On November 5, 2019, the Senate Committee on Energy & Natural Resources (“Committee”) held a hearing to consider the nomination of James Danly as a FERC Commissioner. Mr. Danly, currently FERC’s general counsel, was nominated to fill the vacancy on the Commission left by the passing of FERC Chairman Kevin McIntyre in January of this year.

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On October 28, 2019, the Attorneys General of California, Connecticut, Delaware, the District of Columbia, Maryland, Massachusetts, Michigan, North Carolina, Oregon, Pennsylvania, and Rhode Island (collectively “State AGs”) wrote to FERC to discuss opportunities for the State AGs and FERC to work cooperatively to promote state-level clean energy policies that benefit consumers and enhance grid reliability. The State AGs expressed an “urgent need” for further action to address climate change’s “massive” environmental, health, and economic harms in their states, and noted that the Commission’s actions related to market design, natural gas siting, and grid reliability significantly impact each state’s ability to achieve their clean energy goals.

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On October 17, 2019, FERC issued its 2019-2020 Winter Energy Market Assessment (“Assessment”), which is a summary of staff’s expectations about market preparedness, including a high‐level assessment of the risks and challenges anticipated in the coming winter operating season. In its 2019-2020 Assessment, FERC highlighted that: 1) the National Oceanic and Atmospheric Administration (“NOAA”) forecasts a warmer than average winter; 2) natural gas storage levels are expected to be average going into the winter; 3) natural gas futures prices are lower than last winter; 4) a diverse and changing generation resource mix will maintain electric reliability this winter; and 5) expected winter reserve margins exceed reference levels in all regions.

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On October 17, 2019, FERC issued two separate orders accepting in part PJM Interconnection L.L.C.’s (“PJM”), and Southwest Power Pool, Inc.’s (“SPP”) proposals to comply with FERC’s orders addressing energy storage resources’ (“ESR”) participation in Regional Transmission Organization (“RTO”)-operated markets, subject to further compliance (see February 20, 2018 edition of the WER; April 10, 2019 edition of the WER; and May 22, 2019 edition of the WER for more background and context on Order No. 841). SPP’s and PJM’s ESR participation proposals are the first to be accepted by FERC, which found that the RTOs generally complied with Order No. 841 by enabling ESRs to provide all services they are technically capable of providing, to be compensated for those services in the same manner as other resources, and by recognizing ESRs’ unique physical and operational characteristics. However, FERC initiated further proceedings to require both RTOs to include the minimum run-time requirements applicable to ESRs and other generation resources in their Tariffs, and initiated an investigation into whether PJM’s application of minimum run-time requirements to ESRs participating in its capacity markets is just and reasonable. FERC also directed SPP and PJM to take further action, requiring both RTOs to submit compliance filings within 60 days that, as one example, address the basic metering and accounting practices applicable to ESRs. Commissioner McNamee issued separate opinions concurring with both orders.
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On October 4, 2019, FERC staff issued a report for users, operators, and owners of the bulk-power system to increase compliance with mandatory Critical Infrastructure Protection (“CIP”) standards and improve cybersecurity for the nation’s electric grid. In the report, FERC staff recommended, among other things, that entities:

  1. verify employees’ recurring authorizations for using removable media;
  2. ensure all employees and third-party contractors complete required trainings and properly maintain training records;
  3. consider all generation assets when categorizing bulk electric system cyber systems associated with transmission facilities; and
  4. review all firewalls to ensure there are no obsolete or overly permissive firewall access control rules in use.


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On September 30, 2019, FERC accepted in part and rejected in part, the California Independent System Operator’s (“CAISO”) July 2, 2019 proposed revisions (“July 2 Filing”)  to its open access transmission tariff (“Tariff”) to include three unrelated mitigation measures designed to facilitate the participation of fast-ramping hydroelectric resources in the western energy imbalance market (“EIM”). FERC accepted two aspects of CAISO’s proposal related to the mitigation timing (the “Mitigation Timing” proposal and a hydro default energy bid (“DEB”) proposal, referred to as the “Hydro DEB” proposal), but rejected CAISO’s proposal to allow an EIM entity balancing authority area (“BAA”) in the real-time market to limit dispatch of incremental net exports under certain conditions (the “Net Export Limit” proposal).
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On September 19, 2019, one Independent and four Democratic U.S. Senators wrote a letter to FERC asking for an explanation of three actions the Senators believed showed an “apparent erosion” of the “vital role” FERC plays in preventing fraud and manipulation in U.S. energy markets and financial markets: (1) the decline in FERC-initiated civil penalty actions and the abrupt termination of non-public investigations without explanation; (2) the elimination of the Division of Energy Market Oversight (“DEMO”); and (3) the rescission of its policy on issuing Notices of Alleged Violations (“NAVs”) for investigations. Those Senators were Maria Cantwell (D-WA), Dianne Feinstein (D-CA), Ron Wyden (D-OR), Edward Markey (D-MA), and Angus King (I-ME).

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On September 18, 2019, the First Circuit Court of Appeals (“First Circuit”) affirmed the U.S. District Court for the District of Massachusetts’s (“District Court”) ruling that dismissed twelve New England retail electricity customers’ (“Plaintiffs”) federal antitrust and state-law claims against Eversource Energy and Avangrid, Inc (“Defendants”).  Initially, Plaintiffs filed their lawsuit in District Court, claiming Defendants violated section 2 of the Sherman Act, 15 U.S.C. § 2, as well as various state antitrust and consumer-protection laws (see December 12, 2017 edition of the WER).  The District Court dismissed Plaintiffs’ claims, finding that they were barred by the filed-rate doctrine and, alternatively, that the Plaintiffs lacked antitrust standing and failed to plausibly allege a monopolization claim under the Sherman Act.  On review, the First Circuit agreed with the District Court that the filed-rate doctrine barred Plaintiffs’ federal and state law claims.  Accordingly, the First Circuit found no need to reach the District Court’s alternative grounds for dismissal and dismissed Plaintiffs’ federal and state claims pursuant to the filed-rate doctrine.

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On September 6, 2019, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) dismissed the City of Oberlin, Ohio’s and the Coalition to Reroute Nexus’s (collectively, “Petitioners”) request to vacate FERC’s authorization for Nexus Gas Transmission, LLC (“Nexus”) to: (1) construct and operate an interstate natural gas pipeline through parts of Ohio and Michigan; and (2) use eminent domain to acquire any necessary rights of way to complete the project (see December 18, 2018 edition of the WER).  The D.C. Circuit agreed with Petitioners, however, that the Commission failed to adequately substantiate its finding that it lawfully credited Nexus’s precedent agreements—under which shippers agree to enter into service agreements once the pipeline is built—with foreign shippers serving foreign customers as evidence of market demand for the interstate pipeline.  As a result, the D.C. Circuit remanded this issue to the Commission, without vacatur, for further explanation of the decision.

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On August 27, 2019, FERC staff and the North American Electric Reliability Corporation (“NERC”) staff (collectively, “Staff”) jointly issued a white paper on Notices of Penalty (“NOP”) for violating Critical Infrastructure Protection (“CIP”) Reliability Standards, which details requirements for Bulk Power System cyber security.  Staff elected to draft the white paper in response to the increase in Freedom of Information Act (“FOIA”) requests for the disclosure of non-public information in CIP NOPs, such as the identity of the CIP violator.  The overarching objective of the proposal is to provide increased transparency, while protecting sensitive security information that could jeopardize the Bulk Power System if made public.  If approved, the proposal will not have a retroactive effect on pending matters, or CIP NOPs already filed with the Commission.

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