New FERC ALJs

Originally, I was assigned to be a law clerk to Judge Dring and Judge Hardnett. So I was very sorry to see Judge Hardnett retire at the end of December. Thankfully, a new Administrative Law Judge, Michael Haubner, was appointed! Now I have the opportunity to experience even more types of judicial styles, which I hope will improve my ability to educate triers of fact as a litigator.

Federal Bar Association Publishes Case Summary

The D.C. Chapter of the Federal Bar Association just published a case summary I drafted in their Forum 2012. The summary, titled, AT&T Mobility v. Concepcion et ux.: The Death of Class Actions Arising from Contract, is available at their website. 

New Job – FERC ALJ Law Clerk!

I just received some fantastic news! I will have the honor of spending the next two years as a law clerk for two Administrative Law Judges at the Federal Energy Regulatory Commission. This is going to be an amazing opportunity to learn first-hand about energy regulation. My legal skills should improve incredibly from the daily opportunity to brief arguments, draft initial decisions, observe trial techniques, and assist in settlement agreements. I can’t wait to start this September!

Article on FERC Fed-in Tariffs Published!

I’m delighted to say that my article on the potential market impacts of the Federal Energy Regulatory Commission’s recent Orders regarding FITs has now been published by the Michigan Environmental Law Journal. Here is the full text of the article, America’s QuasiFeed-inTariffs: Leveraging Recent FERC Orders to Kickstart a Renewable Energy Revolution. The Chair of the Journal, Anna Maiuri of Miller Canfield Paddock & Stone PLC, has some kind words for the “excellent article.”

More exciting news about a new publication acceptance coming soon!

Case Summary to be Published!

I previously mentioned that an Article on Feed-in Tariffs will be published shortly in the Michigan Environmental Law Journal. And some good summaries of the Article will be forthcoming, now that I have some free time over vacation. At the same time, a fair amount of my time is being spent reviewing energy derivative cases as a research assistant for Prof. Marc Higgins, Counsel to the Director of Enforcement of the Commodity Futures Trading Commission.

Nonetheless, I managed to find some time to write a case summary of AT&T v. Concepcion which will be published some time soon by the DC Chapter of the Federal Bar Association. When this comes out, I’ll be sure to add a link.

Energy Efficiency Loan Guarantees

While not as sexy as Feed-in Tariffs, new data is starting to quantify the significant energy savings created through retrofitting old buildings with energy efficient technologies. The data showed that refitted buildings in New York generated an average of $310 in annual savings per apartment. That’s almost an additional $30 in each tenant’s pocket per month – which in this economy could have a significant boost on the local economy.

Of course, paying for the retrofits is not cheap. And because the benefits had been uncertain banks were reluctant to make loans for such retrofits. This study helps quantify those benefits, which should make the loans more appealing to bankers.

In an important new twist, the NY Times Reports:

But in this soft economy, lenders are reluctant to rely on new techniques when making loans. To make them more comfortable using projected savings from retrofits, a public-private partnership started this year, the New York City Energy Efficiency Corporation, is planning to dedicate a portion of $37.5 million in federal stimulus money to provide collateral guarantee these deals. If a lender agrees to underwrite a loan and incorporate potential energy savings from a retrofit, the partnership will repay that loan should the projected savings fall short.

Hopefully these loan guarantees will jump start a viable market for financing refits. This is truly a win-win-win-win. Renters get extra income. Local businesses get extra customers. Banks strengthen their balance sheets. And the environment gets protected.

Article on FERC Feed-in Tariff Orders to be Published

Sorry for the lack of posting lately, but I have been busy polishing an Article accepted for upcoming publication in the Michigan Environmental Law Journal. I will post more when I have a chance, but in short, it analyzes analyzes two 2010 FERC Orders, 134 FERC ¶ 61,044 and 133 F.E.R.C. ¶ 61,059. These Orders will give states substantial freedom to set quasi-feed-in tariffs for Qualifying Facilities (QFs). These feed-in tariffs (FITs) provide a strong incentive to invest in renewable electricity generation.

