Recently in Federal Energy Regulatory Commission Category

LEO Still Roars: FERC Declares Montana PURPA Rules Illegal

March 21, 2014

After the Federal Energy Regulatory Commission's ("FERC") recent lawsuit against the Idaho Public Utilities Commission ended in something of a whimper, many industry observers speculated that FERC would retreat from aggressively challenging states that attempt to unduly restrict the rights of power sellers on the Public Utility Regulatory Policies Act of 1978 ("PURPA"). A long-awaiting FERC decision, issued yesterday, suggests this speculation may have been premature. The decision declares that Montana's PURPA program, which requires many PURPA-eligible projects to win irregularly-scheduled competitive bidding processes and also imposes a 50-MW limit on wind generation acquired under PURPA, does not comply with FERC's "legally enforceable obligation" or "LEO" rules. Hydrodynamics, Inc., 146 FERC P 61,193 (issued March 20, 2104).

The controversy centers on how to interpret PURPA's basic mandate, which requires utilities to purchase power from PURPA-eligible generators, called "Qualifying Facilities" or "QFs", at avoided-cost rates. Generally, QFs are small, renewable generators owned by independent power producers. The law was designed to help non-utility developers overcome barriers to entry in the power generation market created by vertically-integrated utility monopolies. Hence, a basic requirement of FERC's PURPA rules is that, if an independent producer presents a utility with a PURPA-eligible contract, it creates a LEO, requiring the utility to honor the contract, even if the utility refuses to sign the contract. This prevents utilities from defeating PURPA's intent by dragging their feet on signing contracts that otherwise meet all PURPA requirements.

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Transmission Terrorism: As Details of Substation Attack Come to Light, Senators Call for Action

February 7, 2014

Just before 1 a.m. on April 16, 2013, as-yet unidentified assailants launched an attack on the Metcalf substation in Silicon Valley. The attack lasted nearly an hour, disabling ten high-voltage transformers and three high-voltage transformer banks. Occurring just hours after the Boston Marathon bombings, the attack garnered little press coverage at the time and, as a federal investigation dragged on, details were slow to emerge. Beginning with an article published in Foreign Policy magazine in late 2013, information suggesting that the attack may have been the work of terrorists rather than vandals has started to come to light. In response to these revelations, group of four U.S. Senators today sent a letter to federal regulators calling for swift action to address the threat.

Earlier this week, the Wall Street Journal published a long article providing many details of the attack. In the article, former Federal Energy Regulatory Commission Chairman Jon Wellinghoff noted several pieces of evidence suggesting that the attack was carefully orchestrated. For example, before the attack began, someone lifted a large cover off an underground vault and cut communications cables, knocking out communications in the area around the substation and interfering with emergency response. More than 100 empty shell cases, likely from AK-47 assault rifles, were found in the area around the substation. None had fingerprints and military experts found small piles of rocks that may have been left by an advance scout to mark the best vantage points for the attack. The number of shell cases and the fact that the vault cover probably could not have been lifted by a single person suggest that multiple individuals were involved in the attack. Many of these details were corroborated in subsequent accounts from media outlets such as National Public Radio and Bay Area newspapers.

Continue reading "Transmission Terrorism: As Details of Substation Attack Come to Light, Senators Call for Action" »

Western PURPA War Update: Retreats, Advances, But Little Clarity

February 4, 2014

As we discussed last summer, the expansion of renewable energy generation, especially wind generation, has produced an escalating conflict between the Federal Energy Regulatory Commission ("FERC") and several Western states over the application of the Public Utility Regulatory Policies Act ("PURPA"). In recent months, at least one major conflict has been resolved, while other conflicts continue to develop. While future developments may depend upon whether newly-nominated FERC Chairman Norman Bay adopts the aggressive enforcement policy of his predecessor, Jon Wellinghoff, recent action provides some hints as to the future legal landscape.

