On January 8, 2018, FERC terminated the Department of Energy’s (“DOE”) Proposed Rule on Grid Reliability and Resilience Pricing (“Proposed Rule”) proceeding, and, instead, initiated a new proceeding whereby FERC plans to collect information on resilience from regional transmission organizations (“RTO”) and independent system operators (“ISO”).  Once that information is collected, FERC will determine whether further action is necessary to address grid resilience.  While FERC’s decision was unanimous, three of FERC’s Commissioners issued separate concurring opinions.  Of note, Commissioner Neil Chatterjee stated that while he would have preferred an order that took an interim step to address the issues raised in the Proposed Rule, he looked forward to addressing those critical issues in the new proceeding established by FERC. Continue Reading FERC Terminates DOE NOPR Proceeding, Requests Information from RTOs/ISOs on Resilience

On January 11, 2018, FERC denied Constitution Pipeline Company, LLC’s (“Constitution”) request asking FERC to conclude that the New York State Department of Environmental Conservation (“New York DEC”) waived its authority to issue a water quality certification under Section 401 of the Clean Water Act (“CWA”).  In so doing, FERC reiterated its authority to address such issues, as they relate to “setting and enforcing” Natural Gas Act (“NGA”)-imposed deadlines, and reaffirmed FERC’s long-standing position that state certifying agencies have up to one year to act on a CWA Section 401 application. Continue Reading FERC Concludes New York Did Not Waive Authority to Issue Water Quality Certificate for Gas Pipeline Project

On January 8, 2018, the U.S. Court of Appeals for the Ninth Circuit (“Ninth Circuit”) ruled that FERC acted arbitrarily and capriciously in approving a 50 basis-point incentive adder to Pacific Gas & Electric Company’s (“PG&E”) return on equity (“ROE”) for its participation in the California Independent System Operator Corporation (“CAISO”).  In particular, the Ninth Circuit held that FERC did not follow its precedent by approving PG&E’s incentive adder while dismissing arguments that PG&E’s ongoing membership in CAISO was required by a California Public Utilities Commission (“CPUC”) order and thus was not voluntary. Continue Reading Ninth Circuit Holds Utilities Are Ineligible for RTO Membership Adder When Membership Is Involuntary

On January 9, 2018, several state Attorneys General, state agencies, and state consumer advocates (“State Advocates”) sent a joint letter to the FERC Commissioners requesting that FERC open an investigation into the continued justness and reasonableness of FERC-jurisdictional electric and natural gas utilities’ (“Public Utilities”) rates considering the recent reduction in the federal corporate income tax rate.  The State Advocates further urged FERC to promptly adjust the revenue requirements of such Public Utilities to prevent utility customers across the nation from overpaying for service.  Continue Reading Multiple States Ask FERC to Adjust Utility and Pipeline Rates due to Tax Reform Bill

On December 28, 2017, the U.S. District Court for the Eastern District of Virginia (“District Court”) held that Powhatan Energy Fund LLC, Dr. Houlian Chen, and two funds owned by Dr. Chen (collectively, “Respondents”) are entitled to a full civil trial in FERC’s action to enforce penalties against Respondents for allegedly manipulating electricity markets.  Notably, the District Court held that a plenary civil trial was required because Respondents elected to forego a formal hearing before a FERC Administrative Law Judge (“ALJ”).  In lieu of a hearing before a FERC ALJ, Respondents instead elected to have FERC assess penalties upon finding a violation occurred, based on the investigative record. Thus, according to the District Court, a proper administrative record was never developed and Respondents were never permitted an opportunity to conduct their own independent discovery. Continue Reading Virginia District Court Orders Discovery in FERC Enforcement Case Against Powhatan

On December 21, 2017, FERC issued a Notice of Proposed Rulemaking (“NOPR”) proposing to direct the North American Electric Reliability Corporation (“NERC”) to modify the cybersecurity incident reporting requirements under the Critical Infrastructure Protection (“CIP”) Reliability Standards.  According to FERC, the proposal is intended to “improve awareness of existing and future cyber security threats and potential vulnerabilities.”
Continue Reading FERC Proposes to Improve Cybersecurity Incident Report Requirements in NOPR

On December 29, 2017, FERC conditionally accepted revisions to the Joint Operating Agreement (“JOA”) between PJM Interconnection, L.L.C. (“PJM”) and Midcontinent Independent Operator System, Inc. (“MISO”) that are intended to improve the coordination of resources that are pseudo-tied between the two regional transmission organizations (“RTOs”).   A “pseudo-tie” is a mechanism used by one Balancing Authority (“BA”) to control generating resources that are physically located in another BA.  The proposed revisions were given an effective date of October 1, 2017, subject to a ministerial compliance filing. Continue Reading FERC Conditionally Accepts Revisions to the PJM-MISO JOA to Enhance Coordination of Pseudo-Tied Resources

On January 2, 2018, the California Independent System Operator Corp. (“CAISO”) announced plans to become its own reliability coordinator by spring 2019.  The plan will require CAISO to withdraw from Peak Reliability, the current reliability coordinator for the Western Interconnection. Although the full suite of reliability services to be offered remains unclear, CAISO stated that it will offer outage coordination, day-ahead planning, and real-time monitoring reliability services. Continue Reading CAISO to Become Its Own Reliability Coordinator

On December 21, 2017, FERC accepted the Southwest Power Pool, Inc.’s (“SPP”) proposed tariff revisions related to its Integrated Transmission Planning (“ITP”) process contained in SPP’s Open Access Transmission Tariff (“Tariff”).  In 2015, SPP created the Transmission Planning Improvement Task Force (“Task Force”) to review its transmission planning process to determine if improvements were needed.  Based on the Task Force’s recommendations, SPP proposed to revise certain language in its Tariff, including moving from a three-year transmission planning cycle to a one-year cycle. Continue Reading FERC Accepts SPP’s One-Year Transmission Planning Cycle Proposal

On December 21, 2017, FERC Chairman Kevin McIntyre unexpectedly announced at his first Commission meeting that FERC will conduct a review of its 1999 Policy Statement on Certification of New Interstate Natural Gas Pipeline Facilities (“1999 Policy Statement”).  In doing so, Chairman McIntyre recognized that “[m]uch has changed in the energy world since 1999, and it is incumbent upon [the Commission] to take another look at the way in which we assess the value and viability of our pipeline applications.”  According to multiple reports, Chairman McIntyre clarified that he does not believe that the review will affect current pending pipeline applications.  Furthermore, Chairman McIntyre indicated that the review of the 1999 Policy Statement, which governs how FERC evaluates proposals for certificating new gas pipeline construction, will take place sometime in 2018.  Continue Reading FERC Unexpectedly Announces Review of its Certification Policy for Natural Gas Pipelines