2024 Election – Implications on Private Equity & Private Credit

Potential Election Impacts on the Private Equity and Private Credit Sectors While the 2024 election cycle may introduce temporary uncertainty, the convergence of positive economic trends such as waning inflation, anticipated additional interest rate cuts, and cautious optimism for a soft landing suggests robust M&A activity into 2025. Additionally, private equity and private credit firms…

2024 Election – Implications on Private Client

Potential Election Impacts on the Private Client Sector As the 2024 election cycle unfolds, the landscape of U.S. policy is poised for potential shifts that could significantly impact individuals and families. With a Harris administration’s focus on increasing tax rates for high earners, implementing new tax policies and providing support for start-up businesses and first-time…

2024 Election – Implications on Life Sciences

As the 2024 election cycle unfolds, the landscape of U.S. policy is poised for potential shifts that could significantly impact various sectors. With the Biden-Harris administration’s focus on lowering the cost of prescription drugs, labor reforms and tax policy adjustments, businesses and individuals alike are bracing for changes that could reshape the economic environment. From…

Hurricanes Helene and Milton: Evaluating Business Interruption Claims Following a Large-Scale Disaster

Storms like the ones that recently caused widespread devastation leave behind challenging questions about business interruption insurance coverage.

Takeaways

Quantifying a policyholder’s business interruption loss is a contentious issue in the wake of wide-impact catastrophic events.
Methods of calculating business interruption losses vary by jurisdiction and policy language.

Hurricanes Helene and Milton physically damaged large areas of the South, particularly in Florida, North and South Carolina, Georgia and Virginia. Businesses in the region are also certainly suffering long-lasting economic damage as they remain closed—and they will rightly want to secure business interruption coverage for those losses.

Following such disasters, one common dispute is whether the measurement of business interruption should account for the post-loss economic conditions of the impacted area. Under ordinary, non-catastrophic circumstances, the performance of a business prior to the catastrophe can be an accurate measurement for how that business would have performed if the damage had not occurred.

But the same may not be true following a wide-impact catastrophe. For example, resulting population shifts—such as an influx of temporary workers or an exodus of residents—can cause long-lasting changes in supply and demand for commodities and services. Construction supplies might be in higher demand than before the catastrophe as rebuilding efforts begin. A business that is able to open might boom if none of its competitors are similarly able to reopen. Consequently, measuring a policyholder’s business interruption loss is one of the most contentious issues to arise from wide-impact catastrophic events like Hurricanes Helene and Milton.

Two lines of authority exist for measuring a policyholder’s business interruption loss following a wide-impact catastrophe: the “economy ignored” and the “economy considered” approaches.

The Economy Ignored approach looks backward and measures the policyholder’s loss only against pre-catastrophe business levels; it does not consider the impact of actual post-catastrophe conditions on the economy, market or demand. Consider, for example, a full-service hotel attached to a convention center that had an 85 percent occupancy rate before a hurricane. The convention center suffered massive damage that required it to close for at least one year. As a result, after the hurricane, the hotel’s occupancy sank to 15 percent. The hotel asserts that the post-hurricane economy should be ignored, and that its business interruption claim should be based on its pre-hurricane occupancy levels, while the insurer posits that the post-hurricane levels should control.

The Economy Considered approach, on the other hand, seeks to place the policyholder in the position that it would have occupied in the actual post-catastrophe environment had it been able to continue its operations. Consider the same convention center and hotel. If the carrier construes its policy as allowing the economy considered measurement, the probable loss of business due to the convention center’s closure could be argued to limit the hotel’s recovery to what it would earn at a 15 percent occupancy. But the reverse could also be true. If the hotel had been operating at an 85 percent occupancy rate for the three years prior to a hurricane, but the influx of temporary workers would have caused it to operate at a 100 percent occupancy rate if it had been open, the hotel could claim full occupancy rates under the economy considered approach. Of course, the insurer would argue that doing so would result in a windfall to the policyholder, as opposed to putting the policyholder in the position that it would have been in had the hurricane not occurred, that is, an 85 percent occupancy rate.

Neither test consistently benefits a policyholder or an insurer in every situation. The outcome instead relies on the unique facts in each circumstance, and which method to use might be based on the particular policy language.

Although policy provisions vary, common business interruption provisions generally include something like:

In determining the amount of the Time Element loss as insured against by this policy, due consideration shall be given to experience of the business before the loss and the probable experience thereafter had no loss occurred.

Following Hurricane Katrina, some insurers inserted language in their policies that they argue reduces a policyholder’s ability to recover in certain situations. These insurers attempt to limit their exposure by including measurement provisions. For example, “Business Income” is to be determined by:

The Net Income of the business before the direct physical loss or direct physical damage occurred; and
The likely Net Income of the business if no physical loss or no physical damage had occurred, but not including any net income that would likely have been earned as a result of an increase in the volume of business due to favorable business conditions caused by the impact of the Covered Cause of Loss on customers or on other businesses (emphasis added).

Obviously, this provision is designed to be one-sided in the insurer’s favor. Policyholders and brokers alike should watch out for provisions like this and seek to negotiate, at a minimum, a more balanced approach.

