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