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Welcome to the sixth 2024 issue of Currents - our e-newsletter focused on energy topics.
During the summer months, our firm is pleased to host a talented group of law students, who get the opportunity to research and write, shadow our attorneys, and learn about the practice of law in a firm setting. As young professionals still deeply involved in higher education, our Summer Associates will be contributing to our summer publications and sharing their perspectives as both students and future legal practitioners. Please join us in welcoming Sanya Memon to the Currents team for this special summer edition.
We are very pleased to announce that several of the firm’s practice groups and attorneys (including the Energy & Environmental Practice Group) were recognized in the 2024 edition of Chambers USA, a directory of leading law firms and attorneys. Chambers and Partners annually researches the strength and reputation of law firms and individual lawyers across the globe. The research process for the United States includes interviewing lawyers and their clients, including influential general counsel at Fortune 100 companies, high-profile entrepreneurs, and significant purchasers of legal services. Click here to learn more.
Join us tomorrow - June 21 - for our 2024 SuperVision Labor & Employment Symposium - The Future of Work: Legal Strategies for Employers in a Dynamic Landscape. Spilman attorneys will be discussing a variety of topics designed to inspire your confidence in navigating complex employment decisions. This symposium is tailored for business owners, HR professionals, and anyone who manages employees. Dive into a day of invaluable insights on topics such as remote work; workplace investigations; AI, emerging technologies, and privacy; union avoidance; workplace violence; and more. Click here to learn more and register.
Thank you for reading!
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Conflicting Energy Demands and Policies Create Significant Future Challenges | |
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By Barry A. Naum
Two noteworthy articles highlight how conflicting energy requirements are posing significant challenges for regional and national energy providers and regulators. As discussed in these articles, the competing interests take the form of the practical, physical requirements driving the demand for energy versus the governmental and regulatory policies that aim to restrict (or promote) how that energy is provided.
Click here to read the entire article.
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“A Republican, See garnered more Senate votes than Democrat David Rosner, who also was confirmed to another FERC seat.”
Why this is important: In mid-June, the Senate appointed Lindsay See, a Republican nominee and now-former West Virginia Solicitor General, to a five-year term as a Commissioner of the Federal Energy Regulatory Commission (FERC). See joins Mark Christie, a former Commissioner at the Virginia State Corporation Commission, as the second Republican nominee at the FERC.
In addition to See, two democratic nominees, David Rosner (second term) and Judy Chang (first term) also received Senate confirmation to serve on the FERC.
These appointments come at an interesting time as the grid is undergoing a transition towards more intermittent, renewable resources, and most recently, numerous parties have sought rehearing of FERC Order 1020, which obligates utilities and regional organizations to engage in long-term transmission planning, among other issues. --- Carrie H. Grundmann
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“West Virginia asked the Federal Energy Regulatory Commission to revisit a decision on reforming the nation’s electric transmission systems, saying the agency’s 2-1 ruling in May exceeds its authority over the process of transmission planning.”
Why this is important: On May 13, 2024, the Federal Energy Regulatory Commission (FERC) issued a new rule impacting regional transmission planning and cost allocation. The Public Service Commission of West Virginia (PSC), 25 states, and numerous stakeholders filed requests for rehearing of the decision, arguing that the final rule exceeds FERC's authority over the process of transmission planning.
The final rule requires grid operators to identify needs for the next 20 years, and the PSC is concerned that FERC did not consider the uncertainty of forecasts that far into the future. The PSC further stated that the final rule undermines states' roles in transmission planning and will not result in just and reasonable rates for customers. The outcome of these requests for rehearing is still uncertain, but the upshot is that FERC's rule may negatively impact customer rates if unchanged. --- Steven W. Lee
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“Clean energy is exploding in the U.S. — a trend that’s only accelerating as nearly $400 billion in Inflation Reduction Act investments give a boost to the industry through 2031.”
Why this is important: This article discusses how the Biden administration plans to add more renewable power sources to shore up the energy grid. With the Inflation Reduction Act, $400 billion will go toward incentives for electric vehicles, building electrification, and renewables like wind power. According to the article, the wind power sector is expected to more than double over the next 25 years, and wind turbine technician positions are the fastest-growing occupation in the country. The demand for such technicians is booming due to significant investments and a shift towards clean energy. Wind capacity in the U.S. has more than tripled since 2010, mainly benefiting rural areas where these projects are located. According to the article, all those wind tech jobs will be high-paying, with the median income for wind technicians at just under $62,000 annually. Some colleges near wind farms are expanding their curriculum to offer classes that provide the crucial training to meet the demand for these promising career opportunities. --- Schenley N. Kent
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“Unlocking potential to build the biggest turbines on land will ‘roughly triple’ global area in which wind is economically viable.”