Knowing the case law that applies in your jurisdiction is also important. Limited recent case law in this area exists, but policyholders affected by Hurricanes Helene and Milton should at least be aware of a Fourth Circuit case that used the economy ignored approach. In Prudential LMI Commercial Insurance Co. v. Colleton Enterprises Inc., 976 F.2d 727 (4th Cir. 1992), the Fourth Circuit, applying South Carolina law, rejected a hotel’s claim for lost profits it would have earned following Hurricane Hugo due to an influx of repair and construction workers in the area. The policy provided: “In determining loss hereunder, due consideration shall be given to: a. the earnings of the business before the date of damage or destruction and to the probable earnings thereafter, had no loss occurred ….” The policyholder had recorded losses during the two-year period prior to the storm. Focusing on the “had no loss occurred” language, the court reasoned that to consider post-storm economic conditions “would be to confer a windfall upon the insured rather than merely to put it in the earnings position it would have been in had the insured peril not occurred.” The court added: “It is that an insured under a business interruption provision such as that here in issue may not claim as a probable source of expected earnings (or operational expenses) a source that would not itself have come into being but for the interrupting peril’s occurrence.” Nevertheless, the court left open the possibility of additional considerations when it stated that the policyholder “might prove that a general economic up-turn for the business had been imminent … or that a specific event had created a profit opportunity which the peril’s occurrence had thwarted.”

Courts across the country have found similarly and differently.

In American Automobile Ins. Co. v. Fisherman’s Paradise Boats Inc., 1994 WL 1720238, at *3 (S.D. Fla. Oct. 3, 1994), the policy stated that business interruption loss would be determined based on likely net income “if no loss or damage occurred.” The court rejected the policyholder’s claim for profits it would have earned due to increased post-hurricane demand for its products, holding that the policy allowed “net income projections that are not itself created by the peril” and the policyholder was not entitled to “the windfall profits.”
In Catlin Syndicate Ltd. v. Imperial Palace of Mississippi Inc., 600 F.3d 511 (5th Cir. 2010), the Fifth Circuit, applying Mississippi law rejected a casino’s claim for the increased profits it would have earned had it remained open following Hurricane Katrina while other area casinos had not. Addressing the typical “had no loss occurred” business interruption policy language, the court reasoned that while the specific “loss” to the casino was distinct from the “occurrence” (the hurricane), the two concepts are intertwined under the language of the business interruption provision, and thus the court held that “only historical sales figures should be considered when determining loss, and sales figures after reopening should not be taken into account.”
On the other hand, in Levitz Furniture Corp. v. Houston Casualty Co., 1997 U.S. Dist. LEXIS 5883 (E.D. La. Apr. 28, 1997), which involved a flood, the court held that the policy at issue “clearly and unambiguously provides coverage for earnings ‘had no interruption’ occurred, and does not exclude profit opportunities due to increased consumer demand created by the flood.”

Policyholders should therefore carefully consider their policy language and the impact of both tests before submitting their claim (and when renewing coverage next time around). Moreover, to maximize coverage, policyholders should adopt appropriate pre- and post-loss planning and claims-handling approaches. These might include, for example, determining which test courts apply in the jurisdictions in which they operate and researching what position their insurers have previously taken, so they can better anticipate possible arguments against their claim. Additionally, policyholders should consider negotiating for better and more appropriate coverage.

Post-Helene and Milton economic conditions may result in some businesses thriving and others struggling. Whether those post-storm conditions will be considered in connection with valuing a business interruption claim depends on the relevant policy language and applicable law. But one thing is certain: post-hurricane economic conditions can have a substantial impact on the value of a business interruption claim.

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2024 Election – Implications on Technology

While the 2024 election cycle may introduce temporary uncertainty, the convergence of positive economic trends such as waning inflation, anticipated interest rate cuts and cautious optimism for a soft landing suggests robust growth in the technology sector into 2025. Additionally, tech companies are poised to benefit from significant advancements in AI, cloud computing and cybersecurity,…

Books, games and collectibles on sale at symphony volunteers’ holiday pop-up

A treasure trove of holiday-related books, CDs, DVDs, puzzles, games and collectibles will be on offer when the Symphony Book Fair holds a seasonal pop-up sale Nov. 9.The pop-up will be open for business from 10 a.m. to 4 p.m. at the Symphony Volunteers’ warehouse, 623 Distributors Row, Suite F, in Elmwood.Volunteers spend all year gathering books, art and more for the group’s giant annual summer book sale. For the holiday pop-up, organizers have curated a selection of items for family fun, entertainment and enrichment that are sure to “make the season bright.”

Admission to the sale is free. For more information, call (504) 343-2226.

Your Online Business Could Be the Next Target for Costly Data Privacy Lawsuits

If your business operates online and uses common marketing tools, your business is at risk of being targeted for lawsuits under pre-internet wiretapping and video rental privacy laws. It is critical to address and mitigate risk before these claims are filed. 

With few exceptions, modern data privacy laws such as California’s CCPA do not give consumers the right to sue businesses directly for privacy violations. Instead, the plaintiffs’ bar has turned to pre-internet laws to assert privacy claims against websites.

The result? A huge upswing in lawsuits and demands against websites based on alleged violations of anti-wiretapping provisions of the California Invasion of Privacy Act (“CIPA”) and the Video Privacy Protection Act (“VPPA”).

Key Information on the Most Common Consumer Data Privacy Claims

The anti-wiretapping and two-party consent provisions of CIPA prohibit intentionally intercepting or accessing the content of a communication without the consent of all parties involved. The wiretapping provisions in CIPA were first passed in 1967 and are facially focused on the tapping of telephone lines. Recently, enterprising plaintiffs’ attorneys have argued, with some success, that third parties that collect data or facilitate communications with customers can be construed as “wiretappers” under the statute. Such internet CIPA claims typically target the use of “pixels,” like those provided by Meta or TikTok, chat services, and “session replay” technology, that provides information on customer behavior on a website. If your site uses common third-party tools to interact with consumers or collect consumer data, your business is at risk of a CIPA claim.

