The Ag Committee markup included a number of bills to rationalize the CFTC’s implementation of Dodd-Frank.  The bills had already been approved by the House Financial Services Committee.  Unlike the U.S. Senate, the U.S. House utilizes sequential referrals of pending bills through various committees of jurisdiction.

“[The bills] are intended to restore the balance that I believe can exist between sound regulation and a healthy economy,” Agriculture Chairman Frank Lucas (R-Okla.) said at the markup held last week.

Although the bills voted out of the Ag Committee generally had bipartisan support, Ranking Member Collin Peterson (D-Minn.) expressed reservations about the roll-back of Dodd-Frank.

“The sad part of this exercise is that we may find out later it wasn’t even necessary,” Peterson said. “What is potentially even sadder is that even if we do find that any of these bills are necessary, they have no future. The majority of Senate Republicans and their leadership have dedicated themselves to the repeal of Dodd-Frank.”

“Swaps” are used by energy companies to hedge commodity risk.  Swaps are contracts that are based on prices of commodities, credit and world currencies.  Supporters of the Dodd-Frank roll-back effort argue that swap “end users” such as utilities should not be subject to stringent oversight for trades used to mitigate risk on an energy company’s own account.

On November 10, 2011, the State Department announced that it could not make a national interest determination regarding the Keystone XL Pipeline permit application without additional information. On January 18, 2012, the State Department recommended to President Obama that the Keystone XL Pipeline permit be denied, and that it be determined not to serve the national interest.  The State Department had previously informed President Obama that their review would be complete by the first quarter of 2013.  The decision to deny the Keystone XL Pipeline permit came about as a result of the Temporary Payroll Tax Cut Continuation Act, which provided, in addition to other items, “not later than 60 days after enactment of this Act, the President, acting through the Secretary of State, shall grant a permit under Executive Order 13337…for the Keystone XL pipeline” and “[t]he President shall not be required to grant the permit…if the President determines that the Keystone XL pipeline would not serve the national interest.”   The State Department issued a statement that the denial of the permit application does not preclude subsequent permit applications.

TransCanada Corp., the developer of the Keystone XL Pipeline, plans to resubmit its application for the 1,700 mile pipeline project, and expects that their new application would be processed to allow for an in-service date in late 2014.

A copy of the President’s memo is available here.

A copy of the State Department’s Press Release is available here.

In the December 14 Order, FERC found “the Mitigation Proposal does not remedy the Proposed Transaction’s adverse effects on competition, including screen failures, identified in the Merger Order.”   FERC indicated that the merger transaction remains conditionally authorized, subject to Commission approval of market power mitigation measures that successfully remedy the screen failures identified in the Merger Order.  FERC held that “until Applicants correct the adverse effects of the Proposed Transaction, the Commission cannot unconditionally authorize it.”    FERC held the mitigation plan was based on a flawed assumption that two new buyers with no existing market share will each purchase one-half of the available energy and therefore would not cure the screen failures.  FERC also found that the proposal unduly restricted the pool of eligible buyers.  “Applicants propose to offer AEC [Available Economic Capacity] Energy under restrictive terms that will reduce the pool of eligible buyers, and provide a product that buyers may not even want.”

Although the Commission rejected the mitigation proposal, the rejection was without prejudice to Applicants proposing new mitigation measures that remedy the screen failures identified in the Merger Order.  The Commission indicated that until Applicants correct the adverse effect of the Proposed Transaction, the Commission cannot unconditionally authorize it.  Commissioner LaFleur issued a separate statement on December 15, 2011, stating “the proposal did not adequately remedy the negative effects on competition previously identified by the Commission.”

A copy of the Commission’s Order is available here.

A copy of Commissioner LaFleur’s statement is available here.

• The connection of 2,700 MW of queued generation to the existing transmission network
• 3,655 miles of new or upgraded transmission lines;
• The creation of between 17,000-39,000 construction jobs and between 28,400-74,000 total jobs;
• $49.2 billion in benefits from the use of lower-cost generation and reductions in energy wasted through transmission losses over a 20 to 40 year timeframe; and
• Reliable facilitation of delivery of 41 million MWh of renewable energy annually and resolve 650 reliability constraints for approximately 6,700 system conditions.

MTEP11 projects are expected to cost $6.5 billion and will be financed by all load within MISO through a postage-stamp rate.  The Federal Energy Regulatory Commission (“FERC” or the “Commission”) approved the cost allocation plan on December 16, 2010, as just and reasonable. (See December 17, 2010 edition of the WER)  FERC reaffirmed its order on October 21, 2011, conditionally accepting MISO’s compliance filing, but also directed MISO to make a further compliance filing concerning reviews of the MVP methodology.  (See October 24, 2011 edition of the WER)

The merger calls for Entergy to divest its transmission assets to the newly-created Mid South TransCo LLC (“Transco”).  Transco will then distribute its shares in a tax-free spin-off and then merge with ITC’s newly-created subsidiary in what is known as a “Reverse Morris Trust transaction.”  Entergy’s shareholders are expected to receive 50.1 percent of the shares of “pro forma” ITC in exchange for their Transco shares.  ITC’s shareholders will own the remaining 49.9 percent of the merged company, and Entergy will issue $1.775 billion in new debt for the merger that ITC eventually will assume. 

Although ITC is headquartered in Novi, Michigan, ITC will maintain a regional headquarters in Jackson, Mississippi.  The merger is expected to be finalized in 2013, but the transaction must be approved by several states and by the Federal Energy Regulatory Commission and the Securities Exchange Commission.

A link to ITC’s merger announcement is available here.