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Author Archive: David Greene

Renewable Energy Industry Legislation Activity in 2014 Virginia General Assembly

We watched a lot of bills arrive and die in the Virginia General Assembly session this past year (a session that still has yet to pass a budget for the state). Here is a brief look at a few initiatives impacting renewable energy development in Virginia that have been enacted or remain active for future sessions.

Senate Bill 653: Renewable Energy Property Grant Fund.

S.B 653 was intended to offset costs to install new renewable energy facilities by offering grants to cover a portion of these costs. This bill defines “renewable energy” as energy derived from sunlight, wind, falling water, biomass, waste, landfill gas, municipal solid waste, wave motion, tides or geothermal power, but does not include energy derived from coal, oil, natural gas, or nuclear power.  The idea was to establish a grant system through which the $10 million fund would allow individuals who placed new renewable energy property into service during a fiscal year 2016 to apply for a grant equal to 40 percent of the costs paid or incurred by the individual, not to exceed $2.5 million for any particular project.

The bill was passed by both the House and the Senate, but amended so that only 35 percent, rather than 40 percent, of the costs may be recovered through a grant. In addition, costs related to existing facilities that generated electricity within the 12 months preceding the date of a grant application would not be eligible and any renewable energy property paid for by ratepayers would also be ineligible. The provisions of act will not become effective unless it is reenacted by the General Assembly in 2015.

Senate Bill 418/House Bill 1239: Real and Personal Property Tax Exemptions for Solar Energy Equipment, Facilities and Devices.

These bills provide an exemption from local taxation for all certified solar energy equipment, facilities and devices. The exemption for solar photovoltaic systems would only apply to projects equaling 20 megawatts or less. It adds “solar energy equipment, facilities, or devices” to the definition of certified pollution control equipment and facilities, whether or not the property has been certified to the Virginia Department of Taxation by a state certifying authority if the property is owned or operated by a business and fits within the 20 megawatt cap. These bills also establish a separate tax classification for other solar energy equipment, facilities, or devices if they are certified by the Virginia Department of Environmental Quality.  Unlike the business-owned solar property, which is exempted by these bills, whether or not the separately classified individual-owned solar property is partially or fully tax exempt is up to the governing body of the individual’s county, city or town.

These bills were signed into law by Governor McAuliffe, taking effect January 1, 2015.

Senate Bill 514/House Bill 796: Postponed the Due Date for Quadrennial Updates to the Virginia Energy Plan.

Amending § 67-202 of the Code of Virginia, these bills postponed scheduled Virginia Energy Plan updates from July 1, 2014 to October 1, 2014. The plan then has to be updated every four years after the update this October. Updates to the plan must reassess goals for energy conservation based on progress toward the goals in the previous plan and lessons learned from attempts to meet those goals. These bills passed both houses and were signed into law by the Governor.

The 2010 Virginia Energy Plan aims to (1) expand both traditional and alternative energy generation, (2) increase the use of conservation and efficiency, and (3) educate the public about Virginia’s energy consumption and production, emphasizing how they affect our economy and teaching Virginians ways to energy more efficiently. Additionally, the plan strives to maximize the Commonwealth’s investments in clean energy research and development through the Universities Clean Energy Development and the Economic Stimulus Foundation. This law takes effect July 1, 2014.

Senate Bill 498/House Bill 822: Changed Virginia’s Renewable Energy Portfolio Standard Program.

These bills limit the ability of an electric utility participating in the renewable energy portfolio standard (“RPS”) program to bank excess renewable energy sales or renewable energy certificates (“RECs”) to achieve its annual RPS goals. A utility may use its excess renewable energy sales and RECs only in the five years following the renewable energy generation or the REC creation. This bill was approved by both houses and signed into law by the Governor.

The goal of these bills is to encourage utilities to continue to expand use of renewable generation to achieve current goals of the plan, but not to bank excess RECs in the short term when RPS goals are lower to use in later years when RPS goals increase, or may even become required. Companies are able to bank excess RECs for five years after their creation before they no longer count toward the utility’s RPS goal.

Virginia’s RPS goals are laid out in four stages, starting in 2010 and running through 2024. In each subsequent stage, the RPS goal increases by a specified percentage. This law takes effect July 1, 2014.

If you have questions about any of these laws and how they might impact your business, please contact the energy lawyers at GreeneHurlocker for more information.

