On October 4, 2019, FERC rejected without prejudice a stated rate tariff and Open Access Transmission Tariff (“OATT”), among other filings, by Tri-State Generation and Transmission Association, Inc. (“Tri-State”) and its subsidiary Thermal Cogen Partnership, L.P. (“Thermal Cogen”). Tri-State, an electric cooperative previously exempt from FERC’s jurisdiction, submitted the filings in an attempt to submit to FERC regulation after Tri-State admitted Mieco, Inc., a jurisdictional public utility, to its Board of Directors. FERC concluded that Tri-State’s stated rate tariff and OATT filings were patently deficient because they failed to provide the supporting data required for FERC to assess whether the proposed rates were just and reasonable, and for potentially interested parties to determine how the rates might affect them.
Continue Reading

On September 30, 2019, FERC issued two orders denying requests for rehearing of orders that respectively granted Pacific Gas & Electric Company (“PG&E”) and Southern California Edison Company (“SCE”) 50-basis point return-on-equity adders for their continued participation in the California Independent System Operator Corporation (“CAISO”) (“RTO-Participation Incentive”). PG&E requested the RTO-Participation Incentive as part of its nineteenth transmission owner tariff filing; SCE requested the RTO-Participation Incentive as part of its 2018 transmission revenue requirement filing. FERC granted both requests in two separate orders issued in 2017. The California Public Utilities Commission (“CPUC”) and Transmission Agency of Northern California requested rehearing of both 2017 orders; the Sacramento Municipal Utility District (“SMUD”) also requested rehearing of the 2017 order granting PG&E the RTO-Participation Incentive (CAISO, CPUC and SMUD are collectively referred to as the “California Parties”). FERC’s September 30, 2019 orders denying the California Parties’ rehearing requests concluded that is appropriate to grant both PG&E and SCE the RTO-Participation Incentive because California law does not mandate that either utility participate in CAISO.
Continue Reading

On September 25, 2019, FERC issued a notice stating that the results of the ISO New England, Inc. (“ISO-NE”) thirteenth Forward Capacity Auction (“FCA”) went into effect as of June 28, 2019 by operation of law—i .e., without FERC action. FCA 13 went into effect by operation of law due to a lack of quorum in the proceeding in which ISO-NE submitted the auction results and requested FERC approval of the auction as being conducted in accordance with ISO-NE’s Tariff and producing just and reasonable rates. Under Section 205 of the Federal Power Act, FERC has 60 days to act on a proposed rate filing; if FERC takes no action in that 60-day period—a very rare occurrence—then the rate becomes effective automatically. On September 27, 2019, Commissioner Richard Glick issued a statement indicating that he did not participate in the proceeding due to an ethics pledge that precludes him from working on any matters in which his former employer, Avangrid Inc., or any of its affiliates or subsidiaries is a party until November 29, 2019. Commissioner Glick explained that he could not participate because Vineyard Wind LLC, a joint venture between Avangrid Renewables, LLC and Copenhagen Infrastructure Partners, was a party to the proceeding.
Continue Reading

On September 19, 2019, FERC granted in part and denied in part a complaint by EDF Renewable Energy, Inc. (“EDF”) which alleged that the Midcontinent Independent System Operator, Inc. (“MISO”), Southwest Power Pool, Inc. (“SPP”), and PJM Interconnection, L.L.C. (“PJM”) Open Access Transmission Tariffs (“Tariffs”), the MISO-SPP Joint Operating Agreement (“JOA”), and the MISO-PJM JOA are unjust and unreasonable because they lack sufficient detail and transparency regarding the process each Regional Transmission Organization (“RTO”) uses to coordinate with Affected Systems, i.e., other transmission systems that may be affected by a proposed generator interconnection.  FERC’s order comes after an April 2018 technical conference that explored the issues raised in EDF’s complaint as well as broader Affected Systems issues (see February 13, 2018 edition of the WER).  FERC’s September 19 order agreed that the lack of transparency in Affected System coordination creates cost uncertainty that presents a significant obstacle to the development of new generation resources, and required MISO, SPP, and PJM to memorialize their current Affected System study coordination processes in their Tariffs and JOAs.  FERC also required the RTOs to add to their Tariffs and JOAs clear references to further Affected System coordination details in business practices and other coordination documents.  However, FERC declined to initiate a generic proceeding on the Affected Systems coordination issues raised in the technical conference in regions beyond those identified in the complaint.
Continue Reading

