Energy Finance Report

Jeffrey Karp

Jeffrey M. Karp is of counsel in Sullivan & Worcester's Washington, D.C. office, where he heads the firm’s Environment, Energy & Natural Resources Practice Group. The Group includes the following fields of practice: environmental regulation, compliance, litigation and transactions; climate-related business & technology; energy transactions and finance; renewable energy, energy efficiency and clean technology; and water resources and conservation. The Group brings together practitioners from across the firm’s legal disciplines in its offices in Boston, New York, Washington, D.C., London and Tel Aviv.

Jeff’s practice focuses on assisting clients in resolving complex regulatory matters and high-stakes business disputes, and engaging in cutting-edge technology transactions. He represents clients on the full range of environmental compliance issues under federal and state laws, including government investigations and enforcement actions. He also has extensive litigation experience, both on the government side and in private practice, and has an impressive track record of resolving disputes short of litigation, both with respect to claims arising under a wide range of federal and state laws, and those involving complex transactions.

Jeff advises corporations, developers, financiers and individuals seeking to participate in water, renewable energy, and clean technology transactions and project development worldwide, with an emphasis on assisting Israeli companies seeking to commercialize their products, services, and technologies. He also has substantial experience assisting clients in addressing legal, contractual, and regulatory issues arising during the development of large-scale infrastructure projects, including obtaining government authorizations and negotiating project agreements.

Before entering private practice in 1990, Jeff served as an environmental prosecutor at the U.S. Department of Justice, where he litigated and later also supervised enforcement cases involving a variety of environmental laws.

Email: jkarp@sandw.com

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Recent Posts

FERC Continues to Forge Its Own Path in Considering Climate Impacts in Pipeline Applications

Posted by Jeffrey Karp on 1/14/19 5:18 PM

By Jeffrey Karp and Kevin Fink

Among other responsibilities, the Federal Energy Regulatory Commission ("FERC" or "the Commission") approves and issues construction certificates for interstate gas pipelines and related infrastructure under section 7 of the Natural Gas Act ("NGA"). Section 7(c) of the NGA requires that any person seeking to construct or operate a facility for the transportation of natural gas in interstate commerce must obtain a certificate of public convenience and necessity from FERC. FERC’s 1999 Statement of Policy - Certification of New Interstate Natural Gas Pipeline Facilities - outlines the evaluation standard for issuing a certificate of public convenience and necessity. Once a certificate application is filed, the gating question is whether the project can go forward without subsidization by the pipeline’s existing customers. If that threshold requirement is met, FERC determines whether the applicant has sought to eliminate or minimize adverse effects on existing customers, existing pipelines in the market and their customers or landowners and communities affected by the route of the new pipeline. If the proposed project has no adverse effects, the Commission proceeds to a preliminary determination or a final order. However, if there are residual adverse effects - after efforts have been made to minimize them - FERC balances the evidence of public benefits achieved against the residual adverse effects in a economic test, and then proceeds to environmental and other reviews if the benefits outweigh the adverse effects.

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Topics: FERC, National Environmental Policy Act, Natural Gas Act

The Role of Renewable Energy Remains Uncertain in Transforming Puerto Rico's Electrical Grid

Posted by Jeffrey Karp on 11/30/18 12:36 PM

By Jeffrey Karp and Kevin Fink

Over a year has elapsed since Hurricane Maria devastated the island of Puerto Rico, which, in addition to claiming thousands of lives, destroyed Puerto Rico’s electrical infrastructure. As discussed in prior postings, a number of factors have contributed to the delay in restoring and upgrading the electrical grid, including contract mismanagement by the Puerto Rico Electric Power Authority ("PREPA") and the lack of a consensus approach regarding the energy mix to be deployed on the Island.

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Topics: Puerto Rico, Hurricane Maria, Renewable Energy

Symposium Spotlights Natural Resource Damage Regulations Under DOI Review

Posted by Jeffrey Karp on 10/9/18 10:00 AM

By Jeffrey Karp and Kevin Fink

Section 301(c) of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) authorizes the Federal government, States and federally recognized Indian Tribes to act as "trustees" on behalf of the public to pursue claims to redress injury or destruction of natural resources caused by hazardous substance releases. The measure of damages is calculated based upon the cost to restore or replace the injured or destroyed natural resources. Trustees also may recover compensation for services the resources would have provided the public pending restoration, as well as the reasonable cost of assessing injury and determining appropriate restoration.

