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DISCLAIMER: This blog is published for general information only - it is not intended to constitute legal advice and cannot be relied upon by any person as legal advice. While we welcome you to contact our authors, the submission of a comment or question does not create an attorney-client relationship between the Firm and you.

Tuesday
Jul192016

Arbitration Award of $1.5 Million to Xpress Natural Gas, LLC Affirmed by Maine Supreme Judicial Court

Recently, the Maine Supreme Judicial Court affirmed an arbitrator’s award of $1.5 million to Xpress Natural Gas, LLC. The court upheld the arbitrator’s decision that Cate Street Capital Inc. was responsible for payments to Xpress Natural Gas that Cate Street’s subsidiary, GNP Parent, LLC (formerly known as Great Northern Paper Company, LLC) owed Xpress Natural Gas for the delivery of compressed natural gas to the Great Northern Paper Mill in East Millinocket (and for the installation costs of certain associated facilities).

The dispute arose from GNP’s failure to prepare the mill for the installation of equipment and for delivery of gas by March 31, 2013. After agreements to extend that deadline expired and GNP failed to make required payments, the parties proceeded to private arbitration. Deferring to the arbitrator’s interpretation of the “guarantee” in a particular commercial agreement, the Court found that arbitrator’s interpretation was “rationally derived from the agreement.” The Court rejected GNP’s argument that the arbitrator exceeded his authority by interpreting the guarantee in a way that showed “manifest disregard for the contract.”

When explaining the standard that the Court applies when reviewing an arbitrator’s award, the Court noted that even when the arbitrator’s interpretation is erroneous, if the interpretation is rationally derived from the agreement, the arbitrator has not exceeded the arbitrator’s authority. However, an arbitrator may not base an award on the arbitrator’s “own individual concept of justice in the particular area involved” or directly contradict the agreement. 

Wednesday
Jul062016

4.4 MW Solar Facility to Provide Power for Madison Electric Works Customers

IGS Solar recently announced that Madison Electric Works will buy power from IGS’s 4.4 MW solar array under a long-term contract. IGS will finance, own and operate the 4.4 megawatt generation facility, which will include more than more than 13,000 solar panels.

MEW serves customers in Madison, Starks, Anson and Norridgewock, including the Madison Business Gateway and Backyard Farms. According to Calvin Ames, the utility’s general manager, energy from the solar facility will help MEW to keep its rates competitive for its approximately 2,500 customers. IGS expects that energy from the facility will fulfill about 20% of MEW’s customers’ annual energy needs. 

Wednesday
Jul062016

D.C. Circuit Remands BOEM Cape Wind Lease under NEPA and ESA, Punts on MBTA Challenge

The U.S. Court of Appeals for the D.C. Circuit has dealt another setback to the Cape Wind offshore wind power project by holding yesterday in Public Employees for Environmental Responsibilities v. Hopper that the Bureau of Ocean Energy Management (BOEM) and the U.S. Fish and Wildlife Service (USFWS) violated the National Environmental Policy Act (NEPA) and the Endangered Species Act (ESA) in approving Cape Wind’s lease on federal land in Nantucket Sound.

However, the Court declined to rule on the more controversial question of whether BOEM’s regulatory approval of Cape Wind violated the Migratory Bird Treaty Act (MBTA) despite the fact that the parties stipulated that operation of the project would result in incidental take of protected migratory birds. The Court also declined to rule on the larger issue of whether the MBTA applies to incidental take at all.  

The D.C. Circuit referenced the 9th Circuit’s recent holding in Protect our Communities Foundation v. Jewell, which rejected the same “novel argument” that the MBTA prohibits federal agencies from authorizing activities that may or will result in prohibited take under the MBTA (or the Bald and Golden Eagle Protection Act), but chose not to engage the question in any substance. Instead, in a lengthy footnote 11, the Court sidestepped project opponents’ MBTA claim based on statements made by BOEM and Cape Wind at oral argument to the effect that Cape Wind would obtain an MBTA permit from USFWS prior to operation of the project. The Court acknowledged that USFWS is currently “considering” whether to adopt regulations that would allow issuance of an MBTA incidental take permit and that there is currently no established process for obtaining such a permit, but was apparently untroubled by those details.

