On July 14, 2017, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) vacated in part the Federal Energy Regulatory Commission’s (“FERC”) orders approving a Joint Dispatch Agreement (“JDA”) between Duke Energy Carolinas, LLC (“Duke”) and Progress Energy Carolinas, Inc. (“Progress”). Specifically, the D.C. Circuit found that FERC failed to articulate a satisfactory explanation for approving the provisions of the JDA that provide for disparate treatment of wholesale ratepayers. As discussed below, the D.C. Circuit remanded the matter to FERC, directing it to reconsider the relevant JDA provisions and provide a reasoned explanation for its approval of the JDA.
On July 13, 2017, President Donald Trump announced his intention to nominate Kevin McIntyre of Virginia to serve as a FERC Commissioner for the term expiring June 30, 2018, and an additional term expiring June 30, 2023. President Trump announced further that upon confirmation by the United States Senate, Mr. McIntyre will be designated Chairman of FERC. According to the White House press release announcing the intended nomination, Mr. McIntyre has spent most of his nearly 30-year legal career in private practice. Continue Reading President Trump Intends to Nominate Kevin McIntyre as FERC Commissioner and Designate as Chairman
On June 30, 2017, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) denied a petition by Seminole Electric Cooperative, Inc. (“Seminole”) seeking to increase the refund amount FERC ordered Florida Power & Light Company (“FP&L”) to pay Seminole for overcharges related to energy imbalance services. Seminole raised two challenges to FERC’s refund order: (1) FERC improperly restricted the refund period to twenty-four months, as opposed to the full four and a half year period for which FP&L overcharged Seminole for energy imbalance services; and (2) FERC failed to require that energy imbalance charges be apportioned among the three tiers established in Schedule 4 of FP&L’s Tariff. Continue Reading D.C. Circuit Rejects Seminole Electric Cooperative’s Appeal for Additional Refunds
On June 21, 2017, the United States Circuit Court of Appeals for the Sixth Circuit (“Sixth Circuit”) upheld FERC’s determination that American Transmission Systems (“ATS”) and Duke Energy Ohio, Inc. (“Duke”) are not required to pay for projects that the Midcontinent Independent System Operator, Inc. (“MISO”) approved after ATS and Duke announced separately that they would be withdrawing from MISO, but prior to their actual departures.
On June 12, 2017, the United States House of Representatives passed a slate of ten energy-related bills. Notably, two of the passed bills seek to amend the Federal Power Act (“FPA”) and FERC’s attendant authority. Continue Reading House Passes Energy-Related Bills Seeking to Amend Federal Power Act
On May 12, 2017, PJM Interconnection, L.L.C. (“PJM”) submitted to FERC revisions to the PJM Open Access Transmission Tariff (“OATT”), Attachment K-Appendix and the PJM Amended and Restated Operating Agreement, Schedule 1 to implement changes to the Operating Reserve demand curves (“ORDC”) that are embedded in PJM’s real-time market clearing engines. According to PJM, the proposed changes to the ORDC are necessary to set clearing prices relative to the degree of severity of a reserve shortage. Continue Reading PJM Proposes Changes to Operating Reserve Demand Curves to Reduce Reserve Shortage Pricing
On May 9, 2017, the New Jersey Boroughs of Milltown, Park Ridge, and South River (collectively, “New Jersey Boroughs”) filed a Federal Power Act (“FPA”) Section 206 complaint against Public Service Electric & Gas Company (“PSE&G”) seeking to reduce PSE&G’s current base return on equity (“ROE”) of 11.18 percent to a base ROE of no higher than 8.3 percent. Additionally, the New Jersey Boroughs requested that FERC order refunds and establish the date of the complaint as the refund effective date.
On May 1, 2017, FERC filed a brief in the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) arguing for the dismissal of United Airlines Inc. and UPS Fuel Services Inc’s (together, “Shippers”) petition for review of a 2013 FERC order in which FERC allowed Enterprise TE Products Pipeline Company LLC (“Pipeline”) to discontinue its jet fuel and diesel fuel transportation service to various shipping entities, including Shippers. Shippers’ petition for review alleged that Pipeline’s termination of this service violated a 2013 settlement agreement (“Settlement Agreement”) requiring Pipeline to provide this service through May 31, 2015. FERC’s brief argued that the petition should be dismissed for lack of justiciability, or in the alternative, for lack of standing.
On April 21, 2017, the United States Court of Appeals for the Ninth Circuit (“Ninth Circuit”) held that: (1) FERC did not act arbitrarily or capriciously in ordering the California Independent System Operator Corporation (“CAISO”) and California Power Exchange Corporation (“Cal-PX”) to net sales and purchases over hourly intervals when calculating refunds to entities that participated in the CAISO and Cal-PX markets during the California energy crisis of 2000-2001; and (2) that FERC did act arbitrarily and capriciously in allocating a $5 million refund shortfall only to net buyers instead of all market participants. The Ninth Circuit opinion is the latest adjudicatory decision in a series of administrative hearings and judicial appeals arising out of the California energy crisis.
On April 14, 2017, the United States Court of Appeals for the District of Columbia Circuit (“DC Circuit”) held that FERC erred in setting the base return on equity (“ROE”) for ISO New England Inc. (“ISO-NE”) at 10.57 percent. The DC Circuit granted a petition filed by a group of New England transmission owners (“NETOs”), and a separate petition filed by a group of wholesale transmission customers and other consumer-side stakeholders (collectively, “Customers”) located in the New England region. The DC Circuit vacated the underlying FERC order and remanded the case to FERC for further consideration.