The National Association of Regulatory Utility Commissioners and utility trade groups went to court to challenge FERC’s Order 841, which the agency issued to clear the way for energy-storage resources to buy and sell energy, capacity and ancillary services in organized wholesale power markets.
NARUC announced its petition for review, filed with the U.S. Court of Appeals for the D.C. Circuit, on July 16. The group said its petition asks the court to throw out FERC’s decision, which it said would “deny states the ability to fully manage storage resources” on distribution systems or behind retail meters.
American Public Power Association, National Rural Electric Cooperative Association, Edison Electric Institute and American Municipal Power on July 15 also filed a petition with the court appealing Orders 841 and 841-A. In the latter order, issued May 16, FERC denied requests for rehearing.
APPA General Counsel Delia Patterson said FERC’s orders intruded on retail electricity markets subject to state regulation.
The utility groups have until Aug. 15 to spell out issues they intend to raise in the appeal. Under the Federal Power Act, only arguments made in their rehearing request may be brought up for appeal, APPA said.
Order 841, which FERC adopted Feb. 15, 2018, requires independent system operators, including California ISO, and regional transmission organizations to establish a “participation model” recognizing the “physical and operational characteristics” of storage resources. Under the rule, storage must be allowed to set market clearing prices as both buyers and sellers.
In rejecting the rehearing request, FERC said its oversight over energy-storage participation in wholesale markets “is essential to the commission’s ability to fulfill its statutory responsibilities to ensure that wholesale rates are just and reasonable.”
In seeking rehearing, APPA and NRECA said Order 841 “suggests” that storage resources on distribution systems or behind retail meters could do an end-run around local and state restrictions preventing them from directly buying or selling in wholesale markets.
In their rehearing request, APPA and NRECA also argued FERC should have allowed state and local authorities to determine whether storage resources on distribution systems or behind retail meters could participate in wholesale markets.
FERC disagreed, stating the law and “relevant precedent” does not require the commission to allow for opt-outs.
Senate Panel Advances Energy Bills
Nearly two dozen energy bills—including legislation to renew hydropower incentives, reauthorize federal weatherization assistance and speed approvals of small-scale natural gas exports—were reported out July 16 in the Senate Energy and Natural Resources Committee.
Among the 22 bills the committee sent to the Senate floor:
- S. 859, sponsored by Sen. Cory Gardner (R-Colo.), renewing authorization through 2036 of production incentives available for hydropower development of up to 10 MW at existing nonfederal dams. The Department of Energy has made $6.6 million available for funding this year, with payments tied to kilowatt-hours generated in 2018.
- S. 983, reauthorizing federal weatherization assistance of $350 million per year for fiscal years 2020 through 2024. The bill would allow DOE to take into account health and safety benefits of weatherization in considering grants. Similar legislation, HR 2041, was reported out July 17 by the House Energy and Commerce Committee (see item below).
- S. 816, reported out on an 11-9 vote, would require DOE to wave through gas-export proposals totaling up to 51.75 Bcf per year.
- S. 903, aimed at speeding commercialization of advanced nuclear technologies, by authorizing federal power purchase agreements of up to 40 years. The bill also would direct DOE to build two advanced nuclear demonstration plants by Dec. 31, 2025, and between two and five additional demonstration plants by Dec. 31, 2035. In addition, S. 903 would direct DOE to make high-assay, low-enriched uranium available for advanced reactors.
- S. 1317, directing the Interior Department to speed production of critical minerals on federal lands and ordering DOE to study critical-minerals recycling and alternatives. Seven senators opposed the bill, including Westerners Maria Cantwell (D-Wash.), Martin Heinrich (D-N.M.), Mike Lee (R-Utah) and Ron Wyden (D-Ore.).
- S. 1052, authorizing DOE to develop techniques for separating rare-earth elements and minerals from coal and coal byproducts.
- S. 1857, setting energy- and water-efficiency performance targets for federal buildings, including reduction of average building energy intensity, measured in Btu per gross square foot, of 2.5 percent per year between fiscal years 2020 and 2030.
