The capacity crunch ushers in a multitude of challenges, notably for utilities, developers, and other stakeholders in the energy market. In this three-part video series, our energy attorneys explore the critical issues and opportunities arising from this pivotal moment.

Continue Reading Capacity Crunch Series: Reliability Issues, Decarbonization, and Tax Opportunities

On December 20, 2023, FERC approved the California Independent System Operator Corporation’s (“CAISO”) proposal to establish the Extended Day Ahead Market (“EDAM”), which allows external Balancing Authority Areas (“BAAs”) to participate in CAISO’s day-ahead market. FERC also approved CAISO’s Day Ahead Market Enhancements (“DAME”) proposal, which establishes two new day-ahead market products: Imbalance Reserves and Reliability Capacity. FERC approved the CAISO’s proposals but rejected the proposed EDAM access charge without prejudice. CAISO must submit a compliance filing addressing FERC’s conditions within sixty (60) days of the Order.

Continue Reading FERC Conditionally Approves CAISO Market Expansion

On November 30, 2023, the Commission denied a waiver request and a request for remedial relief from Ridgeview Solar LLC (“Ridgeview Solar”). Ridgeview Solar had sought a waiver or remedial relief from the procedural deadline in section 212.4 of the PJM Interconnection, L.L.C. (“PJM”) Open Access Transmission Tariff (“Tariff”) to post security after the deadline outlined in the section.

Continue Reading FERC Rejects Solar Developer’s Request for Waiver of Security Posting Requirements After Using the Wrong Form; FERC Urges Tariff Changes

On December 12, 2023, FERC staff offered information and recommendations to help registered entities (i.e., users, owners, and operators of the bulk electric system) improve their compliance with mandatory Critical Infrastructure Protection (“CIP”) reliability standards and their overall cybersecurity postures (the “Report”).  The recommendations are based on FERC staff’s non-public CIP audits of U.S.-based North American Electric Reliability Corporation (“NERC”) registered entities during Fiscal Year 2023, which included the participation of NERC and the regional entities.  FERC staff found that registered entities generally met the mandatory requirements of the CIP Standards, although potential noncompliance and security risks remained. FERC staff also identified and made recommendations concerning other voluntary best practices that could improve cybersecurity.  FERC staff explained that the CIP standards aim to mitigate cybersecurity and physical security risks to the bulk electric system’s facilities and equipment.  The Commission approved the first set of eight mandatory CIP standards on cybersecurity on January 28, 2008, and has since revised the standards to respond to emerging cybersecurity issues.  FERC began its CIP standards audit program for registered entities in 2016 and has conducted CIP audits each year since.  

Continue Reading FERC Staff Issues Report on Lessons Learned from 2023 CIP Audits

On December 19, 2023, FERC issued a Notice of Inquiry (“NOI”) to examine whether and how to revise its policy on providing blanket authorizations for holding companies, including investment companies, to acquire securities in electric utilities and their upstream owners pursuant to section 203(a)(2) of the Federal Power Act (“FPA”). Specifically, the Commission is soliciting comment on what constitutes control of a public utility in evaluating holding companies’ requests for authorization and what factors it should consider when evaluating control. Commissioner Mark Christie concurred with a separate statement, stating that FERC should examine whether investment companies are truly acting as passive investors in electric utilities and whether FERC’s blanket authorization practices are still sufficient to protect the interests of the electric utilities’ customers.

Continue Reading FERC Opens Inquiry into Upstream Investment Interests in Public Utilities

On December 1, 2023, the United States Court of Appeals for the Third Circuit (“Third Circuit”) upheld PJM Interconnection, L.L.C.’s (“PJM”) latest minimum offer price rule (the “Focused MOPR”), denying challenges to both the substance of the rule and FERC’s “constructive” approval of the rule, which went into effect after the Commissioners deadlocked two-to-two and failed to issue a timely order accepting or denying the Focused MOPR. The Third Circuit held that a court’s review of FERC’s “action,” whether actual or constructive, proceeds under the same deferential standards in the Federal Power Act (“FPA”) and the Administrative Procedure Act (“APA”), and encompasses the Commissioners’ mandatory statements setting forth their reasoning for approving or denying the filing. On the merits, the Third Circuit held that FERC’s acceptance of PJM’s Focused MOPR policy was not arbitrary and capricious, pointing to arguments laid out in then-Chairman Glick’s and Commissioner Clements’ Joint Statement supporting the Focused MOPR.

Continue Reading Third Circuit Upholds FERC’s Approval of PJM’s Focused MOPR

On November 27, 2023, Troutman Pepper’s award-winning Energy Group published a white paper titled, Unlocking U.S. Transmission Upgrades – Are We On the Cusp of Real Progress?  The white paper offers perspectives from a range of transmission experts and examines the latest regulatory and legal changes that could lead to much-needed upgrades to the U.S. transmission grid.  Specifically, the report discusses why transmission grid upgrades are needed, identifies four main obstacles to upgrading the transmission system, provides solutions and benefits to overcoming these obstacles, and concludes with reasons for optimism for the future of the U.S. transmission system.

Continue Reading Troutman Pepper Releases White Paper on Transmission Upgrades

On November 17, 2023, the U.S. Court of Appeals of the District of Columbia Circuit (“D.C. Circuit”) denied petitions challenging FERC’s approval of recent changes to the PJM Interconnection, L.L.C.’s (“PJM”) Open Access Transmission Tariff. The changes permit Transmission Owners in PJM to plan for “asset management projects” and certain End of Life (“EOL”) projects without satisfying PJM regional planning criteria. The D.C. Circuit also dismissed certain petitions for lack of standing.

Continue Reading D.C. Circuit Upholds PJM Tariff Changes to Planning of Asset Management and End of Life Projects

On November 30, 2023, the Commission denied the Minnesota Municipal Power Agency’s (“MMPA”) complaint alleging that Northern Natural Gas Company (“Northern”) violated the Natural Gas Act (“NGA”) by refusing to execute an interconnection agreement for MMPA’s planned renewable natural gas (“RNG”) facility in Elk River, Minnesota (“Elk River Project”).  The Commission denied MMPA’s complaint without prejudice because the complaint was unripe since Northern has yet to act on MMPA’s interconnection request.

Continue Reading FERC denies Muni Complaint on Proposed RNG Interconnection Request

The IRS and the Treasury Department issued proposed regulations under Section 48 on November 22, 2023 (Proposed Regulations), providing further guidance in determining whether property is energy property and eligible for the Section 48 credit (ITC). As part of this further guidance, the Proposed Regulations introduce a new framework for the definition of energy property, provide welcome clarification regarding the eligibility of energy property for multiple credits, and provide guidance on the Section 48(a)(10)(C) recapture rules applicable to failures to satisfy the prevailing wage and apprenticeship requirements (PWA requirements). Taxpayers must be aware of these energy property requirements and additional ITC eligibility guidance to ensure future eligibility for the ITC. The Proposed Regulations would amend Treasury Regulation Section 1.48-9, withdraw and replace Proposed Treasury Regulation 1.48-13 as it was proposed in REG-100908-23 (PWA Proposed Regulations), and introduce Proposed Regulation Section 1.48-14. The Proposed Regulations follow the passage of the Inflation Reduction Act of 2022 (IRA) and the publication of Notice 2022-49, 2022-43 I.R.B. 321, which requested comments on issues arising under Section 48.

Continue Reading IRS Issues Proposed Regulations on Energy Property and Rules Applicable to Energy Credit Under Section 48