Pareto Policy Solutions, LLC

advancing innovation through smart regulation

Pareto Policy Solutions, LLC is a policy analysis and advocacy firm committed to advancing sustainability through “smart” regulation: regulation that rewards, and does not penalize, superior performance.  Often, such actions leverage advances in science and technology and make the regulatory program itself more effective as well as more efficient.

Last Week in Regulation: Demand-Response, the Federal Permit Process, and Commercial Drone Technology

SCOTUS To Rule on Demand-Response. On May 4th, the Supreme Court agreed to hear two cases involving a 2011 regulation (FERC Order 745) requiring demand-response, in which electricity consumers reduce usage during peak hours in return for a rebate of the marginal price of electricity in their area.  The Court will hear the case in its October session.  The central question is whether FERC has authority to require demand-response in wholesale markets, or whether this is authority left solely to the states. The DC Court of Appeals ruled against FERC, setting up the opportunity for Supreme Court review.  Demand-response policies are credited with reducing pollution and increasing energy savings since first being employed in 2001.

Researchers Hail Health Benefits of EPA Clean Power Plan.  On May 4th, the science journal Nature Climate Change published a paper showing that reducing power plant emissions via a program akin to EPA’s proposed Clean Power Plan would provide greater health benefits than a regulation focused on “inside-the-fence” controls or a regulation based on a carbon tax.  Allowing demand-side energy efficiency as a compliance option is a major reason for this superior performance, write the authors, affiliated with Harvard University, Syracuse University, and Resources for the Future.  EPA is in the process of making changes to its proposed rule based on public comment.

Senate Committee Approves Bill To Speed Federal Permit Processing. On May 6th, the Senate Committee on Homeland Security and Governmental Affairs approved, by a 12-1 vote, a bill to streamline the federal permit process for major infrastructure projects.  Senator Kelly Ayotte (R-NH) cast the sole dissenting vote, citing constituent concerns.  The bill, sponsored by Senators Rob Portman (R-OH) and Claire McCaskill (D-MO), would establish an interagency council to identify and resolve impediments to the processing of federal permits for major infrastructure projects and would set deadlines for filing lawsuits on permit decisions.  The bill could go to the Senate floor as early as July or more likely after the August recess.

FAA To Test Drone Performance. On May 6th, the FAA announced a partnership with three companies to field test the performance of commercial drone technology.  The Pathfinder Partnership with CNN will investigate newsgathering in urban areas within the pilot’s line-of-sight. BNSF will investigate the inspection of its rail lines outside of a pilot’s direct vision.  And PrecisionHawk (a manufacturer) will survey crops in rural areas outside of the pilot’s line of sight. In February, FAA proposed a rule to severely limit commercial use of drones (e.g., daytime use, operators must be certified, certain applications only, and within a pilot’s direct line of sight).  Amazon and other companies have been critical of the proposed rule, calling it too limiting.  The partnership announcement suggests the FAA is likely to change its regulations to allow faster integration of unmanned aircraft into US airspace.

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