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Update on the Regulation of Electric Energy Storage Facilities in Vermont

On the last day of 2022, provisions of Vermont Act 54 took effect that overhaul and expand the Vermont Public Utility Commission’s (“PUC”) regulation of electric energy storage facilities.

Act 54 directs the PUC to promulgate rules governing energy storage facilities, including those regarding metering, power quality, and interconnection. Notably, the law expands the universe of proposed energy storage facilities requiring PUC approval (a “Certificate of Public Good” or “CPG”), by lowering the threshold from 500 kilowatts (kW) in nameplate capacity to 100 kW. Act 54 also directs the PUC to develop a simplified application process for proposed energy storage facilities between 100 kW and 1 MW (unless the PUC establishes a higher threshold). Proposed facilities eligible for the simplified process would automatically receive a CPG 46 days after filing an application unless the PUC or another party raises a substantive objection during that period.

In response to the simplified procedure directive, the PUC issued a memorandum on December 15, 2022, clarifying that while the PUC works to promulgate a simplified application process, proposed energy storage facilities with capacities between 100 kW and 4.99 MW may seek a CPG under the existing streamlined CPG process provided for in 30 V.S.A. § 248(j). The PUC has yet to issue draft rules governing energy storage but has opened a rulemaking proceeding where interested parties can check for updates. Other sections of Act 54 expand and define the PUC’s regulatory authority over energy storage aggregators (entities that virtually combine multiple energy storage facilities across the grid).

These changes to Vermont law take place in the larger context of changes to federal incentives governing energy storage. President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law in August 2022. The IRA expands eligibility for the energy investment tax credit (“ITC”) to include “energy storage technology,” which is defined broadly as “property . . . which receives, stores, and delivers energy for conversion to electricity . . . and has a nameplate capacity of not less than 5 kilowatt hours.”

Under the IRA, energy storage technology projects that begin construction before January 1, 2025, are now eligible for the existing ITC rate of up to 30 percent. Energy storage technology projects that commence construction after December 31, 2025, will be eligible for a tech-neutral Clean Electricity Investment Tax Credit (“CEITC”), containing a similar rate structure. 

Tax incentives provided by the IRA are expected to stimulate investment in energy storage projects across the country. These projects are particularly important in Vermont where much of our power is from renewable sources (wind, solar, hydro) that generate fluctuating amounts of energy throughout the day and seasonally. As the share of renewables continues to increase within Vermont’s energy supply, and as Vermont electrifies and adds new electric loads—such as electric vehicles charging overnight at homes—increased energy storage capacity serves a critical supporting role, storing renewably-generated electricity to match periods of demand. In this role, energy storage reduces the need for non-renewable energy sources during times of high demand, while expanding the market for renewables. IRA tax incentives, in combination with streamlined PUC procedures for permitting energy storage facilities, may help Vermont to continue reducing its reliance on non-renewable sources of energy.

If you have any questions or need help navigating changes to energy storage regulations, please contact Vic Westgate or Andy Raubvogel at SRH Law.

*The information provided on this website does not, and is not intended to, constitute legal or tax advice; instead, all information, content, and materials available on this site are for general informational purposes only. 

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$6 Million Brownfields Investment Announced to Redevelop 453 Pine Street in Burlington

In a joint press conference last week, Governor Phil Scott announced that the state has committed $6 million in brownfields funding to redevelop a parcel of land along Pine Street in Burlington. The eight-acre parcel at 453 Pine Street has been vacant for decades due to redevelopment issues associated with its proximity to the Pine Street Canal Superfund Site. Now, with the help of brownfields funding, this centrally located parcel in Burlington’s vibrant South End will be put to productive use.

Two local entrepreneurs, Jovial King and Alex Crothers, have proposed the Silt Botanica Bathhouse, a Nordic-style bathhouse and wellness space, and Backside Bowl, a traditional and duck pin bowling alley. The proposed redevelopment also includes a community gathering space that embraces the South End Arts District aesthetic, as well as the donation of land that will be conserved for public use. The project has received enthusiastic support from Senator Patrick Leahy, Senator Bernie Sanders, Congressman Peter Welch, and the South End Arts + Business Association, among others. More information about the project can be found here.

SRH Law has been instrumental in helping to navigate the legal issues surrounding redevelopment of 453 Pine Street. If you are interested in learning more about our redevelopment work or in redeveloping a brownfields site, please reach out to attorneys Brian Dunkiel, Andy Raubvogel,  Drew Kervick, and Paul Quackenbush.

