Clark has served as a member of the ND PSC since 2000, and Clark was President of the National Association of Regulatory Utility Commissioners (“NARUC”) from November 2010 to November 2011.   Also, prior to being elected President of NARUC, Clark served as Chairman of the North Dakota Republican Party, but he resigned from that position in November 2010.  Before joining the ND PSC, Clark served as a state legislator for District 44 in the North Dakota State House of Representatives and also served as North Dakota’s Labor Commissioner.  Clark focused on a variety of issues while serving as President of NARUC, including pipeline safety.  During his tenure, NARUC sponsored a report on state pipeline safety requirements and initiatives. 

Clark’s Senate confirmation will be undertaken by the Senate Committee on Energy and Natural Resources.  The Committee will likely hold a hearing on Clark’s nomination and may choose to report the nomination favorably, unfavorably, without recommendation, or take no action at all.  If the Committee votes to report the nomination, then the process will move to the full Senate.  In some instances, one or more Senators may place a “hold” on a nomination, thereby delaying or preventing it from reaching the floor for further action.  The Senate then has three options: confirm, reject, or take no action on the nomination.  Confirmation requires a simple majority vote.  The last three FERC Commissioners have averaged 97 days to confirm.

A copy of the President’s press release is available here.

The recently issued audit reports highlight the types of information FERC audit staff is reviewing, as well as the types of Form No. 552 errors and corrective actions that have been identified so far.

In its audit reports of Form No. 552, FERC’s Division of Audits within the Office of Enforcement (“OE”) identified the methodology its auditors used in reviewing companies’ Form No. 552 filings.  Among the items that OE auditors reviewed included:

• Reporting of Affiliates: Audit staff reviewed corporate organizational charts and held discussions with employees to identify all affiliates that purchased or sold physical natural gas subject to the reporting requirements of Form No. 552.
• Reporting to Price Index Publishers: Audit staff requested supporting documentation and held discussions with employees to determine whether transaction information was reported to Price Index Publishers.
• Total Transaction Volumes: Audit staff reviewed total reportable physical natural gas purchases and sales volumes to verify the accuracy and completeness of the Form No. 552. 
• Classification of Transaction Volumes: Audit staff evaluated the physical natural gas purchases and sales volumes reported in the form to verify the accuracy of each transaction category. 
• Reportable and Nonreportable Transactions: Audit staff analyzed physical natural gas transactions to ensure all of them were reported in the Form No. 552.

As a result of the audit process, OE auditors identified errors submitted on some Form No. 552 reports, and recommended compliance activities going forward.  While Merrill Lynch and Shell’s Form No. 552 submissions had no errors that required corrections, for others, the audit reports recommended corrections and changes going forward.  For the most part, the recommended actions would correct only accounting errors and internal procedures rather than providing insight on terms used on Form No. 552.  The recommended changes included:

• Updating a company’s procedures used in preparing Form No. 552 to ensure it accurately reports physical natural gas transactions volumes.
• Updating a company’s procedures to ensure that all affiliates with reportable volumes of physical natural gas are identified on the Form No. 552.
• Adopting reporting procedures to exclude sales volumes associated with unprocessed gas, natural gas liquids, and oil.
• Training employees on the Form No. 552 instructions to ensure they can distinguish reportable from non-reportable transactions.
• Revising any previously filed Form No. 552 to reflect corrected volumes for each category, total purchases sales, and recommendations issued.

OE directed Petrohawk and Total Gas to revise and re-file with the Commission the corrected From No. 552 within 30 days after the issuance of the audit report.  In addition, OE directed these companies to submit (1) plans for implementing the recommendations identified in the final audit report, and (2) copies of any written policies and procedures developed in response to the recommendations.

Copies of the audit reports can be found here.

The term “hydrokinetics” describes zero-emission renewable power from the movement of water.  Hydrokinetic projects are often referred to as “tidal” or “wave” projects, and unlike traditional hydropower projects, hydrokinetic projects do not require the building of infrastructure to create an impoundment of water (such as dams that collect and cascade water) to create energy.  Low-head hydropower projects can be confused with several hydrokinetic projects because several low-head hydropower projects are smaller projects that utilize “run-of-the-river” technology, but actually, low-head hydropower usually refers to sites with a head (i.e., elevation difference) of less than five meters (about 16 feet) for the falling water.

