The Oregon Legislature Puts New Limits on Business Energy Tax Credits

Oregon’s Business Energy Tax Credit (“BETC”) is undergoing significant changes as a result of HB 3680, passed by the Oregon Legislature on February 23, 2010. The governor has indicated he will sign the bill. HB 3680 will place new financial limits on the program and give more discretion to the Director of the Oregon Department of Energy (“ODOE”) to reject BETC applications and to reduce the amount of BETCs delivered to projects.

Multifaceted Incentive Programs Move Oregon to Front of Pack

With all the attention that Oregon’s Business Energy Tax Credit, or BETC, has been getting of late, it might seem as if it’s the only game in town that’s providing incentives for renewable energy and sustainability projects in the state. But BETC is much broader than the points of concern raised by various critics, and there are a number of other non-BETC programs available that continue to make Oregon a leader in providing businesses and residents with significant incentives for sustainability projects.

Oregon is at a Clean-Tech Crossroads

Over the past several years, Oregon has taken a leadership position in renewable energy, energy efficiency and clean-technology development. Largely due to progressive energy policy and strategic incentives, Oregon has become a national focal point for solar energy manufacturing, wind energy production, and most recently, electric vehicle technology and infrastructure.

2010: The Year of Energy Efficiency?

Conserving energy no longer is considered merely a “personal virtue.” The cost of generating a kilowatt of electricity from a new facility typically is five times more expensive than saving a kilowatt of electricity in the existing system. Not surprisingly, then, there is a sharpening focus on reducing energy use, growing jobs and reducing homeowner utility costs.

Lane Powell Sustainability and Climate Change

Lane Powell is well-versed in the rapidly evolving legal and regulatory environment that is sustainability and climate change. Indeed, our lawyers also participate in many of the business and government task forces that are shaping those future laws and regulations. In recognition of the scope of the issues, Lane Powell formed its Sustainability and Climate Change team from the many disciplines involved – construction, corporate, environmental, land use, real estate, renewable energy and tax – to provide our clients with up-to-date advice on the state of the law and what may be coming in the near future. View the attached compilation of information authored by our attorneys.

Oregon Department of Energy Issues Temporary Rules Modifying the Business Energy Tax Credit Program

Oregon’s Department of Energy (“Department”) has issued temporary rules to modify the Business Energy Tax Credit (“BETC”) program for renewable energy projects and to address criticisms about the breadth of the credits. The rules are effective from November 3, 2009, until May 1, 2010.

Gov. Kulongoski requested a review of the BETC rules in early August 2009 when he vetoed a house bill that would have significantly reduced the tax credit for larger scale energy generation projects. The Governor also signed into law two related measures – one directing the Department to conduct an economic analysis on renewable energy projects that qualify for the BETC to better understand the state’s return on the investment in the BETC program, and the other scheduling the BETC program for sunset in 2012, if the legislature does not extend the program by the end of the 2011 session. The Department plans to issue permanent BETC rules after the 2010 special session is completed.

Lawyers Witness Upswing in Sustainable Law Trends

As former advisor to Oregon Governor Ted Kulongoski on sustainability-related public policy, a position I held for the past seven years, I’ve helped the governor push forward some of the nation’s most cutting-edge energy and climate change policies.

As I transition into providing private legal services to clients in the sustainability arena in the Pacific Northwest, I am now helping companies tackle a variety of legal issues arising from increased investment in renewable energy and greenhouse gas (GHG) reduction activities, among other things. Following are some trends I predict many lawyers practicing in the sustainability arena will be faced with in coming years.

View full article (PDF).

This article appeared in the October 2009 issue of Sustainable Industries magazine.

IRS Announces Qualifying Advanced Energy Project Tax Credit Program: Preliminary Applications Due September 16, 2009

The Internal Revenue Service yesterday issued Notice 2009-72 (the “Program Guidance”) establishing a program implementing the Qualifying Advanced Energy Project Credit (“QAEP Credit”) under Section 48C of the Internal Revenue Code (the “Code”). The Program Guidance may be found on the IRS website: http://www.irs.gov/pub/irs-drop/n-09-72.pdf.

The QAEP Credit was enacted as part of the American Recovery and Reinvestment Act of 2009 (“ARRA”). It is intended to encourage the development of a domestic manufacturing base to support the U.S. renewable energy industry by providing a tax credit equal to 30 percent of the “qualified investment” in a “qualifying advanced energy project.” The QAEP Credit is subject to a nationwide limitation of $2.3 billion, which must be allocated among eligible projects. ARRA required the Treasury Department to establish by August 17, 2009, a program to consider and award certifications for the QAEP Credit. The program announced yesterday fulfills that mandate and sets a short timeline for credit allocation applications.

View full article (PDF).

