FERC issued three orders focused on increasing regulations for inverter-based resources (IBRs) in fulfillment of one of its primary goals to protect the reliability of the bulk-power system. FERC ensures this reliability through the North American Electric Reliability Corporation (NERC), an independent Electric Reliability Organization that develops and enforces mandatory reliability standards. The reliability standards are only mandatory for certain entities registered with NERC, but most IBRs are not required to register and therefore are not obligated to follow the reliability standards.
Power & Pipes
FERC, CFTC, and State Energy Law Developments
On December 1, 2022, the Environmental Protection Agency (EPA) published its proposed “set” rule for the Renewable Fuel Standard (RFS) Program. In addition to setting the volume and percentage standards for renewable fuels for 2023 through 2025, EPA proposed several regulatory changes to the RFS Program, the most notable of which was its proposal to create a new program to govern the Renewable Identification Numbers (RINs) for renewable electricity, which are known as “eRINs.”
The US Department of Commerce (DOC) issued its preliminary determination on December 2, 2022, related to circumvention of antidumping and countervailing duty (AD/CVD) orders A-570-979 and C-570-980 (the Orders) with respect to Cambodia, Malaysia, Thailand, and Vietnam. DOC determined that imports of certain crystalline silicon photovoltaic (CSPV) cells exported from Cambodia, Malaysia, Thailand, or Vietnam using parts and components produced in China are circumventing the AD/CVD orders on solar cells and modules from China.
Colleagues in our tax practice have prepared a LawFlash discussing the recently released Internal Revenue Service (IRS) guidance for meeting the prevailing wage and apprenticeship (W&A) standards applicable to the investment tax credit (ITC), production tax credit (PTC), and carbon capture credit (Section 45Q), as enacted or amended by the Inflation Reduction Act (IRA).
On November 17, 2022, the Office of Enforcement (OE) of the Federal Energy Regulatory Commission (FERC or the Commission) released its annual report on enforcement activities (Report). The Report details the FY 2022 efforts of OE’s three divisions: Division of Investigations (DOI), Division of Audits and Accounting (DAA), and Division of Analytics and Surveillance (DAS).
The energy industry and market participants have provided a variety of comments on what role the Commodity Futures Trading Commission (CFTC) should play in the voluntary carbon markets, in response to a June 2022 request for information on how the CFTC can help enhance the integrity and transparency of the voluntary carbon markets and what aspects of the voluntary carbon markets are susceptible to fraud and manipulation.
In an article featured in our global energy industry newsletter, Empowered, partners Pam Wu and Levi McAllister discuss the factors preventing purchasers of carbon credits from having full confidence in the voluntary carbon markets. They also analyze efforts to establish standards to spur additional participation in these markets.
Hydrogen will play a key role in addressing the climate crisis, supporting a transition to net zero, and achieving a sustainable clean energy future. As a versatile energy carrier and chemical feedstock, hydrogen offers many advantages and an ability to leverage renewables, nuclear, and fossil fuels with carbon capture and storage. It can also be used as a fuel or feedstock for applications that do not have competitive and efficient clean alternatives.
The Commodity Futures Trading Commission (CFTC or the Commission) released its enforcement results for fiscal year 2022 on October 20, 2022. The enforcement results detail the 82 enforcement actions the CFTC filed in 2022 and show that orders secured by the Commission imposed more than $2.5 billion in restitution, disgorgement, and civil monetary penalties, either through settlement or litigation.
Indemnity clauses are an integral tool used regularly in energy contracts and master service agreements. Indemnity is an obligation by one party to make another whole for a loss or damage, and indemnity clauses are useful tools that allow companies to mitigate and allocate risk that can arise from numerous issues in producing, transporting, refining, and selling oil and gas and other energy resources.