Regulatory Updates

Executive Order Signed to Protect “America’s Supply Chains”

Photo by René DeAnda at https://unsplash.com/photos/zfKlCKK-Ql0.

On February 24, 2021, President Biden signed a new Executive Order (EO) concerning “America’s Supply Chains.” The EO has two parts. First, the EO directs an immediate 100-day review, requiring certain federal agencies to assess vulnerabilities in industry supply chains. Of interest to the electricity sector: (1) the Department of Energy is instructed to submit a report identifying risks in the supply chain for high-capacity batteries, including electric-vehicle batteries, and policy recommendations to address these risks; (2) the Secretary of Commerce is tasked with evaluating semiconductor manufacturing; and (3) the Secretary of Defense must identify risks in the supply chain for critical materials, including rare earth elements. Second, the EO calls for an in-depth one-year review of supply chains across industries, including an evaluation of the energy sector industrial base. 

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FERC to Conduct More Examinations into ERCOT and Others Stemming From Extreme Winter Weather Events

The Federal Energy Regulatory Commission (FERC) will be pursuing two examinations concerning market power and electric reliability that were brought about by extreme winter weather in the Midwest United States and Texas.

On February 22, 2021, FERC announced that its Office of Enforcement, Division of Analytics and Surveillance (DAS) would be looking into possible wholesale natural gas and electricity market manipulation that occurred during the extreme cold weather.  On top of the infrastructure issues occurring throughout the prolonged winter weather conditions, prices for natural gas and power surged significantly.  In an effort to keep the power on for consumers, many utilities paid the increased prices.   

The DAS examination into market power will be part of its ongoing market surveillance currently being performed.  DAS is responsible for evaluating daily and monthly trading data from participants and the financial markets as a way of screening natural gas trading hubs and electricity markets in the United States.  From its analysis, DAS ultimately decides if a formal investigation from the Office of Enforcement is necessary.  FERC states that if DAS finds evidence of potential market wrongdoing, the continuing investigations will be non-public.

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FERC and NERC Inquiry into Extreme Winter Conditions Affecting the BPS

Current extreme cold and winter conditions in the Central United States have left millions of Americans without power in Texas, Oklahoma, and Louisiana.  As the cold weather rolled in, residents and businesses increased electricity demand to stay warm.  In addition, the extreme winter conditions caused obstacles to the availability of generation.  As a result, the decreased amount of generation was not able to meet demand in these states, primarily Texas. 

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Rich Glick Named New Chairman of FERC

On January 21, 2021, President Biden named Rich Glick as the new Chairman of the Federal Energy Regulatory Commission (“FERC”).  Glick steps into the position previously held by James Danly.  Chairman Glick has served as a Commissioner at FERC since his appointment in November 2017.  He previously served as general counsel on the Senate Energy and Natural Resources Committee for the Democrats.  His term runs through June 30, 2022.

For more information, please see FERC’s announcement and bio.

FERC Issues Inquiry Regarding Hydroelectric Financial Assurance

On January 19, 2021, the Federal Energy Regulatory Commission (“FERC”) issued a Notice of Inquiry (“NOI”) regarding its practices for requiring financial assurance measures in hydroelectric licenses.  FERC issues the NOI based on the observation that certain projects are not in compliance or cannot maintain compliance with their license conditions, particularly in connection with safety and environmental measures.  The failure of the Edenville and Sanford dams in 2020 prompt FERC to consider measures to assure that financial resources are available to ensure public safety.  Possible measures for which FERC seeks comment include posting bonds, obtaining insurance, or instituting industry-wide remediation funds.

FERC’s NOI can be found here.  Public comment can be submitted 60 days after publication of the NOI in the Federal Register.

For more information, please contact Joshua Adrian or Donald Clarke.

A New Administration Changes Energy Priorities

The inauguration of Joe Biden as President on January 20, 2021 brings changes to energy and environmental policy and priorities in Washington.  Aside from the anticipated reentry of the United States into the Paris Climate Agreement, President Biden’s plan for a clean energy future promises significant implications for the energy industry.  Key features of the plan include investment in energy infrastructure and transformation of the automobile industry toward electric vehicle production. 

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FERC Issues Order Seeking Reports on Hybrid Resources

During its January 19, 2021 Open Meeting, the Federal Energy Regulatory Commission (“FERC”) approved an order in Docket No. AD20-9, where it recognizes the ongoing initiatives Regional Transmission Organizations and Independent System Operators (“RTO/ISO”) are undertaking to address hybrid resources. The order asks RTO/ISOs to submit reports within six months regarding four topical areas: terminology, interconnection, market participation, and capacity evaluation. In his remarks, Commissioner Neil Chatterjee expressed his support for continued work on hybrid resources, mentioning that expanding market access to storage resources in Order No. 841 was a foundational element of his agenda as the Chair of FERC. Commissioner Allison Clements commented that this order will further FERC’s efforts to assess the technical and market issues affecting hybrid resources in particular. The order was approved as part of the consent agenda.

The Order may be found here.

For more information, please contact Peter Scanlon, Sean Neal or Lauren Perkins.

Drew Solar Project Completes Project Financing

DWGP congratulates NTUA and D.E. Shaw Renewables Investments on the closing of financing for the 100 MW Drew Solar Project that will provide energy to Sacramento Municipal Utility District. The project located in Imperial Valley, CA will begin construction this spring and will provide an employment preference for qualified Navajo renewable energy employees.  The project brings much needed revenue to NTUA for the electrification of homes on the Navajo Nation.  DWGP continues to support NTUA on energy transactions, such as the 100 MW Drew Solar project, to identify resources for NTUA in unique and creative ways to meet NTUA's goal of bringing electricity to all homes in the Navajo Nation.  For more information, please contact Derek Dyson.