FERC, CFTC, and State Energy Law Developments

In response to the US president’s declaration of a national emergency due to the coronavirus (COVID-19) pandemic, on March 20 the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a notice to operators stating that, effective immediately and until further notice or modification, PHMSA does not intend to take any enforcement action with respect to operator qualification (OQ) and control room management (CRM) requirements, and will consider exercising enforcement discretion regarding certain drug testing requirements.

An upcoming webinar on March 27 discussing the impact of the coronavirus (COVID-19) pandemic on shareholder activism, global financial markets, and market capitalizations may interest our energy clients. 

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Our colleagues have prepared a LawFlash addressing the US Securities and Exchange Commission’s March 25 extension of certain filing periods and current views regarding disclosure considerations due to the coronavirus (COVID-19) crisis. 

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Read our recent LawFlash regarding current modifications to enable state and local agencies in California to continue making decisions during the pandemic, while preserving opportunities for public involvement by teleconference or electronic means.

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Read our recent LawFlash detailing the criteria for essential critical infrastructure workers in the electricity, petroleum, and natural gas and propane industries, including the vendors and service providers to the energy industry, and consider whether to provide letters or notices identifying key personnel as essential critical infrastructure workers.

Functioning critical infrastructure is crucial during the response to the coronavirus (COVID-19) emergency for public health and safety reasons. And as noted in the Coronavirus Guidelines for America issued on March 16, US President Donald Trump has recommended that workers in critical infrastructure industries have a “special responsibility” to maintain normal work schedules. The Cybersecurity and Infrastructure Security Agency (CISA) on March 19 issued guidance on defining the Essential Critical Infrastructure Workforce. That guidance explicitly discusses workers in the nuclear and electric industries.

Read the LawFlash prepared by our insurance litigation colleagues discussing business interruption coverage and the steps you may want to take to protect your insurance assets, which may help mitigate financial losses due to the coronavirus (COVID-19) pandemic.

Commission Chairman Neil Chatterjee held a press conference on March 19 to discuss FERC’s work during the current pandemic, provide updates regarding the coronavirus (COVID-19), and respond to questions from the media. According to today’s announcements, FERC plans to keep operating as usual but will provide extensive flexibility to the regulated industry in addressing the effects of the pandemic on FERC-jurisdictional activities.

FERC and NERC issued a joint notice on Wednesday providing compliance flexibility on certain key reliability standard requirements during the ongoing coronavirus (COVID-19) pandemic. Although this guidance can allow utilities to avoid findings of noncompliance for certain requirements where timely compliance activities could be difficult due to personnel shortages and other limitations, this is not a blanket waiver. Instead, utilities must provide written notices of their intent to use this guidance. The content of those notices must be drafted carefully as they will be necessary to demonstrate compliance in future reviews.

The new flexibility is as follows:

  • Due to the limited availability of NERC-certified operators, if a utility cannot provide sufficient certified operators to comply with PER-003 due to COVID-19, the use of noncertified operators is permitted through the end of 2020. In order to take advantage of this flexibility, utilities will need to notify their Regional Entities and Reliability Coordinators (ISO-NE and NYISO). Training requirements, such as those in PER-005, continue to apply.
  • Because of the resource limitations during this time period, periodic actions required by the reliability standards that must occur between March 1, 2020, and July 31, 2020, can be missed on a case-by-case basis if the activities cannot be performed due to COVID-19. To use this flexibility, utilities will need to notify their regional entities of the specific actions that will be missed. These periodic requirements exist in both the Operating & Planning standards (such as protection system maintenance and testing) and the Critical Infrastructure Protection standards (such as patching and vulnerability assessments).

Read the LawFlash prepared by our antitrust lawyers providing tackling questions regarding industry coordination in response to the coronavirus (COVID-19) pandemic.

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