On September 4, 2018, the U.S. Senate passed, by voice vote, two bills related to FERC’s authority under the Federal Power Act (“FPA”).  One bill, S. 186, would allow challenges to rate changes that would automatically go into effect when FERC is deadlocked.  The other bill, H.R. 1109, changes the monetary thresholds for determining when a proposed merger or acquisition requires FERC approval. Continue Reading U.S. Senate Passes Bills Related to FERC Deadlock, Merger Review

On September 5, 2018, the United States Court of Appeals for the Third Circuit (“Third Circuit” or “Court”) found that FERC did not violate federal law when approving Transcontinental Pipe Line Company, LLC’s (“Transco”) Garden State Expansion Project (“Project”).  The Third Circuit did, however, determine that the New Jersey Department of Environmental Protection (“NJDEP”) improperly denied requests for adjudicatory hearings on the issuance of various permits for the Project because the NJDEP misinterpreted the Natural Gas Act (“NGA”).  As such, the Third Circuit remanded back the permit issue so that NJDEP could reconsider those requests. Continue Reading Third Circuit Grants in Part Request to Review Transco Expansion Project

On July 18, 2018, FERC affirmed its Revised Policy Statement on Treatment of Income Taxes (“Revised Policy Statement”), where FERC stated that it will generally not permit master-limited partnerships (“MLPs”) to recover income tax allowance in their cost of service.  In doing so, FERC dismissed requests for clarification and rehearing of its Revised Policy Statement, reiterating that tax pass-through entities (including MLPs) that recover an income tax allowance in addition to a return on equity (“ROE”) based on the discounted cash flow (“DCF”) methodology double recover investors’ tax costs.  FERC did however explain that while pass-through entities may eliminate previously-accumulated sums of accumulated deferred income tax (“ADIT”) from their cost of service, they did not need to refund those ADIT balances to ratepayers.  Continue Reading FERC Affirms Policy on Income Tax Allowance for Gas Pipelines

On July 19, 2018, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) issued a Notice of Proposed Rulemaking (“NOPR”) that would update FERC’s regulations regarding interlocking positions.  According to the NOPR, the proposed revisions to parts 45 and 46 of the Commission’s regulations aim to “reflect statutory changes to the circumstances in which an applicant who would otherwise require Commission authorization to hold an interlocking position need not do so.” Continue Reading FERC Proposes Reforms to Regulations Governing Interlocking Positions

On July 5, 2018, the Midcontinent Independent System Operator, Inc. (“MISO”) proposed to restore provisions in its Open Access Transmission, Energy and Operating Reserve Markets Tariff (“Tariff”) to allow Transmission Owners the discretion to elect to provide initial funding for network upgrades.  MISO filed its proposed Tariff changes after the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) vacated earlier FERC orders that required MISO interconnection customers’ consent before allowing Transmission Owner funding of interconnection-related network upgrades.  Continue Reading MISO Proposes to Reinstate Prior Transmission Owner Network Upgrade Funding Mechanism

On July 2, 2018, FERC denied ISO New England Inc.’s (“ISO-NE”) request for waiver of its Transmission, Markets, and Services Tariff (“Tariff”) and instituted a Federal Power Act (“FPA”) section 206 proceeding because, according to FERC, the Tariff may be unjust and unreasonable.  Specifically, ISO-NE requested waiver of certain provisions in its Tariff in order to delay the retirement of two generating units owned by Exelon Generation Company, LLC (“Exelon”) for fuel security purposes.  FERC denied the waiver request and preliminarily found that the Tariff did not sufficiently address specific regional fuel security concerns.  Continue Reading FERC Finds ISO-NE’s Tariff May Not Adequately Address Fuel Security Concerns

On June 21, 2018, FERC found that the Midcontinent Independent System Operator, Inc.’s (“MISO”) Open Access Transmission Tariff (“Tariff”) provisions governing the termination of generator interconnection agreements (“GIAs”) were unjust and unreasonable due to an inconsistency between the terms of the GIA contained in the Tariff and the MISO Generator Interconnection Procedures (“GIP”).  FERC also accepted, after a paper hearing, MISO’s proposed revisions to the GIA and GIP termination provisions, subject to further revisions.  MISO’s Tariff revisions clarified that an interconnection customer could extend its commercial operating date (“COD”) for up to three years without risking termination from MISO, which FERC found, subject to modification, just and reasonable.  Continue Reading FERC Conditionally Approves MISO Tariff Revisions Regarding Termination of GIAs

On June 8, 2018, FERC approved a Stipulation and Consent Agreement (“Settlement”) between the Office of Enforcement (“OE”) and Duke Energy Corporation and its public utility operating subsidiaries (“Duke”).  OE claimed that Duke violated FERC regulations when it failed to accurately describe certain information in the transmission studies submitted in support of its merger with Progress Energy, Inc. (collectively, “Applicants”).  FERC determined that the Settlement was fair and reasonable and resolved all outstanding claims and proceedings between OE and Duke.  Continue Reading FERC Approves Civil Penalty Against Duke for Submitting Inaccurate Data in Section 203 Proceeding

On June 5, 2018, FERC granted the PJM Interconnection, L.L.C. (“PJM”) independent market monitor’s (“IMM”) request to compel the American Electric Power Services Corporation (“AEP”) to provide certain information related to cost-based offers to the IMM.  The IMM stated in its petition that it needed the information to determine whether AEP’s total costs of variable operations and maintenance (“VOM”) included in its capacity offer raise any market power concerns in the PJM Energy Market.  FERC determined that because the IMM had broad authority under PJM’s Open Access Transmission Tariff (“Tariff”) to request such information, it would grant the IMM’s petition. Continue Reading FERC Approves PJM IMM’s Request for Access to AEP Cost Data for Market Power Analysis

On May 31, 2018, CPV Power Holdings, L.P., Calpine Corporation, and Eastern Generation, LLC (together, “Complainants”) filed a complaint against PJM Interconnection, L.L.C. (“PJM”), contending that PJM’s Open Access Transmission Tariff (“Tariff”) does not prevent the suppression of prices in PJM’s Reliability Pricing Model (“RPM”) market by resources receiving state subsidies, and that the solutions that PJM had proposed to FERC—“Capacity Repricing” and “Minimum Offer Price Rule (“MOPR”)-Ex”—are “inadequate and unjust and unreasonable.”  The Complainants argued that FERC should instead require PJM to adopt a “Clean MOPR”—meaning a MOPR “applicable to all subsidized resources and without categorical exemptions like those in PJM’s MOPR-Ex proposal.” Continue Reading Complaint Proposes “Clean MOPR” as an Alternative to PJM’s Proposals to Address State Subsidies in Capacity Markets