Category: Energy & Utilities

1
Heightened Scrutiny of Director Positions by FERC and DOJ
2
Ensuring Energy Security Section in the Inflation Reduction Act of 2022
3
Lessons To Be Learned from FERC’s Investigation of a New Power Project’s Participation in the New England Capacity Market
4
FERC Moves Forward on Transmission Planning/Cost Allocation Reform
5
FERC Enforcement In 2021: A Year Of Change
6
Infocast Virtual Master Class: Negotiating & Documenting Corporate PPAs
7
We Have ESG Down to the Letter
8
K&L Gates’ Energy Storage Handbook: Volume 6
9
Join Us for a Webinar: The Promise of Fusion Energy May Be Closer Than You Think
10
Join Us at Solar Power International

Heightened Scrutiny of Director Positions by FERC and DOJ

U.S. Energy, Infrastructure, and Resources Alert

By: Ruta K. SkucasKimberly B. FrankDrew MannJennifer L. MersingChimera N. Thompson

The Federal Energy Regulatory Commission and the Department of Justice recently issued orders and statements demonstrating concerns related to director positions and potentially interlocking directorates. These actions together signal greater attention paid to the identities and affiliations of directors serving on corporate boards. Going forward, companies should carefully review the composition of their (and their upstream owners’) board of directors to confirm they are in compliance with FERC and DOJ regulatory requirements.

For more information, please contact our Energy Infrastructure and Resources lawyers or visit our practice page.

Ensuring Energy Security Section in the Inflation Reduction Act of 2022

By Laurie B. Purpuro

On 27 July, Senators Manchin and Schumer announced a deal on the successor to the Build Back Better Act, which is expected to pass in the Senate on Saturday (6 August 2022) and the House the following Friday. This new legislation, called the Inflation Reduction Act of 2022, includes US$370 billion in programs and tax credits to boost renewable energy production in the United States. 

That said, page 644 of the draft includes language that ties federal solar, wind and offshore wind development to federal lease sales for oil and gas. 

The Details

The section of the bill titled “Ensuring Energy Security” prohibits the Bureau of Land Management (BLM) from issuing rights-of-way (ROW) for wind or solar development on federal land unless an onshore oil and gas lease sale has occurred within 120 days before the wind or solar lease issuance. In addition, these wind and solar ROWs would not be allowed unless, in the previous year, BLM completed onshore oil and gas lease sales covering 2,000,000 acres or 50% of the acreage in which interested parties have expressed interest, whichever is lower. (Note: Wind and solar projects that impact federal land are authorized by ROWs.)

Offshore wind (OSW) is similarly impacted by this provision, as it prohibits the Bureau of Ocean Energy Management (BOEM) from issuing an OSW lease unless an oil and gas offshore lease sale of at least 60 million acres is held during the year before the OSW lease issuance.

The Impact

This section of the agreement is intended to force the Biden Administration to restart the regularly scheduled oil and gas lease sales that it has been cancelling since 2021, while at the same time allowing the Biden Administration to conduct fewer annual oil and gas lease sales than currently required.   

The Mineral Leasing Act requires four onshore oil and gas leases per year; the language in this bill requires three onshore oil and gas leases per year, as a prerequisite to solar and wind development on federal land. BOEM offshore oil and gas five-year leasing programs require two offshore oil and gas lease sales in most years; this bill requires one sale per year, in order to allow solar and wind development on federal land. 

Furthermore, the acreage requirements for oil and gas sales outlined in the bill are in line with previous sales. And for the onshore oil and gas lease sales, just in case BLM falls shore of the 2,000,000 acre requirement, they can sell leases for 50% of the acreage that parties are interested in.

The Compromise

This Inflation Reduction Act of 2022 is a compromise forged by Senate Democrats with the slimmest of majorities. The Ensuring Energy Security section is Energy and Natural Resources Committee Chair Joe Manchin’s way of requiring an all of the above energy policy for the country.

Lessons To Be Learned from FERC’s Investigation of a New Power Project’s Participation in the New England Capacity Market

By: Ruta K. SkucasKimberly B. FrankJennifer L. Mersing

On 28 June 2022, the Federal Energy Regulatory Commission (FERC) issued an order approving a Stipulation and Consent Agreement stemming from an enforcement investigation with Salem Harbor Power Development, LP (Salem Harbor or DevCo) in Docket No. IN18-18. Around a week prior to FERC issuing its Order, grid operator ISO New England, Inc. (ISO-NE) issued a notice to the market regarding the forthcoming settlement, then issued a second statement shortly thereafter. FERC’s Order, and any related forthcoming settlements, illustrate the consequence of failing to exercise the diligence necessary to ensure the accuracy of information reported by a market participant to an independent system operator/regional transmission organization (ISO/RTO), and sends a strong signal regarding the amount of discretion that ISO/RTO staff may exercise in implementing the market rules of its organization’s tariff.

For more information, please contact our Energy Infrastructure and Resources lawyers or visit our practice page.

FERC Moves Forward on Transmission Planning/Cost Allocation Reform

U.S. Energy, Infrastructure, and Resources Alert

By: Ruta K. SkucasKimberly B. FrankJennifer L. Mersing

At its open meeting on 21 April 2022, the Federal Energy Regulatory Commission (FERC) issued a Notice of Proposed Rulemaking (NOPR) in response to its Advance Notice of Proposed Rulemaking: Building for the Future Through Electric Regional Transmission Planning and Cost Allocation and Generator Interconnection (Docket No. RM21-17). Commissioner Mark Christie and Commissioner Willie Phillips entered separate concurrences, while Commissioner James Danly dissented. According to the open meeting, the NOPR proposes to reform, pursuant to Federal Power Act Section 206, FERC’s electric regional transmission planning and cost allocation requirements. If enacted, the NOPR’s reforms would require public utility transmission providers to…

For more information, please contact our Energy, Infrastructure, and Resources lawyers or visit our practice page.

