The Legal Intelligencer
By Joe Yeager
On Aug. 10, the U.S. Senate passed President Joe Biden’s Infrastructure Investment and Jobs Act (HR 3684 or Infrastructure Bill) by a vote of 69-30. The $1 trillion Infrastructure Bill received bipartisan support with a proposed $550 billion in new infrastructure spending over the next five years that would be offset by a combination of tax and nontax provisions.
Among other proposals, the Senate bill includes a provision to resurrect a modified version of the long-expired Hazardous Substance Superfund Trust Fund (Superfund) excise tax on chemical manufacturing and imports (Superfund excise taxes). The bill reinstates certain excise taxes to replenish the Superfund, which provides the federal government with resources to respond to environmental threats related to managing hazardous substances.
Congress allowed the excise taxes to expire at the end of 1995, and this absence of funds has forced the Superfund to support cleanup efforts through general disbursements of other tax revenues. Although there have been multiple attempts to reinstate the Superfund excise tax over the course of the last 25 years, none garnered as much bipartisan support.
The new version of the Superfund tax would apply to the production of certain chemicals through Dec. 31, 2031, effective for periods after June 30, 2022. In addition, the Superfund tax will increase the rate of tax per ton on a list of taxable chemicals. Its proponents assert that over the course of 10 years, the new tax is estimated to raise approximately $14.4 billion (or $1.2 billion annually). In support of the Infrastructure Bill, the funds would be specifically aimed at shoring up the Superfund, addressing the overall goals of cleanup and protection of human health and the environment from historical contamination, and bolstering EPA efforts to conduct additional investigations and collect more data on newer sites.
As anticipated, there is opposition by industry (led by the American Chemistry Council) with claims that the reintroduction of the Superfund tax would result in shrinking profit margins and place the United States at a disadvantage in the global chemical industry. The American Chemistry Council condemns the new version of the infrastructure tax because they believe it uniquely focuses on chemical manufacturers and importers (the new Superfund tax differs from the original in that it does not impose tax on oil and petroleum). Historically, the Superfund was funded by three excise taxes applied to oil and petroleum products, chemicals and hazardous substances. The prior funding was intended to seek compensation from those entities deemed responsible for contamination. The proposed Superfund excise taxes are not directed at any particular responsible party, rather the tax will be imposed entirely on those companies that import or produce chemicals, chemical compounds or chemical byproducts. Thus, this new tax could unfairly impact a small subset of the industrial sectors that may have contributed to pollution. According to the opposition, the result of this tax will be the forced closure of more than 40 chemical plants and the loss of thousands of industry-related jobs. In addition, the new Superfund tax would likely increase the cost of a variety of consumer goods, including many of the materials needed for infrastructure and climate improvement.
Assuming the bill passes the House and is signed into law by Biden, a logical next question is how this money be used. The intent of the new tax is to provide monies to EPA in order to boost funding of its Superfund program. It is expected that the monies collected would be applied to contaminated sites without viable responsible parties, known as orphan sites. However, the EPA has also intimated it would like to use some of the new revenue to conduct new investigations about newer sites.
The Senate-passed Infrastructure Bill is currently held up in Congress as talks continue on the passage of the overall act, but there is a strong belief that it will pass because it is viewed as an old tax brought back to life. The Superfund tax is promoted by the Biden administration as a way to advance an increased interest in the environment and as a reliable revenue source to help clean up a backlog of legacy orphan sites. Further, there is bipartisan support to fund the bill due to its potential to offset expenses of the overall Infrastructure Bill without raising new broad-based taxes.
The Senate bill has moved to the House of Representatives for approval and is still pending. It will not become law until it has been approved by the House and signed by Biden.
Although developments continue to unfold, including opposition in Congress, resurrection of the Superfund tax could take some months for the House and Senate to pass a final reconciliation tax bill.
Babst Calland Clements & Zomnir environmental attorneys will continue to track Superfund developments and their implications to the industry in the coming months.
Click here to view the article online in the November issue of the Legal Intelligencer.
Reprinted with permission from the November 4, 2021 edition of The Legal Intelligencer© 2021 ALM Media Properties, LLC. All rights reserved.
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GO-WV News
By Christopher (Kip) Power
The West Virginia Department of Environmental Protection (WVDEP) is continuing work on rules for permitting of geologic storage of captured CO2 — a necessary (but not sufficient) element in developing a CCS industry.
As discussed in the August GO-WV News, the WVDEP released proposed amendments to its Underground Injection Control (UIC) permitting and related regulations (47 CSR 13) on June 23, 2021 and held a public hearing on the proposed rules on July 23, 2021. Although they include substantial changes to the rules for Class 1 permits (governing hazardous waste injection wells) and Class 2 permits (for enhanced recovery of oil and gas, and disposal of produced water), the rule changes primarily consist of an entirely new section establishing a permitting program for Class 6 wells (those used for injecting carbon dioxide for the purpose of permanent geologic sequestration). Those proposed new Class 6 rules are largely modeled on EPA’s detailed “Class VI” regulations promulgated under the federal Safe Drinking Water Act (40 CFR 146).
Ten organizations (including GO-WV and several environmental/citizen groups) filed comments on the draft amendments, and a few of their representatives spoke at the hearing. By letter dated July 23, 2021, the WVDEP released copies of the written comments it received, along with its responses. There was a total of 10 comments that the WVDEP considered to be meritorious enough to alter the proposed rule language in minor ways, almost all of which consisted of typographical errors (along with the elimination of the use of Roman numerals for identifying the “classes” of permits). The final agency-approved rule proposal was filed with the Legislative Rule-Making Review Committee on July 30, 2021 (incorporating most, but not all, of the edits mentioned in the WVDEP’s July 23 letter).
As expected, most of the comments centered on the proposed Class 6 UIC permit provisions. In this regard, the WVDEP acknowledged that it is seeking to incorporate the Class 6 provisions (new section 13) so that the approved regulations may be included as a part of an “Application for Substantial Program Update” to be filed with the EPA, requesting that WVDEP be granted primacy over the Class 6 UIC well permit program. However, for the most part the WVDEP found that concerns raised by commenters pertaining to this aspect of the regulations either addressed matters within the agency’s discretion under the rules as drafted or exceeded the scope of the UIC program. Those topics deemed to be beyond the scope of the regulations include pore space ownership (or “subsurface trespass”) concerns, enhanced set-back requirements for Class 6 projects located near sensitive areas, “liability for accidents,” and the potential transfer of liability to the State for a completed CO2 sequestration site.
The WVDEP did address two Class 6-focused comments. First, it noted that the Division of Water and Waste Management has tentatively agreed to the terms of a Memorandum of Understanding (MOU) with the West Virginia Geological and Economic Survey (WVGES) to review each application for a Class 6 well permit related to geologic matters, including seismicity. Although the WVDEP believes “the likelihood of induced seismicity is low,” its application for primacy over the Class 6 program will specify that no Class 6 permit application will be considered for approval until after such a WVGES review has been completed. Second, the WVDEP stated that it will await approval of primacy over the Class 6 well permit program, and some actual experience with processing Class 6 well permit applications, before it considers whether to seek a supplemental source of funding for the additional administrative burdens imposed by that program.
