Rulemakings

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On March 18, 2021, FERC issued Order No. 2222-A, setting aside its finding in Order No. 2222 that demand response resource participation in heterogeneous distributed energy resource (“DER”) aggregations are subject to the opt-out and opt-in requirements of Order Nos. 719 and 719-A, as well as clarifying other requirements in Order No. 2222 concerning Qualifying Facility (“QF”) interconnection policies, restrictions to avoid double-counting services, and information sharing and criteria for the distribution utility review process. Concurrent with Order No. 2222-A, FERC also issued a Notice of Inquiry (“NOI”) seeking comment on whether to revise its more than a decade-old regulations requiring Regional Transmission Organizations and Independent System Operators (“RTO/ISO”) not to accept bids from an aggregator of retail customers (“ARC”) where the relevant electric retail regulatory authority (“RERRA”) prohibits such customers’ demand response resources from being bid into organized markets (“Demand Response Opt-Out”). Specifically, the NOI applies only to regulations where an ARC aggregates the demand response of the customers of utilities that distributed more than four million megawatt-hours in the previous fiscal year and is intended to examine whether changing circumstances warrant revision of the Demand Response Opt-Out and whether the RTO/ISO market would benefit from including currently barred Demand Response Opt-Out resources.

On December 17, 2020, FERC issued a Notice of Proposed Rulemaking proposing to revise its regulations to establish incentives for public utilities to make certain cybersecurity investments that go beyond the current requirements of the Critical Infrastructure Protection (“CIP”) Reliability Standards established by the North American Electric Reliability Corporation (“NERC”) (“Cybersecurity NOPR”). Specifically, FERC proposed rules to allow regulated entities to:

  1. receive incentive-based rate treatment for the voluntary implementation of: (i) certain NERC CIP Reliability Standards to facilities that are not currently subject to those requirements (“NERC CIP Incentives Approach”), and/or (ii) certain security controls included in the National Institute of Standards and Technology Framework (“NIST Framework Approach”);
  2. request a return-on-equity adder of two hundred (200) basis points for making eligible cybersecurity capital investments; and
  3. defer cost recovery of certain cybersecurity costs that are generally expensed as incurred, and treat such costs as regulatory assets that may be included in transmission rate base.

On December 17, 2020, FERC issued an order concluding its review of the index level used to determine annual changes to oil pipeline rate ceilings, establishing an index level of Producer Price Index for Finished Goods plus 0.78% (PPI-FG+0.78%), and also issued a Withdrawal of Proposed Policy Statement on Oil Pipeline Affiliate Contracts, the latter of which drew a dissenting opinion from Commissioner Richard Glick.

On December 4, 2020, the U.S. Department of Energy (“DOE”) issued a final rule updating its National Environmental Policy Act (“NEPA”) implementing regulations regarding applications to import to, or export from, liquid natural gas (“LNG”) terminals. The final rule follows DOE’s May 1, 2020 Notice of Proposed Rulemaking (“NOPR”) (see May 22, 2020 edition of the WER). In the preamble to the final rule, DOE explained that the objective of the revision is to improve the efficiency of DOE’s decision-making process through saving time and expense associated with NEPA compliance and eliminating unnecessary environmental documentation.

On November 19, 2020, FERC issued a Notice of Proposed Rulemaking (“NOPR”) proposing to reform its regulations and pro forma OATT to improve the accuracy and transparency of transmission line ratings. According to FERC, more accurate line ratings will reduce congestion costs and result in substantial cost savings for consumers, whereas inaccurate line ratings may result in unjust and unreasonable rates.

On October 15, 2020, FERC issued a notice of proposed policy statement (“Proposed Policy Statement”) with proposed guidance for oil pipeline carriers to demonstrate through tariff filings or declaratory order petitions that the rates and terms in long-term contracts with affiliate shippers (“Affiliate Contracts”) are just, reasonable, and not unduly discriminatory under the Interstate Commerce Act (“ICA”).

On October 15, 2020, FERC issued a Notice of Proposed Rulemaking (“NOPR”) to revise its regulations implementing the Public Utility Regulatory Policies Act of 1978 (“PURPA”) to permit Solid Oxide Fuel Cell systems with integrated natural gas reformation equipment to be certified as cogeneration qualifying facilities (“QFs”). FERC proposed the changes in response to what it termed the “technical evolution of cogeneration,” and in response to Bloom Energy Corporation’s (“Bloom Energy”) petitioning FERC for such revisions.

On September 17, 2020, FERC issued a final rule (“Order No. 2222”) amending its regulations to require Regional Transmission Organizations and Independent System Operators (“RTO/ISO”) to revise their tariffs to facilitate the participation of distributed energy resource (“DER”) aggregations in organized wholesale electric markets. In the order, FERC found current RTO/ISO DER aggregation market rules to be unjust and unreasonable, established new definitions for DERs and DER aggregations, and detailed RTO/ISO tariff revisions that will allow DER aggregations to participate in RTO/ISO markets. Commissioner Danly dissented from the order, contending that FERC was overextending its jurisdictional authority and that, through the order, FERC was imprudently encouraging “resource development by fiat.” RTO/ISOs are required to file the tariff changes needed to comply with Order No. 2222 within two hundred seventy (270) days of publication of the order in the Federal Register.

On August 28, 2020, FERC issued a supplemental Notice of a Commission-led Technical Conference on state pricing for carbon dioxide emissions, commonly referred to as carbon pricing, in FERC-jurisdictional wholesale electric markets (“Conference”). The Conference is free and will take place online on Wednesday, September 30, 2020 from 9:00 a.m.…

The Federal Energy Regulatory Commission (Commission or FERC) has proposed to revise its Part 12 dam safety regulations through a Notice of Proposed Rulemaking (NOPR) released at its monthly public meeting on July 14, 2020.  There will be a 60-day public comment period once the proposed regulations are published in the Federal Register.  The proposed revisions contain three major changes to the existing FERC dam safety regulations: