Navigating the Changing Energy Regulatory Landscape
June: Summer 2023 Recap Part 1
In the ever-evolving world of energy regulations, staying informed is key to making strategic decisions for your energy projects. June brought us several significant developments in the regulatory landscape that could shape the future of energy production, distribution, and reliability. In this recap, we’ll delve into these changes, their potential implications, and what they mean for businesses operating in the energy sector.
The world of energy regulations is dynamic and complex, with changes spanning from solar tax credits to grid reliability initiatives. It’s clear that staying well-informed about these developments is imperative for businesses and organizations engaged in energy projects. We’re recapping these regulatory shifts, spanning June 2023 and July 2023 to August 2023. They present a myriad of opportunities and challenges, underscoring the need for adaptability and strategic planning. By keeping a watchful eye on these transformations and proactively preparing for the future, businesses can confidently navigate the ever-changing energy regulatory environment. The journey towards a cleaner, more reliable energy future is underway, and it’s brimming with promise.
1. Solar Tax Credits: A Brighter Future
June marked the IRS’s finalization of direct pay and transferability rules for tax credits in solar projects, injecting a ray of optimism into the solar energy sector. These rules have the potential to not only slightly improve the economic viability of solar projects but also substantially benefit non-profit organizations that choose to invest in solar. For non-profits, this means an opportunity to harness the power of solar with greater financial feasibility.
2. Streamlining Environmental Reviews
In a bid to expedite energy projects, Congress is actively working to reduce the length of environmental reviews, particularly under the National Environmental Policy Act (NEPA). While this move may pave the way for faster approvals of projects like pipelines and transmission lines, the full ramifications of these actions will unfold over several years. Energy project developers should monitor these changes closely to adapt their strategies accordingly.
3. PJM Capacity Schedule: Delayed, but Not Derailed
The Federal Energy Regulatory Commission (FERC) has given the green light to a new PJM capacity schedule, albeit with a delay. The 25/26 auction, crucial for capacity planning, will now take place in June 2024. This delay underscores the importance of flexibility and adaptability in the energy industry, where timelines can shift due to regulatory adjustments.
4. Winter Storm Preparedness
The lessons learned from the grid issues exposed by Winter Storm Elliot have prompted FERC and the North American Electric Reliability Corporation (NERC) to reevaluate winter reliability standards and weatherization requirements. In response, we may witness the emergence of new programs or line item charges, especially in regions like ERCOT, PJM, and ISO-NE. These initiatives are designed to bolster the grid’s resilience during extreme weather events, reminiscent of capacity markets but with a specific focus on winter reliability.
5. The Challenge of Grid Reliability in New York
Looking ahead, grid operators in New York (NYISO) are expressing concerns about grid reliability, particularly around the 2028 timeframe. This unease stems from the state’s ambitious goals to transition to a more renewable-heavy energy generation mix. As we move closer to 2028, we anticipate heightened discussions around on-site generation and reliability strategies, particularly for businesses operating in New York.
The world of energy regulations is a complex and dynamic landscape. Staying informed about these changes is vital for businesses and organizations involved in energy projects. June’s regulatory developments offer both opportunities and challenges, making it crucial to adapt and strategize effectively in response to these shifts. By monitoring these changes closely and proactively planning for the future, businesses can navigate the evolving energy regulatory environment with confidence and resilience. Stay tuned for further updates as we continue to explore the ever-changing world of energy regulations.