The Federal Energy Regulatory Commission (FERC) recently issued a Notice of Proposed Rulemaking (NOPR) to reform its generator interconnection process. The proposed rules are intended to expedite the connection of new generator and storage facilities to the grid, and to clear out a burgeoning interconnection backlog, predominantly of renewable and storage resources.
This
Recently, the three sitting Commissioners of the Federal Energy Regulatory Commission (FERC) convened thirty industry experts at a virtual Technical Conference on state adoption of carbon pricing and its implementation in organized, wholesale electricity markets managed by regional transmission organizations (RTOs) or independent system operators (ISOs). Public interest was high, with more than 2,000 computers across the country logged on to the discussion, which stretched over nine hours. Although no carbon pricing measures have been filed by RTO/ISOs for consideration by FERC, the sense of the Technical Conference was that proposals from states or from RTO/ISOs acting on their own initiative are right around the corner, irrespective of the election outcomes in November.
Continue Reading FERC Takes Close Look at Carbon Pricing
The FERC recently issued a final rule (Order No. 872) revising its regulations implementing the Public Utility Regulatory Policies Act of 1978 (PURPA), which encourages the development of certain renewable and cogeneration facilities. PURPA, and FERC’s rules implementing it, establish benefits to those facilities by obligating electric utilities to purchase electricity from them. As discussed in a prior post to this blog, FERC considered reforming its regulations due in part to changes in the electric power industry over the last several decades.
Continue Reading FERC Revises PURPA Rules
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 Rising from the Ashes: How PG&E’s Bankruptcy Threatens the Energy Sector and California’s Progress on Climate Change
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 New York Proposes Innovative Carbon Pricing for Electricity
A recent New York Times article reported on an early-stage, solar energy microgrid being formed in Brooklyn, called the Brooklyn Microgrid, that relies on blockchain technology, the innovative database technology used by cryptocurrencies like Bitcoin that promises to transform industries as diverse as financial services, health care, retail, and manufacturing. The blockchain-based microgrid enables neighboring
The Trump Administration will take office intent on reversing many Obama Administration policies. Although the Trump Administration’s publicly released 100-day plan does not announce a new energy policy, campaign promises and priorities of the Republican-controlled Congress suggest a number of early initiatives that will impact the power sector. Moreover, the Trump transition team for the Department of Energy signaled a variety of potential energy policy priorities in requesting information from the outgoing Obama Administration. The impacts of these regulatory and legislative initiatives will need to be evaluated against the backdrop of market, technology, international, and consumer driven dynamics that are transforming the power sector independent of federal law and policy. The Covington Energy Group will be watching closely the new Administration’s and Congress’ initiatives and evaluating their significance in altering or reinforcing the transformative changes sweeping the power sector. Below, we identify the more prominent expected initiatives from the new Administration.
Continue Reading Watching for Initiatives from the Trump Administration and Congress Affecting the Power Sector
In FERC v. EPSA, issued on January 25, 2016, the U.S. Supreme Court ruled, in a 6-2 decision, that FERC has jurisdiction under the Federal Power Act (FPA) to regulate demand response transactions in wholesale electricity markets administered by independent system operators (ISOs) and regional transmission organizations (RTOs). The Court also upheld, as reasoned decision-making, FERC’s determination that ISOs/RTOs should pay the same compensation (i.e., the market clearing price) to generators and demand response resources participating in the day-ahead and real-time energy auction markets. In so holding, the Supreme Court may have paved the way for FERC to provide regulatory incentives for other emerging electricity transactions and practices that blur the historical distinction between FERC-regulated wholesale sales and state-regulated retail sales.
Continue Reading U.S. Supreme Court Confirms FERC’s Broad Jurisdictional Reach over Demand Response and other Activities that Affect Wholesale Electricity Markets
In August, EPA is expected to finalize and to modify its ambitious Clean Power Plan to reduce greenhouse gas emissions from existing power plants. Here is a Watch List of key areas for possible changes and clarification that EPA might make, after considering voluminous public comments on the Proposed Regulations, which were issued in June 2014:
Two of the Supreme Court’s major, end-of-term decisions turn on the deference the Court gives to agency determinations of the meaning of ambiguous clauses in complex regulatory statutes, applying the familiar Chevron framework. The Court’s less deferential applications of Chevron raise important questions about the deference courts might be expected to give to the scope