The VPPA was passed in 1988 after Supreme Court nominee Robert Bork’s video rental history surfaced during his 1987 confirmation hearings. Under the VPPA, a “videotape service provider” cannot disclose information that identifies any of its purchasers, renters, or subscribers without receiving consent that is separate from any other contract between the business and the customer. While Blockbuster locations may have disappeared, VPPA claims have recently proliferated. Plaintiffs’ attorneys are increasingly arguing that web sites and other technologies that transmit video to consumers are subject to the VPPA, and that the use of pixels, session replay, and other common marketing data tools constitute violations of the VPPA. If your site embeds video that’s served from a third-party host (like YouTube) or delivers video in a subscription form, including email newsletters, you are at risk of a VPPA claim.

The upsurge in data privacy litigation is exemplified in a recent decision in which a federal appellate court allowed a case under the VPPA to proceed against the NBA. The NBA case makes clear that courts are going to permit consumers to use the VPPA to assert data privacy claims, and that businesses need to proactively mitigate their risk and exposure under the VPPA.

Best Practices for Avoiding These Claims

Following these best practices should reduce the risk of increasingly common CIPA claims:

Full Disclosure and Consent: For CIPA, a banner or click-through consent that links to your privacy notice and user agreement can provide the basis for a strong consent defense. For VPPA, the consent provisions are narrowly drawn, so a separate consent agreement is needed.
Contracts: Ensure agreements with providers prohibit using your users’ data for anything other than fulfilling their obligations to you. A solid Data Processor Agreement (“DPA”) or CCPA-compliance clause will typically cover this.
Route Data Through You: Configure tools to collect data through your business. Routing data through your business’ servers first defeats the core interception element of a wiretap claim.
Review Your Terms: Arbitration clauses are very common and can be helpful to businesses. However, when combined with a waiver of class actions, they could cause your business to fall into the “arbitration trap” in which it is required to defend thousands of claims in a “mass arbitration” rather than consolidating them into a class action. This trap is costly because arbitration filing fees are typically charged on a per claimant basis, and in states where the business is required to pay all, or most, of the fees, a claim with thousands of claimants can yield millions of dollars just in arbitration filing fees. With a few tweaks to an arbitration provision, including providing for the batching of claims, an online business can obviate some of the risks posed by common arbitration clauses.

Nell Nolan: NOCHI 2024, Nocturne – MASNO, Tulane Business Forum 2024, PRC Hampton luncheon

Cause and Food EffectPresented by Hancock Whitney and held at 725 Howard Ave., the NOCHI (New Orleans Culinary & Hospitality Institute) Cooking for a Cause combined all the ingredients for a fine, fundraising time. Elizabeth Boh chaired the event along with her daughter, co-chair Katherine Eshleman Morales (accompanied by husband Richard), while Casey Burka spearheaded the 46-item silent auction. The top five enticements were a European Viking Cruise, dinner at Commander’s Palace with John Bel Edwards, a Chef’s Table Experience at Rosedale Restaurant with Susan Spicer, a dinner curated by NOCHI chef instructors, and a one-night staycation at the Windsor Court Hotel.

The gala’s culinary enticements were numerous and inventive, thanks to guest chefs Leonair Dorsey, NOCHI alumna Martha Gilreath, Amarys Herndon, Michael Gulotta, and eight alumni chefs. Toque thanks! Robin Bordelon Borne and board members Liz Boulware, Jim Landry, Ti Adelaide Martin and Susan Spicer served as gala committee members.

Limelighted as the honorees were Julie and Ted George and Amanda and Isaac Toups, who rated “Cause” kudos! More notables were Dr. Michael Torregano of the Ellis Marsalis Center and his Jazz Trio, and the Merry Antoinettes, who passed out Champagne.

Event planner Tessa Martinez of Contessa & Co. incorporated a colorful palette of sunset pink, peach and orange, which appeared in balloon garlands that draped the circular staircase. Further decorative accents were six-foot marquee letters spelling out NOCHI that were framed with huge paper flowers as a nod to the floral theme, and for photo fun, guests posed in front of a step and repeat. In NOCHI’s fifth-floor event halls, dining tables were dressed in lavish orange taffeta from EB Event Rentals, while cocktail tables sported a multicolor Ikat print. Hundreds of roses and hydrangeas were flown in to embellish the areas.

Relishing all this tabled revelry that trains and sustains the city’s significant and evolving hospitality industry were NOCHI founders George Brower, Ti Martin with Leslie Iwerks, and Dickie Brennan; Deb and Cary Grant; Michael and Leslie Sawaya; and from Hancock Whitney, Liz Hefler and Hartley Crunk. Also, Dook and Gretchen Chase, Emery Van Hook Sonnier and Kristian Sonnier, Margaret and Ken Beer, Mason and Megan Beer Eustis, Stan Harris, Jonathan Baynham, Jennifer Killian, Brian Kish, Katie Mularz, Celeste Baer, Greg Reggio, Ryan and Amanda Berger, and Pepper Baumer. Scores more contributed, such as Katherine (Mrs. Robert H.) Boh, mother of event chair Elizabeth.

Yet another mastheader, a musical one, was “local treasure” Paul Varisco, who with the Milestones, kept the crowds bopping in McIlhenny Hall.Piano PowerThree encores concluded the pianism of Olga Kern, internationally acclaimed pianist, at Nocturne XXI of the Musical Arts Society of New Orleans, which was festively formatted as cocktails, performance and gala dinner at the Ritz-Carlton, New Orleans. Steinway & Sons was a top supporter, along with the host hotel and Hall Piano Company. Riveting the eye was the artist’s glamorous red gown. Her respective dress and jewelry designers are New Yorkers Alez Teih and Alex Soldier.