Summary of NOPR

On September 19, 2019, the Federal Energy Regulatory Commission (FERC) issued a Notice of Proposed Rulemaking (NOPR) proposing to revise its regulations implementing Sections 201 and 210 of the Public Utility Regulatory Policies Act of 1978 (PURPA) in light of changes in the energy industry since 1978.[1]
Continue Reading

On September 10, 2019, the United States Court of Appeals for the Third Circuit (“Third Circuit”) vacated a federal district court order permitting PennEast Pipeline Company (“PennEast”) to exercise eminent domain power under the Natural Gas Act (“NGA”) over property interests owned by the State of New Jersey.  The Third Circuit found that while the NGA delegates the federal government’s eminent domain authority to private gas companies, it does not delegate the federal government’s separate and distinct exemption from state sovereign immunity under the Eleventh Amendment.  After acknowledging concerns that its decision would disrupt the interstate gas pipeline industry, the Third Circuit suggested that in the case of state-owned property, a “work-around” might be for a federal official to file the necessary condemnation actions, and then to transfer the property to the natural gas company.
Continue Reading

On August 27, 2019, FERC affirmed its earlier rejection of PJM Interconnection, L.L.C.’s (“PJM’s”) proposal to, in certain circumstances, exempt incumbent transmission owners from executing a Designated Entity Agreement pursuant to the Regional Transmission Expansion Plan (“RTEP”) process set forth in Schedule 6 of its Operating Agreement, but not to exempt other transmission developers from this requirement (“August 27 Order”).  The August 27 Order on rehearing and compliance affirmed FERC’s conclusion in a July 2018 order that incumbent and non-incumbent transmission owners are similarly situated, and that incumbent transmission owners would be given a competitive advantage in PJM’s RTEP process if they were exempted from executing the Designated Entity Agreement.  The August 27 Order also accepted revisions to PJM’s Operating Agreement to provide a 60-day window for an incumbent transmission developer that PJM identified as a Designated Entity in its RTEP process to accept the designation.
Continue Reading

On July 18, 2019, FERC issued Order No. 861, modifying its regulations regarding the horizontal market power analysis required to obtain authorization to sell energy, capacity, or ancillary services at market-based rates.  FERC adopted its proposal (see December 20, 2018 edition of the WER) to relieve electric power sellers of the obligation to submit indicative screens to obtain or retain market-based rate authority in any Regional Transmission Organization (“RTO”)/Independent System Operator (“ISO”) market with FERC-approved RTO/ISO monitoring and mitigation.  Market-based rate sellers (“MBR Sellers”) must continue to submit indicative screens for authorization to make capacity sales in any RTO/ISO that lacks an RTO/ISO-administered capacity market subject to FERC-approved monitoring and mitigation—currently, the California Independent System Operator (“CAISO”) and Southwest Power Pool (“SPP”).  FERC stated its intent for the rule is to ease regulatory burdens on MBR Sellers while simultaneously preserving its authority to prevent the exercise of market power.
Continue Reading

On June 24, 2019, FERC issued an order rejecting, without prejudice, Midcontinent Independent System Operator’s (“MISO”) and the MISO Transmission Owners’ (“MISO TOs”) proposal to allocate MISO’s share of the costs of certain interregional economic transmission projects with PJM Interconnection, L.L.C. (“PJM”) and Southwest Power Pool, Inc. within the MISO footprint (“Interregional Cost Allocation Proposal”).  FERC explained that it rejected the Interregional Cost Allocation Proposal because it referenced and relied on certain provisions contained within a related, regional cost allocation proposal that FERC rejected as inconsistent with cost causation principles in a concurrently-issued order (see July 18, 2019 edition of the WER ).  The June 24 order also rejected MISO’s submission of the Interregional Cost Allocation Proposal in a compliance filing in a separate complaint proceeding.  FERC directed MISO to submit a new compliance filing either to confirm that an existing cost allocation method will apply to interregional projects, or to propose a new cost allocation method for these projects.
Continue Reading

On June 20, 2019, FERC approved revisions to the Midcontinent Independent System Operator, Inc.’s (“MISO”) Tariff which permit MISO to share, without notice to its market participants, confidential information with federal cybersecurity authorities in response to detected cyber intrusions or weaknesses in electric utility infrastructure that have the potential to compromise reliability and call for immediate action.  FERC concluded that MISO’s proposal allows for greater information sharing with the appropriate federal agencies before a potential cybersecurity threat becomes an emergency, and appropriately maintains the confidentiality of the information at issue.
Continue Reading