Seventh Circuit Finds Smart Meter Data Collection is a Reasonable Search, Not in Violation of the Fourth Amendment

Posted on September 13, 2018 by Katherine O'Konski

Last month, the Seventh Circuit held in Naperville Smart Meter Awareness v. City of Naperville, No. 16-3766, that Naperville, Illinois’ collection of smart meter data from its residents constitutes a reasonable search that is not in violation of the Fourth Amendment or the Illinois Constitution.  In so doing, the court acknowledged Naperville’s legitimate interest in deploying smart meters in order to reduce utility costs, provide cheaper power to consumers, encourage energy efficiency, and increase grid stability.

Naperville received an $11 million grant from DOE to update its grid and used the funds to replace residential, analog energy meters with digital smart meters.  Residents were not given the option to opt-out of the program.  These smart meters collect residents’ energy usage data at 15-minute intervals, and data may be stored by the city for up to three years.  A group of concerned citizens, dubbed Naperville Smart Meter Awareness, brought a Fourth Amendment challenge in federal district court, alleging that the collection of smart meter data permits the city government to surveil citizens in their homes, since the data reveals when people are home, when people are away, when people sleep and eat, what types of appliances are in the house, and when those appliances are used.

The Seventh Circuit took up the question after the district court dismissed the complaint for failure to state a claim and denied leave to amend on futility grounds.  The appellate court agreed that the data collection constitutes a search, but found the search reasonable when balanced against Naperville’s legitimate interest in modernizing its grid.  The court reasoned that Naperville had made clear in a “Smart Grid Customer Bill of Rights” that the city’s public utility would not provide customer data to third parties or law enforcement without a warrant or court order.  And it acknowledged that smart meters play a “crucial role” in grid modernization by allowing utilities to restore service more quickly, offer time-based energy pricing, and reduce labor costs.

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EIA Finds Hydro Most Prevalent Renewable Generation Source in 2017; California Signs 100% Clean Electricity Bill into Law

Posted on September 13, 2018 by Katherine O'Konski

Hydroelectricity represented the largest share of renewable generation in 19 states in 2017, according to a report published by the Energy Information Administration (EIA) on Tuesday.  Hydroelectricity was also the most prevalent source of renewable electricity in 2017 in the United States as a whole, providing 7% of the national total.  But EIA projects that by 2019, wind generation will surpass hydro as the most prevalent source of renewable generation nationwide—wind was already the most prevalent renewable source in 16 states in 2017.  As more wind turbines are constructed and come online, Kansas and Iowa may become the first states to have a renewable source other than hydroelectricity provide the largest share of their electricity generation.

EIA also reports that solar was the most prevalent renewable generation source in 7 states.  Solar generation’s share was highest in California, where is provided 16% of the state’s 2017 total, behind natural gas (41%) and hydroelectricity (20%).

California is poised to increase its share of renewable generation: on Monday, Governor Jerry Brown signed into law California SB 100, which requires the state to obtain 100% of its energy from renewable resources by 2045, and 60% of its energy from renewable resources by 2030 (up from the state’s previous 50% by 2030 goal).

Governor Brown also signed Executive Order B-55-18, directing the state to achieve carbon neutrality by 2045.  “SB 100 sends a clear signal to markets to expand clean energy generation,” Governor Brown stated in a statement issued Monday.

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Group of States, Cities, and Organizations Tell Court Enough is Enough in CPP Abeyance

Posted on September 6, 2018 by Jessica Bell

UPDATED 9.27.2018 On September 21, Intervenor-Respondents filed a joint reply to EPA’s September 14 response.

UPDATED 9.20.2018  EPA’s September 14 response is available here.  Petitioners and Petitioner-Intervenors also responded.

A group of intervenors in the litigation over the CPP (Intervenor-Respondents) filed to oppose EPA’s request for further abeyance.  In its August 24 status report, EPA said that it has “now completed developing proposed replacement section 111(d) emission guidelines premised on an alternative regulatory approach to that set forth in the Clean Power Plan” (that is, the new Affordable Clean Energy (ACE) rule).  The agency also claimed that it “is committed to completing final rulemaking action as expeditiously as practicable.”  EPA requested a continued abeyance pending the conclusion of this rulemaking.  A group of state and industry petitioners and intervenors filed in support of EPA’s request, as did petitioner North Dakota.