House Panel Advances Energy Bills
The House Energy and Commerce Committee on July 17 reported out 10 energy bills aimed at strengthening cybersecurity and boosting efficiency.
Legislation the panel approved for further consideration included:
- HR 360, co-sponsored by Rep. Jerry McNerney (D-Calif.), directing the Department of Energy to establish a program to identify cybersecure products for the bulk power system.
- HR 359, sponsored by McNerney, directing DOE to develop, for voluntary implementation, maturity models, audit methods and self-assessments for electric utilities to evaluate physical security and cybersecurity.
- HR 370, directing DOE to establish policies and procedures to strengthen cybersecurity at gas and oil pipelines and liquefied natural gas terminals.
- HR 2088, reauthorizing energy-efficiency block grants for local, state and tribal governments, at $3.5 billion per year for fiscal years 2020 through 2024.
DOE Formalizes Dishwasher Proposal
The Department of Energy formally proposed a rule on July 16 that would result in separate energy- and water-efficiency standards for residential dishwashers with cycle times of less than one hour.
In a notice published in the Federal Register, DOE agreed with a request that the Competitive Enterprise Institute filed in a 2018 petition. CEI, which is generally skeptical of federal regulations, said energy- and water-efficiency standards have resulted in longer dishwasher cycle times, leading to reduced consumer satisfaction.
If the proposed rule to establish a separate product class for short-cycle dishwashers is finalized, DOE would establish energy- and water-use standards for them in a separate rulemaking.
Comments on the proposal are due by Sept. 16.
If the rule is finalized, litigation challenging it is likely.
Rep. Frank Pallone (D-N.J.), chairman of the House Energy and Commerce Committee, said DOE’s proposal “penalizes both the innovators giving us better, more efficient appliances and the consumers who use them.”
CEI attorney Devin Watkins cheered the proposal. “We hope that its newly announced rulemaking proceeding will end up improving consumer choice, allowing people to purchase dishwashers that clean quickly and well,” he said.
NRC Staff Proposes Reduced Inspections
Nuclear Regulatory Commission staff has proposed reducing the frequency of reactor “problem identification and resolution” inspections from biennially to every three years.
The proposal, made public July 16, also recommends reducing the extent of inspections, which it said would enable inspectors to focus more on issues with potentially greater safety significance. The proposal acknowledged “licensee self-assessments would be less frequent.”
“Resident inspectors will still be required to follow up on emergent safety issues, maintain cognizance of plant status, and be available for event response,” the proposal said.
Proposed changes in reactor oversight also would drop the four-quarter inspection requirement for plants at which previous inspections have turned up findings with low to moderate or higher safety implications. Under the proposal, NRC would mark the finding as resolved once a supplemental inspection verifies the problem has been corrected.
The staff report said the change would give licensees an incentive to fix spotlighted problems earlier.
Top House Democrats on July 15 took issue with NRC’s proposal. In a letter to NRC Chairman Kristine Svinicki, they raised concerns over “arbitrarily reducing core inspections” and “reducing the significance and public reporting of [low to moderate] safety findings.”
“Each proposed alteration weakens the current standards, and it is unclear why the NRC is pursuing these changes now and in an expeditious manner that does not appear to ensure broad public input,” the letter said.
Signers included Rep. Frank Pallone (D-N.J.), chairman of the Energy and Commerce Committee, Rep. Nita Lowey (D-N.Y.), chairwoman of the Appropriations Committee, and subcommittee chairs from both panels.
Trump Rejects Uranium Import Curbs
President Donald Trump on July 12 rejected curbs on uranium imports, a win for utilities with nuclear power that feared quotas would drive up fuel costs.
Trump rejected Commerce Secretary Wilbur Ross’ finding that uranium imports threaten national security “as defined” in the Trade Expansion Act of 1962. Ross made his finding in connection with a petition that two uranium producers—Ur-Energy and Energy Fuels—filed seeking a quota reserving 25 percent of the U.S. market for domestically produced uranium.