In an effort to encourage hydrokinetic development, the Commission developed the pilot license process in 2008 to test new technologies and to evaluate appropriate sites for these new technologies.  FERC also hopes to assess the environmental impact of implementing new hydrokinetic projects.  In order to be eligible to receive a pilot license the project must be: (1) small, (2) short term, (3) located in environmentally non-sensitive areas based on the Commission’s review of the record, (4) removable and able to be shut down on short notice, (5) removed, with the site restored, before the end of the license term (unless a new license is granted), and (6) initiated by a draft application with the appropriate environmental analysis.  To date, FERC has issued 100 preliminary permits to study the feasibility of developing a pilot hydrokinetic project, and currently there are nine entities in the pre-filing process for license applications.  Only three entities have actually submitted full license applications. 

The RITE project will be operated remotely, and although there will be no manned control center, dispatch technicians will be available to check interconnections.  A supervisory computer will collect data on the status of each turbine and allow for real-time and post-processed performance monitoring.  During periods of “no-load” when energy is not being generated, an automatic brake will be applied to the turbines and prevent the rotors from rotating.
 
A full copy of the Commission decision is available here.

At issue in the January 19 Order was FERC’s prior rejection of ISO-New England’s 2010 proposal to address buyer-side market power through a two-tiered pricing system called the “Alternative Price Rule” or “APR” mechanism.  The APR proposal would have addressed new entry pricing by paying one market price to new capacity and a separate clearing price to existing capacity.  FERC rejected that approach in 2010, and defended that decision in this most recent January 19 Order, calling instead for an across- the- board offer floor proposal akin to what PJM Interconnection LLC uses in its capacity market.

Instead, in the January 19 Order, the Commission renewed its prior support for offer floor mitigation in the FCM, which prevents new capacity from bidding into the FCM as price takers if, for example, the new resource is backed by a power purchase agreement or some other price support.  The Commission again rejected pleas by load-serving entities for the ability to self-supply new capacity without the threat of offer floor mitigation, finding that an “across-the-board offer floor mitigation exemption for new resources designated as self-supply would allow for an unacceptable opportunity to exercise buyer market power and thus could inhibit competitive investment.”  Similarly, the Commission refused requests by several state commissions for an exemption to offer floor mitigation for state-sponsored power projects, finding that the mitigation rules treat all “out of market” capacity on equal footing. 

The Commission also affirmed that parties must file a complaint under Section 206 of the Federal Power Act to seek an exemption from the offer floor rules. 

A copy of FERC’s rehearing and clarification can be found here.

The South Carolina petition expressed concern about the “potential effects of [the] EPA regulations on the quality, reliability, and cost of electric service…” and asked FERC to establish one or more regional joint boards to study the issue.  The petition was submitted pursuant to Section 209 of the Federal Power Act, which allows the Commission to establish joint boards to study any “matter arising in the administration” of Part II of the Federal Power Act, and was supported by the state commissions from South Dakota, Wyoming, West Virginia, North Carolina, Louisiana, and Texas. 

In denying the petition, the Commission suggested that the petitioners had failed to identify any matter currently before the Commission that was “cognizable” under Part II of the FPA.  The Commission, however, pointed to a recent technical conference and an upcoming joint “forum” FERC will be holding with the National Association of Regulatory Utility Commissioners, established “to explore reliability issues stemming from new and pending environmental rules for the power sector.” (See January 9, 2012 edition of the WER).

Accompanying the order was a strongly-worded concurring statement from Commissioner Moeller, stating that while the Commission is not legally obligated to form a joint board, the Commission “can still respond to South Carolina’s request in a manner that is productive.”  Moeller called for an increased commitment to “overcoming the obstacles that have now been imposed on the reliable operation of the power grid” and for parties responsible for reliability to work together in an open and transparent manner.

A link to the Commission order is available here.