At its November 20, 2014 meeting, FERC issued a policy proposal to facilitate the recovery of the costs associated with improving pipeline safety and reducing emissions. Recognizing the fact that several pipeline safety and environmental initiatives will be facing the natural gas industry in the coming months, FERC suggests that pipelines and customers could work together to develop a tracker (e.g., a surcharge on base rates) that recovers those costs associated with pipeline safety and environmental compliance. Because a modernization and safety tracker could be developed faster than establishing a cost recovery mechanism through the traditional rate case process, FERC reasons that pipelines may be incentivized to undertake the upgrades. (more…)
WE KNOW ENERGY®
Ty Johnson and Kirstin Gibbs
In an order issued on November 20, 2014, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) directs regional transmission organizations and independent system operators (“ISOs”) to file a report on the status of how their market rules address fuel assurance challenges. ISOs have 90 days from the date of the Commission’s order to evaluate the specific fuel assurance challenges they may experience and prepare a report that comprehensively describes the actions they have already undertaken, and/or propose to undertake, in response to their unique fuel assurance concerns. (more…)
Lowell Rothschild and Eric Washburn
In the latest listing driven by a huge July 2011 settlement with environmental NGOs, the U.S. Fish and Wildlife Service earlier today announced it would list the Gunnison sage-grouse as threatened under the Endangered Species Act (ESA). The listing comes in the face of objections from both sides. Colorado’s Governor and both its senators – all Democrats – had worked hard to prevent the listing, while environmentalists warned in advance that they would sue over a threatened listing, demanding that the bird be listed as endangered, not just threatened. (more…)
The message from the South African Department of Energy at the Windaba Conference in Cape Town last week could not have been clearer. In his address during the opening session of the conference, Dr. Wolsley Barnard (Deputy Director General: Energy Programs and Project at the DOE) forced home the point that the South African authorities “…will be enforcing penalties…” for breaches of the mandatory economic development obligations under the South African Government’s Renewable Energy IPP Procurement Programme.
Listening to Dr. Barnard’s address got me thinking. Three years on from its launch has the REIPPP Programme made a real difference to South Africa’s manufacturing and service sectors? The answer quite clearly has to be a yes. The development of the R300-million wind turbine tower factory at the Coega IDZ, the recent announcement by SunPower of the construction of a new 160MW solar panel manufacturing facility in Cape Town and the DOE’s job creation forecasts for construction and operational posts in the renewable energy sector make this apparent. But it did occur to me that there may be some unexpected side effects to the approach being taken by the DOE to this point. (more…)
Tracy London and Tom Swarbrick
Construction law can be something of a dark art – there isn’t a day that goes by where the humble construction lawyer isn’t presented with a bit of a head-scratcher.
Take liquidated damages, for example. It’s clear that an LDs provision shouldn’t seek to penalise the offending party. It’s also clear that LDs should represent a ‘genuine pre-estimate’ of the innocent party’s loss following breach. So until recently, the well-advised client would make a reasonable effort to assess the likely losses as a result of a particular breach, describe them clearly in the contract and keep records showing the parties’ working. And they could rest safe in the knowledge that any court applying English law would be very reluctant to interfere with a commercial agreement on LDs.
Yet a series of recent cases has given lawyers and their clients food for thought. In two cases, LDs provisions were held to be unenforceable and struck down. So are the courts are seeking to adopt a more flexible approach to LDs, reflecting the commercial reality of their use in commercial contracts? (more…)
Martin Stewart-Smith and Paul Jones
The majority of landlocked Uganda’s estimated 6.5 billion barrels of crude oil reserves are destined to be pumped to the East African coast for export (potentially linking up with supplies from Kenya, South Sudan and Ethiopia along the way). While preferred export routes continue to be debated, it is likely that multiple pipelines stretching across the East Africa region will be developed in the near future. The development of such infrastructure will be heavily dependent on project finance. In this article, we consider some key issues affecting international pipeline projects that sponsors and host governments in the East Africa region will encounter. (more…)