The secretary of the US Department of Energy (DOE) issued an order on December 17 prohibiting electric utilities from installing equipment or components provided by Chinese companies in electric facilities serving designated “Critical Defense Facilities.” Relying on authority from Executive Order 13920 on Securing the United States Bulk-Power System, the order identified threats to the electric supply chain from China and concluded that prohibiting Chinese equipment in these sensitive facilities is necessary to respond to the Chinese government’s plans to undermine the bulk-power system.
FERC, CFTC, and State Energy Law Developments
The Federal Energy Regulatory Commission (FERC) issued Order 569 A on May 21, significantly revising the methodology used to analyze the base return on equity (ROE) of a public utility’s rates under the Federal Power Act. Because the order remains subject to further legal challenge and FERC had last revised its guidance on acceptable methodologies six months earlier in Order 569, uncertainty in acceptable methodologies may continue for some time.
FERC issued a proposal on May 21 to modify its policy regarding requests for waiver of public utility tariff provisions that are subject to FERC’s review and approval under the Federal Power Act and the Natural Gas Act.
In November 2019, New Jersey Governor Phil Murphy issued Executive Order 92 increasing the state’s offshore wind generation goal from 3,500 MW by 2030 to 7,500 MW by 2035. To date, the New Jersey Board of Public Utilities (BPU) has approved only one 1,100 MW offshore wind project, but is expected to conduct additional solicitations in 2020 and 2022 and approve approximately 2,400 MW of additional offshore wind generation.
The Federal Energy Regulatory Commission (FERC) on December 19, 2019, directed PJM Interconnection to extend its minimum offer price rule (MOPR) from new natural gas–fired electric generators to also cover any generator that receives or is entitled to receive certain types of state subsidies.
Our US labor/management relations team continues to track the National Labor Relations Board’s (NLRB’s) increasingly business-friendly approach in 2019. The Board’s busy year to date includes its decision in Entergy Mississippi, addressing the supervisory status of certain electric utility transmission and distribution dispatchers and resulting ineligibility to vote in a union election.
New Jersey advanced several of the Murphy administration’s clean energy goals during June 2019. Over the past month, the state released a draft of its revised Energy Master Plan (EMP), approved the Ocean Wind offshore wind project proposed by Ørsted, and released a detailed analysis on energy storage development in New Jersey.
Consolidated Edison Company of New York, Inc. (Con Edison) and Orange and Rockland Utilities, Inc. (O&R) issued a draft joint Request for Proposals (RFP) on May 31 to competitively procure scheduling and dispatch rights from new energy storage projects.
FERC issued a Notice of Inquiry (NOI) on March 21 seeking stakeholder comment on the scope and implementation of its electric transmission infrastructure development incentives regulations and policy.
The retail storage incentives will be available for storage projects that operate primarily to reduce a customer’s electric demand to off-peak periods and discharge during peaks to relieve grid constraints.