Thank you for reading our 10th issue of Currents for the year.
We hope you enjoy this issue, and, as always, thank you for reading.
The Chevron Doctrine -- what is often referred to as “Chevron deference” – is based on the precedent set by the Supreme Court about four decades ago, which some argue has overly empowered the administrative state (the full body of federal administrative agencies). In a nutshell, the Doctrine holds that, as applied to the actions of administrative agencies, if the statutory language on a specific issue is clear and unambiguous, then the agency must apply the law accordingly; however, if the statutory charge is ambiguous or subject to more than one rational interpretation, then the Courts are to give deference to the agency’s expertise and interpretation so long as it is reasonable.
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● Safety Issues in the Spotlight: Recent Updates from OSHA
The Occupational Safety and Health Administration (OSHA) is proposing a number of new rules that all employers need to track and be prepared to respond to. Here is an update on four significant topics making their way through the rulemaking process.
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● New Business Reporting Obligations: Beneficial Ownership Information Under the Corporate Transparency Act
Effective January 1, 2024, most legal entities incorporated, organized, or registered to do business (i.e., LLCs, LLP, PLLC, Inc., Co., etc.) in a state must disclose information relating to its owners, officers, and controlling persons with the Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury, pursuant to the Corporate Transparency Act (CTA).
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“As companies in all industries and of all sizes respond to demand from customers to lower their carbon footprint, carbon capture and storage technology offers a safe, proven method of providing cleaner energy without jeopardizing the products that we depend on every day.”
Why this is important: In this op-ed written by Diana Irey Vaughan, a commissioner for Washington County, Pa., Commissioner Vaughan posits that carbon capture and storage is the next big economic opportunity for Pennsylvania. In support of this belief, Commissioner Vaughan highlights the need for companies to lower their carbon footprint without jeopardizing the products people depend on every day. By committing to carbon capture and storage technology now, Commission Vaughan believes that Pennsylvania can attract new companies looking for low-carbon energy sources and thus stimulate economic growth. While Commission Vaughan highlights the larger economic benefits of such technology, she does not discuss the cost of developing and maintaining carbon capture and storage technology or who she expects to fund those costs. --- Barry A. Naum
“Roughly half of Rocky Mountain Power’s energy portfolio is coal, with 25% natural gas and the remaining percentage made up of zero-emission energy, such as geothermal, wind and solar.”
Why this is important: The article notes that rate increases for Rocky Mountain Power customers in Wyoming are being driven by higher coal prices. The utility attributes these higher coal prices to two inter-related factors: (1) a shrinking coal market; and (2) pressure from environmental regulators to shut down coal mines and carbon-intensive coal-fired power plants. To address the need for reliable, dispatchable generation, Rocky Mountain Power’s parent company has been working to develop a nuclear power plant in partnership with TerraPower that is expected to come online in 2030. The company also focuses heavily on renewable resources, claiming they are the lowest cost resources for customers. The situation faced by Rocky Mountain Power is not unique to Wyoming. All around the country, utilities are grappling with an energy transition moving away from coal-fired generation towards more intermittent, renewable resources, while also grappling with the need to manage ever-rising utility bills and keep the power on. --- Carrie H. Grundmann
“Ohio utilities have added nearly $6.5 billion in PJM-approved ‘supplemental projects’ since 2017 without oversight of their need, prudence and cost-effectiveness, the Ohio ratepayer advocate said.”
Why this is important: The Office of Ohio Consumers' Counsel (OCC) recently filed a complaint at the Federal Energy Regulatory Commission (FERC), arguing that Ohio utilities have added close to $6.5 billion in PJM Interconnection-approved "supplemental projects" to their local transmission plans since 2017 without any oversight of their need, prudence, and cost-effectiveness. The OCC claims these types of projects fall into a regulatory gap where neither FERC nor the Public Utilities Commission of Ohio provide complete oversight of the projects.
To remedy this, the OCC requests that Ohio utilities be required to seek FERC's approval for supplemental projects before construction starts. Other consumer advocates at the federal level are simultaneously arguing for competition as a way to mitigate transmission development costs. While the outcome of both of these efforts is uncertain, it is clear consumer advocacy groups are focusing on transmission costs as one avenue to lower electricity costs. --- Steven W. Lee
“West Virginia was a longshot to be chosen as one of seven regional hydrogen hubs to receive nearly $1 billion in federal funding.”
