On January 8, 2019, FERC approved revisions to the PJM Interconnection, L.L.C. (“PJM”) Tariff and Operating Agreement regarding the use of transmission constraint penalty factors in its market operations.  PJM’s filing responds to new market transparency requirements set out in Order No. 844, the result of FERC’s rulemaking addressing uplift cost allocation and transparency in Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”).  In accepting PJM’s proposed revisions, FERC found the revisions would provide transparency regarding PJM’s transmission constraint penalty factor procedures and also produce more transparent and appropriate pricing and investment signals that correspond to an underlying transmission constraint. Continue Reading FERC Approves PJM Tariff Revisions Regarding Transmission Constraint Penalty Factors

On January 4, 2019, the U.S. District Court for the District of Maine (“Maine District Court”) issued an order on two motions for summary judgment concluding that FERC’s assessment of a civil penalty against Competitive Energy Services, LLC (“CES”) and its managing member, Richard Silkman (collectively, “Respondents”) was not time-barred by the statute of limitations under 28 U.S.C. § 2462.  In doing so, the Maine District Court denied the Respondents’ motion for summary judgment.  Continue Reading District Court Rules FERC Enforcement Claim Not Barred by Statute of Limitations

On January 7, 2019, FERC Commissioner Bernard McNamee signaled in a letter to members of the United States Senate (“January 7 Letter”) that he would not recuse himself from FERC’s pending grid resiliency proceeding in Docket No. AD18-7 unless the FERC proceeding began to “closely resemble” a Notice of Proposed Rulemaking (“NOPR”) issued in September 2018 by the Department of Energy (“DOE”).  Commissioner McNamee helped draft the DOE NOPR, which also addressed grid resiliency issues and was rejected by FERC in Docket No. RM18-1 in January 2018 (see January 17, 2018 edition of the WER), when he was an attorney at the DOE.  The January 7 Letter responded to a December 12, 2018 request from a group of Senators, led by Catherine Cortez Masto (D-NV), that Commissioner McNamee provide an update on the guidance he received from FERC ethics officials regarding his recusal from specific proceedings.  According to that guidance, notwithstanding the similarities between Docket No. AD18-7 and the now-terminated Docket No. RM18-1 on the DOE NOPR, previous statements by Commissioner McNamee did not meet the legal standard for recusal, although the guidance urged “continued oversight to ensure that Docket No. AD18-7 does not develop in such a way as to replicate or closely resemble Docket No. RM18-1.” Continue Reading Commissioner McNamee Unlikely to Recuse Himself from FERC Grid Resiliency Proceeding Unless it “Closely Resembles” DOE Resiliency NOPR

On December 28, 2018, the U.S. Environmental Protection Agency (“EPA”) released a pre-publication version of a proposal revisiting the cost analysis underlying the Mercury and Air Toxics Standards (“MATS Rule” or “MATS”) for coal- and oil-fired electric generating units (“EGUs”) and conducting the residual risk and technology review required by the Clean Air Act (“Proposal”).  The Proposal would reverse a previous finding, issued by EPA under the Obama Administration, that regulation of hazardous air pollutant (“HAP”) emissions from EGUs under the MATS Rule was “appropriate and necessary” but would nonetheless leave the rule in effect.  The Proposal also concludes that more stringent HAP emission limits are not warranted by the required risk and technology reviews. Continue Reading EPA Proposes to Find the Mercury and Air Toxics Standards Not Cost Justified

On December 6 and December 18, 2018, various environmental groups filed a motion and comments with FERC requesting that Commissioner Bernard McNamee recuse himself from FERC’s two ongoing grid resiliency proceedings.  The groups argued that because Commissioner McNamee represented the Department of Energy (“DOE”) when the agency proposed compensating “fuel-secure” units for their contribution to the resilience of the electrical grid, recusal is appropriate because he is already a party to the proceedings, and in any event, may have already “prejudged” central matters of law and fact relevant to those dockets. Continue Reading Advocates Request Recusal of Newly-Confirmed Commissioner McNamee from Grid Resiliency Proceedings

On December 20, 2018, FERC issued a series of nine orders addressing how certain public utilities calculate accumulated deferred income tax (“ADIT”) balances in their transmission formula rates.  The orders were the result of separate proceedings under Section 206 of the Federal Power Act (“FPA”), which FERC initiated after concluding in a June 21, 2018 order (“June Order”) that the use of its former “two-step” ADIT averaging methodology may be unjust and unreasonable. Continue Reading FERC Addresses ADIT-Related Formula Rate Calculations for Certain Utilities

On December 18, 2018, FERC eliminated the requirement for hydroelectric project licensees to file Form 80, which solicited information on the use and development of recreation facilities at FERC-licensed hydropower projects.  FERC also revised Sections 8.1 and 8.2 of its regulations to (1) modernize licensee public notice practice, (2) clarify recreational signage requirements, and (3) provide flexibility to assist licensees’ compliance with these requirements.  The Final Rule will go into effect 90 days after it is published in the Federal Register. Continue Reading FERC Eliminates Form 80 for Hydroelectric Projects

On December 20, 2018, FERC proposed to revise the horizontal market power analysis required for electric power sellers seeking to obtain or retain market-based rate authority in certain organized wholesale power markets (“NOPR”).  Specifically, FERC proposed to relieve electric power sellers of the obligation to submit indicative screens when seeking to obtain or retain market-based rate authority in any Regional Transmission Organization (“RTO”)/Independent System Operator (“ISO”) market with FERC-approved RTO/ISO monitoring and mitigation, thus easing the regulatory burden for certain market-based rate sellers.  However, FERC proposed to continue to require market-based rate sellers in an RTO/ISO to submit indicative screens for authorization to make capacity sales at market-based rates in any RTO/ISO market that lacks an RTO/ISO-administered capacity market subject to FERC-approved RTO/ISO monitoring and mitigation. Continue Reading FERC Proposes to Ease Regulatory Burden for Certain Market-Based Rate Sellers

On December 11, 2018, FERC approved the Midcontinent Independent System Operator, Inc.’s (“MISO”) proposed tariff revisions to remove the service territory of Entergy New Orleans, LLC (“Entergy New Orleans”) from Cost Allocation Zone 9 to its own new Cost Allocation Zone 12 (“Proposal”).  FERC found that the Proposal was just and reasonable because it would result in an allocation of costs that is at least roughly commensurate with MISO’s Transmission Expansion Plan (“MTEP”) economic project benefits. Continue Reading MISO to Establish New Rate Zone for Entergy New Orleans

On November 23, 2018, the FERC After Action Panel (“FAAP”) issued a report (“FAAP Report”) providing an evaluation of the causes and recommendations to FERC after a spillway failure that took place at the Oroville Dam in February 2017.  According to the FAAP Report, issues with the Oroville Dam spillways have been ongoing since the project was commissioned in 1967, and there are shortcomings related to the implementation of FERC’s Part 12 dam safety regulations.  In light of its assessment, the FAAP provided FERC with recommendations for improvement of the Part 12 program. Continue Reading FERC Releases Oroville Spillway After Action Report