The D.C. Circuit did note without comment that USFWS’s “longstanding position has been that the [MBTA] also applies to harm that occurs incidental to, and which is not the purpose of, an otherwise lawful activity.” The Court did not address the fact that this longstanding USFWS position is inconsistent with the law within the jurisdictions of the Fifth, Eighth and Ninth Circuit Courts of Appeals, which have held that the MBTA only applies to intentional take. The Tenth Circuit and, to a lesser extent, the Second Circuit have gone the other way and upheld the application of the MBTA to incidental take.

It is possible that this circuit split may be resolved before too long by the Supreme Court, but for the time being the D.C. Circuit has decided that it does not want to join the discussion.

And Cape Wind will continue to plod forward, Terminator-like in its apparent willingness and ability to withstand consecutive bludgeonings from opponents, utilities, regulators and the judiciary.  

Friday
Jun242016

Seeking Competition Among the Uncompetitive: Maine PUC Must Define “Competitive” in Biomass Subsidy Proceeding

What makes a competitive bidding process “competitive”? The Maine PUC is currently grappling with this question in Docket No. 2016-00084 in which it is tasked with awarding contracts for up to 80MW of biomass generation. Under a new law, P.L. 2015, ch. 483, the PUC must solicit bids from eligible biomass resources. Lawmakers passed the bill to support Maine’s forest products industry, which has suffered as a result of a string of mill closures in recent years. Under the law, the PUC may enter into “above-market” contracts with biomass generators and pay for the above-market costs from special revenue funds to shield ratepayers from higher energy costs that would result from the contracts. The law is designed to help loggers and other forest service employees that rely on biomass generators, which are struggling to compete against low oil and gas prices.

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Thursday
Jun162016

Maine PUC Opens New Proceeding to Explore Changes to Net Metering Rules

On Tuesday, the PUC opened a new docket (2016-00120) requesting comments from interested stakeholders about the future of net metering (also known as “net energy billing”). In January, CMP notified the Commission that in 2015 net metering resources had exceeded 1% of CMP’s peak demand, triggering PUC review under the rules. The PUC took no action on CMP’s petition while the Legislature debated LD 1649, a bill that would have replaced net metering with the “Standard Solar Buyer” model that emerged from the solar stakeholder process last fall. That bill failed to overcome Governor LePage’s veto at the end of the session. Now the PUC will decide whether to act on its own to make changes to Maine’s net metering rules.

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Friday
May272016

Maine PUC Opens Proceeding to Distribute RGGI Funds to Large Energy Consumers

The Maine Public Utilities Commission recently opened a new docket, 2016-00081, to process refunds to energy intensive manufacturers in Maine out of the fund created by the carbon cap and trade program under the Regional Greenhouse Gas Initiative (RGGI).

Maine is one of nine New England/Mid-Atlantic states that participate in RGGI. Under the program, CO2 is capped in the participating states and fossil-fuel generators in those states are required to purchase emissions allowances to offset their emissions. In Maine, the money raised from the sale of emissions allowances has been used to fund Efficiency Maine, which promotes energy efficiency for Maine business and residential consumers.

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Thursday
May052016

After Solar Bill Fails to Muster Veto-Proof Support, PUC Will Decide Fate of Net Metering 

Last Friday, the Maine House came within two votes of overriding Governor LePage’s veto of LD 1649, a bill that would have substantially increased installed solar capacity in Maine. The Senate had previously voted unanimously to override the veto. The bill would have sought to increase solar capacity nearly tenfold in Maine, from 20 MW to 196 MW in 2021. The bill would have phased out net metering in favor of a system of long-term contracts for rooftop solar and provided similar long-term contracts for community and large-scale solar installations.

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