In a memo, Trump added that a “fuller analysis of national security considerations with respect to the entire nuclear fuel supply chain is necessary at this time.” He ordered formation of a working group to come up with recommendations for increasing domestic uranium production. The group will be led by White House national security and economic policy advisers.
The Nuclear Energy Institute, a trade group of utilities, manufacturers and fuel suppliers, applauded Trump’s decision. “Quotas would have a crippling effect on the economic health of the U.S. nuclear power fleet,” NEI said in a statement.
Ur-Energy and Energy Fuels said they “look forward” to the working group’s recommendations.
Sen. John Barrasso (R-Wyo.), chairman of the Senate Environment and Public Works Committee, called Trump’s decision a “missed opportunity.” Wyoming is a leading domestic producer of uranium concentrate, according to the Energy Information Administration.
In their petition, producers said the domestically produced share of U.S. uranium demand fell from 49 percent in 1987 to 5 percent in 2017. They have warned that foreign sources would make up 99 percent of demand this year.
According to EIA figures, U.S. mines produced 721,000 pounds of uranium concentrate in 2018, down 37 percent from 2017. As recently as 2012, U.S. production of concentrate totaled 4.9 million pounds, EIA said.
The petition said the domestic industry has been damaged by “state-supported producers in the Russian sphere of influence,” including Russia itself, Kazakhstan and Uzbekistan.
More than two dozen House Republicans on July 12 urged Trump to support quotas. Signers on a letter to Trump included Rep. Rob Bishop (R-Utah), ranking Republican on the House Natural Resources Committee, and Rep. Dan Newhouse (R-Wash.).
Opposing the petition, the Ad Hoc Utilities Group argued quotas would drive up fuel prices and endanger the viability of nuclear plants that already face tough price competition from natural gas-fired and renewables generation.
The group’s members include Energy Northwest and Pacific Gas & Electric.
FERC Revises Rules for Market-Based Rate Sellers
FERC approved a rule on July 18 aimed at easing requirements for market-based rate sellers operating in organized wholesale power markets.
Under the rule, FERC dropped market-power information requirements for sellers seeking to obtain or keep market-based rate authorization. The requirements applied to sellers operating in organized wholesale markets running energy, ancillary services and capacity markets subject to commission monitoring and mitigation.
Sellers proposing to offer capacity in the California ISO and Southwest Power Pool markets at market rates, however, must submit market-power information, according to the rule.
The meeting marked Commissioner Cheryl LaFleur’s final one as a member. LaFleur is leaving FERC at the end of August, which will leave FERC with three members, the minimum for a quorum. President Donald Trump has not yet submitted to the Senate a nominee to fill the seat vacated by Kevin McIntyre’s death on Jan. 2.
Chaco Withdrawal Bill Advances
Legislation to block new energy leases on more than 316,000 acres of federal lands around Chaco Culture National Historical Park in New Mexico was reported out July 18 by the House Natural Resources Committee.
The bill, HR 2181, would block leasing in a roughly 10-mile radius around the park.
BLM Planned Move Praised, Criticized
The Interior Department’s plan to establish a BLM headquarters in Grand Junction, Colo., and shift bureau employees to Western offices drew praise from Western congressional Republicans, who said it would bring BLM decision-making closer to affected people.
Interior plans to move BLM’s director out of Washington, D.C., to the new Colorado headquarters. A total of 222 headquarters employees would be shifted to Grand Junction and other BLM offices throughout the West, according to a July 16 letter from Joseph Balash, assistant secretary for land and minerals, to Sen. Lisa Murkowski (R-Alaska), chairman of the Senate Appropriations Committee’s Department of the Interior, Environment, and Related Agencies Subcommittee.
Balash indicated that staff working on renewable-energy permits would be sent to California and other Western states, “where we can reasonably anticipate” continuing work reviewing proposals for solar, wind and geothermal projects on federal lands.
Sen. Cory Gardner (R-Colo.) and Rep. Rob Bishop (R-Utah), ranking Republican on the House Natural Resources Committee, praised the planned move.