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California Adds Requirements for Compostable Marketing Claims

The California legislature recently added new requirements for products sold in the state that claim to be “compostable” or “home compostable” in AB 1201.  As of the beginning of this year, these products must now:

  • have a total organic fluorine concentration less than 100 parts per million (to reduce the presence of perfluoroalkyl or polyfluoroalkyl substances (“PFAS”)),
  • be labeled to easily distinguish the product from non-compostable products (in accordance with any applicable Department of Resources Recycling and Recovery (“Department”) regulations), and
  • be designed to be collected with other compostable materials, such as food scraps and yard trimmings.

Other requirements will take effect in the coming years.  Most notably, the legislative amendment requires products bearing a “compostable” or “home compostable” label to be an allowable agricultural organic input under the USDA’s National Organic Program by 2026, although the Department may grant a five-year extension for certain products.  In addition, the updated law allows the Department to approve a third-party entity to certify products containing a “compostable” or “home compostable” label.  If the Department does so, products bearing these labels must be certified within one year of the Department approving the certification entity, starting in 2024 at the earliest.

The legislative amendment builds upon pre-existing obligations for products making compostable claims, including requirements that products labeled “compostable” meet applicable ASTM standards, and products labeled “home compostable” hold OK compost HOME certification.  While these pre-existing requirements previously applied only to plastic products, the legislative amendment applies them to all products making composting claims.

Potential penalties for violating the law include fines of up to $2,500 for each violation, and injunctions to prevent the sale of mislabeled products.  The law applies to both manufacturers and suppliers, and either party must be ready to provide documentation of a product’s compliance with the law within 90 days of a request by any member of the public.

The law is part of California’s push to greatly expand composting in the state, with the goal of reducing organic waste disposal by 75 percent by 2025 (compared to 2014 levels).  Department regulations aimed at implementing this goal took effect this year and require jurisdictions in California to provide organic waste collection services.  Businesses and residents are required to use these collection services, although penalties for noncompliance do not take effect until 2024.

If you need help navigating the regulatory patchwork related to product claims, please reach out to the following attorneys: Vic Westgate, Brian Dunkiel, or Paul Quackenbush.

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Using Federal Funding for Municipal Resiliency Projects in Vermont

Vermont is awash with an unprecedented surge in federal funding.  The Infrastructure Investment and Jobs Act, American Rescue Plan, and other pandemic-related aid represents the most significant infusion of federal funding to Vermont in decades.  Developers, municipalities, and Vermont citizens should pay close attention, as the funding provides myriad opportunities to build more resilient communities through housing, infrastructure, and environmental improvements.

The American Rescue Plan Act (“ARPA”)—designed to facilitate economic recovery from the COVID-19 pandemic—provides more than $1.25 billion in aid to the State of Vermont.  On January 18th, Governor Phil Scott released his proposal for spending the remaining $500 million in ARPA funds.  While the Vermont legislature (subject to the governor’s veto) will have the final say on how these funds are spent, the proposal envisions allocating remaining ARPA funds to address five main areas: economic development, climate change mitigation, water and sewer infrastructure, housing, and broadband connectivity.  Targeted infrastructure projects include proposals to expand weatherization of low- and moderate-income homes, increase hazard and flood mitigation, improve municipal water and sewer infrastructure, and increase affordable housing.  Previously allocated ARPA funds are being used for projects such as developing community sewer systems, reducing sewer overflows, and aiding compliance with three-acre stormwater permit requirements.

In addition to this infusion of ARPA funding to the State of Vermont, Congress appropriated nearly $200 million in ARPA funding directly to Vermont’s cities, towns, and villages, with the second funding installment scheduled for this August or September.  Towns can use these funds independently, or in partnership with developers, to expand affordable housing, implement sewer and water projects, and for other infrastructure projects.  For example, a town might fund a land bank and work with developers to turn acquired land into affordable housing, build new municipal water and sewer systems to support the creation of new affordable homes, or buy down the cost of water or sewer-connection for income-eligible housing units.  SRH Law has a long track record of working with municipalities and developers on similar projects, such as helping the City of St. Albans revitalize its downtown area by using Tax Increment Financing (“TIF”) to acquire land, remediate it, and build a parking garage that spurred private investment.

Federal COVID-19 relief bills have also authorized $285 million in Elementary and Secondary School Emergency Relief (“ESSER”) funds for Vermont schools.  State guidance allows these funds to be used towards school construction and renovation costs, which may include remediation of polychlorinated biphenyls (“PCBs”) contained in building materials.