PURPA is a 1978 law that, among other requirements, mandates that utilities purchase power produced by smaller renewable generators. Recent conflicts have arisen over PURPA's basic mandate, which requires utilities to purchase power from PURPA-eligible generators, called "Qualifying Facilities" or "QFs", at avoided-cost rates. Conflicts have also arisen from efforts to square PURPA with recent industry developments, such as ownership of Renewable Energy Credits and integration of variable renewable resources..

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New FERC Chairman: President Obama Nominates Norman Bay, Director of FERC Office of Enforcement

January 30, 2014

Today, President Obama announced that he will nominate Norman Bay to become the next Chairman of the Federal Energy Regulatory Commission ("FERC"). Mr. Bay currently directs FERC's Office of Enforcement. In that role, he has been the architect of a substantial ratcheting up of FERC's enforcement role. For example, under his watch, the Office of Enforcement has "grown adult teeth," aggressively pursued charges of market manipulation, obtaining, among other significant results, a settlement of $410 million against the energy trading arm of JP Morgan Chase.

Prior to his FERC career, Mr. Bay had a long career in the Justice Department, including a stint as the U.S. Attorney for New Mexico in 2000-01. Mr. Bay then taught at the University of New Mexico law school before moving to FERC in 2009.

This is President Obama's second attempt at replacing recently-departed FERC Chairman Jon Wellinghoff. The President's first nomination, of former Colorado PUC Chairman Ron Binz, turned into a political fiasco when, amid charges of pro-renewables "activism," Mr. Binz failed to achieve majority support in the Senate Energy Committee and was forced to withdraw his nomination. Because Mr. Bay has little track record in this area, his nomination appears calculated to avoid similar controversy.

If confirmed, Mr. Bay will take over the Chairman's mantle from current Commissioner Cheryl LaFleur, who has been acting Chair since Mr. Wellinghoff's departure. Confirmation is likely to take at least several months and could take longer if, like several recent FERC nominations, it becomes bogged down in partisan disputes and poltical gamesmanship.

"The California ISO-PacifiCorp Energy Imbalance Market Experiment: Can Public Power Avoid Assimilation?" Eric Christensen Publishes Article in January NWPPA Bulletin

January 28, 2014

We're proud to announce that GTH partner Eric Christensen has published an article in the January 2014 Northwest Public Power Association Bulletin. The article is available electronically here. We've inserted the text below:

Regulatory Update: The California ISO-PacifiCorp Energy Imbalance Market Experiment: Can Public Power Avoid Assimilation?
By Eric Christensen, Partner Gordon Thomas Honeywell

PacifiCorp and the California ISO are now cooperating to create an Energy Imbalance Market ("EIM") encompassing their collective service territories, which stretch from Utah to Southern California. For public power managers who follow "Star Trek", this development bring visions of the Borg, perhaps the most frightening foe dreamed up by the imaginative writers of "Star Trek: The Next Generation." The Borg is a half-technological, half-biological alien race with a collective hive-mind. With machine-like implacability, the Borg assimilates all other intelligent species, turning them into cyborgs without independent thought. When the heroic Captain Picard is captured and assimilated, and programmed to instruct the human race "you will be assimilated, resistance is futile," all hope appears lost. Development of the EIM forces public power to consider whether assimilation into the ISO and its mind-numbingly complex system of regulations and "structured" markets, is inevitable, whether resistance is futile, and what can be done to protect core public power values.

As envisioned in the PacifiCorp-ISO scheme, the EIM would create a short-term market for balancing and regulating reserves, scheduled every 15 minutes and dispatched at 5-minute intervals. The core functions of the EIM would be provided by the ISO's automated 15-minute market. Dispatch would be optimized across the footprint of the Balancing Area Authorities ("BAAs") participating in the EIM, principally as a means of optimizing the use of balancing reserves to integrate wind generation and other intermittent resources. The PacifiCorp-ISO EIM is designed to allow other BAAs to easily join, with reduced balancing costs held out as an incentive. It is almost certain that NV Energy, the IOU serving Nevada, will join the EIM once regulators approve its sale to Warren Buffet's business empire, making it part of the same corporate family as PacifiCorp. It is easy to anticipate that other BAAs in the West might follow suit. The assimilation of BAAs across the West makes the assimilation of public power seem all the more inevitable.

