The US Senate Committee on Energy and Natural Resources held a hearing last week to consider the nomination of Bernard L. McNamee, the current head of the US Department of Energy’s (DOE’s) Office of Policy, to the Federal Energy Regulatory Commission (FERC or Commission). FERC commissioners are appointed by the president of the United States but must also be confirmed by vote of a full Senate. President Donald Trump nominated Mr. McNamee, a Republican, in October to fill the vacant seat formerly occupied by former Commissioner Robert Powelson, who stepped down from his post earlier this year. If ultimately confirmed, Mr. McNamee will serve as the third Republican commissioner and restore the five-member panel to full strength.
The US Department of Homeland Security (DHS) announced the formation of the Information and Communications Technology (ICT) Supply Chain Risk Management Task Force (the Task Force) on October 30. The Task Force is a partnership between government and private sector partners created to “examine and develop consensus recommendations to identify and manage risk to the global ICT supply chain.” The announcement came at the conclusion of National Cybersecurity Awareness Month and follows other government industry initiatives, such as the Oil and Natural Gas Pipeline Cybersecurity Initiative, that have been developed to manage risks posed by increasingly global supply chains.
For years, the US electric power industry has witnessed a steady uptick in the total capacity of deployed energy storage resources. Part of that growth is attributable to more favorable economics for storage projects, a trend that is set to continue in the coming years—a recent study by Bloomberg NEF forecasted that the global energy storage industry will see $620 billion in new investments by 2040. While the development of stationary batteries is expected to be outpaced by other storage applications, such as electric vehicles, the study also suggests that rapidly sliding capital costs for battery systems will be advantageous for utility-scale projects.
The Federal Energy Regulatory Commission (FERC or the Commission) Office of Enforcement (OE) issued its 2018 Report on Enforcement on November 15. The report provides a review of OE’s activities during fiscal year 2018 (FY 2018), which begins October 1 and ends September 30 annually. Like last year, the report reveals likely areas of focus for FERC enforcement in the coming year, and provides guidance to the industry based on the wide variety of enforcement matters that are otherwise non-public by synthesizing some of the more disparate developments from audits, market surveillance, and other enforcement activities for the benefit of industry stakeholders.
A new market registration option is among the changes SPP is likely to propose in next month’s mandatory compliance filing.
We reported last week on steps that ISO New England has taken to finalize tariff revisions to meet the directives of Order No. 841, the Federal Energy Regulatory Commission’s (FERC or Commission) final rule on electric storage participation in Independent System Operator (ISO) and Regional Transmission Organization (RTO) markets. Order No. 841 requires RTOs and ISOs to submit proposed models that permit electric storage resources to participate in organized capacity, energy, and ancillary service markets by December 3, 2018 (read a more comprehensive overview of the final rule here). At the end of October, Southwest Power Pool, Inc. (SPP) moved closer towards meeting that goal when its board approved tariff revisions developed in response to FERC’s Order No. 841 directives, which should represent new opportunities for some of the 2.5 GW of pending electric storage resources in SPP’s generator interconnection queue.
On October 18, the Federal Energy Regulatory Commission (FERC or Commission) issued Order No. 850, adopting a suite of reliability standards proposed by the North American Electric Reliability Corporation (NERC) to address the cybersecurity risks posed by supply chains for industrial control system assets and services in critical electric utility environments. The final rule largely adopts the proposals from the Commission’s Notice of Proposed Rulemaking (NOPR). But the Commission also directs NERC to expand the scope of the new requirements to include Electronic Access or Control Monitoring Systems (EACMS) and to evaluate the need to further expand the scope of the requirements to include Physical Access Control Systems (PACS) and Protected Cyber Assets (PCAs).
Despite fears that the Commission would shorten the implementation period for the new requirements, the Commission adopted the 18-month implementation period that was originally proposed by NERC.
Revisions aim to build on framework designed originally for pumped-storage hydro facilities and bring region closer to Order No. 841 compliance.
Earlier this year, the Federal Energy Regulatory Commission (FERC or Commission) issued Electric Storage Participation in Markets Operated by Regional Transmission Organizations and Independent System Operators (Order No. 841), a final rule amending FERC’s regulations to facilitate participation of electric storage resources in the capacity, energy, and ancillary service markets operated by regional transmission organizations (RTOs) and independent system operators (ISOs). As we reported previously, Order No. 841 requires RTOs and ISOs to devise an electric storage resource participation model that meets certain general criteria. The RTOs/ISOs must file the tariff revisions directed by Order No. 841 by December 3, 2018, and implement those changes, if approved, by December 3, 2019.
On October 24, US President Donald Trump designated Commissioner Neil Chatterjee as the new chairman of the Federal Energy Regulatory Commission. Commissioner Chatterjee, a Republican, replaces Commissioner Kevin McIntyre, also a Republican, as chairman of the Commission. Senate confirmation is not required for this chairman designation. Commissioner McIntyre served as Chairman of the Commission for close to a year after he was confirmed by the Senate on November 2, 2017. Commissioner McIntyre had sent a letter to President Trump earlier this week, indicating that he would be stepping down due to health concerns.
The August 2018 enactment of the Foreign Investment Risk Review Modernization Act (FIRRMA) came after more than two years of debate over the appropriate scope of jurisdiction for the Committee on Foreign Investment in the United States (CFIUS). Much has already been written about FIRRMA and its potentially ambitious reach, as well as about the interest by certain parties, including members of Congress, to keep CFIUS away from some transactions. The result was a law that amended a number of provisions defining CFIUS jurisdiction, both expanding and narrowing key parts of the Committee’s reach. The pilot program is focused on certain specific types of transactions, without regard to the country of the acquiring entity, that CFIUS can review under FIRRMA, including transactions involving “Nuclear Electric Power Generation;” “Petrochemical Manufacturing;” “Power, Distribution and Specialty Transformer Manufacturing;” “Storage Battery Manufacturing;” and “Turbine and Turbine Generator Set Units Manufacturing.”
Join Morgan Lewis lawyers for these upcoming programs:
- Transmission Upgrades and Reconductoring Technologies Conference │ October 10, 2018 Conference │ Presenter: J. Daniel Skees
- Ensuring Your COP Meets Regulatory Requirements & Avoids Legal Challenges │ October 17, 2018 │ Conference │ Presenter: Geraldine E. Edens
- Nuclear Regulatory Roundup Q3 2018 │ October 23, 2018 │ Webinar │ Presenters: Alex Polonsky, Stephen Burdick
- Implications of NERC’s Proposed New Reliability Standard │ October 31, 2018 │ Webinars │ Presenters: J. Daniel Skees; Arjun Prasad Ramadevanahalli; Serge Agbre
- Legal Perspectives on NERC Cyber Security Supply Chain Risk Management Standard │ November 14, 2018 │ EBA Roundtable │ Presenter: J. Daniel Skees
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