Electric Reliability Council of Texas’ Independent Market Monitor: Conservative Operating Posture Could Cost Consumers $1.5B

On June 22, 2022, the Electric Reliability Council of Texas (ERCOT) Independent Market Monitor director, Carrie Bivens, testified before the Texas House State Affairs Committee on the ERCOT market design, reporting that ERCOT’s “conservative” operating posture since Winter Storm Uri could add $1.5 billion to consumer bills in 2022. (more…)

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Texas Supreme Court Holds Texas Commission on Environmental Quality Definition of “Operator” Controls Over Judicial Interpretation

On February 11, 2022, the Supreme Court of Texas issued its opinion in Texas Environmental Quality et al. v. Maverick County, et al., a case that addressed the meaning of the term “operator” in the context of the application for an issuance of Texas Pollution Discharge Elimination System (TPDES) permits. Maverick County provides clarity about who must apply for a TPDES permit, particularly in the context of facilities owned by one entity but operated day-to-day by another. The decision also provides a helpful analysis of what definitions govern when a judicial interpretation differs from the language provided by an agency pursuant to its statutory authority. (more…)

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Texas Receives Coal Ash Rule Approval from EPA

On Monday, June 28, 2021, the U.S. Environmental Protection Agency (EPA) approved the Texas Commission on Environmental Quality’s (TCEQ) request for delegated permit authority over coal ash disposal under the Resource Conservation and Recovery Act (RCRA).1

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Texas Legislature Passes Anti-ESG Bill

Earlier in May, the Texas Legislature passed a bill (SB 13) that would prevent Texas from investing in environmental, social, and governance (ESG) financial products that boycott Texas energy companies. If signed into law by Republican Gov. Greg Abbott, SB 13 would require Texas’ public pension funds to “sell, redeem, divest, or withdraw all publicly traded securities of [any] financial company …” that “boycott[s] energy companies.” (more…)

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Fifth Circuit Rejects Challenge to Texas LNG Project

On March 10, 2021, the U.S. Court of Appeals for the Fifth Circuit rejected a challenge to an opinion by the Fish and Wildlife Service (FWS) allowing a South Texas liquified natural gas (LNG) pipeline project to proceed. Sierra Club, et al. v. U.S. Department of Interior, et al. involved a proposed LNG pipeline that would pass through Cameron, Willacy, Kenedy, and Kleburg counties in south Texas. (more…)

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Stakeholders Assess the Effects of the Changing Mix of U.S. Energy Resources

In anticipation of the Department of Energy’s review of the nation’s power grid, stakeholder groups have recently published reports on the state of the U.S. power grid.  The reports add to the debate over what mix of energy resources are needed to sustain a stable, secure and reliable supply of electricity in the United States.

An April 14, 2017 memo from Energy Secretary Rick Perry directing the Energy Department to “explore critical issues central to protecting the long-term reliability of the electric grid” has focused the debate.  According to Secretary Perry, the 60-day review would assess whether federal policies have caused “the erosion of critical baseload resources.”  This includes an assessment of whether reduced coal-fired power generation due “in part from regulatory burdens introduced by previous administrations” has hurt the supply of baseload power and will “undercut the performance of the grid well into the future.”  (more…)

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D.C. Circuit Upholds FERC’s Limited Impacts Analysis in NEPA Documents Addressing Greenhouse Gases

On June 28, 2016, the U.S. Court of Appeals for the District of Columbia Circuit issued a pair of decisions upholding the Federal Energy Regulatory Commission’s (FERC) treatment of indirect and cumulative effects of greenhouse gas (GHG) emissions under the National Environmental Policy Act (NEPA) when the agency approved the construction and operation of enhanced liquid natural gas terminals at sites in Louisiana and Texas. These cases provide direct insight into the treatment of GHG emissions in NEPA analyses and are arguably more limited than Revised Draft Guidance issued in 2014 by the Council on Environmental Quality (CEQ). As explained in a previous Sidley Update, CEQ’s revised draft guidance would conceivably expand the scope of NEPA analyses of GHG emissions beyond what is permitted by NEPA or by CEQ’s implementing regulations in several key respects. In particular, CEQ’s arguably broad inclusion of upstream and downstream emissions associated with the extraction and ultimate combustion of fossil fuels is inconsistent with CEQ’s regulations and with well-established judicial precedent that a closer causal connection between an agency action and alleged environmental impacts. In contrast, the D.C. Circuit’s decisions are consistent with prior case law and provide further reason for CEQ to issue final guidance that clarifies the limits on an agency’s ability to evaluate upstream and downstream emissions when conducting a NEPA analysis.

In each case, the court rejected claims by the Sierra Club that NEPA obligated FERC to study the alleged impacts of extracting and processing additional gas that might be produced to satisfy additional international demand arising from greater export capacity. Also, the court rejected Sierra Club’s assertion that FERC should have included, as part of its cumulative effects analysis, a nationwide study of existing or proposed liquid natural gas export terminals. These rulings are important because they provide a further delineation for when so-called upstream and downstream effects can be excluded from analysis as indirect or cumulative impacts in a NEPA study, especially in the energy field.

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