Regulatory Updates
On June 20 and 21, 2019, the Center for Climate Protection hosted “The Business of Local Energy Symposium 2019” in Irvine, California, as a forum for Community Choice Aggregators (“CCAs”) to share developments and best practices. The conference celebrated the launching of ten CCAs in 2018, effectively doubling the number of CCAs, now at nineteen, with the oldest CCA, Marin Clean Energy (“MCE”), celebrating ten years of operation in 2020. The panels and workshops grappled with complex issues facing the energy sector in California, including wildfires and preventative de-energization events, integrating new technologies into the grid, access to meter data, maintaining autonomy over procurement decisions, constrained resource adequacy capacity, and the potential for the State’s investor-owned utilities (“IOUs”) to become “wires-only” companies.
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As of July 1, 2019, the following North American Electric Reliability Corporation (NERC) Reliability Standards became effective and enforceable in the United States:
- PER-003-2 – Operating Personnel Credentials
- TPL-007-3 – Transmission System Planned Performance for Geomagnetic Disturbance Events (Requirements R1 and R2)
The NERC file containing each of these standards, along with the already enforceable Reliability Standards, is available here.
For more information on the NERC Reliability Standards and their potential applicability and impact, please contact Lisa Gast, Sean Neal or Kristen Connolly McCullough.
- 6/26/19: Petition for Review of PG&E in the United States Court of Appeals for the Ninth Circuit, 19-71615, FERC Docket Nos. EL19-35-000 and EL19-36-000
- 6/07/19: Memorandum Decision granting PG&E’s request for a declaratory judgment pursuant to 28 U.S.C. § 2201 confirming the bankruptcy court’s exclusive jurisdiction over the court’s right to reject any Purchase Power Agreement under Section 365, and further declaring that FERC does not have “concurrent jurisdiction” to grant or deny Debtors’ rejection of any of their PPAs.
- 5/28/19: Bankruptcy Court Order denying request of The Utility Reform Network (TURN) for appointment as an official committee in the bankruptcy proceeding
- 5/24/19: Bankruptcy Court Order extending PG&E exclusive periods to file a chapter 11 plan to September 29, 2019
- 5/01/19: FERC denied PG&E’s requests for rehearing of FERC’s Order finding that FERC has concurrent jurisdiction with the U.S. Bankruptcy Courts over wholesale power purchase agreements where PG&E seeks to reject such contracts in bankruptcy, Docket Nos. EL19-35 and EL19-36
- 4/12/19: The Governor’s Strike Force issued a Report on Wildfires and Climate Change: California’s Energy Future, which includes discussion of the State’s anticipated role in PG&E’s bankruptcy proceedings.
- 3/11/19: District Court enters Order Denying Motion to Withdraw the Reference
- 2/21/19: PG&E filed Notice of Bankruptcy Filing and Imposition of Automatic Stay in FERC Docket No. EL19-38 asserting that any action taken without relief from the automatic stay is void.
- 2/15/19: Notice Regarding Appointment of the Official Committee of Tort Claimants Filed by U.S. Trustee Office of the U.S. Trustee / SF
- 2/12/19: Notice of Appointment of Creditors' Committee Appointment of the Official Committee of Unsecured Creditors
- 1/29/19: PG&E adversary proceeding in bankruptcy court seeking a declaratory judgment that the bankruptcy court, and not FERC, has exclusive jurisdiction over PG&E’s ability to reject any of its PPAs; also seeks injunctive relief prohibiting any further action FERC might take.