In short, the WVDEP’s proposal to amend its UIC regulations to incorporate the Class 6 UIC permit program, which is an important undertaking and will be a key part of application for primacy over that program, is moving along in the rule-making process. However, vesting authority in the WVDEP to issue such permits in West Virginia will almost certainly not be sufficient in and of itself to incentivize the development of carbon dioxide injection and sequestration projects of any significant size.
As other states have done (e.g., North Dakota, Texas), it is reasonable to expect that the West Virginia Legislature will need to enact statutes establishing some fundamental property and liability principles that will govern this new industry before any organization will seek a Class 6 permit to construct a sequestration facility here. Given the number of recent federal legislative proposals that promote the use of some form of carbon capture and sequestration as an important part of the country’s evolving energy policy, and the substantial additional funding that will presumably be available to support such projects, it would appear there is no time to waste in developing those complementary laws.
Click here to view the article online in the November issue of GOWV News.
Renewables Law Blog
(By Bruce Rudoy)
NextEra Energy Inc.’s CEO, Jim Robo, has pushed Congress to extend clean energy tax credits as the company announced record renewables contracts and a major hydrogen project yesterday. Robo said odds are “reasonably high” of an extension if a consensus can be reached on what would be in the reconciliation bill. There is wider support in Congress to expand clean energy tax credits compared to the proposed $150 billion Clean Electricity Performance Program or carbon pricing. Other proposals have included a broad clean energy tax overhaul that some large energy companies say they support. “If something happens there, we feel good about the fact that there will be a long-term extension of the credits,” Robo said, adding that he foresees tax policy support for hydrogen and energy storage investments. “It would be very constructive for us.” As one of the world’s largest renewable energy developers, NextEra has a lot to gain if the Biden administration is successful in financially encouraging wind, solar and other technologies to cut U.S. power sector emissions in half by 2030. President Biden has set the goal of decarbonizing the grid by 2035. “We are increasingly thinking about ourselves as the company that’s going to lead not only the clean energy transformation of the electric grid but really the clean energy transformation of the U.S. economy and the decarbonization of the U.S. economy,” he said. The way Robo sees it, a low-emissions grid is critical to decarbonizing the transportation and industrial sectors. The falling costs of renewable resources combined with utility, corporate and state goals aimed at cutting emissions are driving large-scale projects nationwide. NextEra’s renewable energy unit signed a record 2,160 megawatts of solar, wind and storage projects during the third quarter, the company said during a conference call with Wall Street analysts. This includes 1,240 MW of new wind projects, the largest amount signed during a three-month period in the company’s history, said Rebecca Kujawa, NextEra’s chief financial officer. Even with the future of tax credits in play, NextEra now has more than 18 gigawatts of signed contracts in its development queue, including more than 7,600 MW worth of projects post-2022.
Electric companies nationwide are targeting hydrogen as a new option for emission-free electricity. Kujawa yesterday said NextEra has inked a deal to build a 500 MW wind project designed to power a green hydrogen fuel cell company. “Green” hydrogen is made from water and renewable electricity. That company wants to build a hydrogen electrolyzer nearby and use the wind power to meet up to 100 percent of its load requirements, Kujawa said. The hydrogen produced would be sold to commercial and industrial end-users to replace their current electricity that comes from other forms of hydrogen and fossil fuels, she said. The goal is to further accelerate the decarbonization of the industrial and transportation sectors, she said. Electric companies are eying expanded used of hydrogen during the later part of the 2020s and the next decade, Kujawa said, because it’s likely that long-duration storage will be developed by then. The transportation sector may be able to take advantage of green hydrogen earlier, however, she said. “The big question mark would be whether or not there’s a hydrogen production tax credit ultimately, in the final reconciliation bill,” she said. She said the $3-a-kilogram PTC “really closes the gap” between natural gas-based hydrogen and green hydrogen. That would create more opportunities to replace gas-based hydrogen with green hydrogen and expand renewable energy options. “We’ll know a lot more in January once we see the final package, if there is one,” she said.
E&E News | Article | NextEra announces record renewables, major ‘green’ hydrogen project (politicopro.com)
Tags: decarbonizing, electricity, emission free electricity, Hydrogen, renewable energy
The Legal Intelligencer
(by Anna Jewart)
The requirements of a municipal zoning ordinance are strictly applied, and landowners must comply with the express use and dimensional limitations applicable in the zoning districts in which their properties are located. Landowners wishing to stray from the regulations of that district are usually forced to request relief in the form of a variance, the standards for the granting of which are quite rigorous. However, Article VII of the Pennsylvania Municipalities Planning Code, (MPC), 53 P.S. Sections 10701-10713, authorizes municipalities to enact, amend and repeal provisions within a zoning ordinance fixing standards and conditions for a “planned residential development” (PRD), a form of land development intended to offer an alternative to traditional, cookie-cutter zoning. The opinion of the Commonwealth Court in Gouwens v. Indiana Township Board of Supervisors (Gouwens II), offers an opportunity to revisit the foundations of PRD regulation and to explore the requirements for the tentative approval of a PRD. See Gouwens v. Indiana Township Board of Supervisors, Nos. 544, 992-994 C.D. 2020, 2021 (Pa. Cmwlth. July 8, 2021), publication ordered (Sept. 7, 2021)(Gouwens II), on appeal following remand of Gouwens v. Indiana Township Board of Supervisors, Pa. Cmwlth., No. 1377 C.D. 2018, (filed June 25, 2019), publication ordered (Sept. 7, 2021) (Gouwens I).
A PRD is a larger, integrated residential development that may not meet the use and dimensional standards normally applicable in the underlying zoning district. The idea behind PRD regulations is to create a method of approving large developments which overrides traditional zoning controls and permits the introduction of flexibility into their design. PRD provisions are intended to address a growing demand for housing of all types and design by promoting and encouraging flexibility in land-use regulation, innovation in residential design and layout, and more efficient use of land and public services, while insuring development is carried out under administrative standards and procedures that prevent undue delay. Although PRD regulations represent an opportunity for departure from the terms of the zoning ordinance, they must be based on and interpreted in relation to the statement of community development objectives of that ordinance and must contain certain provisions.
When considering PRD applications, a municipality is required to meet procedural requirements distinct from those imposed upon typical zoning applications. A governing body or planning agency reviewing a planned residential development application must hold a public hearing, and thereafter grant outright or conditional “tentative approval,” or deny the same. The tentative approval of a PRD overrides the zoning ordinance requirements as to that location, and effectively amends the zoning map, pending final approval.
When a PRD has been tentatively approved, the municipality must communicate the decision in writing to the applicant within 60 days following the conclusion of the hearing or 180 days after the date of filing of the application, whichever occurs first. Pursuant to Section 709 of the MPC, 53 P.S. Section 10709, a written decision on a PRD application must include not only conclusions, but also findings of fact and reasons supporting the tentative approval or denial of the application. The MPC expressly requires the decision set forth with particularity in what respect the plan would or would not be in the public interest, including, but not limited to: the extent to which the plan departs from zoning and subdivision regulations otherwise applicable to the property; the purpose, location and amount of common open space proposed; and the manner in which the design of the plan does or does not provide adequate control over vehicular traffic. As outlined in Gouwens II, a municipality’s tentative approval of a PRD may be fatally flawed if it fails to clearly articulate how the plan meets the specific criteria as well as the purpose described in the zoning ordinance.