Floral loveliness came in the form of the roses next to the piano, in different shades of white and pink and designed by “Petite Fleur by Lisa Brooking,” as well the white orchid centerpieces on the dinner tables. As guests savored the tasty meal, they discussed the just-played program of works by Liszt, Debussy, Rachmaninoff and others, including Gershwin (Three Preludes), which was transcribed by American pianist Earl Wild, Nocturne’s first artist 21 years ago. Dr. Terry Voorhies and Leo Landry (with Rand and Beth) served as the 2024 gala chairs.

More notable MASNO names were executive and artistic director Cara McCool Woolf with Vance, president Jason Burge with wife Rebekka Veith, president-elect Robert Edgecombe with Sarah, and founder Julianne Nice with spouse Herb Larson. Also from MASNO were Michael Boucree, Bruce Crutcher with Robin, and Barbara Sands with Thomas. From the LPO came music director Matthew Kraemer with Meg. Noted, too, were Steven and Gina Kinchen, Price and Christine LeBlanc, Dr. Sebastian and Vaughan Koga, and Robin and Dale Williams.

ForumThe recent Tulane Business Forum Reception unfolded in the on-campus Marshall Family Commons, Goldring-Woldenberg Business Complex. Forum co-chairs Laura Beauchamp and Bill Hudlow also figured with Taylor Gilbert and Chris Williams, president, Tulane Association of Business Alumni, on the Forum Sponsor Team. Jennifer McCausland was the forum coordinator. Further representation came from Presenting Media Partner The Times-Picayune| Nola.com and seven patrons. The forum’s morning keynote speakers were Hancock Whitney President and CEO John Hairston and Hancock Whitney Bank President Shane Loper. During the luncheon, Edison Electric Institute President and CEO Dan Brouillette spoke.

“Powering the Wave: Innovation, Trade and Economic Resilience” themed the 45th annual forum that had Galatoire’s & Galerie de Galatoire as the reception underwriter and reception purveyor; the New Orleans Ernest N. Morial Convention Center as host sponsor; Entergy Louisiana, LLC/Entergy New Orleans, forum underwriter, and Phelps Dunbar LLP, Raising the Bar Partner.

Reception brass included A.B. Freeman School of Business Dean Paulo Goes, Tim Hemphill, Mark Preston, Vanessa Claiborne, Philip Coote, Larry Smith, Brent Rosen, Ivy Robinson, Stephanie Riegel and Eric Smith, along with speakers and supporters. For table décor, white linens were accented with ties of Tulane green.

Launching LooksAn easy sell-out, the Preservation Resource Center’s Design Luncheon featured interior designer Alexa Hampton, who discussed her work (and the continuance of the legacy of her late father, Mark Hampton, also a renowned interior designer and writer), her inspirations and her new book, “Design, Style & Influence.” Linda and Gordon Kolb, Holt and Gordon Kolb Jr., Cathy and Hunter Pierson, and Peter Trapolin chaired the event, which unfolded with high style in the Audubon Tea Room, where Alexa’s favorite colors coded the tables (aubergine, vamel, etc.), hydrangea arrangements served as centerpieces, and Dickie Brennan & Co. Catering + Events fed the lovely legions.

Energy & Sustainability Washington Update — November 2024

This month, we wanted to highlight some of the new energy-related programs and announcements from DOD, DOE, and other agencies, as well as other relevant news in the energy and sustainability sector.  Next month, we will discuss the results of the presidential and congressional elections and what they could mean for the direction of federal energy policy, building off the views in our August newsletter.

Significant New Funding Opportunity: DoD Office of Strategic Capital Loan Program to Scale Critical Technologies

On September 30, the Department of Defense’s (DoD) Office of Strategic Capital (OSC) announced its first-ever Notice of Funding Availability (NOFA) to provide loans for energy and other technologies that are critical to US national and economic security. OSC loans can be provided for the construction, expansion, or modernization of commercial facilities that create products supporting the 31 covered technology categories (CTC) laid out in the National Defense Authorization Act (NDAA) for fiscal year 2024.  

OSC was granted a total loan authority of $984 million, which is available through FY26. For the initial round, OSC expects to make loans in the range of $10 million – $150 million to approximately 10 successful applicants. The remaining funding, if any, will be used for future funding opportunities. Subject to appropriations, OSC expects to publish opportunities in the future for additional CTCs and types of assistance, including loan guarantees.

Like many other federal grant and loan programs, OSC is using a two-step process for companies to apply to the NOFA. Part 1 of the application is open to all eligible parties starting on January 2, 2025 through 4:59 pm EST on February 3, 2025. See below for a list of eligible entities. Applications will then be reviewed by the OSC and prioritized by selection criteria. Eligibility and selection criteria for investments require compliance with the statute, the extent to which the investment supports US national security or economic interests, the impact the loan would have on the project, and the creditworthiness of the investment. Selected applicants will be invited to submit Part 2 applications, which will be accepted on a rolling basis.

Continued on ML Strategies Viewpoints.

DOE Notice of Intents (NOIs)

Funding Notice:  $1.3 Billion for Transformational Emissions Reducing Technologies (09/27/2024)The DOE’s Office of Clean Energy Demonstrations (OCED) announced an NOI to fund up to $1.3 billion to catalyze CCUS tech investments. The DOE anticipates offering funding across three topic areas: capture demonstration projects, capture large-scale pilot projects, and planning and design for networks that can share CO2 transport and storage infrastructure. The announcement seeks to increase private sector confidence in adopting CCUS technologies. The solicitation date will be issued later this fall.

