Regulatory & Legislative

On March 6, 2024, the Securities and Exchange Commission (“SEC”) adopted rules requiring registrants to disclose certain climate data in annual reports.

The rules were originally proposed in 2022, and the final language adopted scales back some of the earlier proposal’s more onerous reporting requirements (including Scope 3 emissions reporting).

The Texas Legislature, primarily responding to the unprecedented ERCOT system load shed event during 2021’s Winter Storm Uri, enacted far-reaching system and wholesale market reforms during its 2021 and 2023 legislative sessions. These reforms broadly seek to bolster electric system resilience and reliability while incentivizing, through wholesale market reforms and other out of market actions

Developers of renewable energy projects, many of which are built on agricultural land, should understand local laws and restrictions on foreign ownership and investment in these parcels.  Roughly half of US States have express limits on foreign investment in or purchase of privately held agricultural land. A large swath of the Midwest, plus states in the mid-Atlantic and Florida, among others, have some restrictions. Between January and June of 2023, fifteen states enacted restrictions on foreign ownership of land.

Earlier this summer, the Federal Energy Regulatory Commission (FERC) introduced a groundbreaking order—Order No. 2023—aimed at reforming the generator interconnection process in response to the evolving landscape of energy resources, market dynamics, and emerging technologies across the nation.

Industry reaction to the substance of the new rules has been mixed, but it is

ESG and Renewable Energy

As corporations experience increased pressure from shareholders, consumers, employees, and the federal government to adopt Environmental, Social, and Governance (“ESG”) goals, many are procuring renewable energy as one way of meeting environmental targets. In 2022, more than 96% of S&P 500 companies published an ESG or other formal sustainability report.[1] In addition to voluntary goals and initiatives, the Securities and Exchange Commission is in the process of finalizing enhanced and standardized climate and ESG disclosure requirements for publicly traded corporations. As a result, corporate renewable energy power procurement is expected to account for nearly 40% of the projected utility-scale wind and solar project growth through 2023 and 2024 in the United States.[2]

An increased borrowing limit for the U.S. was not the only change brought about by the recently enacted Fiscal Responsibility Act of 2023. The National Environmental Policy Act (NEPA) review process was also on the minds of our legislators. Indeed, Congress chose to use the debt ceiling fight as a vehicle for implementing several changes to NEPA aimed at improving project authorization and management and establishing timelines for completing the review process. While not all the changes in the so-called Builder Act are dramatic, a handful of them could provide additional certainty for those in the oil and gas and renewables industries seeking federal approval for their projects.

On February 16, 2023, the Federal Energy Regulatory Commission (“FERC”) issued an order approving two extreme cold weather reliability standards: EOP-011-3 (Emergency Operations) and EOP-012-1 (Extreme Cold Weather Preparedness and Operations) proposed by the North American Electric Reliability Corporation (“NERC”), subject to modification.[1] The approved Reliability Standards help to maintain reliable operation of the Bulk Power System by ensuring that enough generating units will be available during a cold weather event. According to FERC, the proposed Reliability Standards EOP-011-3 and EOP-012-1 are improvements to the existing Reliability Standards, but NERC must address additional concerns such as ambiguity, applicability, and compliance timelines. NERC is directed to submit modifications within twelve months.