Supreme Court Upholds FERC’s Authority Over Demand Response Payments

1.26.16

The U.S. Supreme Court, in a 6-2 decision issued January 25, 2016, in FERC v. Electric Power Supply Association, upheld FERC Order No. 745 and ruled that the Federal Energy Regulatory Commission (FERC) has authority to establish demand response rules and rates in wholesale electric-power markets. Wholesale demand response programs pay for commitments to reduce use of power during periods of high electricity demand.

Order No. 745 requires wholesale market operators to pay demand response providers the same rate that is paid to electric power generators so long as the “net benefits test” is met. FERC developed the test to ensure that accepted demand response bids actually save consumers money. The Court of Appeals for the District of Columbia had vacated Order No. 745, ruling among other things that FERC had overstepped its authority because the order directly interfered with the states’ exclusive right to regulate the retail electricity market.

Read the full article here: http://www.huschblackwell.com/businessinsights/supreme-court-upholds-ferc-authority-over-demand-response-payments

Clean Power Plan Moves Forward

BREAKING: DC Circ. Won't Delay EPA's Clean Power Plan

Share us on:   By Keith Goldberg

Law360, New York (January 21, 2016, 4:06 PM ET) -- The D.C. Circuit on Thursday refused to put the Clean Power Plan on hold until legal challenges to the rule are completed, handing the Obama administration a significant early victory as it looks to defend and implement the sweeping regulations that would slash carbon emissions from existing power plants.

Dozens of states and industry groups have petitioned the appeals court to overturn the CPP crafted by the U.S. Environmental Protection Agency, or at the very least, block it from being implemented while the legal battle plays out. They've argued that they'll be irreparably harmed by starting the compliance process, even though they're likely to succeed in convincing the court that the rule is illegal.

However, a D.C. Circuit panel shot the request down in a two-page order, though it said the appeals court would expedite the consideration of the case and schedule oral arguments for June 2.

"Petitioners have not satisfied the stringent requirements for a stay pending court review," the panel said.

The CPP calls for existing power plants to slash their carbon emissions by 32 percent from 2005 levels by 2030. States must start submitting implementation plans by 2018 and start showing emissions reductions by 2022. Challengers of the rule claim the EPA doesn't have the authority under the Clean Air Act to craft the rule.

In their motions to stay, industry petitioners like coal giant Peabody Energy Corp. and Basin Electric Power Cooperative said that if the court doesn't push back the plan's effective date, they stand to lose a lot of money if they comply with the plan and it ends up being scrapped by the court. Peabody, which called the rule “a Draconian measure” that seeks to shut down coal-fired power plants, said that if compliance enforcement isn't stayed, those facilities could be lost even if the petitioners prevail.

In urging the D.C. Circuit to reject the bids for a stay, the federal government argued that the EPA has the CAA authority to implement the CPP and limit air pollution emitted by power plants and the movants do not face any irreparable harm during the “relatively short period” that the court reviews the new rules. Federal attorneys also warned that a stay could be harmful to the general public.

The government also noted that states are being given up to three years to come up with their own plans to implement the CPP and may elect to have the EPA do that work for them. And those in the energy industry also face no imminent harm because the rule builds upon pre-existing industry trends and doesn't obligate them to make any changes until 2022, followed by a gradual phase-in of emissions reductions until 2030.

Supporters of the CPP hailed the D.C. Circuit's ruling Thursday.

"Today’s court decision means we can continue working – without delay -- to protect Americans from the clear and present danger of climate change,” Environmental Defense Fund president Fred Krupp said in a statement. “The Clean Power Plan encourages states to use their own best ideas and resources to create prosperous clean energy economies. It rests on a rock-solid legal foundation and will help America move toward a safer and healthier future.”

Circuit Judges Karen LeCraft Henderson, Judith W. Rogers and Sri Srinivasan sat on the panel for the D.C. Circuit.

The state petitioners are represented by their respective attorney general offices.

The private petitioners are represented by Sidley Austin LLPHunton & Williams LLP and Troutman Sanders LLP, among others.