- 1/29/19: Bankruptcy Courge Bridge Orders - one of two; two of two
- 1/29/19: CAISO News Release “No impacts to California ISO markets from PG&E bankruptcy filing”
- 1/29/19: PG&E 8-K filing with Securities and Exchange Commission
- 1/29/19: PG&E files voluntary petitions under Chapter 11 of the Bankruptcy Code, Northern District of California, Case No. 19-30088
- 1/28/19: FERC issues Order on Petition for Declaratory Order and Complaint, Docket No. EL19-36-000
- 1/25/19: FERC issues Order on Petition for Declaratory Order and Complaint, Docket No. EL19-35-000
- 1/22/19: Exelon files for Declaratory Order, FERC Docket No. EL19-36-000
- 1/18/19: NextEra files for Declaratory Order, FERC Docket No. EL19-35-000
- 1/14/19: PG&E provides 15 day notice to the California Public Utilities Commission - Cal. Pub. Util. Code § 854.2(d)
- 1/13/19: PG&E 8-K filing with Securities and Exchange Commission
On March 28, 2019, the Federal Energy Regulatory Commission (FERC) and the Department of Energy (DOE) held a joint technical conference to discuss and gain a stronger understanding of the types of cyber and physical security threats to electric transmission and natural gas pipeline infrastructure, and explore how federal and state commission authorities can provide incentives and cost recovery mechanisms for security investments in energy infrastructure. Specifically, the technical conference discussed: (1) the need for security investments that go beyond existing reliability standards; (2) how the costs of such investments can be recoverable; and (3) whether additional incentives for making such investments are needed, and if so, how such incentives should be designed.
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As of April 1, 2019, the following North American Electric Reliability Corporation (NERC) Reliability Standards became effective and enforceable in the United States:
- BAL-002-3 (Disturbance Control Standard – Contingency Reserve for Recovery from a Balancing Contingency Event)
- EOP-004-4 (Event Reporting)
- EOP-005-3 (System Restoration from Blackstart Resources)
- EOP-006-3 (System Restoration Coordination)
- EOP-008-2 (Loss of Control Center Functionality)
The NERC file containing each of these standards, along with the already enforceable Reliability Standards, is available here.
For more information on the NERC Reliability Standards and their potential applicability and impact, please contact Lisa Gast, Sean Neal or Kristen Connolly McCullough.
By Executive Order released on Tuesday, March 26, 2019 (March 26, 2019 E.O.), the President of the United States established the first comprehensive “whole-of-government” policy to enhance resilience and protect against electromagnetic pulses (EMPs). EMPs are defined in the March 26, 2019 E.O. as temporary electromagnetic signals that can disrupt, degrade, and damage technology and critical infrastructure systems across large areas.
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Federal Energy Regulatory Commission (“FERC”) Chairman Neil Chatterjee has indicated that FERC’s Return on Equity (“ROE”) and transmission incentives rate policies are the key to shaping the future of the modern grid. Accordingly, on March 21, 2019, the FERC issued two Notices of Inquiry to examine:
- potential modifications to FERC’s approach to determining a just and reasonable ROE for public utilities, as well as interstate natural gas and oil pipelines (“ROE Notice of Inquiry”)(FERC Docket No. PL19-4-000); and
- the scope and implementation of FERC’s electric transmission rates incentive regulation and policy, which was issued in 2006 in Orders No. 679 and 679-A pursuant to the directives of Section 219 of the Federal Power Act as amended in the Energy Policy Act of 2005 (“Transmission Incentives Notice of Inquiry”)(FERC Docket No. PL19-3-000).
ROE Notice of Inquiry. The ROE Notice of Inquiry seeks comments on eight broad areas associated with determining whether, and if so how, to revise its policies on determining the ROE used in setting rates charged by jurisdictional public utilities, and whether any changes should be applied to interstate natural gas and oil pipelines.
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The Fifth Reliability Leadership Summit was put on by the North American Electric Reliability Corporation (NERC) and NERC's Reliability Issues Steering Committee (RISC), on March 14, 2019. Every other year the Summit gathers leaders from the industry and government to identify and prioritize evolving and emerging risks as the Bulk-Power System undergoes transformational change. The key issues addressed at this year’s Summit included: the rapid shift in generation resources, assuring adequate fuel supplies, increased technology deployment, cyber vulnerabilities and supply chain management. The RISC relies on the discussions at the Reliability Leadership Summits in order to inform its critical planning decisions, develop approaches to managing emerging risks, and provide recommendations to the NERC Board of Trustees, which then informs the development of the Electric Reliability Organization (ERO) Enterprise three-year business plan and budget. The keynote speakers were Bruce Walker, assistant secretary at the Department of Energy’s Office of Electricity, and Mark P. Mills, a senior fellow at the Manhattan Institute.
The full NERC announcement is available here.
For additional information on the 2019 NERC Reliability Leadership Summit, please contact Kristen Connolly McCullough.
