Utility Ownership of Renewable Energy Assets

October 28-29, 2021 | Online ::

Direct ownership of solar assets by regulated utilities is a complicated proposition in most states and under most circumstances.  Enough exceptions exist so that it’s not correct to characterize utility-owned solar as infeasible in most cases.  In fact, many holding companies that own regulated utilities also develop and manage renewable energy assets, including solar, through merchant organizations that some consider utilities.  Even so, to this point in its maturity as a generation type, solar as a portfolio asset follows the more familiar paradigm of third party as developer and owner, and utility as off-taker through a power purchase agreement (PPA).

Shoots are emerging on the landscape, however, that suggest policy-makers, utilities and – most importantly – the market may be shifting their perspectives on this solar development convention.  The mushrooming demand and accelerating competition for solar assets across the consumer, corporate and power system user spectrum are important drivers.  They may erode regulatory, accounting and tax provisions that have impeded regulated utility solar asset ownership. 

This course will evaluate the elements contributing to practices that dominate the renewable energy project development and asset ownership landscape.  In addition, it will examine the shifts underway contributing to the perception that more and wider utility engagement in solar asset ownership is a real prospect.  The program will also spell out the paths that utilities themselves are pursuing to convert the possibility of solar asset ownership into their rate- based portfolios.

Learning Outcomes

Attendees will gain practical skills and insights on how to:

• Review the state of the utility solar asset market
• Discuss the full range of renewable energy resource supply options and scenarios
• Examine how utilities are working within the normalization rules applicable to utility accounting to accommodate renewable energy asset ownership
• Assess how utilities are addressing the net operating loss for tax purposes (NOL) to accommodate renewable energy asset ownership
• Describe the influence that tax Incentives and regulatory policies have on utility asset decisions
• Evaluate state + federal policy and tax outlook/scenarios
• Analyze the economics and finance of transactions that favor utility ownership of renewable energy assets
• Assess the considerations associated with the various O&M options to utilities when they own renewable energy assets

Thursday, October 28, 2021 : Central Time

9:00 a.m. – 12:15 p.m.

1. State Of The Utility Renewable Energy Asset Market
   • ISO’s and regulated markets, structures, responsibilities
   • Renewable energy capacity in each region or state
   • Ownership by type
   • Available off-take solutions
     • PPAs
     • Hedges
     • Rate-base assets

1. Utility Market Participants & Roles
   • IOU’s (regulated, operating vs unregulated, merchant), Muni, Coop, Public Power
     • Relationship to IPP, Infrastructure Funds/Private Equity (PE)
     • Relationship to Federal Power Agencies
   • Regulatory/capital approval process of the participants

12:15 – 1:00 p.m. :: Lunch Break

1:00 – 4:45 p.m.

• Utility-Specific Criteria
  • Regulatory Compact
  • Normalization Rules Applicable to Utility Accounting
  • Net Operating Loss for Tax Purposes (NOL)
  • Internal capabilities and balance sheet considerations

1. How Incentives/Drivers Influence The Utility Asset Decision
   • RPS (Define and status by state) and state incentives.
   • REC’s, carbon credits….
   • ESG Goals
   • ITC/PTC
     • How does tax equity work, grandfathering (grandfathering matters because it is a pre-NTP expense that is at-risk – regulated utilities cannot ratebase such an expense)

1. What Utilities Need To Know And How They Need To Position Vis-À-Vis TEI Structuring & Tax Treatment
   • Partnership Flip, Sale-Leaseback, Inverted Lease, Pre-Pay
   • Status of Incentives
   • How does a Build Transfer Agreement (BTA) and/or utility cash equity investment differ from a traditional tax equity financing?
   • Tax equity as acquisition financing
   • Coordination with seller

4:45 p.m. :: Course Adjourns for Day

Friday, October 29, 2021 : Central Time

9:00 a.m. – 12:15 p.m.

• Economics / Finance
  • PPA
    • Assuming TEI
    • 15 year tenor
    • Typical flip timing
    • Buyout clause
  • Utility Self-build
    • With and without direct pay
    • Assume amortization schedule & bond finance
  • BTA/BOT transactions
  • Utility BTA/BOT of cash equity shares @ NTP or COD
    • Implications for rate-basing
    • Risks
  • Full BOT at COD
• Operations
  • Self-perform vs 3rd party
  • FOM (Fixed O&M)
  • VOM (Variable O&M)
  • Balancing
  • Transportation (Basis or tariff)
  • Lifecycle cost considerations

• State + Federal Policy & Tax Outlook/Scenarios
  • Under discussion
    • Direct Pay (Cash Grant) and potential implications
    • What would this mean for non-tax paying entities?
  • What if normalization rules of utility accounting are relaxed to accommodate the development and ownership of solar and other renewable energy assets under certain conditions?

