In an article featured in our global energy industry newsletter, Empowered, lawyers Carl Valenstein and Jonathan Wilcon analyze the implications of the Jones Act on offshore wind development. While the authors acknowledge that many see Jones Act compliance as a “potential bottleneck” for the offshore wind industry’s progress, they discuss strategies that will permit Jones Act compliance and offshore wind development in the United States.
Power & Pipes
FERC, CFTC, and State Energy Law Developments
A recent district court order highlights the importance of maintaining a strong compliance program with effective compliance controls and practices, while highlighting the risk of employee misconduct for the enterprise itself. Specifically, on December 20, a California district court denied a motion to dismiss a FERC complaint that seeks to enforce a penalty against a company and one of its traders. In addition to finding that FERC’s claims were not time barred, the court also found that the employer can be held liable for the trader’s actions even though the trader withheld information from the company regarding the trading activity at issue. However, in a win for the company, the court limited the civil penalties that may be sought in a complaint to the proposed penalty set forth in FERC’s order to show cause. This limits FERC’s ability to penalize a defendant for choosing to contest a proposed sanction in district court.
The Federal Energy Regulatory Commission recently issued a final rule, Order No. 880, revising its hydropower project inspection and safety regulations. The updates revise part 12 of FERC’s regulations and conclude an approximately year and a half of rulemaking in Docket No. RM20-9.
At its December 2021 open meeting, the Federal Energy Regulatory Commission (FERC or the Commission) approved new rules to improve utilization of the transmission system by redefining “transmission line rating” to account for ambient weather conditions. The Commission expects that the change will permit greater transmission line utilization while also fostering reliability and safety. Transmission providers have 120 days to submit a compliance filing to account for the redefinition and must implement all requirements within three years of the compliance filing due date.
The Federal Energy Regulatory Commission issued show cause orders to two natural pipelines—Rover Pipeline and Midship Pipeline Company—following its December 2021 open meeting, and sent a related dispute involving Midship for an administrative hearing. Chairman Richard Glick has signaled in the last year his desire for a more active enforcement program.
The US Department of Transportation’s Federal Highway Administration (FHWA) recently issued a notice seeking public comment on two new electric vehicle (EV) programs that will receive funding under the Infrastructure Investment and Jobs Act (IIJA), which was signed into law by President Biden on November 15, 2021.
The Federal Register recently published the US Department of Energy’s (DOE) notice of Request for Information (RFI) seeking public input on energy sector supply chains. The RFI requests that stakeholders provide comment on a wide variety of issues concerning supply chains of energy and related technologies.
The US District Court for the Southern District of Ohio held on November 29, 2021, that in actions commenced under 16 USC Section 823b, district courts have the power to decide whether FERC can enforce civil penalties but do not have the ability to consider challenges to FERC orders that pursue joint and several liability and disgorgement. The court held that those challenges generally fall within the exclusive jurisdiction of federal appeals courts.
The US Environmental Protection Agency (EPA) recently issued a proposed rule under the Clean Act intended to reduce emissions of greenhouse gases (GHGs) and air pollutants from crude oil and natural gas operations (production, processing, transmission, and storage segments).
US congressional Democrats released the latest version of H.R. 5376—better known as the Build Back Better Act—late last week, hoping to advance a $1.85 trillion spending package after months of deadlock.