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FERC, CFTC, and State Energy Law Developments

Read our recent LawFlash analyzing the Federal Energy Regulatory Commission’s (FERC’s) Order No. 2222, which directs wholesale electric market operators to facilitate the participation of distributed energy resource (DER) aggregators under one or more participation models. The new rule vastly expands the opportunities for DERs, such as grid-enabled water heaters, small solar installations, and electric vehicles, to aggregate and compete alongside traditional generators for a slice of wholesale market revenues. ISOs/RTOs will have 270 days from the date the rule is published in the Federal Register to submit their compliance filings and propose implementation dates for their regions.

Read the full LawFlash.

As New York seeks a path to achieving its greenhouse gas (GHG) emissions goals, the New York Public Service Commission (NYPSC) recently approved an order authorizing New York’s electric utilities to spend up to $701 million to develop “make-ready” sites for electric vehicle (EV) supply equipment (EVSE) and related infrastructure (i.e., charging stations). The program is referred to as the “Make-Ready Program.”

New York is attempting to reduce its GHG emissions to 40% below 1990 levels by 2030, and 80% below 1990 levels by 2050. Electrifying the state’s transportation sector is viewed as integral to achieving that goal, as the transportation sector has a higher GHG output than any other sector of New York’s economy.

New York and New Jersey have announced the largest offshore wind solicitations in the United States. The solicitations—2,500 megawatts (MW) by New York and 2,400 MW by New Jersey—would add nearly 5 gigawatts of offshore wind capacity.

The offshore wind programs of these two states are among the most ambitious in the country. New York has a goal of developing 9,000 MW of offshore wind by 2035, while New Jersey is targeting the development of 7,500 MW of offshore wind by 2035. To date, each state has conducted one solicitation to procure large-scale offshore wind projects.

FERC recently dismissed the New England Ratepayers Association’s petition for declaratory order requesting FERC to exert jurisdiction over certain net-metering transactions. The decision leaves some key legal and jurisdictional questions about net metering unanswered. For now, FERC’s existing view that net-metering transactions are subject to state commissions’ retail sales jurisdiction, unless a customer sells more power back to the utility than it consumes in the applicable retail billing period (usually one month), remains intact.

Read the full LawFlash >>

On July 10, the US Court of Appeals for the DC Circuit found that the Federal Energy Regulatory Commission was well within its rights to prevent states from prohibiting energy storage resources from participating in wholesale (i.e., sales for resale) energy markets. The court’s order is the latest judicial affirmation of FERC’s authority to regulate activities on wide portions of the electric grid, including facilities reserved to state regulators, if those activities affect wholesale rates.

Background

The case arose following challenges to FERC’s Order No. 841 (and its order on rehearing), a 2018 rulemaking requiring grid operators (i.e., regional transmission organizations (RTOs) and independent system operators (ISOs)) to implement rules to facilitate the participation of electric storage resources in wholesale capacity, energy, and ancillary service markets.

The New Jersey Board of Public Utilities (BPU) has issued a straw proposal for electric vehicle (EV) infrastructure build out, to advance the statutory targets for the installation of EV chargers under a law signed earlier this year.

Gov. Phil Murphy signed S. 2252 into law in January 2020 to advance EV growth in the state by offering incentives for EV purchases and setting goals for the development of EV chargers throughout the state.[1]

The BPU’s proposal, issued on May 18, was developed after reviewing best practices from across the country, including California and New York, and addresses the following key policy issues associated with EV charging.

The US Department of Homeland Security’s Cybersecurity & Infrastructure Security Agency (CISA) issued Version 3.0 of its guidance on April 17 on identifying essential critical infrastructure workers amid the coronavirus (COVID-19) pandemic. The revised guidance adopts the latest safety recommendations from the Centers for Disease Control and Prevention (CDC) and builds on prior versions of the guidance by providing an expanded breakdown of job roles that CISA considers essential, particularly in the energy sector. The guidance also addresses the manner in which localities can ensure that essential workers can travel to and perform their jobs.

Recognizing that employers of essential workers have had difficulty ensuring that those workers can physically travel as needed for their jobs, the revised guidance urges that such workers be “exempted from curfews, shelter-in-place orders, and transportation restrictions or restrictions on movement.” The guidance also urges local governments to establish guidance that lets essential workers cross jurisdictional boundaries with neighboring jurisdictions.

Nevada became the sixth state to adopt an energy storage procurement goal on March 12. The Public Utilities Commission of Nevada (PUCN) adopted a regulation in Order No. 44671 that establishes biennial energy storage procurement goals of 100 MW by December 31, 2020, and increasing to 1 GW by 2030. The new regulation is consistent with a 2018 Brattle Group study commissioned by the PUCN that determined a 1 GW level of deployment by 2030 would be cost-effective for Nevada. Nevada utilities will now have to include a plan to meet the biennial storage targets as part of their integrated resource plans and submit progress reports to the PUCN starting in 2022. NV Energy is already on track to meet those targets with the utility’s plans to bring nearly 1.2 GW of new solar energy projects to Nevada and an additional 590 MW of energy storage capacity by 2024. 

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.

A declaratory order issued by the Federal Energy Regulatory Commission (the Commission) on January 30 in Docket No. RP20-41-000 grants pipeline developers greater certainty in planning and siting construction. The order was issued after a split 2-1 vote. It may also significantly reduce pipeline developers’ expenses by avoiding costly disputes with states over the possession of state-owned land. The order resulted from a petition filed by a company (Pipeline) seeking to construct an approximately 116-mile greenfield natural gas pipeline designed to provide firm natural gas transportation service from receipt points in the eastern Marcellus Shale region, in Luzerne County, Pennsylvania, to delivery points in New Jersey and Pennsylvania (the Project). The petition requested the Commission’s interpretation of the scope of the eminent domain authority in Section 7(h) of the Natural Gas Act (NGA).