In Gouwens I, the previous decision of the Commonwealth Court prior to remand, a developer filed an application in Indiana Township, Allegheny County (township), for a PRD consisting of 91 townhouses (plan). In January 2018, the Township Board of Supervisors (board) tentatively approved the plan, despite the fact certain items did not strictly conform to the PRD provisions in the township zoning ordinance (ordinance). In particular, certain details related to the variety of housing, the percentage of the project dedicated to common open space, and the length of a cul-de-sac did not adhere to ordinance requirements. Following the township’s determination, objectors appealed to the trial court, alleging in part that the plan did not meet ordinance requirements and the board’s decision was inadequate under the MPC.
On appeal, the trial court affirmed the tentative approval without taking on additional evidence. objectors again appealed to the Commonwealth Court, which agreed that the Board did not comply with the requirement in Section 709(b) of the MPC that its determination explain how the plan responds, or fails to respond, to specific enumerated ordinance criteria. Consequently, the matter was remanded to the board with directions to issue a new decision with appropriately rendered findings of fact and reasons for the grant of the tentative approval. On remand the board issued a revised decision in support of its grant of tentative approval of the plan. Objectors again appealed to the trial court which again affirmed, and objectors appealed to the Commonwealth Court once more.
On appeal in Gouwens II, the objectors argued that the board’s revised decision still failed to adequately support its determination. The first issue involved whether the plan’s proposal to include three townhouse designs but no other types of housing met the ordinance requirement that a PRD may be approved “if and only if they accomplish” certain purposes, including providing a “variety in the type, design and arrangement of housing units.” The board alleged that the purpose of this requirement was to promote a variety of housing within the township, rather than within the PRD itself, which the court rejected as not reasonable or consistent with the plain language of the ordinance.
The court then turned to whether the Board failed to adequately support its conclusions that the plan met two of the public interest criteria regarding common open space and internal traffic design. As noted above, these criteria are mandated by the MPC and must be adopted in some form within a zoning ordinance’s PRD provisions. Addressing the open space issue first, the court determined that while 60% of the property was proposed to be “open space,” much of it was either to be used for stormwater management, or was located on steep slopes which the developer described as “passive open space,” to be viewed but not used recreationally. The court noted the term “common open space,” as defined in the MPC and ordinance, has been interpreted as a means to ensure the PRD contains mechanisms to provide greater opportunity for recreation and to provide for the conservation and more efficient use of open space ancillary to dwellings. The court rejected the assertions of the developer, adopted by the board, that “passive open space” or portions used for stormwater management constituted “common open space” as defined by the ordinance. It therefore determined the board’s conclusion that the plan met this requirement constituted legal error and an abuse of discretion.
The third issue involved the length of a cul-de-sac proposed to be located within the plan. The ordinance’s PRD requirements stated a PRD proposal must ensure the “physical design of the [PRD] adequately provides for internal traffic circulation and parking …” and requires the “dimensions and construction of … streets … within the PRD will comply with the standards of the township at the time the application is approved.” The township had enacted a “Cul-de-Sac Ordinance” that required cul-de-sacs be no longer than 800 feet including turn-around. In reviewing the plan, the board granted modification of the Cul-de-Sac Ordinance in order to permit a cul-de-sac which exceeded 800 feet. The court found the board had erred by willfully and capriciously disregarding competent and relevant testimony related to the safety issues posed by the length of the cul-de-sac. It further found the board’s decision to grant the modification of the 800-foot limit, and the determination the plan met the adequate traffic circulation requirement, to be legally insufficient and an abuse of discretion.
Because the plan was found to not comply with the requirements of the zoning ordinance, the board’s grant of tentative approval was found to be in error and the trial court’s affirmance of the same was reversed. The Gouwens I and II decisions underscore that while in concept PRDs are intended to encourage flexibility in use and design, that flexibility is constrained by the express requirements of the MPC and underlying zoning ordinance.
For the full article, click here.
Reprinted with permission from the October 21, 2021 edition of The Legal Intelligencer© 2021 ALM Media Properties, LLC. All rights reserved.
The PIOGA Press
(by Kevin J. Garber, Sean M. McGovern and Jean M. Mosites)
On September 14, the Sierra Club, PennFuture, Clean Air Council, Earthworks and other groups submitted two parallel rulemaking petitions to Pennsylvania’s Department of Environmental Protection (DEP) asking the Environmental Quality Board (EQB) to require full-cost bonding for conventional and unconventional oil and gas wells, for both new and existing wells. The petitions do not address or consider the permit surcharges and other funding mechanisms for plugging wells, including the federal infrastructure bill that is expected to provide millions of dollars to plug abandoned wells.
Background
The Pennsylvania General Assembly addressed and increased bonding in 2012. Under Act 13, well owners/operators are required to file a bond for each well they operate or a blanket bond for multiple wells. Currently, the bond amount for conventional wells is $2,500 per well, with the option to post a $25,000 blanket bond for multiple wells. 72. P.S. §1606-E. For unconventional wells, the current bond amount required varies by the total well bore length and the number of wells and is limited under the statute to a maximum of $600,000 for more than 150 wells with a total well bore length of at least 6,000 feet. 58 Pa.C.S. §3225(a)(1)(ii). EQB has statutory authority to adjust these amounts every two years to reflect the projected costs to the Commonwealth of plugging the well.
Proposed changes to bond amounts
The petitioners contend that a lack of full-cost bonding has resulted in the abandonment of thousands of wells and that such wells pollute the environment and adversely affect the health of communities, and allege that the EQB has an obligation to increase bond amounts pursuant to the petition under the Environmental Rights Amendment. Pa. Const. art. I, § 1 27. Petitioners argue that increased bond amounts would encourage operators to plug nonproducing wells or provide funds for the state to plug wells if an operator does not plug them.
The petitioners rely upon the EQB’s authority to adjust a well’s bond “every two years to reflect the projected costs to the Commonwealth of plugging the well” (58 Pa.C.S. § 3225(a)) to propose a dramatic increase in bond amounts, applying the increases retroactively.
Petition for full-cost bonding for conventional wells. The petition for conventional well bonding seeks to amend 25 Pa. Code § 78.302.
The petition requests the bond increase from $2,500 to $38,000 per well and the blanket bond increase from $25,000 to the sum of the applicable individual bond or security amount required for each well. For example, a blanket bond for 10 wells at $38,000 per well would total $380,000. The petitioners contend that the proposed bond amount is supported by an expert analysis of average well plugging costs from 1989 to 2020. The expert report concludes that the bond should be raised to $25,000 and $70,000, for conventional and unconventional wells respectively. The petition notes, however, that $38,000 is in line with DEP’s estimate of $33,000 for its average historical cost of plugging abandoned/ orphaned conventional wells.
The amendment requested would apply to new as well as existing wells drilled after April 17, 1985. The amendment also would require DEP to report to EQB every two years (four years, if two is not feasible) whether EQB should adjust the bond amount.
Petition for full-cost bonding for unconventional wells. The petition asks EQB to adopt a new regulation for unconventional wells in 25 Pa. Code Chapter 78, which would mirror an amended regulation for conventional wells, even though 25 Pa. Code § 78a.302 already exists and would contradict the proposed new regulation.