In their September 4 response, Intervenor-Respondents, including New York, California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Mexico, Oregon, Rhode Island, Vermont, Virginia, Washington, and Washington, D.C., as well as several cities and non-governmental organizations, urged the D.C. Circuit to “decide the live controversy before it.”  They argue that “EPA, with Petitioners’ support, has taken undue advantage of the abeyance, prolonging the delay through a series of notices that do not come close to fulfilling EPA’s statutory obligations.”  They catalogue the different (non-finalized) proposals that EPA has promulgated since the change in administration related to the CPP, including the proposed repeal and the advanced notice of proposed rulemaking for a potential replacement.

Intervenor-Respondents acknowledge EPA’s August 31 ACE proposal, but find it flawed.  They specifically assert that the proposal “entirely fails to address emissions from natural gas-fired combined cycle power plants” and “does not require any particular degree of emission reduction by any particular deadline.”  Citing EPA’s Regulatory Impact Analysis for the proposal, they state that the rule “will result in increased hospital admissions due to respiratory illness, increased asthma-related emergency room visits, and exacerbation of asthma, and may result in over 1,000 more premature deaths per year by 2030 relative to the Clean Power Plan.”

Intervenor-Respondents accuse EPA of taking advantage of the abeyances to avoid fulfilling its statutory duty.  They argue that the legal premise of EPA’s new proposal—that the Clean Air Act requires the regulation of greenhouse gas pollution from power plants, but prohibits the best system of emission reduction of the CPP—are the legal questions that have been briefed and argued in this case.  Therefore, they urge the Court to decide the case now.

As a reminder, several D.C. Circuit judges expressed a reluctance to continue in the same holding pattern when the Court extended the abeyance earlier this summer.

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EIA Reports on Renewable Growth Under PURPA, but Changes May Be on the Horizon

Posted on August 30, 2018 by Jeff Bayne

The Energy Information Administration (EIA) released data on renewable generation developed under certain provisions of the Public Utility Regulatory Policies Act of 1978 (PURPA).  PURPA established a new category of generators, Qualifying Facilities (QFs), to receive special regulatory treatment.  QFs can be either cogeneration facilities or small renewable resources of 80 MW or fewer.  Electric utilities are required to (1) purchase energy and capacity made available by QFs, (2) sell energy and capacity to QFs, and (3) interconnect with QFs.

In the past ten years, PURPA has been a driver of the growth of renewable capacity in the United States.  EIA data show that from 2008 to 2017, 14 GW of capacity has come online from QFs certified as small renewable resources.  This is approximately 13.5% of all renewable generating capacity, and almost one third of all solar photovoltaic (PV) capacity, added during that time period.

Although PURPA requires electric utilities to purchase energy and capacity made available by QFs, the rates for these purchases are not to exceed the cost the utility would otherwise pay if it had to build new capacity or purchase from a non-QF generator (this is referred to as the utility’s “avoided cost”).  EIA explains that over the past decade, the cost of solar PV installations has dropped below utilities’ avoided costs, and, as a result, QFs have become more cost competitive.  States, the Federal Energy Regulatory Commission (FERC), and Congress, however, are all considering actions that would change how PURPA is implemented.

States.  While PURPA is a federal statute, states and nonregulated electric utilities have the initial responsibility for determining avoided-cost rates, consistent with FERC’s regulations.  In recent years, some states, such as North Carolina, have updated how avoid costs are determined in ways that lower these rates, whereas others, such as Michigan, have new methodologies that increase avoided-cost rates.  States are also considering changes to their requirements for standard contract terms and conditions, such as fixed standard contract lengths for certain QFs.

FERC.  In its May 2018 meeting, Chairman McIntyre announced that FERC was “reenergizing” its PURPA review initiative.  FERC cannot change the fundamental PURPA obligations required by the statute, but it can revisit its regulations governing the implementing PURPA.  These regulations cover issues such as when an electric utility can terminate its obligation to purchase from QFs who have nondiscriminatory access to certain markets and when multiple facilities (e.g., multiple solar panels or wind turbines) are considered a single “facility” for purposes of the 80-MW limit on small renewable QFs.

