The IRS and the Treasury Department issued proposed regulations under Section 48 on November 22, 2023 (Proposed Regulations), providing further guidance in determining whether property is energy property and eligible for the Section 48 credit (ITC). As part of this further guidance, the Proposed Regulations introduce a new framework for the definition of energy property, provide welcome clarification regarding the eligibility of energy property for multiple credits, and provide guidance on the Section 48(a)(10)(C) recapture rules applicable to failures to satisfy the prevailing wage and apprenticeship requirements (PWA requirements). Taxpayers must be aware of these energy property requirements and additional ITC eligibility guidance to ensure future eligibility for the ITC. The Proposed Regulations would amend Treasury Regulation Section 1.48-9, withdraw and replace Proposed Treasury Regulation 1.48-13 as it was proposed in REG-100908-23 (PWA Proposed Regulations), and introduce Proposed Regulation Section 1.48-14. The Proposed Regulations follow the passage of the Inflation Reduction Act of 2022 (IRA) and the publication of Notice 2022-49, 2022-43 I.R.B. 321, which requested comments on issues arising under Section 48.Continue Reading IRS Issues Proposed Regulations on Energy Property and Rules Applicable to Energy Credit Under Section 48

On October 19, 2023, FERC issued a Notice of Proposed Rule Making (“NOPR”) proposing various changes to its Electric Quarterly Report (“EQR”) filing requirements. According to FERC, the proposed changes are designed to update the data collection process, improve data quality, increase market transparency, decrease costs of preparing necessary data for submission, and streamline compliance with future filing requirements. The following is a summary of the primary reforms proposed.Continue Reading FERC Proposes Changes to Filing Requirements and Data Collection for Electric Quarterly Report

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 August 10, 2023 in response to incentives made available through the Bipartisan Infrastructure Law and the Inflation Reduction Act, the U.S. Department of Energy (“DOE”) proposed reforms to its regulations governing the coordination of Federal authorizations for the development of interstate, onshore electric transmission facilities and to establish the Coordinated Interagency Transmission Authorizations and Permits Program (“CITAP Program”). The main goal of the CITAP Program, which will be administered by DOE’s Grid Deployment Office, is to “reduce the time required for transmission project developers to receive decisions on Federal authorizations for transmission projects.” Public comments are due by 11:59pm ET on October 2, 2023.Continue Reading Department of Energy Proposes New Program to Streamline Federal Authorizations to Site Interstate Transmission Projects

On June 15, 2023, FERC issued Order No. 895, adopting new regulations permitting regional transmission organizations (“RTO”) and independent system operators (“ISO”) to share, amongst each other, credit-related information of their market participants, and requiring RTOs/ISOs to adopt tariff or similar rules for providing credit-related information sharing in order to better assess market participants’ credit risks.Continue Reading FERC Adopts Regulations to Permit Credit-Related Information Sharing

On June 15, 2023, FERC issued two final rules aimed at boosting bulk power system resilience by improving how grid operators assess and plan for extreme weather impacts to the transmission system. One rule directs NERC to develop a reliability standard that requires transmission system planners to account for a range of extreme weather conditions, and the other rule directs each FERC-jurisdictional transmission provider to submit an informational report to the Commission that outlines its policies and processes for conducting extreme weather vulnerability assessments.Continue Reading FERC Directs NERC to Develop New Transmission Planning Reliability Standard; Directs Transmission Providers to Submit One-Time Informational Reports on Extreme Weather Risk Assessment

On March 3, 2023, the House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) and Energy, Climate Change, and Grid Security Subcommittee Chair Jeff Duncan (R-SC) sent a letter to Acting FERC Chairman Willie Phillips and Commissioners asking the Commission to respond to a series of questions related to FERC’s authority as it relates to two policy statements issued in February 2022 and a Notice of Proposed Rulemaking (“NOPR”) issued in December 2022. The two policy statements concern Greenhouse Gas (“GHG”) emissions of natural gas infrastructure projects (see February 18, 2022 Troutman Pepper Insights; February 23, 2022 edition of the WER). The NOPR would require applicants proposing to build electric transmission infrastructure to prepare Environmental Justice Public Engagement Plans.Continue Reading House Republicans Press FERC on Environmental Review Issues

On January 19, 2023, the Commission issued a final rule that directs the North American Electric Reliability Corporation (“NERC”) to develop and submit reliability standards for monitoring high and medium impact bulk electric systems with high-speed internet connections. The Commission stated that the new reliability standards would assist entities in monitoring network traffic inside the bulk electric systems and detecting unauthorized activity inside those systems.Continue Reading FERC Directs NERC to Develop Internal Network Security Monitoring for High and Medium Impact Bulk Electric System Cyber Systems

On December 15, 2022, FERC issued a Notice of Proposed Rulemaking (“NOPR”) seeking to revise its regulations governing applications for permits to site electric transmission facilities under § 216 of the Federal Power Act (“FPA”). Specifically, the NOPR seeks to: (1) revise Section 50.6 of FERC’s regulations to reflect the Infrastructure Investment and Jobs Act’s (“IIJA”) amendments to the FPA § 216; (2) eliminate the required one-year delay before the commencement of FERC’s pre-filing process; (3) supplement the existing landowner and stakeholder participation provisions in Part 50 of its regulations; and (4) revise the timing of the required Project Participation Plan (“Plan”) in the pre-filing application process.Continue Reading FERC Issues Proposed Rule Implementing FPA Amendments in Infrastructure Investment and Jobs Act

On June 16, 2022, FERC issued two Notice of Proposed Rulemakings (“NOPRs”) aimed at improving the reliability of the bulk power system against threats of extreme weather. The NOPRs build on the June 2021 Technical Conference on Climate Change, Extreme Weather, and Electric System Reliability, which revealed an industry-wide need to assess current vulnerabilities of the transmission system to weather-related risks.
Continue Reading FERC Proposes Rules to Address Extreme Weather