FERC Enforcement In 2021: A Year Of Change

By:  Ruta Skučas, Kimberly Frank, and Maeve Tibbetts

Originally posted on Law360 on January 3, 2022

2021 was a pivotal year for the Federal Energy Regulatory Commission‘s Office of Enforcement. Under the direction of Chairman Richard Glick, the office gained a new director, Janel Burdick, added threats to infrastructure as a new priority, and increased its pace of opening and closing investigations and reaching settlements.

Most significantly, Glick asserted at the presentation of the 2021 enforcement report that “the cop is back on the street,” and that he intends to ensure “vigorous oversight and enforcement” of jurisdictional markets.

Increased Investigations Under Chairman Glick

During the commission’s November 2020 open meeting, when the Office of Enforcement presented its 2020 annual report, then-Commissioner Glick criticized the commission’s enforcement efforts, which he perceived as lacking. In 2020, the commission opened only six new investigations, and reached three settlements totaling $553,376.

Infocast Virtual Master Class: Negotiating & Documenting Corporate PPAs

CO-HOSTED WITH K&L GATES

29-30 July 2021

Over the last decade, corporate buyers and renewable energy suppliers have developed a variety of innovative structures to enable corporations to purchase renewable energy.

In the Negotiating & Documenting Corporate PPAs Master Class, expert instructors will provide an overview of the types of agreements that are commonly used to facilitate corporate renewable energy procurement, as well as when best to use them.

Attend to expand your knowledge and gain expert insights for real-world applications:

  • Background: Utility Monopolies and Exclusive Service Territories
  • REC Agreements
  • Green Tariffs 1.0
  • Green Tariffs 2.0
  • On-site solar PPAs
  • Physical PPAs (including direct access)
  • Community Solar PPAs
  • Virtual PPAs (VPPAs/contracts for differences)
  • Portfolio Aggregation PPAs
  • Block Delivery PPAs

Instructors will include: William H. Holmes, Lana Le Hir, Elizabeth Crouse, James Douglass, Tariq Fedda, Kenneth Gish, and Teresa Hill.

We Have ESG Down to the Letter

Our integrated environmental, social, and corporate governance (ESG) approach is designed to help our clients navigate ever-evolving standards and add value to their companies. We’ve structured our broad scope of ESG services within coordinated and collaborative areas of focus, including corporate governance, investing, energy, and agriculture. These global teams span regions and industries to address an array of issues, from legislative, regulatory, and policy matters, to fund launches and environmentally responsible corporate initiatives.

We can evaluate and advise your business from E to S to G.

For more on our ESG practice, please click here.

K&L Gates’ Energy Storage Handbook: Volume 6

Now Available Online!

As a courtesy to our clients and friends, the K&L Gates Power practice has updated the Energy Storage Handbook.

This Energy Storage Handbook is designed to be a basic primer on what energy storage is, how federal and state governments regulate it, and what sorts of issues are encountered when such projects are financed and developed. While this Handbook is not meant to be a definitive catalog of every energy storage law and issue existing in today’s marketplace, we have endeavored to highlight the most common development and regulatory matters our clients face and the industries we serve. We will continue to update this Handbook periodically as additional states and stakeholders continue to address the implementation of energy storage resources in the marketplace.

We hope you find it useful and welcome your feedback.

New in Volume 6:

  • Completely refreshed FERC and ISO/RTO sections, including FERC Order 2222.
  • Hydrogen storage? It’s getting close.
  • Avoiding disputes in battery supply agreements.
  • New states, including Virginia and South Carolina.
  • The latest with PJM’s capacity rules.

To view the full Handbook, please follow the link below:

Join Us for a Webinar: The Promise of Fusion Energy May Be Closer Than You Think

Join us on 1 October 2020 for a webinar on fusion energy.

For nearly 100 years, scientists and engineers, as well as science fiction authors and fans, have dreamt of harnessing fusion reactions to power our economy. Despite daunting technical challenges, fusion energy may become a technically viable and economic energy source in the coming years, as an attractive carbon-free baseload alternative to conventional energy sources.

As the energy sector progresses towards commercial fusion, governmental regulators around the world are considering how they should treat fusion facilities. Two of the most active jurisdictions for commercial fusion development are the United States and the United Kingdom. Along with Fire Energy and Prospect Law, members of our K&L Gates fusion energy team will provide an update on the regulatory approaches to fusion that the US and UK are taking, the prospects for differentiating regulations for future fusion facilities from those applicable to existing fission-powered nuclear plants, next steps in developing regulatory certainty for the emerging fusion power sectors in these nations, and include a section on risk and the management of risk through insurance.

For more information and to register, please click here.

Join Us at Solar Power International

Please join K&L Gates Energy, Infrastructure and Resources Practice Area Leader, David Benson, at Solar Power International as he moderates the panel, “The Evolution of Finance in a Changing Offtake Market,” on Friday, September 25, 2020, at 3:05pm EDT.

This panel will discuss new revenue models, such as merchant projects, hedging strategies, and VPPAs, are changing how renewable energy projects are being financed. Topics will include how panelists view projects with these evolving offtake approaches and how they view risk in these markets, taking the audience through transaction structures and what it takes to execute renewable energy deals.

For more information on Solar Power International, please click here.

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