The Federal Energy Regulatory Commission (FERC) has issued an order denying all requests for rehearing of its rule aimed at clearing away obstacles to participation by electric storage resources in wholesale markets administered by Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs).[1] Electric storage resources often complement renewable resources when the sun is not shining and the wind is not blowing. Easing the entry of storage is likely to have a growing impact on electricity markets and the mix of resources used to meet demand in those markets. Accordingly, FERC’s action should be of interest to a wide range of electricity market participants including utilities, generation companies, and investors in storage and other electricity resources and electricity customers. Continue Reading
EU Commission Issues Recommendation on Cybersecurity in the Energy Sector
The European Commission (“Commission”) has published a Recommendation on cybersecurity in the energy sector (“Recommendation”). The Recommendation builds on recent EU legislation in this area, including the NIS Directive and EU Cybersecurity Act (see our posts here and here). It sets out guidance to achieve a higher level of cybersecurity taking into account specific characteristics of the energy sector, including the use of legacy technology and interdependent systems across borders.
This Recommendation sets out the main issues related to cybersecurity in the energy sector and identifies actions to enhance cybersecurity preparedness. The Commission calls on Member States to encourage industry stakeholders to build up knowledge and skills related to cybersecurity and, where appropriate, to include these considerations into their national cybersecurity framework (e.g., through strategies, laws, regulations and other administrative provisions). Continue Reading
Pricing Roads in the United States: New York Sets the Bar on Fixing Traffic and Reducing Urban Pollution
Last month, New York Governor Andrew M. Cuomo and state lawmakers agreed on a plan to implement a sweeping new transportation policy in Manhattan: congestion pricing. New York will join other major cities around the world – including London (Congestion Charge), Stockholm (Congestion Tax), and Singapore (Electronic Road Pricing) – which have recently implemented a form of congestion pricing, but New York City will be the first American city to do it. Continue Reading
FERC Considering Reforms to ROE Determinations
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
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.
Federal Circuit Rules Broad Discretion for Commerce in Country of Origin of AD/CVD Imports
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
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
