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DISCLAIMER: This blog is published for general information only - it is not intended to constitute legal advice and cannot be relied upon by any person as legal advice. While we welcome you to contact our authors, the submission of a comment or question does not create an attorney-client relationship between the Firm and you.

Entries in FERC (22)

Tuesday
Aug012017

“Untethered” Clean Energy Subsidies Survive Post-Hughes Preemption Challenges

Last year in Hughes v. Talen, the Supreme Court struck down a Maryland generator subsidy program, concluding that it had a direct impact on the wholesale energy auctions and was therefore preempted by the Federal Power Act (FPA). Broadly speaking, under the FPA, wholesale energy sales are federally regulated, by FERC and regional grid operators, and retail sales are state regulated. As described by the court, the fatal flaw inherent in Maryland’s program was that it was directly linked to the generator’s participation in the regional wholesale energy (or capacity) auction—it required generators to bid into the wholesale market but guaranteed them a price distinct from the market clearing price, thereby distorting the wholesale market. Critically, however, the court expressly limited its holding, stating: “Nothing in this opinion should be read to foreclose Maryland and other States from encouraging production of new or clean generation through measures untethered to a generator’s wholesale market participation.” (emphasis added)

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Tuesday
Aug012017

The Future of the Kennebunk Dams

On Thursday July 20th, the Board of Selectmen for the Town of Kennebunk held a workshop to gather information regarding the Town’s potential role in the future of three dams along the Mousam River in Kennebunk, Maine.  The Board workshop was centered around a presentation prepared by Verrill Dana attorneys Scott Anderson and Jim Cohen.  During the meeting, Anderson presented four options for the future of the dams, including whether or not to conduct an independent “peer review” of the economics of retaining or abandoning the dams.

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Wednesday
Apr202016

Hughes v. Talen Energy: Supreme Court Strikes Down Maryland Generation Subsidy on Narrow Grounds

On Tuesday, the Supreme Court issued its decision (8-0) in Hughes v. Talen Energy striking down a Maryland program that encouraged additional in-state generation. Hughes is the second decision of the term, following FERC v. Electric Power Supply Association, in which the Court has struggled to clarify the increasingly blurry boundary between state and federal jurisdiction over energy policy. In this case, the Court focused on the precise mechanism of the Maryland program which required load serving entities (LSEs) in Maryland to enter into a 20-year pricing contract with a new gas-fired generator owned by CPV Maryland, LLC (CPV). To understand the Court’s holding, it is necessary to understand a bit about FERC’s capacity auctions.

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Wednesday
Jan272016

“The Rate Is What It Is”: Supreme Court Upholds FERC’s Demand Response Rule 

At oral argument in FERC v. Electric Power Supply Association, the Government argued that the retail rate or price of electricity “is what it is”—exactly the amount charged to the customer, without considering any foregone benefits. On Monday, the Supreme Court agreed with that characterization and upheld FERC’s Demand Response rule, rejecting arguments that the rule exceeded FERC’s authority by regulating retail electric rates that are exclusively the domain of state regulators. But before we get to the merits, some background is in order.

What is Demand Response?

Demand Response (DR) refers to the practice of incenting electricity consumers to reduce their demand for power during times of peak power usage. During these peak times, electricity becomes very expensive to generate as older and more inefficient generators are required to run to meet the high demand.

Grid operators throughout the country are tasked with precisely balancing electricity demand and supply at all times. Historically, these grid operators focused on the supply side of the equation—overseeing markets to ensure there is an adequate supply of generation to meet forecasted demand. Over the last 10-15 years, however, FERC and regional grid operators have learned that by lowering demand, they can reduce wholesale power costs and improve grid reliability.

 

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Wednesday
Oct022013

FERC Approves Modifications and Clarifications to Reliability Standards for Generators

Analysis from guest blogger and Verrill Dana associate Braden Clement. 

On September 19, FERC issued a final rule approving modifications and clarifications to Reliability Standards (the “Standards”) proposed by the North American Electric Reliability Corporation (“NERC”).  NERC is responsible for developing and enforcing Standards throughout North America and is subject to oversight by FERC.  In particular, FERC approved Standards FAC-001-1, FAC-003-3, PRC-004-2.1a, and PRC-005-1-1b.  To access a copy of the final rule, click here.

Taken together, the approved modifications will enhance reliability in two ways: first, by expanding the reach of the Standards to certain generator owners and operators; and second, by adding clarity to existing obligations applicable to protective relay systems on generator interconnection facilities. 

Specifically, FAC-001-1 extends the obligation to document, maintain, and publish facility connection requirements to any generator owner that enters into an agreement to evaluate the reliability impact of interconnecting a third-party facility to its existing facility. 

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Friday
May172013

Energy News Roundup: May 11-May 17

This week in regional energy news …

Friday
Apr122013

Energy News Roundup: April 6-April 12