On May 17, 2018, the Federal Energy Regulatory Commission (FERC or the “Commission”) granted in part and denied in part a request by Zeeland Farm Services, Inc. (“Zeeland”) for a waiver of FERC’s regulations requiring small power production Qualifying Facilities (QFs) to self-certify their QF-status under the Public Utility Regulatory Policies Act of 1978 (PURPA).1 Zeeland claimed that its failure to self-certify (i.e., its failure to file a FERC Form 556), was a good-faith, inadvertent error by individuals and companies not otherwise engaged in the power industry.2 Although FERC granted Zeeland’s request that its wind farms be treated as QFs during the period of noncompliance—an approximately 10-year period—it denied such request with regard to the exemption for QFs under 20 MW from FERC’s filing requirements under Section 205 of the Federal Power Act.
In September 2017, we reported on a Court of Appeals of North Carolina decision holding that entities installing solar panels on customer rooftops are “public utilities” under state law, at least if they retain ownership of the panels and sell the output to the customer.
On May 9, 2018, Environmental Protection Agency (EPA) Administrator Scott Pruitt issued a memorandum outlining a “back-to-basics” process for reviewing National Ambient Air Quality Standards (NAAQS) for criteria pollutants—carbon monoxide, lead, ground-level ozone, nitrogen dioxide, particulate matter and sulfur dioxide—under the Clean Air Act (CAA). “Consistent with [EPA’s] commitment to cooperative federalism,” the memo establishes five principles to guide future NAAQS reviews, with the laudable goal of complying with the five-year statutory deadline for review.
Earlier this week, on April 30, 2018, the U.S. Environmental Protection Agency (EPA) quietly modified its source determination test that is used to determine whether emissions from nearby and closely related sources should be grouped together for New Source Review (NSR) and Title V permitting programs. The decision paves the way for the Pennsylvania Department of Environmental Protection to treat a biogas processing facility and an adjacent landfill as separate sources and escape regulation under NSR or Title V. According to EPA, because the two sources would be owned by separate entities, and each entity would lack direct control of the other, there was no “common control” of the sources. EPA emphasized that its “narrower interpretation,” focusing on “the power or authority of one entity to dictate decisions of the other that could affect the applicability of, or compliance with, relevant air pollution regulatory requirements,” will promote clarity, consistency and more practical outcomes in source determinations.
In its Global Energy Report 2018, Project Finance International has published the article ““Financing power at the shallow end,” written by Dan Sinaiko and John Marciano, co-heads of the global project finance group at Akin Gump Strauss Hauer & Feld LLP. The article looks at how new unconventional offtake structures have stimulated a wave of ingenuity for project developers and their financiers.
To read the full article, please click here.
On March 30, 2018, the Federal Energy Regulatory Commission (FERC or the “Commission”) issued separate orders (i) partially granting one of two challenges to PJM Interconnection, L.L.C.’s (PJM) frequency regulation (“Regulation”) market reform1 and (ii) rejecting PJM’s proposed operational enhancements to its Regulation market (“October 2017 Proposal”).2 Given the overlap in issues raised during the proceedings, the Commission also established a technical conference to explore PJM’s Regulation market design under its requirement that wholesale electricity market operators compensate for Regulation service “based on the actual service provided.”3
Effective yesterday, April 10, 2018, seven executive departments, the U.S. Army Corps of Engineers, the Environmental Protection Agency, and the Federal Energy Regulatory Commission have agreed to cooperate for the timely environmental review and authorization of major infrastructure projects, such as pipelines, roads, and bridges, by signing a Memorandum of Understanding (MOU) implementing President Trump’s August 2017 “One Federal Decision” Executive Order. Under the MOU, one lead agency will be responsible for developing a streamlined permitting timetable that would generally apply to all the environmental reviews and authorizations required for a project with an express goal of completing all reviews and authorizations within two years (commencing from the lead agency’s Notice of Intent (NOI) through the Record of Decision (ROD) publication). While this timetable would govern the actions of involved and cooperating agencies and include multiple milestones that should help move environmental reviews forward more quickly and efficiently, it is important to note that the two-year deadline is a “goal;” the deadlines are not enforceable unless enacted into law by Congress. The signatory agencies now have 90 days to develop detailed policies to implement this MOU and submit them to the Council on Environmental Quality and the Office of Management and Budget.
The MOU also recognizes the role that state, tribal, and local governments can have in approving major infrastructure projects. While the MOU cannot bind the state, tribal, or local agencies, under the MOU the lead agency is directed to seek the cooperation of such entities and their commitment to comply with the permitting timetable, including the two-year goal. Depending on the posture of the state, tribal, or local government vis-à-vis the project, they may or may not wish to cooperate, and certainly those that have resisted environmental rollbacks may be less accommodating.
On April 3, 2018, Susan Bodine, Assistant Administrator of U.S. EPA’s Office of Enforcement Assurance and Compliance Assistance (OECA), issued an internal memorandum titled “The Appropriate Use of Compliance Tools in Civil Enforcement Settlements” (the “Civil Tools Memo”). The memorandum withdraws an Obama administration memorandum titled “Use of Next Generation Compliance Tools in Civil Enforcement Settlements” (“Next Gen Memo”). Next Gen was the Obama EPA’s initiative to increase compliance with environmental regulations by using advances in pollutant monitoring and information technology. It had multiple components, one of which was “Innovative Enforcement,” which was described to include tools such as advance monitoring, third-party verification of compliance with settlement obligations, electronic reporting and public accountability through increased transparency of compliance data.