Nevada Assembly Bill 186, effective October 1, 2009, is expected to make financing the installation of renewable energy systems throughout the state easier for third parties.  AB 186 clarifies the definition of “third-party ownership” allowing third-party providers to install, own, and operate a renewable energy system, such as solar, on a home or facility and lease the system to the property owner without being subject to the same regulations as a utility.  Seeking a utility classification burdens non-utility entities with the expertise and capital required to finance renewable system installation yet lacking the resources to attain utility classification. 

While the changes in AB 186 may seem small, the bill has major implications.  “There are huge benefits from an economic perspective and a jobs perspective,” said renewable energy lobbyist Tom Clark. “Nevada is in a footrace with other Western states in trying to invite renewable companies. This law, along with other laws that provide incentives for renewable energy, sends a message that Nevada is the place to be when it comes to doing things related to renewable energy.”

Before AB 186, groups such as NV Energy contended that state law required companies that wanted to lease renewable systems, such as solar panels, to become public utilities.  The classification was a major barrier for businesses that did not desire to become utilities and simply wanted to lease land or renewable systems. Besides regulatory oversight, being classified as a “utility” in Nevada means that rate changes by a third-party company would be subject to investigation by regulators. Additionally, legal staff at the Public Utilities Commission of Nevada pointed out that state law at the time made third-party ownership illegal.

The typical application for a third-party renewable system involves installing solar panels on top of buildings.  An example would be a school that desires installation of a solar system but cannot pay the up-front costs.  In the third-party system, a company comes in and shoulders the cost for the installation instead of the building owner.  Then the company agrees with the school or office building to lease the solar system either though a low initial rate that slowly escalates over time or a higher flat rate set for a certain number of years.

Leasing solar panels has become a popular option for individual homeowners in some markets, notably California. As the law becomes finalized in December, the progression of similar programs in Nevada should be interesting.

Carlos L. McDade, Esq.

Related posts:

1. Nevada Moves Forward on Renewable Energy
2. New Supreme Court Opinion on International Family Law Case

The Justice Department announced that American Smelting and Refining Company, LLC (ASARCO), as part of its bankruptcy reorganization plan, will pay $1.79 billion to fund environmental cleanup and restoration at its sites and former sites in 19 states:  Arizona, Alabama, Arkansas, California, Colorado, Idaho, Illinois, Indiana, Kansas, Missouri, Montana, Nebraska, New Jersey, New Mexico, Ohio, Oklahoma, Texas, Utah, and Washington. 

ASARCO is a leading producer of copper and one of the largest nonferrous metal producers in the United States.  It has been in business for 110 years and filed for bankruptcy protection in 2005.  It is now based in Arizona and is responsible for sites around the country that are contaminated with hazardous waste. The funds will be paid to federal and state governments and other groups that have cleaned-up or will clean up hazardous waste for which ASARCO is responsible. 

To read the Department of Justice Press Release click here.

Carlos L. McDade, Esq., L.L.M. (Environmental Law)

Related posts:

1. Cost Recovery for Environmental Clean-ups

Nevada lawmakers voted in June, 2009, to start up a new Nevada renewable energy agency.  That set the stage for the Governor to appoint a Commissioner to head the agency in its work.

The agency’s purpose is to study science and technology and to develop ideas to conserve energy use.  It will also focus on ways to bring green businesses to Nevada. The agency will study solar power, wind, and geothermal projects in order to attract those businesses to the state.  On the business and political side, the agency will examine a combination of financing options, possible tax breaks and technological partnerships that may be offered by the State to renewable energy businesses.  The agency will also examine possible locations in the state that may be attractive to renewable energy companies.

The new agency will work with Nevada’s State Energy Director Hatice Gecol. She was given control of the Fund for Renewable Energy, Energy Efficiency and Energy Conservations Loans.  Through this fund, the energy director can make three percent interest rate loans, with legislative approval, to companies that build renewable projects.

There are unanswered questions from some lawmakers about funding the agency in the long term. The agency will be working with Ms. Gecol to obtain Nevada’s share of the Federal Stimulus Package money for renewable energy projects. That source may provide funding in the short-term.

Related posts:

1. Changes to Law Enables More Renewable Energy Investments

A release of hazardous waste is often a traumatic event, such as a spill from an overturned tanker truck or a cloud of toxic gas rising from a railroad car. Sometimes, the release is quiet and it is not noticed for a period of time.  For example, an unaware purchaser of real estate might unluckily come across hazardous waste on their newly purchased property or, a leaking drum might be discovered in a state park. 

In any situation, it is incumbent on someone to stabilize the situation to prevent spread of the contamination and then to start a clean-up.  The “person” doing the clean-up, under federal law can be the federal, state or tribal government, an individual, a company, a business, a city or a county, to name a few.  Once the remediation begins, then the costs begin accumulating.  At that point, the entity doing the clean up starts looking for someone to help cover the expenses.  

The federal law that governs this topic is the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), also known as the Superfund Act.  Under CERCLA, there are two methods of cost recovery.  

CERCLA Section 107(a)(4)(B) authorizes any person to recover the costs incurred from the cleanup from a potentially responsible party (PRP) that released or spilled the hazardous waste.  Section 107(a) of CERCLA defines four categories of PRPs, 94 Stat. 2781, 42 U. S. C. §§9607(a)(1)-(4), and makes them liable for, among other things: 

     “(A) all costs of removal or remedial action incurred by the United States Government, a State, or an Indian tribe not inconsistent with the national contingency plan; [and]

     (B) any other necessary costs of response incurred by any other person consistent with the national contingency plan.”  §9607(a)(4)(A)-(B).”

The courts have interpreted “any other person” to mean any person who is not authorized under Subsection (A), namely, the United States, a State, or a Tribal government.  So cities, individuals, businesses and companies are authorized under (B) to recover their costs incurred in a cleanup.  United States v. Atlantic Research Corp., 551 U.S. 128 (2007).   

The other means of recovery is authorized by Section 113(f) of CERCLA, that allows a PRP to recover contribution from another PRP, but only after the claimant-PRP has itself been sued under Section 106 or 107 of CERCLA.   See Cooper Industries, Inc. v. Aviall Services, Inc., 543 U. S. 157 (2004). 

There is some confusion among practitioners about whether or not a party must be sued before being authorized to recover costs.  That view is based on an incomplete understanding of the interaction between Section 107(a) and Section 113(f) of CERCLA.  While a PRP is only entitled to recover contribution from another PRP under Section 113(f) after the claiming PRP has itself been sued, that precursor condition does not exist under Section 107(a). Both authorities for cost recovery exist independently of each other, though they are related.  See Atlantic Research, supra.  

There are other differences between the two statutes, such as the statute of limitations and the scope of liability.  Practitioners should use care in distinguishing the two provisions and utilize the section that best meets the facts and serves the client’s needs.

Carlos L. McDade, Esq.

Related posts:

1. Environmental Bankruptcy to Pay $1.79 Billion