Originally posted on Troutman Sanders’ Washington Energy Report

On October 4, 2017, FERC issued two separate orders clarifying its jurisdiction under sections 203 and 205 of the Federal Power Act (“FPA”) related to certain project development activities.  In Ad Hoc Renewable Energy Financing Group, FERC granted a petition for declaratory order and confirmed that certain tax equity interests in public utilities do not constitute “voting securities” for purposes of FPA section 203 and therefore do not require prior FERC approval.  Separately, in ALLETE, Inc., FERC disclaimed jurisdiction under FPA section 205 over certain pre-construction activities and thereby found that ALLETE, Inc. did not need to file three pre-construction agreements with the agency.  Continue Reading FERC Issues Orders Clarifying Jurisdiction Over Specific Project Development Activities

Originally posted on Troutman Sanders’ Washington Energy Report

On October 4, 2017, FERC issued two separate orders clarifying its jurisdiction under sections 203 and 205 of the Federal Power Act (“FPA”) related to certain project development activities.  In Ad Hoc Renewable Energy Financing Group, FERC granted a petition for declaratory order and confirmed that certain tax equity interests in public utilities do not constitute “voting securities” for purposes of FPA section 203 and therefore do not require prior FERC approval.  Separately, in ALLETE, Inc., FERC disclaimed jurisdiction under FPA section 205 over certain pre-construction activities and thereby found that ALLETE, Inc. did not need to file three pre-construction agreements with the agency. 

In Ad Hoc Renewable Energy Financing Group, Petitioners filed a petition for a declaratory order requesting that FERC find that: (1) tax equity interests are not voting securities, but rather passive interests in accordance with FERC’s AES Creative Resources precedent; (2) assuming such interests are passive interests, the issuance or transfer of such interests does not require prior authorization under section 203 of the FPA; and (3) the acquisition of such interests by a holding company, therefore, qualifies for a blanket authorization under FERC’s regulations.  In the AES Creative Resources case, FERC held that certain tax equity interests in public utilities do not constitute “voting securities” for purposes of FERC’s market-based rate regulations under FPA section 205.  In granting the petition for declaratory order filed by Petitioners, FERC noted that its finding that tax equity interests were passive and did not require prior-approval under section 203 of the FPA was limited to the types of securities addressed in the AES Creative Resource proceeding.

In the ALLETE, Inc. proceeding, FERC found that three agreements governing pre-construction activities were not jurisdictional.  On March 10, 2017, ALLETE filed, pursuant to FPA section 205, three agreements entered into with Manitoba Hydro and its subsidiary, Manitoba Limited, for the design, construction, and operation of the Great Northern Transmission Line.  Specifically, the three agreements addressed the rights and obligations of the parties during the early stages of the project prior to energization of the transmission line.  ALLETE contended that the agreements did not need to be filed with FERC because they concerned “preliminary scoping, study, pre-construction activities, and cost-sharing and, therefore, do not significantly affect rates and services” under FERC’s “rule of reason,” which allows FERC to exercise its discretion to allow utilities to forgo specific filings which deal with “practically insignificant” matters.  FERC agreed with ALLETE and disclaimed jurisdiction over three agreements.  FERC concluded that the matters within the agreements were only tangentially related to FERC’s jurisdiction under FPA section 205(c) and therefore, under FERC’s rule of reason, the agreements need not be filed.

A copy of the Ad Hoc Renewable Energy Financing Group order can be found here.  A copy of the ALLETE, Inc. order is available here.

From The Washington Energy Report

On September 29, 2017, United States Department of Energy (“DOE”) Secretary Rick Perry took the unusual step of proposing a rule for final action by the Federal Energy Regulatory Commission (“FERC”). Secretary Perry’s initiative, a DOE-issued Notice of Proposed Rulemaking (“NOPR”) under section 403 of the Department of Energy Organization Act (“DOE Act”) (42 U.S.C. § 7173), urges FERC to act extremely quickly to enact rules requiring regional transmission organizations and independent system operators (“RTOs/ISOs”) to provide just and reasonable rates for “fuel-secure” generation units (e.g., coal and nuclear units). See Grid Resiliency Pricing Rule, Docket No. RM17-3-000, at 4–5 (Sept. 29, 2017) (“DOE NOPR”). Continue Reading Department of Energy Proposes FERC-Authorized Full Cost Recovery for Certain Nuclear and Coal Power Generation

From The Washington Energy Report

On September 19, 2017, the Senate Committee on Energy and Natural Resources (“ENR Committee”) unanimously advanced FERC nominees Kevin McIntyre and Richard Glick to a full vote on the Senate floor.  If confirmed by the Senate, Mr. McIntyre and Mr. Glick will join current FERC Commissioners Cheryl A. LaFleur, Robert F. Powelson, and Chairman Neil Chatterjee to fill all five seats at the Commission.  Upon confirmation, Mr. McIntyre will become the new Chairman of FERC. Continue Reading Senate Energy and Natural Resources Committee Advances FERC Nominees for Confirmation