The federal government is represented by assistant U.S. attorney general John C. Cruden, as well as Eric G. Hostetler, Norman L. Rave Jr., Amanda S. Berman, Brian H. Lynk and Chloe H. Kolman of the U.S. Department of Justice.

The case is West Virginia et al. v. EPA, case number 15-1363 in the U.S. Court of Appeals for the District of Columbia Circuit.

--Additional reporting by Alex Wolf and John Kennedy
http://www.law360.com/articles/741160/dc-circ-won-t-delay-epa-s-clean-power-plan

Congress Extends Tax Incentives for Wind and Solar Development

Congress this week extended both the wind production tax credit and the solar investment tax credit as part of the Consolidated Appropriations Act of 2016, an omnibus government funding package. The extended tax credits provide financial incentives that will help drive development and investment in wind and solar energy projects through the end of this decade. 
  
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GridNEXT Recap: Texas Stakes Its Claim on Clean Energy

Amazing things can happen when you bring 150 or so like-minded individuals into a gridlocked Houston hotel with no reason to go outside to commute anywhere. You listen to each other, stop to think, and try to imagine a future where anything is possible.

At the GridNEXT conference, hosted by the Texas Renewable Energy Industries Alliance (TREIA), we explored gridlock issues of another sort – energy transmission planning in Texas, where we’re known for high wind penetration and slow but growing solar adoption – all via an independent grid where consumers in deregulated areas have the power to choose their electricity providers. In many ways, Texas is the perfect laboratory for all forms of renewable development, and our experience here can be instructive to other early-stage renewable states.

READ FULL STORY HERE

EPA's Clean Power Plan Rules Published in Federal Register

On October 23, 2015, the U.S. Environmental Protection Agency published in the Federal Register its final rules implementing the Clean Power Plan’s goal of significantly limiting carbon dioxide emissions from existing, new, modified and reconstructed fossil fuel-fired electric generating units. EPA also published its proposed model state trading rules and federal plans for implementation of the required emission reductions from existing EGUs. Updated information on the effective date of the final rules and the deadline for filing comments on the proposed rules is included in this alert. Submission of comments to EPA regarding the proposed rate- and mass-based federal plans for adoption on a state-by-state basis may still significantly impact regulation of EGUs in each state.
  
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TREIA Hosts GridNEXT Clean Energy Conference in Houston Nov. 11-13

AUSTIN, TEXAS (Oct. 23, 2015)…The Texas Renewable Energy Industries Alliance (TREIA) will take on the challenge of modernizing the power grid to significantly expand the use of clean energy in Texas at GridNEXT – the premier renewable energy conference in Texas – on Nov. 11-13, 2015, at the Westin Galleria in Houston.

GridNEXT: Advancing Clean Energy on the New Texas Grid will convene utility executives, industry thought leaders, technology innovators and energy policy-makers for two days of panel discussions, workshops and networking events. 

Texas continues to be the leader in wind energy, energy storage is making good strides, and solar is expected to grow 50-fold over the next 15 years according to a new report released by independent grid operator ERCOT. At the GridNEXT conference, utility leaders will join with leaders from the solar, wind, storage, geothermal and other clean energy industries to define the challenges of utility business model innovation and come up with actionable strategies for grid modernization to maximize clean energy integration on the grid.

“Texas is an ideal learning environment for clean energy companies and utilities all over the country because our grid is independent and we’ve had such incredible success with wind integration,” said Hala Ballouz, president of TREIA.  “We look forward to bringing together all the stakeholders to debate, explore and to create an action plan for advancing our state’s renewable energy leadership.”

Keynoting the welcome event on Wednesday, Nov. 11 is Bryan Hannegan, PhD., associate director for energy systems integration at the National Renewable Energy Laboratory, the U.S. Department of Energy’s primary national laboratory for energy efficiency and renewable energy research and development.  Dr. Hannegan leads NREL’s global initiative to optimize links between electricity, fuel, thermal, water, and communication networks in order to enable a more sustainable society. 

