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FERC, CFTC, and State Energy Law Developments

Bill Kissinger, Ella Foley Gannon, and Rick Rothman discuss recent US regulatory and legislative developments addressing climate change and renewable energy. They discuss the Biden-Harris administration's focus on setting goals to address climate change and highlight the success in California as a possible model for the United States. Read the Law360 article.

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 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.
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.
The Federal Energy Regulatory Commission (FERC) announced on February 22 that its Office of Enforcement would examine wholesale natural gas and electricity market activity during last week’s extreme cold weather “to determine if any market participants engaged in market manipulation or other violations.” FERC’s brief press release explained that its examination is part of its existing surveillance program for market participant behaviors in the wholesale natural gas and electric markets.
FERC has issued an order revising its prior order on PJM’s Minimum Offer Price Rule (MOPR) by vacating a footnote that suggested the New Jersey Basic Generation Service default service auction—and by extension other state default service auctions shaped by state resource policy—were not “fuel neutral” or “nondiscriminatory” as required by Commission precedent. As a result of this clarification, resources selected through the New Jersey default service auction will not be presumed to be subject to the MOPR and may be eligible for the MOPR exclusion for independently evaluated, nondiscriminatory, fuel-neutral, competitive state-directed default service auctions.
Midcontinent Independent System Operator (MISO) has issued a report analyzing the effects of renewable energy growth in the MISO region and concluding that the system can reliably accommodate a significant percentage of variable renewable resources.