U.S. Treasury Department Issues Guidance for Cash Grants in Lieu of Energy Tax Credits

On July 9, 2009, the U.S. Treasury Department issued guidance for the award of cash grants by the federal government (“Grants”) in lieu of energy tax credits under Section 1603 of the American Recovery and Reinvestment Act of 2009 (“ARRA”). When ARRA was enacted in February 2009, Congress recognized that current economic conditions have reduced investors’ taxable income, and the attractiveness of the production tax credit (“PTC”) and the investment tax credit (“ITC”) as incentives for development of renewable energy projects has diminished. The goal in providing cash grants for a limited period is to spur renewable energy development, even in the absence of taxable income, and to further the goals of job creation and expansion of renewable energy sources.

View full article (PDF).

Need a Little Incentive? Tax Credits that Can Help You Save Money

While the American Recovery and Reinvestment Act of 2009 provides a number of federal income tax incentives to businesses, it is important to remember that there are also a wide variety of state and local tax incentives available to taxpayers, ranging from income tax credits and sales and use tax exemptions to relief from property taxes on qualifying investments. With proper planning, developers and their customers may be able to realize a significant reduction in the state and local tax costs associated with the development and ownership of commercial and industrial real estate. View full article (PDF).

This article appeared in BUILDERnews magazine.

Stimulus for smart grids is welcome, but faces challenges

As money starts flowing from the economic stimulus package passed by Congress and signed by President Obama, there is plenty of good news for supporters of energy conservation and renewable energy, but also some challenges. The American Recovery and Reinvestment Act of 2009 contains several provisions for increased funding, extended tax incentives, or outright grants to encourage renewable energy projects, energy savings and green jobs. One key feature of the bill is $30 billion in funding to upgrade the power transmission system and develop so-called smart grid technology. While funding is certain to help, upgrading an overburdened power grid and implementing smart technology both come with issues that money alone may not solve. View full article (PDF).

This article first appeared in the Puget Sound Business Journal.

Federal Stimulus Provides Major Funding for Renewable Energy and Energy Conservation

The economic stimulus package passed by Congress and signed today by President Obama contains good news for supporters of renewable energy and energy conservation. The American Recovery and Reinvestment Act of 2009 provides increased funding, extended tax incentives and outright grants to encourage renewable energy projects, energy savings and green jobs. View full article (PDF).

Governor’s ‘green’ agenda will also impact real estate – Proposals include mandating improved energy efficiency

By many accounts, nearly 40 percent of the world’s carbon emissions are a byproduct of the power produced for residential and commercial consumption. In an effort to curtail these carbon emissions, significant efforts are ongoing to create clean sources of power. View full article (PDF).

This article first appeared in the Portland Business Journal.

Washington Supreme Court Gives Green Light to State Approval of Wind Farms Over Local Objections

A unanimous Washington Supreme Court ruling on November 20 should give backers of large-scale wind projects a major boost in their efforts to build wind farms in this state. In Residents Opposed to Kittitas Turbines v. Energy Facility Site Evaluation Council (“ROKT”), the court ruled that the Governor and the state Energy Facility Site Evaluation Council (“EFSEC”) have the power to override local zoning ordinances that might hinder development of wind projects. View full article (PDF).

Financial Bailout Package Contains Tax Incentives for Renewable Energy

Renewable energy projects got a large boost last week when tax breaks for those developments were included in the $700 billion federal bailout package passed by Congress and signed into law by President Bush. While solar and wind projects stand to be the largest beneficiaries, other renewables and energy efficiency measures also are likely to gain from the incentives. View full article (PDF).

The Oregon Business Energy Tax Credit

The Oregon Business Energy Tax Credit (“BETC”) is a nonrefundable credit against Oregon personal and corporate income taxes based on the “certified cost” of certain investments in energy conservation, recycling, renewable energy resources, or reduced use of polluting transportation fuels. Originally enacted in 1979, the BETC was significantly expanded in 2007, and expanded again in 2008, as part of an effort to encourage alternative energy development. The BETC is available only for investments in facilities that are completed by the end of 2015. View full article (PDF).

Portland Becomes First City to Adopt Renewable Fuel Standard

On July 5, 2006, the City of Portland, Oregon, took an aggressive step towards energy independence by passing a ordinance requiring all diesel sold after June 30, 2007, within the City of Portland to contain a minimum blend of 5 percent biodiesel, commonly referred to as “B5,” and all gasoline sold after June 30, 2007, within the City of Portland to contain a minimum blend of 10 percent ethanol, commonly referred to as “E10.” While Minnesota and Washington both have state laws requiring fuels sold in those states to contain a minimum percentage of renewable fuels, Portland is the first city to have a renewable fuel standard. It is expected that the Oregon legislature will pass renewable fuel standards state-wide in 2007. View full article (PDF).