Tag: Federal Energy Regulatory Commission

1
K&L Gates’ Energy Storage Handbook
2
FERC Welcomes New Commissioners, Quorum Restored
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Illinois District Court Rejects Federal Preemption Challenges to State Zero-Emissions Credit Program
4
CFTC and FERC Begin Formal Data Sharing

K&L Gates’ Energy Storage Handbook

Version 4.0 Now Available!

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

This Energy Storage Handbook (Handbook) is designed to be a basic primer on what energy storage is, how it is regulated by federal and state governments, 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 regulatory and development issues faced by our clients and the industries that we serve. We anticipate continuing to update this Handbook 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.

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FERC Welcomes New Commissioners, Quorum Restored

By David L. Wochner, Sandra E. Safro, William M. Keyser, Molly Suda, Michael L. O’Neill, Jennifer L. Bruneau, Benjamin L. Tejblum, Elizabeth P. Trinkle and Gillian R. Giannetti

On August 3, 2017, the U.S. Senate confirmed President Trump’s nominations of Neil Chatterjee and Robert Powelson as Federal Energy Regulatory Commission (FERC) Commissioners and restored FERC’s quorum for the first time in nearly 180 days. The next step is for Mr. Chatterjee and Mr. Powelson to be sworn into their positions.

FERC has not had a quorum since February 3, 2017. In the interim, the Commission has accumulated a backlog of filings that will require formal Commission action, including

  • Applications under Section 4 of the Natural Gas Act (NGA) related to the rates and terms and conditions of service;
  • Applications related to interstate natural gas pipeline infrastructure under Section 7 of the NGA;
  • Applications related to the rates and terms and conditions of service for interstate oil and products pipelines under the Interstate Commerce Act;
  • Applications related to rates, rules, or charges for the transmission or wholesale sale of electric energy under the Federal Power Act;
  • Complaints challenging rates, rules, or charges for the transmission or wholesale sale of electric energy under the Federal Power Act; and
  • Petitions for declaratory orders seeking clarification from the Commission.

With FERC’s quorum restored, it also can move forward with rulemaking proceedings, including notices of proposed rulemaking that were issued before February 2017, as well as formal investigations and enforcement actions that require Commission authorization. It is unclear at this point how FERC will process and prioritize this backlog and how long it will take before the Commission is able to process filings on more traditional timeframes.

FERC does not hold a formal Commission meeting in August, but the Commissioners can vote notationally and therefore could begin issuing orders in the near term.

Below is a brief biography of FERC’s newest members.

Neil Chatterjee

Mr. Chatterjee most recently served as Senate Majority Leader Mitch McConnell (R-KY)’s senior energy policy analyst. While in this position, Mr. Chatterjee advised Senator McConnell on energy and infrastructure initiatives, including President Obama’s Clean Power Plan. Mr. Chatterjee worked previously as a Principal in Government Relations for the National Rural Cooperative Association and as an aide to House Republican Conference chairman Deborah Pryce (R-OH). Mr. Chatterjee grew up in Lexington, Kentucky near the heart of the coal industry. He earned his bachelor’s degree from St. Lawrence University in New York and a law degree from the University of Cincinnati. Mr. Chatterjee’s term expires on June 30, 2021.

Robert Powelson

Mr. Powelson has extensive regulatory experience, having served as a Commissioner at the Pennsylvania Public Utility Commission (PUC) and as President of the National Association of Regulatory Utility Commissioners. Mr. Powelson has served on numerous academic boards, including Drexel University’s Board of Trustees and Lincoln University’s Board of Directors. Prior to his position on the Pennsylvania PUC, Mr. Powelson worked as Chief Executive Officer and President of the Chester County, Pennsylvania Chamber of Business and Industry. He earned his bachelor’s degree from St. Joseph’s University and a master’s in government administration from the University of Pennsylvania. Mr. Powelson’s term expires on June 30, 2020.

In addition, the U.S. Senate Energy and Natural Resources Committee has scheduled a hearing for President Trump’s two other nominees, Richard Glick and Kevin McIntyre, for September 7, 2017, at 10 a.m. If approved by the Committee, Mr. Glick and Mr. McIntyre will then be ready to be scheduled for full Senate confirmation. Below is a brief biography for both nominees.

Richard Glick

Before President Trump nominated him for FERC, Mr. Glick served as General Counsel for the Democrats on the Senate Energy and Natural Resources Committee. Previously, Mr. Glick served as an energy and wind power lobbyist and advised U.S. Department of Energy Secretary Bill Richardson during the Clinton Administration. Mr. Glick earned his bachelor’s degree from The George Washington University and his law degree from the Georgetown University Law Center. If confirmed, Mr. Glick’s term would expire on June 30, 2022.

Kevin McIntyre

Mr. McIntyre is well-known among industry professionals, having served as co-head of Jones Day’s energy practice. While in private practice, Mr. McIntyre focused on government regulation of energy markets, electric and natural gas utilities, oil and natural gas pipelines, and co-authored several treatises on energy practice. Mr. McIntyre is actively involved in the Energy Bar Association, having served as on its Charitable Foundation’s Board of Directors. He also has served on the advisory board of Georgetown University Law Center’s Corporate Counsel Institute. Mr. McIntyre earned his bachelor’s degree from San Diego State University and his law degree from the Georgetown University Law Center. If confirmed, Mr. McIntyre’s term would expire on June 30, 2018. The White House press release announcing Mr. McIntyre’s nomination also states the White House’s intention to seek an additional term for Mr. McIntyre, to expire on June 30, 2023.