The petitioners want EQB to increase the bond from the current range, which starts at $4,000 per well, to $83,000 per unconventional well. Blanket bonds would equal the sum of the applicable individual bond or security amount required for each well. For example, a blanket bond for 10 wells at $83,000 per well would total $830,000. The petitioners rely on substantially the same analysis and rationale used in their petition for conventional wells to support the increased bond amounts.
Like the petition for conventional wells, the regulation would apply to new and existing unconventional wells drilled after April 17, 1985, and would require DEP to report to EQB every two years (four years, if two is not feasible) whether EQB should adjust bond amounts.
What happens next?
Under EQB’s Petition Policy (25 Pa. Code Chapter 23), DEP must determine whether the petitions are complete and if they request an action that EQB can take without conflicting with federal law. If DEP determines the petitions meet the above conditions, it will inform EQB of the petition and the nature of the request. The petitioners may make a brief oral presentation at the next EQB meeting occurring at least 15 days after the department’s determination, and DEP will make a recommendation whether the EQB should accept the petition.
Babst Calland is tracking these petitions and subsequent actions taken by DEP and the EQB. If you have questions regarding the potential regulatory changes described above, please contact Kevin Garber at 412-394-5404 or kgarber@babstcalland.com; Sean McGovern, 412-394-5439 or smcgovern@babstcalland.com; or Jean Mosites, 412-394-6468 or jmosites@babstcalland.com.
For the full article, click here.
Reprinted with permission from the October 2021 issue of The PIOGA Press. All rights reserved.
Smart Business
(by Sue Ostrowski featuring Peter Schnore)
COVID-19 has had a dramatic impact across the board, creating economic uncertainty and having an adverse effect on commercial property values that continues to this day. In Allegheny County, effects are perhaps most pronounced in the office market, and in particular in Class B downtown Pittsburgh office space, but no commercial property type with indoor space has been immune, says Peter Schnore, shareholder at Babst Calland.
“Tenants’ initial response to COVID was a wait-and-see holding pattern with respect to whether they were going to renew leases or move to new space,” says Schnore. “As a result, many landlords have had to dig deep to keep and attract tenants by offering unprecedented periods of free rent or tenant improvement allowances, creating an adverse impact on net operating income. The unknowns surrounding COVID are still affecting nearly all commercial property types, not just office properties.”
Smart Business spoke with Schnore about how COVID is impacting the value of commercial real estate and why it may be a good idea to review your recent tax assessment.
What is the current situation for owners of commercial real estate?
Future uncertainty while we remain in the throes of COVID is driving up risk of commercial property investment, driving down commercial property values. Landlord concessions — in some cases multiple years of free rent or triple-digit tenant improvement allowances — are increasing operating expenses and reducing short-term income, resulting in an immediate and substantial adverse impact on value. As a result, many properties that house office, retail, restaurants, hospitality and others now have assessments that are higher than the current value of the real estate merits.
COVID-19 has also impacted business owners who own their own space as they question whether they actually need the amount of space they own. If your space has been sitting partially empty for a year and a half now because employees are working remotely, do you really need to hang on to it? That is adding to the glut of available space on the market and driving down value, including the value of owner-occupied space.
Why might your assessment appear low but actually be high?
In Allegheny County, the last reassessment was in 2012 — thus, the assessment on your tax bill represents value from nearly a decade ago. Pennsylvania has no regular reassessment schedule, and it is easy to forget taxpayers have an annual right to challenge assessments. Each year, the state publishes an equalization ratio for counties based on a comparison of the county’s most recent years’ sales data vs. the sold properties’ assessments. In a properly filed appeal, this ratio can be applied to the property’s current fair market value to set the assessment. Because counties are not required to regularly reassess, the financial benefit of a decreased assessment may be enjoyed for many years.
Importantly, for Allegheny County, there has been a sudden and significant drop in this ratio from last year, the most significant drop since the last reassessment. That makes 2022 a particularly good year for owners to evaluate whether an appeal is warranted.
Owners of commercial properties in Allegheny County have until March 31, 2022, to initiate an appeal; for owners of property in the remainder of Pennsylvania, annual appeal deadlines are between Aug. 1 and Oct. 3, 2022, depending on the county.
What is the appeals process?
Start by gathering your income and expenses for the last three years. Work with an attorney to discuss what the income of the property has been and the expected rate of return. Whether an income-producing investment property or an owner-occupied facility, an attorney, often with the assistance of the right appraiser, can evaluate the current value and help determine whether an appeal is warranted.
Although you can’t file an appeal in Allegheny County until Jan. 1, 2022, talk to an attorney now. Getting your information in order allows you to be prepared when the filing period begins. Property taxes are often the most significant operating expense for an income-producing property, so it’s important to evaluate your situation, with the help of an attorney, to make sure you are not paying more than you should be.
For the full article, click here.
For the PDF, click here.
Renewables Law Blog
(By Ashley Krick)
On September 8, 2021, the Department of Energy (DOE) released its Solar Futures Study providing a blueprint for the role of solar energy in decarbonizing the nation’s power sector. The 310-page Study outlines a future in which solar provides 40% of the nation’s electricity supply by 2035 through cost reductions, technological improvement, rapid deployment, and supportive policies. And, with the electrification of buildings and the transportation sector, solar could also power 30% of all building end uses and 14% of transportation end uses by 2050.
The Study identifies several policy initiatives needed to support the deployment of solar at this scale, including decarbonization targets, R&D investments and cost reductions, changes to wholesale electricity market regulation, and transmission development, to name a few. In order to meet the 40% by 2035 goal, the Study estimates that the U.S. must install an average of 30 GW of solar capacity per year between now and 2025 and 60 GW per year from 2025-2030, with a total of 1,000 GW of solar deployed by 2035. If the solar industry sees this level of growth, the Study estimates that the industry could employ up to 1.5 million people by 2035. The Study also highlights the important role that battery storage and demand-side management will play given that solar power varies based on daily and seasonal patterns.
With solar power currently providing approximately 3% of the nation’s electricity supply, the DOE’s 40% goal will be contingent on many factors supporting the industry in the coming years, including cost reductions, supportive policies, and widespread deployment.
Tags: Department of Energy, DOE, renewable, renewable energy, solar, solar energy
The PIOGA Press
(by Lisa Bruderly)
The U.S. Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers announced, on September 3 that they had halted implementation of the current definition of “waters of the United States” (WOTUS) effective immediately and reverted back to the pre-2015 definition until further notice. The switch follows an August 30 order from the U.S. District Court for the District of Arizona, which remanded and vacated the definition of WOTUS promulgated by the Trump administration in 2020 (commonly referred to as the Navigable Waters Protection Rule (NWPR)) in the case of Pascua Yaqui Tribe v. U.S. Environmental Protection Agency. While there was speculation that the court’s vacatur could be narrowly interpreted to apply only to states where the plaintiffs in the case were located (i.e., Arizona, Minnesota, Washington and Wisconsin), EPA and the Corps are applying the change in WOTUS definition nationwide.
Importance of the definition of WOTUS
The definition of WOTUS identifies which waters are federally-regulated under the Clean Water Act (CWA), and therefore determines when a federal permit is required for projects (e.g., pipelines, access roads, well pads) that involve dredging or filling of a waterbody (i.e., a Section 404 permit). The WOTUS definition also affects federal spill reporting and spill prevention planning.
