On September 19, 2019, one Independent and four Democratic Senators wrote a letter to FERC which expressed concerns over recent actions taken by FERC and which directed a series of questions to FERC regarding the “apparent erosion” of FERC’s role in preventing fraud and manipulation in U.S. energy and financial markets (see October 3, 2019 edition of the WER). The concerns expressed by the senators related to (i) the decline in the number of civil penalty actions initiated by FERC; (ii) the closing of FERC’s Division of Energy Market Oversight (“DEMO”), and (iii) FERC’s ending its policy on issuing Notices of Alleged Violations (“NAVs”) regarding investigations. Continue Reading FERC Commissioners Respond to Senate Inquiries on FERC’s Enforcement Role
On November 5, 2019, the Senate Committee on Energy & Natural Resources (“Committee”) held a hearing to consider the nomination of James Danly as a FERC Commissioner. Mr. Danly, currently FERC’s general counsel, was nominated to fill the vacancy on the Commission left by the passing of FERC Chairman Kevin McIntyre in January of this year.
On November 5 and 6, 2019, FERC staff held a two-day workshop at its headquarters in Washington, DC on technologies that increase the capacity, efficiency, or reliability of transmission facilities. Panelists and FERC staff discussed technologies that are currently used in transmission planning and operations, challenges associated with the deployment of grid-enhancing technologies, and regulatory actions that might promote increased adoption of these technologies going forward. A formal notice requesting written comments will soon be issued. Continue Reading FERC Holds Workshop on Grid-Enhancing Technologies, Seeks Comment
On November 1, 2019 FERC approved a Stipulation and Consent Agreement between its Office of Enforcement (“OE”), the regional reliability entity Texas Reliability Entity, Inc. (“Texas RE”), the North American Electric Reliability Corporation (“NERC”), and Calpine Corporation (“Calpine”), related to Calpine’s alleged violations of NERC reliability standards governing maintenance and testing of batteries and other protection systems, as well as provisions of the California Independent System Operator Corporation (“CAISO”) Tariff requiring entities to report planned and unplanned generator outages. As part of the settlement, Calpine neither admitted nor denied the alleged violations, but agreed to pay civil penalties of $375,000 to Texas RE and $25,000 to the United States Treasury, and to undergo compliance monitoring. Continue Reading Calpine Corp. Settles FERC Investigation of Battery Testing and Outage Issues
The U.S. News – Best Lawyers® “Best Law Firms” report has named Troutman Sanders LLP as the 2020 “Law Firm of the Year” in Energy Law. Only one law firm is awarded “Law Firm of the Year” in each nationally eligible practice area. Rankings are based on a rigorous evaluation process that includes the collection of client and lawyer evaluations, peer review from leading attorneys in the ﬁeld, and review of relevant law firm data.
Troutman Sanders has counseled energy clients for nearly a century. Of the firm’s 650 attorneys nationwide, more than 100 practice in the energy sector, serving clients day-in and day-out across all facets of the regulatory, project finance, corporate, tax, environmental, and real estate needs of its clients, offering strategic business and legal counselling to guide clients through the unique and complex challenges that face the energy industry.
“We are very proud to be recognized by U.S. News & World Report – Best Lawyers® as the top national firm for energy law,” said Amie Colby, a partner in the firm’s Energy practice and chair of its Regulatory and Finance Department. “The recognition highlights Troutman Sanders’ unrelenting commitment to provide the best client service to our energy clients and beyond.”
