On June 8, 2017, the U.S. Court of Appeals for the Fifth Circuit (“Fifth Circuit”) dismissed Total Gas & Power N.A., Inc., Aaron Hall, and Therese Tran’s (collectively, “Total”) arguments that the Natural Gas Act (“NGA”) provides federal district courts – not FERC – with exclusive authority to adjudicate violations of the NGA and assess civil penalties, finding that Total’s claims were unripe because FERC neither has determined that Total has violated the NGA nor assessed any civil penalties.  The Fifth Circuit also dismissed Total’s arguments that FERC’s procedures for appointing Administrative Law Judges (“ALJs”) and conducting hearings are unconstitutional.  Continue Reading Fifth Circuit Dismisses Total’s Arguments Against FERC’s NGA Enforcement Authority as Unripe

On June 5, 2017, the U.S. Supreme Court (“Supreme Court”) held that 28 U.S.C. § 2462’s (“Section 2462”) five-year limitations period for the enforcement of penalties applies to claims for disgorgement brought by the U.S. Securities and Exchange Commission (“SEC”).  As a result, additional federal agencies, including FERC, may similarly be limited to seeking disgorgement within five years of the date the claim accrued. Continue Reading Supreme Court Ruling in SEC Case Could Affect FERC Enforcement Proceedings Involving Disgorgement

On April 10, 2017, the U.S. Department of Justice, on behalf of FERC, argued to the U.S. Court of Appeals for the Fifth Circuit (“Fifth Circuit”) that a recent district court order requiring de novo review of market manipulation allegations under the Federal Power Act (“FPA”) is inapplicable to similar circumstances under the Natural Gas Act (“NGA”).  FERC’s counsel challenged Total Gas & Power North America Inc.’s (“Total”) reliance on a district court order in FERC v. Barclays Bank PLC et al., (“Barclays Order”) (see April 10, 2017 edition of the WER), arguing that it does not support reading a “de novo review” option into the NGA because that order interpreted a separate FPA provision for which there is no parallel under the NGA. Continue Reading FERC Counsel Argues that Review of Market Manipulation Allegations under FPA Are Distinct from Similar Circumstances under NGA

In an order issued on March 28, 2017, the United States District Court for the Eastern District of California (“District Court”) rejected arguments from FERC regarding the scope of review and applicable procedural rules governing the District Court’s review of a market manipulation enforcement proceeding.  Like every other federal court decision expressly addressing this issue—including one from a different judge in that same court earlier that month (see March 20, 2017 edition of the WER)—the District Court held that the defending parties were entitled to conduct discovery under the Federal Rules of Civil Procedure (“FRCP”). Continue Reading California District Court Allows Discovery in Review of FERC Enforcement Action Against Barclays

In an order issued on March 7, 2017, the United States District Court  for the Eastern District of California (“District Court”) rejected arguments from FERC regarding the scope of review and applicable procedural rules governing the District Court’s review of a market manipulation enforcement proceeding. The District Court held that the Federal Rules of Civil Procedure (“FRCP”) applied to the action and rejected arguments that it was limited to “de novo” review of the administrative record as compiled by FERC. As a result, the District Court ordered FERC to provide discovery to the opposing parties. Continue Reading California District Court Orders Discovery in FERC Enforcement Case

On February 2, 2017, FERC rejected the Midcontinent Independent System Operator, Inc’s. (“MISO”) proposed Competitive Retail Solution (“CRS Proposal”), which would have bifurcated the MISO capacity market into two distinct market clearing processes – the existing Planning Resource Auction (“PRA”) and a newly proposed, three-year forward capacity auction (“FCA”) for jurisdictions that had implemented retail choice initiatives. FERC found that the proposed bifurcated construct could potentially have adverse impacts on price formation in both the PRA and the FCA.

Continue Reading FERC Rejects MISO’s Proposal for Bifurcated Capacity Market Clearing Processes

On December 15, 2016, FERC issued a Notice of Inquiry (“NOI”) requesting comments regarding how FERC can ensure that partnerships that own and operate jurisdictional pipelines or public utilities, or similar pass-through entities (collectively, “Partnerships”), are not receiving “a double recovery of [income] taxes” based on FERC’s current income tax allowance (“ITA”) and return on equity (“ROE”) policies. FERC’s NOI comes in response to United Airlines, Inc. v. FERC, 827 F.3d 122 (2016), where the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) held that FERC had not “adequately justified” its current policy of granting such Partnerships an ITA – that is, the authority to recover from their ratepayers as a “cost” the income taxes paid by partner-investors on their shares of partnership income. Continue Reading FERC Questions Recovery of Income Tax Costs by Partnerships and Other Pass-Through Entities

On December 15, 2016, FERC issued a Notice of Proposed Rulemaking (“NOPR”) in which it proposed to revise its regulations and the pro forma Large Generator Interconnection Procedures (“LGIP”) and pro forma Large Generator Interconnection Agreement (“LGIA”). According to FERC, the proposed reforms could help “improve the efficiency of processing interconnection requests for both transmission providers and interconnection customers, maintain reliability, increase energy supply, balance the needs of interconnection customers and transmission owners, and remove barriers to needed resource development.” Comments on the proposed reforms in FERC’s NOPR are due 60 days after publication of the NOPR in the Federal Register. Continue Reading FERC Proposes Generator Interconnection Changes

On December 15, 2016, FERC issued a notice of proposed rulemaking (“NOPR”) that proposed to establish a set of fast-start pricing requirements applicable to regional transmission organizations (“RTO”) and independent system operators (“ISO”). FERC indicated it was issuing the NOPR to address concerns that rates for fast-start resources in RTO and ISO day-ahead and real-time markets do not reflect the value of fast-start resources. Continue Reading FERC Proposes Fast-Start Resource Pricing Rules for RTOs and ISOs

On December 6, 2016, FERC issued an order partially denying and partially granting a complaint brought by a coalition of transmission customers (“Coalition”) of the Midcontinent Independent System Operator, Inc. (“MISO”). The Coalition argued that MISO misapplied portions of its open access transmission tariff (“OATT” or “Tariff”) regarding the 2016/2017 planning year resource auction. Although the Commission rejected the Coalition’s argument that MISO utilized an unjust and unreasonable methodology for calculating Sub-Regional Export and Import constraints for the 2016/2017 auction, FERC found that prospective application of those methodologies was no longer just and reasonable, and directed MISO to modify its Tariff accordingly. Continue Reading FERC Partially Denies and Grants Customer Complaint Regarding MISO Planning Auction and Sub-Regional Export and Import Constraints