Speaking Energy
As the energy industry continues to grow and change with new technologies, markets and resources, the Speaking Energy blog provides readers with key updates and insights.
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*Thank you to JaKell Larson, 2024 Akin Summer Associate, for her valuable collaboration on this article.
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Interstate oil, liquid and refined products pipelines regulated by the Federal Energy Regulatory Commission (FERC) will soon be able to raise their transportation rates (provided they were set using FERC’s popular Index rate methodology) in the wake of a significant new decision by the District of Columbia Circuit (the D.C. Circuit) in Liquid Energy Pipeline Association v. FERC (LEPA).
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On Wednesday, July 24, 2024, the U.S. House of Representative Committee on Energy and Commerce held a Subcommittee on Energy, Climate, and Grid Security hearing to review the Federal Energy Regulatory Commission (FERC or Commission) Fiscal Year 2025 Budget Request. Members of the Subcommittee had the opportunity to hear testimony from all five Commissioners, including FERC Chairman Willie Phillips and Commissioner Mark Christie, as well as the three recently confirmed commissioners, David Rosner, Lindsay See and Judy Chang. In addition to their prepared remarks, the five commissioners answered questions on FERC’s mandate to provide affordable and reliable electricity and natural gas services nationwide, while also ensuring it fulfills its primary mission of maintaining just and reasonable rates.
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On July 9, 2024, the U.S. Court of the Appeals for the D.C. Circuit held that the Federal Energy Regulatory Commission (FERC or the Commission) erred in ordering refunds for certain bilateral spot market transactions in the Western Energy Coordinating Council (WECC) region that exceeded the $1,000/megawatt-hour (MWh) “soft” price cap for such sales.1 Finding FERC failed to conduct a “Mobile-Sierra public-interest analysis” before “altering” those contracts by ordering refunds, the court vacated FERC’s orders and remanded the case to FERC for further proceedings.2
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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.
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On Thursday, March 21, 2024, the U.S. Senate Committee on Energy and Natural Resources held a full committee hearing to question President Biden’s three nominees to serve as Federal Energy Regulatory Commission (FERC or Commission) commissioners. The three nominees are David Rosner, a FERC Staff Energy Industry Analyst and current Detailee for the Senate Committee on Energy and Natural Resources; Lindsay See, the Solicitor General for West Virginia; and Judy Chang, a managing principal at the Boston-based Analysis Group and former Undersecretary of Energy and Climate Solutions for Massachusetts. If confirmed, the three would serve staggered terms, with Mr. Rosner and Ms. See filling the vacancies created by the departures of former Chairmen and Commissioners James Danly and Richard Glick, and Ms. Chang filling the seat currently occupied by Commissioner Allison Clements, whose term expires on June 30.[1] The three nominees would bring various backgrounds to the Commission with diverse government service at the state and federal levels.
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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
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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.