On December 12, 2019, the United States Court of Appeals for the Sixth Circuit (“Sixth Circuit”) issued an opinion affirming in part and reversing in part a bankruptcy court’s assertion of exclusive and unlimited jurisdiction over certain of FirstEnergy Solutions’ (“FES”) power purchase agreements that FERC had previously approved under the Federal Power Act (“FPA”) and that FES sought to reject in bankruptcy. While the Sixth Circuit agreed that the bankruptcy court has jurisdiction to decide whether FES may reject the contracts, it rejected the bankruptcy court’s decision to enjoin FERC from taking any action relating to the contracts, and permitting FES to reject the contracts. Characterizing the bankruptcy court’s decision as “a rash and unnecessary overreach,” the Sixth Circuit held that the injunction issued against FERC was overly broad, and the bankruptcy court’s standard for deciding whether to permit FES to reject the contracts too limited. The Sixth Circuit also rejected the bankruptcy court’s sole application of the business judgment rule to decide whether to permit FES to reject the contracts at issue. Rather, the Sixth Circuit held that the court should have also taken public interest considerations into account, and should have invited FERC to participate and provide an opinion in accordance with the FPA. Judge Richard Allen Griffin penned separate opinion dissenting in part, in which he concluded that the bankruptcy court exceeded its jurisdiction and infringed on FERC’s exclusive jurisdiction to decide whether to modify or abrogate a filed rate.
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On November 26, 2019, FERC rejected, without prejudice, various filings from Basin Electric Power Cooperative (“Basin”) to establish FERC-jurisdictional rates, terms, and conditions of wholesale power and transmission service ahead of certain anticipated changes among Basin’s member cooperatives that would trigger FERC jurisdiction. FERC generally rejected the filings as “patently” deficient.
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On November 14, 2019, the Senate Committee on Energy and Natural Resources (“Committee”) held a hearing to consider the nomination of Dan Brouillette as Secretary of Energy. Mr. Brouillette is currently DOE’s Deputy Secretary, and has been nominated by President Trump to replace outgoing Secretary Rick Perry.
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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.
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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.
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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.
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On October 4, 2019, FERC staff issued a report for users, operators, and owners of the bulk-power system to increase compliance with mandatory Critical Infrastructure Protection (“CIP”) standards and improve cybersecurity for the nation’s electric grid. In the report, FERC staff recommended, among other things, that entities:

  1. verify employees’ recurring authorizations for using removable media;
  2. ensure all employees and third-party contractors complete required trainings and properly maintain training records;
  3. consider all generation assets when categorizing bulk electric system cyber systems associated with transmission facilities; and
  4. review all firewalls to ensure there are no obsolete or overly permissive firewall access control rules in use.


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On September 27, 2019, FERC approved CAISO tariff revisions to its voluntary Capacity Procurement Mechanism (“CPM”) and mandatory Reliability-Must-Run (“RMR”) framework such that all backstop procurement from resources that would otherwise retire or mothball will be addressed through CAISO’s RMR provisions. While FERC has traditionally considered RMR contracts as measures of last resort, FERC found it just and reasonable for CAISO to expand its use of such contracts to address evolving operational needs due, in part, to the increased penetration of variable energy resources in California. Commissioner Glick partially dissented, arguing that the approved tariff changes essentially provide CAISO “unchecked authority” to enter into out-of-market contracts to meet its resource adequacy needs.
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Summary of NOPR

On September 19, 2019, the Federal Energy Regulatory Commission (FERC) issued a Notice of Proposed Rulemaking (NOPR) proposing to revise its regulations implementing Sections 201 and 210 of the Public Utility Regulatory Policies Act of 1978 (PURPA) in light of changes in the energy industry since 1978.[1]
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On July 18, 2019, FERC affirmed on remand its prior approval of Pacific Gas and Electric Company’s (“PG&E”) request for a return-on-equity (“ROE”) incentive adder to its transmission rates (“RTO-Participation Incentive”) for its ongoing membership in the California Independent System Operator Corporation (“CAISO”).  In its decision, which followed from a 2018 remand from the U.S. Court of Appeals for the Ninth Circuit (“Ninth Circuit”), FERC reasserted its jurisdiction over such transmission incentive questions and determined that, absent a relevant mandate under California law requiring PG&E’s participation in CAISO, the RTO-Participation Incentive was warranted because it induces PG&E to continue its CAISO membership.
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