently dismissed a challenge to a transaction in which a master limited partnership (the "MLP") repurchased an interest in a crude oil pipeline in 2015 previously sold to its general partner (the "General Partner") in 2009. The plaintiff alleged that the defendants, in the course of approving the transaction, breached the MLP’s limited partnership agreement, the implied covenant of good faith and fair dealing and default fiduciary duties. In finding for the defendants, the court concluded that under the applicable standard set forth in the limited partnership...

Selling Power to a Texas Muni Just Got Easier (or at least more enforceable)

Electric utilities operated by Texas municipalities (Munis) are attractive wholesale customers for power generators, as Munis are willing to enter into the coveted long-term power purchase agreements (PPAs) that enable the financing of new generation capacity. Because Munis are governmental entities, however, there has been a longstanding question regarding the extent to which “governmental immunity” may restrict a generator’s ability to recover damages when its counterparty to the PPA is a Muni. Until last month the answer to this question was uncertain, with different districts of the Texas...

CFTC Proposal Creates Jurisdictional Controversy and Uncertainty in the RTO and ISO Markets

On May 10, 2016, the Commodity Futures Trading Commission (“CFTC” or “Commission”) issued a proposed amendment (“May 10 Proposed Amendment”) [1] to a final order issued on March 28, 2013 (the “RTO-ISO Order”) that exempted certain specified transactions of six Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”) from certain provisions of the Commodity Exchange Act (“CEA”) and other CFTC regulations. [2] The May 10 Proposed Amendment would modify the RTO-ISO Order to state that the exemption provided therein does not prohibit private causes of action pursuant...

IRS Updates Guidance on the Beginning of Construction Rule for Renewable Energy Production Tax Credits

On May 5, 2016, the Internal Revenue Service ("IRS") released Notice 2016-31 (the "Notice"). The Notice updates previous IRS guidance on satisfying the "beginning of construction" requirement for renewable energy facilities to qualify for the renewable energy production tax credits (the "PTC"), reflecting the extensions under the Protecting Americans from Tax Hikes Act of 2015 (the "PATH Act") of the "beginning of construction" date for renewable energy facilities to qualify for PTC. The Notice (i) extends and modifies the "continuity safe harbor" period in which a facility has to be placed...

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