United States: Energy, Environment And Resources Update

Virginia—Recovery of Natural Gas Supply Investment Costs

Some Virginia retail natural gas customers will not see gas production costs included in their rates, notwithstanding a recent state law allowing it. On November 6, 2015, the Virginia State Corporation Commission, in Case No. PUE-2015-00055, denied an application by Washington Gas Light Company (WGL) to include natural gas production costs in ratepayers' bills through a natural gas supply investment plan. WGL had proposed to invest more than $120 million in natural gas production and wells located in Pennsylvania, asserting that the investment would secure lower-cost supplies of natural gas over a 20-year period. Although WGL submitted studies demonstrating the potential cost savings, the proposal was opposed by the state's Division of Consumer Counsel, which argued that WGL's proposal could increase ratepayer costs by about $51 million. Ultimately, the Commission denied the application, finding that it would transfer too much risk from WGL to its customers, and noting that some cost analyses had shown little or no benefits for ratepayers.

WGL's application was the first by a utility under Virginia's 2014 law that allows utilities to seek Commission approval to recover natural gas supply investment costs from ratepayers while providing reasonably anticipated benefits to customers. The investments, however, cannot exceed 25 percent of the utility's annual firm sales demand by volume. WGL serves over one million customers in Virginia, Maryland and the District of Columbia.

Nuclear Plant Closures

New York state is slated to lose another baseload generation facility due to economic factors. Entergy Corporation, owner of the James A. FitzPatrick Nuclear Power Plant, announced its intention to retire the generation facility in late 2016 or early 2017. FitzPatrick is located on the shore of Lake Ontario, near the towns of Scriba and Oswego. Entergy cited competition from low-cost natural gas-fired generation, an energy market that ignores the benefits provided by the facility, and high operating costs. The benefits noted include fuel diversity, low carbon emissions, on-site fuel storage and reliable baseload generation capability. The R. E. Ginna Nuclear Power Plant, located near Rochester, is also on course to close. Ginna, owned by Exelon Generation, is negotiating a compensation agreement to keep the plant online for reliability purposes.

This announcement follows an earlier notification by Entergy of its plan to close the Pilgrim Nuclear Power Station in Plymouth, Massachusetts. Pilgrim's closure is expected to occur before the middle of 2019 and, like FitzPatrick, is the result of unfavorable economic conditions. Pilgrim has a generating capacity of 680 megawatts and began operation in 1972, while FitzPatrick has a generating capacity of 838 megawatts and began operation in 1975.

New York PSC Adopts Net Metering of Community Distributed Generation Projects

In July 2015, the New York State Public Service Commission (PSC) issued an order establishing a Community Distributed Generation program, effective October 19, 2015. The program is intended to make renewables and other forms of distributed generation (DG) available to end users who are otherwise unable to take advantage of them.

The program framework is centered on net metering of power, authorized under New York Public Service Law § 66-j and § 66-l, from solar generators up to 2 MW; farm waste electrical generators up to 1 MW; CHP and fuel cells up to 10 kw; and wind generation of not more than 2 MW for commercial customers, 500 kw for farm customers and 25 kw for residential customers. Community DG enables a group of customers to join together as members of an entity that is able to contract with a DG developer.

Up to 40 percent of the electricity generated by a project may be consumed on-site by the host, which serves as an anchor for the project. If the project is remotely sited, one member of a group of customers may take up to 40 percent of the output. The balance of 60 percent must be net metered to community members whose energy demand may not exceed 25 kw and all members must be located in the same utility service territory. A sponsor may be any single entity, including a generation facility developer, an energy service company ("ESCO"), a municipal or other government entity, an LLC, a partnership or another form of business or civic association. Community DG can be used to reduce energy costs and is particularly useful in multi-family housing, including co-ops and condos, where the building owner and tenants are separately metered.

EPA's Clean Power Plan—Litigation and the Court of Public Opinion

On the heels of the October 23, 2015, publication of the final EPA Clean Power Plan (CPP), which mandates a 32-percent reduction in CO2 emissions (from 2005 levels) by 2030, the lawsuits have already begun. Within the past month, 26 states, joined by a number of industry groups, have filed suit in the U.S. Court of Appeals for the District of Columbia, seeking a stay of the CPP. A variety of challenges have been advanced, ranging from constitutional arguments to an attack based on the unusual legislative history of the Clean Air Act (CAA) (there are differing Senate and House versions of key Section 111(d) of the CAA).

While one might think that all state political leaders would be taking positions along strict party lines, there are early indications to the contrary. On October 25, Republican Senator Kelly Ayotte of New Hampshire publicly announced her support for the CPP. In Colorado, Republican Governor John Hickenlooper has openly supported the CPP, notwithstanding his Attorney General's decision to join other states' Attorneys General in suing EPA. Michigan Republican Governor Rick Snyder has also publicly expressed disagreement with his Attorney General's decision to include Michigan as a plaintiff. Some Democratic leaders in coal-producing states, and in states that rely heavily on coal for electricity generation, have opposed the CPP.

The crossing of party lines in support of the CPP might have something to do with survey and polling data. Early this month, the Yale Project on Climate Change Communication published the results of a national survey for which data was collected between 2008 and 2014 by the Yale Project and the George Mason Center for Climate Change Communication. Although the headlines about this study centered on the reported 63-percent majority who expressed a belief that "climate change is happening," more notable statistics include the reported 77 percent who support funding research into renewable energy sources and the reported 74 percent who support regulating CO2 as a pollutant. In addition, some of the nation's largest corporations and employers are openly expressing support for the CPP (e.g., see July 31, 2015, letter from 365 companies and investors, including General Mills, Mars, Nestlé, Staples, Unilever and VF Corporation, stating: "Clean energy solutions are cost effective and innovative ways to drive investment and reduce greenhouse gas emissions. Increasingly, businesses rely on renewable energy and energy efficiency solutions to cut costs and improve corporation performance.")

As interesting as the in-court CAA litigation will likely be, developments in the court of public opinion may prove to be even more so.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.