With regard to Section 404 permitting, the more expansive the definition of WOTUS, the more waters that are federally-regulated. The extent of WOTUS impacts resulting from a project determines whether an individual or a general Section 404 permit is required, with the process for obtaining an individual permit typically resulting in more Corps involvement, delay and expense.
Significance of the change in WOTUS definition
When the Trump administration promulgated the NWPR in 2020, environmental groups criticized and challenged the new WOTUS definition, claiming it was too narrow and did not federally regulate enough types of waters. For example, the NWPR did not federally regulate ephemeral streams or other waters based on Justice Anthony Kennedy’s “significant nexus” test, introduced in the seminal Supreme Court opinion Rapanos v. United States and Carabell v. United States.
By vacating the NWPR, WOTUS are again described under a definition promulgated in the late 1980s and interpreted in subsequent EPA/Corps guidance that was issued following the Rapanos and Solid Waste Agency of Northern Cook County (SWANCC) v. United States Supreme Court decisions. This earlier definition and subsequent interpretations are generally considered to be more expansive and inclusive than the NWPR. Subsequently, reverting to this earlier definition is expected to result in more waters being federally regulated.
Biden administration’s plan to revise the WOTUS definition
President Biden has always intended to revise the definition of WOTUS. In his first week in office, he asked EPA and the Corps to consider revising or rescinding the current definition. On June 9, EPA and the Corps announced their intent to revise the WOTUS definition “to better protect our nation’s vital water resources.” The agencies identified a two-step rulemaking process, which would first restore protections in place prior to 2015 with updates to reflect relevant Supreme Court decisions, and a second rulemaking that would continue to “refine and build” on the prior definition. In addition to developments in science, EPA and the Corps identified that the new rulemaking would consider, among other things, the effects of climate change and input received from disadvantaged communities with environ-mental justice concerns.
On the same day, the Department of Justice (DOJ) filed a motion to request remand of the NWPR to EPA and the Corps. DOJ also asked courts to stay judicial challenges to the current WOTUS definition while the Biden administration reconsidered the definition. However, the court in the Pascua Yaqui Tribe case, instead remanded and vacated the NWPR definition. This vacatur prompted the EPA/Corps decision on September 3 to revert to the pre-2015 WOTUS definition.
Anticipated impact and timing
While the WOTUS definition proposed by the Biden administration will certainly be more expansive than the NWPR, it is yet unclear how far the pendulum will swing with the proposed rulemakings. The agencies have expressed their intent to develop a “durable” definition of WOTUS based on input from “diverse perspectives and based on an inclusive foundation.” To start this process, the agencies solicited pre-proposal written recommendations about how to define WOTUS and implement this definition. In addition, the agencies held several public meetings, during which the public could pro-vide verbal recommendations. More public engagement is anticipated, including 10 geographically focused roundtables for stakeholders.
Among other things, the Biden administration’s definition of WOTUS will most likely regulate waters (including ephemeral streams) that are considered to have a “significant nexus” to traditionally navigable waters. This definitional change is expected to require more energy infrastructure projects to obtain federal CWA permitting, thus extending the time and increasing cost of permitting for many projects that impact waters. No timeframe for the new rulemakings has been announced. While EPA’s Spring 2021 Unified Agenda of Regulatory and Deregulatory Actions identified revision of the definition of WOTUS as a “long-term action,” with unspecified dates for the proposed and final actions, it is unclear whether this most recent change in WOTUS definition will change the schedule for proceeding with the proposed rulemakings.
Babst Calland will continue to track developments related to the federal regulation of waters and will provide necessary updates. If you have any questions or would like any additional information, please contact Lisa M. Bruderly at 412-394-6495 or lbruderly@babstcalland.com.
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Reprinted with permission from the September 2021 issue of The PIOGA Press. All rights reserved.
RMMLF Water Law Newsletter
(By Lisa M. Bruderly)
On June 25, 2021, the U.S. Army Corps of Engineers (Corps) released the finalized Pennsylvania State Programmatic General Permit-6 (PASPGP-6). See Corps, Special Pub. Notice No. SPN-21-28 (June 25, 2021). Going into effect on July 1, 2021, the permit will expire in five years, on June 30, 2026. Under section 404 of the Clean Water Act, 33 U.S.C. § 1344, and section 10 of the River and Harbor Act of 1899, 33 U.S.C. § 403, PASPGP-6 authorizes work in “waters of the United States” (WOTUS) within Pennsylvania that causes no more than minimal adverse environmental effects. State authorization under the Pennsylvania Department of Environmental Protection’s (PADEP) chapter 105 regulations (typically, a general permit or a waiver) is still required for most activities authorized by PASPGP-6.
For projects that meet the threshold criteria, PASPGP-6 typically provides a quicker and less complicated alternative to obtaining an individual section 404 permit. The permit identifies reporting activities, which require Corps review and coordination, as well as non-reporting activities, which can be authorized by PADEP without Corps involvement. Compensatory mitigation, at a minimum one-to-one ratio, will typically be required for impacts to WOTUS that are greater than 0.1 acre and are a reporting activity.
PASPGP-6 updates include new eligibility and reporting guidelines. Key changes from PASPGP-5 to PASPGP-6 include:
- The 1.0 acre eligibility threshold for temporary and/or permanent impacts to WOTUS was changed to an eligibility threshold for permanent loss, both direct and indirect, of 0.5 acre of WOTUS and 1,000 linear feet of jurisdictional stream channel.
- The eligibility threshold for temporary impacts to WOTUS, including jurisdictional wetlands, was changed from 1.0 acre to unlimited acreage, provided the work is determined to result in no more than minimal impact.
- Eligibility thresholds are determined based on the impacts of each “single and complete project,” as determined by the Corps. Reporting thresholds are determined based on the impacts of the overall project, and not the single and complete project.
- The reporting thresholds of 0.10 acre of permanent wetland conversion and 0.5 acre of temporary and/or permanent impacts to WOTUS were replaced with thresholds of 0.25 acre of permanent impacts to WOTUS, 250 linear feet of permanent impacts to juris-dictional stream channel, and 1.0 acre of temporary impacts to WOTUS.
- Certain formerly ineligible section 10 waters in the Corps’ Pittsburgh District are now eligible for the PASPGP. Except for work that qualifies for authorization under PADEP Waivers 10 and 12, any regulated work within these waters is a reporting activity and requires Corps review.
- Language was added stating that all waters and wetlands are assumed to be WOTUS in the absence of an approved jurisdictional determination.
Grandfathering provisions are in place for activities that were permitted (or intended to be permitted) under PASPGP-5. Generally, verified reporting activities under PASPGP-5 that comply with the terms and conditions of PASPGP-6 are authorized by PASPGP-6. In addition, all previously authorized non-reporting activities under PASPGP-5 that meet the terms and conditions of PASPGP-6 are reauthorized without further notice to the Corps. Activities that obtained PASPGP-5 authorization by June 30, 2021, have a valid state authorization, and commenced construction (or had construction work under contract to commence) prior to June 30, 2021, have until June 30, 2022, at the latest, to complete the regulated work under the terms of the PASPGP-5 authorization and PADEP authorization. The Corps has provided additional guidance on grandfathered activities and other aspects of PASPGP-6 on its websites for the applicable districts.