It now appears nearly certain we will see some form of EIM in the West. Public power should take proactive steps to prevent assimilation, to achieve a peaceful co-existence with the EIM, and, ideally, to move the EIM in a direction that benefits public power. To achieve these goals, public power will need to engage actively in the ongoing PacifiCorp-ISO process and the parallel Northwest Power Pool process. Public power should also consider creative structural solutions that can both insulate us from the problems of an EIM and allow us greater control of our own destiny.

Assimilation by the ISO creates a number of problems for public power. These include, for example, "mission creep," the concern that an EIM would establish a beachhead for a much intrusive entity, such as a west-wide RTO long opposed by public power. Similarly, there is concern that the EIM will lead toward substantially increased regulation by the Federal Energy Commission ("FERC"), particularly over the Bonneville Power Administration.

Two examples demonstrate the potential problems. First, Southern California public power entities operating within the California ISO have been subject to FERC regulation of their transmission rates where it was adjudged that their rates were an element of the ISO's FERC-jurisdictional rates. Second, attempts by both Maryland and New Jersey to deal with the inadequacies of the PJM market, which lacks a coherent mechanism for load-serving entities to secure long-term power supplies, have recently been struck down by federal courts as inconsistent with FERC's exclusive jurisdiction over the wholesale power market. Thus, experience with other RTO/ISO markets suggests that expansion of the EIM to a west-side RTO could create both greater FERC jurisdiction over western public power entities and undermine the ability of public power to secure long-term power supplies. These outcomes are, of course, antithetical to public power's core value of local control and its primary mission of assuring reliable and economical power to public power customer-owners.

The problem of expanded FERC jurisdiction is, in light of recent events, a particular concern with respect to Bonneville Power Administration ("BPA"). If BPA joins the EIM as an active participant, FERC may well assert that the rates it charges for power dispatched into the EIM are a component of FERC-jurisdictional wholesale rates charged by the EIM. This would subject BPA to greater FERC jurisdiction, shifting the focus of control over the agency toward Washington, DC, and away from the Pacific Northwest. And it may provide a lever for FERC to exert greater pressure on BPA to move toward a west-wide RTO.

As discussed in my May 2013 Bulletin article, the risks of mission creep and expanded FERC jurisdiction can be limited by including specific safeguards in the documents governing the EIM. In this article, I propose additional safeguards, including a publics-only EIM and additional measures that should be included in the EIM's governing documents.

By moving aggressively to create its own EIM with membership limited to public power entities, public power can create a structural mechanism to limit both damaging proposals from the EIM and FERC jurisdiction over BPA and other publicly-owned utilities. Fundamentally, the proposed structure would bring together public power utilities, including but not necessarily limited to publics operating BAAs, to pool regulation and balancing reserves and to interact with the PacifiCorp-ISO EIM.
A publics-only EIM would have several advantages over an EIM with mixed public and IOU participation. Perhaps most importantly, the publics-only structure would create an attractive option for BPA, capturing most or all of the advantages that an EIM might create for BPA, but creating a bulwark against expanded FERC jurisdiction over the agency.

In addition, the publics-only EIM would keep public power's fate squarely in its own hands. Because FERC generally has no authority over public power, a publics-only EIM will be able to resist top-down mandates from FERC. If FERC attempts to force a publics-only structure into an expanded mandatory market along the lines of a West-wide RTO, the publics can resist without the same fear of regulatory consequences that would be inherent in an EIM where FERC-jurisdictional IOUs are participants.

Similarly, when faced with the question of adding new functions that would move the EIM toward a full-scale RTO, a publics-only RTO can consider adding new functions on the basis of their own merits, without concern that mandates from FERC would force their hand. Thus, this structure allows public power greater control of its own fate, limiting the extent to which FERC can use its expansive jurisdiction over IOUs as a lever to force its will on the West.