Congress.  The most significant changes to PURPA would have to come from Congress, which enacted PURPA in the first place.  PURPA reform bills have been introduced in both the House and the Senate.  Along with changes similar to those FERC is considering, both of these bills would allow states and nonregulated utilities to eliminate the obligation for an electric utility to purchase from small renewable QFs if they determine that the utility has no need to purchase such energy or if the utility conducts a competitive resource procurement process open to these QFs.

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EPA Issues “Affordable Clean Energy” Proposal to Replace the Clean Power Plan

Posted on August 23, 2018 by Katherine O'Konski

UPDATED 09.11.2018 The notice of public hearing was published in the Federal Register on September 10, 2018. The online registration form to speak at the public hearing is available here.

UPDATED 09.07.2018 The proposed rule was published in the Federal Register on August 31, 2018. Comments on the rule are due by October 31, 2018 and can be submitted here.

EPA will be holding a public hearing on the rule on October 1, 2018 in Chicago, Illinois. Registration to speak at the hearing ends September 25, 2018. The prepublication notice is available here.

On Tuesday, EPA issued the prepublication version of the Affordable Clean Energy (ACE) rule, its proposed replacement to the CPP.  The proposed rule establishes a new framework under which states will develop plans to address greenhouse gas emissions from existing coal-fired electric generating units (EGUs).  Compared to a no-CPP scenario, EPA projects that the ACE rule will reduce CO2 emissions in 2020 between 13 and 30 million short tons.  And EPA states that under some scenarios, avoided compliance costs total $6.4 billion compared to the CPP.

The proposed rule has four components.  First, EPA proposes to determine the “Best System of Emissions Reduction” (BSER) for existing EGUs based on measures that can be applied at an individual stationary source.  EPA states that this marks a departure from the CPP, which established the BSER “using measures that applied to the power sector as a whole, rather than measures that apply at . . . the level of[] individual facilities.”

Second, EPA proposes to define the BSER as heat-rate efficiency improvements that lower the CO2 emission rate of affected EGUs.  EPA explains that when an EGU improves its heat rate, it consumes less fuel and emits lower amounts of CO2 per kWh of electricity generated. EPA states that these heat-rate efficiency improvements will be achieved through the use of certain “candidate technologies,” equipment upgrades, and best operating and maintenance practices, which states may consider in establishing standards of performance for their EGUs.  These “candidate technologies” include:

  • Neural Network/Intelligent Sootblowers
  • Boiler Feed Pumps
  • Air Heater and Duct Leakage Control
  • Variable Frequency Drives
  • Blade Path Upgrade (Stem Turbine)
  • Redesign/Replace Economizer
  • Improved Operating and Maintenance Practices

The rule also proposes new implementing regulations under Clean Air Action Section 111(d) to give states more time to develop State Implementation Plans (SIPs).  The new rule provides states three years from the date of the final rule to prepare and submit its SIP.  EPA will then have twelve months to evaluate and determine whether the plan can be approved.  In the event that a state does not submit a plan or its plan is not approved, EPA has two years to develop a federal plan for that state. (The existing implementing regulations provided nine months for states to develop SIPs; four months for EPA to evaluate and act on the plans; and six months for EPA to issue a federal plan.)

Finally, EPA proposes a new preliminary applicability test for determining whether a physical or operational change made to an EGU is a “major modification” triggering EPA’s New Source Review (NSR).  Under the new rules, only projects that increase a plant’s hourly rate of pollutant emissions will undergo a full NSR analysis.  EPA states that this proposal will “give the owners/operators of EGUs more latitude to make the efficiency improvements that are consistent with EPA’s proposed BSER without triggering onerous and costly NSR permit requirements.”

The prepublication version of the proposed rule is available on EPA’s website, along with EPA’s press release and fact sheets.  Comments on the rule will be due 60 days after publication in the Federal Register.

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