FERC Considering Reforms to ROE Determinations

By Bud Earley on Posted in Department of Energy, FERC

Setting the return on equity (ROE) that utility stockholders may earn from providing certain services, primarily electric transmission and pipeline services, is a fundamental aspect of FERC’s cost-of-service regulatory regime.[1]  FERC has used the same basic method to determine ROE since the 1980s but recently made some reforms that applied to a few electric transmission cases.  Now FERC has issued a Notice of Inquiry (NOI) seeking public comments regarding those reforms and whether reforms should also be applied to interstate gas and oil pipelines.

The ROE along the with debt interest rate is applied to a utility’s invested capital in setting the revenue to be collected by rates and is a principal driver of profitability.  By the same token, an appropriate ROE policy that balances both investor and consumer interests is critical to achieving FERC’s overarching mission of ensuring just and reasonable rates.  Accordingly, changes in the way FERC sets the ROE should be of great importance to energy consumers and to any company or investor with an interest in an electric utility, gas pipeline, or oil pipeline that is subject to FERC’s cost-of-service regulation. Continue Reading

IoT Update: How Smart Cities and Connected Cars May Benefit from Each Other

By Brooke Kahn and Thomas Parisi on Posted in Internet of Things (IoT)

Innovative leaders worldwide are investing in technologies to transform their cities into smart cities—environments in which data collection and analysis is utilized to manage assets and resources efficiently.  Smart city technologies can improve safety, manage traffic and transportation systems, and save energy, as we discussed in a previous post.  One important aspect of a successful smart city will be ensuring infrastructure is in place to support new technologies.  Federal investment in infrastructure may accordingly benefit both smart cities and smart transportation, as explained in another post on connected and autonomous vehicles (“CAVs”).

Given the growing presence of CAVs in the U.S., and the legislative efforts surrounding them, CAVs are likely to play an important role in the future of smart cities.  This post explores how cities are already using smart transportation technologies and how CAV technologies fit into this landscape.  It also addresses the legal issues and practical challenges involved in developing smart transportation systems.  As CAVs and smart cities continue to develop, each technology can leverage the other’s advances and encourage the other’s deployment.

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Federal Circuit Rules Broad Discretion for Commerce in Country of Origin of AD/CVD Imports

By William Isasi on Posted in Clean Energy, Renewables, Solar

On March 12, 2019, the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) affirmed the U.S. Department of Commerce’s (“Commerce”) determination that solar panels assembled in China from non-Chinese cells were subject to antidumping (AD) and countervailing duties (CVD).  See Canadian Solar, Inc. v. United States.  In doing so, the Federal Circuit found that Commerce had discretion to depart from its long-standing practice of using a substantial transformation test to determine country of origin and instead the agency may fashion different tests for different AD/CVD orders.  The discretion recognized in this ruling creates greater uncertainty for importers with respect to the country of origin of imports covered by AD/CVD orders, making customs compliance more difficult. Continue Reading

Legislation Introduced in Washington Senate Would Establish Linked Cap and Trade Program

By Kevin Poloncarz on Posted in Clean Energy

On March 6, 2019, a bill was introduced in the Washington Senate, SB 5981, to establish a cap and trade program linked to the existing California-Québec program, which is implemented under the auspices of the Western Climate Initiative (WCI).  The bill mirrors many of the design elements from the California program, as amended pursuant to a 2017 law that authorizes its extension beyond 2020, and also borrows from legislation currently under consideration by the neighboring State of Oregon, HB 2020, which would establish a similar “cap and invest” program, also intended to be linked with the WCI jurisdictions.

