On June 9, the Department of Transportation (DOT), through the Federal Highway Administration (FHWA), proposed mandatory standards concerning the development and operation of publicly available electric vehicle (EV) charging infrastructure in US markets. DOT’s proposal is the first-ever effort of the US government to impose mandatory standards on EV charging infrastructure in an effort to create uniformity and consumer transparency in the EV charging sector. DOT’s proposal is subject to comment and consideration, and a final rule is expected later this year.
Power & Pipes
FERC, CFTC, and State Energy Law Developments
With the push to transition to a low-carbon economy, carbon offsets have become an option that many have turned to in order to decarbonize and achieve their climate goals. The demand for carbon offsets is quickly increasing, and the industry has recognized the need for quality standards applicable to a carbon offset, the ability to monitor, report, and verify carbon offsets, and mechanisms that ensure market integrity. Next month, the Commodity Futures Trading Commission (CFTC) will be hosting a meeting to discuss issues related to the supply and demand for high quality carbon offsets and to gather information to assess its potential role in regulating products involving carbon offsets.
FERC recently held a Staff-led technical conference to discuss whether, and if so, how, the Commission should require additional financial assurance mechanisms in the licenses and other authorizations it issues for hydroelectric projects, to ensure that licensees have the capability to carry out license requirements and, particularly, to maintain their projects in safe condition. The feedback received during the conference, as well as the comments to be filed, will likely shape the ultimate FERC rule on financial assurance requirements currently under consideration.
Not Just Boilerplate
Authored by litigators from our energy team, the Not Just Boilerplate series on Power & Pipes provides real-world examples of the impact that certain contract clauses can have on energy companies. Whether in repeat form agreements, employment agreements, or heavily negotiated one-off deals or mergers, there can sometimes be a tendency to just “grab” clauses from prior agreements, with the thinking that “it has always worked before . . .”
Cost allocation for regional transmission projects has long been one of the more challenging aspects of regional transmission development because it determines who should ultimately bear the costs of the regional transmission projects and in what proportion. Litigation over these issues is not uncommon.
FERC believes that barriers to transmission investment pose significant risks to the energy economy. Inadequate transmission can lead to transmission congestion, which in turn impedes capital investment in energy infrastructure and the facilities necessary to ensure reliable and efficient service. That problem is compounded by changing supply and demand conditions and an increasingly diverse generation mix, which can create ripple effects on competitive wholesale markets.
As an example of its renewed focus on dam safety, FERC recently issued an order assessing a $600,000 civil penalty to Ampersand Cranberry Lake Hydro LLC for a violation of Ampersand’s hydro license for the 500 kW Cranberry Lake Project No. 9658. The violation is related to Ampersand’s failure to complete known dam safety repairs over multiple years and its loss of property rights needed for the Cranberry Lake Project, located on the Oswegatchie River in St. Lawrence County, New York.
According to FERC, one of the biggest shortcomings of existing regional transmission planning is its focus on short-term needs. Long-term planning, while part of planning processes today, is not sufficient in FERC’s view and has led to “piecemeal” transmission development and an overreliance on meeting transmission needs through generator interconnection processes, which are not designed with larger regional facilities in mind.
To address changing system needs, FERC ordered each Regional Transmission Organization and Independent System Operator (collectively, RTO/ISO) to submit information to the Commission regarding changes to wholesale markets within 180 days.
FERC initiated show-cause proceedings on April 21, 2022, to investigate the justness and reasonableness of the formula rate protocols of five public utility transmission providers in the West.