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FERC, CFTC, and State Energy Law Developments
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.
The Federal Energy Regulatory Commission (FERC or the Commission) announced during its March 18 open meeting two recent actions to promote greater use of distributed energy resources and demand response. First, FERC has amended regulations on distributed energy resource aggregation in the capacity, energy, and ancillary markets operated by a Regional Transmission Organization (RTO) or an Independent System Operator (ISO). Second, and related to its distributed energy resource amendments, FERC is seeking public comment on whether to revise regulations barring RTOs and ISOs from accepting bids of certain demand response aggregations.
In May 2020, US President Donald Trump issued Executive Order 13920, banning the unrestricted import or use of certain categories of bulk-power system electric equipment from foreign adversaries, with a focus on Russian and Chinese equipment suppliers. The future of that regulation is now up in the air.
Our colleagues in the tax practice recently prepared a LawFlash examining the final regulation on the Section 45Q carbon capture tax credit issued by the US Department of the Treasury and Internal Revenue Service. We discussed the draft regulations in an earlier LawFlash, which also provides background on the Section 45Q credit. Because the final rule was published and took effect before the inauguration of President Joe Biden, the regulation is not subject to the regulatory freeze issued by the new administration.
FERC has issued a notice of inquiry inviting comments on potential changes to its regulations requiring financial assurance measures in licenses and other authorizations for hydroelectric projects.
At its December open meeting, FERC proposed to establish rules for incentive-based rate treatments for voluntary cybersecurity investments by a public utility.
FERC has issued a final rule, Order No. 874, expanding the eligibility criteria for Qualifying Facilities (QFs) as defined under the Public Utility Regulatory Policies Act of 1978 (PURPA) to enable certain fuel cell–based electric generation to receive QF status.
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.
The US Department of Energy (DOE or Department) finalized a rulemaking proceeding last week that revises its National Environmental Policy Act (NEPA) implementing procedures pertaining to certain authorizations under the Natural Gas Act (NGA). This update limits DOE’s review of environmental impacts associated with natural gas exports to certain countries; DOE’s review will only consider the environmental effects of marine transportation, which DOE has also determined as not creating a significant environmental impact.
FERC has issued a final rule, Order No. 872, revising the Commission’s regulations governing qualifying small power producers and co-generators (collectively, qualifying facilities or QFs) under the Public Utility Regulatory Policies Act of 1978 (PURPA).