The electricity sector is subject to comprehensive regulation through a collaborative federal-state framework. This legal architecture was written generations ago, and many assumptions embedded in these century-old laws no longer hold true.
The Electricity Law Initiative of the Environmental & Energy Law Program supports the development of state and federal policies that reflect modern realities and enable a cleaner grid. We look for on the cracks in the electricity sector’s legal foundation that have been exposed by changes in the industry’s structure and available technologies.
State Power Project
States have traditionally determined the types of fuels (i.e. natural gas, coal, wind) that are used to generate electricity within their borders. However, as utilities increasingly rely on interstate federally regulated markets to procure electricity, states have developed new policies to ensure the grid includes renewable energy and meets environmental standards.
At Statepowerproject.org, we track recent and ongoing litigation challenging these and related state policies as unconstitutional or preempted by federal law. We also develop guidance on states can work within legal limits to achieve energy policy goals, and write policymaker summaries of recent academic work in this field.
Visit Statepowerproject.org for more.
In addition to the Statepowerproject.org website, related work on state authority and FERC-regulated interstate power markets includes:
- Minimizing Constitutional Risk. Provides policymakers with key lessons from recently filed lawsuits and suggestions on how states can work within their constitutional limits to achieve energy policy goals.
- Easing Jurisdictional Tensions by Integrating Public Policy in Wholesale Electricity Markets. Explores FERC’s authority under the Federal Power Act to approve an RTO tariff that includes zero-emission energy procurement or a carbon price and concludes that approval of a wholesale market tariff that incorporates public policy goals is consistent with the generous construction of the FPA afforded by courts.
- Brief of Electricity Regulation Scholars. Argues that Illinois’ Zero Emission Credit program is consistent with long-standing principles of state utility regulation and that opponents are advancing a jurisdictional theory that would upset the balance between state and federal authorities.
- Climate Implications of FERC Proceedings. Provides an overview of FERC’s oversight of interstate power markets, explains how market rules can affect the competitiveness of various fuels and technologies, and discusses legal strategies employed by opponents of new natural gas infrastructure in FERC permitting proceedings.
- State Clean Energy Policies at Risk: Courts Should Not Preempt Zero Emission Credits for Nuclear Plants. Recaps the evolution of state and federal roles in regulating the electric industry and argues that states’ zero emission credit programs for nuclear plants adapt traditional state authority over power generation and utility portfolios to today’s restructured electric grid.
- Comment to FERC on PJM’s Capacity Market Proposals. Argues that generation procurement is a program of cooperative federalism and that PJM’s proposals to pay lower rates to some resources paid for their environmental benefits would disrupt the balance of state-federal authority.
- Comments on the Department of Energy’s Proposed Resiliency Pricing Rule. Observes that the proposal does not propose that current rates are unjust and unreasonable and argues that the proposal is legally deficient and cannot form the basis of a final rule.
- Policymaker Summaries. Distills recent scholarship on state-federal energy policy issues to highlight key recommendations.
- PURPA @ 40: Remarks at NARUC’s 2017 Winter Meeting. Recaps the purpose and history of Title II of the Public Utilities Regulatory Policies Act of 1978 and comments on recent controversies.
- Regulatory Paths Forward for a Cleaner Grid. Summarizes discussions at a workshop about the future of wholesale electricity markets and how they might account for state clean energy policies
Unlocking Distributed Energy Resources
Advancements in business models and technologies of distributed energy resources (DER) open new possibilities for electricity generation, transmission, and distribution. Many existing regulatory practices were designed without consideration of such opportunities, and may erect barriers to deployment of these resources. Regulators have numerous potential paths forward to unlock the values that DERs can provide to the system, ranging from modifying retail rate designs to making fundamental reforms to state utility regulation.
A sampling of our work includes:
- The Case Against Direct FERC Regulation of Distributed Energy Resources. Pieces together how FERC’s authority applies to DERs, finds that the resulting fragmented regulatory regime inhibits a cohesive regulatory framework for DERs, and recommends that FERC disclaim jurisdiction over DER energy sales.
- Comment on NARUC’s Manual on Compensation for Distributed Energy Resources. Urges the Subcommittee to include in the next version: 1) a thorough examination of how deployment of DERs by consumers and non-utility companies affects utility financial performance, and 2) consideration of competition and consumer choice in DER rate design.
- Comment to FERC on its Proposed Rule about DER Aggregation. Affirms that FERC has legal authority to require market operators to facilitate the participation of DER aggregators and suggests that the Commission articulate a jurisdictional line that allows states to regulate sales from individual DERs.
- Comment to Department of Energy on the Quadrennial Energy Review. Rebuts the notion that there is a “regulatory compact” between regulators and utilities that underlies regulation.
- Presentation at the Federal Trade Commission’s workshop on rooftop solar. Highlights the critical role of state regulation in how investor-owned utilities have responded to the growth of distributed energy resources.
- Primer on Utility Ratemaking – Unjust, Unreasonable, and Unduly Discriminatory: Utility Rates and the Campaign Against Rooftop Solar. Provides an historical perspective on recent and ongoing debates about rooftop solar utility rate reform (appears in The Texas Journal of Oil, Gas, and Energy Law).
- Alternative Dispute Resolution at Public Utility Commissions white paper. Provides background information on common forms of ADR, discusses considerations for using ADR in settling public utility disputes, and highlights how PUCs across the country incorporate ADR into their operations.
Power Shift Network
Power Shift connects expert communities – energy and environmental law scholars, utility regulators, technical analysts, and policymakers – around a legal vision for tomorrow’s grid. We bring these communities together through workshops, webinars, and other forums to exchange ideas, drive cutting-edge scholarship, and translate that scholarship into practical tools and policy solutions.
A sampling of Power Shift projects includes:
- Summary Report of a Discussion Marking the 80th Anniversary of the Enactment of FPA Title II Discusses the challenges of governing an evolving industry with an eighty-year old legal framework, identified opportunities for continued adaptation and reform, and suggested topics that warrant further research and discussion.
- Webinar on Carbon Prices in RTO Markets Judy Chang (Brattle Group) provides an overview of the market mechanics of carbon pricing in electricity markets and Steve Weissman (Berkeley’s Goldman School of Public Policy) and Professor Joel Eisen (University of Richmond School of Law) discuss FERC’s legal authority to allow a carbon price in the markets it regulates.
- Webinar on RTO Governance Professor Elizabeth Wilson (Univ. of Minnesota) joins Jeff Dennis and Suedeen Kelly (Akin Gump) to discuss the history of RTOs and case studies about their governance and decision making processes.