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.
Our energy lawyers have prepared a LawFlash addressing the notice of proposed rulemaking (NPRM), “Update to the Regulations Implementing the Procedural Provisions of the National Environmental Policy Act,” published today in the Federal Register by the White House’s Council on Environmental Quality (CEQ). The proposed rule has four major elements: (1) to modernize, simplify, and accelerate the NEPA process; (2) clarify terms, application, and scope of NEPA review; (3) enhance coordination with states, tribes, and localities; and (4) reduce unnecessary burdens and delays.
To date, the commercial nuclear power industry has expressed strong support for the types of rule changes proposed by the CEQ in its NPRM, as they are intended to streamline and expedite the federal agency NEPA review process. Those in the industry that depend on federal agency action when advancing projects and securing permits should actively participate in the proposed rulemaking and help the CEQ build a sufficient agency record to defend against any later litigation challenges to new regulations.
The Federal Energy Regulatory Commission (FERC) ordered PJM Interconnection, LLC’s (PJM) on July 25 to suspend its 2019 Base Residual Auction (BRA), which provides for capacity payments to electric generators. FERC found that delaying the auction until FERC establishes a replacement rate would provide greater certainty to the market than conducting the auction under the existing rules.
This is the second time that the 2019 BRA, which provides for capacity payments for 2022–2023, has been delayed. PJM originally planned to run the auction in May, but delayed it based on a prior FERC order. FERC’s July 25 order delays the 2019 BRA until FERC establishes a replacement rate.
The Environmental Protection Agency (EPA) issued three rules on June 19, granting additional powers to states to determine their projected energy resource mixes, including nuclear energy. In response to the rules, utilities should be prepared for possible changes to state policies defining what constitutes “clean” energy and supporting reliability. The rules are intended to go into effect 30 days from their issuance. However, the implementation timeline for the rules is not certain because several states and organizations have stated they intend to challenge the rules in the federal courts.
The New Jersey Board of Public Utilities (BPU) approved applications submitted by PSEG Nuclear LLC seeking subsidies of up to $300 million annually, in the form of zero emission credits (ZECs), for PSEG’s Hope Creek and Salem 1 and 2 nuclear generating stations on April 18. The PSEG applications were filed on December 19, 2018, after New Jersey enacted legislation on May 23, 2018, establishing a ZEC program for the state (the ZEC Act).
The US Court of Appeals for the Second Circuit on September 27 affirmed a decision of the US District Court for the Southern District of New York dismissing a complaint seeking to invalidate New York’s Zero Emissions Credit (ZEC) program. This decision comes on the heels of a Seventh Circuit decision affirming the validity of a similar ZEC program in Illinois. In its opinion, the Second Circuit noted that its conclusions accorded with the Seventh Circuit’s decision, which we wrote about in an earlier post.
The US Court of Appeals for the Seventh Circuit on September 13 affirmed a decision of the US District Court for the Northern District of Illinois that dismissed two complaints seeking to invalidate the Illinois Zero Emission Credits (ZEC) program.
The Illinois ZEC program was created in 2016 as part of the Future Energy Jobs Act. A ZEC is a credit that represents the environmental attribute of one megawatt hour of energy produced from an eligible zero-emission facility as defined by the statute. The Illinois Power Agency confers ZECs to eligible facilities generating zero-emission power and requires utilities to purchase those ZECs. The act set an initial price for ZECs based on a calculated “social cost” of carbon, but the price can adjust downward based on an index of wholesale power prices. While the eligible zero-emission generators will still participate in wholesale electricity markets, ZECs provide additional out-of-market payments to compensate the generators for their zero-emission power.
Public comments made last week by Federal Energy Regulatory Commission Chief of Staff Anthony Pugliese before the American Nuclear Society indicate that the agency is working with other federal government officials to identify power plants that are “absolutely critical” to the grid, E&E News reported.
In a June 26 letter, a broad coalition of 77 former government officials, lawmakers, and industry leaders urged US Department of Energy (DOE) Secretary Rick Perry to take “concrete steps” to prevent the premature shutdown of any additional nuclear power plants.
The letter commends Secretary Perry’s support of the nuclear industry to date but asks him to specifically promote the national security significance of nuclear energy. In doing so, the letter underscores the key role that nuclear energy plays in national security, particularly as an essential component of electric grid resilience and the largest source of emission-free generation.
The letter acknowledges that discussions of the general importance of nuclear energy are underway at the Federal Energy Regulatory Commission as well as at the grid operator and state regulator levels, but asserts that only DOE has the power to integrate nuclear power into the broader national security imperatives. The letter notes that such an integration will take time to consider, but asks Secretary Perry to ensure that no more nuclear power plants are closed in the meantime.
This letter appears to support President Donald Trump’s June 1 request for DOE to take measures to prevent further closures of nuclear power plants due to a national security interest in securing the national power grid's resilience.
The commissioners from the Nuclear Regulatory Commission (NRC) and the Federal Energy Regulatory Commission (FERC) held a joint meeting to discuss grid reliability and cybersecurity, including issues such as nuclear new build that factor into power availability. Both NRC and FERC staff provided presentations on the activities of both agencies to promote a stable, resilient, and secure grid, and a representative from the North American Electric Reliability Corporation (NERC) addressed grid reliability.