On October 5, 2018, FERC accepted revisions to the New York Independent System Operator, Inc.’s (“NYISO”) methodology used to determine Locational Installed Capacity Requirements (“LCRs”) in NYISO’s Installed Capacity (“ICAP”) market. In doing so, FERC found that the proposed Alternative LCR Methodology was just and reasonable because, among other things, the Alternative LCR Methodology results in LCRs, and thus capacity costs, that are reasonably aligned with the associated reliability benefits.
On October 10, 2018, the U.S. Senate passed S. 3021, the America’s Water Infrastructure Act of 2018 (“AWIA”), which contains several hydropower provisions that seek to amend the Federal Power Act (“FPA”) to promote hydropower development. The Senate passed the AWIA by a 99-1 vote. The AWIA was previously passed by the U.S. House of Representatives on September 14, 2018 and will now go to the President for his signature. Continue Reading Congress Includes Hydropower Provisions in Water Bill Sent to the White House
On October 11, 2018, twenty-six pipelines submitted filings in compliance with Order No. 849 in response to a directive from FERC concerning the effect of reduced corporate income taxes on pipelines. Order No. 849 established a staggered filing schedule, so pipelines have between 28 and 84 days to submit “FERC Form No. 501-G,” depending on how FERC assigned the pipelines. The pipelines in the first category were required to file Form No. 501-G along with other information to inform FERC and the public of the impact of the recent reduction in federal income tax rates, as well as the effect of the Commission’s policy on the collection of federal income taxes by tax pass-through entities, on their revenue requirements. Continue Reading Natural Gas Pipelines Submit Income Tax Compliance Filings
Troutman Sanders LLP has authored the 2019 Alternative Energy & Power Guide for Chambers and Partners. The firm’s Energy and Capital Projects & Infrastructure practices were asked by Chambers to be the exclusive contributor for the section. Associates Jamond Perry and Meghan Mandel and partners Christopher Jones, Amie Colby, Anne Dailey, Bill Derasmo, Cliff Sikora, and John Leonti wrote and edited the guide.
Troutman Sanders’ energy practice groups have counseled utilities and other energy clients about changing regulatory challenges since the 1920s. The team handles matters across the energy-related sector including renewable energy, nuclear, and natural gas, energy construction, electricity, and energy storage.
On September 28, 2018, President Donald Trump signed into law Public Law No: 115-247, amending Federal Power Act (“FPA”) section 203 to add a $10 million threshold for public utility mergers and acquisitions requiring FERC approval. The new law will also require FERC to (i) issue a rule to require any public utility to notify FERC, after 30 days of the close of the transaction, if the value of the merger is more than $1 million but less than $10 million and (ii) submit a report to Congress assessing the impacts of the new law. The amendments to FPA section 203 will become effective on March 27, 2019. Continue Reading New Law Amends FPA Section 203 to Add Monetary Threshold to Public Utility Mergers and Acquisitions
On October 1, 2018, FERC released its Strategic Plan for fiscal years 2018-2022. FERC affirmed its mission of maintaining reliable, efficient, and sustainable energy for consumers by setting three primary goals: (1) ensuring that rates, terms, and conditions are just, reasonable, and not unduly discriminatory or preferential; (2) promoting the development of safe, reliable, and efficient energy infrastructure that serves the public interest through the review of natural gas and hydropower infrastructure proposals; and (3) managing resourcing to support its mission through organizational excellence. Continue Reading FERC Releases Strategic Plan for FY 2018-2022
On October 2, 2018, PJM Interconnection, L.L.C. (“PJM”) submitted a filing at FERC (“October 2 Filing”) in response to a June 29, 2018 FERC order invalidating PJM’s capacity market rules (“June 29 Order”). FERC found PJM’s existing capacity market rules unjust and unreasonable because they do not consider the impacts state subsidies have on PJM’s capacity market. In the October 2 Filing, PJM proposes two alternative methods in response to the June 2018 Order: an expanded Minimum Offer Price Rule (“MOPR”) and Resource Carve-Out construct. Continue Reading PJM Proposes New Fix to Capacity Market to Address State-Subsidized Resources
On October 3, 3018, President Donald Trump announced his intent to nominate Bernard L. McNamee to fill the vacant seat on FERC, for the term expiring June 30, 2020, resulting from Commissioner Robert Powelson’s resignation. If nominated, confirmed, and sworn in, Mr. McNamee would restore the Republican majority among FERC Commissioners.
On September 20, 2018, FERC partially accepted tariff amendments proposed by the California Independent System Operator Corporation (“CAISO”) aimed at improving the efficiency of its congestion revenue rights (“CRR”) market rules. Specifically, CAISO proposed to decrease the percentage of transmission system capacity available in the annual CRR allocation and auction processes from 75 percent to 65 percent (“Capacity Release Reduction Proposal”). FERC accepted the Capacity Release Reduction Proposal, finding it just and reasonable. CAISO also proposed to eliminate full funding of CRRs and instead scale CRR payouts, on a constraint-by-constraint basis, up to the extent that CAISO collects sufficient revenue through the day-ahead market congestion charges and charges to counterflow CRRs (“Scaling Proposal”). FERC, however, rejected the Scaling Proposal as not just and reasonable. Continue Reading FERC Partially Accepts CAISO Tariff Amendments Aimed at Improving Efficiency of Congestion Revenue Rights Market Rules
On September 21, 2018, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) ruled that FERC’s order to deny ANR Storage Company’s (“ANR”) request to charge market-based rates was arbitrary and capricious. The D.C. Circuit found that FERC provided no basis for treating ANR differently from another competitor, DTE Energy Company (“DTE”) in a prior decision, and that FERC’s explanation for why intrastate facilities could not restrain ANR’s exercise of market power was internally inconsistent. As such, the D.C. Circuit remanded the proceeding back to FERC. Continue Reading D.C. Circuit Overturns FERC Order Denying ANR Storage Market-Based Rate Authority