If both the Washington and Oregon bills were enacted, it would represent a significant step forward in the development of North American carbon markets and would help realize the original WCI vision of a broad, economy-wide trading program embracing a significant share of the North American economy. Continue Reading

FERC Approves Notice Requirement For Public Utility Mergers and Acquisitions Under New Monetary Threshold

By Bud Earley on Posted in FERC

FERC has approved a final rule that sets a $10 million threshold for requiring FERC prior approval of public utility mergers and consolidations and requires public utilities to simply notify FERC of mergers and consolidations with a value over $1 million but less than $10 million.  The changes place mergers and consolidations under the same value threshold as other types of transactions and eliminate the need for low-value mergers and consolidations to secure FERC approval.  This new rule will be of interest to entities that anticipate merging or consolidating facilities that are subject to the jurisdiction of FERC. Continue Reading

EPA Publishes Final Hazardous Waste Pharmaceuticals Rule, With Significant Implications for Pharmaceuticals and Product Recalls

By Thomas Brugato and Hali Kerr on Posted in Enforcement, EPA

EPA published today in the Federal Register its final rule governing hazardous waste pharmaceuticals.  This rule adopts a novel scheme under the Resource Conservation and Recovery Act (“RCRA”) for the management of hazardous waste pharmaceuticals that are discarded by healthcare facilities or managed by “reverse” distributors.  It also applies to other types of products such as e-cigarettes, liquid nicotine, and dietary supplements. Continue Reading

Trump’s New Executive Order Requires Additional Buy American Preferences For Infrastructure Projects

By Sandy Hoe, Michael Wagner and Peter Terenzio on Posted in Infrastructure Development

Last week, President Trump issued a new executive order, entitled “Strengthening Buy-American Preferences for Infrastructure Projects.”  This order serves as an extension of the President’s earlier April 2017 “Buy American and Hire American” executive order, which we have previously analyzed in this space.  The April 2017 order stated that “it shall be the policy of the executive branch to buy American and hire American,” and, among other things, directed agencies to “scrupulously, monitor, enforce, and comply with” domestic preference laws (referred to by the executive order as “Buy American Laws”) and to minimize use of waivers that would permit the purchase of foreign end products. Continue Reading

Rising from the Ashes: How PG&E’s Bankruptcy Threatens the Energy Sector and California’s Progress on Climate Change

By Dianne Coffino, William R. Collins, James R. Dean Jr., W. Andrew Jack, Jake Levine, Bill Massey, Mark Perlis, Kevin Poloncarz and Donald Ristow on Posted in California, Clean Energy, Climate Change, FERC

With potential liabilities in excess of $30 billion stemming from a series of deadly wildfires that ignited across Northern California in 2017 and 2018, Pacific Gas and Electric Company and its holding company PG&E Corp. (PG&E) filed for Chapter 11 relief in the United States Bankruptcy Court for the Northern District of California on Tuesday.

The filing triggers a complex, multi-forum struggle among creditors, energy providers, and many other diverse stakeholders.  The impact of the restructuring process will be far reaching, jeopardizing compensation to wildfire victims, the state’s implementation of its ambitious climate and renewable energy policies, and the ultimate future of the utility as a partner in those efforts. Continue Reading

FERC Proposes to Reduce Regulatory Burdens for Electricity Sellers in RTO/ISO Markets

By Bud Earley on Posted in FERC

FERC recently proposed to streamline its market power rules so that generators in markets operated by Regional Transmission Organizations and Independent System Operators would no longer need to demonstrate a lack of horizontal market power in order to charge flexible market-based rates.  Instead, FERC will rely on the existing market monitoring and mitigation measures approved for those markets to guard against exercises of market power.

This proposal will significantly simplify the regular market power filings required of generating resources in RTO/ISO markets.  FERC estimates that, after the proposal is in effect, the total estimated annual reduction in cost burden to respondents will be $2,226,388, or $42,406 per respondent Continue Reading

Trump EPA Expands Rigorous Enforcement of Pesticide Law as Part of “Return to Core Mission”

By Thomas Brugato and Hali Kerr on Posted in Enforcement, EPA

Despite its deregulatory efforts in other areas, the Trump administration continues to enforce pesticide laws rigorously as part of its stated goal of returning EPA to its “core mission.”  EPA regulates pesticides pursuant to its authority under the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”), 7 U.S.C. § 136 et seq.  “Pesticides” are broadly defined to include any substance intended for destroying, mitigating, or repelling any pest, which include not only insects and rodents but also bacteria and other microorganisms.  7 U.S.C. § 136(t)-(u).  Thus, pesticides that must be registered under FIFRA can include a wide range of products not colloquially thought of as pesticides, such as alcohol wipes used for sanitizing surfaces.  Continue Reading

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