On October 8, 2019, FERC accepted ISO New England Inc.’s (“ISO-NE”) public and private versions of a filing containing the de-list bids (“De-List Bids”) and substation auction test prices (“Test Prices”) for the fourteenth Forward Capacity Auction (“FCA 14”), to be held in February 2020 and to become effective August 27, 2019. In the process, FERC also granted ISO-NE’s requested waiver of FERC’s regulations requiring parties requesting privileged treatment of their filings to provide a copy of such non-public documents to intervenors who execute a protective agreement.
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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.
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On September 19, 2019, FERC granted a petition for declaratory order by the New England Ratepayers Association (“New England Ratepayers”), which asked FERC to find that a New Hampshire statute, Senate Bill 365 (“SB 365”), mandating a purchase price for wholesale sales of certain biomass and waste generators in the state, is preempted by the Federal Power Act (“FPA”) and violates section 210 of the Public Utility Regulatory Policies Act of 1978 (“PURPA”).
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On September 19, 2019, FERC concurrently issued two orders granting in part separate complaints filed by American Electric Power Service Corporation (“AEP”) and the City of Prescott, Arkansas (“Prescott”) finding that, to the extent loads pseudo-tied from Midcontinent Independent System Operator, Inc. (“MISO”) to Southwest Power Pool, Inc. (“SPP”) are subject to overlapping or duplicative congestion charges by both MISO and SPP, then such charges are unjust, unreasonable, unduly discriminatory, or preferential.  On the same day, FERC also established briefing procedures (“Briefing Order”) related to the complaint orders to further investigate issues concerning potentially unjust, unreasonable, and unduly discriminatory tariff provisions, contract provisions, and/or practices that result in overlapping and/or duplicative congestion charges being imposed on pseudo-tie transactions between MISO and SPP.
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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]
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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.
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On July 23, 2019, the U.S. Court of Appeals for the Third Circuit (“Third Circuit”) ruled that state substantive law should be used as the federal standard when determining landowners’ compensation in condemnation actions brought by private entities acting under the Natural Gas Act of 1938 (“NGA”).  The Third Circuit ruling reversed a decision by the U.S. District Court for the Middle District of Pennsylvania (“District Court”) and remanded the case for further proceedings.
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On July 19, 2019, FERC largely denied four complaints filed in May and June of 2015 (“2015 Complaints”) concerning the results of the Midcontinent Independent System Operator, Inc.’s (“MISO”) 2015/16 Planning Resource Auction (“2015/16 Auction”) for Local Resource Zone 4 (“Zone 4”).  In relevant part, FERC: (1) found that the results of the 2015/16 Auction for Zone 4 were just and reasonable; and (2) denied requests to hold an evidentiary hearing to resolve issues related to the 2015/16 Auction.  Specifically, FERC found no evidence in the record indicating that certain Auction offers violated the MISO Tariff, and the resulting Zone 4 auction-clearing price was just and reasonable.
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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.
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On June 20, 2019, FERC issued an Order on Voluntary Remand from the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) directing PJM Interconnection, L.L.C. (“PJM”) to refund certain line loss over-collection amounts to certain virtual traders.  Upon re-examining its refund authority in light of recent court precedent, FERC determined that it has greater discretion to order refunds in cost allocation and rate design proceedings than it previously had determined.
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