As currently planned, the EIM will operate using the ISO's 15-minute market system. This creates the danger that the ISO will become the default operator of the EIM across the West. With this underlying market structure, ensuring that public power, especially public power entities operating outside California, have an adequate voice in the EIM's operation becomes a challenge.

PacifiCorp and the ISO propose a "Transition Committee" to move toward an independent governing structure for the EIM, but it is not clear the proposed structure would result in fully representative governance. The Transition Committee would be composed of seven members, but, apart from EIM participants, there is no requirement that any particular segment of the industry be represented. This is particularly a problem for public power utilities without BAAs, which are likely to ultimately foot the bill for EIM costs but will not directly participate. And the long-term governance structure of the EIM is still to be developed. This process merits public power's careful attention.

In addition, public power should insist on a "Circuit Breaker" that would require the EIM to suspend operations if there are indications that the market is being manipulated or is otherwise functioning improperly. Circuit breakers of this type are a common feature of most commodity markets. When there are indications that a market participant is attempting to "corner" the market in particular commodity or is otherwise manipulating market prices or outcomes, the circuit breaker kicks in and trading is suspended in that market until appropriate measures are put in place to end the market abuse and make whole those market participants who have suffered from the manipulation.

A circuit breaker is particularly important for the EIM because credible concerns have been raised about market power in the transmission markets covered by the EIM and because the cost-benefit analyses performed so far suggest, at best, modest benefits for the EIM. It is simply not worth the risk of repeating the disaster of the 2000-01 Enron crisis in order to obtain these relatively modest benefits. A circuit breaker would provide market participants with the kind of immediate protection that was lacking in 2000-01, when Western public power waited for more than a year for FERC to take meaningful action to end widespread manipulation and dysfunction of the power markets, which cost hundreds of thousands their jobs and reduced regional economic output by tens of billions of dollars.

When all hope of avoiding assimilation by the Borg appears lost, Star Fleet throws all its remaining ships into a blockade around the inner Solar System. With some clever last-minute thinking by the crew of the U.S.S. Enterprise, the Borg's invasion is stopped and the human race is saved from assimilation. In the same way, the measures suggested here can create a blockade that protects core public power values, and prevents assimilation into FERC and the ISO.

Eric Christensen to Speak at 19th Annual Buying & Selling Electric Power Conference

January 7, 2014

Please join us on January 13 and 14, 2014, for the 19th Annual Conference on Buying and Selling Electric Power in the West. The conference brings together leading energy attorneys, expert consultants, industry executives, government officials, and many others to discuss cutting-edge issues affecting the electric industry in the West.

On January 14, Eric Christensen, Chairman of GTH's Energy, Telecommunications and Utilities practice group will present a lecture on Columbia River Treaty, the current status of the treaty, and how future changes are likely to affect electric power production and transmission in the Pacific Northwest.

We look forward to seeing you there.

Cajun Christmas Surprise: Louisiana Electric Cooperative Successfully Defends NERC Deregistration

December 20, 2013

Yesterday the Federal Energy Regulatory Commission ("FERC") reaffirmed its July order (discussed here) ordering the North American Electric Reliability Corporation ("NERC") to remove Southeast Louisiana Electric Cooperative Association ("SLECA") from its registry of entities subject to electric reliability regulation. Barring appeal by FERC, SLECA is the first small utility company to successfully deregister and thereby to remove itself from often onerous reliability compliance burdens.

In 2008, SLECA voluntarily registered with NERC as a "Distribution Provider" and a "Load-Serving Entity," thereby becoming obligated to comply with a significant number of NERC Reliability Standards. Later, SLECA realized it had registered in error and sought to remove itself from the NERC registry. NERC refused to deregister SLECA. SLECA appealed NERC's decision to FERC, and FERC in July rejected NERC's position and concluded that SLECA should not be registered, primarily because it is not "directly connected to" the Bulk Electric System, as required by the NERC Statement of Compliance Registry Criteria ("SCRC").

