By Jeffrey Hammons

Introduction

Over the past few months, the Michigan Public Service Commission (“MPSC”) issued a series of orders updating how it implements its obligations under Section 210 of the Public Utility Regulatory Policies Act (“PURPA”).[1] These orders could spur new development of solar energy facilities in Michigan. Due to the lower costs of solar PV, other states have seen large increases in the development of these facilities over the past decade thanks to PURPA. For example, as of August 2016, North Carolina had 1,173 MW of installed solar photovoltaic (“PV”) capacity as a direct result of PURPA. Other states could use the example set in Michigan as a model to update their own implementation of PURPA.

Background on PURPA

PURPA requires electric utilities to purchase energy and capacity from qualifying renewable energy facilities (“QFs”). The rates for these mandatory purchases are based on the utility’s “avoided costs,” i.e., the cost to the electric utility of the energy and capacity which, but for the purchase from the qualifying facility, such utility would generate or purchase from another source.[2] Under a cooperative federalism framework, PURPA directed the Federal Energy Regulatory Commission (“FERC”) to promulgate regulations to promote development of QFs and delegated to states the role of implementing FERC’s regulations.

Congress enacted PURPA to “encourage the development of cogeneration and small power production facilities.”[3] “Congress believed that increased use of these sources of energy would reduce the demand for traditional fossil fuels,” and it recognized that electric utilities had traditionally been “reluctant to purchase power from, and to sell power to, the nontraditional facilities.”[4] PURPA removes barriers for non-utility generation where such generation is cost-effective, thereby increasing competition and creating a downward pressure on future energy costs.[5]

Michigan’s New Implementation of PURPA

The MPSC orders for the two largest utilities in the state made a number of changes to key issues related to Michigan’s implementation of PURPA, but three issues stand out as most important for promoting greater development of QFs in Michigan. First, the orders updated the methodology used to calculate the utilities’ avoided costs. Second, the orders required standard rates of purchase for all QFs with a nameplate capacity of two megawatts or less. Third, the orders set term length requirements for PURPA contracts with utilities for facilities with a design capacity of two megawatts or less.

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By Dena Adler

 Photo Credit: NASA

The International Civil Aviation Organisation (ICAO), the UN specialized body for aviation, earned international praise in October 2016 for striking a deal to cap emissions from international passenger and cargo flights at 2020 levels, but a new Sabin Center Working Paper argues that ICAO must improve its transparency to truly “take-off.” Given the hurdles to achieving international cooperation, ICAO deserves kudos for developing its Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), the program that aims to put the brakes on emissions from aviation—a sector responsible for approximately 5% of man-made radiative forcing. The Environmental Defense Fund estimates that if effective the program could offset 2.5 billion tonnes of carbon dioxide between 2021 to 2035. However, first the program must achieve lift-off. What additional efforts could help launch its success?

In a new Sabin Center Working Paper, legal consultant, Aoife O’Leary, argues that for starters, CORSIA must significantly improve its governance structure and transparency. Otherwise, it will risk being perceived as illegitimate by the public. In her paper, she evaluates whether CORSIA would pass muster under the Aarhus Convention—an international treaty that grants the public rights of access to information, participation in decision-making, and access to justice in environmental matters. Applying the Aarhus Convention, she finds that ICAO must allow public participation and transparency as the details of CORSIA, especially biofuel and offset standards, are determined. In addition, O’Leary explains why the EU is obligated to publicly disclose any CORSIA documents and exposes uncertainty regarding whether the implementation of CORSIA into EU law will be in compliance with the Aarhus Convention. Read the complete Sabin Center Working Paper to learn more.

November 2017 Updates to the Climate Case Charts


Posted on November 7th, 2017 by Tiffany Challe

Each month, Arnold & Porter Kaye Scholer LLP (APKS) and the Sabin Center for Climate Change Law collect and summarize developments in climate-related litigation, which we also add to our U.S. and non-U.S. climate litigation charts.  If you know of any cases we have missed, please email us at columbiaclimate at gmail dot com.

HERE ARE THE ADDITIONS TO THE CLIMATE CASE CHART SINCE UPDATE # 103.

