USA Law and Practice Contributed by: David P. Flynn, Lindsey E. Haubenreich, Thomas F. Puchner, Dennis W. Elsenbeck and Zachary R. Hirschfeld, Phillips Lytle LLP
purchase of transmission services – not merely enti- ties providing service under FERC-approved, MBR authority (16 USC Section 824v). Anti-Manipulation Rule FERC implemented its authority under the EPAct by promulgating the Anti-Manipulation Rule in Order No 670 in 2006. The Anti-Manipulation Rule broadly defines market manipulation to include conduct such as: • using or employing any device, scheme or artifice to defraud; • making untrue statements or omitting to state material facts; or • engaging in any act, practice or course of business that would operate as fraud or deceit upon another entity (16 USC Section 824v). Office of Enforcement For market surveillance and enforcement, FERC has an Office of Enforcement (OE), which is comprised of scientists, engineers, attorneys, auditors, financial analysts and energy analysts. Each division of OE oversees a variety of functions, including: • ensuring compliance from market participants; • initiating and executing investigations; • providing warning of vulnerable market conditions; • maintaining an Enforcement Hotline to informally resolve disputes; and • advising FERC on enforcement and compliance issues. RSO Market-Monitoring Plans Each RSO has market-monitoring plans, which imple- ment a variety of activities designed to assess and improve wholesale electricity market competition. Similar to the functions of FERC’s OE, RSO monitor- ing system functions include: • monitoring and ensuring compliance with market rules and procedures; • gathering data; • evaluating and reporting on market performance; • proposing rule changes to improve market opera- tion and performance; and
• in some cases, employing mitigation measures and sanctions where authorised.
3. Generation Facilities 3.1 Constructing and Operating Generation Facilities The system of laws applicable to the construction and operation of generation facilities varies depending on the type of facility and its location. For the purposes of this discussion, distinction is drawn between offshore facilities and onshore facilities. State law is the primary authority for the construction and operation of onshore generation facilities. Appli-
cable laws generally take the form of: • public utility law regulatory authorities; • local/state permitting laws; and • state environmental review laws.
In the first category, some states require that electric- ity-generating facilities obtain a Certificate of Public Convenience and Necessity (CPCN) or similar approv- al for generating facilities prior to construction and operation under the state’s public utility laws. In the second category, local permitting may be required from the municipality where a facility will be sited in the form of a special use permit or similar approval under local land use and zoning laws. In some states, permitting is governed by a centralised (“one-stop”) siting board that may supersede some or all local permitting authorities. In the third category, various state environmental review acts (or “mini-NEPAs”) apply, which generally resemble the federal National Environmental Policy Act (NEPA). Generally, if a federal permit is involved and the project may result in discharge into waters of the USA, a Clean Water Act (CWA) Section 401 Water Quality Certification will be necessary. Efforts are under way to streamline the Federal NEPA pro- cess as it relates to certain energy projects, including energy infrastructure projects.
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