FERC has issued its final rule paving the way for incentive-based rate treatment for electric utilities that make certain voluntary cybersecurity investments. As we first noted in 2020 when describing the proposed rule, the final rule provides a new mechanism for promoting cybersecurity of the bulk-power system by rewarding utilities for proactively enhancing their cybersecurity programs beyond the mandatory requirements of the North American Electric Reliability Corporation (NERC) Critical Infrastructure Protection (CIP) reliability standards.
Power & Pipes
FERC, CFTC, and State Energy Law Developments
On January 1, 2023, newly constructed standalone energy storage facilities became eligible for an investment tax credit (ITC) under Section 48 of the Internal Code of 1986, as amended (Code), pursuant to provisions of the recently enacted Inflation Reduction Act (IRA). Storage facilities placed in service before 2023 generally were only eligible for an ITC when constructed as part of a combined renewable generation (typically solar) plus storage facility and the storage system was charged by the paired renewable generation system at least for the 5-year initial operating period. Storage developers and owners will now be able to take advantage of new and significant tax credit opportunities, whether or not the storage system is paired with a renewable generation energy facility.
On March 24, FERC granted a public utility’s petition for declaratory order regarding the treatment of a master license agreement for communications equipment under the public utility’s previously approved revenue sharing mechanism (Revenue Sharing Mechanism).
At its December open meeting, FERC proposed to establish rules for incentive-based rate treatments for voluntary cybersecurity investments by a public utility.
FERC recently dismissed the New England Ratepayers Association’s petition for declaratory order requesting FERC to exert jurisdiction over certain net-metering transactions.