Kayla J. Grant

House of Reps, TSA Tackle Cybersecurity in the Energy Industry

This week, the House of Representatives approved three measures aimed at improving cybersecurity in the energy industry:

  • Energy Emergency Leadership Act. This Bill requires the Secretary of Energy to assign energy emergency and cybersecurity responsibilities to an Assistant Secretary, including responsibilities regarding infrastructure and cybersecurity.

 

 

  • Cyber Sense Act of 2021. This Bill encourages coordination between the Department of Energy and electric utilities. It also requires the Department of Energy to test products and technologies intended for use in the bulk power system.

These measures, which will now move to the Senate, are in response to the slew of recent cybersecurity attacks against critical U.S.

Connecticut Targets Deployment of 1,000 MW of Energy Storage to all Electric Customers by 2030

In a victory for the energy storage industry, the Connecticut Senate has passed a bill targeting deployment of 1,000 MW of energy storage by December 31, 2030. The bill also establishes interim targets of 300 MW by December 31, 2024 and 650 MW by December 31, 2027. Pursuant to the legislation, the Public Utilities Regulatory Authority (“PURA”) must initiate a proceeding by January 1, 2022, to develop and implement programs and associated funding mechanisms to interconnect energy storage resources with the electric distribution system. The energy storage programs implemented by PURA must include rate design incentives designed to avoid or defer investment in traditional electric distribution system capacity upgrades. Moreover, PURA’s program must achieve the following objectives: 1) provide positive net present value to ratepayers; 2) provide multiple benefits to the grid, including resilience, ancillary services, and leveling peaks in demand; 3) foster sustained, orderly development of state-based energy storage industry; and 4) maximize value from participation of energy storage in capacity markets.

 

Government Races to Secure Critical Infrastructure in Wake of Colonial Pipeline Ransomware Attack

One of the nation’s largest pipelines, Colonial Pipeline, which carries 45 percent of the East Coast’s fuel supplies, was forced to shut down on May 7 after it was targeted by a ransomware attack. Ransomware is a type of malware where criminal groups encrypt data, effectively “holding it hostage,” until the victim pays a ransom.

Colonial Pipeline resumed operations on May 15. However, the cyberattack has sparked public panic and outcry as parts of the country experience fuel shortages and fuel prices rise to their highest levels in nearly seven years. The incident has also renewed efforts government-wide to strengthen security of U.S. pipelines and the power grid. On May 11, the U.S. House Committee on Energy and Commerce reintroduced bipartisan legislation aimed at bolstering the Department of Energy’s (“DOE”) ability to respond to cybersecurity threats to U.S. energy infrastructure. Among the several measures introduced were:

(1) The Pipeline and LNG Facility Cybersecurity Preparedness Act, which would require DOE to implement

State Climate Legislation Takes Aim at Natural Gas Industry

This is the second post in an ongoing series focused on how state and federal measures addressing climate and carbon reduction are affecting the natural gas industry. You can find the first post in this series here.

Nevada

In the latest effort to phase out or reduce the use of natural gas, a bill was introduced to the Nevada Legislature on March 23, 2021 (A.B. 380) that would set emissions reduction targets for buildings over the next 30 years to achieve a 95% decrease in emissions from buildings by 2050. The latest bill builds on Nevada’s 2019 climate strategy, which established a goal of economy-wide net-zero emissions by 2050.[1]

The bill would direct the Nevada Public Utilities Commission (“Nevada PUC”) to open an investigatory docket to examine how gas utilities can assist the state in achieving its 2050 emissions goal and how gas utilities can maintain safety standards

Clean Energy Stands to Win Big with Biden Administration’s Proposed Infrastructure Plan

On March 31, 2021, President Biden released his $2 trillion infrastructure plan (the “Infrastructure Plan”) intended to target grid modernization, energy efficiency, and renewable energy development as part of the Administration’s ongoing effort to achieve a net-zero emissions power sector by 2035, and net-zero economy by 2050. In response to the recent Texas power crisis, the Infrastructure Plan proposes a $100 billion investment to modernize the electric grid with at least 20 GW of high-voltage capacity power lines. The Biden Administration also proposes creation of a Grid Deployment Authority at the Department of Energy to leverage existing rights-of-way and support creative financing tools to encourage high-voltage transmission lines.

The Infrastructure Plan proposes a 10-year extension and phase down of an expanded direct-pay investment tax credit and production tax credit for clean energy generation and storage. The Biden Administration also proposes creation of an Energy Efficiency and Clean Electricity Standard (EECES) aimed at cutting electricity bills and electricity pollution, increasing competition in the market, incentivizing efficient use

The Natural Gas Industry in a Climate-Focused Future: Regulators Take Action to Adapt

Introduction

Climate change policies at the state and federal levels will have significant impacts on natural gas companies and their customers.  On the one hand, there is pressure on companies to maintain safe and reliable service – on the other, the push for net-zero carbon emissions by 2050.  These competing objectives will have notable effects on how companies conduct their long-term planning to maintain system reliability while avoiding potential stranded costs and safeguarding ratepayers.  This post and subsequent updates will focus on how federal and some state regulators are addressing the issues.

