The Nickel Report

On May 17, 2018, the Federal Energy Regulatory Commission (Commission) held its May 2018 open meeting. Highlights of the meeting include:

PURPA

In his opening remarks, Chairman McIntyre announced that the Commission would soon be turning to a review of its long-standing policies under the Public Utilities Regulatory Policies Act of 1978 (PURPA). He noted that the Commission had initiated a review of these policies in 2015-2016 and had held a technical conference on certain PURPA issues in 2016.  He has directed Commission staff to restart the initiative so the Commission can determine what, if anything, should be done to improve and update the policies.  The other commissioners were supportive of this initiative.  Commissioner Powelson pushed for an expedited review of the PURPA policies, referencing the previously developed record.  Commissioner Glick indicated that any changes to policies should address issues raised not only by industry, but also by qualifying facility developers.  The commissioners also acknowledged that more substantial changes to PURPA would have to be addressed by Congress.

The Administration is considering substantial changes to the current regulatory approach to reducing exposure to lead in drinking water. The US EPA (EPA) is assessing long-term revisions to the Lead and Copper Rule (LC Rule), a Safe Drinking Water Act (SDWA) regulation that seeks to protect public health by minimizing lead and copper in drinking water, primarily through corrosion control measures. Lead contamination in drinking water has been the subject of national scrutiny in the aftermath of the public health crisis in Flint, Michigan, where high levels of lead leached from aging pipes into the city’s drinking water after the city switched its source of drinking water to the Flint River, the quality of which was more corrosive than the prior source. Congress eventually banned lead pipes in new construction with amendments to the SDWA in 1986, but in a 2016 survey, the American Water Works Association estimated that 6 million lead-containing service lines continue to distribute drinking water to 15-22 million people in the United States. As state and local governments nationwide confront similar challenges, EPA appears poised to address the legacy of lead infrastructure through updates to the LC Rule. In January 2018, EPA Administrator Scott Pruitt pledged to update the LC Rule as part of his “war on lead” in drinking water.

On May 9, the White House released its Spring 2018 update to EPA’s regulatory agenda. Agency watchers quickly dove into the document to check the status and timelines for high-profile rulemakings and gain insights on the Trump administration’s priorities. But aside from any revelations about the administration’s own initiatives, this latest document was also notable for showing just how much EPA’s regulatory agenda can be driven by forces outside of the executive branch.

Recently, the Trump administration’s Assistant Administrator for Enforcement, Susan Parker Bodine, clarified the role of EPA’s Next Generation Compliance initiative in civil enforcement settlements by announcing that (contrary to the prior administration’s suggestion) there is “no default expectation” that “innovative enforcement” provisions will routinely be sought as injunctive relief in civil settlements. Does this suggest a broader reassessment of the “Next Gen” program by EPA?

We are taught from a young age that two plus two equals four; it is a given just as the earth is round, despite recent controversy. But two plus two may not equal four due to two concepts: significant figures and rounding. But why should you care about either of those two concepts? If you are subject to permit limits or standards those concepts can be the difference between compliance and noncompliance.

On April 19, 2018, the Federal Energy Regulatory Commission (Commission) held its April open meeting. Among other things, the Commission issued major orders concerning the interconnection of large generating (and storage) facilities to the electric transmission grid and price formation in wholesale power markets. It also issued a notice of inquiry (NOI) exploring potential changes to the Commission’s policies governing the certification of new interstate natural gas facilities, addressed in a separate post. The Commission also took action on various other matters.

Two notable developments in the past few weeks signal potential changes ahead to the policies and timeframes for pipeline approvals, particularly natural gas pipelines under Federal Energy Regulatory Commission oversight. These developments reflect both the increased public scrutiny of the pipeline approval process seen in recent years and the emphasis placed by the current administration on expediting review and approval of major infrastructure projects, two factors that are in some tension with each other.

See the full report on PipelineLaw.com.

On April 16, 2018, the U.S. Fish and Wildlife Service published a final rule removing the black-capped vireo (BCV) from the Federal List of Endangered and Threatened Wildlife. 83 Fed. Reg. 16,228. The BCV is a migratory songbird that breeds and nests in Texas, Oklahoma, and northern Mexico, and winters along Mexico’s Pacific coast. Its breeding habitat includes shrublands and open woodlands. The delisting decision is based on the Service’s determination “that the primary threats to the [BCV] have been reduced or managed to the point that the species has recovered.” The delisting will take effect on May 16, 2018. The Service will work with the States of Texas and Oklahoma to implement a 5-year post-delisting monitoring program in compliance with section 4(g)(1) of the Endangered Species Act (ESA).

When California Assembly Bill 617 (AB 617) was signed into law, California ambitiously announced a new “community focused” strategy to improve air quality in California. AB 617’s stated goal is to improve air quality in environmental justice communities through local, community-specific strategies focused on the individual needs and issues particular to each community. The development and implementation of this “community focused” strategy is largely the responsibility of California’s local air quality management districts (AQMDs) because AB 617 places new, explicit responsibilities on AQMDs so that they take the lead in improving the air quality in their environmental justice communities.

Recent press reports indicate that a cyber-attack disabled the third-party platform used by oil and gas pipeline company Energy Transfer Partners to exchange documents with other customers. Effects from the attack were largely confined because no other systems were impacted, including, most notably, industrial controls for critical infrastructure. However, the attack comes on the heels of a Federal Bureau of Investigation and Department of Homeland Security (“DHS”) alert warning of Russian attempts to use tactics including spearphishing, watering hole attacks, and credential gathering to target industrial control systems throughout critical infrastructure, as well as an indictment against Iranian nationals who used similar tactics to attack private, education, and government intuitions, including the Federal Energy Regulatory Commission (“FERC”). These incidents are raising questions about cybersecurity across the US pipeline network.