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Eric Hurlocker Named to State Panel Studying Solar Power Issues

RICHMOND, VA, April 30, 2014 — Eric Hurlocker, a founding partner of GreeneHurlocker PLC, has been named to the Small Solar Working Group (SSWG) Stakeholder Group on Distributed Solar Generation and Net Metering formed to advise the Virginia Department of Mines, Minerals & Energy and the Department of Environmental Quality, reports Brian Greene co-managing partner of the firm.

Hurlocker has focused his practice on advising clients in the areas of energy law, as well as commercial transactions and general corporate work for energy and technology companies, manufacturers and services providers for the past twenty years. He graduated from the University of Richmond, was a member of the Phi Beta Kappa honor society, and earned his law degree from the University’s School of Law, magna cum laude.

The SSWG was established at the request of stakeholders and with DEQ Director David Paylor’s support. It began meeting in the summer of 2013. It is now comprised of approximately 50 representatives from the solar industry, utilities, conservation groups, local government, state agencies, and academia. The goal of the group is informally and collaboratively to seek common ground in encouraging solar development in Virginia, in keeping with the Commonwealth’s energy policy.

About GreeneHurlocker

GreeneHurlocker, PLC, located in Richmond, Virginia, provides a broad range of litigation, energy law, transactional, administrative/regulatory law, and corporate services. GreeneHurlocker is committed to delivering the highest quality legal services to its clients in a professional, effective and cost-efficient manner. Please contact us for more information, and you can also follow us on Twitter.
Categories: Firm News

Virginia Senate Asks for Solar Power Study

As a result of certain resolutions that were considered in this year’s General Assembly session, the Virginia State Senate requested that the Virginia Department of Mines, Minerals and Energy (DMME) and the Department of Environmental Quality (DEQ) study the costs and benefits of distributed solar power generation and net metering.

The DMME combined the required Stakeholder Group on Distributed Solar Energy and Net Metering with the Small Solar Working Group (SSWG), which was established in 2013 at the request of stakeholders and with DEQ Director David Paylor’s support. It is now comprised of about 50 representatives from the solar industry, utilities, conservation groups, local government, state agencies, and academia. The goal of the Stakeholder Group is informally and collaboratively to seek common ground in encouraging solar development in Virginia, in keeping with the Commonwealth’s energy policy.

DEQ and DMME staff members serve as neutral facilitators and do not take positions, lobby on behalf of the SSWG, or operate in their regulatory capacity. The first meeting of the combined group was April 28 in Charlottesville. I am honored to have been asked to be on the Stakeholder Group and hope that my long experience in the fields of energy regulation, renewable and solar power generation, and the structuring of complex commercial transactions can be of assistance to this important discussion and study.

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Planning to be at Lev Nadiv Gala

We are delighted to be among the sponsors for the June 1 Lev Nadiv Gala where the Rudlin Torah Academy (RTA) will present the 2014 Chesed Award and the Above and Beyond the Call of Duty (ABCD) Award. We’re looking forward to the keynote address from Dr. Scott J. Goldberg, Director of the YU Institute for University-School Partnership.

GreeneHurlocker has long been a proud supporter of RTA, which is Richmond’s only Jewish day school.  RTA provides exceptional secular and Judaic education to students in grades K-8.  RTA’s students consistently score in the highest percentiles in standardized testing and, in the past 10 years, at least 95% of RTA’s 8th graders that have applied to the area’s most selective leadership or Governor’s high schools have been accepted.  For more about RTA, please visit the school’s website, www.rudlin.com.

We hope you will make plans to join us at this year’s Lev Nadiv Gala, which is Hebrew for “generous heart.” Contact RTA for full dinner details!

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Retail Suppliers Beware! Four More Lessons Learned from Starion Energy’s Record-Setting Fine in Maryland

This is the second in a two-part series highlighting “Lessons Learned” from the Maryland Public Service Commission’s recent ruling penalizing Starion Energy PA, Inc. for violating various consumer protection laws in Maryland. The first cited three lessons for retail electricity suppliers. This final post lists another four.

Lesson Four: Retail Suppliers Absolutely Cannot Make Misrepresentations When Communicating With Customers.

This part of the Maryland Public Service Commission’s decision is painful to read. The Commission found that Starion engaged in a “clear pattern of repeated misrepresentations” to potential customers, including (1) claiming to be representatives of the utility; ; (2) guaranteeing savings; (3) claiming that SMECO buys its power from Starion, so buying direct from Starion would eliminate the middle man. Starion representatives included similar claims on marketing materials, including door hangers left on the doors of SMECO customers. Many of the complaints contended that the Starion representative committed multiple violations in the same phone call.

