On July 25, 2017, two weeks after an Illinois federal judge issued a similar ruling, the U.S. District Court of the Southern District of New York (“District Court”) issued an order dismissing challenges to a New York state “zero emission credit” (“ZEC”) program established by the New York Public Service Commission (“NYPSC”).  As with the Illinois court’s decision regarding the Illinois ZEC program (see July 25, 2017 edition of the WER), the District Court found the New York ZEC program constitutional and determined that the challengers lacked a private right of action to challenge the New York ZEC program on preemption and dormant commerce clause grounds.  Nevertheless, the District Court reached, and rejected, the merits of those challenges.  Continue Reading Federal District Court Dismisses Challenges to New York ZEC Program

On July 14, 2017, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) vacated in part the Federal Energy Regulatory Commission’s (“FERC”) orders approving a Joint Dispatch Agreement (“JDA”) between Duke Energy Carolinas, LLC (“Duke”) and Progress Energy Carolinas, Inc. (“Progress”).  Specifically, the D.C. Circuit found that FERC failed to articulate a satisfactory explanation for approving the provisions of the JDA that provide for disparate treatment of wholesale ratepayers.  As discussed below, the D.C. Circuit remanded the matter to FERC, directing it to reconsider the relevant JDA provisions and provide a reasoned explanation for its approval of the JDA.

Continue Reading D.C. Circuit Remands Duke-Progress Joint Dispatch Agreement for Disparate Treatment of Wholesale Ratepayers

On July 14, 2017, the United States District Court for the Northern District of Illinois, Eastern Division (“District Court”), issued a memorandum opinion and order dismissing various challenges to an Illinois “zero emission credit” (“ZEC”) program passed into law at the end of 2016 (“ZEC Program”).  After finding that the plaintiffs largely lacked standing to bring their claims, the District Court nonetheless reached the merits of, and rejected, the plaintiffs’ preemption, equal protection, and dormant commerce clause challenges to the ZEC Program.  Three days after its release, the ruling was appealed to the U.S. Court of Appeals for the Seventh Circuit (“Seventh Circuit”). Continue Reading Federal District Court’s Standing Analysis and Dismissal of Illinois ZEC Challenges Heads to Court of Appeals

On June 28, 2017, the United States Court of Appeals for the Second Circuit (“Second Circuit”) affirmed a district court’s dismissal of challenges to Connecticut’s renewable energy solicitation program and Renewable Portfolio Standard (“RPS”) law.  The Second Circuit rejected arguments from the plaintiff-appellant, Allco Finance Limited (“Allco”), that the solicitation program was preempted by the Federal Power Act (“FPA”) and the Public Utility Regulatory Policies Act of 1978 (“PURPA”) and that the RPS law unduly burdens interstate commerce, in violation of the “dormant commerce clause.” Continue Reading Second Circuit Upholds Connecticut’s Renewables Solicitation Program and RPS Against Preemption, Dormant Commerce Clause Challenges

On May 19, 2017, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued a decision in which it held in part that FERC erred by determining that it lacked authority under the Federal Power Act (“FPA”) to order a non-jurisdictional entity to repay refunds that it should not have received.  The D.C. Circuit made clear that although the FPA prohibits FERC from ordering a non-jurisdictional entity to provide a refund to another entity, FPA Section 309 vests FERC with broad remedial authority, including authority to grant recoupment when it is justified and FERC otherwise has jurisdiction over the disputed funds. Continue Reading D.C. Circuit Holds that FERC has Authority to Order BPA to Forfeit Inappropriate Refunds

On March 28, 2017, Dynegy Marketing and Trade, LLC and Illinois Power Marketing Company (collectively, the “Complainants”) filed a complaint against the Midcontinent Independent System Operator, Inc. (“MISO”) alleging that MISO has failed to comply with the terms of its Open Access Transmission, Energy and Operating Reserve Markets Tariff (“MISO Tariff”) with respect to resources “pseudo-tied” into PJM Interconnection, L.L.C. (“PJM”). According to the Complainants, MISO has been assessing congestion and losses charges to MISO resources pseudo-tied into PJM using “Financial Schedules” in a manner that “blatantly contravenes the MISO Tariff and that results in the unjust, unreasonable, and unduly discriminatory imposition of duplicative charges.” The Complainants request that the Commission order MISO to immediately cease and desist from imposing such charges and that MISO “refund duplicative congestion and losses charges unlawfully imposed.” Continue Reading Dynegy and IPM Allege MISO Failed to Comply with Own Tariff Regarding Resources Pseudo-Tied into PJM

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 November 30, 2016, FERC issued an order accepting tariff revisions filed by Public Service Company of Colorado (“PSCo”) regarding penalty charges for energy imbalance and generator imbalance services under Schedules 4 and 9 of PSCo’s open access transmission tariff (“OATT”). FERC found the revisions, which PSCo filed to address the influx of variable wind generation on its system, to provide incentives for accurate scheduling from transmission customers. Continue Reading FERC Approves PSCo Tariff Revisions Regarding Energy and Generator Imbalance Penalty Charges

On November 17, 2016, FERC issued a Notice of Proposed Rulemaking (“NOPR”) in which it proposed modifications to its pro forma interconnection agreements that would require new generating facilities to install and enable primary frequency response equipment as a condition of interconnection. FERC explained that the proposed modifications are intended to address industry-wide reliability concerns related to declining frequency response performance. Continue Reading FERC Issues NOPR Proposing to Include Primary Frequency Response Provisions in <em>Pro Forma</em> Generation Interconnection Agreements

On October 11, 2016, FERC issued an order on the refund liability of Midwest Generation, LLC (“Midwest”) for violating FERC-approved settlement agreement terms regarding reactive supply and voltage control service. Of note, although FERC approved Midwest’s total refund obligation calculation of over $3.6 million, it declined to exercise its primary jurisdiction over whether Midwest should be responsible to pay the portion of this obligation that accrued before the utility’s debts were discharged in an April 2014 bankruptcy proceeding. Instead, FERC directed Midwest to pay the refund amounts that accrued following the bankruptcy proceeding, which totaled around $1.7 million. Continue Reading FERC Declines to Exercise Primary Jurisdiction Over Midwest Generation’s Pre-Bankruptcy Refund Liability