Continue reading "Cajun Christmas Surprise: Louisiana Electric Cooperative Successfully Defends NERC Deregistration" »

With ISO Vote, Energy Imbalance Market Begins to Take Shape

November 24, 2013

The California Independent System Operator's ("Cal-ISO") Board of Governors recently voted to move forward with a proposed Energy Imbalance Market ("EIM"), with the aim of encouraging Balancing Authority Areas ("BAAs") from across the West to participate in real-time energy imbalance market operated by the ISO. The market design approved by the Cal-ISO Board of Governors is scheduled to begin operation in October 2014. Consistent with an earlier agreement, PacifiCorp and the Cal-ISO would be the initial participants, but the market design approved last week is meant encourage the West's other BAAs to join the EIM. Ultimately, the aim is to create optimal real-time dispatch of generation resources across the EIM footprint, and thereby to reduce dispatch costs and improve the region's ability to integrate variable renewable resources like wind and solar into the electric system.

Under the Cal-ISO's plan, the EIM will be integrated into the Cal-ISO's real-time market. The ISO is now in the process of implementing a real-time market featuring 15-minute scheduling and five-minute dispatch. This market is being developed in response to the Federal Energy Regulatory Commission's ("FERC") Order No. 764, which, among other measures, required adoption of 15-minute scheduling as a means to improve integration variable renewable resources such as wind and solar. The ISO plans to implement this new market structure in the spring of 2014, and will use this structure as the basis of the EIM. Balancing Authorities participating in the EIM will then be able to voluntarily offer resources into the EIM and the ISO will use its 15-minute scheduling and five-minute dispatch programs to efficiently dispatch balancing resources and transfers between balancing authorities across the EIM/ISO footprint. Participants will also submit schedules 75 minutes before the operating hour. These will serve as the load forecast and the base schedule against which balancing resources will be dispatched.

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Does PURPA Wreck RECs? West Virginia Federal Court Rejects QF Claim for REC Payments

October 11, 2013

Renewable Energy Credits ("RECs") are a recent invention, a mechanism devised to aid compliance with state Renewable Portfolio Standards ("RPS"), which have been adopted in many states within the last decade. Both courts and regulators have struggled to determine how RECs should be treated under older energy statutes adopted in the pre-REC era, especially the 1978 Public Utility Regulatory Policies Act ("PURPA"). A recent opinion from the U.S. District Court in West Virginia adds another tile to this complex mosaic, rejecting the claim of a PURPA "Qualifying Facility" that it is entitled to compensation for RECs transferred to a purchasing utility under a pre-PURPA contract. To complicate matters, the court reached this conclusion despite an order from the Federal Energy Regulatory Commission ("FERC") concluding that the purchasing utilities owe compensation for RECs transferred from the QF. (Morgantown Energy Associates v. Public Service Commission of West Virginia, No. 2:12-cv-6327 (issued Sept. 30, 2013)).

Passed as part of package of bills aimed at addressing the energy crises of the 1970s, PURPA requires electric utilities to purchase electricity produced by "Qualfiying Facilities" ("QFs"), which generally include small renewable or cogeneration facilities. The utilities must purchase QF output at "avoided cost" rates. Avoided cost is the cost the utility would have incurred to construct a new generator to provide the same electricity or to purchase it from another source. PURPA's mandatory purchase obligation was the first crack in the edifice of traditional, vertically-integrated electric utilities, and set the stage for the subsequent evolution of the industry toward market-oriented reforms and wholesale competition.

Continue reading "Does PURPA Wreck RECs? West Virginia Federal Court Rejects QF Claim for REC Payments" »

FERC Files Suit Seeking Market Manipulation Penalties Against Barclays

October 10, 2013

Following last week's announcement that it has found evidence of manipulation in the Western markets by Constellation Energy Commodities Group, the Federal Energy Regulatory Commission ("FERC") yesterday took another major step in its battle to protect the electricity markets from manipulation by unscrupulous traders. Seeking to enforce nearly $500 million in penalties it assessed in July against Barclays Bank and four individual Barclays energy traders, FERC filed a lawsuit in the U.S. District Court for the Eastern District of California. (Case No. 2:13-at-01158, filed Oct. 9, 2013).

