Monday, August 18, 2014 5:15 pm by Seth Lucia
On August 15, 2014, the U.S. Court of Appeals for the D.C. Circuit (D.C. Circuit) issued an opinion in South Carolina Public Service Authority v. FERC, Case Nos. 12-1232, et al. (consolidated), upholding the Federal Energy Regulatory Commission’s (FERC) Order No. 1000 in its entirety, giving FERC a major win in a case involving 45 petitioners and 16 intervenors.
Authority to Require Participation: In Order No. 888 in 1996, FERC required public utility transmission providers to functionally unbundle their wholesale generation and transmission services and file open-access transmission tariffs to provide non-discriminatory transmission service and to provide the benefits of competitively priced generation. Previously, the D.C. Circuit upheld Order No. 888 in nearly all respects. In this opinion, the D.C. Circuit affirmed FERC’s conclusion that transmission planning affects transmission rates and that FERC has authority under Section 206 of the Federal Power Act (FPA) to require transmission providers to participate in a regional planning process. The Court expressed its view that such a requirement is simply the next step in reforms that began with Order No. 888. The Court also concluded that the statutory directive for “voluntary interconnection and coordination” found in Section 202(a) of the FPA does not bar FERC from requiring regional planning and that Order No. 1000 does not interfere with traditional state authority. (more…)
Category: FERC, Power, Transmission
2:45 pm by Manuel Vera and Andrew Farris
On Monday, August 11, 2014, Mexican President Enrique Pena Nieto signed a package of energy secondary laws passed by the Mexican Congress (the “Legislation”) that will overhaul the Mexican oil and natural gas, petrochemical, and power generation industries. The Legislation includes nine new laws and amendments to several current laws.
The cornerstones of the Mexican oil and gas reforms are the Hydrocarbons Law (Ley de Hidrocarburos) and the Hydrocarbons Revenue Tax Law (Ley de Ingresos Sobre Hidrocarburos). These new statutes regulate, among other items: (i) “entitlements” (asignaciones) granted to state-owned entities, such as Pemex; (ii) the types of exploration and production contracts that will be granted to Mexican and foreign operators as well as joint ventures between certain state-owned companies such as Pemex and private parties; (ii) the rules for the granting of such contracts and execution by the National Hydrocarbons Commission (Comisión Nacional de Hidrocarburos or “CNH”) through a public bid process; and (iv) the regulations for midstream and downstream activities, which will be overseen by the Ministry of Energy (Secretaría de Energía or “SENER”) and the Energy Regulatory Commission (Comisión Reguladora de Energía or “CRE”). (more…)
Category: Midstream, Regional Energy Law, Upstream Energy
Wednesday, August 13, 2014 2:58 pm by Richard Alonso, Jeff Holmstead, Tim Wilkins and Sandra Snyder
On August 12, 2014, the 9th Circuit Court of Appeals overturned a Prevention of Significant Deterioration (PSD) permit issued under the Clean Air Act (CAA) by EPA to the Avenal Power Center. Sierra Club v. EPA, No. 11-73342 (9th Cir. Aug. 12, 2014). The PSD permit authorized the construction of a 600 MW natural gas-fired plant located in California’s San Joaquin Valley. The plant was required to install state-of-the-art pollution controls for all traditionally regulated pollutants, such as nitrogen oxides, particulate matter, and carbon monoxide. The Court vacated the PSD permit because it found it was improper for EPA to issue a PSD permit that did not address new CAA requirements that were promulgated by EPA after the application was submitted.
Although EPA has the authority to grandfather pending applications, it must exercise that authority through regulation by setting an effective date for the new regulation which would make the regulation applicable to permit applications submitted after a given date. When EPA does not address grandfathering in its regulations, the court stated that all PSD permits that are not final prior to the effective date of the new rule must be revised to address any new regulatory requirement, even if the permit had already been through the public comment process. The Court implied that any new assessment would likely need to go through a separate public comment process. (more…)
Category: Air Quality/Climate Change, Courts, Electric, Enforcement, Environmental, Litigation, Midstream, National Energy Law, Power, Shale Development, Upstream Energy
Monday, August 11, 2014 12:49 pm by Michael Weller and Heather Palmer
Spurred by several recent industrial incidents, both onshore and offshore, the U.S. Environmental Protection Agency has announced several potential revisions to its Clean Air Act Risk Management Program (RMP) regulations. The RMP program Request for Information (2014 RMP RFI) contemplates a vast array of changes that could, on the one hand, increase the number of sources regulated, e.g., the addition of ammonium nitrate as a regulated substance; and on the other, increase the costs of those sources currently regulated, e.g., mandatory third-party audits, installation of automated detection and monitoring systems.
Other proposed changes could be controversial or simply difficult for sources to integrate, e.g., mandatory root cause investigations, siting requirements, mandatory disclosure of chemicals and accident history for the facility. At this time, EPA indicates that it is not committed to undertaking a rulemaking and that it is engaged only in information gathering to assess whether changes to the RMP are necessary. Comments on the RFI must be received by October 29, 2014. (more…)
Category: Air Quality/Climate Change, Electric, Enforcement, Environmental, Midstream, National Energy Law, Natural Gas/LNG, Offshore, Power, Shale Development, Upstream Energy
Wednesday, August 6, 2014 9:26 am by Robert E. Pease
On August 5, 2014, the Federal Energy Regulatory Commission’s (FERC) Secretary, at the direction of the Division of Enforcement, issued a Notice of Alleged Violations against Powhatan Energy Fund, LLC, a hedge fund owned by brothers Kevin and Richard Gates. In the Notice, FERC Enforcement alleged that Powhatan’s trader, Dr. Houlian Chen, engaged in Up to Congestion trades in the PJM market that allegedly were the equivalent of wash trades in violation of FERC’s anti-manipulation rule. FERC’s Notices generally reveal little about the matter under investigation. However, in this case we know a great deal about Enforcement’s case because Powhatan itself publically disclosed much of the investigative record. See http://ferclitigation.com/legal-back-and-forth/. It has been Powhatan’s contention that their actions have been transparent and fully consistent with the PJM tariff and FERC’s rules. Nevertheless, in staff’s preliminary findings, dated August 9, 2013, Enforcement alleged that Chen made the wash trades in order to capture millions of dollars from the Margin Loss Surplus Allocation (MLSA). FERC alleged that Powhatan entered the riskless trades in order to boost the volume of its trading thus increasing the MLSA payments. (more…)
Category: Enforcement, FERC, Organized Markets, Power
Monday, July 28, 2014 1:09 pm by Alastair Young, Darren Spalding and Nick Kendrick
The UK Government has today announced the opening of the eagerly anticipated 14th onshore oil and gas licensing round, with applications invited until 2pm on 28 October 2014.
Hundreds of blocks are available in the bidding process. The Government is keen to encourage onshore exploration and drilling and to facilitate the development of a shale industry in the UK.
The previous onshore licensing round was in 2008.
For more information, refer to the Government guidance at: https://www.gov.uk/oil-and-gas-licensing-rounds.
Category: European Energy Law, Shale Development, Upstream Energy