Energy & Environmental Law Adviser

D.C. Circuit Orders USEPA to Respond to Petition to Stop Carbon Rulemaking

Posted in Air, Electric

Murray Energy Corp. Suit Allowed to Proceed

Upon publication of the proposed “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Generating Units” (also referred to as the Proposal or Clean Power Plan), on June 18, 2014, Murray Energy Corp. filed a petition for writ of extraordinary relief, alleging that the United States Environmental Protection Agency (USEPA) does not have the legal authority under the Clean Air Act to finalize performance standards for existing sources under Section 111(d).  Murray Energy Corporation v. U.S. Environmental Protection Agency, No. 14-1112 (D.C. Cir. filed June 18, 2014).  A week later, on June 25, 2014, a group of nine states filed an amici curiae brief, urging the D.C. Circuit to grant Murray Energy’s petition for writ, prohibiting USEPA to continue with its rulemaking. Continue Reading

FERC Approves ISO-NE Winter Reliability Program for 2014-15, Requires Stakeholder Discussions to Address Future Reliability Concerns

Posted in Electric, Regulatory, Uncategorized

FERC recently issued an order approving ISO-New England’s 2014-15 Winter Reliability Program, but ordered ISO-NE to commence stakeholder discussions by January, 2015, to develop a longer term solution to reliability problems in the region. (http://www.ferc.gov/CalendarFiles/20140909165718-ER14-2407-000.pdf).  ISO-NE’s Winter Reliability Program is designed to ensure electric system reliability during the winter months through out-of-market payments to generators making arrangements to run their plants on oil or LNG or to participants who provide demand response when dispatched. Continue Reading

IDNR Issues Proposed Final Fracking Rules

Posted in Land/Waste, Regulatory

The Illinois Department of Natural Resources (IDNR) on August 29, 2014 filed proposed rules that if adopted, will create additional burdens on companies seeking to extract natural gas in Illinois.  The proposed rules, filed with the Joint Committee on Administrative Rules (JCAR), represent IDNR’s final rules implementing the Hydraulic Fracturing Regulatory (Act), the comprehensive law which permits, and strictly regulates, high volume horizontal hydraulic fracturing (fracking) in Illinois.  These new rules (Rules) could be argued to impose requirements well-beyond those expressly provided by the Act and the proposed rules issued by the IDNR on November 13, 2013.  The following are among the ways in which the Rules could be viewed to go beyond requirements of the Act. Continue Reading

D.C. Circuit Vacates FERC Order Upholding Monetary Penalty for Federal Agency Violation of Reliability Standards

Posted in Regulatory

In a unanimous opinion issued on August 22nd, the U.S. Court of Appeals for the District of Columbia (D.C. Circuit) vacated an order issued by the Federal Energy Regulatory Commission (FERC) upholding the assessment of a monetary penalty against the Southwestern Power Administration (SWPA), a federal Power Marketing Administration (PMA) under the jurisdiction of the Department of Energy (DOE).  In reviewing Section 215 which instituted the current electric reliability paradigm, the D.C. Circuit found that in the Energy Policy Act of 2005 Congress had not unequivocally waived the Federal Government’s sovereign immunity to allow for the assessment of monetary penalties. Continue Reading

Ninth Circuit Holds that Railyard Emissions are Outside the Scope of Federal Regulation

Posted in Land/Waste, Regulatory

The United States Court of Appeals for the Ninth Circuit on August 20, 2014 determined that emissions of diesel particulate matter from a railyard were not regulated under the Resource Conservation and Recovery Act (RCRA).  In Center for Community Action and Environmental Justice, et al, v. BNSF Railway Co., et al, (Case No. 12-56086), the court held that the railyards’ emissions did not constitute a “disposal” of solid waste under RCRA, and that more broadly, emissions from indirect sources such as railyards “fall entirely out of the ambit of federal regulation.” Continue Reading

PJM Interconnection Proposes New Capacity Performance Rules to Provide Stronger Performance Incentives and Operational Availability During Peak Conditions