Signed into law in November 2021, the Infrastructure Investment and Jobs Act (“IIJA”) represents the newest large influx of infrastructure funding, with $550 billion in new nationwide spending over the next five years.  This includes $40 million for the Lake Champlain Basin Program to address excess phosphorous and other threats to the lake.  The IIJA will also quadruple Vermont’s water and wastewater revolving loan funds, which provide grants and loans to municipalities to construct, improve, and expand public drinking water and wastewater systems.  In addition, the IIJA contains funding to make Vermont’s road and bridges more resilient to climate change, provide flood mitigation assistance grants, and remediate environmental hazards including brownfield sites.

These new federal funding opportunities bring new legal challenges, including hurdles associated with permitting, compliance, and remediation.  SRH Law is monitoring the progress of new funding and helping clients identify and implement opportunities to improve the resilience of our communities.  We have extensive experience in affordable housing development, land use, environmental and energy permitting, and the legal issues arising out of public infrastructure projects.  If you have any questions about developing these types of projects using federal funds, please contact Brian Dunkiel, Drew Kervick, Geoffrey Hand, Jon Rose, or Paul Quackenbush at (802) 860-1003.

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Vermont DEC Issues Draft Guidance on PCBs in Non-School Buildings

On March 10, 2022, the Vermont Department of Environmental Conservation (“DEC”) published new draft technical guidance addressing polychlorinated biphenyls (“PCBs”) that are contained within building materials located in non-school buildings.  DEC previously published separate guidance for PCBs in schools in February 2022.  

The new draft guidance implements a 2021 legislative change to the waste management statute that changed the definition of a “release” to include the “spilling, leaking, emission, or disposal of PCBs from building materials.” See 10 V.S.A. § 1283(g)(3) and 10 V.S.A. § 6602(17).  While concerns surrounding PCBs found in Vermont schools in 2020 precipitated this change in Vermont law, the change applies broadly to all other buildings.  DEC’s draft guidance implementing this statutory change pertains to all non-school buildings in Vermont that were built or remodeled before 1980—the period when PCBs were commonly used in building materials.  As such, the requirements in the guidance would impact a multitude of owners of pre-1980 properties, and transactions involving these properties.

Among other things, the draft guidance sets the new regulatory “action” level for PCBs at 22.5 nanograms per cubic meter (ng/m3), provides standards for preparing an inventory of PCB-containing materials and sampling indoor air for PCBs, and describes how properties participating in Vermont’s Brownfields Reuse and Environmental Liability Limitation (“BRELLA”) program must comply with these new requirements.  For BRELLA participants, the draft guidance provides that the presence or possible presence of PCB-containing materials should be identified as a “Business Environmental Risk” in Phase I Environmental Site Assessment reports for pre-1980 buildings.  As a result of this guidance, environmental due diligence for real estate transactions involving pre-1980 buildings in Vermont likely will require indoor investigation and air sampling for PCBs.  This could impact financing and redevelopment plans, and present new liability risks for existing property owners.  Pre-1980 buildings that are currently in the BRELLA program but have not yet received a Certificate of Completion (“COC”) would also require indoor PCB testing prior to receiving a COC under the draft guidance.

The statutory changes to the waste management statute and DEC’s new implementing guidance could have a substantial impact on the use, sale, re-development, and re-use of any pre-1980 non-school buildings in Vermont.  The deadline for comments on DEC’s draft guidance is March 27, 2022, and a public hearing to discuss the guidance is scheduled for April 4, 2022.

If you have any questions, please contact the following SRH Law attorneys: Brian Dunkiel, Andy Raubvogel, Geoffrey Hand, or Paul Quackenbush at (802) 860-1003.

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Paul Quackenbush Joins SRH Law

Burlington, VT – SRH Law announced that Paul Quackenbush Paul Quackenbush has joined the firm as an associate attorney. Paul is a 2021 graduate of Vermont Law School, where he was an environmental mission scholar. In his practice at SRH Law, Paul will focus on energy, environmental, litigation, and transactional law.

Paul also holds a Master’s degree in geology and has worked and published in that field. Before law school, he worked as an environmental consultant and scientist in Massachusetts.

“Paul brings a strong background in environmental science and related issues, as well as a passion for the mission-driven work we do at SRH Law. We are pleased to have him join the firm”, said Andy Raubvogel, Managing Partner.

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