On September 5, 2023, the U.S. Court of Appeals for the Ninth Circuit (“Ninth Circuit”), in Solar Energy Industries Association v. FERC, held that the Public Utility Regulatory Policy Act (“PURPA”) gives FERC broad discretion to evaluate which implementation rules are needed to encourage the development of qualifying small-scale renewable generating facilities. While the Ninth Circuit did not vacate FERC’s decision, it remanded the decision back to FERC for failing to conduct the proper National Environmental Policy Act (“NEPA”) review. The decision stems from the Solar Energy Industries Association and several environmental organizations’ (collectively, “Petitioners”) challenge to Order Nos. 872 and 872‑A (collectively, “Order 872”), which were rules adopted by FERC that altered which small-scale renewable facilities qualify for benefits under PURPA and how those facilities are compensated (see July 20, 2020 edition of the WER).Continue Reading Ninth Circuit Finds that PURPA Gives FERC Broad Implementation Discretion, But Remands New Qualifying Facility Rules for Lack of NEPA Review

On July 13, 2023, FERC on rehearing set aside its prior order that had accepted Southwest Power Pool, Inc.’s (“SPP”) proposal to establish a case-by-case process to allocate, on a regional, postage-stamp basis, all of the costs of a transmission facility with a voltage level between 100 kV and 300 kV (“Byway facility”).  In setting aside its prior approval, FERC found that SPP’s Proposal granted the SPP Board too much discretion in allocating the costs of Byway facilities. Commissioners Mark Christie and James Danly each concurred with separate statements.  FERC’s rejection marked the second time SPP’s proposal failed to obtain Commission approval.Continue Reading FERC Reverses Course, Rejects SPP Byway Cost Allocation Proposal for Second Time

On June 13, 2023, the House of Representatives Subcommittee on Energy, Climate, and Grid Security held a hearing on the “Oversight of FERC: Adhering to a Mission of Affordable and Reliable Energy for America.” The hearing focused on reliability and the transition from fossil fuel generation to renewable resources.Continue Reading House Subcommittee Holds FERC Oversight Hearing on Improving Reliability Through Energy Expansion, Interregional Transmission, and Backing Renewables with Fossil Fuels

On May 4, 2023, the Senate Energy and Natural Resources Committee hosted all four FERC Commissioners for an oversight hearing to focus on reliability in the face of (1) cyber-attacks, (2) coal and natural gas plant retirements, (3) severe weather, and (4) subsidies, climate policies, and market signals that encourage more intermittent resources to come online.Continue Reading FERC Commissioners Answer to Senate Committee on Fleet Transformation and Other Pressing Issues

On April 21, 2023, the President Biden issued an “Executive Order on Revitalizing Our Nation’s Commitment to Environmental Justice for All.” The new Executive Order provides that “each [federal] agency should make achieving environmental justice part of its mission.” To that end, it provides that agencies shall:Continue Reading Biden Issues Executive Order Increasing Agency Requirements on Environmental Justice

On March 16, 2023, FERC approved a new cybersecurity reliability standard, CIP-003-9 (along with associated violation risk factors and violation security levels), proposed by the North American Electric Reliability Corporation (“NERC”).  CIP-003-9 focuses on supply chain risk management for low impact Bulk Electric System (“BES”) Cyber Systems and requires: (1) responsible entities to include the topic of “vendor electronic remote access security controls” in their cyber security policies; (2) entities with low impact BES facilities to have methods for identifying and disabling vendor remote access; and (3) entities with low impact BES facilities to have methods for detecting malicious communications for vendor remote access.  The new standard aims to prevent compromises to cyber systems in the event of a known or suspected malicious communication and will become effective 36 months after FERC’s approval.Continue Reading FERC Approves Extending Risk Management Practices to Low-Impact Cyber Systems

On February 16, 2023, FERC addressed arguments raised on rehearing of its August 31, 2022, order accepting Midcontinent Independent System Operator, Inc.’s (“MISO”) proposal to establish a seasonal resource adequacy construct with availability-based resource accreditation (“August 2022 Order”). In doing so, FERC continued to find that MISO’s proposed transition from an annual planning resource auction to an independent auction to meet seasonal requirements is just and reasonable.Continue Reading On Rehearing, FERC Accepts MISO’s Seasonal Resource Adequacy Construct

On January 27, 2023, FERC approved the Midcontinent Independent System Operator, Inc. (“MISO”) Transmission Owners’ (“TOs”) proposal to terminate reactive power charges and compensation under MISO’s Open Access Transmission, Energy, and Operating Reserve Markets Tariff (“Tariff”), effective December 1, 2022.  As a result, MISO will no longer charge transmission customers for reactive power service within the standard power range, and no generators, whether affiliated with the MISO TOs or not, will receive compensation for providing reactive power service within the standard power factor range.  Nevertheless, FERC’s determination does not affect MISO generators’ ongoing obligation to provide reactive power.  If MISO directs a generator to provide reactive power outside of the standard power factor range, the generator will be compensated based on existing mechanisms already included in MISO’s Tariff.  Continue Reading FERC Allows MISO Transmission Owners to Retroactively Terminate Reactive Power Compensation Back to December 2022

On October 6, the Fourteenth Court of Appeals of Houston, Texas issued an opinion in San Jacinto River Authority v. Gonzalez, et al., a case involving claims by 85 residents against the San Jacinto River Authority (“Authority”), the governmental entity that maintains Lake Conroe and the Lake Conroe Dam, for releasing water from Lake Conroe and allegedly flooding their homes. The court found that the residents failed to prove causation because residents’ homes would have flooded even if the Authority had not released any water.Continue Reading Texas Court Finds Lack of Causation in Takings Case Arising from Spills at Texas Dam During Hurricane Harvey

On October 21, 2022, the U.S. Department of Energy (“DOE”) announced three new funding opportunities to support research and development projects for hydropower infrastructure in the United States.  The funding totals $28 million and is part of the Bipartisan Infrastructure Law’s efforts to advance hydropower as a clean energy source.  DOE explains that the funding will support the expansion of: (1) “low-impact hydropower,” such as retrofits for dams that do not currently produce power and existing pumped storage hydropower facilities, (2) the development of new pumped storage hydropower facilities, and (3) engagement with “key voices” on issues including fleet modernization, sustainability, and environmental impacts.Continue Reading DOE Announces $28 Million Funding to Support Hydroelectric Programs