On November 19, we published an article on the Federal Energy Regulatory Commission’s (“FERC”) efforts to reform transmission planning and cost allocation issues addressed in FERC’s Advance Notice of Proposed Rulemaking (“ANOPR”). Just last week, FERC issued a notice seeking comments in response to its November 15, 2021 technical conference on ANOPR in Docket No. RM21-17. Please be advised that all interested persons are invited to file post-technical conference comments to address the issues raised during that event on or before November 30, 2021. Continue Reading Updates on FERC Transmission Planning Process Reform – 11/22/21
Regulatory Update – FERC transmission planning process reform
On July 15, 2021, the Federal Energy Regulatory Commission (“FERC”) issued an Advanced Notice of Proposed Rulemaking (“ANOPR”) to broadly examine FERC’s current electric regional transmission planning, cost allocation, and generator interconnection policies. The ANOPR seeks public comment on “potential reforms for longer-term regional transmission planning and cost-allocation processes that take into account more holistic planning, including planning for anticipated future generation, rethinking cost responsibility for regional transmission facilities and interconnection-related network upgrades, and enhanced transmission oversight over how new transmission facilities are identified and paid for.” Issuance of a final rule could have a significant impact on transmission grid planning processes throughout the nation. Below are some key takeaways and perspectives based on the ANOPR and its public comment process.
Tax considerations are one of the main drivers for renewable energy projects. This fall, Husch Blackwell’s Energy and Natural Resources team hosted a webinar that explored the available federal and state credits, abatements, incentives, and in some cases, specialty taxes that affect the profitability of renewable energy projects. During the program, we received a number of questions worth sharing with our blog subscribers that are navigating tax issues on their renewable energy projects. This article addresses those questions. Continue Reading Digging Deeper: Tax Considerations for Renewable Energy Projects
On May 7, 2021, pipeline operator Colonial Pipeline Company suffered a ransomware cyberattack on its namesake Colonial Pipeline. Hackers attacked computerized management equipment, effectively freezing one of the largest pipelines responsible for delivering gasoline and jet fuel across the Southeastern United States. The attack was the largest of its kind on an oil infrastructure target in United States history.
With FBI assistance, the company paid a $4.4 million ransom to restore pipeline operations. Law enforcement agencies and media sources identified DarkSide, a criminal hacking group, as the culprit.
In the wake of the attack, developers of energy projects which rely on pipelines to deliver products (from traditional oil to renewable natural gas) find themselves exposed to the new risk of ransomware attacks – a risk which security technology is still struggling to address. In the meantime, energy project stakeholders (from financing sources to offtake customers) are turning to cyber risk insurance for protection. Project financiers and offtake customers to whom firm delivery obligations are owed are increasingly seeking evidence of cyber risk coverage during diligence efforts. But not all policies are created equal; selecting the coverage most appropriate to a project requires an understanding of the types of coverage available and common exclusions. Continue Reading Cyber Risk Insurance in the Wake of the Colonial Pipeline Cyberattack
On November 15, 2021, President Biden signed into law the Infrastructure Investment and Jobs Act, a monumental $1.2 trillion bipartisan infrastructure bill. Given its wide scope, the bill will drive remarkable activity and long-term investment in a wide variety of infrastructure sectors. The infrastructure bill takes an expansive view on what constitutes infrastructure and includes significant funding for the electric power system, clean energy technologies, and oil and gas infrastructure.
Pursuant to the Renewable Fuel Standard (“RFS”), the U.S. Environmental Protection Agency (“U.S. EPA”) issues annual renewable volume obligations (“RVOs”), which set the minimum aggregate volume of renewable fuel that refiners must blend with transportation fuel for the following calendar year.
Refineries producing transportation fuel meet their RVOs by blending the required volume of renewable fuel into gasoline or diesel fuel or by acquiring credits (called renewable identification numbers, or “RINs”). The RFS permits “small” refineries – those producing fewer than 75,000 barrels of fuel per day – to claim an exemption by showing that meeting their RVOs would cause them “disproportionate economic hardship.” Continue Reading Exemptions Under The Renewable Fuel Standard
The American Society for Testing and Materials (“ASTM”) is expected to release a revised international standard for Phase I Environmental Site Assessments (“ESAs”) in December of 2021 that will clarify a number of key components of the standard and elevate the importance of per/poly-fluoroalkyl substances (“PFAS”).