Why this is important: The Appalachian Regional Clean Hydrogen Hub (ARCH2) has been selected by the U.S. Department of Energy as one of seven regional hydrogen hubs that will receive federal funding. ARCH2 will involve the development of facilities to produce and distribute hydrogen in areas of Kentucky, Ohio, Pennsylvania and West Virginia. A critical feedstock for this effort will be natural gas produced in West Virginia. Production nodes are anticipated to be located in Belle, Fairmont, Follansbee, Point Pleasant, and Washington, West Virginia. The ARCH2 hub will be headquartered in Morgantown. The approval of ARCH2 lays the foundation for significant community, economic, labor and technological development in the Appalachian Region. --- William M. Herlihy
“The push to move away from the internal combustion engine is becoming an election issue on two continents.”
Why this is important: Electric vehicles make a lot of sense – they require fewer parts for construction, the torque from electric motors provides high performance, and their tail pipe emissions are zero. They are running into headwinds, though, due to consumer resistance to their high prices, even with subsidies, and range anxiety. Until those issues are addressed, politicians are going to have a difficult time forcing a transition to a fully electrified consumer transportation market. --- David L. Yaussy
“Utility company will request rate increase on Kansans’ energy bills to help provide EV factory with power.”
Why this is important: New car battery factories are being built around the country and little focus is being made on how to power them. Kansas has a $4 billion battery factory under construction that will employ 8,000 workers in a four-million square foot building under construction. The plant is set to begin production in 2026, but will need 250 MW of power to operate. Kansas utilities will need to continue to operate coal-fired electrical generation plants to provide power to the plant through at least 2028. While the EV revolution is real and will reduce greenhouse gases in the transportation sector, it is clear the battery plants will need help from fossil fuel generation sources like coal to begin operations. --- Mark E. Heath
“The task force sprang from Shapiro questioning his predecessor’s use of regulatory authority to join the Regional Greenhouse Gas Initiative, a consortium of 12 eastern states that imposes a price and declining cap on carbon dioxide emissions from power plants.”
Why this is important: This article discusses Pennsylvania Governor Shapiro's position on Pennsylvania's participation in the Regional Greenhouse Gas Initiative (RGGI), a multi-state program that imposes a price and declining cap on carbon dioxide emissions from power plants, which critics say will significantly increase power costs. According to the article, Governor Shapiro remains noncommittal on Pennsylvania's participation in RGGI while litigation is ongoing challenging said participation. Governor Shapiro initiated a task force to evaluate Pennsylvania's participation in RGGI. According to the article, the task force did not appear to reach a consensus, and Governor Shapiro has thus far only indicated he will review the task force's recommendations while awaiting the court's decision regarding Pennsylvania's RGGI participation. Interested stakeholders will thus need to wait for the litigation outcome before knowing how Governor Shapiro will respond. --- Barry A. Naum
“Despite recent reforms, transmission planning processes designed for fossil fuels are not ready for the massive influx of clean energy expected by 2050, experts say.”
Why this is important: In 2020, Virginia passed the Virginia Clean Economy Act, a piece of legislation designed to make the Commonwealth’s two largest investor owned utilities carbon-free by no later than 2050. As the article notes, under the VCEA, the utilities must propose and obtain approval from the state regulator – the Virginia State Corporation Commission – to build new renewable energy generation and storage resources. Hindering the utilities reaching these goals is not approval from the State Corporation Commission, but a logjam in the interconnection queue at the Regional Transmission Operator covering the Commonwealth of Virginia: PJM Interconnection. While certain reforms have occurred and are likely to address some of the interconnection backlog problems, the article argues more needs to be done to effectively and efficiently bring the thousands of megawatts of new renewable generation in PJM’s queue online. The ability to interconnect more generation will be key to whether (and when) Virginia meets its goals under the VCEA. --- Carrie H. Grundmann
“The carbon-free electricity from these plants provides a low-cost way to make H2 with electrolysis.”
Why this is important: Nuclear power is continuing to be studied to reduce greenhouses gases. Some projects would use nuclear power to pull hydrogen from water and use it for manufacturing or transportation. Currently, $1.5 billion in funds is going to the projects and the government is looking at other projects to help fund. One system would use a nuclear plant to power water electrolysis to pull hydrogen from water for power generation. These steps could help drop CO2 levels worldwide by lowering CO2 from transportation sectors. --- Mark E. Heath
“Although electric vehicles took roughly six years to get from 1% to 10% of global market share, it will take just six more years to reach 80% adoption, an RMI report says.”
Why this is important: Electric vehicle sales depend a great deal on subsidies and state directives. Norway and China, the countries with two of the highest rates of EV adoption, provide significant help to EV manufacturers in this fashion. In the U.S., where subsidies are somewhat less generous, the cost of EVs and concerns about range anxiety have led to slowing sales, and an abundance of cars on dealer lots. Developing countries, while relatively small car markets, have almost none of the infrastructure to support EV sales. Consequently, the likelihood of EVs reaching 86 percent of global vehicle sales in six years, even with strong governmental support in the developed world, is low. --- David L. Yaussy