Why this is important: The article outlines a project by Radia, an energy company focused on expanding the scope and scale of onshore wind, to build the WindRunner, the largest airplane ever, to transform the wind power industry. This plane will transport and install massive wind turbine components in remote and difficult-to-reach areas, landing on semi-prepared dirt runways. As proposed, the WindRunner can carry turbine blades as long as a football pitch and land on semi-prepared dirt runways. This innovation addresses the logistical challenges of transporting large turbines, which are typically limited to offshore locations. By enabling the installation of the largest turbines onshore, the WindRunner could expand the economically viable areas for wind power by roughly tripling them, thus enhancing global wind energy capacity. Although the overall economies of the project are unclear, it has garnered $100 million in funding and aims to have the aircraft operational by the end of the decade. Mark Lundstrom, CEO of Radia, envisions the WindRunner becoming an integral part of the wind sector, making large-scale onshore wind energy installations more practical and efficient. --- Sanya Memon
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“One of the state's focal points to do this is to move away from the state's historical reliance on coal-fired power plants for electricity and replace them with ‘greener’ power sources.”
“A review of comments shows clear dissatisfaction with Duke Energy’s proposed Carbon Plan, which critics say put arbitrary limits on solar and assumes technology will emerge to run fossil fuel power plants without emissions.”
Why this is important: In the context of Duke Energy’s efforts to comply with HB 951, a North Carolina law obligating the utility to reduce its carbon emissions by 70 percent by 2030 (subject to some delay) and ultimately, 100 percent by 2050, these two articles note that a number of voices oppose the utility’s proposal to invest more heavily in natural gas power plants and instead favor greater investment in currently available clean technologies like solar, wind, and batteries. What is missing in both of these articles, however, is a recognition of the different operational characteristics of these various resources. Quite simply, solar, battery, and wind are dependent upon the source of their power – namely the wind to blow, the sun to shine, or a generation resource to charge the battery. It is myopic to view the need for carbon-free energy in a vacuum. Equally important to ensuring a clean energy transition is the need to ensure that energy is affordable and available when customers need it. It is unclear whether, if not entirely unlikely, a more substantial investment in solar, wind, and battery can provide the reliable and affordable energy that customers depend upon. --- Carrie H. Grundmann
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“The ‘move fast and break things’ business model of the technology sector is meeting the regulated spending and reliability imperatives of the utility sector.”
Why this is important: Artificial intelligence (AI) has been on the rise in recent years. Per the article, for a utility industry that generally has an innovation-impeding focus on reliability, AI could provide solutions on ways to use and share power system data to create greater efficiencies. As the nation becomes more electrified and data centers continue to impact the load on the system, technology companies like NVIDIA, Microsoft, and others are trying to apply AI to help utilities optimize system operations and undergo a technology transformation. While AI may create greater efficiencies, utilities will still have to verify that potential and convince regulators that such investments are worthwhile as a cost to customers. --- Steven W. Lee
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“Dominion Energy, the state’s largest utility, says new natural gas plants will be needed to meet rising electricity demand, while the state studies how this booming sector will impact Virginia’s transition to renewable energy.”
Why this is important: Per the article, Virginia, specifically the service territory for Dominion Energy, is home to the largest concentration of data centers in the country, and that growth is expected to explode over the next 15 years. Data centers, with their 24/7/365 operations, utilize a lot of energy, which can present a challenge, particularly for utilities seeking to reduce their carbon footprint. Dominion proposes to solve this load growth issue (at least in the short-term) by building new natural gas-based generation, a solution opposed by a host of groups. In addition to the opposition to new natural gas power plants, the article also notes the growing opposition to the expansion of data centers more generally.
The growth in data center load is not unique to Virginia; such growth is occurring — or the potential for it — around the country, and concerns about the cost consequences if a utility expands its system in anticipation of load that never materializes. For that reason, the article notes some parties are pushing for more granular modeling by the utility to better predict the future, but also to enable a broader range of solutions to this data center load beyond merely building more natural gas. --- Carrie H. Grundmann
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“Brian Hutchings, CFX’s manager of community engagement, told NBC affiliate WESH that the roadway will be equipped with coils that can charge electric vehicles as they travel over them.”
Why this is important: This article discusses how a new 4.4-mile expressway in Central Florida will enable electric vehicles (EVs) to charge while driving using embedded coils in the road, similar to wireless smartphone charging. According to the article, this system will initially only be available for a fleet of test EVs with the goal of expanding to all EV types in the next three years. The $534 million State Road 516 project will connect Lake and Orange counties and will also feature a wildlife underpass and paths for runners and bikers. The project is expected to be completed by 2027. --- Schenley N. Kent
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“An updated rule targets pollution from ash dumps, but it’s up to companies that own them to propose steps to protect groundwater.”
Why this is important: In April 2024, the Environmental Protection Agency (EPA) finalized rules that in part target pollution from ash dumps from coal-fired power plants. The rules require companies to ensure that ash dumps are contained and stop pollution of heavy metals into water supplies. The article notes, however, that the rule is self-implementing, meaning that the companies report where the ash is stored and propose their own steps to stop groundwater contamination.
Additionally, this type of direct implementation is overseen by individual states, meaning that there is significant interpretation over what cleanup steps are acceptable and outcomes can vary significantly between states. In an attempt to gain greater oversight, the EPA may try to institute a federal permitting system under the Water Infrastructure Improvements for the Nation Act. Even if the EPA gains greater oversight, there are still significant questions regarding acceptable means of addressing its new rules and the long-term costs. --- Steven W. Lee
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Here is a round-up of the latest statistics concerning the energy industry.
ELECTRICITY
PETROLEUM
NATURAL GAS
COAL
RENEWABLES
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