FEATURED CASE

Bankruptcy Court Said California City and Counties Could Not Sue Coal Company for Climate Change Impacts

A federal bankruptcy court in Missouri enjoined San Mateo and Marin Counties and the City of Imperial Beach (the plaintiffs) from pursuing their climate change lawsuits against Peabody Energy Corporation (Peabody). The plaintiffs alleged that Peabody (and a number of other fossil fuel companies) caused greenhouse gas emissions that resulted in sea level rise and damage to their property. Peabody,  a coal company, filed for bankruptcy in April 2016 and emerged from bankruptcy under a plan that became effective on April 3, 2017. As an initial matter, the bankruptcy court said the plaintiffs had not established any basis for a claim because the complaints’ only Peabody-specific allegations were that Peabody had exported coal from terminals or ports in several California counties and was a member of organizations that plaintiffs said denied climate change. The court further concluded, however, that even assuming claims did exist, the claims were pre-bankruptcy petition claims that had been discharged under the bankruptcy plan because the plaintiffs had not filed proofs of claim. The court determined, moreover, that even if the plaintiffs’ claims could be construed as post-effective date claims (i.e., claims concerning conduct and harm after Peabody emerged from bankruptcy), the claims did not fall within the scope of a settlement with the U.S. Environmental Protection Agency (EPA) and other governmental entities to allow continued enforcement of environmental laws related to ongoing mining operations. The bankruptcy court also rejected the plaintiffs’ argument that one of their nuisance claims did not constitute a “Claim” or “Liability” pursuant to the Bankruptcy Code and Peabody’s bankruptcy plan and therefore could not be discharged and enjoined. Reorganized Peabody Energy Corp. v. County of San Mateo (In re Peabody Energy Corp.), No. 16-42529 (Bankr. E.D. Mo. Oct. 24, 2017).

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By Romany Webb

The 23rd Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC) is set to begin next Monday, November 6, in the city of Bonn in western Germany. The COP will bring together representatives of 194 countries for two weeks of talks on advancing the 2015 Paris Agreement. Much of the focus will be on continuing to develop guidelines on implementing the Paris Agreement, a process that began at COP22 last year and is due to be completed by COP24 in 2018.

Implementation guidelines are required to be developed under various provisions of the Paris Agreement, including Article 6, which provides for international cooperation on actions to mitigate climate change. The Article identifies several possible “cooperative approaches,” including market-based approaches involving carbon trading. Article 6.2, for example, indicates that parties may “use . . . internationally transferred mitigation outcomes” (ITMOs) to meet their carbon reduction goals. This has the potential to benefit developing countries, leading to increased funding for their climate change mitigation projects. Care must, however, be taken to ensure that mitigation projects do not adversely affect local communities or infringe on individuals’ human rights. To avoid this outcome, it is vital that any guidelines developed under Article 6 of the Paris Agreement recognize the importance of protecting human rights when engaging in cooperative approaches, and include safeguards designed to achieve that goal.

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By Michael Burger

Earlier this week EPA Administrator Scott Pruitt issued a directive that prohibits scientists from serving on the EPA’s independent scientific advisory committees if they are currently a principal investigator or co-investigator on a research project that receives grant funding from the agency, or “if they are otherwise in a position to reap substantial direct benefit from an EPA grant.” Pruitt justified this unprecedented ruling on the eligibility of certain members of the public to serve on federal advisory committees by titling his directive “Strengthening and Improving Membership on EPA Federal Advisory Committees” and stating that committee members “shall be independent from the agency.” The problem, here, is that Pruitt’s policy runs counter to existing conflict-of-interests law, and is on its face arbitrary and capricious, in violation of the Administrative Procedures Act.

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Can Fossil Fuel Companies Be Held Liable for Climate Change?


Posted on October 25th, 2017 by Justin Gundlach
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by Justin Gundlach

We know that burning fossil fuels is the main cause of anthropogenic climate change, and that climate change is the source of adverse impacts on communities and even regional and national economies. Those impacts—sometimes irksome, sometimes devastating—are increasingly obvious, and the causal mechanisms that connect them to the emission of greenhouse gases increasingly well understood. In addition to this basic causal link, we know something more: the companies that profit from extracting fossil fuels have understood this aspect of climate science for some time, yet their response has not been to stem the harmful flow of emissions. Instead, it has been to stem and confuse the flow of information about climate change to the public and political leaders.

These points are largely undisputed. What remains very hotly disputed is whether they do or should add up to legal liability on the part of companies that profit from the extraction and sale of fossil fuels.

The Sabin Center hosted a discussion of this issue among several leading experts:

Peter Frumhoff, Director of Science & Policy at the Union of Concerned Scientists;

Sharon Eubanks, an attorney at Bordas & Bordas who previously led the U.S. government’s RICO case against Big Tobacco when she was an attorney at the Department of Justice;

Thomas A. Lorenzen, an attorney at Crowell & Moring LLP who has led the coalition of petitioners challenging the Clean Power Plan before the D.C. Circuit and Supreme Court; and

Gerald Torres, a professor at Cornell Law School whose recent work has focused on interactions between social movements, litigation, and legislative change.

Read on below the jump about the contents of their presentations and of the discussion that followed.

