On November 5, 2018, the American Wind Energy Association and the Wind Coalition (together, the “Wind Developers”) filed a complaint against Southwest Power Pool, Inc. (“SPP”) regarding SPP’s Bylaws and Membership Agreement.  Specifically, the Wind Developers object to the sections of the Bylaws and Membership Agreement which impose financial obligations (“exit fees”) on independent power producers (“IPPs”), other comparable non-transmission owners (“non-TOs”), and non-load-serving entities (“non-LSEs”).  The Wind Developers argue that the exit fee violates cost causation principles, may pose a barrier to entry into SPP to vote on critical issues, directly affects jurisdictional rates, and that therefore, the exit fee is unjust, unreasonable, and unduly discriminatory. Continue Reading Wind Developers File Complaint Against SPP Exit Fee for IPPs, non-TOs, and non-LSEs

On October 29, 2018, FERC approved the California Independent System Operator Corp.’s (“CAISO”) tariff revisions related to its Energy Imbalance Market (“EIM”) bid adders, which reflect EIM participating resources’ costs to comply with the California Air Resources Board’s (“CARB”) greenhouse gas (“GHG”) regulations.  Specifically, FERC accepted CAISO’s proposal to limit the hourly megawatt quantity included in an EIM bid adder to the range between the EIM resource’s base schedule and its effective upper economic bid for that hour. Continue Reading FERC Approves Limit to Hourly MW Quantity Included in CAISO EIM GHG Bid Adders

On October 18, 2018, FERC denied several motions to stay an order issued on September 10, 2018, which invoked FERC’s rarely used authority under section 31 of the Federal Power Act to revoke the license for the existing 4.8-Megawatt Edenville Project No. 10808 (“Edenville Project”), located on the Tobacco and Tittabawassee Rivers in Gladwin and Midland Counties, Michigan.  Motions to stay FERC’s revocation order were filed by licensee Boyce Hydro Power, LLC’s (“Boyce Hydro”), Sanford Lake Preservation Association, Wixom Lake Association, and the Gladwin County Board of District Commissioner (together, the “Lake Associations”).  FERC denied the motion to stay because Boyce Hydro and the Lake Associations did not show that they would suffer irreparable non-economic harm if the stay were not in place.  FERC also held that the stay did not violate the public interest. Continue Reading FERC Denies Stay of Hydro Project License Termination

On October 16, 2018, FERC proposed a new method to determine whether a utility’s return on equity (“ROE”) remains just and reasonable under section 206 of the Federal Power Act (“FPA”).  Specifically, FERC discussed three additional methods, along with the well-known and traditionally used Discounted Cash Flow (“DCF”) analysis, and proposed to average the results to come to an equitable ROE.  This new method will apply to successive complaints filed against the New England Transmission Owners (“NETOs”), regarding the justness and reasonableness of their existing ROE.  Briefs related to this proposal are due on December 17, 2018.  Continue Reading FERC Proposes Change in ROE Methodology, Directs Briefing

On October 11, 2018, twenty-six pipelines submitted filings in compliance with Order No. 849 in response to a directive from FERC concerning the effect of reduced corporate income taxes on pipelines. Order No. 849 established a staggered filing schedule, so pipelines have between 28 and 84 days to submit “FERC Form No. 501-G,” depending on how FERC assigned the pipelines. The pipelines in the first category were required to file Form No. 501-G along with other information to inform FERC and the public of the impact of the recent reduction in federal income tax rates, as well as the effect of the Commission’s policy on the collection of federal income taxes by tax pass-through entities, on their revenue requirements.  Continue Reading Natural Gas Pipelines Submit Income Tax Compliance Filings

On September 28, 2018, President Donald Trump signed into law Public Law No: 115-247, amending Federal Power Act (“FPA”) section 203 to add a $10 million threshold for public utility mergers and acquisitions requiring FERC approval.  The new law will also require FERC to (i) issue a rule to require any public utility to notify FERC, after 30 days of the close of the transaction, if the value of the merger is more than $1 million but less than $10 million and (ii) submit a report to Congress assessing the impacts of the new law.  The amendments to FPA section 203 will become effective on March 27, 2019.  Continue Reading New Law Amends FPA Section 203 to Add Monetary Threshold to Public Utility Mergers and Acquisitions

On October 1, 2018, FERC released its Strategic Plan for fiscal years 2018-2022.  FERC affirmed its mission of maintaining reliable, efficient, and sustainable energy for consumers by setting three primary goals: (1) ensuring that rates, terms, and conditions are just, reasonable, and not unduly discriminatory or preferential; (2) promoting the development of safe, reliable, and efficient energy infrastructure that serves the public interest through the review of natural gas and hydropower infrastructure proposals; and (3) managing resourcing to support its mission through organizational excellence. Continue Reading FERC Releases Strategic Plan for FY 2018-2022

On September 21, 2018, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) ruled that FERC’s order to deny ANR Storage Company’s (“ANR”) request to charge market-based rates was arbitrary and capricious.  The D.C. Circuit found that FERC provided no basis for treating ANR differently from another competitor, DTE Energy Company (“DTE”) in a prior decision, and that FERC’s explanation for why intrastate facilities could not restrain ANR’s exercise of market power was internally inconsistent.  As such, the D.C. Circuit remanded the proceeding back to FERC. Continue Reading D.C. Circuit Overturns FERC Order Denying ANR Storage Market-Based Rate Authority

On September 24, 2018, the U.S. District Court for the Eastern District of Virginia (“District Court”) concluded that FERC’s assessment of a civil penalty against Powhatan Energy Fund, LLC and certain of its traders and affiliates (“Powhatan”) for market manipulation allegations was not barred by the statute of limitations because FERC’s claim accrued when Powhatan failed to pay the civil penalty rather than when the alleged violations actually occurred.  However, the District Court noted that it was particularly difficult to apply the statute of limitations to enforcement actions brought under the Federal Power Act’s (“FPA”) de novo review procedures and thus stayed the issue to allow Powhatan to file an interlocutory appeal. Continue Reading District Court Rules FERC Action Against Powhatan Not Barred by Statute of Limitations

On September 20, 2018, FERC denied rehearing and partially granted clarification of its order regarding Multi-Value Project (“MVP”) rate pancaking charges between PJM Interconnection, L.L.C. (“PJM”) and the Midwest Independent Transmission System Operator, Inc. (“MISO”).  In the underlying order, FERC determined that because MISO’s transmission projects benefited the existing MISO-PJM system, the limitation on rate pancaking imposed by FERC in 2003 and 2010 was no longer reasonable.  Continue Reading FERC Denies Rehearing, Partially Grants Clarification on MVP Rate Pancaking Order