Energy Law Blog

As Congress was completing final negotiations of the stimulus package dealing with the public health and economic impacts of the coronavirus pandemic, several key energy provisions made their way into the 5593-page omnibus spending bill passed by the House and Senate on December 21, 2020, particularly much needed extensions of several renewable energy and energy efficiency tax incentives. Specifically, the Consolidated Appropriations Act, 2021 (the “Act”)[1] addresses, among other things, the concerns of renewable energy developers regarding the potential expiration of the Production Tax Credit (PTC) and Investment Tax Credit (ITC) and, for the first time, includes provisions for…
Momentum is growing quickly towards widespread construction of US offshore wind-powered electrical generation facilities. Several States along the northern part of the Atlantic coast have projects actively under development and RFPs for more projects to come.  Recent regulatory guidance has been issued clarifying Jones Act implementation. Here are six key trends and developments for market participants to be aware of. Click here for the full article: Six Key Items to be Aware of Today in U.S. Offshore Wind (“OSW”) Other Parts of this series include: NYISO Battery Storage Rules Tax Equity for Public Utilities Natural Gas Pipeline Development CORSIA Baseline
Recently, the New York Independent System Operator (“NYISO”) implemented new rules to integrate storage resources, including battery resources, into wholesale electricity markets. NYISO’s rules come in response to FERC Order No. 841. Here are six key regulatory and transactional items from the new rules. Click here for the full article: NYISO Battery Storage Rules Other Parts of this series include Tax Equity for Public Utilities, Natural Gas Pipeline Development, CORSIA Baseline Emissions Decision, and Blockchain in the Electricity Industry: Six Items to Consider.…
Blockchain technology and smart contracts continue to show their potential for disrupting the electric energy industry. Through the use of blockchain, electricity markets could become more decentralized, efficient, transparent and automated. However, blockchain users must have a good understanding of the regulatory landscape in which they will be operating to ensure compliance with applicable laws, and traditional utilities should be aware of the opportunities and pitfalls the technology could pose. Please see attached the latest Sheppard Mullin Six Items to Consider concerning blockchain in the electric industry. Click here for the full article: Blockchain in the Electricity Industry: Six Items
A September 17, 2020 Final Rule adopted by the Federal Energy Regulatory Commission (“Commission”) removes barriers to the participation of distributed energy resource aggregators in Regional Transmission Organization (“RTO”) and Independent System Operator (“ISO”) markets.[1]  The Commission’s modified regulations[2] require each RTO/ISO to revise its tariff to ensure that its market rules facilitate the participation of distributed energy resource aggregators.  Order No. 2222 is a positive development for distributed energy resources that would like to participate in wholesale electric markets but are unable to do so, and should encourage greater renewable energy resource development in the coming…
The changes brought about by evolutions in renewable energy technologies, and in some cases aggravated by the impacts of COVID-19, are likely to up-end traditional relationships between different forms of energy and the customers that use them. These changes are significantly impacting not just competitors, but their contract counter-parties, the risks they face, their credit-worthiness and their customers. Renewable generation equipment’s cost continues to decline. Output from solar and wind is available at $0 short-term incremental dispatch cost. Battery research is identifying ways to lengthen the duration of output from that form of storage, and to lower its cost. But…
The International Civil Aviation Organization (ICAO) has determined that 2019, rather than 2020, will be used as the emissions baseline for the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).  Here are six carbon financing impacts coming out of ICAO’s decision. Click here for the full article: CORSIA Baseline Emissions Decision Also, see part one and two of this series.…
Pipeline development continues to be highly contested in Federal Energy Regulatory Commission (FERC) certificate proceedings and before trial and appellate courts.  Please see our discussion of six key topics for pipeline developers to be aware of. Click here for the full article: Natural Gas Pipeline Development Also, see part one of this series, “Tax Equity for Public Utilities.”…