Posted in Uncategorized

On August 20, 2014, PJM Interconnection (PJM) proposed changes to their capacity market to address reliability concerns highlighted by generator performance during the 2013-2014 winter season, during which up to 22% of PJM capacity was unavailable due to cold-weather issues. The purpose of this proposal is to provide details regarding PJM’s proposed initial solution to issues identified in PJM’s August 1, 2014 whitepaper entitled “Problem Statement on PJM Capacity Performance Definition.” PJM expects the solutions detailed in this proposal will be adapted through discussions with stakeholders. Continue Reading

U.S. Court of Appeals Affirms FERC Order No. 1000 on Regional Transmission Planning and Cost Allocation

Posted in Regulatory

On August 15, 2014, a three judge panel (Circuit Judges Rogers, Griffith and Pillard) of the United States Court of Appeals for the District of Columbia Circuit affirmed the Federal Energy Regulatory Commission’s (FERC) Order No. 1000 Final Rule and subsequent rehearing orders – Order No. 1000-A and Order No. 1000-B (together, Order No. 1000) on regional transmission planning and cost allocation, South Carolina Public Service Authority v. FERC, Case Nos. 12-1232, et al. (consolidated). 45 petitioners and 16 intervenors, including state regulatory agencies, electric transmission providers, regional transmission organizations, and electric industry trade associations, had petitioned for review of Order No. 1000.  The Court’s 97-page opinion is attached.  In brief, the Court held as follows: Continue Reading

FERC Approves $12 Million Settlement for Reliability Standards Violations of Imperial Irrigation District

Posted in Compliance, Regulatory

On August 7, 2014, FERC issued an order approving a Stipulation and Consent Agreement between FERC’s enforcement staff, NERC, and Imperial Irrigation District (IID).  See Imperial Irrigation District, 148 FERC ¶ 61,108 (2014). As indicated in FERC’s press release about the order, this Stipulation and Consent Agreement is the second settlement to stem from the September 8, 2011 Southwest Blackout, which left more than 5 million people in Southern California, Arizona, and Baja California, Mexico without power for up to 12 hours.  As we previously reported, FERC approved the first settlement on July 7, 2014, which provided for a $3.25 million civil penalty against Arizona Public Service Company (APS). Continue Reading

FERC Staff Issues Notice of Alleged Violations in Powhatan Case

Posted in Regulatory

On August 5, 2014, FERC’s Office of Enforcement (OE) issued a Notice of Alleged Violations (NAV) asserting that Powhatan Energy Fund, LLC, HEEP Fund, Inc., CU Fund Inc., and Houlian (Alan) Chen (jointly Powhatan) engaged in improper and manipulative Up to Congestion (UTC) trading in PJM markets.   The NAV alleges that, between June 1, 2010 and August 3, 2010, Powhatan engaged in UTC transactions “designed to falsely appear to be spread trades, as a vehicle for collecting certain payments (called Marginal Loss Surplus Allocation or MLSA) from PJM.”  In addition, the NAV claims that Powhatan’s strategy involved the use of wash trades – or offsetting – for the same number of MWh at the same trading points in order to cancel out the financial effects of these trades while continuing to capture MLSA payments.  FERC has long prohibited wash trades. Continue Reading

FERC Concludes It Lacks Jurisdiction Over LNG Facility in Marcellus Region

Posted in Natural Gas, Regulatory

FERC recently issued an order disclaiming jurisdiction over an LNG facility to be constructed and operated by Gulf Oil Limited Partnership (Gulf Oil) in the Marcellus Shale region.  Gulf Oil sought a declaratory order asking FERC to disclaim any jurisdiction it might have under Section 7 of the Natural Gas Act.  Gulf Oil asserted that the LNG facility will be used to convert natural gas produced in the Marcellus region into LNG for use as a vehicular fuel or for transportation by truck to LDCs for peak shaving purposes.  Gulf Oil stated that, to the best of its knowledge, neither the natural gas transported to the LNG facility nor the subsequently produced LNG would be transported over a pipeline in interstate commerce.  Gulf Oil noted that, after the LNG has been delivered by truck to LDCs, the LDCs could possibly re-gasify the LNG and transport it over interstate pipelines. Continue Reading