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Entries in Generator (2)


“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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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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