Regulation Database – Federal Energy Regulatory Commission

Electricity

FERC Order 2222 aims to eliminate barriers to the participation of distributed energy resources (DERs) in organized wholesale electricity markets. The order defines DERs to include "any resource located on the distribution system, any subsystem thereof, or behind a customer meter." The order requires each Regional Transmission Operator and Independent System Operator to revise its tariff to establish DER aggregations as a category of market participant and allow them to register under one or more participation model(s) that accommodate their physical and operational characteristics.

FERC Order 872 revises the regulations implementing sections 201 and 210 of the Public Utility Regulatory Policies Act (PURPA). Among other things, PURPA requires utilities to purchase energy and capacity from qualifying small power production facilities and cogeneration facilities at avoided cost rates, determined by the states. FERC is required to adopt regulations to encourage the development of QFs. Order 872 makes several revisions to FERC's regulations. Under the revised regulations, utilities participating in organized wholesale electricity markets are no longer required to purchase energy from qualifying small power production facilities exceeding five megawatts in size (down from twenty megawatts under the previous regulations). FERC's revised regulations also give states more flexibility in establishing avoided cost rates for qualifying facility sales. Under the new regulations, states now have discretion to allow utilities to offer qualifying facilities contracts with variable energy rates (i.e., which vary with market rates). This provision was clarified in FERC Order 872-A, which provides that a state may only allow the use of variable rates if the utility has published avoided cost data in accordance with 18 C.F.R. 292.302.  

FERC Order 841 aims to remove barriers to the participation of energy storage resources in wholesale electricity markets. The order requires Regional Transmission Organizations and Independent System Operators to revise their tariffs to establish a market participation model specifically tailored to energy storage resources. The participation model must, among other things, ensure that energy storage resources are eligible to provide all capacity, energy, and ancillary services that they are technically capable of providing in the market. 

Litigation: Order 841 was upheld by the U.S. Court of Appeals for the District of Columbia Circuit in National Association of Regulatory Utility Commissioners v. FERC (2020)

FERC Order 792 revises the interconnection procedures for small generating facilities up to 20 megawatts in size. Among other things, the order provides that energy storage devices are eligible to participate in the "fast track" interconnection process, and revises that process to require transmission providers to offer developers an interconnection agreement within five business days after the provider determines that the facility can be safely interconnected.

FERC Order 748 aims to foster competition and increase transparency in ancillary service markets by, among other things, removing barriers to market participation by third-party providers. The order lifts restrictions on third-party sales of ancillary services to public utility transmission providers. It also requires public utility transmission providers to take into account the speed and accuracy of regulation resources when determining whether a customer choosing to self-supply frequency and regulation services has met its obligation to make "alternative comparable arrangements" to satisfy its regulation and frequency response service obligation. That could facilitate greater use of energy storage resources to provide ancillary services. 

FERC Order 1000 reforms electric transmission planning and cost allocation requirements for public utility providers. The Commission now requires public utility providers to participate in a regional planning process. During the regional transmission planning process the parties must ensure that public policy requirements are satisfied and that infrastructure is developed in a manner that contributes to energy efficiency. In addition to regional planning, FERC Order 1000 also introduces cost allocation measures controlling the distribution of the cost of new infrastructure that serves the region. The order has been amended twice (Orders 1000-A and 1000-B). More information can be found here.

FERC Order 745 was issued as a result of the mandates of the Energy Policy Act of 2005 related to barriers to the demand response market. The order requires demand response resources participating in organized wholesale electricity markets to be compensated at the same market price as is received by conventional resources (including generators). The market price is set according to the cost of making electricity available at the location in question (locational marginal price).

Litigation: Order 745 was upheld by the U.S. Supreme Court in FERC v. Electric Power Supply Association (2016)

FERC Order 719 aims to remove barriers to the participation of demand response resources in organized wholesale markets. Among other things, the order requires Regional Transmission Organizations and Independent System Operators to accept bids from demand response resources for certain ancillary services, and provides that all accepted bids must receive the market clearing price. These requirements were clarified in FERC Orders 719-A and 719-B. 

Natural Gas 

On May 18, 2018 FERC clarified that it will not consider upstream and downstream greenhouse gas emissions when conducting environmental reviews of natural gas pipelines, except in limited circumstances. FERC reasoned that upstream emissions associated with natural gas production and downstream emissions association with natural gas combustion are too attenuated and uncertain to warrant consideration. FERC indicated that it will continue to analyze upstream and downstream effects when they are “sufficiently causally connected to and are reasonably foreseeable effects of the proposed action.” In particular, FERC will consider downstream emissions associated with natural gas combustion, where it has information about the intended use of the natural gas transported via the pipeline project.

On March 18, 2021, FERC for the first time assessed the significance of a proposed natural gas pipeline project’s greenhouse gas emissions and their contribution to climate change, and committed to conducting the same assessment in similar orders going forward.

On February 18, 2022, FERC published an interim policy statement titled “Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure Project Reviews.” The document describes FERC’s procedures for evaluating climate impacts under National Environmental Policy Act and how FERC will integrate climate considerations into its public interest determinations under the Natural Gas Act. The document states that FERC is establishing a rebuttable presumption that proposed projects with 100,000 metric tons per year of carbon dioxide equivalents (CO2e) emissions will be deemed to have a significant impact on climate change. The document also explains how FERC will quantify greenhouse gas emissions and how FERC will handle the potential mitigation of climate impacts. You can read more about the policy statement in this blog post. 

On March 25, FERC announced that the statement was a draft statement that it was seeking further comment on. 

On April 19, 2018, FERC issued a Notice of Inquiry requesting information on whether and how it should revise its policy for certifying natural gas pipelines under section 7 of the Natural Gas Act. Specifically, FERC requested information on whether and how it should adjust (1) its methodology for determining whether there is a need for a proposed pipeline, (2) its consideration of landowner interests relating to a proposed project, and (3) its evaluation of the environmental impacts of a proposed project. 

On February 18, 2022, FERC published its “Updated Policy Statement on Certification of New Interstate Natural Gas Facilities.” The document describes how FERC will evaluate factors bearing on the public interest in determining whether a new interstate natural gas transportation project is required by the public convenience and necessity under the Natural Gas Act. One key element of the updated policy is the requirement that FERC look beyond precedent agreements when determining whether there is public need for a project. The document also includes information on how FERC will consider environmental impacts, including impacts on environmental justice communities. You can read more about the policy statement in this blog post. 

On March 25, FERC announced that the statement was a draft statement that it was seeking further comment on. 

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