A National Renewable Energy Laboratory (NREL) report shows that utility-scale solar costs fell 29% last year to roughly $35/MWh on a levelized basis. Overall, prices for utility-scale solar power purchase agreements have dropped nearly 75% since 2009, according to the report. The cost decline is attributed to lower module and inverter prices, higher module efficiency, and lower labor costs, though the pace of decline appears to be slowing. The NREL study indicates that the U.S. Department of Energy’s SunShot Initiative has reached its 2020 cost target for utility-scale solar systems three years early. The U.S. Department of Energy Laboratory based its study on 189 PPAs totaling nearly 11,800 MW.  The report warned that increasing rates of curtailment is reducing the wholesale market value of solar, but offered that battery storage projects attached to utility-scale solar is one way to restore value. For more information, see the NREL’s press release here, and the full report here.

On September 22, 2017, the U.S. International Trade Commission (USITC) determined that increased imports of crystalline silicon photovoltaic cells (whether or not partially or fully assembled into other products) are a substantial cause of serious injury to the domestic industry producing competing articles. The determination was made by a 4-0 vote and was in response to a petition filed by Suniva Inc. The USITC will proceed into the remedy phase of the investigation with a public hearing set for October 3, 2017, and a report of the USITC’s injury determinations and remedy recommendations will be submitted to the President by November 13, 2017. For more information, please see the USITC news release here.

 

Originally posted on Troutman Sanders’ Washington Energy Report

On June 30, 2017, the North Carolina General Assembly ratified compromise legislation that modernizes the state’s solar energy rules but also includes an 18-month moratorium on wind energy projects in the state.  The bill now awaits Governor Roy Cooper’s signature or veto.

House Bill 589 was developed through a year-long process of stakeholder negotiations, including representatives from the North Carolina Sustainable Energy Association (“NCSEA”).  Of note, when the bill was introduced in the Senate after passing in the House, the wind moratorium was added to the legislation to provide for a comprehensive study on wind energy development in the state, citing concerns over the impacts of the siting of wind energy facilities on the aviation operations of the state’s military installations. Continue Reading North Carolina Passes Solar Reform Bill with an 18-Month Wind Moratorium

Originally posted on Troutman Sanders’ Washington Energy Report

On June 30, 2017, the Massachusetts Department of Energy Resources (“DOER”) informed the Massachusetts Legislature of its adoption of a 200 MWh energy storage target for electric distribution companies (“EDCs”) to procure “viable and cost-effective energy storage systems” within the Commonwealth of Massachusetts.  DOER specified that the target is to be achieved by January 1, 2020, and would permit EDCs to identify the most cost-effective applications and the best locations for energy storage deployment, including both in front of the meter and behind the meter applications. Continue Reading Massachusetts Announces 200 MWh Energy Storage Procurement Target

Originally posted on Troutman Sanders’ Washington Energy Report

On June 22, 2017, both chambers of the New York State Legislature unanimously passed legislation—Senate Bill 5190 and Assembly Bill 6571 (collectively, the “Bill”)—which would require the New York Public Service Commission (“NYPSC”) to commence a proceeding to establish an Energy Storage Deployment Program for the State of New York within ninety days of the Bill’s effective date.  The Bill would also require that, no later than January 1, 2018, the NYPSC establish a target for the installation of energy storage systems through 2030, and programs that will enable the State of New York to meet those targets.  The Bill now heads to Governor Andrew Cuomo for signature. Continue Reading New York Legislature Unanimously Passes Bill Directing NYPSC to Establish Energy Storage Target by January 1, 2018

Originally posted on Troutman Sanders’ Washington Energy Report

On June 8, 2017, the North American Electric Reliability Corporation (“NERC”) released a report on the August 2016 Blue Cut Fire, which resulted in the loss of 1,200 megawatts (“MW”) of solar photovoltaic (“PV”) power generation.  NERC’s report contains recommendations for avoiding similar incidents by reconfiguring solar inverters, the devices that convert solar energy from direct current to alternating current.

On August 16, 2016, the Blue Cut Fire erupted in Southern California’s Cajon Pass, near a significant transmission corridor containing three 500 kilovolt (“kV”) lines owned by Southern California Edison (“SCE”) and two 287 kV lines owned by the Los Angeles Department of Water and Power (“LADWP”).  During the incident, the fire interrupted solar PV power generation in the transmission corridor by inducing faults on the transmission system.  In total, the SCE lines experienced 13 faults and the LADWP lines experienced two faults.  The most significant event resulted in the loss of 1,200 MW of solar PV power generation.  The fault events did not de-energize any of the solar PV facilities; instead, the facilities ceased output in response to the faults perceived on the system. Continue Reading NERC Recommends Inverter Changes After California Fire Disrupts Solar Generation