For its part, Starion did not dispute that these statements were made by Starion representatives. In fact, the Commission noted that, Starion “conceded that the number of misrepresentations could exceed 10,000, although we understand that she was merely reflecting the fact that Starion could not verify how often these misrepresentations occurred.”

Prohibitions against such false or misleading sales tactics are a fundamental component of both Maryland and federal consumer protection laws. Retail electricity suppliers need to be adamant in their training and monitoring of sales agents, including vendors, to ensure that misrepresentations of this kind do not occur.

Lesson Five: Retail Suppliers Must Comply With Maryland’s Door-to-Door Act.

Maryland’s Door-to-Door Act requires sales representatives to fulfill certain requirements. These requirements include things like the sales representative wearing a name badge clearly himself/herself – not branded to the customer’s utility – and providing the customer a written copy of the contract. The Commission found that Starion had violated these requirements over a series of months, and that “[c]onsidering how significantly Starion relied upon this type of solicitation to attract new customers, its ongoing failure to comply with this law is remarkable.” Door-to-door solicitation is generally a risky endeavor, and the Commission in a prior case has held that one instance of misrepresentation could have been enough, if proven, to warrant revocation of the supplier’s license. Therefore, retail suppliers engaging in door-to-door solicitations need to make sure they comply with the requirements of the Door-to-Door Act by, among other things, making sure their sales representatives and vendors receive adequate training before soliciting customers, and the sales force should be monitored daily, even by random audits, if possible.

Lesson Six: Retail Suppliers Should Be Aware that the Maryland Telephone Solicitation Act is Unlike Other State’s Telemarketing Laws.

The Maryland Telephone Solicitation Act (MTSA) has certain specific requirements to obtain a valid and enforceable contract via a phone solicitation. After the initial phone call suppliers must send the customer a written contract within three business days containing statutorily specified language, which the customer must then sign. There are several exemptions to the MTSA, and its “wet” signature requirement. One exemption is if the supplier sends the prospective customer written marketing materials before the telephone solicitation, and the sale is made pursuant to an examination of those materials. Suppliers conducting telephone solicitations in the regulated Maryland retail electricity market also need to be aware of and comply with federal consumer protection laws addressing telephone solicitations – including the Telephone Consumer Protection Act and the National Do-Not-Call List. To avoid falling afoul of telephone solicitation laws, be sure to include required disclosures and statutorily-prescribed language in the scripts used by your telemarketers.

Starion had not obtained any wet signatures and, for whatever reason, no party questioned the Starion witness about whether Starion sent direct mail pieces before calling Maryland residents. While the Commission noted that Starion had the burden of proving that the MTSA exemption applied, the Commission nonetheless held that there could be no MTSA violation because the record was unclear as to Starion’s prior contacts.

Lesson Seven: Retail Suppliers’ Licenses in Maryland are Specific to Utility Service Territories and Customer Service Types, and the Commission Must Approve Any Changes to a Supplier’s License.

In its 2010 Maryland license application, Starion elected not to include commercial customers in Pepco’s service territory or any customers in SMECO’s service territory. Starion could have included these territories simply by checking the applicable boxes on its application. Because Starion had not sought the Commission’s approval to amend its license, the Commission found that Starion had violated applicable regulations. Prudent retail electricity suppliers seeking an initial license should select all of the customer types and service areas, as there is no requirement that a supplier initially serve all selected customers. For those suppliers already licensed and operating in Maryland, it is imperative that you know the scope of your license and operate within the service territories you selected. If you wish to expand, following proper Commission procedures to update your license will save you some serious headaches, and possible dollars, down the road. In the Commission’s words, Starion’s “failure to request an expanded license to operate in SMECO’s service territory until after it is caught is not an academic mistake.”

The regulatory landscape for retail electricity suppliers in Maryland is complex and dynamic, so suppliers need to be aware of the breadth of law regulating marketing in Maryland, and learn from Starion’s mistakes. If you have questions about the Maryland electricity market, the Starion decision or other issues of energy regulation and sales, please contact one of our energy lawyers.