Federal

The Biden Administration’s clean energy plan, which calls for a 100% clean energy economy by 2035 and net-zero emissions economy-wide by no later than 2050, has sparked an increased focus on achieving these goals. To reach net-zero by 2050, the Biden Administration plans to invest $1.7 trillion in federal funds in clean energy research and modernization, deploy zero emission vehicles across the government, and enforce

FERC Accepts PJM Compliance Filings Overhauling Reserve Market and E&AS Offset Calculation

On November 12, 2020, the Federal Energy Regulatory Commission (“Commission”) approved changes regarding PJM Interconnection, L.L.C.’s (“PJM”) reserve market, including how the Regional Transmission Organization (“RTO”) calculates its energy and ancillary services offset (“E&AS Offset”). The order approves a PJM compliance filing establishing categorical exclusions for nuclear, wind and solar resources, which historically have not provided capacity reserves due to their inflexible characteristics.  The order also greenlighted a related exemption process PJM will use to determine reserve eligibility for resources that are automatically deselected, recognizing that in some circumstances nuclear, wind, and solar may be able to provide reserves.

As background, on August 5, 2020, PJM submitted a compliance filing containing revisions to its tariff to incorporate a forward-looking E&AS Offset beginning with the Base Residual Auction (“BRA”) for the delivery year commencing June 1, 2022.  The Commission accepted the compliance filing and established an effective date of May 1, 2022.

PJM’s compliance filing described which resources may provide synchronized reserves, non-synchronized

Energy Infrastructure in Biden’s Administration: What You Need to Know

President elect Joe Biden has set forth two comprehensive plans targeting clean energy and climate change (collectively “The Biden Energy Plan”).[1]  The Biden Energy Plan seeks to aggressively pursue a net-zero (carbon neutral) power sector by 2035 and a net-zero U.S. economy by 2050. Additionally, themes from Biden’s Build Back Better plan for job growth and economic recovery are interwoven throughout the Biden Energy Plan.

The Biden Energy Plan is comprised of the following major initiatives:

Biden Energy Plan Commitments for Day 1 of the Biden Administration

On Day 1 of Biden’s administration, Biden plans to put the Biden Energy Plan into action by requiring methane pollution limits for new and existing oil and gas operations, developing new fuel economy standards, aiming for 100% of sales for light- and medium-duty vehicles to be zero emissions, and protecting federal lands and waters from new oil and gas leasing.

Clean Energy Mobilization at the Federal Level

To

FERC Proposes Policy Statement on Oil Pipeline Affiliate Contracts

On October 15, 2020, the Federal Energy Regulatory Commission (FERC) issued a proposed policy statement containing guidance for oil (and petroleum products) pipeline common carriers proposing rates and terms pursuant to affiliate contracts.  The proposed guidance likely stems from a 2017 order in Magellan Midstream Partners, L.P., wherein FERC denied a petition for declaratory order requesting that a proposal to establish a marketing affiliate to buy, sell, and ship crude oil be found compliant with the Interstate Commerce Act (ICA).  FERC’s guidance seeks to address the key issue identified in the Magellan order—using affiliates to provide a discount or rebate to producers that are not shippers.  The policy statement addresses this concern by requesting additional disclosures in an effort to foster greater transparency.

The policy statement provides oil pipelines with clear guidelines when seeking approval in a petition for declaratory order or tariff filing for contract rates or terms pursuant to an affiliate contract.  The policy statement outlines information carriers

Update: First Circuit Revises Prior Decision to Vacate Air Permit in Light of Material Developments

As discussed previously in Pierce Atwood’s Energy Infrastructure Blog, on June 3, 2020, the U.S. Court of Appeals for the First Circuit vacated an air permit issued by the Massachusetts Department of Environmental Protection (DEP) for the construction of a new compressor station proposed by Algonquin Gas Transmission (Algonquin) as part of its Atlantic Bridge natural gas pipeline project and remanded the matter to the agency for further analysis.  Town of Weymouth v. Massachusetts Department of Environmental Protection, et al., No. 19-1794 (Jun. 3, 2020) (June 3 Opinion). Algonquin petitioned for panel rehearing as to the remedy only. On August 31, 2020, the Court granted Algonquin’s petition and revised its June 3 Opinion to remand without vacatur. Town of Weymouth v. Massachusetts Department of Environmental Protection, et al.No. 19-1794 (Aug. 31, 2020).

When deciding whether to vacate the agency’s decision or remand without vacating, the Court considered the “severity