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On October 24, 2019, FERC denied Harbor Cogeneration Company, LLC’s (“Harbor”) complaint alleging that Southern California Edison Company (“SoCal Edison”) misclassified certain interconnection facilities contrary to FERC’s Order No. 2003 and violated SoCal Edison’s Transmission Owner Tariff (“TO Tariff”) in directly assigning the facility costs to Harbor without FERC “approval.” FERC denied the complaint and rejected Harbor’s request for refunds, reasoning that the charges constituted valid filed rates notwithstanding that FERC did not use the word “approve” in its delegated letter orders, and that, therefore, the charges were lawfully imposed regardless of any alleged conflicts with FERC interconnection pricing policies. Continue Reading FERC Denies Complaint Alleging SoCal Edison Improperly Directly Assigned Certain Network Facilities Charges
On October 28, 2019, the Attorneys General of California, Connecticut, Delaware, the District of Columbia, Maryland, Massachusetts, Michigan, North Carolina, Oregon, Pennsylvania, and Rhode Island (collectively “State AGs”) wrote to FERC to discuss opportunities for the State AGs and FERC to work cooperatively to promote state-level clean energy policies that benefit consumers and enhance grid reliability. The State AGs expressed an “urgent need” for further action to address climate change’s “massive” environmental, health, and economic harms in their states, and noted that the Commission’s actions related to market design, natural gas siting, and grid reliability significantly impact each state’s ability to achieve their clean energy goals.
On October 30, 2019, the House Committee on Energy & Commerce held a hearing in furtherance of its development of comprehensive climate legislation focused on reaching a 100 percent clean energy economy by 2050. John Bear, the Chief Executive Officer of the Midcontinent Independent System Operator, Inc. (“MISO”) testified at the hearing while Southwest Power Pool, Inc. (“SPP”) and PJM Interconnection, L.L.C. (“PJM”) provided input in response to an earlier request from the Committee. The three Regional Transmission Organizations (“RTOs”) generally reported increases in both renewable and distributed generation in their regions over the past several years, highlighting the operational and reliability challenges that can come along with the growing prevalence of both. The RTOs also recognized the widely divergent state decarbonization policies and the associated impacts to the regional wholesale markets. Continue Reading RTOs Weigh In on Decarbonization
On October 25, 2019, FERC found that Vitol, Inc. (“Vitol”) and one of its traders, Federico Corteggiano, violated the Federal Power Act (“FPA”) and FERC’s rules prohibiting energy market manipulation by importing power at a loss from October 28 through November 1, 2013, at the border of the California Independent System Operator Corporation’s (“CAISO”) wholesale electric market in order to relieve transmission congestion and to benefit Vitol’s congestion revenue rights (“CRRs”) sourced at that location. The order follows an investigation into Vitol’s and Corteggiano’s trading practices that was initiated in 2014 by FERC’s Office of Enforcement. In July 2019, following the completion of Enforcement Staff’s investigation, FERC issued an order directing Vitol and Corteggiano to show cause why they should not be assessed Enforcement Staff’s recommended civil penalties of $6 million and $800,000 respectively, and directing Vitol to show cause why it should not disgorge $1,227,143 in unjust profits. FERC’s October 25 order affirmed Enforcement Staff’s conclusion that Vitol and Corteggiano engaged in market manipulation, and ordered Vitol to disgorge $1,227,143 in unjust profits. However, FERC significantly reduced Vitol’s civil penalty to $1.5 million and increased Corteggiano’s civil penalty to $1 million after concluding that Corteggiano was primarily responsible for the manipulative conduct. Continue Reading FERC Orders Civil Penalties and Disgorgement of Profits in Cross-Market Manipulation Investigation
On October 17, 2019, FERC directed PJM Interconnection, L.L.C. (“PJM”) and other interested parties to provide information with respect to how uplift costs—i.e., the costs associated with make-whole payments provided by Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”) to market participants whose commitment and dispatch resulted in a shortfall between the generator’s offer and the revenue earned through market-clearing prices—should be allocated to virtual transactions in PJM, and in particular to Up-to-Congestion (“UTC”) transactions. FERC’s order seeks to update the record in an ongoing Federal Power Act Section 206 investigation into PJM’s UTC and uplift practices that FERC initiated in 2014. Continue Reading FERC Directs Additional Briefing in Ongoing Investigation of PJM’s Uplift Cost Allocation