The case will blaze new legal ground because it is the first time FERC has used its power under Section 823b(d) of the Federal Power Act to enforce civil penalties against a power trader accused of market manipulation. Under those procedures, the District Court will conduct a review de novo of the law and facts found by FERC in its July order. Section 823b(d)'s de novo review standard is considerably more stringent that the "arbitrary and capricious" standard ordinarily applied by the courts when reviewing FERC orders.

If you have any questions about the lawsuit against Barclays and its traders, FERC's market manipulation rules, or other matters involving the energy industry, please contact a member of GTH's Energy, Telecommunications, and Utilities practice group.

FERC Announces New Allegations of Western Electricity Market Manipulation

October 9, 2013

On October 4, the Federal Energy Regulatory Commission ("FERC") issued a terse announcement of its preliminary determination that Constellation Energy Commodities Group ("CECG") improperly manipulated the Western electricity markets. FERC issues such notices after its investigative staff has completed a non-public investigation of alleged misconduct, the subject of the investigation has had an opportunity to respond in writing, and FERC staff has considered that response. Hence, the notice is not a definitive statement that improper conduct has occurred, but it indicates that the staff is sufficiently confident in the evidence to announce its preliminary conclusions publicly.

The notice provides almost no details of the allegations against CECG. However, the nature of the violation specified in the notice, combined with a previous investigation resulting in a then-record fine against CECG, suggests that CECG may have been manipulating the California ISO's physical market prices to artificially benefit its financial positions in those markets.

Continue reading "FERC Announces New Allegations of Western Electricity Market Manipulation" »

Federal Court Decision Illustrates Hazards of FERC-Jurisdictional Markets in the Pacific Northwest

October 7, 2013

The U.S. District Court for the District of Maryland last week issued an opinion striking down a "contract for differences" designed to ensure an adequate long-term power supply. The decision underscores some of the pitfalls that may be arise from creation of an "Energy Imbalance Market" ("EIM") or similar FERC-jurisdictional "centralized" markets here in the Pacific Northwest. PPL Energy Plus, LLC v. Nazarian, D. Md. No. MJG-12-1286 (issued Sept. 30, 2013).

The case arises from the struggles of the Maryland Public Service Commission ("MPSC") to address long-term power supplies in Maryland, particularly in constrained areas of the PJM market. The MPSC was concerned that in PJM -- the regional transmission organization ("RTO") that operates electric markets in the mid-Atlantic region, where prices are set based upon fluctuating Locational Marginal Price -- fails to provide adequate incentives for construction long-term power supplies. To address this problem, the MPSC approved a "contract for differences" between the local supplier and a generation developer. The contract creates a mechanism that effectively ensures a stable long-term price for generation by compensating the generation owner when short-term locational prices fall below the long-term guaranteed price.

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How the Federal Shutdown Affects Federal Energy Agencies

October 2, 2013

With the opposing sides entrenched in inflexible positions, it appears that the shutdown of the federal government won't end anytime soon. Because of differences in how the agencies are funded, a couple of energy-related agencies are operating normally for the time being. Here is a quick summary of how the federal shutdown will affect federal agencies of concern to the energy industry:

1. Power Marketing Agencies: By virtue of the fact that it is self-funded, the Bonneville Power Administration will continue to operate as normal. The Bonneville Fund, a permanent revolving fund created by the Federal Columbia River Transmission Act of 1974, allows BPA to operate without the necessity of annual Congressional appropriations. Even other federal power marketing agencies are not so lucky. For example, the Western Area Power Agency will operate with only 77 employees, retained to perform functions related to the protection of human life and property.

2. Federal Energy Regulatory Commission: For the time being, FERC will operate normally, relying on funds collected from filing fees and other types of user fees that do not require Congressional appropriations. Once those funds are exhausted, FERC will drastically curtail its operations. According to press reports, Chairman Jon Wellinghoff has estimated that FERC may continue to operate for somewhere between two weeks and one month before available funds run dry.