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Topics: Environmental Law, Environmental Policy

Grid–Scale Energy Storage: Stakeholder Participation Key to Successful Implementation of FERC Order 841

Posted by Jeffrey Karp on 8/8/18 5:11 PM

In recent posts, we have discussed how Order 841 issued by the Federal Energy Regulatory Commission (“FERC”) on February 15, 2018 is expected to create new opportunities for the expansion of grid-scale (“in front of the meter”) energy storage. Order 841 is intended to encourage deployment of energy storage by addressing participation of energy storage resources in wholesale electricity markets operated by Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”).  

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Topics: FERC, Order 841, Energy Storage

Puerto Rico Update: A Busy Week as House Committee Holds Hearing on PREPA Oversight and Reform, and PREPA Reaches Preliminary Agreement with Bondholders

Posted by Jeffrey Karp on 8/6/18 4:18 PM

By Jeffrey Karp and Kevin Fink

As discussed in our posting covering continuing challenges to rebuild Puerto Rico’s electrical grid, the Puerto Rico Electric Power Authority (“PREPA”) has inhibited the recovery and redevelopment of the Island’s energy system. On July 25, 2018, the U.S. Congress House Committee on Natural Resources held an oversight hearing to discuss the “Management Crisis at the Puerto Rico Electric Power Authority and Implications for Recovery.” A panel of five witnesses – Bruce Walker (U.S. Department of Energy, Assistant Secretary of the Office of Electricity), Eduardo Bhatia (Puerto Rico Senate Minority Leader) and three energy and infrastructure advisors and consultants[1] – were present to testify and answer legislators’ questions. Puerto Rico’s Governor Ricardo Rosselló also was invited, but chose not to attend.

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Topics: Puerto Rico, U.S. House of Representatives, Microgrid, privatization

Puerto Rico: The Continuing Challenge to Rebuild the Island’s Power System and the Role of Microgrids in a Sustainable Future

Posted by Jeffrey Karp on 7/12/18 10:34 AM

By: Jeffrey Karp, Zachary Altman and Caroline Lambert

In the nine months since Hurricane Maria, substantial progress has occurred in bringing Puerto Rico’s power grid back online. Some consumers with access to solar microgrid systems regained power as soon as a few days after the storm, while others who relied on traditional energy sources had to wait for the power grid to be repaired. Solar microgrid systems are unique; they offer solar-powered electricity in parallel with the traditional energy grid but can also disconnect from the grid in times of crisis and provide solar-powered energy to a smaller subset of consumers.

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Topics: Solar Energy, Microgrid, Puerto Rico, Hurricane Maria

Northeast States See Surge in Plans for Offshore Wind Projects, But Developers Must Address Remaining Barriers

Posted by Jeffrey Karp on 6/18/18 12:37 PM

By Jeffrey Karp and Kevin Fink

As previously discussed, offshore wind is  well-developed outside the United States. In Europe, the first offshore wind facility was installed in 1991, and a record 3,148 MW of capacity was added in 2017. In comparison, the first and only operating offshore wind farm in the U.S. is Block Island, a 30 MW facility off the coast of Rhode Island, which began operation in 2016. While the U.S. lags behind European wind energy leaders, Northeast states have sought to facilitate large scale offshore wind development by setting goals and awarding contracts to offshore lease areas. These recent activities have been met with optimism and promise; however, there still are challenges beyond initially securing leases that must be met before offshore wind projects in the U.S. are successfully implemented from start to finish.

