In a speech last month, Energy Secretary Rick Perry stated that the Department of Energy (“DOE”) may need to “intervene” in state renewable energy policies to protect grid security and reliability. Secretary Perry made the statement to energy industry stakeholders at the Bloomberg New Energy Finance Summit on April 25, 2017. In early April, Secretary Perry ordered a DOE study to determine the extent wholesale market structures, energy mandates, federal policy and tax subsidies are affecting long-term grid reliability. Secretary Perry suggested that the DOE was concerned by ongoing baseload generating facility retirements stimulated in part by pressure on utilities to meet renewable portfolio standard (“RPS”) benchmarks. During a question and answer session, Secretary Perry stated that increased reliance on intermittent renewable energy sources makes the grid unreliable, which ultimately creates a concern for national security. Continue Reading Trump Administration Considers Preemption of State Renewable Policies
On May 16, 2017, Virginia Governor Terry McAuliffe signed Executive Directive 11, which instructs the Department of Environmental Quality to propose regulations that “abate, control, or limit carbon dioxide emissions” from electric power facilities to the State Air Pollution Control Board no later than December 31, 2017. ED 11 requires the regulations to include provisions that allow for (1) “the use of market-based mechanisms and the trading of carbon dioxide allowances through a multi-state trading program” and (2) “abatement mechanisms providing for a corresponding level of stringency to limits on carbon dioxide emissions imposed in other states with such limits”. For more information, please see the Utility Dive article here and the full text of ED 11 here.
On April 24, 2017, PJM Interconnection, L.L.C. (“PJM”) submitted an amicus curiae brief in a legal challenge against an Illinois program to provide additional revenue for some of the state’s financially-struggling nuclear energy facilities. The program allows eligible generators to generate and sell Zero Emission Credits (“ZECs”) and obligates the state’s utilities to buy a certain share of those credits. In its brief, PJM argued that the program allows uneconomic generators to continue participating in wholesale energy and capacity markets, thereby causing “substantial harm” to the markets and other participating generators. Continue Reading PJM Files Amicus Brief Opposing Illinois ZEC Program in Federal District Court Challenge
On April 25, 2017, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) dismissed Portland General Electric Company’s (“PGE”) and PáTu Wind Farm LLC’s (“PáTu”) petitions for review of FERC’s orders finding that PGE must purchase all of the power delivered by PáTu pursuant to their power purchase agreement (“PPA”) under the Public Utility Regulatory Policies Act (“PURPA”), but that PGE was not required to use dynamic scheduling. In doing so, the D.C. Circuit held, among other things, that: (1) it lacked jurisdiction to review FERC’s resolution of PGE and PáTu’s PURPA dispute because the orders were merely declaratory; (2) circuit court review of PURPA section 210(h) enforcement actions occurs on appeal from district courts; and (3) FERC’s Federal Power Act (“FPA”)-based regulations cited to by PáTu in support of its claim that FERC should require PGE to use dynamic scheduling only apply to the transmission customer-transmission provider relationship, which was unlike PáTu and PGE’s relationship. Continue Reading D.C. Circuit Dismisses PGE Petition for Review over PURPA Purchase Obligation, Denies PáTu Petition on the Merits
On April 13, 2017 the Energy Storage Association (“ESA”) filed a complaint with FERC, alleging that PJM Interconnection, L.L.C. (“PJM”) had unilaterally implemented a series of changes to its Regulation market without FERC’s review and approval, in violation of the Federal Power Act (“FPA”). ESA contended that its members who participate in the Regulation market had “suffered significant and detrimental financial harm” as a result of PJM’s changes, and that ESA was filing its complaint “to compel PJM to give the Commission the opportunity to determine whether each of these changes are just and reasonable and not unduly discriminatory.” Continue Reading Energy Storage Association Alleges Changes to PJM Regulation Market Violate FPA
On April 6, the California Public Utilities Commission (CPUC) unanimously approved an order doubling the budget of California’s Self-Generation Incentive Program (SGIP). The order directs California’s three investor owned utilities to double their collection of SGIP fees from ratepayers. Together the utilities will collect $166 million dollars annually through 2019 to fund the SGIP, resulting in an addition $249 million for project funding.