Funding Notice: High Performance Computing for Energy Innovation (10/10/2024)The DOE’s Office of Fossil Energy and Carbon Management (FECM) announced an NOI for the High-Performance Computing for Energy Innovation (HPC4EI). The program is the parent initiative to both the HPC4Materials (HPC4Mtls) and HPC4Manufacturing (HPC4Mfg) programs, which are designed to support improvements in manufacturing processes and materials performance. This opportunity helps qualified industry partners participate in short-term projects with DOE national laboratories. The NOI anticipates awarding up to $400,000 per project and requires industry partners to provide a contribution of at least 20% of total project funding. The solicitation date will be issued later this fall.

Funding Opportunity Announcements (FOAs)

ARPA-E Announces SCALEUP Opportunities (10/2/2024)DOE’s Advanced Research Projects Agency-Energy (ARPA-E) announced up to $50 million in open-ended funding for the commercial scale-up of disruptive energy technologies. The SCALEUP Ready program will support advancing technologies from ARPA-E’s portfolio toward market adoption. As a rolling funding opportunity, SCALEUP Ready allows applicants to submit applications at any time while the Notice of Funding Opportunity (NOFO) remains open. There has been no announced date as to when the NOFO will close. Teams may request pre-submission discussions with an ARPA-E Technology-to-Market Advisor and use a self-assessment tool to gauge their SCALEUP readiness for application.

$400 Million in New Funding for America’s Rural and Remote Communities (10/3/2024)DOE’s OCED opened applications for up to $400 million to support clean energy solutions for rural and remote communities as part of the Energy Improvements in Rural or Remote Areas Program. Funding awards will range from $2 million to $50 million. DOE seeks a minimum 5 – 50% minimum cost share per project. Concept papers are due Feb. 27, 2025, and full applications are due Aug. 28, 2025.

$44 Million for Clean Energy Planning and Deployment on Tribal Lands (09/27/2024)DOE anticipates issuing $25 million via 20 – 40 awards ranging from $100,000 to $2.5 million for “projects that support the planning, assessment, and development of clean energy for Tribal buildings or on Tribal lands.” Applications are due January 23, 2025.

$4 Million to Advance Solid Oxide Fuel Cell Technology for Clean, Low-Cost Hydrogen Production (09/26/2024)DOE’s Office of Fossil Energy and Carbon Management (FECM) announced up to $4 million to increase hydrogen affordability across energy efficiency and clean energy applications, including hydrogen energy storage, microgrids, and combined heat and power. The FOA will support R&D efforts around solid oxide fuel cell technology with a focus on reversible solid oxide fuel cell (R-SOFC) systems. Applications are due December 2, 2024. $19.5 Million to Develop a Secure Domestic Supply Chain of Critical Minerals and Materials (09/25/2024)DOE’s Office of Fossil Energy and Carbon Management (FECM), in collaboration with the Office of Energy Efficiency and Renewable Energy (EERE), announced a $19.5 million FOA, which looks to reduce costs for recovering critical minerals and materials from domestic secondary and unconventional sources. The FOA’s four areas of interest are critical mineral coproduction from unconventional carbon feedstock sources, heavy rare earth element recovery, critical mineral recovery from produced water, and process diversification across multiple feedstock types. Applications are due Nov. 26, 2024.

$15 Million to Develop Innovative Systems for Clean Hydrogen Production (09/23/2024)DOE announced up to $15 million to support hydrogen generation efforts, which convert feedstocks (coal, biomass, household waste, etc.) into synthesis gas. Highlighted areas of interest are research around demonstrating entrained flow gasification tech for alternative feedstocks and fluidized bed gasification tech for alternative feedstocks. DOE expects to give up to five awards with a minimum of 20% cost-sharing from the awardees. Full applications are due November 22, 2024.

Requests for Information (RFI)

DOE Solicits Feedback on Its Plan To Increase Products and Materials Circularity (10/9/2024)DOE’s EERE released an RFI seeking input for its draft strategic framework on circularity for secure and sustainable products and materials, including how to improve circularity, variables involved in circularity, public-private partnership opportunities, and data and analysis to inform their efforts. Responses to the RFI must be submitted electronically to [email protected] by December 16, 2024.

LPO Announcements

LPO Announces Conditional Commitment to EVgo to Deploy Nationwide EV Fast Charging Network (10/3/2024)DOE’s Loan Programs Office (LPO) made a conditional commitment to EVgo for a loan guarantee of up to $1.05 billion to deploy 7,500 high-power (350 kW) and speed charging stalls across Arizona, California, Florida, Georgia, Illinois, Michigan, New Jersey, New York, Pennsylvania, and Texas. This rollout will include dynamic power-sharing technology and enable unused power from adjacent stalls to be transferred to a charging vehicle. In support of the administration’s Justice40 initiative, the company intends to install more than 40% of new charging stations in disadvantaged communities. The project is likely to see benefits from the 30C Alternative Fuel Vehicle Refueling Property Tax Credit specifically targeted for rural areas.

Treasury Announcements

Treasury’s final rule for manufacturing tax credit important for critical minerals (10/24/24)The Treasury Department released a finalized rule for the Inflation Reduction Act’s advanced manufacturing production tax credit, 45X, which is available to US producers of clean energy components such as battery cells, solar modules, or critical minerals. After much debate, the final rule makes significant changes to allow domestic mining of critical minerals to be eligible for a 10% cost of production credit and clarifies eligibility for producing components using recycled materials. Taxpayers may include materials and extraction costs if they also process the minerals in the US to a level of specified purity. The tax credit is available through 2032 but begins to phase down after 2029 for most components, except critical minerals. The final rule does not contain a prohibition on funds flowing to foreign entities of concern.

