On June 28, 2024, the United States Supreme Court (“Supreme Court”) overruled its prior decision in Chevron U.S.A. v. Natural Resources Defense Council (“Chevron”) in a 6-3 vote in Loper Bright Enterprises et al. v. Raimondo, Secretary of Commerce, et al. (“Loper Bright”). The Chevron doctrine has required federal courts to defer to administrative agencies’ interpretations of statutes the agency administers when the underlying statute is ambiguous. Under the Loper Bright ruling, federal courts will not defer to administrative agencies in interpreting ambiguous statutes and instead must exercise their judgment in determining whether the agency acted within its statutory authority. The decision will likely have a substantial impact on both regulated industries and federal agencies such as FERC.
Continue Reading SCOTUS Overrules Chevron Deference in 6-3 RulingFERC Issues ANOPR on Dynamic Line Ratings
By Dixon Wallace & Elizabeth McCormick on
On June 27, 2024, FERC issued an advance notice of proposed rulemaking (“ANOPR”) regarding potential reforms to require transmission providers to use dynamic line ratings (“DLRs”) to encourage more accurate and transparent line ratings. The Commission seeks comment on a proposed DLR framework and whether other transmission line rating reforms are needed to ensure just and reasonable and not unduly discriminatory or preferential FERC-jurisdictional rates. Initial and reply comments are due 90 and 120 days after the ANOPR’s publication in the Federal Register, respectively. After the comment period in this proceeding ends, FERC may consider issuing a formal Notice of Proposed Rulemaking, which would be a prerequisite to issuing any final rule.
Continue Reading FERC Issues ANOPR on Dynamic Line RatingsFueling Up: How to Make U.S. Clean Hydrogen Projects Happen
By Daniel Archuleta, Gregory Len, Anne Loomis & Mindy McGrath on
We are pleased to announce the release of our latest whitepaper, Fueling Up: How to Make U.S. Clean Hydrogen Projects Happen. This comprehensive report explores the critical steps needed to unlock the potential of clean hydrogen in the U.S., and the related challenges faced by developers and utilities.
Continue Reading Fueling Up: How to Make U.S. Clean Hydrogen Projects HappenFERC Issues Notice of Proposed Rulemaking to Conform to EPA’s Recent CWA § 401 Rule
Posted in Hydropower, Rulemakings
At its May 23, 2024 open meeting, the Federal Energy Regulatory Commission (“FERC”) issued a Notice of Proposed Rulemaking (“NOPR”) proposing to establish a one-year “reasonable period of time” for certifying authorities to act on requests for water quality certification under section 401 of the Clean Water Act (“CWA”). The proposed rule also clarifies that all FERC authorizations “that have the potential to discharge into waters of the United States,” including exemptions from licensing, require either a section 401 water quality certification or waiver thereof.
Continue Reading FERC Issues Notice of Proposed Rulemaking to Conform to EPA’s Recent CWA § 401 RuleFERC Dismisses Lackawanna Complaint Against PJM Seeking “Stability Limit”-Related Lost Opportunity Costs
On May 23, 2024, FERC issued an Order denying Lackawanna Energy Center LLC’s (“Lackawanna”) complaint against PJM Interconnection, L.L.C. (“PJM”) alleging that PJM failed to reimburse Lackawanna for lost opportunity costs (“LOC”) incurred following allegedly improper curtailment orders from PJM during a 2023 transmission line outage. Lackawanna argued that PJM’s curtailment of its generation output violated the Federal Power Act and the PJM Tariff, which typically allow for LOC payments when generator output is reduced due to transmission constraints or reliability issues. FERC dismissed all claims raised in the complaint.
Continue Reading FERC Dismisses Lackawanna Complaint Against PJM Seeking “Stability Limit”-Related Lost Opportunity CostsFERC Approves NERC’s CIP Reliability Standard on Cyber Security
By Quintessa Davis & Russell Kooistra on
Posted in FERC Practice
On May 23, 2024, FERC approved the North American Electric Reliability Corporation’s (“NERC”) proposed Critical Infrastructure Protection (“CIP”) Reliability Standard, CIP-012-2 (Cyber Security – Communications between Control Centers), which is intended to improve upon and expand existing reliability standards to mitigate risks posed by loss of availability of communication links and certain data transmitted between bulk electric system (“BES”) Control Centers. FERC also approved NERC’s associated implementation plan, violation risk factors and violation severity levels, and the retirement of Reliability Standard CIP-012-1.
Continue Reading FERC Approves NERC’s CIP Reliability Standard on Cyber SecurityFERC Accepts CAISO’s Request to Raise Soft Cap Offer
By Juan Dawson & Elizabeth McCormick on
Posted in FERC Practice, Market Policy
On April 25, 2024, FERC approved the California Independent System Operator Corporation’s (“CAISO”) request to increase its capacity procurement mechanism (“CPM”) soft cap offer from $6.31/kW-month to $7.32, which will become effective in June 2024.
Continue Reading FERC Accepts CAISO’s Request to Raise Soft Cap OfferDivided FERC Announces Much-Anticipated Transmission Rules
On May 13, 2024, the Commission announced two major transmission reform final rules: Building for the Future Through Electric Regional Transmission Planning and Cost Allocation (“Order No. 1920”) and Applications for Permits to Site Interstate Electric Transmission Facilities (“Order No. 1977”). Order No. 1920, which adopts specific requirements for how transmission providers must conduct long-term planning and allocate costs for regional transmission facilities, was the subject of significant debate at today’s meeting and only mustered two votes in support from the three sitting commissioners. The Commission unanimously approved Order No. 1977, which updates the process FERC will use in the limited circumstances in which it must exercise its authority over siting electric transmission lines, as directed by Congress in the Infrastructure Investment and Jobs Act of 2021 (“IIJA”).
Continue Reading Divided FERC Announces Much-Anticipated Transmission RulesSenate Introduces Bipartisan Legislation to Give FERC Retroactive Refund Authority Under Section 5 of the Natural Gas Act
By Antonia Douglas & Mary-Kate Rigney on
Posted in Legislation, Natural Gas
On April 18, 2024, Senators Richard Blumenthal (D-CT) and Cindy Hyde-Smith (R-MS) introduced the Making Pipelines Accountable to Consumers and Taxpayers Act (“MPACT Act”) (S. 4171) that, if adopted, would grant FERC authority to order refunds under section 5 of the Natural Gas Act (“NGA”). Specifically, the MPACT Act amends section 5 of the NGA to give FERC authority to order a pipeline to issue retroactive refunds for charges FERC determines are unjust and unreasonable. The MPACT is intended to align FERC’s authority over the gas and electric industries and protect customers from unjust and unreasonable rates. At this time, a companion bill has not been introduced in the House of Representatives.
Continue Reading Senate Introduces Bipartisan Legislation to Give FERC Retroactive Refund Authority Under Section 5 of the Natural Gas ActThird Circuit Upholds PJM Capacity Market Change but Prevents Retroactive Application
On March 12, 2024, the U.S. Court of Appeals for the Third Circuit upheld a prospective rule change to PJM Interconnection, L.L.C.’s (“PJM”) annual capacity auction but struck down attempts by PJM and FERC to apply the rule change to the ongoing auction held in December 2022. Although the rule change permits PJM to adjust the Locational Deliverability Area (“LDA”) Reliability Requirement downward to reflect the lack of participation in the December 2022 auction by certain resources to correct for distortions to the auction results, the Third Circuit held that FERC could not permit the change to go into effect in the middle of an ongoing auction.
Continue Reading Third Circuit Upholds PJM Capacity Market Change but Prevents Retroactive Application