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.
Continue Reading

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.
Continue Reading

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.
Continue Reading

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.
Continue Reading

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.   
Continue Reading

On January 17, 2019, FERC denied North Carolina Electric Membership Corporation’s (“NCEMC”) Formal Challenge and Complaint against Duke Energy Progress, LLC’s (“DEP”) transmission formula rate and Joint Open Access Transmission Tariff (“Joint OATT”) for failing to reflect in its wholesale transmission rates reductions related to federal, and North Carolina state, corporate income tax changes.  For various reasons discussed below, FERC denied NCEMC’s Complaint because it found that DEP had correctly applied its historical test year formula rate methodology.
Continue Reading

On January 8, 2019, FERC approved revisions to the PJM Interconnection, L.L.C. (“PJM”) Tariff and Operating Agreement regarding the use of transmission constraint penalty factors in its market operations.  PJM’s filing responds to new market transparency requirements set out in Order No. 844, the result of FERC’s rulemaking addressing uplift cost allocation and transparency in Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”).  In accepting PJM’s proposed revisions, FERC found the revisions would provide transparency regarding PJM’s transmission constraint penalty factor procedures and also produce more transparent and appropriate pricing and investment signals that correspond to an underlying transmission constraint.
Continue Reading

On December 20, 2018, FERC proposed to revise the horizontal market power analysis required for electric power sellers seeking to obtain or retain market-based rate authority in certain organized wholesale power markets (“NOPR”).  Specifically, FERC proposed to relieve electric power sellers of the obligation to submit indicative screens when seeking 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, thus easing the regulatory burden for certain market-based rate sellers.  However, FERC proposed to continue to require market-based rate sellers in an RTO/ISO to submit indicative screens for authorization to make capacity sales at market-based rates in any RTO/ISO market that lacks an RTO/ISO-administered capacity market subject to FERC-approved RTO/ISO monitoring and mitigation.
Continue Reading

On November 19, 2018, FERC accepted ISO New England Inc.’s (“ISO-NE”) request to terminate the capacity supply obligation (“CSO”) of the Clear River Unit 1 natural gas-fired generator (“Clear River”) for the 2021–2022 Capacity Commitment Period. In doing so, FERC found that ISO-NE had the right under its Tariff to terminate Clear River’s CSO because Clear River’s project sponsor, Invenergy Energy Management LLC (“Invenergy”), had covered Clear River’s CSO for two consecutive Capacity Commitment Periods. In the same order, FERC denied Invenergy’s request for waiver of certain provisions of ISO-NE’s Tariff related to the termination of Clear River’s CSO.
Continue Reading