Continuing reductions in environmental regulations across the power industry may seem like a good time for the C-suite to direct energy and attention towards other key priorities, but there is another force steadily working to tug reform back over the line — highly organized and increasingly strategic NGOs. Because deregulation is antithetical to their policy preferences, environmental groups routinely argue that federal agencies violate federal statutory laws, and power plant operations and infrastructure get caught in the crossfire.
As 2017 comes to a close, the specifics of the Trump Administration’s agenda for energy regulatory reform in 2018 are beginning to take shape. To implement President Trump’s Executive Order on “Promoting Energy Independence and Economic Growth” (No. 13783), federal agencies solicited public comment and have now issued reports identifying their priorities for reform. These energy independence reports, as well as the Trump Administration’s broader agenda for regulatory reduction and reform, describe steps the administration can take—largely without congressional involvement—to reduce the compliance burden associated with environmental regulations and permit requirements. Continue Reading 2018 Energy Reform Priorities: Streamlining to Further Reduce Compliance Burden
On July 21, 2016, the Federal Energy Regulatory Commission (FERC) issued a Notice of Proposed Rulemaking (NOPR) in Docket No. RM16-17-000 to revise regulations regarding the collection of data for analytics and surveillance purposes from market-based rates (MBR) sellers and entities trading virtual products or holding financial transmission rights (Virtual/FTR Participants). FERC also withdrew two earlier NOPRs in Docket Nos. RM15-23-000 and RM16-3-000. FERC indicated that the newly-issued NOPR would address many of the issues in the withdrawn NOPRs. Continue Reading FERC Issues NOPR on Information Collection, Rescinds Previous Iterations of Rule
On June 22, 2016, President Obama signed the Lautenberg Chemical Safety Act into law. The Act is the first significant change to the 1976 Toxic Substances Control Act in 40 years and amends the Environmental Protection Agency’s (EPA) methods for reviewing chemical substances before they are marketed and allowed to be used in consumer products.
The Act has several new key features: Continue Reading Toxic Substances Control Act Revised for the 21st Century
The Federal Energy Regulatory Commission (FERC) has issued a Notice of Proposed Rulemaking (NOPR) to revise its pro forma Small Generator Interconnection Agreement (SGIA). The new rule would require small generators (those that are 20 MW or less) to “ride through” through or to stay connected to and synchronized with the transmission system during a system disturbance. Continue Reading Small Generators May Soon Be Required to “Ride Through” System Disturbances
Environmental groups continue their attack on long-standing rule provisions under the Clean Air Act that limit or exclude liability related to “startup, shutdown, and malfunction” events. Historically, USEPA has acknowledged that it may be impracticable, if not impossible, for industry to meet emissions standards during certain periods, including during startup, shutdown or malfunction events, when emissions are typically higher than during normal operation. However, in May 2015, in response to prior challenges, USEPA instructed 36 states to revise their implementation plans with regard to SSM events. Continue Reading Environmental Groups Challenge EPA Refinery Rule
On August 3, 2015, the United States Environmental Protection Agency (EPA) released the final version of the Existing Source Performance Standards (ESPS) component of the Obama Administration’s Clean Power Plan (CPP), setting the first-ever carbon dioxide emission reduction goals for States. Environmental Protection Agency, Carbon Pollution Emission Guidelines for Existing Stationary Sources, 40 CFR Part 60, Docket No. EPA-HQ-OAR-2013-0602, RIN 2060-AR33 (April 3, 2015). When fully implemented by 2030, the CPP is expected to reduce CO2 emissions from the power sector by 32% over 2005 levels. The final version includes significant changes from the original proposal, 79 Fed. Reg. 34829 (June 18, 2014). Continue Reading Clean Power Plan: EPA Issues Final Carbon Reduction Rule for Existing Stationary Sources
On March 6, 2015, the Federal Energy Regulatory Commission (FERC) issued an Order to Show Cause and Notice of Proposed Penalty (Order) to City Power Marketing, LLC and K. Stephen Tsingas (jointly, Respondents). The Order requires the Respondents to show cause why they should not be found to have violated the Federal Power Act and the Commission’s regulations prohibiting market manipulation by engaging in fraudulent Up To Congestion (UTC) transactions in PJM Interconnection L.L.C.’s (PJM) energy markets. The Order also requires City Power to show cause why it should not be found to have violated the Commission’s rules by making false statements and material omissions related to the existence of instant messages between partners in City Power discussing the alleged fraudulent conduct.
The Order directs the Respondent show cause why they should not be required to disgorge profits and be assessed civil penalties in the following amounts:
- City Power and Mr. Tsingas: Jointly and severally disgorge unjust profits of $1,278,358
- City Power: $14,000,000 civil penalty
- Tsingas: $1,000,000 civil penalty
Keeping with a growing trend, a New York appellate court in Exxon Mobil Corp. v. State of New York Tax Appeals recently upheld a ruling applying a sales and use tax assessment to environmental remediation work.
New York law has a provision imposing a sales tax on services related to “[m]aintaining, servicing or repairing real property, property or land…as distinguished from adding to or improving such real property, property or land, by a capital improvement.” 20 NYCRR 527.7(a)(1). The court held that this language was broad enough to extend to environmental remediation work. Exxon Mobil Corp. v. State of New York Tax Appeals Tribunal, No. 517504, 2015 WL 919788, at *2 (N.Y. App. Div. Mar. 5, 2015). Continue Reading Monitoring and Testing (and Taxing): New York Appellate Court Imposes Sales Tax on Environmental Remediation Work
On November 3, 2014, the Commodity Futures Trading Commission (CFTC), along with the Securities and Exchange Commission (SEC), proposed a clarification of its previously issued interpretation concerning the exclusion of forward contracts with embedded volumetric optionality from the “swap” and “future delivery” definitions. The CFTC seeks to clarify the seven elements previously provided as guidance to market participants analyzing whether a contract with embedded volumetric optionality is a swap or a forward. Specifically, the proposed clarification would address concerns raised by utilities and commercial market participants regarding the application of the fourth, fifth, and seventh elements of the interpretive test. Continue Reading CFTC Proposes Clarification of the Interpretation on Forward Contracts with Embedded Volumetric Optionality