On July 7, the Federal Energy Regulatory Commission (FERC) approved a stipulation and consent agreement between FERC’s Office of Enforcement, the North American Electric Reliability Corporation (NERC) and Arizona Public Service Company (APS) resolving FERC and NERC’s joint investigation into APS’s involvement in the September 8, 2011 Southwest Blackout. The Southwest Blackout was a system disturbance in the Pacific Southwest that affected transmission in Arizona, California and Mexico, and ultimately caused a complete blackout of San Diego. FERC and NERC found that APS violated certain of the Transmission Operations (TOP) group of NERC Reliability Standards, and that these violations resulted in cascading outages in which 2.7 million customers, or approximately 5 million people, lost power for several hours. FERC and NERC concluded that APS failed to prepare for this type of event by not performing a unique day-ahead study for September 8 and by not coordinating its day-ahead studies with neighboring transmission operators, including the Imperial Irrigation District and the California Independent System Operator. APS has neither admitted nor denied the violations in the stipulation and consent agreement. (more…)
WE KNOW ENERGY®
Robert E. Pease and Caitlin Tweed
On June 30, 2014, the New York State Court of Appeals, the highest court in the state, held that municipalities can effectively “zone out” oil and gas operations by passing zoning ordinances that ban oil and gas production activities, including hydraulic fracturing, within municipal boundaries. The court rejected claims that the state’s Oil Gas and Solution Mining Law (OGSML) preempts efforts on behalf of local authorities to ban hydraulic fracturing operations.
In 2011, the Town of Dryden, New York banned hydraulic fracturing by passing a zoning ordinance that prohibited “all activities related to the exploration for, and the production or storage of, natural gas and petroleum.” Norse Energy challenged the ordinance, arguing that the Town of Dryden lacked authority to prohibit natural gas exploration and extraction activities because the OGSML preempts local zoning laws that curtail energy production. The lower court concluded there was no evidence of express or implied preemption in the OGSML. (more…)
Sandra Snyder, Richard Alonso, Jeff Holmstead and Charles Nixon
On Monday, June 23, the U.S. Supreme Court issued its long awaited decision in UARG v. EPA, the case that questioned EPA’s authority to require stationary sources to obtain Prevention of Significant Deterioration (PSD) and Title V air permits for greenhouse gases (GHGs). Specifically, the Court considered: (1) whether a stationary source can be required to obtain a PSD or Title V air permit based solely on its potential to emit GHGs and (2) whether sources that have to obtain PSD and Title V permits based on their potential to emit traditional criteria pollutants (so called “anyway sources”) must also obtain a permit limit based on the Best Available Control Technology (BACT) for controlling GHG emissions. Ultimately, the Court held that GHG emissions alone cannot trigger an obligation to obtain a PSD or Title V permit, but that EPA can require a source to have a BACT limit for GHGs in its PSD permit if the source is required to obtain a PSD permit for any other pollutant. (more…)
Alastair Young, Darren Spalding and Nick Kendrick
Energy Minister Michael Fallon took the opportunity on 24 June 2014 at the UK Shale Conference to cite the energy security crises in the Ukraine and Iraq as further reason for the UK to focus on shale gas and oil exploration.
In the latest step towards the development of the UK shale industry, revisions to petroleum licence Model Clauses will be implemented to accommodate the practicalities of fracking compared with recovery of conventional resources. Specifically, and recognising that shale plays may cover vast areas (see, for example, the Bakken formation in North America and the Bazhenov formation in Russia), existing rules relating to operations and retention of acreage will be amended to allow greater flexibility for unconventional resource development. (more…)
Stephen Hug and Serena Rwejuna
On June 19, 2014, the Federal Energy Regulatory Commission (“FERC” or “Commission”) issued a Notice of Proposed Rulemaking (“NOPR”) proposing to revise its standards for evaluating applications to sell energy, capacity, and ancillary services at market-based rates, as set forth in Order No. 697 and subsequent orders. FERC’s revisions have two primary goals: (1) to streamline the horizontal and vertical market power analyses that public utilities are required to submit when filing an application for market-based rate authority or a triennial market power update; and (2) increase the transparency of information that sellers report to FERC as part of the market-based rate process, including the seller’s affiliates and corporate structure and its interest in generation and transmission assets. (more…)
Bracewell & Giuliani
Category: Air Quality/Climate Change, Courts, Crude and Products, DOE, Electric, Enforcement, Environmental, Litigation, Midstream, National Energy Law, Natural Gas/LNG, Offshore, Power, Regional Energy Law, Renewable Energy/Cleantech, Shale Development, Transmission, Upstream Energy