On March 26, 2019, FERC accepted, subject to condition, AMP Transmission, LLC’s (“AMP”) proposed formula rate template and implementation protocols (collectively, “Formula Rate”) to recover a revenue requirement based on a cash-flow method for AMP’s integrated transmission facilities located in the PJM Interconnection, L.L.C. (“PJM”) region.  As a minor condition of acceptance, FERC directed AMP to revise on compliance its Formula Rate to enable AMP to use it in PJM transmission zones that require different rate years, as opposed to only in zones whose rate year is based on the calendar year.
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On March 21, 2019, FERC issued a Notice of Inquiry (“NOI”) seeking information regarding whether and how to revise its policy for determining the rate of return on equity (“ROE”) used in setting rates charged by jurisdictional public utilities.  The NOI also seeks comment on whether any changes to the Commission’s ROE policies for public utilities should be applied to interstate natural gas and oil pipelines.  Specifically, the NOI requests information in eight areas:  (1) the role of FERC’s base ROE in investment decision-making and what objectives should guide the Commission’s approach; (2) whether uniform application of FERC’s base ROE policy across the electric, interstate natural gas pipeline and oil pipeline industries is appropriate and advisable; (3) performance of the discounted cash flow (“DCF”) model; (4) proxy groups; (5) the choice of financial model(s) used; (6) the mismatch between market-based ROE determinations and book-value rate base; (7) how FERC determines whether an existing ROE is unjust and unreasonable under the first prong of Federal Power Act section 206; and (8) model mechanics and implementation.
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On March 11, 2019, PJM Interconnection, L.L.C. (“PJM”) made a filing informing FERC that it has begun advising Capacity Market Sellers to use both its existing capacity market rules, as well as its proposed Capacity Reform rules while it awaits a final order from FERC on the proposed reforms.  PJM stated that this approach ensures that all Capacity Market Sellers will have satisfied both the existing and PJM’s proposed pre-auction requirements prior to the conduct of the August 2019 Base Residual Auction (for the 2022/2023 Delivery Year) in anticipation of a Commission order.  The Capacity Reform rules include revised Minimum Offer Price (“MOPR”) rules and the “Resource Carve-Out” alternative.
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On February 28, 2019, FERC denied the Coalition of Midwest Power Producers, Inc.’s (“Power Producers”) complaint alleging that Midcontinent Independent System Operator, Inc. (“MISO”) violated its tariff (“OATT”) by not requiring all capacity resources to be deliverable up to their installed capacity levels (“Complaint”).  FERC concluded that MISO reasonably implemented its OATT provisions regarding capacity resources.
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On February 25, 2019, FERC issued an order accepting proposed revisions to the ISO New England Inc. (“ISO-NE”) Transmission, Markets and Services Tariff (“Tariff”) that would enable electric storage resources (“ESRs”) to more fully participate in ISO-NE’s markets (“Storage Revisions”).  FERC found that the Storage Revisions reduce barriers to entry for ESRs by enabling them to provide services they are capable of providing, which would enhance competition, thus helping to ensure just and reasonable rates in the ISO-NE markets.  ISO-NE submitted these changes as essentially an interim step on its road to becoming fully compliant with Order No. 841’s generic requirements regarding Regional Transmission Operators (“RTOs”) and Independent Service Operators (“ISOs”) enabling storage participation in competitive markets.
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On February 21, 2019, FERC issued a final rule (“Order No. 855”) amending Part 33 of its regulations to establish that FERC authorization for mergers or consolidations of a public utility’s jurisdictional facilities is only required when such transactions exceed a $10 million threshold.  Order No. 855 also establishes that public utilities are not required to secure FERC authorization for mergers and acquisitions that are valued between $1 million and $10 million – instead they are only required to submit a notification filing.  Order No. 855 will become effective 30 days after publication in the Federal Register.
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On February 14, 2019, FERC Chairman Neil Chatterjee testified alongside officials from the North American Electric Reliability Corporation, the Department of Energy (“DOE”), the National Guard, and an engineering firm at a hearing before the U.S. Senate Committee on Energy and Natural Resources (“Committee”) to consider cybersecurity efforts in the energy industry.  In response to Senators’ questions about whether the natural gas industry should be subject to mandatory cyber security standards, a position the Chairman laid out in a June 2018 op-ed written with fellow FERC Commissioner Richard Glick, Chairman Chatterjee acknowledged that natural gas pipelines remain vulnerable to cyber-attacks and that it is imperative to continue work to address these threats.  He made clear, however, that industry and government have made significant strides toward addressing the issue even without mandatory cybersecurity standards.  Chairman Chatterjee assured the Committee that FERC is dedicated to protecting the energy sector from cyber threats and is ready to work with Congress and other agencies to bolster the nation’s cybersecurity posture.
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On January 29, FERC issued an order accepting revisions to ISO New England Inc.’s (“ISO-NE”) Competitive Auctions with Sponsored Policy Resources (“CASPR”) program, the ISO-NE’s mechanism to integrate state-sponsored generation resources (“Sponsored Policy Resources”) that might otherwise suppress prices in its Forward Capacity Market.  The order addressed the contested test price mechanism in detail, ultimately accepting it as a just and reasonable modification to ISO-NE’s Forward Capacity Auction (“FCA”) design.  In so doing, FERC’s order permits ISO-NE to bar capacity resources from participating in the FCA secondary auction if those resources bid capacity into the FCA primary action at a price below the ISO-NE’s assessment of their going-forward costs.  FERC’s order drew a dissent from Commissioner Glick, who argued that the test price mechanism had not been shown to be just and reasonable.
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In orders issued on January 25 and 28, 2019, FERC concluded that the Commission and the bankruptcy courts have concurrent jurisdiction to review and address the disposition of FERC-jurisdictional contracts sought to be rejected through bankruptcy and, therefore, a party to a FERC-jurisdictional wholesale power agreement must first obtain approval from both FERC and the bankruptcy court to modify the filed rate and reject the filed wholesale power contract, respectively.  FERC made its determination in response to two separate petitions (“Petitions”) filed by NextEra Energy, Inc. and NextEra Energy Partners, L.P. (collectively, “NextEra”) and Exelon Corporation (“Exelon”), individually, against Pacific Gas and Electric Company (“PG&E”).  In those Petitions, NextEra and Exelon asked FERC to clarify its authority regarding the prospect of PG&E seeking to reject or amend FERC-jurisdictional wholesale power agreements in its anticipated bankruptcy proceeding.  On January 29, 2019, PG&E submitted its anticipated bankruptcy filing in the U.S. Bankruptcy Court for the Northern District of California.   
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