Regulatory Updates

Mark Christie Sworn In as FERC Commissioner

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On January 4, 2021, Mark C. Christie (R) former Chair of the Virginia State Corporation Commission, was sworn in to serve a term as Commissioner of the Federal Energy Regulatory Commission (“Commission”).  Commissioner Christie’s term will run to mid-2025.  With the recent addition of Allison Clements (D) in December, all five seats of the Commission are filled.  The Commission’s announcements of the swearing in of its new Commissioners can be found here (Clements) and here (Christie).

January 1, 2021 Newly Effective Reliability Standards

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As of January 1, 2021, the following standards become effective:

CIP-008-6  - Cyber Security – Incident Reporting and Response Planning
PRC-002-2 - Disturbance Monitoring and Reporting Requirements
(50% compliance for Requirements R2-R4, R6-R11)
PRC-012-2 - Remedial Action Schemes
PRC-025-2 - Generator Relay Loadability
(phased-in implementation of Attachment 1: Relay Settings, Table 1 Options 5b, 14b, 15b, and 16b)

All Reliability Standards, along with their status, purpose, implementation plans, relevant FERC Orders, and Reliability Standard Audit Worksheets, can be accessed at NERC’s One-Stop Shop.

For more information on the NERC Reliability Standards and their potential applicability and impact, please contact Kristen Connolly McCullough, Lisa Gast, or Sean Neal.

FERC Takes Regulatory Measures to Bolster Cybersecurity

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On December 17, 2020, the Federal Energy Regulatory Commission (“FERC”) took two separate actions intended to enhance the cybersecurity of the Bulk Electric System (“BES”).  First, FERC issued a Notice of Proposed Rulemaking (“NOPR”) in Docket No. RM21-3 to establish rules for incentive-based rate treatment for public utilities’ voluntary cybersecurity investments that exceed the North American Electric Reliability Corporation (“NERC”) Critical Infrastructure Protection (“CIP”) Reliability Standards requirements.  This action builds off FERC Staff’s White Paper addressing cybersecurity investment incentives, issued this past summer. 

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December 1, 2020 Newly Effective Reliability Standards

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As of December 1, 2020, the following standard became effective:

BAL-003-2 – Frequency Response and Frequency Bias Setting

All Reliability Standards, along with their status, purpose, implementation plans, relevant FERC Orders, and Reliability Standard Audit Worksheets, can be accessed at NERC’s One-Stop Shop.

For more information on the NERC Reliability Standards and their potential applicability and impact, please contact Kristen Connolly McCulloughLisa Gast, or Sean Neal.

James Danly Appointed to Become Chairman of the Federal Energy Regulatory Commission

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President Trump appointed current Commissioner James Danly as Chairman of the Federal Energy Regulatory Commission.  Danly’s tenure with FERC began in 2017, serving as general counsel to the Commission, and subsequently beginning a term as Commissioner in March of this year.  Danly replaces Neil Chatterjee, who will remain as a Commissioner of the Commission.  In his remarks thanking Chatterjee for his service as Chairman, Danly commented on Chatterjee’s efforts to advance liquified natural gas terminals, protect competitive markets, revise the Commission’s policies under PURPA, and expedite approvals of critical energy infrastructure.  As Chairman, Chatterjee in recent months led efforts to remove barriers to participation of distributed energy resources in organized markets and to propose a policy statement that would clarify the Commission’s role over state-determined carbon pricing in wholesale markets.  Chatterjee intends to stay on as a Commissioner through the end of his term in June 2021.

FERC’s announcement can be found here.

PURPA Rulemaking Would Encompass Certain Fuel Cells

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On October 15, 2020, the Federal Energy Regulatory Commission (“Commission”) issued a Notice of Proposed Rulemaking (“NOPR”) in Docket No. RM21-2, in which it proposes to amend its regulations implementing the Public Utility Regulatory Policies Act of 1978 (“PURPA”) to clarify that the definition of “useful thermal energy output” of a topping-cycle cogeneration qualifying facility (“QF”) includes energy produced by Solid Oxide Fuel Cell systems with integrated natural gas reformation equipment. 

The Commission issued this NOPR in recognition of the technical development and commercialization of Solid Oxide Fuel Cell systems with integrated natural gas reformation equipment over the past decade, and in response to a Petition for Rulemaking filed by Bloom Energy Corporation (“Bloom Energy”) in Docket No. RM20-20.  The Commission states that the NOPR furthers PURPA’s goal of encouraging the innovation and development of cogeneration facilities. 

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FERC Proposes Policy Statement on Carbon Pricing

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On October 15, 2020, the Federal Energy Regulatory Commission (Commission) issued a Notice of Proposed Policy Statement for Carbon Pricing in Organized Wholesale Electricity Markets after convening a technical conference on the subject. Due to the increased trend of states controlling greenhouse gas emissions by way of carbon pricing, the Commission’s proposed policy statement continues the discussion around market rules that include carbon pricing.

In its proposed policy statement, the Commission explains a long history of allowing generating resources to recover costs associated with environmental compliance through their wholesale rates. The Commission states that its jurisdiction over RTO/ISO market rules that include a state-set carbon price is no different. The Commission takes the opportunity to encourage RTOs/ISOs to consider establishing these types of market rules and make Federal Power Act section 205 filings.

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FERC Issues Order Regarding Minimum Offer Price Rule

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On October 15, 2020, the Federal Energy Regulatory Commission (“Commission”) issued an Order (“October 15 Order”) accepting in part, rejecting in part, and specifying modifications to tariff revisions proposed by the PJM Interconnection (“PJM”) to implement the Commission-directed expansion of the minimum offer price rule (“MOPR”) within the PJM footprint.

Prior to the Commission’s December 2019 Order to expand the MOPR to all state-subsidized capacity resources, the MOPR only applied to new natural gas-fired combustion turbine and combined cycle resources. The Commission’s October 15 Order accepts PJM’s MOPR compliance filings to apply the MOPR to any capacity resource that receives or is entitled to receive a state subsidy.

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