12:15 p.m. :: Course Adjournment

Uday Varadarajan is Electricity Practice Principal at Rocky Mountain Institute (RMI) and Precourt Energy Scholar for the Sustainable Finance Initiative at Stanford University.  Before joining the think tank, he was a Principal at CPI Energy Finance, managing their San Francisco team. At CPI, he led the development of financial, regulatory, and policy data analytics and tools to assist consumers, utilities, and communities in states across the US (including New York, Colorado, Missouri, Minnesota, Utah, and South Carolina) realize the benefits from a just and equitable transition from uneconomic dirty resources to clean energy. Prior to moving to the Bay Area, he served as a program examiner in the U.S. White House Office of Management and Budget (OMB), where oversaw the budget for U.S. Department of Energy (DOE) energy efficiency and renewable energy programs and the cost assessment and approval of the first $8 billion in DOE loans to automakers, including loans to Tesla and Nissan to build electric vehicles. Before joining OMB, Dr. Varadarajan was a AAAS Science and Technology Policy Fellow at the Department of Energy and then on detail to the staff of the U.S. House of Representatives, Appropriations Committee. He came to DC after completing a postdoctoral fellowship in theoretical physics in the Weinberg Theory Group at the University of Texas at Austin.

David Posner is a consultant to RMI, specializing in evaluating the impact of tax policies on the clean energy transition.  Before RMI, David was a Consultant at CPI Energy Finance in San Francisco, working on a team that developed innovative financing tools to accelerate the retirement of coal-fired power plants. Before moving to the Bay Area, he was a policy analyst in Washington, DC, where he spent five years at the U.S. Department of Energy in the Office of Energy Efficiency & Renewable Energy. David has a PhD in history and has taught at Yale University, the Eberhard Karls Universität Tübingen, and the Universität Mannheim.

Stefanie Padgett is Vice President of Distributed Infrastructure at NAES Corp, which provides operations, maintenance, construction, engineering and technical support to build, operate and maintain both traditional and renewable resources.  Her expertise applies to strategic market insight, execution of product strategy, commercial management, contractual negotiations and cost analyses, In Ms. Padgett’s nearly two decades in the industry, she has also served as Vice President of Asset Management at Nautilus Solar Energy, Senior Sales Manager for O&M at First Solar, Senior Global Key Account Manager at GE Power Conversion and Key Account Manager at ABB.

Keith Martin is partner and Co-Head of Projects U.S. at Norton Rose Fulbright.  He is a transactional lawyer whose principal areas of practice are tax and project finance. He acted for 146 companies last year. He also lobbies Congress and the Treasury Department on policy issues. The prestigious Chambers directory has called him a “preeminent authority on tax structurings in the US” and gives him its sole “star” ranking among US renewable energy lawyers.

Adam Bernardi is Manager of Renewable Business Development at Burns & McDonnell Engineering.  He has 15 years of experience in the power generation industry.  Mr. Bernardi supports utilities and developers in the upfront development of renewable energy projects, from siting and commercialization strategies all the way through startup and commissioning.

We will be using Microsoft Teams to facilitate your participation in the upcoming event. You do not need to have an existing Teams account in order to participate in the broadcast – the course will play in your browser and you will have the option of using a microphone to speak with the room and ask questions, or type any questions in via the chat window and our on-site representative will relay your question to the instructor.

• IMPORTANT NOTE: After November 30 you will not be able to join a Teams meeting using Internet Explorer 11. Microsoft recommends downloading and installing the Teams app if possible. You may also use the Edge browser or Chrome.
• You will receive a meeting invitation will include a link to join the meeting.
• Separate meeting invitations will be sent for the morning and afternoon sessions of the course.
  • You will need to join the appropriate meeting at the appropriate time.
• If you are using a microphone, please ensure that it is muted until such time as you need to ask a question.
• The remote meeting connection will be open approximately 30 minutes before the start of the course. We encourage you to connect as early as possible in case you experience any unforeseen problems.

REGISTER NOW FOR THIS EVENT:

Utility Ownership of Renewable Energy Assets

October 28-29, 2021 | Online

Your registration may be transferred to a member of your organization up to 24 hours in advance of the event. Cancellations must be received on or before September 24, 2021 in order to be refunded and will be subject to a US $195.00 processing fee per registrant. No refunds will be made after this date. Cancellations received after this date will create a credit of the tuition (less processing fee) good toward any other EUCI event. This credit will be good for six months from the cancellation date. In the event of non-attendance, all registration fees will be forfeited. In case of conference cancellation, EUCIs liability is limited to refund of the event registration fee only. For more information regarding administrative policies, such as complaints and refunds, please contact our offices at 303-770-8800

Credits

EUCI is accredited by the International Accreditors for Continuing Education and Training (IACET) and offers IACET CEUs for its learning events that comply with the ANSI/IACET Continuing Education and Training Standard. IACET is recognized internationally as a standard development organization and accrediting body that promotes quality of continuing education and training.

EUCI is authorized by IACET to offer 1.0 CEUs for this event.

Instructional Methods

Case studies and PowerPoint presentations will be used in this program.

Requirements For Successful Completion Of Program

Participants must log in for the entirety of the event to be eligible for continuing education credit.

Upon successful completion of this event, program participants interested in receiving CPE credits will receive a certificate of completion.

Course CPE Credits: 12.0
There is no prerequisite for this Course.
Program field of study: Specialized Knowledge
Program Level: Basic
Delivery Methood: Group-Live
Advanced Preperation: None

EUCI is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its web site: www.nasbaregistry.org

Who Should Attend

• Integrated resource planning
• Strategic and long-range planning
• Forecasting and analysis
• Transmission planning
• Renewable energy planning
• State regulatory and commission staff
• Regulatory affairs
• Asset management
• Financial analysis
• Treasury