Phase I ESAs are conducted by many parties when they become involved in the sale, acquisition, development, or financing of a piece of land, including developers, owners, and parties who provide loans for or serve as tax equity investors on renewable energy projects. The Phase I ESAs allow those parties to get a glimpse into the environmental condition of the land and identify any potential contamination on-site. Some of those parties – by acquiring an ownership or leasehold interest in the land, or by becoming an operator of the site – take on potential environmental liability if there have been releases on-site, including liability under the strict liability scheme of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”). A defense to CERCLA liability is available if the party conducted certain diligence that complies with the United States Environmental Protection Agency’s All Appropriate Inquiries (“AAI”) standard, and if the party exercises appropriate care with respect to issues identified. Environmental consultants prepare those Phase I ESAs and use the current ASTM standard as a guideline to prepare a thorough report and comply with AAI. Continue Reading A Revised ASTM Phase I Environmental Site Assessment Standard is Coming
On November 10, 2021, ERCOT held a workshop on Generation Entity Winter Weather Preparedness. At this workshop, ERCOT provided an explanation of its approach to implementing the Public Utility Commission’s Winter Emergency Preparedness Rule, which was issued in August 2021 in response to legislative directives contained in Texas Senate Bill 3 (“SB 3”). The new rule aims to ensure that the electric industry is prepared to provide continuous reliable electric service throughout this upcoming winter season and to comply with the statutory deadline for the adoption of weather emergency preparedness reliability standards set forth in SB 3. Continue Reading Texas Winter Readiness Update – November 10, 2021
Partner Brian Hendrix recently authored “MSHA’s Current Rulemaking Agenda” in Coal Age. The article outlines the U.S. Mine Safety and Health Administration’s (MSHA) rulemaking plans that include a powered haulage rule, followed by a Respirable Crystalline Silica (RCS) rule. No details are available on the RCS rule, but it is safe to assume MSHA will propose a reduction of the silica PEL from 100 µg/m3 to 50 µg/ m3 or less.
MSHA’s current rulemaking plans aren’t limited to just these. There are four rules on the agenda, and it is laying the groundwork for more.
For more information, read the article here.
On November 4, 2021, the Occupational Safety and Health Administration (OSHA) issued its Emergency Temporary Standard (ETS) applicable to employers of 100 or more employees. The ETS requires employers to adopt a soft vaccine mandate obligating employees to either get vaccinated or to undergo regular COVID-19 testing and to wear a face covering at work. OSHA expressly states that the ETS pre-empts all state or local laws that are contrary to the ETS requirements.
The ETS was originally set to be effective on the date of publication in the Federal Register (November 5, 2021), with employees who work for covered employers having until January 4, 2022 to get vaccinated or otherwise comply with the testing/masking requirements. However, on Saturday, November 6, 2021, the U.S. Court of Appeals for the Fifth Circuit issued an emergency stay of the ETS. Hence, it is not currently enforceable with respect to workplaces located in the Fifth Circuit, which includes Louisiana, Mississippi, and Texas. The stay may also extend to other states across the country, although that is not clear as the court did not specify whether its decision applied nationwide or only to the states under its jurisdiction. Regardless, other challenges to the rule have been filed around the country. Notwithstanding this emergency stay, we advise that employers that would be subject to the rule still consider preparing for enforcement while this matter is being litigated. More details on the rule, if it withstands the legal challenges, are below.
The ETS places the compliance and recordkeeping burden squarely on employers, and it leaves employers to decide whether employees may opt for testing instead of vaccination. Under the ETS, employers may: (1) require all employees to be vaccinated (except those exempted for religious or medical reasons) l; or (2) require employees to be either vaccinated (except those exempted for religious or medical reasons) or wear a mask and be tested regularly. The ETS also leaves it up to employers to decide whether the costs of testing and masks will be covered by the employer or by the employees who opt for testing/masking instead of vaccination.
The new OSHA rule is not enforceable by the Mine Safety and Health Administration (MSHA) and does not apply to mines regulated by MSHA. MSHA continues to encourage miners to get vaccinated, and mine operators and organized labor are doing the same. MSHA has publicly stated (as recently as last week) that it does not currently intend to issue an emergency standard on COVID.