Treasury aims to publish final clean hydrogen rules by year end (10/1/2024)The Treasury Department said it intends to finalize rules for the IRA’s Section 45V, which offers hydrogen producers a tax credit of up to $3 per kilogram of clean hydrogen they produce. Hydrogen companies considered the initial guidelines issued by Treasury late last year too strict and warned that many of their planned plants wouldn’t qualify for the full incentive. The industry is hoping that this long-awaited guidance will clarify qualification questions and also how to request an “emissions value” determination from DOE. Answers will revive progress with the US’ regional clean hydrogen hubs, which are expected to generate $40 billion in private investment and support 334,280 jobs.

Legislative Developments

The Cool Roof Rebate Act of 2024 was recently introduced by Reps. Valerie Foushee (D-NC), Emanuel Cleaver (D-MO), and Raul Diaz (D-CA). The bill would create a rebate program for reflective roofing products to lower home temperatures and reduce energy consumption and costs. It authorizes up to $25 million in household rebates annually across all 50 states and US territories between FY25-FY29. The bill is endorsed by the American Public Health Association, the Federation of American Scientists, and the Smart Surfaces Coalition.

Rep. David Trone (D-MD) has introduced the Revitalizing Economic Competitiveness of Highway Adjacent Areas with Reliable Green Energy for Electric Vehicles (RECHARGE-EV) Act to revise federal EV charger funding guidelines for small towns. The bill directs the Secretary of Transportation to update the guidance for the National Electric Vehicle Infrastructure (NEVI) Formula Program to increase flexibility within the current Bipartisan Infrastructure Law requirement that EV chargers be placed within less than one mile from a freeway exit or highway, which has largely left small towns without federal assistance. The bill is supported by the League of Conservation Voters, Sierra Club, Third Way, and Transportation for America.

The Hydrogen for Industry Act was introduced by Reps. Eric Sorensen (D-IL), Marc Molinaro (R-NY), Don Bacon (R-NE), Jim Costa (D-CA), and Nikki Budzinksi (D-IL). The bipartisan bill would create a program for hydrogen to be used to produce building materials such as steel, cement, glass, chemicals, and fuel. Specifically, the legislation establishes a commercial-scale demonstration program for hydrogen use in heavy industry; provides competitive grants to hydrogen demonstrations in industries such as iron and steel, cement, chemicals, refining, and other industrial products; and directs the Secretary of Energy, Secretary of Commerce, and Secretary of Transportation to jointly conduct a study on the bill’s impact, cost, and safety. A bipartisan version of the bill was introduced in the Senate last year by Sens. John Cornyn (R-TX), Chris Coons (D-DE), Bill Cassidy (R-LA), Martin Heinrich (D-NM), and Ben Ray Lujan (D-NM).

ICYMI

Utilities ‘caught flat-footed’ as energy demand grows, report finds (10/18/2024)A report by consulting firm Wood Mackenzie found that utilities will struggle to meet growing electricity demand in the US, predicting 4 – 15% growth in demand through 2029. This demand-side growth, due to surges in data centers, domestic manufacturing, and industrial electrification, lacks supply-side planning from utilities, as new infrastructure typically takes five to ten years to plan and construct. Electricity demand is expected to increase over the next five years by 25,000, 15,000, and 7,000 MW, respectively. Bottlenecks persist across transmission planning, permitting, and construction. Various solutions to meeting this rising demand could include grid-enhancing technologies, collaboration between data centers and utilities, and a more transparent interconnection process.

Amazon, Google, DOE go big on small nuclear reactors (10/17/2024)Amazon, Google, and the DOE have invested heavily in the development of advanced reactor technology to provide a boost to “nascent energy technology.” Amazon and Dominion Energy expressed that they would explore a 300-MW SMR project close to the North Anna Power Station in Louisa County, Virginia, where the region hosts the largest cluster of data centers in the country.

Amazon inks deal aimed at deploying 5GW of nuclear by 2039 (10/16/2024)Amazon has signed a $500 million deal with nuclear developer X Energy to bring 5 GW of small modular reactors (SMRs) online by 2039. This builds on an agreement Amazon previously signed with the utility Energy Northwest to develop four advanced reactors capable of generating 320 MW by early 2030. According to Amazon and X Energy, this would be the largest deployment of such reactors to date.

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Energy & Sustainability Washington Update — November 2024

This month, we wanted to highlight some of the new energy-related programs and announcements from DOD, DOE, and other agencies, as well as other relevant news in the energy and sustainability sector.  Next month, we will discuss the results of the presidential and congressional elections and what they could mean for the direction of federal energy policy, building off the views in our August newsletter.

Significant New Funding Opportunity: DoD Office of Strategic Capital Loan Program to Scale Critical Technologies

On September 30, the Department of Defense’s (DoD) Office of Strategic Capital (OSC) announced its first-ever Notice of Funding Availability (NOFA) to provide loans for energy and other technologies that are critical to US national and economic security. OSC loans can be provided for the construction, expansion, or modernization of commercial facilities that create products supporting the 31 covered technology categories (CTC) laid out in the National Defense Authorization Act (NDAA) for fiscal year 2024.  

OSC was granted a total loan authority of $984 million, which is available through FY26. For the initial round, OSC expects to make loans in the range of $10 million – $150 million to approximately 10 successful applicants. The remaining funding, if any, will be used for future funding opportunities. Subject to appropriations, OSC expects to publish opportunities in the future for additional CTCs and types of assistance, including loan guarantees.

