As the novel coronavirus (COVID-19) continues to spread, Sidley is helping clients navigate the potential consequences to energy markets and attendant legal risks. The following frequently asked questions address actions by the U.S. Federal Energy Regulatory Commission (FERC) on April 2, 2020 in response to the current market conditions. This document updates energy regulatory FAQs published by Sidley on March 20, 2020.
On March 25, EPA issued a draft memorandum outlining its revised regulatory interpretation of when site owners and operators can “begin actual construction” of new major stationary sources or major modifications to existing major sources under the New Source Review (NSR) preconstruction permitting program. Under the NSR program and Prevention of Significant Deterioration of Air Quality rules at 40 C.F.R § 52.21, a site owner cannot “begin actual construction” on these sources without an NSR permit in hand. “Begin actual construction” is defined as “in general, initiation of physical on-site construction activities on an emissions unit which are of a permanent nature. … [including] installation of building supports and foundations, laying underground pipework and construction of permanent storage structures.”
On March 18, the U.S. Environmental Protection Agency (EPA or the Agency) published a supplemental notice of proposed rulemaking in its “Strengthening Transparency in Regulatory Science” rulemaking. EPA’s original “Transparency in Science” proposal, published in April 2018, proposed that “for the science pivotal to its significant regulatory actions, EPA will ensure that the data and models underlying the science is publicly available in a manner sufficient for validation and analysis.”
On March 12, the U.S. Department of Justice (DOJ) Environment and Natural Resources Division (ENRD) issued guidance ending its decades-long practice of permitting private defendants in civil settlements to expend funds to provide environmentally beneficial goods and services to third parties in lieu of civil penalty payments. Defendants have long preferred to undertake supplemental environmental projects (SEPs) in lieu of paying larger penalties, and government enforcement lawyers saw SEPs as a valuable tool to encourage settlements. DOJ now finds that these SEPs violate the federal Miscellaneous Receipts Act, which requires federal officers receiving funds on behalf of the United States to deposit those funds into the United States Treasury. “Moving forward, [SEPs] will no longer be part of the suite of relief the Environment and Natural Resources Division seeks in its cases (unless specifically authorized by Congress), both in light of their inconsistency with law and their departure from sound enforcement practices,” according to ENRD’s memorandum. ENRD’s new policy is prospective and will not affect SEPs in existing settlements.
The Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Corporation (NERC) announced yesterday they are taking steps to ensure that operators of the bulk electric system can focus their resources on keeping people safe and the lights on during this unprecedented public health emergency.
On March 2, 2020, the U.S. Environmental Protection Agency (EPA) issued a final rule providing the procedures for EPA inspections in civil cases.
On Tuesday, March 3, the U.S. Environmental Protection Agency (EPA) released a list of antimicrobial disinfectant products that are currently approved to make limited efficacy claims against SARS-CoV-2, the coronavirus that causes COVID-19. The exact claims that can be made, and where they can be made, are specifically governed by the EPA’s 2016 Emerging Viral Pathogen guidance, which the agency activated on January 29 for SARS-CoV-2/COVID-19.
