With the inauguration of President Trump as the 45th President of the United States, stakeholders in various sectors of the energy industry have speculated about the future of energy policy in the new administration. While the early days of the administration have seen a clear commitment to the oil and gas sectors with action on the Dakota Access and Keystone XL pipelines, the question remains regarding the president’s anticipated support of the renewable energy sector. Continue Reading Renewable Energy Development Can Still Look to PURPA as New Administration Moves In
In 2013, President Obama issued the Climate Action Plan. Its goal: to reduce greenhouse gas emissions from a broad range of economic sectors. Moreover, the Climate Action Plan is the key set of initiatives necessary to achieve the United States’ GHG reduction commitment set out in the 2015 Paris Agreement, an international accord.
We covered the initiation of a wide range of rulemakings in a blog post dated September 28, 2015, and, as the Obama Administration comes to a close, climate change rulemakings continue to move forward. The most contentious rule—the Clean Power Plan—has moved from rulemaking to litigation. Many other rules (e.g. new rules limiting methane emissions from the oil and gas industry and the renewable fuel standards) have moved from proposal to final rules. We summarize the status of 10 different rules, standards, or programs meant to implement the Climate Action Plan below. Continue Reading Recap: Climate Action Plan Nears Completion
A slowly developing renewable fuels market, several well-publicized fraud cases, and EPA’s delayed volumetric designations that frustrated industry participants have led EPA and the CFTC to a new era of cooperation. On March 17, 2016, the Commodity Futures Trading Commission (CFTC) and the Environmental Protection Agency (EPA) announced that they would share Renewable Fuel Standard data and analysis pursuant to a Memorandum of Understanding (MOU). Under the MOU, the CFTC and EPA can share information and conduct joint or separate investigations into potential fraud, market abuse, deceptive practices, commodity market manipulation, or other violations relating to the generation of, and trading in, Renewable Identification Numbers (RINs). Continue Reading CFTC and EPA sign Memorandum of Understanding on Renewable Fuel Markets
On February 9, 2016, the U.S. Supreme Court issued a 5-4 decision staying implementation of the Clean Power Plan until the D.C. Circuit rules on challenges to the Plan. The Court left open the possibility that it would review the D.C. Circuit’s ultimate decision.
The decision delays President Obama’s Climate Action Plan. The Clean Power Plan is its key climate change rule. It requires states and utilities to reduce carbon dioxide (CO2) emissions by generating less electricity from coal, and more from lower carbon-emitting sources like natural gas, or zero-carbon sources like solar and wind. The Plan has an ambitious goal: to reduce CO2 emissions 32% below 2005 levels by 2030. Continue Reading Supreme Court Stays Clean Power Plan
The D.C. Circuit denied industry petitioners’ motions to stay the effectiveness of the Clean Power Plan on Jan. 21. In a two-page order, the court found the petitioners had not satisfied the requirements for a stay pending review and issued an expedited case schedule.
The order asked parties to submit a format for briefing as well as a schedule by Jan. 27, 2016 that ensures that all briefing will be complete by April 22, 2016. Parties will debate whether the cost of implementing the rule is too great and whether EPA has exceeded the bounds of its authority, among numerous other issues. Oral arguments are scheduled to begin June 2, 2016 and continue to June 3 if necessary. This schedule could allow for a court decision before initial state plans are due in September 2016. Continue Reading Clean Power Plan Will Stay in Effect Pending the Outcome of Litigation
On November 19, 2015 the Federal Energy Regulatory Commission (Commission) issued a proposal titled “Reactive Power Requirements for Non-Synchronous Generation.” In this proposal, the Commission proposes to revise standard generator interconnection agreements (GIAs) to eliminate the exemptions for non-synchronous generation, including wind generators, from the requirement to provide reactive power. Continue Reading FERC Issues Proposal to Require Wind Generators to Provide Reactive Power
The summer of 2015 saw several controversial EPA rulemaking proceedings that will affect the energy, transportation, waste management and construction sectors across the United States. These rulemakings implement President Obama’s 2013 Climate Action Plan, which has a goal of reducing greenhouse gas (GHG) emissions to mitigate the impacts of climate change. Continue Reading Climate Action Plan Takes Shape
On May 29, the United States Environmental Protection Agency (EPA) proposed long-delayed Renewable Fuel Standard (RFS) volume requirements for 2014, 2015, and 2016. Despite significant efforts to promote the use of renewable fuels, real-world limitations, such as the slower than expected development of the cellulosic biofuel industry, less growth in gasoline use than was expected when Congress enacted these provisions in 2007, and constraints in supplying certain biofuels to consumers, have made Congress’ original RFS goals for 2014, 2015, and 2016 effectively beyond reach. Congress established the RFS program in 2005 (42 U.S.C. § 15801) and expanded the program in 2007 (EISA, P.L. 110-140), when it set specific volume production goals. The program, according to EPA, is designed to promote energy security by increasing the percentage of domestic renewable fuels used in transportation. The RFS program has played a key role in the emergence of the biofuels industry but has been insufficient to overcome challenges such as the declining demand for gasoline, insufficient infrastructure capacity to transport the fuels, high cost associated with producing some renewable fuels, and limitations on how much renewable fuel can be blended with conventional fuels. As production of renewable fuels lagged, EPA failed to use its discretion to waive the Congressionally-authorized goals. Continue Reading EPA Announces Long-Awaited Renewable Volume Obligations
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 June 2, 2014, the Commodity Futures Trading Commission (CFTC) published in the Federal Register a notice of a proposed amendment to the de minimis exception from the definition of “swap dealer” with respect to certain swaps entered into with government-owned utilities. As explained below, the adoption of this proposal would expand the number of entities that would be willing to enter into swaps with those utilities. The text of the Federal Register notice can be found here. Continue Reading CFTC Proposal Would Expand Hedging Choices For Government-Owned Utilities