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Topics: Offshore Wind, New York, New Jersey, Massachusetts, Rhode Island, Jones Act, Port Infrastructure, Shipping, Renewable Energy, Outer Continental Shelf Lands Act

A Possible Formula for Puerto Rico's Hurricane Recovery: Distributed Renewable Energy

Posted by Jeffrey Karp on 2/13/18 3:02 PM

By Jeffrey Karp, Zachary Altman, Ryan Rosenblatt and Kevin Fink

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The New Administration’s Efforts to Deconstruct the Obama Climate Initiatives

Posted by Jeffrey Karp on 8/11/17 2:22 PM

President Trump is spearheading a government-wide roll back of Obama Era climate initiatives. The president and his EPA Administrator, Scott Pruitt, have delivered a one-two punch.  They both have denied the impact of human activity on climate change, while seeking to resurrect the moribund fossil fuel sector.  In March 2017, the President issued a wide-ranging “Energy Independence” Executive Order requiring review and reconsideration of any rule that might burden development of domestic energy sources, particularly oil, gas, coal and nuclear energy. After much drama, in June 2017, President Trump fulfilled a campaign promise to withdraw the United States from the Paris Climate Accord (“Accord”).  Moreover, in seeking to implement the new Administration’s energy independence strategy, government departments and agencies are pursuing delay or repeal of regulations aimed at curbing greenhouse gas (“GHG’) emissions, most notably EPA’s targeting for elimination the Clean Power Plan rule (“CPP”).

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Topics: Trump Administration, Climate change, Energy Independence Executive Order, Paris Climate Accord, clean power plan

The New Administration’s Deregulatory Agenda and its Impact on Environmental & Energy Policy

Posted by Jeffrey Karp on 7/28/17 8:24 AM

As seen in the first six months of President Trump’s Administration, the country is on a rollercoaster ride.  There is much uncertainty regarding the implementation of new policies and the status of existing programs throughout the government.  Nowhere is this sentiment more evident than in the environmental and energy arenas.  President Trump is quickly trying to undo the Obama Administration’s programs through executive orders seeking to roll back regulations; the appointment of faithful supporters of deregulatory agenda to key positions; significant budget cuts that substantially reduce agencies’ head counts and defund targeted programs; and the helping hand of a Republican-controlled Congress.

However, achieving this desired goal is easier said than done.  President Trump’s objectives may be tempered by legal, procedural and resource constraints, bureaucratic resistance combined with delays in filling key agency decisions, and higher priority domestic agenda items and world events.  This article will examine what already has occurred and what may be in store on significant issues involving energy and the environment.  It also will highlight aspects of the Trump Administration’s deregulatory efforts and the proposed budgetary impacts.

Out of the gate, the new administration has pursued an aggressive deregulatory agenda. President Trump’s operative goal is to “deconstruct the administrative state.”  His administration is building on campaign rhetoric to “roll back” “economy-choking regulations,” and implementing his campaign promise to “Drain the Swamp” by reining in and shrinking the federal bureaucracy.  For example, in January 2017, President Trump issued the “2-for-1” Executive Order (EO) on Reducing Regulation and Controlling Regulatory Costs, which specifies that agencies must repeal two existing regulations for every new significant regulatory action.  The EO further requires cost balancing between new and repealed regulations and a net cost of zero for any new regulations.  In response, Non-Governmental Organizations (NGOs) and others, led by the Natural Resources Defense Council (NRDC), are challenging the validity of the EO in the U.S. District Court for the District of Columbia, arguing that the executive order is “arbitrary, capricious, an abuse of discretion, and not in accordance with law.”  In April 2017, the Department of Justice filed a motion to dismiss the complaint on the President’s behalf, and the NGOs moved for summary judgment in May.  Attorneys General from 14 states filed a brief in support of the EO.  The case is in limbo, as the court has not yet ruled on the parties’ motions.

In February 2017, President Trump issued another EO, on Enforcing the Regulatory Reform Agenda, which requires designation of regulatory reform officers and task forces in all agencies and departments.  Each task force must identify “all regulations that are unnecessary, burdensome and harmful to the economy.”  In addition to internal deliberations, the task forces have asked stakeholders to help identify troublesome regulations.  For example, the Commerce Department sought public comment on government regulations interfering with domestic manufacturing.  Of the 168 comments submitted, 79 called out the EPA, the majority of which cited the Clean Air Act (CAA) and Clean Water Act (CWA).

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Topics: Environmental Policy, Energy Policy, Trump Administration, Deregulatory Agenda, Executive Orders

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