On May 17, 2018, FERC issued two orders denying requests for rehearing of two orders rejecting certain Southwest Power Pool, Inc (“SPP”) Open Access Transmission Tariff (“OATT”) proposals that, as FERC found, provided Auction Revenue Rights (“ARRs”) and Long-term Congestion Rights (“LTCRs”) on an unjust and unreasonable basis (“May 2018 Orders”). FERC’s previous orders, both issued on October 19, 2017 (“October 2017 Orders”), found that SPP was impermissibly providing ARRs and LTCRs for network service subject to “redispatch” (or, curtailment), on the same basis as network service not subject to redispatch. See October 25, 2017 edition of the WER. In these latest orders, FERC rejected claims that, among other things, the October 2017 Orders had violated the contract rights of eligible network customers and that they constituted unlawful retroactive agency action. Continue Reading FERC Rejects Requests for Rehearing of SPP Congestion Revenue Rights Orders

On March 17, 2018, FERC issued a Notice of Proposed Rulemaking (“NOPR”) proposing to eliminate the Licensed Hydropower Development Recreation Report, designated as FERC Form No. 80 (“Form 80”), which collects information on the use and development of recreational facilities at licensed hydropower projects.  In addition, FERC proposed in the NOPR to revise related regulations in order “to modernize public notice practices, clarify recreational signage requirements, and provide flexibility to assist licensees’ compliance efforts.”  Continue Reading FERC Proposes to Eliminate Form 80 for Hydroelectric Projects

On May 4, 2018, FERC issued an order approving a proposal by the Southwest Power Pool, Inc. (“SPP”) to eliminate transmission revenue credits for certain non-capacity network upgrades and to exempt non-firm and short-term firm point-to-point transmission service requests from incurring payment obligations for otherwise creditable system upgrades.  Recognizing the flexibility afforded to Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”) in the assignment of network upgrade costs, FERC rejected protests that SPP was not sufficiently recognizing the benefits of non-capacity upgrades. Continue Reading FERC Approves SPP’s Elimination of Transmission Revenue Credits for Non-Capacity Upgrades and Limiting Revenue Collection to Long-Term Firm Service Customers

On May 8, 2018, FERC rejected PJM Interconnection, L.L.C.’s (“PJM”) proposed revisions to its Open Access Transmission Tariff (“Tariff”) and Reliability Assurance Agreement Among Load Serving Entities in the PJM Region.  PJM stated that these revisions would reform its Incremental Auctions and its method for addressing excess capacity in the PJM region (“Incremental Auction Proposal”).  PJM specified that its current market rules do not protect against, and may in fact provide an incentive to engage in, speculative behavior, which distort price signals on the value of capacity.  FERC rejected PJM’s Incremental Auction Proposal because, according to FERC, PJM did not support its argument that speculative behavior is actually transpiring, and PJM already had procedures in place to address this activity if it is actually occurring. Continue Reading FERC Rejects PJM Tariff Proposal to Reduce Capacity Market Arbitraging

On May 4, 2018, the U.S. Court of Appeals for the Second Circuit (“Second Circuit”) dismissed a private suit filed by a group of investors (“Plaintiffs”) seeking damages for Total Gas & Power North America, Inc., Total S.A., and Total Gas & Power Limited (collectively, “Total”) for allegedly manipulating natural gas markets at four western trading hubs.  In doing so, the Second Circuit held that Plaintiffs – who did not trade at the four western trading hubs at which Total traded, but argued that Total’s trading impacted Plaintiffs’ trading at the Henry Hub – established constitutional standing but failed to plead sufficient facts to establish a plausible substantive cause of action. Continue Reading Second Circuit Dismisses Private Suit Against Total for Alleged Gas Market Manipulation

On May 4, 2018, FERC approved the joint petition filed by the North American Electric Reliability Corporation (“NERC”), Midwest Reliability Organization (“MRO”), and SERC Reliability Corporation (“SERC”) (collectively “Petitioners”) requesting FERC approvals for the dissolution of the Southwest Power Pool Regional Entity (“SPP RE”), and the transfer of the registered entities within the SPP RE footprint to MRO and SERC (“Joint Petition”). Continue Reading FERC Approves of SPP Regional Entity Dissolution and Registered Entity Transfer to SERC, MRO

On May 1, 2018, FERC staff held a technical conference on local transmission planning within the California Independent System Operator Corporation (“CAISO”) footprint.  The conference comes at a time when two California utilities, Pacific Gas and Electric Company (“PG&E”) and Southern California Edison Company (“SCE”), have transmission planning issues before the Commission, and also following FERC’s recent order addressing compliance with Order No. 890 in the PJM Interconnection, L.L.C. (“PJM”) region (see February 20, 2018 edition of the WER). Continue Reading FERC Holds Technical Conference on Local Transmission Planning Issues in CAISO Amid Concerns of Order No. 890 Compliance

On April 30, 2018, the Commission granted the California Independent System Operator Corporation’s (“CAISO”) request for a limited waiver of a specific section of CAISO’s Tariff to allow CAISO to: (1) process out-of-time annual recertifications for certain resources as “Acquired Resources” for the 2018 resource adequacy compliance year, and (2) provide certainty to those resources that their Resource Adequacy Availability Incentive Mechanism (“RAAIM”) exemption for the 2017 resource adequacy compliance year will not be unwound. Continue Reading FERC Grants CAISO Waiver for Acquired Resources in RAAIM

On April 27, 2018 (“April 27 Order”), FERC denied a rehearing request of Basin Electric Power Cooperative (“Basin Electric”), Heartland Consumers Power District (“Heartland”), and Missouri River Energy Services (“Missouri River”; collectively, “Rehearing Parties”).  The Rehearing Parties contended that their grandfathered agreement regarding the Missouri Basin Power Project was eligible for carve-out treatment under the Southwest Power Pool, Inc. (“SPP”) Open Access Transmission Tariff (“SPP Tariff”).  In this proceeding, “carve-out treatment” refers to an exemption from congestion charges and marginal losses.  FERC ultimately rejected the rehearing request because it found, among other reasons, that Rehearing Parties are not similarly situated to another party, who had already been given carve-out treatment. Continue Reading FERC Rejects Rehearing Request Regarding SPP Congestion Charge Exemptions

On May 2, 2018, staff from FERC, the North American Electric Reliability Corporation (“NERC”), and the NERC Regional Entities (the “Joint Study Team”), issued a joint report titled “FERC-NERC-Regional Entity Joint Review of Restoration and Recovery Plans” (“Joint Report”), which evaluated blackstart resources and planning by a representative sample of nine volunteer utilities registered with NERC (the “Participants”).  According to the Joint Report, the Participants verified that they currently have sufficient blackstart resources in their system restoration plans, as well as comprehensive strategies for mitigating against loss of any additional blackstart resources going forward.  The Joint Report also made a number of recommendations for users, owners, or operators of the bulk-power system (“Registered Entities”) and others responsible for system restoration.

Continue Reading FERC, NERC, and Regional Entity Staff Issue Joint Report on Registered Entity Restoration and Recovery Plans