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Retail Suppliers Beware! Seven Lessons Learned from Starion Energy’s Record-Setting Fine in Maryland, Part 1

This is the first in a two-part series highlighting “Lessons Learned” from the Maryland Public Service Commission’s recent ruling penalizing Starion Energy PA, Inc. for violating various consumer protection laws in Maryland  While these lessons may seem elementary to most retail electricity suppliers, bad actors exist and are finding themselves in trouble with the law.  When that happens, the reputations of fine retail suppliers in the energy market, and the restructured industry in general, are damaged.  As lawyers representing retail providers , we recognize the vast majority of retail electricity suppliers do their best to adhere to applicable laws.  We hope that this series will assist retail  electricity and, for that matter, natural gas, sellers in Maryland  to comply with  state laws and allow them to better serve Maryland customers.

The Maryland Public Service Commission recently imposed its harshest penalty to date on a retail supplier.  In Order No. 86211, the Commission found that Starion Energy, PA, Inc. had committed hundreds of violations of applicable statutes and regulations.  For instance, Starion (1) violated the Maryland Door-to-Door Sales Act by not providing customers with contracts that contain the required language in that Act; (2) engaged in an ongoing pattern of regularly switching customers to Starion service without the customer’s permission, and of employing false and misleading statements to solicit new customers; and (3) actively marketed within Southern Maryland Electric Cooperative’s (SMECO’s) service territory and to Pepco’s commercial customers without a license for a period of approximately six months and continued to operate in SMECO’s territory on a passive basis despite being fully aware that it lacked the necessary license.  For all this (and more), the Commission fined Starion $350,000 and imposed other restrictions and compliance requirements.

The underlying thread connecting all of Starion’s violations was lack of oversight and control over its sales and marketing representatives during a time of what Starion termed as rapid and unexpected customer growth in the Maryland retail electricity market.  The Commission ruled that rapid growth does not mitigate a supplier’s obligations to comply with applicable regulations and found that Starion had committed more than a hundred customer protection violations.

Starion entered the Maryland electricity market in 2010, after receiving a $70,000 penalty from the Connecticut Department of Public Utilities for allegations that included slamming.  The Commission was aware of the Connecticut proceeding but issued the license based on an affidavit from Starion’s CEO that Starion would adhere to all applicable Maryland regulations.  Starion apparently hit the Maryland ground running, signing up more customers than its customer service personnel could handle.  Although the Order does not reveal Starion’s customer count, Starion relied heavily on door-to-door and telemarketing to solicit new customers.  Most of the violations occurred in the SMECO territory; in fact, SMECO contended that it began receiving complaints as soon as Starion and SMECO completed their EDI testing.

Lesson One:  Retail Suppliers Are Responsible for the Acts of Their Marketing Agents.

Starion contracted both directly with independent representatives and indirectly through vendors that contracted with other independent representatives on behalf of Starion. While this kind of marketing structure is not unique or impermissible in Maryland, such an attenuated sales force structure requires thoughtful and diligent compliance training and ongoing monitoring. As the Starion story shows, outsourcing door-to-door marketing, and telemarketing for that matter, does not insulate a supplier from the risks and penalties for failure to comply with applicable state and federal statutes and regulations.

Starion, like the retail suppliers in prior cases involving alleged consumer protection violations, did not dispute that it was responsible for the conduct of its marketing vendors and their contractors.  When marketing agents make false or misleading claims to customers, those claims are imputed to the retail supplier they represent. The Commission’s decision in Starion reiterated this view.

Lesson Two:  To Guard Against Slamming Allegations, Retail Suppliers Should Obtain the Customer’s Permission to Switch Before Requesting the Customer’s Utility Account Number.

The Commission found that its Office of External Relations (OER) had received 122 complaints relating to allegations of slamming by Starion.  The customers who complained to SMECO repeatedly stated that the Starion representative attempted to obtain their SMECO account number prior to the customer agreeing to switch service (or at times even before the customers fully understood the nature of the call).  While the Commission did not explicitly say so, it seems that the best practice would be for the retail supplier to have the customer affirmatively state that he or she desires to switch electricity service.  Only then should the retail supplier attempt to obtain the customer’s utility account number.

Lesson Three:  Retail Suppliers Should Fully Disclose Terms and Conditions of Service Regarding Variable Rates.

Starion offered a variable rate product in Maryland, probably similar to variable rates offered by other suppliers in Maryland and beyond. When Starion experienced rising costs in the northeast, it raised its prices throughout its footprint, including a “significant increase” for its Maryland customers even though the reason for the increase stemmed from areas beyond Maryland and PJM.  According to Starion, this price increase resulted in many customer lodging complaints with the Commission.  While the Commission did not find any consumer protection violation resulting from Starion’s spreading the cost over its entire footprint, it did express concern “that Maryland customers may not be fully informed that their variable rate may be calculated based upon market prices across such a wide geographic area. Starion has an obligation to clearly disclose the terms of its service to its Maryland customers.”

