Troutman Pepper Locke

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On December 31, 2012, the North American Electric Reliability Corporation (“NERC”) filed with FERC a new reliability standard, EOP-004-2, that would require certain entities to report any event that impacts or could impact the reliability of the power grid.  Among other requirements, the proposed standard would require responsible entities to establish both an operating plan and a timeframe for reporting the events.

On January 9, 2013, Google announced its approximately $200 million equity investment in the Spinning Spur Wind Project, a 161 megawatt, 70 turbine wind facility built by EDF Renewable Energy in Oldham County, near Amarillo, Texas.  The energy created at Spinning Spur is contracted to Southwestern Public Service Company, which primarily serves customers in Texas and New Mexico.

On December 18, 2012, the U.S. Court of Appeals for the District of Columbia Circuit (“DC Circuit”) again addressed the question of whether, and to what degree, FERC has the authority to regulate charges to electric generators for the use of station power.  Denying a petition for review by a group of generators from California led by Calpine Corporation (“Calpine”), the DC Circuit held that FERC properly recognized that its lack of jurisdiction over retail sales prevented it from regulating the netting periods used by utilities to assess station power charges.

On December 20, 2012, FERC issued two orders related to the Bonneville Power Administration’s (“Bonneville”) transmission service curtailment practices under a protocol originally called the Environmental Redispatch and Negative Pricing Policies (“Environmental Redispatch Policies”).  FERC both: (1) reaffirmed its authority under Federal Power Act (“FPA”) Section 211A and its exercise of that authority in this case in order to remedy Bonneville’s unduly discriminatory practices against wind generation; and (2) directed Bonneville to significantly revise its proposed oversupply curtailment policies and cost allocation mechanisms in order to ensure comparability and eliminate undue discrimination.

On December 21, 2012, EPA finally completed its reconsideration of four regulations designed to address hazardous air pollutant (“HAP”) emissions from industrial boilers and waste incinerators.  The rules are long overdue, considering that a court ordered EPA to finalize the rules in February 2011 and EPA itself promised to release the rule in April 2012.

On December 20, 2012, FERC issued Order No. 764-A, denying rehearing and affirming its Integration of Variable Energy Resources (“VER”) rule established in Order No. 764.  However, FERC did clarify various parts of its original VER rule and agreed to extend the rule’s compliance deadline from September 11, 2013, to November 12, 2013.  By extending the compliance deadline, FERC will allow transmission providers to implement their reforms outside of the summer peak season.

On December 14, 2012, the Environmental Protection Agency (“EPA”) announced that it is strengthening the annual standard for fine particulate matter (PM2.5) from 15 ug/m3 to 12 ug/m3.  With the more stringent standard, EPA expects to designate as many as 66 counties to be in violation, 19 of which will be new to the list of counties that do not meet federal PM standards.  The official “nonattainment” designations will not be effective until early 2015; states will have a year to submit recommended designations, and EPA will have another year to act on those recommendations.  Because PM2.5 levels are expected to continue declining over the next few years in most areas, the final tally of nonattainment counties could be lower.

On Demember 14, 2012, The United States Court of Appeals for the D.C. Circuit dismissed an extraordinary appeal of proposed EPA New Source Performance Standards (“NSPS”) for greenhouse gas emissions from new coal-fueled electric generating units.  The appeal of the proposed standards was taken by a group of companies seeking to develop new coal-fueled generation and by the Utility Air Regulatory Group.

On December 10, 2012, FERC granted a complaint that alleged that the New York Independent System Operator, Inc. (“NYISO”) violated the Federal Power Act (“FPA”) and its Market Administration and Central Area Services Tariff (“Services Tariff”) by issuing a technical bulletin that excluded certain behind-the-meter generators from participating in the NYISO’s Special Case Resources (“SCR”) program.  FERC held that the technical bulletin, NYISO’s Service Tariff, and its Installed Capacity (“ICAP”) manual were ambiguous as to which generators are able to participate in the NYISO SCR program.

On December 10, 2012, FERC approved amendments to the California Independent System Operator Corporation (“CAISO”) tariff that are designed to improve overall market efficiency by allowing for the dissemination of certain market data to market participants  This release of information by CAISO is intended to enhance participation in CAISO’s energy, ancillary services, and congestion rights markets.