The Nickel Report

On March 21, 2019, the Federal Energy Regulatory Commission (Commission or FERC) held its monthly open meeting. Highlights of the meeting included the following:

• Electric Transmission Incentives Policy (Docket No. PL19-4-000)
  • The Commission issued a Notice of Inquiry (NOI) seeking comments on the scope and implementation of its electric transmission incentives regulation and policy.
  • Section 219 of the Federal Power Act directs the Commission to use transmission incentives to help ensure reliability and reduce the cost of delivered power by reducing transmission congestion. The Commission issued Order No. 679 in 2006 to establish its approach to transmission incentives and set forth a series of potential incentives that it would consider. The Commission subsequently refined its approach in a 2012 policy statement.
  • The NOI seeks comments in response to questions addressing many matters, including several that have not previously been addressed by the Commission’s transmission incentive policy, including:

A recently successful effort by Wisconsin utility MGE Energy to exclude an environmental proposal from its proxy statement may signal a new approach for boards of directors to consider when managing vexatious shareholder proposals.

Legalization of medicinal and adult-use cannabis in California has fomented a surge of seed-to-sale companies angling to lure market share from a sea of customers. The water may soon be agitated, however, by the Office of Environmental Health Hazard Assessment (OEHHA). OEHHA is the lead California agency that oversees implementation of Proposition 65, formally known as the Safe Drinking Water and Toxic Enforcement Act of 1986. OEHHA recently announced that it has selected cannabis (marijuana), marijuana (cannabis) smoke, cannabis extracts, and delta-9-Tetrahydrocannabinol (THC) for review for possible listing under Proposition 65 as chemicals that cause reproductive toxicity. If the Developmental and Reproductive Toxicant Identification Committee (DARTIC) determines that these chemicals cause reproductive toxicity based upon “scientifically valid testing according to generally accepted principles,” marijuana in its various forms will likely join a list of more than 900 chemicals known to the state to cause cancer, birth defects, or other reproductive harm. Companies that cultivate, distribute, and/or sell marijuana and products containing marijuana in California would then be required to warn consumers—and possibly employees and passersby—that exposure to these listed chemicals can cause reproductive harm.

While coming from opposite ends of the political spectrum, the administrations of US President Donald Trump and Mexico’s recently elected chief executive, Andrés Manuel López Obrador (commonly referred to as “AMLO”), have each heralded significant policy shifts with potential to affect bilateral relations as well as international energy markets.

EPA has shown a little love for states wanting action on per- and polyfluoroalkyl substances (PFAS). On February 14, 2019, EPA announced its PFAS Action Plan, calling it “the most comprehensive, cross- agency action plan for a chemical of concern ever undertaken by the Agency.” The Action Plan consists of 23 priority action items with the majority identified as short-term or generally taking place or expected to be completed in the next two years.