Uncategorized

Subscribe to Uncategorized via RSS

After over a decade of litigation, EPA’s original NSR enforcement attack on Cinergy for various projects completed in the late 1980’s and early 1990’s is finally over.  On October 12, 2010, the U.S. Court of Appeals for the Seventh Circuit threw out EPA’s only  victory in that original action – a jury verdict finding Cinergy in violation of the Clean Air Act’s preconstruction permit requirements for several pulverizer projects performed at its Wabash plant in Indiana.  While the decision represents a significant win for Cinergy and other utilities facing similar claims, it could have a ripple effect for other Clean Air Act programs, including EPA’s new greenhouse gas regulations.

On October 7, 2010, the North American Electric Reliability Corporation (“NERC”) issued an industry alert asking for transmission facility owners to create a plan to review their facility ratings and report that plan back to NERC by December 15, 2010. NERC identified possible discrepancies between actual field conditions and the design of those conditions, and since there are over 450,000 miles of transmission lines greater than 100 kv, the situation requires immediate actions to mitigate any potential risks.

On October 6, 2010, Secretary Salazar and Cape Wind Associates, LLC signed the first lease for commercial wind energy development on the Outer Continental Shelf (“OCS”), the Cape Wind Project.  The Cape Wind Project has 130 planned wind turbines which could then create up to 468 megawatts, with an average output of 182 megawatts.  The Cape Wind Project could power over 200,000 homes in Massachusetts, roughly 75 percent of electricity demand in Cape Cod, Martha’s Vineyard, and Nantucket Island.  The lease for the Cape Wind Project is for 28 years and will cost Cape Wind Associates a 2 to 7 percent operating fee while in production which equals $88,278 a year.

EPA’s Clean Air Act Advisory Committee (“CAAAC”) met on October 5, 2010 and October 6, 2010 to discuss the CAAAC Climate Change Work Group’s newest report on the implementation of Best Available Control Technology (“BACT”) for greenhouse gas (“GHG”) permitting.  While the report was issued on August 5, 2010, the report was not formally considered by CAAAC until this week.  CAAAC formally accepted the report and transmitted it to EPA.

On December 22, 2009, the California ballot initiative, Proposition 23 (“Prop 23”) was introduced by Thomas W. Hiltachk.  Prop 23 would suspend California’s Global Warming Solution Act of 2006 (“AB 32”), which requires the state to reduce greenhouse gas emissions 30 percent by 2020, until California’s unemployment rate is 5.5 percent or less for a calendar year. (see October 1, 2010 edition of the WER). 

On the heels of receiving dozens of submissions in response to the Midwest Independent System Operator, Inc.’s (“MISO”) “MVP” cost allocation filing, (see July 23, 2010 edition of the WER) the Federal Energy Regulatory Commission (“FERC”) this week received well over one hundred submissions in response to its Notice of Proposed Rulemaking (“NOPR”) on transmission planning and cost allocation (see June 18, 2010 edition of the WER). Interestingly, FERC also issued a Notice indicating that reply comments in the NOPR docket would not be due until November 12, 2010, which indicates that agency action on the NOPR is highly unlikely before the end of the year.

On September 17, 2010, FERC accepted proposed revisions to PJM Interconnection, L.L.C.’s (“PJM”) Operating Agreement, and Attachment K to their open access transmission tariff (“Tariff”).  The changes represented a “temporary solution” to prevent alleged manipulation in PJM’s energy markets.  The September filings were preceded by a lengthy history, as summarized below.

On September 23, 2010, FERC settled with RRI Energy, Inc. and RRI Energy Wholesale Generation LLC (collectively “RRI”) over open access transportation violations, and RRI agreed to pay a civil penalty of $750,000. The settlement concluded an investigation by FERC Enforcement that identified potential violations from January 2000 to March 2008.

On September 23, 2010, the California Air Resources Board (“CARB”) passed a renewable portfolio standard (“RPS”) that will require 33 percent of the electricity sold in California to come from renewable energy.   The new standard was created in response to the Governor’s Renewable Electricity Standard Order in 2009, and the state law Assembly Bill 32, the law seeking to bring emissions down to 1990 levels by the year 2020.  

On September 22, 2010, the New York Independent System Operator (“NYISO”) released its 2010 reliability needs assessment (“RNA”) which was approved by the Board of Directors.  This is the fifth RNA NYISO has released since 2004, when the Federal Energy Regulatory Commission (“FERC” or the “Commission”) approved NYISO’s Comprehensive System Planning Process.