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On December 22, 2021, FERC issued an order on voluntary remand from the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) directing changes to PJM Interconnection, L.L.C.’s (“PJM’s”) reserve market design. FERC’s December 22 order reverses certain changes it previously ordered in May 2020 (“May 2020 Order”). The December 22 order affirmed FERC’s decision in the May 2020 Order to accept PJM’s proposal to consolidate its Tier 1 and Tier 2 Synchronized Reserve Products. However, the December 22 order required PJM to revert back to its currently-effective Reserve Penalty Factors, two-step Operating Reserve Demand Curve (“ORDC”), and a backward-looking Energy and Ancillary Services (“E&AS”) Offset. FERC directed PJM to apply the backward-looking E&AS Offset to the 2023/24 Base Residual Auction (“BRA”), which was previously scheduled to run in January 2022, notwithstanding any resulting delay to the auction schedule. FERC required PJM to submit a revised BRA schedule on compliance. Commissioner Christie issued a concurring opinion, and Commissioner Danly dissented in part.
Continue Reading FERC Reverses Certain Changes to PJM Reserve Market in Voluntary Remand Proceeding

On December 16, 2021, FERC ordered Energy Transfer Partners, L.P. and its subsidiary Rover Pipeline, LLC (“Rover Pipeline”) to explain why it should not pay a $40 million civil penalty for alleged violations of the Natural Gas Act, and the pipeline’s certificate order, during construction of its 711 mile interstate natural gas pipeline.

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On October 21, the Department of Energy (DOE)’s National Renewable Energy Laboratory (NREL) issued An Examination of the Hydropower Licensing and Federal Authorization Process, in which it examined the various statutory and regulatory requirements applicable to hydropower projects, and how those requirements protect water quality, fish and wildlife, among other things, they can also add to the time and cost of licensing.  The report provides quantitative and qualitative analyses, considers the perspectives of developers and regulators, and addresses various studies on hydropower licensing timelines and costs, both in the United States and in other hydropower-producing countries.  The report does not propose specific recommendations, but makes a series of key findings that it suggests can be used by policymakers and regulators to engage in informed discussions with project developers and other hydropower stakeholders.
Continue Reading Department of Energy Issues Report on Hydropower Permitting

On December 16, 2021, the Federal Energy Regulatory Commission (Commission or FERC) issued a final rule amending its regulations governing the dam safety of FERC-licensed hydroelectric projects under the Federal Power Act (FPA).  FERC’s final rule follows its July 16, 2020 Notice of Proposed Rulemaking (NOPR) (see July 21, 2020 edition of the WER), which FERC issued following the 2017 spillway incident at the Oroville Dam and the May 2020 dam failures at the Edenville Dam and Sanford Dam in central Michigan.

The Commission explained that its final rule accomplished four objectives that are essential to improving its dam safety program under part 12 of its regulations.  First, it implements the two-tiered inspection program set forth in the NOPR, which will include a comprehensive assessment and a periodic inspection, each of which will be performed at a 10-year interval.  The comprehensive assessment will be more in-depth than the current part 12 inspections, will formally incorporate the existing Potential Failure Mode Analysis process, and will also require a semi-quantitative risk analysis.  The periodic inspection will be narrower in scope and primarily focused on performance of project works between comprehensive assessments.  This two-tier structure retains FERC’s current five-year interval between part 12 inspections at each Commission-licensed project and is consistent with the Federal Emergency Management Agency’s (FEMA) recommendation that “formal” inspections be conducted every five years.  FERC’s rule explained that this two-tier inspection scheme is similar to those used by the Bureau of Reclamation and the Army Corps of Engineers.
Continue Reading FERC Finalizes Revisions to Dam Safety Regulations

On October 25, the North American Electric Reliability Corporation (NERC) released a report regarding the lessons learned from the electric industry’s response to the novel coronavirus (COVID-19) pandemic. NERC’s report described the industry’s response and provided possible solutions and paths for the industry’s future based on its findings.

Continue Reading NERC Issues Report on Lessons Learned from Utilities Response to the COVID-19 Pandemic

On September 23, 2021, the Federal Energy Regulatory Commission (FERC), for the first time, issued two orders reserving the right to require future license measures to ensure that licensees have adequate financial reserves “to carry out the terms of the license and Commission orders pertaining thereto.”  FERC’s orders follow its January 2021 Notice of Inquiry, in which it solicited public comments on whether and how it should impose financial assurance requirements on hydropower licensees to ensure licensees have sufficient financial resources to maintain their projects in safe condition.
Continue Reading FERC Includes Financial Assurance Requirement in Recent Licensing Orders

As Seattle City Light proceeds through the FERC relicensing of its Skagit River Hydroelectric Project, it faces two recent lawsuits filed by the Sauk-Suiattle Indian Tribe and one by Skagit County.  Two of the suits are related to the Project’s alleged impacts on fish passage, and another alleges that Seattle City Light is misleading the public, or “greenwashing” with respect to its clean energy claims.
Continue Reading Seattle City Light Faces Lawsuits During Skagit Relicensing

On September 23, 2021, the Federal Energy Regulatory Commission (“FERC”) and the North American Electric Reliability Corporation (“NERC”) Staff released their report and recommendations regarding the 2021 Winter Freeze during the September Open Meeting at FERC. In this joint review, Staff reviewed what happened during the freeze, what caused the failure, and outlined various recommendations to prevent similar events in the future.
Continue Reading FERC and NERC Release Report and Recommendations Regarding 2021 Winter Freeze