At the June 18, 2020 and July 16, 2020 Commissioner meetings, FERC issued a combined five orders continuing its trend of finding that a state has waived its Clean Water Act (“CWA”) section 401 authority for failing to issue a water quality certification within one year from receiving the request for certification.  Since the D.C. Circuit’s 2019 ruling in Hoopa Valley Tribe v. FERC (see December 11, 2019 edition of the WER), which held that the plain language of section 401 limited a state’s review to one year, the Commission has consistently found state waiver when the time period has been exceeded under a variety of circumstances.  Below is a summary of FERC’s recent orders finding that a state certifying authority waived its section 401 authority.

In the two months since the failures of the Edenville Dam and the downstream FERC-licensed Sanford Dam (Project No. 2785) in central Michigan, there has been a flurry of correspondence between the Federal Energy Regulatory Commission (Commission or FERC) and the licensee, including a series of directives and the warning of potential enforcement actions from the Commission, as well as discussion of possible harm to protected species following the dam breaches.

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:

On July 2, 2020, FERC staff issued an order granting an exemption from licensing to the City and County of Denver, Colorado, through its Board of Water Commissioners (“Denver Water”) for its Strontia Springs Hydroelectric Project (“Project”).  Prior to FERC issuing the exemption order, Denver Water held an original minor license for the Project, which is located on the South Platte River in Douglas and Jefferson counties, Colorado.

Throughout June 2020, a number of legislative proposals poised to impact hydropower resources have been introduced in Congress.  On Monday, June 22, Democratic members of the House of Representatives released H.R. 2, the Moving Forward Act, which aims to encourage investment in infrastructure and includes several provisions on hydropower and dam safety.  On Monday June 29, Congresswoman Cathy McMorris Rodgers (WA-05) introduced the Hydropower Clean Energy Future Act which includes updates to the licensing process for non-federal hydroelectric projects and promotes innovation of new generation technologies that would protect the environment and natural resources while providing additional reliability services to the nation’s electric grid.  Finally, on June 30, Democratic members of the House Select Committee on the Climate Crisis released a Climate Crisis Action Plan, which includes provisions on hydropower and marine energy facilities.

On Thursday, July 9, 2020 the Supreme Court, in a 5-4 decision, held that a large swath of northeastern Oklahoma, including most of the city of Tulsa, remains part of the Muscogee (Creek) Reservation and, as a result, that the state lacks jurisdiction to prosecute a major crime involving a tribal member within the reservation. Justice Gorsuch delivered the opinion for the Majority, confirming the durable principle of tribal sovereignty, despite significant efforts throughout history to dismantle tribal reservations and governments.  Chief Justice Roberts filed a dissenting opinion, in which Justices Alito and Kavanaugh joined, and in which Justice Thomas joined, except as to one footnote.  Some analyses have raised the possibility that this decision could have a significant impact on taxation and natural resources management in Indian Country throughout the United States, as discussed more fully below.  However, because the direct holding of the Court is quite narrow, the full impact of this decision remains to be seen. 

Executive Summary of FERC Order No. 872: Qualifying Facility Rates and Requirements Implementation Issues Under the Public Utility Regulatory Policies Act of 1978 [1]

I. Overview

On July 16, 2020, the Federal Energy Regulatory Commission (FERC or the Commission) issued Order No. 872, the Commission’s final order revising its regulations implementing Sections 201 and 210 of the Public Utility Regulatory Policies Act of 1978 (PURPA) [2]. This order, which follows a 2016 technical conference on PURPA issues and a September 2019 Notice of Proposed Rulemaking (NOPR) [3], is the first major set of revisions to FERC’s regulations implementing PURPA since they were established through Order No. 69 in 1980.

As FERC explained in the NOPR, the energy landscape has evolved in significant ways since the initial PURPA regulations were established, which includes increased supplies of natural gas, a more matured renewables industry, and the growing presence of non-Qualifying Facility (QF) independent power producers. These and other changes prompted FERC to revise its PURPA regulations, many of which are implemented by the states. These new changes provide additional guidance to state commissions regarding PURPA implementation and rests additional authority in state commissions regarding QF rates and contract terms.

On July 8, 2020, the U.S. Department of Energy (“DOE”) issued a request for information (“RFI”) seeking public input on the energy industry’s current risk mitigation practices with regard to the bulk-power system supply chain. The DOE issued the RFI pursuant to Executive Order No. 13920 (“Executive Order”), wherein the Secretary of Energy was directed, among other things, to investigate the bulk power system for equipment presenting a risk from foreign adversaries (see May 5, 2020 edition of the WER). In the RFI, DOE asks stakeholders to identify potential vulnerabilities in the bulk-power system supply chain that could have national security implications and the estimated economic costs of implementing the Executive Order.

On July 10, 2020, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued an opinion resolving jurisdictional challenges under the Federal Power Act (“FPA”) of FERC’s electric storage resource (“ESR”) participation rule, holding that the challenges “fail to show that Order Nos. 841 and 841-A run afoul of the [FPA’s] jurisdictional bifurcation or that they are otherwise arbitrary and capricious” because they do not include a state opt-out provision.

On July 6, 2020, FERC moved for a ninety-day stay of the United States Court of Appeals for the District of Columbia Circuit’s (“D.C. Circuit’s”) mandate in Allegheny Defense Project v. FERC. That decision upset FERC’s long-used practice of granting itself more time to consider requests for rehearing of its orders by issuing tolling orders (see July 1, 2020 issue of the WER). Although the decision was issued in the context of a pipeline proceeding under the Natural Gas Act (“NGA”), FERC’s motion noted that the impact of the D.C. Circuit’s decision extends to all requests for rehearing under the NGA, and presumably to those under the Federal Power Act as well. In support of its motion, FERC explained that over the past fifty years, tolling orders have been a critical tool to help manage its large case load and bring its expertise to bear on complex technical matters before they are presented to the courts of appeals. FERC stated that a stay of the court’s mandate would afford it time to consider how to revise its processes and allocate its resources in the absence of tolling orders. FERC also argued that a stay would give it and the Solicitor General additional time to consider whether to petition the Supreme Court for a writ of certiorari, though it noted that the ultimate decision of whether to petition the Supreme Court lies with the Solicitor General and the Department of Justice.