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FERC, CFTC, and State Energy Law Developments

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.

FERC has issued an order extending the blanket waivers of all requirements to hold meetings in person and/or to provide or obtain notarized documents in open-access transmission tariffs through January 29, 2021. The order continues the blanket waivers first issued on April 2, 2020, in response to requests from regulated entities, which were set to expire on September 1, 2020. FERC cites the coronavirus (COVID-19) national emergency proclamation issued by President Trump on March 13, 2020; the continued risk to health and safety currently presented by personal contact; and guidance from public health officials on social distancing as good cause for the waivers.

Our litigation and environmental teams recently discussed the DC Circuit’s ruling that rejected a challenge to the EPA’s listing of a site on the Superfund National Priorities List (NPL). This decision will inform listing decisions at other sites with subsurface contamination, and could lead to the listing of more industrial sites on the NPL. It also serves as a reminder that parties must evaluate and raise with EPA in the preliminary assessment and site listing process all potential challenges to EPA’s listing decision.

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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 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). The Commission stated that the rule addresses significant changes that have occurred in the US energy markets and the Commission’s desire to modernize its PURPA regulations to protect consumers and preserve competition while meeting the Commission’s statutory obligations. The revisions will have significant implications for all utilities required to purchase the output of QFs, as well as generators that rely on PURPA rates and obligations. The final rule takes effect 120 days after publication in the Federal Register.

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.

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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.

Read our recent LawFlash discussing a June 30 decision by the US Court of Appeals for the DC Circuit regarding the recent use of tolling orders by FERC as a way to prevent rehearing requests from being denied by operation of law.

As discussed in the LawFlash, a near unanimous DC Circuit held that the Natural Gas Act does not permit tolling orders on rehearing applications regarding pipeline construction requests that serve only to buy FERC time to act upon the rehearing request. Accordingly, for cases brought within the DC Circuit, FERC must act on a rehearing request within 30 days of receipt. FERC need not, however, decide the merits within 30 days, as it may act by granting the request and then allowing additional time for further substantive briefings.

While the decision related to orders under the Natural Gas Act, the Federal Power Act has similar provisions regarding rehearing orders, and FERC will likely apply the decision to its rules related to rehearings on the electric side as well. In fact, FERC Chairman Chatterjee and Commissioner Glick responded with a joint statement asking Congress to provide a reasonable amount of time in which FERC can act on a rehearing of orders involving Natural Gas Act and the Federal Power Act matters and, during the pendency of a rehearing request, both prohibit the Commission from issuing a notice to proceed with construction and prohibit the construction applicant from commencing eminent domain proceedings.

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At its June 18 open meeting, FERC issued a notice of inquiry seeking public input on cybersecurity-related enhancements to the Critical Infrastructure Protection (CIP) reliability standards. In light of the constantly evolving nature of cybersecurity threats to the bulk power system, FERC is interested in determining whether the current CIP standards adequately address specific cyberrisk areas related to data security and cybersecurity incident detection, containment, and mitigation. In addition, FERC is seeking comment on the potential risk of a coordinated cyberattack on geographically distributed targets.

Our environmental and energy regulatory teams recently analyzed the US Supreme Court’s recent ruling that the US Forest Service is authorized to issue permits for pipelines going through public lands, even when those pipelines cross national trails. While the decision is a positive development for natural gas pipeline sponsors, recent rulings by courts and federal agencies suggest that there may be additional permitting considerations impacting natural gas pipeline project development.

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