Originally posted at oregonlive.com
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The PUC clears legal questions over a third-party financing model used by cities, counties and public entities

State utility regulators gave the go-ahead Thursday to dozens of solar-electric projects in a ruling that cleared away legal questions hanging over a popular financing plan.

The decision was a sweeping endorsement of the financing deals, which allow outside investors to tap into lucrative tax breaks by building solar projects for cities, counties and other public entities.

"After review, we find these types of arrangements are consistent with existing laws and rules," said Lee Beyer, chairman of the Oregon Public Utility Commission, which issued the ruling.

About 80 percent of the commercial solar projects set for construction rely on the deals, known as third-party financing, according to Energy Trust of Oregon. If the 32 projects are built, they would more than double the solar power capacity in the state.

"This is a huge green light for renewable energy in Oregon," said Stephen Hall, a partner at Stoel Rives who is chairman of the law firm's Renewable Energy Initiative.

The city of Portland and Multnomah County were among those relieved by the decision. Each has solar projects in the works, as do Bend, Medford, Corvallis and Roseburg. All are relying on variations of third-party financing.

"This is a clear ruling and incredibly helpful," said Dave Tooze, a senior energy specialist with the Portland Office of Sustainable Development. The city is on track to put solar panels on the roof of a new community pool on the east side and an installation at a groundwater pump station near the airport, he said.

The utility commission was under pressure to act quickly because the federal tax credit is to expire at year's end. If deals aren't secured soon, time will run out and potential investors will walk away, solar advocates and financial analysts say.

Public entities -- which can't use tax credits because they produce no income -- say they can't afford the solar installations on their own. The answer has been to hook up with outside investors, such as Honeywell Energy Services, that build and own the projects, sell the power to a city or county under long-term contracts and tap the tax credits.

Pacific Power questioned the legality of the deals in a mid-June petition. The company asked the utility commission to decide whether the outside investors were acting as utilities and therefore were subject to strict state oversight.

The utility also asked whether a city or county could receive credit from its utility for any excess power that the solar installation produced. That's allowed under the state's net metering law.

The utility commission ruled that investors were not utilities, and that the net metering law could be used. Those were the decisions solar advocates said they needed to keep the deals alive.

Pacific Power said it also was pleased with the decision.

"We appreciate the PUC giving all of us the quick legal clarity that was necessary to continue to promote solar power throughout Oregon," said Art Sasse, a utility spokesman.

Gail Kinsey Hill: 503-221-8590; gailhill@news.oregonian.com For environment news, go to oregonlive.com/environment

Originally posted at oregonlive.com
Read the original post here