Speaking Energy

On June 28, 2024, in Loper Bright Enterprises v. Raimondo, the U.S. Supreme Court overruled Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., which for 40 years required court deference to reasonable agency interpretations of federal statutes in certain circumstances, even when the reviewing court would read the statute differently. The Court ended “Chevron deference” and held that courts “must exercise their independent judgment in deciding whether an agency has acted within its statutory authority.” In doing so, the Court upended a longstanding principle of administrative law that is likely to make agency decisions more susceptible to challenge in the courts.

Akin senior counsel Scott Johnson will present part of a live webinar with Strafford entitled “PURPA Rules: FERC Revisions Regarding QF Power Sales, Requirements for Utilities, QF Certification, State Authority.” The panel will provide in-depth analysis of the Federal Energy Regulatory Commission’s (FERC) regulations under the Public Utility Regulatory Policies Act of 1978 (PURPA), recent revisions to those regulations and appeals of those revisions. It will discuss critical aspects of the rules to encourage the development of qualifying small power production facilities and cogeneration facilities (QFs), requirements for electric utilities, state authority to set rates in QF power sales contracts and modification of FERC’s “one-mile rule.” It will also address changes to a utility’s obligation to purchase QF output, QF certifications and other important aspects of FERC’s PURPA regulations. The webinar is approved for CLE credit and will take place on Thursday, April 18, from 1:00 p.m. – 2:30 p.m. ET. Please click here for more information and to register.

On March 21, 2024, the Federal Energy Regulatory Commission (FERC or the Commission) issued its Compensation for Reactive Power Within the Standard Power Factor Range Notice of Proposed Rulemaking,¹ which proposes to prohibit generators from receiving compensation from transmission providers for providing reactive power within the standard power factor range or “deadband.” The NOPR, if adopted, would represent a departure from the Commission’s current policy that requires transmission providers to compensate generators for providing reactive power within the deadband if the transmission provider pays its own or affiliated generation for reactive power.² The Commission’s proposal to eliminate reactive power compensation comes at a time when numerous markets are facing imminent resource adequacy shortfalls as a result of the retirement of existing generation resources.³

March 26, 2024 is the deadline for comments on a Notice of Inquiry issued by the Federal Energy Regulatory Commission ("FERC" or "Commission") at the end of 2023 on whether the Commission should modify its policies respecting the availability of blanket authorizations under Section 203(a)(2) of the Federal Power Act ("FPA"), including its evaluation of whether an investor has the ability to control a utility.

On February 29, 2024, President Joe Biden nominated three individuals to the Federal Energy Regulatory Commission (FERC or the Commission): Judy W. Chang (Democrat), David Rosner (Democrat) and Lindsay S. See (Republican). As noted in the White House announcement, “[b]y statute, the Federal Energy Regulatory Commission shall be composed of five members, with no more than three from the same political party,” and Lindsay S. See “is the nominee recommended by the Senate Minority Leader Mitch McConnell.”

On October 19, 2023, the Federal Energy Regulatory Commission (FERC) directed the North American Electric Reliability Corporation (NERC) to submit new or modified Reliability Standards that address the impacts of inverter-based resources (IBRs) on the reliable operation of the Bulk-Power System¹ to “protect the grid as the nation makes the transition to expanded use of clean energy technologies.”² The Final Rule also addresses certain IBRs connected to the distribution system that in the aggregate have a material impact on the Bulk-Power System (IBR-DERs).³ Broadly speaking, IBRs are “power electronic devices [used] to change the direct current power produced by generators into alternating current power that is then transmitted on the bulk electric system,”⁴ and they are common to solar, wind, battery storage and fuel cell facilities, among others. Because such resources “respond to grid disturbances differently from traditional [synchronous] generation resources such as hydropower, nuclear, coal or natural gas plants,” FERC determined that they require different Reliability Standards “to ensure IBRs support reliability in the same manner as traditional generation resources.”⁵ We previously covered other FERC actions to address the potential impact of such resources here.

On October 27, 2023, the Federal Energy Regulatory Commission (FERC or the Commission) issued orders on two liquefied natural gas (LNG) export terminal projects sponsored by Rio Grande LNG, LLC (Rio Grande)¹ and Texas LNG Brownsville LLC (Texas LNG)² under development in Brownsville, Texas. The orders reaffirmed FERC’s April 2023 decisions³ finding that the terminals’ authorizations were not inconsistent with the public interest under section 3 of the Natural Gas Act (NGA) after challenges to those decisions were filed in May. The genesis of the April 2023 decisions was a remand ordered by the U.S. Court of Appeals for the District of Columbia (D.C. Circuit) finding that FERC’s initial authorization of the projects in 2019 was legally deficient.