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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.

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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.

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On October 23, 2019, FERC issued twin orders denying rehearing of the PJM Interconnection, L.L.C. (“PJM”) Phase 1 and Phase 2 Revisions, which sought to resolve overlapping congestion charges on pseudo-tied generation in Midcontinent Independent System Operator, Inc. (“MISO”) and PJM. American Municipal Power (“AMP”) requested rehearing, arguing that FERC engaged in impermissible piecemeal ratemaking, failed to evaluate the ultimate end result of the revisions, and did not fully address overlapping congestion charges. FERC rejected AMP’s arguments, confirming that it fully considered the proposed revisions and found them just and reasonable.
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On October 17, 2019, FERC denied a complaint filed in June 2019 by Nevada Hydro Company, Inc. (“Nevada Hydro”) alleging that the California Independent System Operator Corporation (“CAISO”) failed to follow its Tariff requirements in studying the Lake Elsinore Advanced Pumped Storage Project (“LEAPS”) as a transmission facility in CAISO’s 2018-2019 transmission planning process. FERC concluded that Nevada Hydro failed to demonstrate that CAISO violated its Tariff in studying LEAPS as a proposed reliability-driven transmission solution and as a proposed economic transmission project. Rather, FERC accepted CAISO’s conclusion that it could identify no reliability need for LEAPS, and that the project’s economic benefits are far outweighed by its costs. FERC’s October 17 order also explained that it found no evidence that CAISO’s treatment of LEAPS was biased by a predetermined conclusion that LEAPS is a generation asset or that storage cannot qualify as transmission. FERC went on to note that a project’s ability to provide transmission benefits does not equate to a transmission need, nor does it guarantee eligibility to recover costs through transmission rates.
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On September 30, 2019, FERC accepted in part and rejected in part, the California Independent System Operator’s (“CAISO”) July 2, 2019 proposed revisions (“July 2 Filing”)  to its open access transmission tariff (“Tariff”) to include three unrelated mitigation measures designed to facilitate the participation of fast-ramping hydroelectric resources in the western energy imbalance market (“EIM”). FERC accepted two aspects of CAISO’s proposal related to the mitigation timing (the “Mitigation Timing” proposal and a hydro default energy bid (“DEB”) proposal, referred to as the “Hydro DEB” proposal), but rejected CAISO’s proposal to allow an EIM entity balancing authority area (“BAA”) in the real-time market to limit dispatch of incremental net exports under certain conditions (the “Net Export Limit” proposal).
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On September 16, 2019, FERC accepted revisions to the PJM Interconnection, L.L.C. (“PJM”) tariff that: (1) establish a process by which existing capacity sellers can request removal of their capacity resource’s status; and (2) revise the process for must-offer exceptions due to an existing seller’s physical inability to meet its capacity requirements. The changes clarify how existing capacity resources may, under certain circumstances, effectively elect to “opt out” of PJM’s annual capacity auctions (termed Based Residual Auctions, or “BRAs”).
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On September 20, 2019, FERC issued an original license to McMahan Hydroelectric, LLC (“McMahan”) for the 600-kilowatt Bynum Hydroelectric Project, located on the Haw River in Chatham County, North Carolina. In its licensing order, FERC held that North Carolina waived authority under section 401 of the Clean Water Act (“CWA”) by failing to act within one year of receiving McMahan’s request for water quality certification under section 401. In a separate statement, Commissioner Glick—while agreeing with the conclusion that North Carolina had waived section 401 authority—dissented in the Commission’s rationale for finding waiver.
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On September 18, 2019, the First Circuit Court of Appeals (“First Circuit”) affirmed the U.S. District Court for the District of Massachusetts’s (“District Court”) ruling that dismissed twelve New England retail electricity customers’ (“Plaintiffs”) federal antitrust and state-law claims against Eversource Energy and Avangrid, Inc (“Defendants”).  Initially, Plaintiffs filed their lawsuit in District Court, claiming Defendants violated section 2 of the Sherman Act, 15 U.S.C. § 2, as well as various state antitrust and consumer-protection laws (see December 12, 2017 edition of the WER).  The District Court dismissed Plaintiffs’ claims, finding that they were barred by the filed-rate doctrine and, alternatively, that the Plaintiffs lacked antitrust standing and failed to plausibly allege a monopolization claim under the Sherman Act.  On review, the First Circuit agreed with the District Court that the filed-rate doctrine barred Plaintiffs’ federal and state law claims.  Accordingly, the First Circuit found no need to reach the District Court’s alternative grounds for dismissal and dismissed Plaintiffs’ federal and state claims pursuant to the filed-rate doctrine.

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On September 4, 2019, the North American Electric Reliability Corporation (“NERC”) published a Lessons Learned report (“Report”) analyzing a March 5, 2019 cybersecurity incident that caused brief communications outages across several states.  NERC also provided guidance on how to avoid the firewall firmware vulnerabilities that made the cybersecurity incident possible.
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On August 27, 2019, FERC issued a final rule amending its regulations at 18 C.F.R. § 385.2001(a) to require that all physical filings and submissions to be delivered to FERC, other than those sent via the U.S. Postal Service (“USPS”), are to be sent to FERC’s off-site security screening facility in Rockville, Maryland.  FERC’s rule makes no changes to electronic filings submitted through its online system.  The final rule was published in the Federal Register on September 4 and will go into effect 60 days later, or on November 4, 2019.
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