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

On June 2, 2014, the United States Environmental Protection Agency (USEPA) released the most sweeping component of President Obama’s Climate Change Action Plan.  USEPA’s 650-page proposed Clean Power Plan states that carbon dioxide (CO2) emissions from the combustion of fossil fuels at existing power plants is the single largest category of stationary source Greenhouse Gas (GHG) Emissions in the United States, accounting for about one-third of all GHGs emitted. Continue Reading USEPA’s Clean Power Plan: Proposed Rule For Existing Power Plants

The Federal Energy Regulatory Commission (FERC) announced this week that it will hold a technical conference on centralized capacity markets in Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs). The purpose of the technical conference is to consider how current centralized capacity market rules and structures are supporting the procurement and retention of resources necessary to meet future reliability and operational needs. In its Notice, FERC pointed out that since their establishment, centralized capacity markets have continued to evolve. Meanwhile, the mix of resources is also evolving in response to changing market conditions, including low natural gas prices, state and federal policies encouraging the entry of renewable resources and other specific technologies, and the retirement of aging generation resources. This changing resource mix, according to FERC, may result in future reliability and operational needs that are different than those of the past. In addition, some states have pursued individual resource adequacy policies to ensure the development of new resources in particular areas or with particular characteristics, and questions have been raised as to how those individual policies can be accommodated in centralized capacity markets. Continue Reading FERC To Hold Technical Conference on Centralized Capacity Markets in RTOs and ISOs

President Obama issued an Executive Order on February 12, 2013, declaring “the national and economic security of the United States depends on the reliable function of the Nation’s critical infrastructure” in the face of repeated cyber intrusions into crucial infrastructure and the growing and continuing threat to cyber security and critical infrastructure. Continue Reading President Obama Issues Executive Order — Improving Critical Infrastructure Cybersecurity