Federal District Court Dismisses Challenges to New York ZEC Program

On July 25, 2017, two weeks after an Illinois federal judge issued a similar ruling, the U.S. District Court of the Southern District of New York (“District Court”) issued an order dismissing challenges to a New York state “zero emission credit” (“ZEC”) program established by the New York Public Service Commission (“NYPSC”).  As with the Illinois court’s decision regarding the Illinois ZEC program (see July 25, 2017 edition of the WER), the District Court found the New York ZEC program constitutional and determined that the challengers lacked a private right of action to challenge the New York ZEC program on preemption and dormant commerce clause grounds.  Nevertheless, the District Court reached, and rejected, the merits of those challenges.  Continue reading

Federal District Court Dismisses Illinois ZEC Challenges; Appeal Heads to Seventh Circuit

On July 14, 2017, the United States District Court for the Northern District of Illinois, Eastern Division (“District Court”), issued a memorandum opinion and order dismissing various challenges to an Illinois “zero emission credit” (“ZEC”) program passed into law at the end of 2016 (“ZEC Program”).  After finding that the plaintiffs largely lacked standing to bring their claims, the District Court nonetheless reached the merits of, and rejected, the plaintiffs’ preemption, equal protection, and dormant commerce clause challenges to the ZEC Program.  Three days after its release, the ruling was appealed to the U.S. Court of Appeals for the Seventh Circuit (“Seventh Circuit”). Continue reading

D.C. Circuit Rejects FERC’s use of FPA Section 205 to Revise PJM Minimum Offer Price Rule

On July 7, 2017, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) vacated and remanded a set of FERC orders in 2013 and 2015 that revised the minimum offer price rule (“MOPR”) of the PJM Interconnection, LLC (“PJM”).  The D.C. Circuit held that FERC exceeded its role under Federal Power Act (“FPA”) Section 205 by imposing changes that amounted to an “entirely new rate scheme” for PJM. Continue reading

Second Circuit Upholds Connecticut’s Renewables Solicitation Program and RPS Against Preemption, Dormant Commerce Clause Challenges

On June 28, 2017, the United States Court of Appeals for the Second Circuit (“Second Circuit”) affirmed a district court’s dismissal of challenges to Connecticut’s renewable energy solicitation program and Renewable Portfolio Standard (“RPS”) law. The Second Circuit rejected arguments from the plaintiff-appellant, Allco Finance Limited (“Allco”), that the solicitation program was preempted by the Federal Power Act (“FPA”) and the Public Utility Regulatory Policies Act of 1978 (“PURPA”) and that the RPS law unduly burdens interstate commerce, in violation of the “dormant commerce clause.” Continue reading

D.C. Circuit Rejects Challenges to PJM’s Capacity Market Rules, Including Year-Round Requirement Impacting Renewable Energy Generators

On June 20, 2017, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit” or “the court”) rejected petitions for review challenging FERC’s approval of capacity market rules set by the PJM Interconnection, LLC (“PJM”) in 2014.  The D.C. Circuit held that FERC’s approval of the rules was adequately explained and within its statutory authority under the Federal Power Act.  In particular, the D.C. Circuit rejected assertions from various environmental, clean energy, and public utility petitioners that the new capacity market rules unduly discriminated against variable energy resources like solar and wind power. Continue reading

CAISO Issues Draft Final Proposal on Energy Storage and Distributed Energy Resources

On June 8, 2017, the California Independent System Operator (“CAISO”) released the draft final proposal of Phase 2 of its energy storage and distributed energy resources (“ESDER”) initiative.  The aim of the proposal is to lower the barrier to entry and market participation for various transmission grid-connected energy storage and distribution-connected resources. “Integrating these resources,” the proposal states, “will help lower carbon emissions and add operational flexibility.” Continue reading

AEE Requests Declaratory Rulings on Federal Preemption for Energy Efficiency Resources in FERC-Regulated Markets

On June 5, 2017, Advanced Energy Economy (“Advanced”), a national trade association representing organizations within the energy efficiency, demand response, and other advanced energy industry sectors, filed a petition for a declaratory order with FERC.  Among other things, the petition requests that FERC assert exclusive jurisdiction over how Energy Efficiency Resources (“EERs”) can participate in markets operated by Regional Transmission Organizations and Independent System Operators (“RTOs/ISOs”).  In particular, Advanced highlights a recent proposal from PJM Interconnection, L.L.C. (“PJM”) to initiate a stakeholder process to ultimately grant state regulators the authority to bar, restrict, or otherwise condition EER participation in PJM’s capacity market.  The petition, filed while FERC still lacks a quorum to take action, came just days before the Kentucky Public Service Commission (“KYPSC”) issued an order restricting participation of EERs in PJM wholesale markets. Continue reading

D.C. Circuit Holds that FERC has Authority to Order BPA to Forfeit Inappropriate Refunds

On May 19, 2017, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued a decision in which it held in part that FERC erred by determining that it lacked authority under the Federal Power Act (“FPA”) to order a non-jurisdictional entity to repay refunds that it should not have received.  The D.C. Circuit made clear that although the FPA prohibits FERC from ordering a non-jurisdictional entity to provide a refund to another entity, FPA Section 309 vests FERC with broad remedial authority, including authority to grant recoupment when it is justified and FERC otherwise has jurisdiction over the disputed funds. Continue reading

ISO-NE Proposes Capacity Market Reforms to Manage State-Subsidized Generators

On April 20, 2017, staff from the Northeast’s Independent System Operator, ISO New England Inc. (“ISO-NE”), presented a proposal to its ten-member Board of Directors on how to better incorporate state-subsidized new resources into ISO-NE’s Forward Capacity Market (“FCM”). The proposal contemplates a two-stage process whereby retiring resources that clear the annual Forward Capacity Auction (“FCA”) can transfer their capacity obligations to state-subsidized generators in exchange for payment and permanent retirement. If approved by the Board of Directors, stakeholder discussions could begin in May, with associated tariff revisions filed with FERC in December. Continue reading

California District Court Orders Discovery in FERC Enforcement Case

In an order issued on March 7, 2017, the United States District Court for the Eastern District of California rejected arguments from FERC regarding the scope of review and applicable procedural rules governing the court’s review of a market manipulation enforcement proceeding. The court held that the Federal Rules of Civil Procedure (“FRCP”) applied to the action and rejected arguments that it was limited to “de novo” review of the administrative record as compiled by FERC. As a result, the court ordered FERC to provide discovery to the opposing parties. Continue reading