On March 18, 2021, FERC issued a Final Rule amending its regulations to establish a one-year period for states, tribes, or other certifying authorities (“Certifying Agencies”) to act on a Clean Water Act (“CWA”) Section 401 water quality certification request for proposed natural gas and liquefied natural gas projects. Continue Reading FERC Establishes Water Quality Certification Waiver Period for Natural Gas Projects

On March 5, 2021, FERC issued a Notice of Virtual Listening Sessions and Public Comment Period soliciting input on how it should establish and operate its Office of Public Participation (OPP) pursuant to section 319 of the Federal Power Act (FPA).  Commission staff, led by Commissioner Clements, held the first public listening session on March 17, and additional listening sessions and a Technical Workshop are scheduled for the coming weeks. Continue Reading Addressing Environmental Justice: FERC Holds Virtual Listening Sessions and Accepts Public Comments on Development of the Office of Public Participation

On March 22, 2021, FERC, for the first time, assessed the significance of a proposed natural gas pipeline project’s greenhouse gas emissions (“GHGs”) and their contribution to climate change when it approved Northern Natural Gas Company’s (“Northern”) South Sioux City to Sioux Falls A-line Replacement project (“Project”). As proposed, Northern will abandon in-place certain pipeline facilities in Nebraska and South Dakota, construct and operate approximately 87.3 miles of replacement pipeline, and modify existing and install new above-ground facilities. While all five FERC Commissioners agreed to approve the Project, both Commissioner Danly and Commissioner Christie dissented from FERC’s decision to determine the significance of GHGs in an individual pipeline proceeding.

Continue Reading FERC Changes Course, Considers Pipeline’s GHGs Significance and Climate Impacts

On March 18, 2021, FERC granted two consolidated complaints alleging that the default offer cap in PJM Interconnection, L.L.C.’s (“PJM”) capacity market is unjust and unreasonable because the Expected Performance Assessment Intervals input, set at a value of 360 12-minute intervals (30 hours), is too high. Ultimately, FERC found that the default offer cap is “incorrectly calibrated,” rendering PJM and its Market Monitor unable to ensure competitive market outcomes. FERC ordered additional briefing on a replacement rate, but concluded that PJM’s capacity auction for the 2022-2023 delivery year, scheduled for May 2021, should go forward under the current rules. Continue Reading FERC Grants Complaints, Directs Further Briefing on PJM Capacity Market Default Offer Cap

On March 19, 2021, FERC set aside a September 1, 2020 order (“September Order”) that had upended 40 years’ worth of FERC precedent regarding how to determine the 80MW threshold for small power production qualifying facilities (“QFs”) under the Public Utility Regulatory Policies Act of 1978 (“PURPA”). Specifically, FERC rejected the September Order’s denial of QF status to a hybrid photovoltaic solar and storage facility owned by Broadview Solar LLC (“Broadview”) as a result of the facility’s 160 MW gross capacity, as opposed to the facility’s 80 MW maximum net output or “send out.” After further consideration, FERC explained that it had erred by departing from and overturning its longstanding “send out” precedent. Commissioner Danly dissented, arguing that the September Order correctly applied PURPA in relying on gross power production capacity. Continue Reading FERC Reverses September 2020 Order, Reinstating Long-Standing “Send Out” Test for Small Power Production QF 80MW Threshold

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.

Continue Reading FERC to Allow Distributed Energy Resource Aggregations in Wholesale Electric Markets to Include Demand Response Resources

On February 26, 2021, FERC accepted a proposal from Entergy Services, LLC (“Entergy”) to amend a wholesale rate schedule, the Unit Power Sales Agreement (“UPSA”), subject to refund and set the matter for hearing.  FERC also instituted an investigation under section 206 of the FPA to allow customers to recover refunds associated with any further rate reduction, consolidated various related Entergy proceedings on accumulated deferred income taxes (“ADIT”), set a hearing procedure and held those procedures in abeyance pending the issuance of further FERC orders. Continue Reading FERC Sets Entergy’s Proposal to Amend the Unit Power Sales Agreement for Hearing to Determine Whether Customers Should Receive a Bigger Rate Decrease

On March 2, 2021, the United States Court of Appeals of the District of Columbia Circuit (“D.C. Circuit”) denied petitions for review of three FERC orders addressing cost allocation by PJM Interconnection, L.L.C. (“PJM”) for a high-voltage transmission line connecting three nuclear power plants on Artificial Island in New Jersey to the Delmarva transmission zone (“Artificial Island Project”). In a 2016 order, FERC upheld PJM’s use of a hybrid cost allocation method including the “Solution Based DFAX” method to assign 90 percent of the costs of the Artificial Island Project to PJM’s Delmarva transmission zone; FERC reversed its position in a 2018 rehearing order. In dismissing the petitions for review filed by certain PJM transmission owners including Public Service Electric and Gas Company (“PSE&G”), the New Jersey Board of Public Utilities, and the New Jersey Division of Rate Counsel, the D.C. Circuit’s March 2 opinion held that FERC reasonably concluded that assigning nearly 90 percent of the Artificial Island Project costs to the Delmarva transmission zone would not be commensurate with the benefits that zone received, and that FERC’s change in position was adequately explained and supported by substantial evidence. Continue Reading D.C. Circuit Upholds FERC Cost Allocation Orders for PJM Artificial Island Transmission Project

On March 2, 2021, members of the United States House of Representatives introduced H.R.1512, the Climate Leadership and Environmental Action for our Nation’s Future Act (“CLEAN Future Act”). The CLEAN Future Act, aims to achieve net zero greenhouse gas (“GHG”) emissions by 2050 in concert with the target identified by the United Nations Intergovernmental Panel on Climate Change to limit temperature increases to 1.5°C in order to avoid the most catastrophic consequences of climate change. H.R.1512 is a revision of draft legislation released in January 2020. Continue Reading House Introduces CLEAN Future Act – A Comprehensive Bill to Achieve A Net Zero Greenhouse Gas Economy by 2050