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

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”

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

DOE Drops “End Use” Requirement From LNG Export Reporting

DOE’s authorizations to export natural gas, including LNG, from the U.S. impose reporting requirements regarding the destination of the exported gas and certain contracts regarding its supply and sales.  DOE recently modified one of those requirements in a significant way and proposed sharper guidelines for complying another to minimize regulatory burdens and reduce administrative uncertainty.  These changes in DOE policy will be of interest to LNG export authorization holders and their counterparties in gas sales contracts, and to proposed LNG export projects that are now seeking or will seek such authorizations from DOE. Continue Reading

Northeast States to Tackle Transportation GHG Emissions

Nine Northeast and Mid-Atlantic states and the District of Columbia announced this week a new regional initiative to cap and reduce greenhouse gas pollution from the transportation sector.  Much remains to be decided before the program takes effect, however.

Connecticut, Delaware, Maryland, Massachusetts, New Jersey, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington D.C.[1] aim to cap carbon emissions from combustion of transportation fuels, and invest the proceeds into low-emission and improved transportation infrastructure, including by aiding electric vehicle adoption, and increasing public transit and biking opportunities. Continue Reading

New York Proposes Innovative Carbon Pricing for Electricity

Carbon pricing is seen by many as an effective means of reducing carbon dioxide (CO2) emissions from electricity generation.  California and several Eastern states have enacted “cap and trade” emission allowance programs, which have forced generators in those states to pay a price for their CO2 emissions.  With the Obama Administration’s Clean Power Plan not being implemented, there is currently no federal policy in place that would result in carbon pricing for electricity.  In a singular proposal, acting without any state or congressional mandate, but with the support of State regulatory agencies, the New York Independent System Operator (NYISO) proposes to require carbon pricing for all power sold in New York State through the NYISO wholesale electricity market.  For the first time, the Federal Energy Regulatory Commission (FERC) will be called upon to decide whether and how carbon pricing may be incorporated into wholesale electricity market tariffs solely under the authority of the Federal Power Act.

The NYISO carbon pricing proposal must be fully developed and vetted through a stakeholder process that could take one to two years to reach consensus on a tariff amendment that would be submitted to FERC for review and approval.  This stakeholder process and the subsequent FERC proceeding will grapple with complex issues of electricity market design and novel jurisdictional and policy issues.  The outcome of this process could lead to a push for the adoption of carbon pricing in other FERC-regulated organized regional electricity markets throughout the nation. Continue Reading

COP 24 Round-Up Part Two: Looking Ahead from Katowice

COP 24 negotiations culminated in the 2018 “Paris Rulebook” (“Rulebook”) but fell short of resolving all issues implementing the 2015 Paris Agreement (“Agreement”).  In 2019 and subsequent years, we expect dynamic debates between negotiators on at least five key issues:

  1. How to implement voluntary market mechanisms under Article 6 of the Agreement,
  2. How to increase collective ambition through each country’s voluntary pledges,
  3. How to recognize the IPCC 1.5◦C Report’s scientific findings,
  4. Setting a new climate financing goal for developed nations to meet, and
  5. Continuing discussions on “loss and damage” issues for vulnerable nations.

Continue Reading

COP 24 Round-Up Part One: The Paris Rulebook

On December 15, 2018, climate negotiators in Katowice, Poland reached agreement on a “Paris Rulebook” (“Rulebook”) which will implement the Paris Agreement (“Agreement”).  Reactions to the ambitiousness of the Rulebook have been mixed.  Although negotiators found some common ground on specific reporting and transparency rules, they could not reach consensus on implementing more ambitious voluntary market mechanisms, including the linking of global carbon markets.

This is the first of a two-part series discussing the results of the COP 24 summit.  Part Two will address unresolved issues for climate negotiations in 2019 and future years.   Continue Reading

EPA and CARB Begin Reexamining Heavy-Duty Vehicle Regulations

On November 13, 2018, the U.S. Environmental Protection Agency (EPA) launched its Cleaner Trucks Initiative (CTI), which will decrease nitrogen oxide (NOx) emissions by updating the existing NOx standard for heavy-duty trucks. EPA’s announcement comes just as the California Air Resources Board (CARB) updated its Heavy-Duty On-board Diagnostic (HD OBD) requirements and prepares to implement its own Phase 2 GHG regulation for heavy-duty vehicles and trailers. Continue Reading

Companies Face Greater Scrutiny for Misleading Environmental Claims and Nonstandard Sustainability Reporting

As more companies recognize the value of enhanced sustainability reporting and publicize the positive environmental features of their products and services, they should also be attentive to greater public scrutiny of “green” claims.  Companies that engage in greenwashing – asserting exaggerated, misstated, or immaterial environmental claims – are increasingly exposed to reputational damage and legal battles, as regulators, investors, and civil society actors dedicate more resources to scrutinizing environmental claims.  Companies also face growing pressure from investors to publish standardized and rigorous sustainability information that allows for cross-industry benchmarking. Continue Reading

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

A recent amendment to the Federal Power Act (FPA) that will become effective March 27, 2019 sets a $10 million threshold for requiring Federal Energy Regulatory Commission (FERC) prior approval of public utility mergers and consolidations.  That amendment also calls for FERC to adopt a rule requiring public utilities to simply notify FERC of mergers and consolidations with a value over $1 million but less than $10 million.  At its recent public meeting, FERC approved a Notice of Proposed Rulemaking (NOPR) regarding that notice requirement.  These provisions, when in effect, will 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.  These legislative and regulatory changes will be of interest to entities that anticipate merging or consolidating facilities that are subject to the jurisdiction of FERC. Continue Reading

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