Headlining the awards luncheon on Friday is John Hofmeister, founder of Citizens for Affordable Energy and former president of Shell Oil. A champion of sustainable environmental policies and energy security, Hofmeister is the author of Why We Hate the Oil Companies: Straight Talk from an Energy Insider.

Among the featured panels is a two-part, deep-dive panel discussion on innovative business models in the utility industry. A session on transmission will examine new business and financial models to extend the 2,400-mile Competitive Renewable Energy Network to enable more wind and solar generation.  A session on unbundling the grid will look at the changes that Distributed Energy Resources will bring to our grid.  Sessions on community solar, microgrids, wind development and geothermal are all on the two-day agenda.

Key executives from ERCOT, the Independent System Operator of 90 percent of the Texas grid, as well as every major utility in the state, renewable energy companies and other key stakeholders will participate in the event’s full slate of panel discussions and talks.

For the full agenda and list of speakers, visit www.GridNEXT.org. For advance registration rates, sign up by Nov. 5. To register by phone, call 512/345-5446.

# # #

TREIA Contact:

Mark Sanders, Executive Director

Texas Renewable Energy Industries Alliance

msanders@treia.org

(512) 345-5446

 

Media Contact:

Nancy Edwards

Clean Power Marketing Group

nancy@cleanpowermarketinggroup.com

512-239-9837

 

 

ERCOT UPDATE

Several important studies and white papers are being developed by EROCT that specifically relate to renewable generation, particularly Solar, Wind, Energy Storage and Distributed Energy Resources (DER).  TREIA’s president Hala N. Ballouz, is actively participating in the ERCOT groups overseeing these studies and we welcome input from TREIA members.


ON August 25 in the DREAM TF Workshop, ERCOT presented the DER White Paper, as well as presented Issues to be tackled that were identified by the Stakeholders during the workshop.  Both the paper and the issues list can be downloaded from the following link.  The white paper is an important read for stakeholders.

TREIA has taken the lead on two action items (see below) for the DER White Paper, which are very relevant to our members.  TREIA and our members are tasked with fleshing out the costs/benefits and significance of DER Light and DER Heavy options.

Item #4: What are the cost/benefit of proposed DER Light and DER Heavy? i.e., what are the impacts on LSE obligations (AS obligations, T&D charges, Load Ratio Share uplifts, etc.)?

Item #5: Should DER Light or DER Heavy status be optional, or mandatory?

  • How would it work if mandatory?
  • If optional, would the DER’s selection be permanent? If not permanent, how frequent could a DER change its status?

TREIA is also watching over the Panhandle Transfer Analysis study findings and has provided comments to ERCOT.  This study is going to the PUC on September 15.

ERCOT’s findings justify the addition of “Synchronous Condensers”  for the committed 3,604 MW of wind generation in the Panhandle (that have met section 6.9 of the protocols).

The study also briefly looked at the system needs if an additional 300 MW were considered (3,604 + 300 MW), and the justification of adding a “Second Circuit” on the Alibates-Windmill-OgallalaTule Canyon 345 kV line.

TREIA’s recommendation to ERCOT included suggestions to show the results of the aggregated benefits of the addition of both the “synchronous Condensers” and the “Second transmission Circuit” for the case of adding (3,604 + 300) MW of wind in the Panhandle.

Justification of the second circuit may be challenging and will be carried by the wind industry at the PUC after submittal of the ERCOT report.  If one more wind project in the panhandle were to meet the 6.9 protocol requirements beyond the currently 3,604 MW then that may significantly enhance the chances of the second circuit to be approved.


ERCOT also presented the first Scope of the West Texas Solar Penetration Study:

Electric Power Engineers and TREIA’s President will be working closely with ERCOT on this study, which will be conceptual at first, however is significant in terms of outlook on what the area needs are.  Note that ERCOT is also conducting in parallel on a West Texas Load study, which will target transmission upgrades to meet the high load growth in West and Far West Texas.