Copyright © 2021, The Foundation for Natural Resources and Energy Law, Westminster, Colorado
Smart Business
(by Sue Ostrowski featuring Kevin Douglass)
You’ve just discovered someone is stealing from your company. Worse yet, what if a high-level person — a partner, an owner, a director or an officer — is involved?
“Particularly if the theft involves a substantial amount of money, an accomplice outside of your business, or if criminal investigatory agencies are involved, you should consult with an attorney about how best to interact with authorities, respond to possible subpoenas, conduct an internal investigation and craft a consistent message to employees and customers,” says Kevin Douglass, a shareholder at Babst Calland.
Of course, every employee with access to company financials poses a risk, and every company should take steps to protect itself.
Smart Business spoke with Douglass about how to keep your business from falling prey to a theft — and what to do if it happens anyway.
How can a company protect its assets?
Employees with the greatest access to the company’s finances are in the best position to take advantage. The easiest way to prevent stealing is to ensure that there are checks and balances built into your company’s financial system, regardless of the trust you have in employees or colleagues responsible for managing that system.
The easiest way to do that is to require that more than one person monitor the company’s cash flow, including approval or review of checks, credit and debit card usage, petty cash and invoicing. If that is not possible, consider an audit every couple of years by an independent accounting firm and provide them with full access to the company’s internal financial records.
An individual may only take small amounts in the beginning, increasing the amount and frequency as they gain confidence. And to cover their tracks, they likely will delete, alter or fabricate financial recordkeeping. If undetected, embezzlement can last years, or even decades, and add up to thousands or millions of dollars. Once someone starts down this path, they rarely stop until they are caught.
Company theft happens more often than you might think. No company wants to publicize the fact that an employee is stealing. Often, once detected, a business may choose to quietly terminate the employee and sweep the situation under the rug to avoid negative attention. But that does not mean that it did not happen.
Once theft is discovered, how should a company proceed in the immediate aftermath?
First, you must be certain the person has actually stolen from the business. As quickly as possible, perform an internal investigation and, depending on the complexity and scope, consider hiring an independent investigator or accountant to ensure your investigation is credible and comprehensive.
You also need to take steps to prevent further harm to your business, including likely termination of the employee, denying the offender access to the company’s accounts and finances, as well as other company records and property, including laptops and company phones. An employee under suspicion may intentionally delete computer files and/or alter records, so decisive and immediate action is necessary. If the individual has signature authority on a bank account, you need to remove that authority or consider closing the account.
After a theft is discovered, consider whether and how to communicate with other employees, customers and the public. Can you keep this quiet? Should you keep it quiet? What is the right messaging?
In addition, you must decide whether to report the theft and seek recovery of the stolen funds. Is a customer a victim via fabricated invoices or other means? If yes, consider your obligations with counsel given the company’s unwitting role in the theft.
How can an attorney help you navigate the crisis?
It is critical to receive sound advice as quickly as possible when confronted with a theft of company assets involving an owner or employee. Counsel can guide you through this stressful process, ensuring proper communication and messaging with governmental authorities, employees and customers, as well coordinating the internal investigation. In addition, counsel can help navigate the complex contractual issues that may arise in order to sever ties with an offending owner.
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EmTech Law Blog
(by Ashleigh Krick)
On August 13, 2021, the National Highway Traffic Safety Administration’s (NHTSA) Office of Defect Investigations (ODI) opened a Preliminary Evaluation (PE21-020) into crashes with in-road or roadside first responders involving Tesla vehicles where Autopilot was confirmed to have been engaged during the approach to the crash. NHTSA cites to 11 crashes involving emergency vehicles that involved 17 total injuries and 1 fatality. The earliest cited crash is the January 22, 2018, crash in Culver City, California, where a Tesla Model S rear-ended a firetruck parked along a California freeway. A National Transportation Safety Board investigation into the crash found that the driver was overly reliant on Autopilot and that Autopilot allowed the driver to disengage from the driving task.
In the investigation report, ODI described Tesla’s Autopilot as an SAE Level 2 Advanced Driver Assistance System (ADAS) system “in which the vehicle maintains its speed and lane centering when engaged within its Operational Design Domain (ODD).” Even with the ADAS active, ODI noted that the driver continues to hold primary responsibility for Object and Event Detection and Response (OEDR). As such, ODI explained that the investigation will “assess the technologies and methods used to monitor, assist, and enforce the driver’s engagement with the dynamic driving task during Autopilot operation.” ODI will also evaluate Autopilot’s ODD and OEDR.
While the investigation focuses on a relatively narrow issue—the ability of Autopilot to identify and respond to parked emergency vehicles—it reinforces the Agency’s interest in crashes involving SAE Level 2 ADAS systems that are being deployed on public roads. Particularly, the Agency’s interest in how vehicle manufacturers are perhaps enforcing the driver’s engagement when these systems are activated. This investigation follows NHTSA’s recent Order requiring crash reporting for ADAS-equipped vehicles.
Tags: Advanced Driver Assistance System, autopilot, investigation, NHTSA
Babst Calland is pleased to announce that three lawyers were selected as 2022 Best Lawyers “Lawyer of the Year” in Pittsburgh, Pa. and Charleston, W. Va. (by BL Rankings). Only a single lawyer in each practice area and designated metropolitan area is honored as the “Lawyer of the Year,” making this accolade particularly significant.
Receiving this designation reflects the high level of respect a lawyer has earned among other leading lawyers in the same communities and the same practice areas for their abilities, professionalism, and integrity. Those named to the 2022 Best Lawyers “Lawyer of the Year” include:
Kevin K. Douglass, Natural Resources Law “Lawyer of the Year” in Pittsburgh, Pa.
Mark D. Shepard, Bet-the-Company Litigation “Lawyer of the Year” in Pittsburgh, Pa.
Robert M. Stonestreet, Environmental Law “Lawyer of the Year” in Charleston, W. Va.