Like many other federal grant and loan programs, OSC is using a two-step process for companies to apply to the NOFA. Part 1 of the application is open to all eligible parties starting on January 2, 2025 through 4:59 pm EST on February 3, 2025. See below for a list of eligible entities. Applications will then be reviewed by the OSC and prioritized by selection criteria. Eligibility and selection criteria for investments require compliance with the statute, the extent to which the investment supports US national security or economic interests, the impact the loan would have on the project, and the creditworthiness of the investment. Selected applicants will be invited to submit Part 2 applications, which will be accepted on a rolling basis.

Continued on ML Strategies Viewpoints.

DOE Notice of Intents (NOIs)

Funding Notice:  $1.3 Billion for Transformational Emissions Reducing Technologies (09/27/2024)The DOE’s Office of Clean Energy Demonstrations (OCED) announced an NOI to fund up to $1.3 billion to catalyze CCUS tech investments. The DOE anticipates offering funding across three topic areas: capture demonstration projects, capture large-scale pilot projects, and planning and design for networks that can share CO2 transport and storage infrastructure. The announcement seeks to increase private sector confidence in adopting CCUS technologies. The solicitation date will be issued later this fall.

Funding Notice: High Performance Computing for Energy Innovation (10/10/2024)The DOE’s Office of Fossil Energy and Carbon Management (FECM) announced an NOI for the High-Performance Computing for Energy Innovation (HPC4EI). The program is the parent initiative to both the HPC4Materials (HPC4Mtls) and HPC4Manufacturing (HPC4Mfg) programs, which are designed to support improvements in manufacturing processes and materials performance. This opportunity helps qualified industry partners participate in short-term projects with DOE national laboratories. The NOI anticipates awarding up to $400,000 per project and requires industry partners to provide a contribution of at least 20% of total project funding. The solicitation date will be issued later this fall.

Funding Opportunity Announcements (FOAs)

ARPA-E Announces SCALEUP Opportunities (10/2/2024)DOE’s Advanced Research Projects Agency-Energy (ARPA-E) announced up to $50 million in open-ended funding for the commercial scale-up of disruptive energy technologies. The SCALEUP Ready program will support advancing technologies from ARPA-E’s portfolio toward market adoption. As a rolling funding opportunity, SCALEUP Ready allows applicants to submit applications at any time while the Notice of Funding Opportunity (NOFO) remains open. There has been no announced date as to when the NOFO will close. Teams may request pre-submission discussions with an ARPA-E Technology-to-Market Advisor and use a self-assessment tool to gauge their SCALEUP readiness for application.

$400 Million in New Funding for America’s Rural and Remote Communities (10/3/2024)DOE’s OCED opened applications for up to $400 million to support clean energy solutions for rural and remote communities as part of the Energy Improvements in Rural or Remote Areas Program. Funding awards will range from $2 million to $50 million. DOE seeks a minimum 5 – 50% minimum cost share per project. Concept papers are due Feb. 27, 2025, and full applications are due Aug. 28, 2025.

$44 Million for Clean Energy Planning and Deployment on Tribal Lands (09/27/2024)DOE anticipates issuing $25 million via 20 – 40 awards ranging from $100,000 to $2.5 million for “projects that support the planning, assessment, and development of clean energy for Tribal buildings or on Tribal lands.” Applications are due January 23, 2025.

$4 Million to Advance Solid Oxide Fuel Cell Technology for Clean, Low-Cost Hydrogen Production (09/26/2024)DOE’s Office of Fossil Energy and Carbon Management (FECM) announced up to $4 million to increase hydrogen affordability across energy efficiency and clean energy applications, including hydrogen energy storage, microgrids, and combined heat and power. The FOA will support R&D efforts around solid oxide fuel cell technology with a focus on reversible solid oxide fuel cell (R-SOFC) systems. Applications are due December 2, 2024. $19.5 Million to Develop a Secure Domestic Supply Chain of Critical Minerals and Materials (09/25/2024)DOE’s Office of Fossil Energy and Carbon Management (FECM), in collaboration with the Office of Energy Efficiency and Renewable Energy (EERE), announced a $19.5 million FOA, which looks to reduce costs for recovering critical minerals and materials from domestic secondary and unconventional sources. The FOA’s four areas of interest are critical mineral coproduction from unconventional carbon feedstock sources, heavy rare earth element recovery, critical mineral recovery from produced water, and process diversification across multiple feedstock types. Applications are due Nov. 26, 2024.

$15 Million to Develop Innovative Systems for Clean Hydrogen Production (09/23/2024)DOE announced up to $15 million to support hydrogen generation efforts, which convert feedstocks (coal, biomass, household waste, etc.) into synthesis gas. Highlighted areas of interest are research around demonstrating entrained flow gasification tech for alternative feedstocks and fluidized bed gasification tech for alternative feedstocks. DOE expects to give up to five awards with a minimum of 20% cost-sharing from the awardees. Full applications are due November 22, 2024.

Requests for Information (RFI)

DOE Solicits Feedback on Its Plan To Increase Products and Materials Circularity (10/9/2024)DOE’s EERE released an RFI seeking input for its draft strategic framework on circularity for secure and sustainable products and materials, including how to improve circularity, variables involved in circularity, public-private partnership opportunities, and data and analysis to inform their efforts. Responses to the RFI must be submitted electronically to [email protected] by December 16, 2024.

