On January 19, 2023, the U.S. Federal Energy Regulatory Commission (FERC) issued a final rule (RM22-3) (the Rule) directing the North American Electric Reliability Corporation (NERC) to develop and submit for approval reliability standards that require internal network security monitoring (INSM) within a trusted Critical Infrastructure Protection (CIP) networked environment for all high-impact bulk electric system (BES) cyber systems and medium-impact BES cyber systems with external routable connectivity. FERC also directed NERC to study all low-impact BES cyber systems and medium-impact BES cyber systems without external routable connectivity (Other BES). NERC has 15 months to submit its proposed reliability standards for approval and 12 months to submit a report on its study of the Other BES.
Former U.S. Federal Energy Regulatory Commission (FERC or the Commission) Chairman Richard Glick has officially departed the independent Commission after failing to secure a reconfirmation hearing before the Senate in December 2022. Glick’s departure leaves the Commission with a 2–2 split between Democrats and Republicans that could stall a number of major initiatives that were ongoing under the former Chairman and the Commission’s Democratic majority.
This Sidley Energy Enforcement update covers:
- Federal Energy Regulatory Commission (FERC) approves settlement between Enforcement staff and Coaltrain
- Both FERC and Commodity Futures Trading Commission (CFTC) enforcement reports highlight the respective agency’s continued commitment to strong enforcement
- U.S. Court of Appeals for the Fifth Circuit upholds FERC’s finding that BP manipulated the natural gas market but remands to FERC to recalculate its $20 million penalty
- CFTC orders Glencore to pay a record-setting penalty of $1.186 billion
- CFTC and Securities and Exchange Commission (SEC) orders over $1.8 billion in fines against 11 firms for recordkeeping failure — employees using unapproved method of communications such as texts and WhatsApp on personal devices
On September 9, 2022, the Federal Energy Regulatory Commission (FERC) issued a Notice of Scoping Period Requesting Comments on Environmental Issues for the Proposed Carbon Capture and Sequestration System Amendment, and Notice of Public Scoping Sessions (Notice) requesting public comment on the environmental effects of a proposed carbon capture and sequestration (CCS) systems addition to the Rio Grande Liquid Natural Gas (LNG) Terminal (Terminal). This marks the first time FERC has requested public comment on the potential environmental effects, environmental mitigation measures, and reasonable alternatives related to CCS technology as part of National Environmental Policy Act review for an LNG terminal facility.
On July 19, 2022, the U.S. Court of Appeals for the Fifth Circuit held that debtors in bankruptcy may reject regulated energy contracts, vacating two Federal Energy Regulatory Commission (FERC) orders to the contrary, in Gulfport Energy Corp. v. FERC. The question turned on how a party’s ability to reject executory contracts in bankruptcy interacts with FERC’s ability to determine whether a party can abrogate or modify contracts that constitute filed rates under a doctrine referred to as Mobile-Sierra. The court found that FERC cannot use its Natural Gas Act authority over contract abrogation and modification to countermand a debtor’s bankruptcy-law rights or the bankruptcy court’s powers.
On Friday, June 17, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) upheld a decision by the Federal Energy Regulatory Commission (FERC) in Turlock Irrigation District et al. v. Federal Energy Regulatory Commission et al. ruling that the California State Water Resources Control Board (Water Board) did not waive its authority to issue permits in connection with FERC’s licensing of the Don Pedro and La Grange hydroelectric plants (the Projects) in central California under Section 401 of the Clean Water Act. (more…)
NOPR to Reform Generator Interconnection Procedures and Agreements
On June 16, 2022, the Federal Energy Regulatory Commission (FERC) took another step to ease access to the transmission grid with a Notice of Proposed Rulemaking (NOPR) on Improvements to Generator Interconnection Procedures and Agreements. The NOPR seeks to reform FERC’s current procedures and agreements, and in doing so (1) address the significant interconnection queue backlogs, (2) provide greater certainty, and (3) prevent undue discrimination against new generation technologies. (more…)
On June 14, 2022, the U.S. Court of Appeals for the District of Columbia Circuit upheld the Federal Energy Regulatory Commission (FERC) finding of jurisdiction over New Fortress Energy LLC’s (New Fortress) liquified natural gas (LNG) import terminal facility in San Juan, Puerto Rico, in New Fortress Energy Inc. v. FERC. (more…)
The U.S. Federal Energy Regulatory Commission (FERC) is expected to issue an order later this month that could influence the development of “responsibly sourced natural gas” (RSG), natural gas certified by a qualified third party as meeting certain performance and operational criteria. Some in the energy industry have touted RSG as a way to meet net-zero and lower carbon emissions goals. (more…)
At its May 19, 2022, Open Meeting, the Federal Energy Regulatory Commission (FERC or the Commission) announced a Notice of Proposed Rulemaking (NOPR) on potential changes as to how natural gas pipelines submit supporting statements, schedules, and workpapers when filing a Natural Gas Act (NGA) Section 4 rate case. (more…)