Energy Legal Blog

In a big win for FERC and supporters of electricity markets, on January 23, the US Court of Appeals for the DC Circuit rejected Connecticut Attorney General Richard Blumenthal’s challenge to New England’s market design.  The Attorney General and a group of New England industrial customers challenged FERC’s decisions approving a temporary “hybrid” market design in New England, under which generators are compensated for sales into the market on different bases—some at regulated cost-based rates and others at market prices.  This interim market structure has been in place during the ISO New England’s transition to competitive wholesale power markets, which is expected to be fully implemented in 2010. (more…)

In the waning days of 2008 a three-judge panel of the US appeals court ended months of uncertainty surrounding the regulation of power plant emissions of sulfur dioxide (SO2) and oxides of nitrogen (NOx) when it ruled that the EPA’s Clean Air Interstate Rule (CAIR) could remain in effect until the Agency develops a lawful alternative.  The same court last July vacated the tradable emission allowance scheme that CAIR has implemented since 2005 as “fatally flawed” because it could not assure compliance with the Clear Air Act directive that prohibits sources within one State from contributing significantly to non-attainment with national ambient air quality standards (NAAQS) in any other State.  In reliance on CAIR owners of electric generating units in 28 eastern states and the District of Columbia had spent many millions of dollars to acquire emissions allowances in compliance with CAIR requirements. (more…)

In a policy memorandum that the Obama administration will likely revisit, current EPA administrator Stephen Johnson announced December 18 that Clean Air Act (CAA) operating permits for new or modified power generating plants need not be conditioned on the developer implementing best available control technology (BACT) to reduce plant emissions of carbon dioxide (CO2) and other greenhouse gasses that cause climate change.  The controversial memorandum responds to a November 13 decision of the US Environmental Appeals Board that validated in part the Sierra Club’s objection to EPA Region 8’s failure to impose greenhouse gas BACT on its issuance of an operating permit to a proposed coal-fired power station in Bonanza, Utah.  The CAA program for the prevention of significant deterioration (PSD) of air quality requires BACT in power plant operating permits for emissions of “each pollutant subject to regulation under” the CAA.  Administrator Johnson’s memorandum concludes that CO2 is not subject to regulation under the CAA and therefore does not trigger BACT under the PSD program. (more…)