Illinois District Court Rejects Federal Preemption Challenges to State Zero-Emissions Credit Program

By Molly Suda, Donald A. Kaplan, William M. Keyser, John L. Longstreth, and Elizabeth P. Trinkle

UPDATE: On July 25, 2017, the New York court issued its decision, which also upheld New York’s ZEC program. We will have more analysis of that decision in a later post.

On July 14, 2017, the U.S. District Court for the Northern District of Illinois issued an opinion dismissing challenges to the state of Illinois’ zero-emissions credit (“ZEC”) program. Illinois’ ZECs are tradable credits created by statute that, in the court’s words, put “money in the coffers of Exelon from the sale of ZECs that will give it a benefit when pricing its energy in the wholesale market relative to competing energy producers that do not receive ZEC payments.” The ZECs represent the zero-emissions attributes of nuclear power and would provide additional revenue for nuclear power plants, whose owners state they are unable to cover their costs in the current low-price wholesale energy and capacity markets.

In its decision in the companion cases Village of Old Mill Creek v. Star and Electric Power Supply Association v. Star upholding the ZEC program, the court rejected arguments that Illinois’ program is preempted by the Federal Power Act and further concluded that ZECs do not discriminate under the dormant commerce or equal protection clauses. If affirmed on appeal, the opinion could have important implications for the future of other states’ programs aimed at supporting at-risk nuclear power plants and may influence the Federal Energy Regulatory Commission’s (“FERC”) outlook on its role in integrating state programs and policies into wholesale energy markets.

To read the full alert on K&L Gates HUB, click here.

CFTC and FERC Begin Formal Data Sharing

On March 5, 2014, the Commodity Futures Trading Commission (CFTC) and Federal Energy Regulatory Commission (FERC) announced that they had shared data for the first time under an information sharing Memorandum of Understanding (MOU) that was signed by the two agencies at the beginning of this year.  The purpose of the MOU is to minimize duplicative information requests when the agencies are conducting market surveillance or investigating possible manipulation, fraud or market abuse.  Congress directed the agencies to enter into the MOU as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).

The data that is subject to sharing under the MOU relates to information about market participants as well as entities regulated by either agency.  Accordingly, FERC may share data concerning Regional Transmission Organizations (RTOs), Independent System Operators (ISOs), and the independent market monitor of RTOs and ISOs, which is the North American Electric Reliability Corporation (NERC).  The data subject to sharing also includes information about interstate pipelines and storage facilities, which are regulated by FERC, and designated contract markets, swap execution facilities, derivatives clearing organizations and swap data repositories, which are regulated by the CFTC.  Any data shared by the agencies remains confidential unless it is used in an enforcement proceeding.

The agencies also announced the formation of a staff level Interagency Surveillance and Data Analytics Working Group to coordinate information sharing between the agencies and focus on data security, data sharing infrastructure, and the use of analytical tools for regulatory purposes. 

Dodd-Frank mandated a second MOU between the agencies, which also was signed at the beginning of this year, that is intended to resolve conflicts concerning potential overlapping jurisdiction and avoiding conflicting or duplicative regulation.  That MOU addresses circumstances where an entity seeks, or an agency considers sua sponte, an authorization or exemption to engage in activities that the agency thinks may also come within the other agency’s jurisdiction.  This MOU has yet to be invoked.  The second MOU specifically states that it “does not expand, alter or limit the . . . [a]gencies’ respective authorities pursuant to applicable statutes and regulations.”  It therefore remains to be seen whether the agencies will cooperate and coordinate with respect to enforcement matters, or whether we will instead see the prospect of another Amaranth case with multiple actions brought by both agencies.

The agencies have taken a long time to get to this point.  Dodd-Frank provided that the MOUs should be entered into by January 2011, and they were not actually entered into until three years later.  In the interim, the CFTC gave priority to the promulgation of the dozens of regulations that it was also required to adopt under Dodd-Frank.  In addition, last April the CFTC issued Orders exempting from the Commodity Exchange Act (1) certain electric operations transactions entered into by certain government and cooperatively-owned electric utility companies, and (2) certain transactions entered into by ISOs and RTOs that are authorized by a tariff or protocol approved by FERC or the Public Utility Commission of Texas.

The implementation of the information sharing MOU was carried out while each agency is being lead by an Acting Chairman.  Hopefully, the sharing of information under the MOU signals an era of greater cooperation and coordination between FERC and the CFTC than has sometimes been the case in the past.  It will be particularly important to observe this relationship as each agency gets new permanent leadership and the Dodd-Frank regulatory structure is developed.  It is a further reminder that, even though the jurisdictional issues among international regulators arising from cross-border swap transactions have grabbed most of the market’s attention, there are jurisdictional issues among U.S. regulators that have yet to be resolved.

 

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