On June 28, 2024, the United States Supreme Court (“Supreme Court”) overruled its prior decision in Chevron U.S.A. v. Natural Resources Defense Council (“Chevron”) in a 6-3 vote in Loper Bright Enterprises et al. v. Raimondo, Secretary of Commerce, et al. (“Loper Bright”). The Chevron doctrine has required federal courts to defer to administrative agencies’ interpretations of statutes the agency administers when the underlying statute is ambiguous. Under the Loper Bright ruling, federal courts will not defer to administrative agencies in interpreting ambiguous statutes and instead must exercise their judgment in determining whether the agency acted within its statutory authority. The decision will likely have a substantial impact on both regulated industries and federal agencies such as FERC.Continue Reading SCOTUS Overrules Chevron Deference in 6-3 Ruling
FERC Approves NERC’s CIP Reliability Standard on Cyber Security
On May 23, 2024, FERC approved the North American Electric Reliability Corporation’s (“NERC”) proposed Critical Infrastructure Protection (“CIP”) Reliability Standard, CIP-012-2 (Cyber Security – Communications between Control Centers), which is intended to improve upon and expand existing reliability standards to mitigate risks posed by loss of availability of communication links and certain data transmitted between bulk electric system (“BES”) Control Centers. FERC also approved NERC’s associated implementation plan, violation risk factors and violation severity levels, and the retirement of Reliability Standard CIP-012-1.Continue Reading FERC Approves NERC’s CIP Reliability Standard on Cyber Security
Divided FERC Announces Much-Anticipated Transmission Rules
On May 13, 2024, the Commission announced two major transmission reform final rules: Building for the Future Through Electric Regional Transmission Planning and Cost Allocation (“Order No. 1920”) and Applications for Permits to Site Interstate Electric Transmission Facilities (“Order No. 1977”). Order No. 1920, which adopts specific requirements for how transmission providers must conduct long-term planning and allocate costs for regional transmission facilities, was the subject of significant debate at today’s meeting and only mustered two votes in support from the three sitting commissioners. The Commission unanimously approved Order No. 1977, which updates the process FERC will use in the limited circumstances in which it must exercise its authority over siting electric transmission lines, as directed by Congress in the Infrastructure Investment and Jobs Act of 2021 (“IIJA”).Continue Reading Divided FERC Announces Much-Anticipated Transmission Rules
D.C. Circuit Upholds FERC Orders Granting Natural Gas Pipeline Companies’ Requests to Extend Project Deadlines
The United States Court of Appeals for the District of Columbia (“D.C. Circuit”) recently upheld two FERC orders granting natural gas pipeline developers’ requests to extend their construction deadlines. The D.C. Circuit denied the Sierra Club’s petitions for review of the extension orders because the court determined that FERC’s decisions were reasonable and adequately supported by the record. The D.C. Circuit further provided that FERC has broad discretion in determining whether a developer has demonstrated good cause for an extension and whether circumstances have changed enough to warrant revisiting FERC’s original findings.Continue Reading D.C. Circuit Upholds FERC Orders Granting Natural Gas Pipeline Companies’ Requests to Extend Project Deadlines
FERC Initiates Inquiry into Capacity Allocation on Non-Contiguous Pipeline Segments
On March 21, 2024, FERC issued a Notice of Inquiry (“NOI”) seeking additional information on whether the Commission should continue to allow interstate pipelines to package “high value” capacity with non-contiguous and operationally unrelated parcels of capacity in a single auction or open season, thus requiring interested bidders to bid on both segments of capacity. Initial comments on the NOI are due by June 20, 2024.Continue Reading FERC Initiates Inquiry into Capacity Allocation on Non-Contiguous Pipeline Segments
Troutman Pepper Summary of FERC Order No. 2023-A on Generator Interconnections
Executive Summary
On March 21, the Federal Energy Regulatory Commission (FERC or the Commission) issued Order No. 2023-A (Final Rule), which reaffirmed aspects of Order No. 2023 — the Commission’s landmark order updating its generator interconnection procedures. As detailed further in this summary, the Commission largely upheld Order No. 2023, including some of the more controversial aspects of the order, such as penalties and the transmission capacity “heat map,” and provided further clarity on other aspects.Continue Reading Troutman Pepper Summary of FERC Order No. 2023-A on Generator Interconnections
FERC Opens Inquiry into Upstream Investment Interests in Public Utilities
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
DOE Proposes to Limit NEPA Review for Transmission, Storage, and Solar
On November 16, 2023, the U.S. Department of Energy (“DOE”) issued a Notice of Proposed Rulemaking (“NOPR”) to update its National Environmental Policy Act (“NEPA”) implementing regulations to add a categorical exclusion for specific energy storage systems and revising categorical exclusions for upgrading and rebuilding transmission lines and solar photovoltaic (“PV”) systems. Comments on the NOPR are due January 2, 2024.Continue Reading DOE Proposes to Limit NEPA Review for Transmission, Storage, and Solar
FERC Accepts Tennessee Gas Pipeline’s New PowerServe Rate Schedule and Authorizes Capacity Lease Agreement with Kinder Morgan
On September 29, 2023, FERC approved Tennessee Gas Pipeline Company, L.L.C.’s (“TGP”) proposal to lease intrastate capacity from Kinder Morgan Texas Pipeline LLC (“Kinder Morgan”) to offer a new hourly transportation “PowerServe” service. According to the parties’ joint application, PowerServe will offer increased flexibility to shippers serving gas-fired power generation facilities that backstop renewable energy sources. Commissioner Danly concurred in part and dissented in part with a separate statement that has not been issued at the time of this article.Continue Reading FERC Accepts Tennessee Gas Pipeline’s New PowerServe Rate Schedule and Authorizes Capacity Lease Agreement with Kinder Morgan
FERC Finds Affiliation Between J.P. Morgan Investment and Mankato Companies
On September 21, 2023, the Commission found that J.P. Morgan Investment Management Inc. (“J.P. Morgan Investment”) is an affiliate of Mankato Energy Center, LLC and Mankato Energy Center II, LLC (“Mankato Companies”) through their upstream owner, IIF US Holding 2 LP (“IIF US Holding 2”) because there is liable to be an absence of arm’s-length bargaining in transactions between Mankato Companies and J.P. Morgan Investment. In doing so, FERC considered, among other things, the power delegated by IIF US Holding 2 to J.P. Morgan Investment, which serves as IIF US Holding 2’s investment advisor. Commissioner Danly concurred in the result in a separate statement, and Chairman Willie Phillips concurred in a separate statement.Continue Reading FERC Finds Affiliation Between J.P. Morgan Investment and Mankato Companies