Interesting developments for the offshore wind market are on the horizon with Vestas today having completed its extensive testing of what will be the world’s most powerful wind turbine – the Vestas V164 – 8 MW with the nacelle weighing in at a massive 390 tons and being 20 metres long. Whilst the prototype is to be installed and tested to ensure reliability and performance in the early part of 2014, a turbine with this capacity is what the offshore wind market has been waiting for, making future offshore wind projects much more commercially viable compared to the current offshore wind farms. With current wind turbines in a majority of operating offshore wind projects currently each having a maximum capacity between 3 MW and 3.6 MW, an 8 MW wind turbine will dramatically change the economics of an offshore wind project given the cost of installation and cost of operation and maintenance of the turbines offshore as well as the savings for infrastructure.
WE KNOW ENERGY®
Charles Nixon, John Riley and Tim Wilkins
As we discussed in an October post, the Texas Commission on Environmental Quality (TCEQ) has proposed rules to create a greenhouse gas (GHG) permitting program for the state of Texas and take over permitting authority from the U.S. Environmental Protection Agency (EPA). Because it hopes to make the transition as quickly as possible, TCEQ is using a streamlined public participation process, which is soon coming to an end. At 2:00 pm on December 5th, TCEQ will hold its only public hearing on the proposal (see notice here). TCEQ will then continue to accept written comments on the rules through December 9th.
If your company would like to see a change to—or particularly supports—some aspect of the proposed rules, it is important to participate in the hearing or submit written comments before the deadline. It is not clear whether these proposed rules will be controversial, but it is possible, and participating during the comment period can help strengthen one’s position before the Commission or a court, should a challenge be brought. If you have any questions about attending the hearing or submitting questions or comments, please feel free to contact any of our Environmental Section members in the Austin office. We will be attending and are happy to assist any way we can.
Heather Corken, Jason Hutt and Michael Weller
Today, the California Department of Conservation (“DOC”) released proposed regulations applicable to oil and gas well stimulation activities in the state. This follows up on the passage of SB 4 back on September 20, 2013, which established the first set of requirements specifically associated with hydraulic fracturing and other well stimulation techniques. Previously, in December 2012, the Division of Oil, Gas and Geothermal Resources (“DOGGR”) released a pre-rulemaking “discussion draft” of regulations applicable to hydraulic fracturing. However, that discussion draft did not trigger the formal rulemaking process and simply acted as a means of engaging stakeholders in the process early on. DOGGR withdrew the discussion draft following the passage of SB 4. (more…)
FERC institutes proceeding to determine whether Idaho Power Company can continue to sell at market-based rates9:54 am by Stephen Hug
On November 13, 2013, the Federal Energy Regulatory Commission (“FERC”) issued an order instituting a proceeding pursuant to Section 206 of the Federal Power Act to determine whether Idaho Power Company’s (“Idaho Power”) market-based rate authority in its home balancing authority area remains just and reasonable. The order responded to Idaho Power’s June 28, 2013 triennial market power analysis for the Northwest region. That submittal indicated that Idaho Power failed FERC’s market share indicative screen when the additional 300 MW of capacity associated with Idaho Power’s recently constructed Langley Gulch power plant was taken into account. In its filing, Idaho Power noted that when preparing its triennial update this summer, it realized that in the summer of 2012, it had not filed a notice of change in status within 30 days of when the Langley Gulch power plant came on-line as required by FERC’s regulations. FERC permits sellers that fail the indicative screens to rebut the presumption of market power associated with failure of the screens through the submission of a delivered price test (“DPT”) analysis. However, Idaho Power explained in its filing that it did not have time to prepare a DPT analysis prior to the June 30, 2013 due date for its triennial filing. Idaho Power submitted the DPT analysis on November 7, 2013. (more…)
Customers Seek to Lower Returns for MISO Transmission Owners and also Challenge Capital Structure and Incentive AddersThursday, November 14, 2013 5:50 pm by Kaleb Lockwood
Adding to a recent spate of complaints filed at FERC seeking to reduce the return on equity (“ROE”) of various transmission owners, on November 12, 2013, several groups composed of large industrial and commercial Midcontinent Independent System Operator (“MISO”) transmission customers together filed a complaint against MISO transmission owners asking for a reduction in the MISO transmission owners’ ROE. With one exception, all MISO transmission owners currently have a base ROE of 12.38%. The complaint seeks to lower the transmission owners’ base ROE over 300 basis points below the current base ROE, to 9.15%.
The law is well settled that in regulated industries, ROEs must be set at levels sufficient to attract capital investment. Transmission owners have responded to the recent complaints seeking ROE reductions by expressing concerns that lower ROEs will result in lower levels of investment in transmission, contrary to FERC’s policy initiatives intended to encourage and sustain transmission investment. (more…)
Lowell Rothschild and Matthew Haynie
Rule Could Have Significant Impact on Infrastructure, Energy and Land Development
On September 18, we blogged about the pending release of a draft rule which would establish the scope of waters subject to the federal Clean Water Act – a rule which could have significant impacts on entities engaged in infrastructure or other land development activities, such as upstream and midstream oil and gas development, highway projects and real estate developers. While still not yet formally proposed, a leaked version of the draft rule has surfaced, providing insight on what the US Environmental Protection Agency and Army Corps of Engineers’ proposed rule will eventually look like. (more…)