LPO Announcements

LPO Announces Conditional Commitment to EVgo to Deploy Nationwide EV Fast Charging Network (10/3/2024)DOE’s Loan Programs Office (LPO) made a conditional commitment to EVgo for a loan guarantee of up to $1.05 billion to deploy 7,500 high-power (350 kW) and speed charging stalls across Arizona, California, Florida, Georgia, Illinois, Michigan, New Jersey, New York, Pennsylvania, and Texas. This rollout will include dynamic power-sharing technology and enable unused power from adjacent stalls to be transferred to a charging vehicle. In support of the administration’s Justice40 initiative, the company intends to install more than 40% of new charging stations in disadvantaged communities. The project is likely to see benefits from the 30C Alternative Fuel Vehicle Refueling Property Tax Credit specifically targeted for rural areas.

Treasury Announcements

Treasury’s final rule for manufacturing tax credit important for critical minerals (10/24/24)The Treasury Department released a finalized rule for the Inflation Reduction Act’s advanced manufacturing production tax credit, 45X, which is available to US producers of clean energy components such as battery cells, solar modules, or critical minerals. After much debate, the final rule makes significant changes to allow domestic mining of critical minerals to be eligible for a 10% cost of production credit and clarifies eligibility for producing components using recycled materials. Taxpayers may include materials and extraction costs if they also process the minerals in the US to a level of specified purity. The tax credit is available through 2032 but begins to phase down after 2029 for most components, except critical minerals. The final rule does not contain a prohibition on funds flowing to foreign entities of concern.

Treasury aims to publish final clean hydrogen rules by year end (10/1/2024)The Treasury Department said it intends to finalize rules for the IRA’s Section 45V, which offers hydrogen producers a tax credit of up to $3 per kilogram of clean hydrogen they produce. Hydrogen companies considered the initial guidelines issued by Treasury late last year too strict and warned that many of their planned plants wouldn’t qualify for the full incentive. The industry is hoping that this long-awaited guidance will clarify qualification questions and also how to request an “emissions value” determination from DOE. Answers will revive progress with the US’ regional clean hydrogen hubs, which are expected to generate $40 billion in private investment and support 334,280 jobs.

Legislative Developments

The Cool Roof Rebate Act of 2024 was recently introduced by Reps. Valerie Foushee (D-NC), Emanuel Cleaver (D-MO), and Raul Diaz (D-CA). The bill would create a rebate program for reflective roofing products to lower home temperatures and reduce energy consumption and costs. It authorizes up to $25 million in household rebates annually across all 50 states and US territories between FY25-FY29. The bill is endorsed by the American Public Health Association, the Federation of American Scientists, and the Smart Surfaces Coalition.

Rep. David Trone (D-MD) has introduced the Revitalizing Economic Competitiveness of Highway Adjacent Areas with Reliable Green Energy for Electric Vehicles (RECHARGE-EV) Act to revise federal EV charger funding guidelines for small towns. The bill directs the Secretary of Transportation to update the guidance for the National Electric Vehicle Infrastructure (NEVI) Formula Program to increase flexibility within the current Bipartisan Infrastructure Law requirement that EV chargers be placed within less than one mile from a freeway exit or highway, which has largely left small towns without federal assistance. The bill is supported by the League of Conservation Voters, Sierra Club, Third Way, and Transportation for America.

The Hydrogen for Industry Act was introduced by Reps. Eric Sorensen (D-IL), Marc Molinaro (R-NY), Don Bacon (R-NE), Jim Costa (D-CA), and Nikki Budzinksi (D-IL). The bipartisan bill would create a program for hydrogen to be used to produce building materials such as steel, cement, glass, chemicals, and fuel. Specifically, the legislation establishes a commercial-scale demonstration program for hydrogen use in heavy industry; provides competitive grants to hydrogen demonstrations in industries such as iron and steel, cement, chemicals, refining, and other industrial products; and directs the Secretary of Energy, Secretary of Commerce, and Secretary of Transportation to jointly conduct a study on the bill’s impact, cost, and safety. A bipartisan version of the bill was introduced in the Senate last year by Sens. John Cornyn (R-TX), Chris Coons (D-DE), Bill Cassidy (R-LA), Martin Heinrich (D-NM), and Ben Ray Lujan (D-NM).

ICYMI

Utilities ‘caught flat-footed’ as energy demand grows, report finds (10/18/2024)A report by consulting firm Wood Mackenzie found that utilities will struggle to meet growing electricity demand in the US, predicting 4 – 15% growth in demand through 2029. This demand-side growth, due to surges in data centers, domestic manufacturing, and industrial electrification, lacks supply-side planning from utilities, as new infrastructure typically takes five to ten years to plan and construct. Electricity demand is expected to increase over the next five years by 25,000, 15,000, and 7,000 MW, respectively. Bottlenecks persist across transmission planning, permitting, and construction. Various solutions to meeting this rising demand could include grid-enhancing technologies, collaboration between data centers and utilities, and a more transparent interconnection process.

Amazon, Google, DOE go big on small nuclear reactors (10/17/2024)Amazon, Google, and the DOE have invested heavily in the development of advanced reactor technology to provide a boost to “nascent energy technology.” Amazon and Dominion Energy expressed that they would explore a 300-MW SMR project close to the North Anna Power Station in Louisa County, Virginia, where the region hosts the largest cluster of data centers in the country.

Amazon inks deal aimed at deploying 5GW of nuclear by 2039 (10/16/2024)Amazon has signed a $500 million deal with nuclear developer X Energy to bring 5 GW of small modular reactors (SMRs) online by 2039. This builds on an agreement Amazon previously signed with the utility Energy Northwest to develop four advanced reactors capable of generating 320 MW by early 2030. According to Amazon and X Energy, this would be the largest deployment of such reactors to date.

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