Under the Energy Independence and Security Act of 2007 (EISA), GSA is required to evaluate green building certification systems for use by federal agencies every five years. Recently, the U.S. General Service Administration (GSA) completed its current review and provided updated recommendations to the Secretary of Energy.
GSA sought and received extensive input in forming its recommendations, as discussed here. There has been significant controversy about the potential use of the LEED v4 – the latest version of the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) certification system, formerly identified as LEED 2012.
GSA’s recommendations include the following:
- Agencies should continue to use third-party certification systems.
- Agencies should choose between two certification systems: LEED 2009 or the Green Building Initiative’s Green Globes 2010.
- Agencies should use credits that align with federal requirements: Several agencies have identified credits within the certification systems that align with federal green building requirements. In using a green building certification system, agencies should focus on credits that help meet federal requirements.
- Agencies should select only one system on an agency, bureau or portfolio basis.
- GSA should establish a process to keep current with revisions to the rating systems: GSA proposes to work with other agencies within one year after a new system is finalized to discuss the revisions and whether the federal government should adopt the newest version.
- The federal government should participate in the ongoing development of green building rating systems: Continuing to work with the systems will help them better align with the government’s needs.
Of particular interest is (1) the identification of Green Globes 2010 as an alternative to LEED, and (2) the apparent decision to put off to another day the controversial decision of whether to adopt LEED v4. It is likely that the second question will be the subject of spirited debate over the next year.
Vicki R. Harding, Esq.
The Department of Energy’s National Renewable Energy Laboratory (NREL) published its 2012 Renewable Energy Data Book on November 23, 2013, reporting significant growth, particularly for wind and solar photovoltaic (PV) technologies. Compared to 2011, cumulative installed wind capacity grew nearly 28% and PV capacity jumped 83% on the same measure. In 2012, renewables accounted for 14% of total installed capacity, 12.2% of total electric power generation, and more than 56% of all new electrical capacity installations in the U.S. And global trends are strong as well: installed renewable electricity, including hydropower, doubled between 2000 and 2012.
Jane C. Luxton, Esq.
On November 18, 2013, in a non-precedential decision, Linder v. SWEPI, LP, 2013 U.S. App. LEXIS 23196 (3d Cir. Nov. 18, 2013), the Third Circuit Court of Appeals affirmed a district court’s decision that the lessee did not surrender non-unitized acreage and that the oil and gas lease did not terminate as a result of a brief delay of a rental payment.
During the primary term of the lease, the lessee unitized 137 of the 338 leasehold acres. The lease apparently did not have a Pugh clause that permitted the non-unitized acreage to be released at the end of the primary term. Instead, the lease provided that if the unitized acreage was less than 50 percent of the total leasehold acreage, delay rentals would continue to be due on the non-unitized acreage.
The lessor argued that at the end of the primary term the unitization of less than 50 percent of the leasehold acreage resulted in two leasehold parcels. The Court rejected the argument, finding that the lease continued in its entirety as a result of the productive activity on the parcel and that the lease required a rental payment to be paid for the non-unitized acreage. The lessor also argued that the late payment of this rental terminated the lease. The Court disagreed and found that the lease did not include a “time-is-of-the-essence” clause and thus a brief delay in payment did not result in a material breach that would terminate the lease.
Justin G. Weber, Esq.
In a recently released analysis, Deloitte provides an upbeat summary of the high growth occurring in infrastructure projects needed to support the hydraulic fracturing and horizontal drilling – or “fracking” – boom across the country. A sector once considered mature and slow-growth has instead seen new demand for expansion in pipeline, processing, storage, and transport capacity. Deloitte predicts that new investment on the order of $200 billion will be needed by 2035, and that investors will be well-rewarded, given that average profit margins are three times greater than interest expense, partly due to use of Master Limited Partnerships. Noting the strong growth potential in a market with these opportunities, the report nonetheless cautions that small and medium-sized companies will face challenges compared to larger enterprises in terms of access to financing, ability to cover the breadth of the value chain, and competitiveness in new and emerging shale plays. These realities will favor midstream majors for the most significant gains, but will still leave room for niche opportunities for innovative, nimble smaller companies.
Jane Luxton, Esq.
In a watershed moment, Standard & Poor’s recently gave a BBB+ rating to bonds backed by solar power contracts that are expected to raise $54.4 million for SolarCity, an installer of residential and commercial solar panels. The yield rate is expected to be 4.8%, a relatively high rate in the current market, commensurate with the untested nature of the security.
Although the rating is a low investment grade designation, it is strong enough to validate this important new source of financing for renewables, which comes at a key time as federal tax credits, which have largely sustained renewable energy expansion, are tapering off or ending. According to the New York Times, SolarCity overcame potential investment risk concerns by shortening the time frame for the bonds, including extra collateral, and creating a special reserve account to cover equipment failures. S.&P. analysts predict brisk growth for this asset class.
Jane C. Luxton, Esq.