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By Romany Webb

Environmental Protection Agency (EPA) Administrator Scott Pruitt was again in the headlines last week after suggesting that scientists receiving agency funding may lack “independence and objectivity.” Speaking at an event hosted by the Heritage Foundation on October 16, Administrator Pruitt vowed to “fix” what he sees as the problem of such scientists serving on the agency’s advisory boards, so as to ensure “the veracity . . . [of] the scientific advice we’re getting.” Precisely what this fix will involve remains to be seen, but many have speculated that Pruitt may seek to change the composition of EPA advisory boards, to replace agency-funded scientists with industry representatives. That is, however, unlikely to improve the quality of scientific advice provided by the boards.

Contrary to Administrator Pruitt’s suggestion, EPA-funded scientists are not inherently biased, such that they should be prevented from serving on advisory boards. The same is, of course, true of industry-funded scientists. The mere fact that a scientist receives funding from industry does not necessarily mean that he/she will automatically oppose environmental regulation or otherwise make him/her biased. It does increase the potential for such outcomes, however. Numerous studies have documented a so-called “funding effect,” whereby industry-sponsored scientists are more likely to reach conclusions that align with the sponsor’s commercial interests, likely due to unconscious bias. Unfortunately, however, it is often impossible to tell whether a scientist may be affected by such bias as most do not disclose their funding sources (unless required to do so, for example, by a scientific journal publishing their work). Even where a scientist is appointed to serve on an EPA advisory board, the public may have no idea whether he/she is funded by industry.

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by Justin Gundlach

As a spate of disasters in the past few months has made painfully clear to people in Texas, Florida, Louisiana, Puerto Rico, and northern California, designing the electric grid to be reliable at all times requires anticipating and preparing for destructive hazards that can interrupt its operation. That is, reliability requires resilience, the capacity to withstand or bounce back. This has long been true, but is becoming increasingly important to address as climate change amplifies coastal storms, downpours, and wildfires, all of which can disrupt the grid’s operation and thereby impede the functioning of critical infrastructure like communications systems and medical facilities when they are needed most.

I described in a September 13th blog post how utility commissions in California and New York have led the way in pressing retail utilities to assess electric grid vulnerabilities to climate-driven hazards. That post mentioned the term “resilience” but it did not describe the effort currently underway to specify how wholesale electricity markets should compensate investments that improve the grid’s resilience to diverse hazards, ranging from cyber attacks to coastal storms. Below the jump, this post discusses how the Trump Administration is putting that effort at risk and why it is so important for those steering “resilience” from concept to policy to keep the process as separate from the Administration’s imprudent deregulatory agenda as possible.

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By Romany Webb

Power lines damaged by Hurricane Maria

Nearly three weeks after being hit by Hurricane Maria, 90 percent of Puerto Rico remains without electricity. While the island’s nine key generating facilities were not seriously damaged by Maria, they cannot be used, as the infrastructure required to transfer electricity to customers no longer exists. The Puerto Rico Electric Power Authority (PREPA) estimates that Maria destroyed eighty percent of the island’s electricity transmission infrastructure and nearly 100 percent of its distribution infrastructure. Rebuilding this infrastructure will be a major undertaking, particularly since new transmission lines will need to be constructed through Puerto Rico’s mountainous interior, to connect generating facilities on its southern coast with population centers in the north. According to some officials, it could be up to six months before the system is rebuilt, and electricity is restored.

With pressure mounting for immediate action, on September 28, the Army Corps of Engineers was put in charge of rebuilding Puerto Rico’s electric grid. Rebuilding will be funded primarily, if not entirely, with federal money appropriated by Congress. As my colleague, Justin Gundlach, recently reported, past appropriations acts have been interpreted as requiring federal money to be used solely to rebuild what was lost (i.e., without any improvements). That doesn’t make a lot of sense in the age of climate change, however. With storms expected to become more frequent and severe, we must “build back better,” so as to increase resiliency to future disasters. Puerto Rico’s electric system, for example, should be rebuilt in a way that reduces reliance on centralized generation necessitating long-distance transmission of electricity. In doing so, the Commonwealth can learn from the experiences of other islands, such as Cuba, which has increased its disaster resiliency by making greater use of distributed energy resources (DERs).

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By Dena Adler

Former EPA Administrator Gina McCarthy delivered the third David Sive Memorial Lecture on Environmental Law at Columbia Law School on Thursday, September 28. Sharing her thoughts on “The Present and Future of the EPA,” she sharply critiqued the actions of Scott Pruitt’s EPA as illegal and without scientific basis or direction, while finding hope in the progress spurred by investment, innovation, and democratic participation.

“This is the first administration in history at EPA where the administrator has absolutely no vision moving forward that isn’t about looking in the rearview mirror at the past eight years and rolling back every single thing that happened, without any discriminating analysis about if any of them were any good,” McCarthy said. As of October 2nd, the Sabin Center’s Climate Deregulation Tracker has already identified 77 steps taken by the Trump administration and Congress to scale back or wholly eliminate federal climate mitigation and adaptation measures. Read more »

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