On March 2, 2017, the U.S. Senate voted 62-37 to confirm Rick Perry as the Secretary of the Department of Energy (“DOE”). Secretary Perry will succeed Dr. Ernest Moniz. Prior to his confirmation as Secretary of the DOE, Secretary Perry was Governor of Texas from December 2000 to January 2015,
FERC Acting Chairman LaFleur Appoints Clark Cheney as ALJ
On February 21, 2017, FERC’s Acting Chairman, Cheryl LaFleur, announced the appointment of Judge Clark S. Cheney as a FERC Administrative Law Judge (“ALJ”).
Judge Cheney previously served as an ALJ with the Social Security Administration. Prior to working at the Social Security Administration, Judge Cheney was an attorney adviser
President Trump Asks Agencies to Freeze Regulations, Orders Agencies to Repeal Two Regulations for Every New Regulation Promulgated
On January 20, 2017, President Donald Trump asked the heads of executive departments and agencies temporarily to refrain from sending regulations to the Office of the Federal Register (“OFR”), withdraw regulations that have been sent to the OFR but have not yet published in the Federal Register, and postpone certain regulations that have been published in the Federal Register but have not taken effect. In addition, on January 30, 2017, President Trump ordered executive departments and agencies to identify at least two existing regulations to be repealed for every new regulation proposed for notice and comment or otherwise promulgated (“January 30 Executive Order”). In a guidance memorandum released February 2, 2017, the Office of Management and Budget (“OMB”) clarified, among other things, that the January 30 Executive Order does not apply to independent agencies such as FERC.
FERC Approves Disturbance Control Standard for Balancing Authorities and Reserve Sharing Groups
On January 19, 2017, FERC approved Reliability Standard BAL-002-2, Disturbance Control Standard—Contingency Reserve for Recovery from a Balancing Contingency Event, which is designed to “ensure that balancing authorities and reserve sharing groups balance resources and demand and return their Area Control Error to defined values following a Reportable Balancing Contingency Event.” In doing so, FERC also directed the North American Electric Reliability Corporation (“NERC”) to: (1) collect and report on data regarding additional energy losses following Reportable Balancing Contingency Events during the Contingency Reserve Restoration Period; and (2) study and report on reliability risks associated with energy losses above the most severe single contingency that do not cause energy emergencies.
ISO-NE Modifies Natural Gas Price Source Used to Calculate Market Thresholds
On January 9, 2017, FERC approved ISO New England Inc.’s (“ISO-NE”) proposed revisions to its Transmission, Markets and Services Tariff (“Tariff”) to change the source of natural gas prices used in calculating the daily energy market offer threshold for Import Capacity Resources, the Peak Energy Rent Strike Price, and the Forward Reserve Threshold Price under ISO-NE’s Tariff. In doing so, FERC found that ISO-NE’s proposal to calculate these thresholds using the Intercontinental Exchange’s (“ICE”) AGT-CG (Non-G) hub instead of ICE’s AGT-CG hub was just and reasonable because it changes the natural gas price index from one that is rarely liquid to one that is reliably liquid and satisfies FERC’s requirements for using price indices in tariffs.
FERC Approves Revised Definition of “Load Serving Entity” in CAISO
On December 30, 2016, FERC accepted the California Independent System Operator Corporation’s (“CAISO”) proposed revisions to the definition of “Load Serving Entity” under its tariff. In particular, CAISO’s proposed tariff revisions seek to add a new class of end user Load Serving Entities that: (1) are the ultimate consumers of electricity; (2) have legal authority to serve load through the purchase of energy from an entity that is not a Load Serving Entity; and (3) have exercised their right to purchase electricity from a party that is not serving as the Load Serving Entity for the transaction.
CFTC Reproposes Position Limits Rule
On December 5, 2016, the U.S. Commodity Futures Trading Commission (“CFTC”) reproposed regulations implementing limits on speculative futures and swaps positions (“Reproposal”). Notably, in the Reproposal, the CFTC: (1) proposes limits on speculative positions in 25 physical commodity futures contracts and their “economically equivalent” futures, options, and swaps; (2) proposes numerous adjustments to the bona fide hedging position definition; and (3) proposes to allow exchanges to recognize non-enumerated bona fide hedging positions and certain enumerated anticipatory hedge positions, and to grant spread exemptions.
FERC Adopts FAST Act Provisions on Critical Infrastructure Information
On November 17, 2016, FERC issued a final rule amending and clarifying its regulations to implement provisions of the Fixing America’s Surface Transportation Act (the “FAST Act”) regarding the designation, protection, and sharing of Critical Energy/Electric Infrastructure Information (“CEII”). In doing so, FERC established criteria and procedures for the designation of CEII, prohibited unauthorized disclosure of CEII, created sanctions for the unauthorized disclosure of CEII by FERC personnel, and permitted the voluntary sharing of CEII among appropriate entities.
D.C. Circuit Denies Review, Upholds FERC Approval of Corpus Christi LNG Facility
On November 4, 2016, the U.S. Court of Appeals for the D.C. Circuit (the “D.C. Circuit”) rejected Sierra Club’s arguments that FERC’s environmental review under the National Environmental Policy Act of 1969 (“NEPA”) of Cheniere Energy Inc.’s (“Cheniere”) Corpus Christi, Texas liquefied natural gas (“LNG”) export project (the “Corpus Christi Project”) was inadequate. Notably, the D.C. Circuit held that FERC does not have to address the indirect environmental effects of anticipated exports of LNG in its NEPA review because the U.S. Department of Energy (the “DOE”) has sole authority to approve the export of natural gas.
FERC Rejects Arguments that Environmental Review of Presidio Border Crossing Project Failed to Consider Related Intrastate Pipeline
On November 1, 2016, FERC rejected arguments raised by numerous intervenors (“Environmental Intervenors”) that FERC had too narrowly defined its jurisdiction over Trans-Pecos Pipeline, LLC’s (“Trans-Pecos”) Presidio Border Crossing Project (the “Project”) and interconnecting intrastate pipeline (the “Trans-Pecos Pipeline”), which resulted in an abbreviated environmental review that failed to comply with the National Environmental Policy Act of 1969 (“NEPA”). In doing so, FERC found that the Trans-Pecos Pipeline will be an intrastate pipeline receiving natural gas produced solely in Texas, and thus environmental review of the construction and operation of the pipeline is not subject to FERC’s Natural Gas Act (“NGA”) Section 7 jurisdiction.