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.

We are pleased to share a recording of Akin’s recently presented “FERC Order No. 2023-A: What’s New and What’s Next?” webinar, along with the program materials.

The Federal Energy Regulatory Commission (FERC or the “Commission”) recently issued Order Nos. 896 and 897 (collectively, the “Reliability Orders”),¹ which are two final rules designed to bolster electric grid reliability during extreme heat and cold weather events that “may cause unacceptable risk to life and economic harm,” especially during periods of unexpectedly high demand on the Bulk-Power System.²

We are pleased to share a recording of Akin’s recently presented “FERC’s Interconnection Rule: What’s In, What’s Out and Does It Matter?” webinar, along with the presentation materials.

On Thursday, May 4, 2023, the U.S. Senate Energy and Natural Resources Committee, led by Chair Joe Manchin (D-WV) and Ranking Member John Barrasso (R-WY), held a Full Committee Hearing to Conduct Oversight of the Federal Energy Regulatory Commission (FERC). All four sitting FERC Commissioners, including Acting Chairman Willie Phillips, James Danly, Allison Clements and Mark Christie, testified before the Committee, with most of the Committee members present. The reliability of the U.S. power grid, and FERC’s role in designing markets and approving projects that promote reliability, was a primary focus of the hearing. Senators Manchin and Barrasso, who both hail from coal-producing states, elicited testimony from all four Commissioners that the elimination of coal-fired generation would hinder grid reliability.  The Commissioners also agreed with the Senators’ contentions that reliability provided by coal-fired and natural gas-fired generation cannot currently be replaced with renewable generation. Commissioner Phillips also testified that FERC must be resource neutral and agreed with questions from Senator Barrasso that delayed natural gas pipeline projects undermine efforts to integrate wind and solar facilities into the grid. Commissioner Danly explained that the operational characteristics of thermal generation resources support frequency and voltage in a manner that intermittent resources currently do not.  Commissioner Christie, consistent with comments he has made during FERC’s open meetings, testified that retirements of dispatchable resources, not the addition of renewable energy resources, threatened grid reliability. The Senators also sought follow up on FERC’s natural gas pipeline certification policy, which was the subject of a heated oversight hearing in March 2022, and for information on hydropower licensing reform.

For the fourth straight meeting of the Federal Energy Regulatory Commission (FERC) and the fourth since Willie L. Phillips was appointed its acting Chair, an order aimed at improving the reliability of the nation’s electric grid was placed atop FERC’s agenda. At the most recent FERC open meeting on April 20, 2023, FERC issued Order No. 893—Incentives for Advanced Cybersecurity Investment—which permits certain public and non-public utilities to seek incentive-based rate treatment for their eligible cybersecurity investments.¹As discussed further below, as a result of Order No. 893, transmission owning utilities will now have the ability to make a filing to seek to recover the costs of their voluntary investments in cybersecurity capabilities.

In February 2023, the U.S. Department of Energy (DOE) released its West Coast Offshore Wind Transmission Literature Review and Gaps Analysis (“Transmission Review”) aimed at identifying areas where additional transmission studies will be required to support the development of offshore wind projects off the coasts of California, Oregon and Washington.¹ DOE followed up the release of its Transmission Review with an announcement that it would be conducting a new 20-month West Coast Wind Transmission Study (“Transmission Study”), which will provide a roadmap for developing the transmission infrastructure necessary to eliminate the transmission constraints currently limiting offshore wind development along the west coast.² Given the Biden administration, California and Oregon’s aggressive offshore wind goals and the fact that existing onshore transmission is insufficient to accommodate these goals, the Transmission Review and Transmission Study are likely to play a key role in planning for the build-out of transmission necessary to deploy major west coast offshore wind projects.