In addition, 32 Babst Calland lawyers were selected for inclusion in the 2022 Edition of The Best Lawyers in America (by BL Rankings), the most respected peer-review publication in the legal profession:
- Chester R. Babst – Environmental Law, Litigation – Environmental
- Donald C. Bluedorn II – Environmental Law, Water Law, Litigation – Environmental
- Dean A. Calland – Environmental Law
- Matthew S. Casto – Commercial Litigation
- Frank J. Clements – Corporate Law
- Kathy K. Condo – Commercial Litigation
- James Curry – Oil and Gas Law
- Julie R. Domike – Environmental Law, Litigation – Environmental
- Kevin K. Douglass – Natural Resources Law
- Christian A. Farmakis – Corporate Law
- Kevin J. Garber – Environmental Law, Natural Resources Law, Energy Law, Water Law, Litigation – Environmental
- Norman E. Gilkey – Bankruptcy and Creditor Debtor Rights/Insolvency and Reorganization Law, Litigation – Bankruptcy, and Mediation
- Steven M. Green – Energy Law
- Lindsay P. Howard – Environmental Law, Litigation – Environmental
- Blaine A. Lucas – Energy Law, Land Use and Zoning Law, Municipal Law, Litigation – Land Use and Zoning
- John A. McCreary – Labor Law – Management
- Janet L. McQuaid – Environmental Law
- James D. Miller – Construction Law and Litigation – Construction
- Timothy M. Miller – Energy Law, Commercial Litigation, Bet-the-Company Litigation, Oil and Gas Law, Litigation – Environmental
- Jean M. Mosites – Environmental Law
- Christopher B. Power – Environmental Law, Natural Resources Law, Energy Law, Commercial Litigation, Mining Law, Oil and Gas Law, Litigation – Regulatory
Enforcement (SEC, Telecom, Energy), Litigation – Environmental, Litigation – Land Use and Zoning, Litigation – Municipal
- Joseph K. Reinhart – Environmental Law, Natural Resources Law, Energy Law, Litigation – Environmental
- Bruce F. Rudoy – Mergers and Acquisitions Law, Corporate Law
- Charles F.W. Saffer – Real Estate Law
- Mychal Sommer Schulz – Litigation – ERISA
- Mark D. Shepard – Commercial Litigation, Bet-the-Company Litigation, Litigation – Environmental
- Steven B. Silverman – Information Technology Law, Commercial Litigation
- Krista-Ann M. Staley – Land Use and Zoning Law
- Laura Stone – Corporate Law
- Robert M. Stonestreet – Environmental Law, Energy Law, Commercial Litigation
- David E. White – Construction Law, Litigation – Construction
- Michael H. Winek – Environmental Law
13 Babst Calland lawyers were also named to the 2022 Best Lawyers: Ones to Watch list which recognizes associates and other lawyers who are earlier in their careers for their outstanding professional excellence in private practice in the United States:
- Mary H. Binker – Corporate Law and Real Estate Law
- Katrina N. Bowers – Energy Law and Environmental Law
- Carla M. Castello – Commercial Litigation, Litigation – Labor and Employment and Mass Tort Litigation / Class Actions – Defendants
- Marissa A. Cocciolone – Energy Law
- Nicholas M. Faas – Administrative / Regulatory Law and Government Relations Practice
- Marc J. Felezzola – Commercial Litigation and Litigation – Construction
- Alyssa Golfieri – Land Use and Zoning Law and Municipal Law
- Sean R. Keegan – Commercial Litigation and Litigation – Labor and Employment
- Jennifer L. Malik – Land Use and Zoning Law
- James D. Mazzocco – Litigation – Environmental and Transportation Law
- Cary M. Snyder – Appellate Practice, Commercial Litigation, and Communications Law
- Joshua S. Snyder – Commercial Litigation and Energy Law
- Benjamin R. Wright – Commercial Litigation and Construction Law
Best Lawyers undergoes an authentication process, and inclusion in The Best Lawyers in America is based solely on peer review and is divided by geographic region and practice areas. The list has published for more than three decades, earning the respect of the profession, the media, and the public as the most reliable, unbiased source of legal referrals. Its first international list was published in 2006 and since then has grown to provide lists in over 65 countries.
The Legal Intelligencer
(by Krista Staley and Anna Jewart)
On June 30, 2021, Governor Tom Wolf signed Pennsylvania House Bill 1621, the Small Wireless Facilities Deployment Act as Act 50 of 2021 (“Act 50”), into law. This Act reflects years of negotiations between industry groups and municipalities over the balance of local land use authority and ease of deployment in small cell infrastructure deployment. Effective August 29th, the Act standardizes the local permitting process for small cell facilities located within municipal rights-of-way.
As demand increases exponentially for faster and more reliable wireless service, so does the demand to develop infrastructure capable of providing greater coverage and capacity. A decade ago, a single large cell tower on the outskirts of town could meet a community’s wireless voice and data service needs. However, the reliability of these large “macro cell” wireless facilities has decreased as mobile data traffic exploded. The telecommunications industry responded by developing “small cell networks” distributed throughout communities and buildings to better meet to the constant on-the-go data needs of the modern age. Instead of utilizing a single tower, possibly hundreds of feet high, small cell networks use multiple low-power antennas that connect to fiber optic cables. These small cell systems allow for greater speeds and more uniform coverage where they are deployed. However, they require a greater level of “wireless density” in order to function as intended. In other words, small cell facilities must be installed every few blocks rather than every few miles.
To achieve the desired wireless density providers have sought to utilize existing utility poles, street lights, or other structures within municipal rights-of-way. This allows for ease of installation as well as proximity to users. While the use of the right-of-way, and the existing infrastructure therein, is a convenient solution for wireless providers, the rapid development of these technologies has forced municipalities across the country to scramble to determine how to handle permits for the installation of small cell facilities within their communities. Conflicts between local zoning and land use regulations and federal law has led to confusion among local leaders, often spurred by citizen opposition and misinformation about the safety of these new technologies.
Although local governments have a certain level of control over activities within their rights-of-way, federal law, contained in Sections 253 and 332(c)(7) of the Communications Act, 47 U.S.C. §253(a), 332(c)(7)(B)(i)(II), prohibits state or local regulations that prohibit or “have the effect of prohibiting” interstate communications. This prohibition limits municipalities’ ability to regulate small cell providers through their zoning, land development, or other ordinances. In 2018, the Federal Communications Commission (“FCC”) issued a Declaratory Ruling (“Small Cell Order”) which outlined when such an effective prohibition has occurred. Act 50 largely codifies these FCC rules, but it also places certain additional burdens and limitations on municipalities within the Commonwealth that will impact how local governments process applications for the installation of small cell facilities within their rights-of-way going forward.
While the Act in large part attempts to standardize local permitting for small cell facilities, it also imposes certain requirements on wireless providers. For example, wireless providers must repair any damage to the right-of-way or other land disturbed by its activities or that of its contractors. If a provider fails to do so, a municipality may, within 30 days after written notice, perform the repairs and charge the provider for the costs plus a penalty not to exceed $500.00. Providers are also required to demonstrate that collocation on an existing structure is not possible prior to placing a new structure within the right-of-way. The Act also defines “Small Wireless Facilities” subject to its protections as facilities where each antenna is no greater than three cubic feet, and the volume of all other equipment associated with the facility is cumulatively no more than 28 cubic feet. Utility poles used for small cell facilities may not be greater than fifty feet in height.
Act 50 primarily sets requirements for how municipalities handle applications to place small cell facilities within their rights-of-way. From a zoning perspective, small cell facilities must be considered a permitted use in all areas of the municipality, except underground districts. They may still be reviewed by municipal staff in accordance with local zoning, land use, and certain other ordinances. However, municipalities may not subject small cell applicants to discretionary zoning review, such as conditional use or special exception requirements. Municipalities may require applicants to obtain permits of general applicability in order to collocate small cell facilities on existing poles, replace existing utility poles with added small cell infrastructure, or install a new utility pole with added small cell infrastructure within the municipal right-of-way.
In accordance with the 2018 FCC Small Cell Order, Act 50 limits the application fee municipalities may charge for placing a small cell facility within their rights-of-way. The Act allows up to $500.00 for an application seeking approval of up to five collocated small cell facilities, up to $100.00 for each additional collocated facility, and up to $1,000.00 for an application for a new or replacement pole. In addition, municipalities are permitted to charge a right-of-way management fee of up to $270.00 per small cell facility per year, unless they can demonstrate that a higher fee is a reasonable approximation of the actual cost to manage the right-of-way and that the fee is reasonable and non-discriminatory. These limits may be adjusted in the future if the FCC adjusts the fee levels in its 2018 Small Cell Order.
