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On May 20, 2021, FERC issued two orders in which it authorized two pipeline companies to construct and abandon certain pipeline facilities, subject to conditions. In an exciting and sometimes tense Commission open-meeting, the Commission ultimately approved Northern Natural Gas Company’s (“Northern”) application to construct and operate certain pipeline compression and auxiliary facilities and abandon short segments of existing pipeline (“2021 Expansion Project”) in Minnesota.

Continue Reading FERC Approves Pipeline Certificates with Last Minute Amendment Caveating GHG NEPA Analysis as “Information Only”

On April 30, 2021, FERC rejected PJM Interconnection, L.L.C.’s (“PJM”) proposed revisions to both its Tariff and its Reliability Assurance Agreement (“RAA”) to implement an Effective Load Carrying Capability (“ELCC”) construct for determining capacity values for Variable Resources, Limited Duration Resources, and Combination Resources. PJM also proposed to update its capacity value analysis annually based on variations in resource deployment and load. To account for changes in capacity values from one year to the next, PJM had proposed a transition mechanism that would establish ELCC floor values for resources on a rolling annual basis for 13 years after they enter the PJM capacity market. FERC rejected PJM’s ELCC proposal, finding the proposed transition mechanism to be unjust and unreasonable. However, FERC found that aside from the transition mechanism, other portions of the ELCC framework appear to be just and reasonable for determining accredited capacity values. FERC lifted its previously-established abeyance on the paper hearing procedures addressing PJM’s capacity valuation method, and established a briefing schedule. FERC acknowledged that PJM is under no obligation to implement its ELCC proposal prior to the next Base Residual Auction (for Delivery Year 2022/2023), but emphasized that it “specified an expedient paper hearing schedule to investigate the justness and reasonableness of PJM’s existing capacity valuation methods as soon as possible.” Commissioner Christie issued a separate concurring statement.
Continue Reading FERC Rejects PJM ELCC Proposal Based on Transition Mechanism; Establishes Paper Hearing Procedures

On April 15, 2021, FERC issued a long-awaited policy statement providing guidance on incorporating state-determined carbon pricing into organized markets operated by Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”). The non-binding policy statement explains how FERC will review and consider rate filings submitted under section 205 of the Federal Power Act (“FPA”) to establish market rules for incorporating state-determined carbon pricing into RTOs and ISOs.
Continue Reading FERC Issues Policy Statement on Carbon Pricing in Organized Wholesale Electric Markets

On March 23, 2021, the United States Court of Appeals for the Second Circuit (the “Second Circuit” or the “Court”) agreed with FERC’s determination that the New York State Department of Environmental Conservation (“DEC”) had waived its certification authority under the Clean Water Act (“CWA”) by failing to act within the one-year statutory deadline. Notably, the Second Circuit held that a state agency cannot revise a certification request date by written agreement with the applicant, thereby altering the one-year statutory deadline for state action. Denying the petitions for rehearing by DEC and the Sierra Club, the Court applied the same reasoning it applied in New York State Dep’t of Env’t Conservation v. FERC (“New York I”), 884 F.3d 450, 455-56 (2d Cir. 2018) (see March 20, 2018 edition of the WER) where the Second Circuit determined that DEC could not unilaterally alter the application date based on when it considered an application complete “because that approach would allow a state agency not only to dictate when the review process can begin but also to delay it indefinitely.” There, to avoid such a subjective standard, the Second Circuit established a bright line rule that the beginning of the review is determined by the date “of receipt of such request.”

Continue Reading Second Circuit Sides with FERC – States May Not Agree to Revise the Certification Request Date to Avoid Waiver of its Certification Authority Under Section 401 of the Clean Water Act

On March 18, 2021, FERC issued a Final Rule amending its regulations to establish a one-year period for states, tribes, or other certifying authorities (“Certifying Agencies”) to act on a Clean Water Act (“CWA”) Section 401 water quality certification request for proposed natural gas and liquefied natural gas projects.
Continue Reading FERC Establishes Water Quality Certification Waiver Period for Natural Gas Projects

On March 5, 2021, FERC issued a Notice of Virtual Listening Sessions and Public Comment Period soliciting input on how it should establish and operate its Office of Public Participation (OPP) pursuant to section 319 of the Federal Power Act (FPA).  Commission staff, led by Commissioner Clements, held the first public listening session on March 17, and additional listening sessions and a Technical Workshop are scheduled for the coming weeks.
Continue Reading Addressing Environmental Justice: FERC Holds Virtual Listening Sessions and Accepts Public Comments on Development of the Office of Public Participation

On March 22, 2021, FERC, for the first time, assessed the significance of a proposed natural gas pipeline project’s greenhouse gas emissions (“GHGs”) and their contribution to climate change when it approved Northern Natural Gas Company’s (“Northern”) South Sioux City to Sioux Falls A-line Replacement project (“Project”). As proposed, Northern will abandon in-place certain pipeline facilities in Nebraska and South Dakota, construct and operate approximately 87.3 miles of replacement pipeline, and modify existing and install new above-ground facilities. While all five FERC Commissioners agreed to approve the Project, both Commissioner Danly and Commissioner Christie dissented from FERC’s decision to determine the significance of GHGs in an individual pipeline proceeding.

Continue Reading FERC Changes Course, Considers Pipeline’s GHGs Significance and Climate Impacts

On March 18, 2021, FERC issued Order No. 2222-A, setting aside its finding in Order No. 2222 that demand response resource participation in heterogeneous distributed energy resource (“DER”) aggregations are subject to the opt-out and opt-in requirements of Order Nos. 719 and 719-A, as well as clarifying other requirements in Order No. 2222 concerning Qualifying Facility (“QF”) interconnection policies, restrictions to avoid double-counting services, and information sharing and criteria for the distribution utility review process. Concurrent with Order No. 2222-A, FERC also issued a Notice of Inquiry (“NOI”) seeking comment on whether to revise its more than a decade-old regulations requiring Regional Transmission Organizations and Independent System Operators (“RTO/ISO”) not to accept bids from an aggregator of retail customers (“ARC”) where the relevant electric retail regulatory authority (“RERRA”) prohibits such customers’ demand response resources from being bid into organized markets (“Demand Response Opt-Out”). Specifically, the NOI applies only to regulations where an ARC aggregates the demand response of the customers of utilities that distributed more than four million megawatt-hours in the previous fiscal year and is intended to examine whether changing circumstances warrant revision of the Demand Response Opt-Out and whether the RTO/ISO market would benefit from including currently barred Demand Response Opt-Out resources.

Continue Reading FERC to Allow Distributed Energy Resource Aggregations in Wholesale Electric Markets to Include Demand Response Resources

On February 26, 2021, FERC accepted a proposal from Entergy Services, LLC (“Entergy”) to amend a wholesale rate schedule, the Unit Power Sales Agreement (“UPSA”), subject to refund and set the matter for hearing.  FERC also instituted an investigation under section 206 of the FPA to allow customers to recover refunds associated with any further rate reduction, consolidated various related Entergy proceedings on accumulated deferred income taxes (“ADIT”), set a hearing procedure and held those procedures in abeyance pending the issuance of further FERC orders.
Continue Reading FERC Sets Entergy’s Proposal to Amend the Unit Power Sales Agreement for Hearing to Determine Whether Customers Should Receive a Bigger Rate Decrease