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

Continue Reading FERC Issues Order to Show Cause and Notice of Proposed Penalty to City Power Marketing, LLC and K. Stephen Tsingas

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

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

Q:        What is the Clean Power Plan?

A:        The United States Environmental Protection Agency (USEPA) is proposing to regulate greenhouse gas (GHG) emissions from fossil fuel-fired electric generating units (EGUs) through a rule called the Clean Power Plan.  This rule does not purport to directly regulate EGUs.  Instead, USEPA is proposing statewide carbon dioxide (CO2) emission goals and guidelines, called the “state goals.”  States would develop plans to meet those state goals, using a flexible menu of programs and tools that USEPA discusses in the proposal.  Most of the details are left to the states and will be included in State Implementation Plans (SIPs).
Continue Reading The Clean Power Plan: Key Questions and Answers

At the penultimate Open Meeting of the year (and the last open meeting of Chairman Wellinghoff), the Federal Energy Regulatory Commission (FERC) took a number of significant actions related to electric reliability.  Commissioner LaFleur issued a statement regarding the actions and FERC Staff provided a presentation regarding each item.  In her remarks, Commissioner LaFleur noted that the three orders described below “have broader implications for NERC’s efforts to reform its standards development process and enforcement processes.”  She explained that she “strongly support[s] NERC’s efforts in both the standards and enforcement areas, but emphasize that for them to be successful the standards themselves must be clear, enforceable, and technically justified.”
Continue Reading Electric Reliability Actions at November 21, 2013 FERC Open Meeting

In addition to the reliability-related decisions and Notices of Proposed Rulemaking (NOPR) issued during the Federal Energy Regulatory Commission’s (FERC) July 18, 2013 Open Meeting, there are two reliability-related dockets that are worthy of mention and provide an opportunity for interested parties to submit comments.
Continue Reading Follow-Up on Reliability-Related NOPRs

On July 18, 2013, FERC issued a report on its audit of Salt River Project Agricultural Improvement and Power District (SRP). This audit commenced on November 15, 2011, and it reviewed SRP’s compliance with the NERC reliability standards for the entire period from June 18, 2007 (when the reliability standards became mandatory and enforceable) until March 14, 2013. According to the audit report, the focus of the audit was on the last two years.
Continue Reading FERC issues Report on Reliability Standards Audit of Salt River Project

During its July 18 Open Meeting, the Federal Energy Regulatory Commission made several reliability-related issuances: three Notices of Proposed Rulemakings (NOPR), one final rule approving a reliability standard, and a decision regarding South Louisiana Electric Cooperative Association’s (SLECA) North American Electric Reliability Corporation’s (NERC) registry appeal.
Continue Reading FERC Makes Several Reliability-Related Issuances at Its July Open Meeting