On July 16, 2020, the Federal Energy Regulatory Commission (“FERC” or “Commission”) dismissed a petition filed by the New England Ratepayers Association (“NERA”) requesting that the Commission declare that certain sales of energy by net-metered, behind-the-meter generators are exclusively subject to federal jurisdiction.  If granted, the petition would have resulted in the rates for such sales being set at an avoided cost rate in accordance with the Public Utility Regulatory Policies Act of 1978 (“PURPA”) or wholesale market prices under the Federal Power Act (“FPA”), as applicable, rather than the interconnected utility’s retail rate.  The Commission declined to address the…
On July 18, 2019, the Federal Energy Regulatory Commission issued Order No. 860.  The order requires entities with or seeking market-based rate authority (sellers) to submit certain data related to FERC’s market power analyses, including its indicative screens and asset appendices, into a “relational database” maintained by FERC.  The order also requires the submission of information associated with long-term firm sales.  When changes occur to data previously submitted, the relational database must be updated monthly by sellers.  The database will be used to, among other things, develop asset appendices and indicative screens for FERC filings that require a market…
Faced with the onset of another wildfire season, and seeking to avoid both the prospect of utility-caused wildfires and the impacts of utilities’ Public Safety Power Shutoffs (PSPS) to avoid them, the California Public Utilities Commission (CPUC) recently took wide-ranging actions to expand the penetration of microgrids in California and enhance reliability and resilience of electric service.  The decision  partially  implements Senate Bill 1339 (SB 1339) and the CPUC’s related three part rulemaking (Rulemaking 19-09-009).  The CPUC’s decision focuses on behind the meter applications and directs California’s large Investor Owned Utilities (IOUs) to, among other things, develop standardized pre-approved system…
On June 9, 2020, the Federal Energy Regulatory Commission (FERC) issued a regulation precluding construction authorization for pipelines approved pursuant to Sections 3 and 7 of the Natural Gas Act (NGA) until FERC acts on the merits of any timely-filed requests for rehearing or the time for filing a rehearing request has expired.  Parties seeking to construct new interstate pipeline facilities likely will contend FERC’s regulation is overbroad and burdensome.  They may contend that it imposes unnecessary delays on the construction of critical energy infrastructure already approved by FERC and found to be in the public interest.  The regulation precludes…
On May 28, 2020, the IRS proposed long-awaited regulations that address key areas of uncertainty in existing guidance for Internal Revenue Code Section 45Q (45Q) carbon capture and sequestration tax credits. Although some questions remain unanswered, the regulations are a significant step towards reducing regulatory uncertainty and fostering a functional market for 45Q credits. This article will focus on the regulations’ key takeaways for transaction structuring, while also highlighting technical clarifications of significant import for this nascent industry. Recapture One of the most significant questions facing potential participants in the 45Q market was whether and how the IRS would address…
On May 21, 2020, the Federal Energy Regulatory Commission (“FERC” or “Commission”) approved two orders by 3-1 votes revising its methods to estimate electric, natural gas and oil utilities’ returns on equity (“ROE”).[1]  Return on equity is one of the most contentious issues in cost-of-service proceedings before FERC, and FERC’s guidance is unlikely to alter that.  In many important ways, the guidance significantly deviated for electric utilities and pipelines, which raises a number of issues regarding whether such deviations are supported by each industry’s risks. Revised Guidance for Calculating ROEs FERC guidance was provided in two separate orders. …
On May 1, 2020, President Trump issued Executive Order 13920 (“Executive Order”), which prohibited certain transactions involving bulk-power system electric equipment manufactured or supplied by persons owned by, controlled by, or subject to the jurisdiction of a foreign adversary that poses an undue risk of catastrophic effects on the security or resiliency of U.S. critical infrastructure or the national security of the U.S.  The Executive Order poses several potential problems for electric industry participants, particularly renewable generation owners, developers and investors, which will likely cause uncertainty in equipment procurement decisions.  The Executive Order and its potential issues are discussed below.…