Check back soon for Part Two of this series.

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We’ve Got Happy Feet for Deep Run High

Our firm is happy to join the sponsors of the Deep Run Marathon Dance , scheduled for March 14-15, 2014. The students of the Deep Run High School are staging this 8th Annual Marathon Dance to benefit the charities of our local community. Deep Run High School students, of all grades, have raised more than $1.1 million for local charities.  Last year alone, they raised over $243,000.00!  The Marathon Dance is run and put together by the help of the student committee. They organize and promote fundraisers and the event itself. They also help choose the beneficiaries. Read more at the Richmond Times Dispatch.

Solar Energy Industries Association Meets at Firm Offices

We were pleased to host the Board of Directors of the Maryland, District of Columbia and Virginia Solar Energy Industries Association (MDV-SEIA) in downtown Richmond on February 20, 2014. Eric Hurlocker, a founding partner of the firm, is a Board member of the MDV-SEIA.

The Board covered regular business of the association, and will also discuss issues before the General Assembly of Virginia, which is considering a number of solar and other renewable energy related initiatives.

Eric was elected to the Board in 2013. His law practice involves representing developers, investors and manufacturers of solar projects and equipment, as well as other businesses in the renewable energy sector. He also works with clients on commercial transactions and general corporate work for energy and technology companies, manufacturers and services providers.

Members of MDV-SEIA design, sell, integrate, install, maintain and finance solar energy equipment for residential, commercial, and institutional customers throughout the region. Among the membership are included accountants, attorneys, builders, architects, electricians, plumbers, and consultants that support the solar industries. Complete information is available at http://mdvseia.org/

 

Eric Wallace Joins As Associate

RICHMOND, VA —  Eric J. Wallace, a recent magna cum laude graduate of the University of Richmond School of Law, has joined the GreeneHurlocker law firm as an associate in  Energy Law and Litigation, supporting partners Brian Greene and Eric Hurlocker in these expanding practices.

Wallace’s experience includes a summer studying energy and environmental law at the University of Cambridge, UK, and the research and drafting of articles related to energy and environmental issues while in law school. He is well-positioned to work with energy clients in the electricity, natural gas, solar and demand-response industries as well as corporate clients with a range of business and litigation needs.

“Eric’s skills in case law research and courtroom tactics are already being put to use with our clients in the energy industry including renewable energy companies and demand-response systems,” said Greene.

Wallace earned his law degree in 2013 and his undergraduate degree, cum laude, at Washington and Lee University in 2008.  At the University of Richmond School of Law, he was awarded membership in the Order of the Coif and the McNeill Honor Society, and served on the Moot Court Board and the Law Review.

About GreeneHurlocker

GreeneHurlocker PLC is a Virginia-based law firm that provides a broad range of litigation, energy law, administrative/regulatory law, and corporate services. The firm represents clients before state and local agencies, state commissions, the Federal Energy Regulatory Commission, and state and federal courts in Virginia, Maryland, and Washington, D.C., and around the United States.

. GreeneHurlocker is committed to delivering the highest quality legal services to its clients in a professional, effective and cost-efficient manner. Please contact us for more information, and you can also follow us on Twitter.
Categories: Firm News

GreeneHurlocker Lawyers Named 2013 Super Lawyers

RICHMOND, VA — GreeneHurlocker is pleased to announce that Brian Greene and Eric Hurlocker have been recognized as 2013 Super Lawyers in the area of Energy and Natural Resources. This marks Mr. Greene’s eighth consecutive year as a Super Lawyer and Mr. Hurlocker’s first. Only five percent of all attorneys in Virginia are recognized as Super Lawyers.

The selections for this list are made by the research team at Super Lawyers. Super Lawyers, a Thomson Reuters business, is a rating service for lawyers from more than 70 practice areas. The annual selections are made using a rigorous multi-phased process that includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area. The Super Lawyers lists are published nationwide in Super Lawyers magazines and in leading city and regional magazines across the country.

About GreeneHurlocker

GreeneHurlocker, PLC, located in Richmond, Virginia, provides a broad range of litigation, energy law, transactional, administrative/regulatory law, and corporate services. GreeneHurlocker is committed to delivering the highest quality legal services to its clients in a professional, effective and cost-efficient manner. Please contact us for more information, and you can also follow us on Twitter.
Categories: Firm News