The Order implements California’s Greenhouse Gas Reduction Act (AB 1637), which Governor Brown signed into law in September, 2016. The Act directs the PUC to increase the maximum collection for SGIP and extends the net energy metering program for fuel cells that commence commercial operation on or before December 31, 2021. The law updated the qualifications for the battery storage program by increasing the individual project cap to 5 MW and increasing the statewide cap by approximately 76 MW. Continue Reading California Seeks to Transform the Market: Doubles Funding for Distributed Generation with a Vision for Massive Battery Storage Growth
We would like to thank all our clients for choosing Troutman Sanders to represent them in 2016. In 2016, our work spanned 23 states and several countries and accounted for more than 2 gigawatts of installed renewable energy with a value exceeding $5.5 billion.
In “2016 Renewable Energy Market Year in Review and a Look Ahead to 2017,” we reflect on the biggest trends and challenges we observed in 2016 and offer insights into important trends and policy agenda items that will continue to be significant in 2017 and beyond, including:
- Tax Reform
- Federal Tax Credits
- The “Duck Curve”
- Renewable Portfolio Standards
- Energy Storage / Battery Storage
- Public Utility Regulatory Policies Act of 1978 (PURPA)
- Resurgence of Natural Gas-Fired Generation
- Commercial Power Purchase Agreements
- Proxy Revenue Swaps
- Foreign Investment
- Community Choice Aggregation
- Federal Policy
To view the complete newsletter, click here.
On Thursday, March 16, the Trump Administration released its 2018 budget blueprint, which shifts away from many of the Obama Administration’s chief initiatives as related to clean energy. While not surprising, the new Administration’s approach to the 2018 budget is to cut spending and reduce regulations. The proposal demonstrates that goal and “the Administration’s commitment to reasserting the proper role of what has become a sprawling Federal Government.” The White House will release the full budget in May, but this blueprint provides some guidance on the Administration’s direction moving forward.
The U.S. Department of Energy budget blueprint would shrink the overall budget 5.6% from 2017 levels to $20.8 billion. While the overall budget would decrease, Trump proposed an 11% ($1.4 billion) increase to the National Nuclear Security Administration, which oversees nuclear weapons and falls within the umbrella of the DOE. Accordingly, the 5.6% overall cut may be a bit misleading. Continue Reading President Trump Releases Budget Blueprint Including Cuts to Clean Energy Research and Development
According to various reports, President Donald Trump plans to appoint Kevin McIntyre as FERC Chairman, and Neil Chatterjee and Rob Powelson as FERC Commissioners, to fill the three vacant Commissioner seats at FERC. All three potential appointees are Republicans, whereas the current Commissioners—Acting Chairman Cheryl LaFleur and Commissioner Collette Honorable—are Democrats. Continue Reading Reports Suggest President Trump Plans to Appoint McIntyre as FERC Chairman, Chatterjee and Powelson as FERC Commissioners
With New Federal Administration, States Betting Bigger on Renewables
Nearly 1 in 10 States have launched proposals directing utilities to procure anywhere from 50% to 100% of their power from renewable energy resources by mid-century. Currently 29 states and the District of Columbia have renewable portfolio standards (RPS) in place. Several states, however, have introduced even more aggressive proposals likely in reaction to the fact that new federal requirements are not likely to be promulgated (e.g., the Clean Power Plan).
Some States Move All In For 100% Renewables
In 2015, Hawaii became the first state to adopt a 100% RPS designed to completely decarbonize its power portfolio. Over the next thirty years Hawaii’s RPS will ramp up with incremental requirements starting with 30% renewable generation by 2020 and ultimately achieving 100% renewable generation by 2045.
In recent weeks, state law makers in Massachusetts and California have introduced legislation to require 100% renewable energy output. In Massachusetts, a bill would require the state to get all of its electricity from renewable sources by 2035, and ultimately meet all of its heating, cooling and transportation needs through renewable sources by 2050. Continue Reading With New Federal Administration, States Betting Bigger on Renewables