3. Environmental Protection Agency: Like most federal agencies, EPA has furloughed a large majority of its employees. Hence, permitting and rulemaking activity is on hold for the duration of the shutdown.

4. Department of Energy: With the exception of employees involved in nuclear safety, nearly all Department of Energy employees have been furloughed, including, for example, all but two employees at the Pacific Northwest National Laboratory. In fact, the DOE's website has been taken offline except for a detailed statement about the Department's furlough policy.

In short, with the exception of the BPA and FERC, nearly all federal activity related to energy and environmental protection has come to a halt. FERC will enjoy a short reprieve from the shutdown, but the reprieve will last only a few weeks, perhaps less.

If you have questions about the federal shutdown, the affected agencies, or other questions related to energy or environmental law, please contact a member of GTH's Energy, Telecommunications, and Utilities practice group or Environment & Natural Resources practice group. We are proud that our partner Jim Waldo was recently named 2013 Lawyer of the Year for Energy and Natural Resources Law, and practice group members Don Cohen, Bill Lynn, and Brad Jones were all named among Seattle's Best Lawyers.

Join GTH at the annual APPA Legal Seminar in Seattle

August 28, 2013

Please join us at the American Public Power Association's Legal Seminar here in Seattle. The Legal Seminar is one of the largest gatherings of its kind, annually attracting hundreds of public power attorneys from across the country. This year's seminar will be October 20-23.

We're pleased to announced that GTH attorneys Don Cohen and Eric Christensen will both be making presentations at the conference. Don will be co-leading a pre-conference seminar on pole attachment issues. Don is representing Pacific County (Washington) PUD in an extended dispute with large telecommunications providers involving pole attachment rates charged by the PUD.

Eric Christensen will be co-leader of a NERC Compliance Issues Roundtable, which will address the current state of regulation in the evolving world of mandatory reliability standards under Section 215 of the Federal Power Act. Eric will also present a talk entitled "Separating 'Transporter Psychosis' from 'Phaser Blast': The Washington Supreme Court's Decision Rejecting Nuisance Claims Based on Electromagnetic Field Exposoure," which will analyze the Court's treatment of scientific evidence in Lakey v. Puget Sound Energyand what it portends for similar claims involving, for example, "wind turbine syndrome" and exposure to radio waves from "smart" meters.

A Big Boost for Small Hydro: Senate Sends Two Bills Promoting Small and Conduit Hydro to President Obama's Desk

August 5, 2013

In an increasingly-rare display of bipartisanship, the U.S. Senate on August 1 passed two bills that should promote the development of small hydroelectric power on existing dams and in water conduits. The new legislation will also take the first steps to simplifying the FERC licensing project for larger projects and for pumped storage projects. Both bills are expected to be signed by President Obama in the near future.

The first bill, H.R. 267 ("The Hydropower Regulatory Efficiency Act of 2013") makes several significant changes to federal law that are intended to simplify and streamline the regulatory process for small hydroelectric projects:

First, HR 267 raises the eligibility threshold to 10,000 kW for the Federal Energy Regulatory Commission's ("FERC") simplified licensing process. Eligibility is currently capped at 5,000 kW.

Second, the new law provides a complete exemption from FERC licensing for non-federal conduit hydro projects -- those operating on a canal, flume, aqueduct, or similar structure -- for projects with up to 5 MW of capacity. This provision requires FERC to issue a declaration that a project qualifies for the exemption within fifteen days after receiving a notice of intent from the project sponsor and requires any challenges to that determination to be lodged within 45 days. In the absence of such a protest, the determination that the project qualifies for the licensing exemption becomes binding.

Third, the law authorizes FERC to grant complete or partial licensing exemptions for conduit projects with up to 40 MW of capacity.

Continue reading "A Big Boost for Small Hydro: Senate Sends Two Bills Promoting Small and Conduit Hydro to President Obama's Desk" »