Energy

FERC Staff Recommends Natural Gas Infrastructure Winterization Measures in Light of 2021 Extreme Winter Weather Events

Practice area:

The Federal Energy Regulatory Commission (“FERC”), in coordination with the North American Electric Reliability Corporation (“NERC”), presented its preliminary findings and recommendations at FERC’s Open Meeting on September 23 regarding its inquiry into the February 2021 Cold Weather Event in the Electric Reliability Council of Texas (“ERCOT”), Southwest Power Pool, Inc. (“SPP”), and Midcontinent Independent System Operator, Inc. (“MISO”).

The February 2021 Cold Weather Event occurred from February 8 through 20, 2021, during which large numbers of generating units experienced outages, derates, or failures to start, resulting in energy and transmission emergencies. The power outages affected millions of customers throughout the ERCOT, MISO, and SPP regions. On February 16, 2021, FERC and NERC announced a joint inquiry to examine the root causes of the event.

The preliminary findings indicate that a majority of the unplanned generating unit outages, derates, and failures to start were due to natural gas fuel supply issues. The major causes of the decline in natural gas

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.

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 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

Green Power and the 2020 California Blackouts

This week, California experienced its first blackouts in nearly 20 years. On August 19, the California Independent System Operator (“CAISO”) issued another state-wide flex alert, calling on the public to reduce energy use to prevent rotating power outages. As the state’s heat wave enters its seventh day, the temperature in California today will again reach dangerous levels and will continue to strain the system. While the exact cause of the recent blackouts is under investigation, Assemblyman Jim Patterson pointed to the unreliability of renewable power and the state’s reduced dependence on natural gas.

CAISO called the events this week a “perfect storm,” caused by the heat wave and corresponding spike in demand, simultaneous loss of some sources of power, and inability to import out-of-state electricity. When the sun sets, electricity generated by solar facilities drops, removing thousands of megawatts of solar power from the system while demand, fueled by the record-breaking heat, remains high.

Despite allegations that renewables are unreliable, there is no indication

Update: FERC Revises “Tolling” Order Language to Address Recent Court of Appeals Decision; Seeks Legislative Fix

As discussed previously in Pierce Atwood’s Energy Infrastructure Blog, on June 30, 2020, the U.S. Court of Appeals for the DC Circuit ruled that FERC lacks authority to issue tolling orders that postpone rehearing decisions on natural gas project orders solely to give the agency more time to consider rehearing requests and which delay opposing parties’ efforts to file appeals court challenges.  Allegheny Defense Project v. FERC, No. 17-1098 (D.C. Cir. June 30, 2020).  On July 1, 2020, the Federal Energy Regulatory Commission (“FERC”) issued its first order since the Allegheny Defense decision addressing a rehearing request that it did not act on within the 30-day statutory time period under the Natural Gas Act.

Incorporating suggestions from the court’s opinion, in Midcontinent Independent System Operator, Inc., 172 FERC ¶ 61,009 (2020), FERC issued a Notice of Denial of Rehearing by Operation of Law and Providing for Further Consideration.  That notice debuted

DC Circuit Rejects FERC’s Tolling Authority in Pipeline Certificate Proceedings

The Federal Energy Regulatory Commission (“FERC”) can no longer delay judicial review of its orders under the Natural Gas Act by issuing a tolling order that takes no action on a rehearing request other than granting itself more time to address the merits.  On June 30, 2020, the United States Court of Appeals for the District of Columbia Circuit issued an en banc opinion on rehearing denying motions to dismiss petitions for review filed with the court after FERC issued a “tolling” order extending the statutory 30-day time period for FERC to act on rehearing, but before FERC issued a rehearing order on the merits.  Allegheny Defense Project, et al. v. FERC, No. 17-1098 (D.C. Cir. Jun. 30, 2020).

Such tolling orders in pipeline certificate proceedings under Section 7(c) of the Natural Gas Act enable FERC to authorize pipeline developers to begin construction and seek to condemn construction rights-of-way by eminent domain if necessary before FERC issues a merits