On August 30, FERC plans to hold a virtual workshop to discuss how members of the public (including customers and consumer advocates) can better participate in hydroelectric proceedings. The workshop is part of Commission’s increased focus on stakeholder engagement and environmental justice.
As we previously reported, the Infrastructure Investment and Jobs Act, also known as the Bipartisan Infrastructure Law (BIL), which President Biden signed into law on November 15, 2021, included over $900 million in waterpower incentives for new and existing hydropower, pumped storage, and marine energy. Specifically, the BIL provided additional funding for the existing incentive programs established by Sections 242 and 243 of the Energy Policy Act of 2005 (EPAct 2005) and created a new incentive program to maintain and enhance hydroelectricity through improvements to grid resiliency, dam safety, and the environment under Section 247 of EPAct 2005.
On August 5, the U.S. Court of Appeals for the Ninth Circuit overruled several orders by the Federal Energy Regulatory Commission (FERC) and held that the California State Water Resources Control Board (SWRCB) did not waive its authority to issue water quality certifications for several hydroelectric projects. Before the court in SWRCB v. FERC, No. 20-72432, were several orders on appeal from FERC where the Commission found that SWRCB had participated in a coordinated “withdrawal-and-resubmission” scheme to evade the Clean Water Act (CWA) Section 401 one-year statutory time limit on a state’s review of a certification application.
On July 28, 2022, FERC issued a show cause order indicating that several regional transmission organization (“RTO”) and independent system operator (“ISO”) tariffs appear to be unjust and unreasonable because they lack certain credit risk management practices. FERC also issued a related Notice of Proposed Rulemaking (“NOPR”) to allow all market operators to share credit-related information among themselves so that they can more accurately assess market participants’ credit risks. Both actions aim to improve credit risk management in organized wholesale electric power markets. Continue Reading FERC Issues Show Cause Order and NOPR on Credit Risk
On July 28, 2022, FERC proposed a new “duty of candor” rule that would broadly apply to “all entities communicating with the Commission or other specified organizations related to a matter subject to the jurisdiction of the Commission.” According to the Commission, the Notice of Proposed Rulemaking (“NOPR”) is intended to capture the types of communications that may not have been included in the Commission’s existing communication rules and policies, some of which have an existing duty of candor standard.
On July 28, 2022, FERC upheld changes to PJM Interconnection, L.L.C.’s (“PJM”) Reserve Market that it first required in a December 2021 order on voluntary remand from the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”). FERC’s July 28 order continues to require PJM to: (1) consolidate its Tier 1 and Tier 2 Synchronized Reserve Products; (2) align reserve procurement in the day-ahead and real-time markets by establishing two 10-minute reserve requirements and one 30-minute reserve requirement in each market; (3) revert back to a stepped Operating Reserve Demand Curve (“ORDC”) and $850/MWh Reserve Penalty Factors; and (4) revert to a backward-looking Energy & Ancillary Services (“E&AS”) Offset in the Net Cost of New Entry calculation. The July 28 order also addressed challenges to the December 2021 order on the basis that the motion for voluntary remand was not filed in the D.C. Circuit pursuant to FERC’s tradition of polling the Commissioners for major litigation decisions. The order makes certain clarifications on the Chairman’s role to oversee the executive and administrative operation of FERC, including the direction of litigation. Commissioner James Danly filed a separate dissenting statement. Continue Reading FERC Upholds PJM Reserve Market Changes, Clarifies Chairman’s Role to Oversee Major Litigation Decisions
On July 28, 2022, FERC proposed changes to its Uniform System of Accounts (“USofA”) in response to the growth of non-hydro renewable generation such as wind, solar, and storage and to codify accounting for renewable energy credits (“RECs”). FERC’s Notice of Proposed Rulemaking (“NOPR”) follows a Notice of Inquiry issued in January 2021 seeking comment on the appropriate accounting treatment for certain renewable energy assets (see January 28, 2021 edition of the WER). Comments on the NOPR are due 45 days from its publication in the Federal Register. Continue Reading FERC Proposes Revised Accounting Rules to Address Renewables
On July 15, 2022, a FERC Administrative Law Judge (“Presiding Judge”) issued an initial decision in a proceeding involving the “threshold” issue of whether four solar generating facilities (collectively, “Facilities”) interconnected at the distribution level are eligible to receive reactive power compensation under Schedule 2 of the PJM Interconnection, L.L.C. (“PJM”) Open Access Transmission Tariff (“Tariff”). The Presiding Judge concluded that the Facilities are ineligible to receive reactive power rates because the facilities in question did not satisfy the so-called capability requirement, as explained further below. Continue Reading FERC Judge Rules that Four Solar Generators Interconnected at the Distribution Level Are Ineligible to Receive Reactive Power Compensation Under PJM’s Tariff
On June 28, 2022, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued a decision in Sierra Club v. FERC upholding FERC’s approval of Mountain Valley Pipeline, LLC’s (“MVP”) Southgate Project. Continue Reading D.C. Circuit Upholds FERC’s Approval of MVP’s Southgate Project
On July 8, 2022, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued its decision in City of Oberlin, Ohio v. FERC, a proceeding involving the issue of whether FERC properly granted NEXUS Gas Transmission, LLC (“Nexus”) a certificate of public convenience and necessity to construct and operate a natural gas pipeline that will facilitate exports into Canadian markets (“Project”). The Court upheld the certificate. Continue Reading D.C. Circuit Allows Natural Gas Pipeline Certificate to Stand, Accepting Export Precedent Agreements as Probative of Need