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

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

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

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

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

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

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

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