FERC Issues Landmark Order on Distributed Energy Resources

The Federal Energy Regulatory Commission (“FERC” or “Commission”) issued a landmark final rule, Order No. 2222 , at its September 17, 2020 open meeting that aims to remove barriers for distributed energy resources (“DER”) to participate in wholesale markets regulated by FERC through aggregators. As defined by FERC, DER is “any resource located on the distribution system, any subsystem thereof or behind a customer meter.” [1] DER, thus, refers to resources that provide electricity near the point of use as opposed to centralized generation sources from utility-scale power plants that are often...

FERC Redefines QF Eligibility Requirements

On September 1, 2020, the Federal Energy Regulatory Commission (“FERC” or “Commission”) issued an order breaking with decades of precedent regarding how it will determine whether a renewable resource is eligible for certification as a qualifying small power production facility (“QF”) pursuant to the Public Utility Regulatory Policies Act of 1978, as amended (“PURPA”). [1] The result of the Commission’s order is that renewable resources will no longer have the ability to qualify for QF status by voluntarily limiting their output to comply with the 80 MW cap on small power production facilities...

FERC Staff Report on High Voltage Transmission Development to Congress

On Friday, August 7, 2020, Federal Energy Regulatory Commission (“FERC”) Staff sent a report to Congress examining the “barriers and opportunities for high voltage transmission.” FERC Staff prepared this report in accordance with the Congressional directive contained in the 2020 Further Consolidated Appropriations Act. 2020, Pub. L. No. 116-94 (Dec. 20, 2019). The report reviews the relevant studies, analyses, FERC orders and polices, and other regulations that have an effect on the construction and development of high voltage transmission lines in the U.S. [1] The primary thesis of the...
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Predictable unpredictability: stranded assets and the scope for disputes under PSCs

Summary In the current climate, many exploration and production companies are looking to reduce capital expenditure and to streamline their operations. They are also reassessing their demand and price forecasts and considering the impact on their balance sheets. In this article we consider how the desire of contractor parties to reduce costs on the one hand, and the wish of producing states to maximise returns on the other, has the potential to increase disputes under production sharing contracts, in particular in connection with the minimum work and expenditure obligations. An unpredictable...

FERC Finalizes Reforms to PURPA Regulations

On July 16, 2020, the Federal Energy Regulatory Commission (“FERC” or “Commission”) issued Order No. 872 , a final rule that the Commission explains is intended to implement its statutory mandate to update rules promulgated pursuant to the Public Utility Regulatory Policies Act of 1978 (“PURPA”). [1] The rule will become effective in late November. [2] The changes generally restrict the ability of the owners of Qualifying Facilities (“QFs”) to access some of the more favorable commercial terms mandated by Commission policy previously in place for several decades. As background, PURPA...
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