FERC Ends Partnership Pipelines' Recovery of Tax Allowances Amid Concerns of Double Dipping
The Federal Energy Regulatory Commission announced that it will no longer allow master limited partnership pipelines to recover an income tax allowance in cost-of-service rates, marking a potential win for companies that ship products across the links. The policy change stems from a ruling by the District of Columbia Circuit that found that because partnership pipelines don’t incur entity-level taxes and already receive a pre-tax return on equity to attract investments, the collection of a tax allowance in rates amounts to double recovery of income tax costs. The case is United Airlines Inc. v. FERC (11-1479).
PJM Calls for Out-of-Market Payouts to Address System Emergencies in Grid Resiliency Plan
PJM Interconnection LLC unveiled a suite of recommendations to bolster the resiliency of the bulk power system, responding to an inquiry by the Federal Energy Regulatory Commission. PJM proposed that it make out-of-market payments to generators in times of emergencies and prolonged degraded operations. It asked FERC to strengthen rules for coordination between grid managers and pipeline operators and develop processes for identifying vulnerabilities, assessing threats and system restoration. Since the Polar Vortex in 2014 caused major disruptions to the power system, U.S. regulators and grid operators have scrambled to harden the transmission network and generator fleet through a number of rules and compensation schemes.
New York Awards $1.4 Billion to Dozens of Solar Farms in Largest Renewables Investment by a State in U.S. History
New York Gov. Andrew Cuomo, a Democrat, announced that 22 utility-scale solar farms, three wind farms and one hydroelectric project won contracts to supply renewable energy in the first solicitation under the state’s Clean Energy Standard, according to a March 8 press release. The projects will add over 1,380 megawatts of capacity, or enough power to meet the energy needs of nearly half a million homes, putting the state closer to meeting its goal to source half its electricity supplies from renewable sources by 2030. The New York State Energy Research and Development Authority, known as NYSERDA, will issue the next solicitation for large-scale renewable energy on April 25. Cuomo also announced that the state has formally requested an exclusion from the federal government’s five-year oil and gas program that proposed to open over 90 percent of the total U.S. offshore acreage to drilling.