October 18, 2019 Feature

Electricity

Mark Strain

A. Introduction

This report is a collaborative effort to cover the significant developments within the electric industry that are currently being addressed in the various regions of the United States. Notable proceedings currently pending before the Federal Energy Regulatory Commission (“FERC”) involve out-of-market subsidies and the methodology for determining return on equity (“ROE”). The expansion of the renewable energy industry continues to dominate the attention of regulatory authorities and market participants. This is especially evident in the widely anticipated expansions of offshore wind development projects in the Northeast. The push for renewable resources has driven not only the construction of new generation resources, but, in the Southwest, renewable energy development has been an impetus behind projects for battery storage systems, a recently announced solar-plus battery project, and planning for infrastructure development for electric vehicles. Legislative initiatives intended to address greenhouse gas emissions also featured prominently with states in the West investigating options such as cap-and-spend programs and performance-based ratemaking. The potentially significant effects of the Tax Cuts and Jobs Act (“TCJA”) spurred regulatory proceedings in numerous states to evaluate and consider the effects on investor-owned utilities’ (“IOUs”) cost of service. Among other notable events, the Midcontinent Independent System Operator, Inc. (“MISO”) completed implementation of five-minute settlements. The Electric Reliability Council of Texas (“ERCOT”) remains focused on price formation issues. And utilities and regulators in California continue to grapple with the aftermath of damages caused by wildfires.

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