Three Massachusetts utilities, in coordination with the Massachusetts Department of Energy Resources (DOER), issued a request for proposals on May 7, 2021 seeking bids for offshore wind projects. The utilities are seeking to procure between 400 megawatts (MW) and 1.6 gigawatts (GW), and developers are permitted to submit applications for projects between 200 MW and 1.6 GW.
FERC, CFTC, and State Energy Law Developments
A very significant step in the development of offshore wind in the United States was reached on May 11, 2021, when the Bureau of Ocean Energy Management (BOEM) approved Vineyard Wind’s 62-turbine offshore wind farm located about 15 miles off the coast of Martha’s Vineyard. This is the first major offshore wind project approved by BOEM, the US Army Corps of Engineers, and the National Marine Fisheries Service: at 800 megawatts of capacity, the project is an order of magnitude larger than previously-installed test turbines and projects like the 30-megawatt Block Island Wind Farm.
FERC granted a partial waiver requested by a generation and transmission service cooperative (Petitioner) of certain obligations under FERC’s regulations implementing Section 210 of the Public Utility Regulatory Act of 1978 (PURPA), which mandates the purchase of power from qualifying facilities (QFs). Petitioner filed on behalf of itself and six distribution cooperative member-owners (Participating Members) for waiver of the Participating Members’ obligations to purchase energy and capacity directly from QFs and waiver of Petitioner’s obligation to sell energy and capacity directly to QFs. The order is an example of jurisdictional entities’ ability to swap certain of their obligations under FERC’s regulations in limited situations so long as the intent of the relevant laws is fulfilled.
On March 18, FERC issued a highly anticipated order denying the petition for declaratory order filed by several electric public utilities addressing the extent to which equity ownership of multiple utility holding companies by certain institutional investors creates affiliation between those holding companies. The institutional investors in question hold specific blanket authorizations to acquire up to 20% of the voting equity in public utilities without seeking transaction-specific authorizations from FERC, in contrast to the existing blanket authorization available to all entities that allows acquisitions below 10% without prior authorization.
FERC issued a Notice Seeking Comments on March 18 on its proposal to collect additional data from market-based rate (MBR) Sellers whose ultimate upstream affiliate(s) own their voting securities under a Federal Power Act Section 203(a)(2) blanket authorization. FERC proposes changes to the MBR Data Dictionary so that the relational database rolling out in 2021 can more accurately reflect ultimate upstream affiliates (or the lack thereof) among Sellers that have an ultimate upstream affiliate that is an institutional investor who acquired their securities pursuant to a Section 203(a)(2) blanket authorization specific to that investor.
FERC approved revisions to three Critical Infrastructure Protection (CIP) North American Electric Reliability Corporation (NERC) Reliability Standards to expand the scope of the assets subject to supply chain cybersecurity requirements and related obligations. Supply chain cybersecurity continues to be a focus of NERC, energy industry stakeholders, and government regulatory and securities agencies.
In the wake of the February extreme cold weather that caused record levels of electric generation to be taken offline, the Federal Energy Regulatory Commission (FERC or the Commission) has scheduled a two-day technical conference to discuss issues surrounding the threat to electric system reliability posed by climate change and extreme weather. The virtual technical conference is scheduled for Tuesday and Wednesday, June 1 and 2, from 1:00 pm to 5:00 pm ET.
FERC issued an original license for a period of 25 years, pursuant to Part I of the Federal Power Act, to Oregon State University (OSU) to construct, operate, and maintain the proposed PacWave South Hydrokinetic Project No. 14616 (PacWave Project). The PacWave Project is a first-of-its-kind wave energy testing facility that will be sited approximately seven miles off the coast of the state of Oregon and consists of both offshore and onshore components.
FERC announced on February 22 that it will open a new proceeding to examine the threats of climate change and extreme weather to electric reliability. The investigation will assess how grid operators prepare for and respond to extreme weather events, including, droughts, extreme cold, wildfires, hurricanes, and prolonged heat waves. The proceeding will include a technical conference with an opportunity for parties to submit comments in advance of that conference.
FERC has issued an order setting aside in part its prior order on New York Independent System Operator, Inc.’s (NYISO’s) buyer-side market power mitigation rules by reversing its decision not to exempt payments received under the Commercial System Distribution Load Relief Programs (CSRPs) submitted for consideration from the calculation of Special Case Resource (SCR) offer floors.