Nearly a year after summoning stakeholders to discuss whether—and if so, how—the wholesale power markets should accommodate state policy goals, the Federal Energy Regulatory Commission (FERC or the “Commission”) has taken a first step toward addressing the issue. In a split decision1 issued March 9, the Commission accepted a new capacity market construct proposed by ISO New England (ISO-NE or ISO). The construct, referred to as “Competitive Auctions with Sponsored Policy Resources”(CASPR) will attempt to integrate increasing amounts of subsidized renewable resources into the ISO’s FERC-regulated wholesale markets.
Akin Gump partner and co-head of the firm’s energy regulation, markets and enforcement practice, David Applebaum has co-written a chapter in Global Competition Review’s new book The Guide to Energy Market Manipulation, along with counsel Todd Brecher and senior counsel J. Porter Wiseman. The chapter, titled “FERC Practice and Procedure,” provides an overview of the key points to consider for subjects of market manipulation cases.
To read the chapter in its entirety, please click here.
On February 23, 2018, the Environmental Protection Agency (EPA) issued a prepublication notice to change the Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources rule (“2016 Rule”). The rule, soon to be published in the Federal Register, addresses the so-called “delayed repairs” requirement of the rule, and will eliminate the requirement that well and compressor station owners or operators repair leaks during unscheduled or emergency blowdowns, shutdowns, or shut-ins. The new rule will allow the owners and operators to wait to repair a leak until the next scheduled blowdown, shutdown or shut-in, or do so within two years, whichever is earlier. The changes reflect the EPA’s resolution of industry complaints received in response to a November 2017 request for comment, including concerns related to service disruptions and higher shutdown emissions caused by depressurizing the equipment in order to repair it. Additional industry comments that relate to other aspects of the 2016 Rule, however, remain to be addressed in subsequent EPA rulemakings.
On February 20, 2018, the Environmental Protection Agency (EPA) published a notice in the Federal Register1 requesting public comment on whether the EPA can regulate discharges to groundwater that flow to jurisdictional surface waters under the Clean Water Act (CWA). Specifically, the EPA seeks comment on whether such regulation is “consistent with the text, structure, and purposes of the CWA.” It further seeks comment on whether the EPA should clarify its prior statements concerning these discharges, including defining the scope of the word “direct.”
At its February 15, 2018, Open Meeting, the Federal Energy Regulatory Commission (FERC or the “Commission”) issued Order No. 841 (the “Final Rule”) to remove barriers to the participation of energy storage resources1 in the capacity, energy, and ancillary services markets operated by regional transmission organizations and independent system operators (RTOs/ISOs). As Commissioner Robert Powelson explains, the Final Rule “strikes the appropriate balance between prescriptive requirements and high-level directives” by requiring that RTOs/ISOs establish a participation model for energy storage that “properly recognize[s] [its] physical and operational characteristics” and ensures its participation in the markets as both a buyer and a seller.
We are pleased to share a recording of our energy briefing that took place last week, “The Global Energy Industry 2018: A Look to the Year Ahead.” Speakers included Akin Gump tax partner Alison Chen, oil and gas partner John Goodgame, global project finance practice co-head John Marciano, along with oil and gas partner Christine LaFollette as moderator. The topics covered included:
- Tax reform: Impact on Energy Companies and Power Projects
- Shifting Focus from Production to Returns: Implications for the Exploration & Production Business
To view the recording, please click here.
In an opinion 1 issued January 8, 2018, the United States Court of Appeals for the 9th Circuit found that the Federal Energy Regulatory Commission (FERC) had acted arbitrarily and capriciously when it determined that Pacific Gas & Electric Company (PG&E) was eligible for an incentive adder to its transmission return on equity (ROE) for remaining a member of the California Independent System Operator (CAISO). The court reasoned that FERC had misinterpreted its own landmark orders—Orders No. 679 and 679-A2 —which provide that FERC will award incentive adders on a “case-by-case basis”3 on the presumption that membership in an independent system operator or regional transmission organization (each a “transmission organization”), such as CAISO, is voluntary.4 The California Public Utilities Commission (CPUC) challenged FERC’s decision to grant PG&E an incentive ROE adder on the grounds that PG&E’s membership in CAISO was not, in fact, voluntary, and that PG&E required authorization from CPUC to withdraw from CAISO.
On January 8, 2018, the Federal Energy Regulatory Commission (FERC) issued a Final Rule amending its regulations governing the maximum civil monetary penalties assessable for violations of statutes, rules and orders within its jurisdiction. The Final Rule is a result of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which requires each federal agency to issue an annual inflation adjustment by January 15 for each civil monetary penalty provided by law within the agency’s jurisdiction. The adjustments in the Final Rule represent an increase of approximately 2 percent for each covered maximum penalty. FERC’s adjusted maximum penalty amounts, which will apply at the time of assessment of a civil penalty regardless of the date on which the violation occurred, are set forth here and are effective January 12, 2018.