Power & Pipes

FERC, CFTC, and State Energy Law Developments
In 2022, FERC began issuing directives aimed at ensuring that the reliability of the bulk-power system is protected from potential risks posed by the growing number of inverter-based resources (IBRs) connected to the electric grid. As we previously reported, FERC issued three orders in December 2022 focused on increasing regulations for IBRs through the North American Electric Reliability Corporation (NERC), an independent electric reliability organization that develops and enforces mandatory reliability standards. In continuance of this goal, this fall, FERC took the step of directing NERC to develop or modify reliability standards specifically to address reliability concerns attributable to IBRs (Order No. 901).
The US Department of Energy’s (DOE’s) Office of Energy Efficiency and Renewable Energy (EERE) announced on November 16, 2023 its intention to issue, on behalf of the Hydrogen and Fuel Cell Technologies Office, a funding opportunity announcement (FOA) that is expected to focus on advancing fueling infrastructure for heavy-duty (HD) vehicles and other HD transportation applications and addressing key challenges to siting, permitting, and installation.
The US Federal Energy Regulatory Commission (FERC or Commission) has released its annual report on enforcement for fiscal year 2023. As in fiscal year 2022, FERC’s Office of Enforcement (OE) focused on matters involving fraud and market manipulation, serious violations of the Reliability Standards, anticompetitive conduct, threats to the nation’s energy infrastructure and associated impacts on the environment and surrounding communities, and conduct that threatens the transparency of regulated markets.
The Commodity Futures Trading Commission (CFTC or Commission) released its enforcement results for fiscal year 2023 on November 7, 2023. The CFTC’s Division of Enforcement filed 96 enforcement actions in 2023 charging a range of violations in a variety of markets that resulted in more than $4.3 billion in civil monetary penalties, restitution, and disgorgement. Both metrics show an increase from last year, when the Commission initiated 82 enforcement actions and imposed more than $2.5 billion in restitution, disgorgement, and penalties. The uptick in cases stemmed largely from a near doubling of fraud-related cases.
The compliance deadline for the Voluntary Carbon Market Disclosures Act (VCMDA) is quickly approaching, but the statutory language of the VCMDA leaves open for interpretation several key issues, including threshold applicability questions that potentially impacted companies will need to grapple with.
The US Department of Energy (DOE) has announced the much-anticipated selection of seven hydrogen hub projects across the country that are eligible for $7 billion in federal investment. The selectees will now undergo an award negotiation process to obtain a commitment from DOE. This funding aims to accelerate the commercial-scale deployment of low-cost, clean hydrogen as an alternative source of energy and the creation of networks of clean hydrogen producers, consumers, and infrastructure.
California Governor Gavin Newsom signed the Voluntary Carbon Market Disclosures Act (VCMDA) on October 7, imposing disclosure obligations on businesses that market, sell, or purchase voluntary carbon offsets in California and businesses that make net-zero or carbon-neutral claims, effective on January 1, 2024.
In a per curiam decision on October 3, 2023, the US Court of Appeals for the Sixth Circuit affirmed that the Federal Power Act prevents tort suits against the United States relating to damage caused by dams that are licensed by the Federal Energy Regulatory Commission (FERC). That is, liability for any injuries or damages caused by any dam licensed by FERC is solely the responsibility of the licensee, and liability cannot flow to the United States, even after dam failures.
Electric vehicle (EV) charging relies on a complex ecosystem involving multiple entities, including utility operators, third-party data network providers, charging infrastructure owners, and the EVs themselves. The high degree of digital interconnectivity required to run that ecosystem presents significant cybersecurity risks, including the potential for data theft, physical property damage, and electric grid disruptions.
The Commodity Futures Trading Commission’s (CFTC’s) Division of Enforcement announced that it has established a new task force—the Environmental Fraud Task Force—to combat environmental fraud and misconduct in derivatives and relevant spot markets, including the carbon markets.