FERC Proposes New Treatment of Fuel Cells Under PURPA

Comments for FERC’s Notice of Proposed Rulemaking on Fuel Cell Energy Output (“NOPR”) are due tomorrow, November 25, 2020. [1] In the NOPR, FERC proposes to modify its regulations for qualifying facility (“QF”) status under the Public Utility Regulatory Policies Act of 1978, as amended, (“PURPA”) to allow Solid Oxide Fuel Cell systems with integrated natural gas reformation equipment to be eligible for PURPA QF status. This post provides an overview of the NOPR itself. The Bracewell team will follow up next week with an overview of the comments that are posted in this docket. QF owners enjoy...

U.S. Chemical Safety Board Issues Factual Update on TPC Group Port Neches Facility

Today, the CSB issued an interim factual update on its investigation of the November 27, 2019 explosion at TPC Group's Port Neches facility in Texas. The November 2019 explosion resulted in millions of dollars of estimated loss, shut down the area for several days, and a fire that burned for months. The facility manufactured 1,3-butadiene and raffinate-1, and the facility was subject to OSHA's process-safety-management ("PSM") standard and U.S. EPA's risk-management-plan program ("RMP"). Based upon the CSB's investigation so far, the explosion may have occurred from a loss of containment in...

10th Circuit expands PSM coverage

The Tenth Circuit Court of Appeals (covering Oklahoma, Kansas, New Mexico, Colorado, Wyoming, and Utah) issued an opinion on Tuesday (10/27/2020) that expands the applicability of OSHA’s process-safety-management standard to interconnected processes—even when the interconnected process does not contain any highly hazardous chemicals. The Tenth Circuit reached its decision based upon a plain reading of the regulatory definition of “process.” In doing so, the court also rejected Wynnewood Refining’s argument, under Kisor v. Wilkie , that the court should consider the “text, structure, history,...

FERC Issues Settlement Order Reaffirming “Gaming” Prohibition in Power Markets

Last week the Federal Energy Regulatory Commission (FERC) issued an Order Approving Stipulation and Consent Agreement involving High Desert Power Project, LLC (High Desert) and Middle River Power LLC. (Middle River) to resolve allegations of market manipulation in the California Independent System Operator (CAISO) market. The settlement is noteworthy because it involved allegations of market manipulation that were completely absent of any attempt to influence market prices or to send false signals to the market. This instead is one of the purest examples of FERC taking the position that its...
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FERC Proposes Policy Statement Encouraging RTOs/ISOs to Develop Rules Incorporating State Determined Carbon Prices

On October 15, 2020, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) issued a Proposed Policy Statement regarding carbon pricing in organized wholesale electricity markets. In short, the statement would clarify that the Commission has “jurisdiction over RTO/ISO market rules that incorporate a state-determined carbon price.” The Commission also proposes that it be Commission policy “to encourage efforts to incorporate a state-determined carbon price in RTO/ISO markets.” Commissioner Danly dissented in part, agreeing that FERC has jurisdiction “to entertain section 205...

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