In addition, the Act establishes time limits for municipal review of applications for small cell facilities. Municipalities have only 60 days to approve or deny an application to collocate facilities and 90 days to render a decision on an application to replace or install a new pole. Failure to comply with these deadlines results in a deemed approval. Municipalities are only permitted to deny an application for certain enumerated reasons, such as interference with the safe operation of traffic control, failure to comply with their applicable codes, or failure to comply with the requirements of the Act. If approved, right-of-way occupancy permits must have an initial term of at least five years and permit two five-year renewal terms. On the other hand, the applicant must complete all permitted work within one year.
The Act does allow for a certain level of local control over application and design criteria for small cell facilities. Municipalities may adopt objective guidelines for small cell facilities regarding minimization of their aesthetic impact so long as the guidelines do not prohibit the provider’s technology or unreasonably discriminate among providers of functionally equivalent services. This includes requiring concealment measures for facilities within historic districts, as well as limitations on access to areas designed exclusively for underground cable or utility facilities. They may also adopt certain application criteria such as requiring the submission of construction and engineering drawings, documentation of approval from the pole owner, and documentation showing compliance with the municipality’s design guidelines.
If municipalities desire to amend or adopt an ordinance in compliance with the Act, including establishing permissible aesthetic guidelines or application requirements, they must do so within 60 days of the effective date of the Act. If a municipality does not do so, any applications received must be processed in compliance with the Act. Therefore, municipalities should review their ordinances for compliance with the Act and consider amendment or adoption of any permissible design or application criteria for small cell facilities prior to October 28, 2021.
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Reprinted with permission from the August 19, 2021 edition of The Legal Intelligencer© 2021 ALM Media Properties, LLC. All rights reserved.
The PIOGA Press
This is another excerpt from The 2021 Babst Calland Report, which represents the collective legal perspectives of Babst Calland’s energy attorneys addressing the most current business and regulatory issues facing the oil and natural gas industry. The full report is available online at reports.babstcalland.com/the-2021-babst-calland-report-1.
Appalachian Storage Hub
As has been chronicled in earlier editions of this white paper, the explosive growth of natural gas production from the Marcellus and Utica shale formations in the Appalachian region starting in 2010 produced strong economic gains for West Virginia, Pennsylvania and eastern Ohio for several years.
In addition, much of that gas is relatively “wet”— meaning that it has a high proportion of natural gas liquids (NGLs) such as ethane, propane, butanes and natural gasolines (pentanes) that are used as petrochemicals in various manufacturing industries. Regional leaders, seeking to capitalize on the vast natural gas resources of those shales, began to stress the importance of developing local businesses that use NGLs—rather than allowing plastics manufacturing and other uses to accrue in other areas.
In 2017, the American Chemistry Council published a report suggesting that the buildout of the petrochemical industry in Appalachia could support the construction of as many as five ethane crackers. Among other factors, the report described that a key to the development of petrochemical manufacturing presence in the area would be the establishment of an Appalachian Storage Hub (ASH) that would act as a conduit for the production and sale of NGLs, storing massive quantities of the liquids and connecting the storage facilities to end users via pipelines. U.S. Senators Shelley Moore Capito and Joe Manchin of West Virginia, along with Senator Rob Portman of Ohio, introduced legislation intended to promote the goal of establishing an ASH. In 2018, the U.S. Department of Energy’s National Energy Technology Laboratory (located in Morgantown, West Virginia, and led by Project Director Brian Anderson) published the “Ethane Storage and Distribution Hub in the United States Report to Congress,” outlining the potential benefits of an ASH and ranking the most likely methods of building such a facility based on the geology, topography and other relevant regional factors. As recently as November 17, 2020, Senator Manchin wrote to DOE Secretary Dan Brouillette, seeking an update on the department’s efforts at preparing a report addressing the proposed ASH, as called for in the Fiscal Year 2020 Energy and Water bill.
Today, we find that Mr. Anderson has been appointed as the Executive Director of the Biden’s administration Interagency Working Group (IWG) on Coal and Power Plant Communities and Economic Revitalization. The NETL website offers no discussion of planned updates to the 2018 study, and the prospect of development of an ASH backed by DOE-guaranteed loans would seem to be directly at odds with most if not all of President Joseph R. Biden, Jr.’s plans to move swiftly away from the use of fossil fuels in our energy mix. Speaking at a recent meeting of the Ohio River Valley Institute, Finance Professor Kathy Hipple of Bard College’s MBA in Sustainability program commented that the recent major shift in the plastics market away from single-use plastic products, as well as China’s 2018 decision to stop importing plastics waste and recycled material, have created considerable concerns about the growth projections for the plastics industry, which only creates a further cloud on the development of an ASH anytime in the foreseeable future.
In short, while unforeseen events have a way of changing the outlook for the natural gas industry (including NGLs), for now it appears that the development of an ASH to support a robust plastics manufacturing industry in our region is firmly on the back shelf.
Carbon capture and storage
The federal government is trying to incentivize the development of carbon capture and storage (CCS) to inject captured carbon dioxide from emissions into underground geologic formations by expanding tax credits for qualifying projects. The Bipartisan Budget Act of 2018 expanded Section 45Q of the tax code to increase the CCS project credit value (so long as the project started within seven years of enactment), reduce the minimum eligibility threshold, allow for the transfer of credit and expand the program to include carbon oxides, rather than just carbon dioxide.
In January 2021, the Treasury Department and IRS issued final regulations regarding the Section 45Q credit. These regulations provide procedures to determine adequate CCS security measures, exceptions for determining to whom the credit is attributable, procedures to allow third-party taxpayers to claim the credit, standards for measuring carbon oxide and conditions that allow smaller carbon capture facilities to be aggregated for purposes of claiming the credit.
Some states are also working together to incentivize the development of CCS projects. For example, on October 1, 2020, seven states– Kansas, Louisiana, Maryland, Montana, Oklahoma, Pennsylvania and Wyoming—signed a memorandum of understanding committing to establish and implement a regional CO₂ transport infrastructure plan. Under the MOU, the signatory states will establish a coordination group to develop an action plan that will include policy recommendations for and barriers to CO₂ transport infrastructure deployment. This action plan is set for release in October 2021.
Other states are taking more direct action. In March 2021, the North Dakota Legislature passed, and the governor signed, a bill exempting CO₂ that is either stored underground or injected into old oil fields to boost production, a process known as “enhanced oil recovery,” from sales tax. A number of CCS projects are already underway in North Dakota.
Wyoming is looking to use CCS to extend the use of traditional fossil fuels including coal. The governor of Wyoming requested a study and the state partnered with the U.S. Department of Energy to evaluate the potential opportunities for retrofitting existing power plants with CCS technology. The study showed CCS retrofits can provide significant benefits, including reduced carbon dioxide emission, reduction in consumer cost, increased employment benefits, and higher state and local revenue.
In addition to funding studies, the Department of Energy has also provided federal funding for research into air capture technologies and other CCS-related technologies. As technology and infrastructure development for both capture and transportation improves, and with the availability to tax incentives, an increase in CCS projects is anticipated in the coming years.
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Reprinted with permission from the August 2021 issue of The PIOGA Press. All rights reserved.