On May 9, 2017, the New Jersey Boroughs of Milltown, Park Ridge, and South River (collectively, “New Jersey Boroughs”) filed a Federal Power Act (“FPA”) Section 206 complaint against Public Service Electric & Gas Company (“PSE&G”) seeking to reduce PSE&G’s current base return on equity (“ROE”) of 11.18 percent to a base ROE of no higher than 8.3 percent. Additionally, the New Jersey Boroughs requested that FERC order refunds and establish the date of the complaint as the refund effective date.
On April 14, 2017, the United States Court of Appeals for the District of Columbia Circuit (“DC Circuit”) held that FERC erred in setting the base return on equity (“ROE”) for ISO New England Inc. (“ISO-NE”) at 10.57 percent. The DC Circuit granted a petition filed by a group of New England transmission owners (“NETOs”), and a separate petition filed by a group of wholesale transmission customers and other consumer-side stakeholders (collectively, “Customers”) located in the New England region. The DC Circuit vacated the underlying FERC order and remanded the case to FERC for further consideration.
On April 18, 2017, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) upheld FERC orders that (1) required ISO New England (“ISO-NE”) and its participating transmission owners (“TOs”) to remove right of first refusal (“ROFR”) provisions from their Transmission Operating Agreement (“TOA”) that granted incumbent transmission facilities the option to construct any new transmission facilities within their footprint; and (2) permitted ISO-NE to consider state policy goals in evaluating transmission needs during the Order No. 1000 transmission process. Of note, the D.C. Circuit affirmed FERC’s finding that the Mobile-Sierra presumption against abrogating negotiated contract provisions was overcome because the TOA’s existing ROFR provisions “severely harm the public interest.” Continue Reading D.C. Circuit Backs FERC Removal of ISO-NE Right of First Refusal and Consideration of State Policies in Transmission Planning
On April 4, 2017, the United States Court of Appeals for the District of Columbia Circuit (“DC Circuit”) held that FERC had erred in finding that the terms of an interconnection agreement between NextEra Desert Center Blythe, LLC (“NextEra”), Southern California Edison Company (“SCE”), and the California Independent System Operator (“CAISO”) clearly and unambiguously bars NextEra from receiving Congestion Revenue Rights (“CRR”). The DC Circuit remanded the case to FERC for consideration in light of the identified ambiguity.
On March 31, 2017, a group of California parties, consisting of various public power utilities and the California Public Utilities Commission (the “Complainants”), alleged in their complaint at FERC that Pacific Gas and Electric Company’s (“PG&E”) proposed transmission rates in its eighteenth rate filing (“TO-18”) contained significant errors and overstated expenses. The Complainants requested that FERC investigate the proposed TO-18 rates, which FERC had already set for hearing and settlement judge procedures in a separate proceeding. In addition, the Complainants requested that FERC exercise its authority to supplement the refund effective date established for the proposed TO-18 rates, in the event that the record eventually justified establishing a revenue requirement below PG&E’s last “clean” rate, established through settlement in its seventeenth rate filing (“TO-17”). Continue Reading California Parties Request Refunds from PG&E Based on Alleged Errors in Proposed Transmission Revenue Requirement
On March 15, 2017, the Board of Governors of the California Independent System Operator Corporation (“CAISO”) approved the 2016-2017 Transmission Plan, which is an annual, comprehensive assessment of transmission needs of the CAISO system over a 10-year planning horizon. According to the accompanying memorandum from CAISO Management, the Transmission Plan “provides a comprehensive evaluation of the ISO’s transmission grid to identify upgrades needed to successfully meet California’s policy goals, in addition to examining conventional grid reliability requirements and transmission projects that can bring economic benefits to consumers.” Continue Reading CAISO Board Approves Annual Transmission Plan
On March 9, 2017, FERC issued notice that FERC staff will convene a technical conference on June 26, 27, and 28, 2017 to explore opportunities for increasing market and planning efficiency through improved software. FERC staff will facilitate a discussion regarding advances in market modeling that have the potential to improve efficiency. FERC will accept comments following the conference, with a deadline of July 31, 2017. Continue Reading FERC to Convene Technical Conference on Increasing Real-Time and Day-Ahead Market Efficiency through Improved Software
On March 6, 2017, the Supreme Court of the United States denied a petition to review FERC’s requirement in Order No. 1000 that transmission providers remove from their tariffs and agreements provisions granting incumbent transmission owners a right of first refusal (“ROFR”) to construct transmission facilities selected in a regional transmission plan (see April 13, 2016 edition of the WER). The October 14, 2016 petition, filed by a group of Midcontinent Independent System Operator, Inc. (“MISO”) transmission owners, requested review of an April 8, 2016 decision by the United States Court of Appeals for the Seventh Circuit (“Seventh Circuit”) upholding FERC’s requirement.
The denial of the petition for writ of certiorari means that the Seventh Circuit’s April 8, 2016 ruling will stand. The case is docketed in Case No. 16-531.
On February 15, 2017, the PJM Interconnection, L.L.C. (“PJM”) Board authorized more than $1.5 billion in electric transmission projects in the PJM-region as part of the Regional Transmission Enhancement Plan process. According to PJM President and CEO Andy Ott, the current round of project approvals addresses “the growing need to replace aging infrastructure, energy efficiency, and the resulting reduction in the growth of demand for electricity.” Both the list of approved projects and the proposed cost allocation for each project will be the subject of future filings with FERC.
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