On February 21, 2019, FERC issued an order (“Order No. 845-A”) granting in part and denying in part various requests for rehearing and clarification of its determinations in Order No. 845.  In Order No. 845, FERC revised its interconnection rules for large generators, i.e., generators with capacities greater than 20 MW.  Although the requests for rehearing asked FERC to reconsider all but one of the Order No. 845 reforms, Order No. 845-A effectively leaves the major reforms intact, and focuses in large part on explaining FERC’s intentions as to how the new rules should work.  Compliance filings in response to both Order Nos. 845 and 845-A are due May 22, 2019.
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On February 11, 2019, a group of seventeen Democrat United States Senators and Senator Bernie Sanders wrote a letter (the “2019 Letter”) to FERC Chairman Neil Chatterjee urging FERC to adopt a rule requiring Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”) to open their markets to participation of aggregated distributed energy resources (“DERs”).
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On December 14, 2018, Vineyard Wind, LLC (“Vineyard Wind”) filed a Petition with FERC to waive the pro-rata proration requirements of the ISO New England, Inc. (“ISO-NE”) Transmission, Markets and Services Tariff (“Tariff”) so that Vineyard Wind could participate in the upcoming ISO-NE Forward Capacity Auction 13 (“Auction 13”) as a Renewable Technology Resource (“RTR”).  Because time was of the essence, Vineyard Wind asked FERC to render an expedited decision no later than January 29, 2019.  FERC took no action on the Petition, however, and as of this writing, has also not taken any action on Vineyard Wind’s subsequent Emergency Motion for relief, rendering it all but certain that Vineyard Wind will be unable to participate in Auction 13.
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On January 29, 2019, FERC rejected the New England Power Pool Participants Committee’s (“NEPOOL”) proposed revisions to its Second Restated NEPOOL Agreement (“NEPOOL Agreement”) that would have disqualified members of the press from being eligible to become NEPOOL members.  NEPOOL argued that the proposed revisions (“NEPOOL Press Amendments”) were necessary because allowing members of the press as NEPOOL members would undermine the effectiveness of the NEPOOL stakeholder process.  FERC rejected the revisions in part because, according to FERC, NEPOOL did not show that the revisions were just and reasonable and not unduly discriminatory or preferential.
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On January 18, 2019, FERC accepted PJM Interconnection, L.L.C.’s (“PJM”) proposed revisions to both PJM’s Amended and Restated Operating Agreement and Open Access Transmission Tariff (“Tariff”) designed to allow PJM to stop using certain resources to calculate the frequency regulation (“regulation”) market clearing price and reduce spikes in the clearing price in PJM’s regulation market.  FERC found the proposal to be a narrowly-tailored solution to the price spike problem, while noting that broader issues raised in protests regarding PJM’s proposal were beyond the scope of the proceeding and are currently pending before the Commission in other dockets regarding PJM’s regulation market design.
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On January 15, 2019, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) in San Diego Gas & Electric Co. v. FERC, No. 16-1433, denied San Diego Gas & Electric’s (“SDG&E”) petition for review of FERC orders declining retroactive application of its cancelled or abandoned electric transmission facilities incentive (“Abandonment Incentive”).  The D.C. Circuit’s decision denies SDG&E the eligibility to recover, in the case of abandonment, approximately $15 million in development costs associated with its South Orange County Reliability Enhancement Project (“SOCRE Project”).  The decision also prompted a dissent from Senior Circuit Judge A. Raymond Randolph, who argued that the underlying FERC orders were contrary to the plain language of the regulation at issue, as well as the Commission’s own precedent.
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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.”
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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.
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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.
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On December 7, 2018, the United States Court of Appeals for the Sixth Circuit (“Sixth Circuit”) affirmed the United States District Court for the Northern District of Ohio’s (“District Court”) granting of a preliminary injunction to Nexus Gas Transmission, LLC (“Nexus”).  The preliminary injunction will allow Nexus to exercise the right of eminent domain under the Natural Gas Act (“NGA”) to build an interstate natural gas pipeline through parts of Ohio and Michigan.  The Sixth Circuit held that the District Court did not abuse its discretion in balancing the preliminary injunction factors and in refusing to allow an evidentiary hearing on the issue.
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