However, for QFs larger than 20 mW, this opportunity will be undermined by the Energy Policy Act of 2005. The Energy Policy Act of 2005 allows utilities to easily petition FERC to relive their obligation to purchase from all QFs larger than 20 mW. FITs that are set too high will encourage utilities to petition FERC to relieve this obligation to save money. FITs that are too high run the danger of undermining PURPA. At the same time, the Energy Policy Act of 2005 makes it very difficult to remove this purchase obligation from smaller QFs. The combination of a guaranteed market and a FIT above the standard market rates should result in the growth of small-scale renewables, especially distributed generation facilities.

I have much more to write about this, so stay tuned.

FATCA Resources for Chief Compliance Officers (CCOs) and Counsel

As I noted last week, Foreign Financial Institutions (FFIs) need to begin taking immediate steps to comply with the Foreign Account Tax Compliance Act (FATCA). To assist Chief Compliance Officers (CCOs), General Counsels (GCs), and the generally curious, I have complied list of the best resources on FATCA compliance.

• Deloitte’s FATCA library
• Ernst & Young’s FATCA resources
• The IRS’ FATCA portal (including the ongoing rulemaking)
• Text of FATCA (26 USC § 1471; P.L 111-145 Title V)

These resources represent essential background reading for parties required to comply with FATCA. Stay tuned for more analysis to come.

South Korea Wins Winter Olympic Bid – Good News for the Economy!

Korea to host the 2018 Winter Olympics thanks to Kim Yu Na

Congratulations to South Korea for its winning bid on the 2018 Winter Olympics. The event will be held at  the small mountain town of Pyeongchang in eastern South Korea. While the Winter Olympics is still seven years away, I’m sure South Korea will leverage the opportunity to accelerate growth, just as it did with the 1988 Olympics in Seoul. By the time the event is held, I expect South Korea to be completely classified as a developed nation. While Hyundai and the other large conglomerates are likely to get most of the largess,  international companies with experience in large infrastructure development and project finance are likely to find good opportunities as well. This event should definitely help South Korea maintain its economic momentum in the face of a slowing world economy. Congratulations, again.

China Bailout Underway

Marketwatch points to a worrying trend in Chinese markets, but misses the mark slightly.  Dong Tao, an analyst at Credit Suisse, recently suggested that China could be headed for a bank bailout because of problems with local debt:

 “China’s banking system will require an eventual bailout by the central government, according to some analysts, who said figures released last week on the size of local-government borrowings point to the need for a rescue.”

While the underlying premise of the article – that the weak financial position of local governments in China will lead to a Central Government intervention – is sound, it ignores the fact that a massive bailout is already underway in China . As I argue in an article (hopefully) to be published this fall, China’s government has been using financial repression for decades to underwrite local debts.

Essentially, China’s limited investment opportunities (coupled with social factors) lead its citizens to deposit roughly 30% of GDP in savings accounts. The government controls the interest rates paid on the deposits and also maintains influence over the inflation rate. Over time, the government sets rates such that citizens lose money on their deposits. For political and structural reasons, state-owned banks use these deposits as cheap capital to lend to the heavily indebted local governments mentioned in the article. Citizen deposits have underwritten these debts, and they will continue to be used to service them.

Preserving social harmony is the prime mover of all Chinese policy. China already faces thousands of protests and riots a year. Corrupt local officials are generally the target of these grievances. If you think Americans were upset by the bank bailouts, imagine how the millions of Chinese citizens whose land was forcibly dispossessed by a corrupt local official will react to that official receiving a headline-grabbing bailout.

Because an outright bailout of local governments would cause serious social unrest, Beijing will only pursue it as a matter of last resort. Instead of the flashy lump-sum bailouts Dong Tao points to, it seems much more likely that the government will intensify its current framework of shadowy cross-subsidies to local governments through consumer deposits.