“BLM personnel will be moved where they will have a greater impact on, and input by, the people in the regions where their influence is greatest,” Bishop said.
However, Rep. Raúl Grijalva (D-Ariz.), chairman of the Natural Resources Committee, said the plan “makes it easier” for industry lobbyists “to walk in the door demanding favors without congressional oversight or accountability.”
Grijalva predicted BLM “will lose a lot of good people because of this move, and I suspect that’s the administration’s real goal here.”
More Cyberdata Sharing Urged
Utilities need faster access to actionable cyberthreat information from federal agencies, the head of NERC told a House subcommittee hearing July 12.
Jim Robb, NERC’s CEO, called for “rapid declassification and/or broader availability of security clearances” for utility officials. Robb testified at a hearing on cybersecurity held by the House Energy and Commerce Committee’s Energy Subcommittee.
In response to questions from Rep. Scott Peters (D-Calif.), Robb said “we don’t need to know the origins, we don’t know need to know the sources, we just need to know the ‘whats.’”
In his written testimony, Robb said cyberthreat trends he sees include “credential harvesting.”
“Sophisticated spear phishing activity to harvest [log-in] credentials is the most common technique observed” by members of NERC’s Electricity Information Sharing and Analysis Center, he wrote.
Andy Dodge, director of FERC’s Office of Reliability, said the commission offers classified briefings and information on cybersecurity “best practices” to managers of small utilities.
DOE Seeks Data on Weather Resilience
The Department of Energy has requested information about codes and industry practices to “provide guidance” for strengthening weather-related resilience of the electric-power grid and oil and gas infrastructure.
In requests for information published July 9 in the Federal Register, DOE said “gathering this information will enable existing requirements and expert knowledge on this subject to be synthesized and made broadly available to interested policy officials and other decision-makers.”
DOE said “more frequent and severe weather events” have resulted in heightened concern about making power, oil and gas infrastructure more resilient. The information requests do not mention climate change.
Deadline for responding to the information requests is Aug. 23.
Defense Bill Passes with Climate Amendments
The House on July 12 passed a defense authorization bill with an amendment to codify a 2013 executive order requiring the Pentagon to seek removal of barriers hindering facility climate-change resilience investments.
The amendment, offered by Rep. Earl Blumenauer (D-Ore.), was approved by voice vote.
Another Blumenauer amendment to incorporate projected sea-level changes into military construction planning also was approved by voice vote.
The White House has threatened a presidential veto of HR 2500 over numerous spending and policy provisions.
GAO Scolds EPA on Advisory Panels
The Environmental Protection Agency failed to follow internal procedures for ensuring balanced membership in filling slots on its Science Advisory Board and Clean Air Scientific Advisory Committee, the Government Accountability Office said in a report made public July 16.
GAO also said EPA failed to ensure that financial disclosure forms filed by members comply with federal ethics rules.
Rep. Mikie Sherrill (D-N.J.), chairwoman of the House Science Committee’s Investigations and Oversight Subcommittee, told a July 16 panel hearing that EPA’s action “undermines the transparency and integrity we expect from these important expert panels.”
Rep. Ralph Norman (R-S.C.), the subcommittee’s ranking Republican, defended EPA. He said the agency’s filling of advisory panel slots was based on “a more rigorous process, where the administrator was thoroughly briefed on the qualifications of multiple candidates.”
Stevens Opinion Opened Door to EPA GHG Regulation
Retired Supreme Court Justice John Paul Stevens, author of the high court opinion that cleared the way for the Environmental Protection Agency to regulate greenhouse gas emissions, died July 15 at the age of 99.
Stevens authored the majority opinion in the 2007 Massachusetts v. EPA case, in which justices ruled the Clean Air Act requires EPA regulation of greenhouse gas emissions if it finds they endanger public health or welfare.
Stevens also authored the 1984 high court opinion that established the “Chevron deference” doctrine, under which judges defer to reasonable agency interpretations of ambiguous statutes covering environmental and other regulatory issues.
Stevens served on the Supreme Court from 1975 to 2010.