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.

Continue Reading

On July 23, 2019, FERC Chairman Neil Chatterjee announced that the Commission is establishing a new Division of LNG Facility Review & Inspection (“DLNG”), within its Office of Energy Projects, to handle the growing number of complex applications to site, build, and operate liquified natural gas export terminals.  Prior to the establishment of this division,

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.
Continue Reading

On June 27, 2019, FERC rejected PJM Interconnection, L.L.C.’s (“PJM”) proposed revisions to its Open Access Transmission Tariff and Reliability Assurance Agreement Among Load Serving Entities in the PJM Region that would have required demand resources to be available year-round.  PJM argued that the proposed revisions better aligned its Price Responsive Demand (“PRD”) program with the year-around availability obligation of other supply-side “Capacity Performance Resources” participating in PJM’s capacity market. On review, however, FERC agreed with concerns raised by PJM’s Independent Market Monitor (“IMM”) and other parties that, among other things, the price-responsive demand program must be more consistent with the annual peak-based billing framework for capacity procurement by Load Serving Entities (“LSEs”).  FERC also agreed that, as a result, PJM’s proposal failed to accurately reflect PRD participants’ load reduction capabilities.
Continue Reading

On June 20, 2019, FERC Commissioner Cheryl LaFleur announced on Twitter that she will be leaving FERC at the end of August after serving on the Commission for nine years.  She first announced her intent to leave the Commission in January of this year.  In her recent announcement, Commissioner LaFleur noted that the July open meeting will be her last meeting as a commissioner.  FERC currently has four members—Commissioners Neil Chatterjee and Bernard McNamee, who are Republicans, and Commissioners LaFleur and Richard Glick, who are Democrats.  Assuming no nominee is confirmed by the end of August, Commissioner LaFleur’s departure would leave FERC with a two to one Republican majority, and a minimum number of commissioners for a quorum.
Continue Reading

On June 7, 2019, Judge Dennis Montali of the U.S. Bankruptcy Court of the Northern District of California San Francisco Division found that FERC’s finding that it had concurrent jurisdiction with the U.S. bankruptcy court over wholesale power agreements was “unenforceable in bankruptcy court and of no force on the parties before it.” Judge Montali further noted that if necessary, the U.S. bankruptcy court will “enjoin FERC from perpetuating its attempt to exercise power it wholly lacks.” At issue, on review by the bankruptcy court, was whether, pursuant to 28 U.S.C. 2201, the bankruptcy court has exclusive jurisdiction over Pacific Gas & Electric Company’s and Pacific Gas & Electric Corporation’s (collectively “Debtors”) right to reject a power purchase agreement (“PPA”) under Section 365 of the Bankruptcy Code, and whether FERC has concurrent jurisdiction to grant or deny PG&E’s rejection of any PPAs.

Continue Reading

On May 28, 2019, FERC issued an order approving Commonwealth Edison Company’s (“ComEd”) proposal to modify its formula transmission rate (“Formula Rate”) to recover its portion of the costs to construct, operate, and maintain the Superconductor Cable Development Project (the “Project”).  FERC also approved ComEd’s request for a transmission rate incentive to recover 100 percent of its prudently incurred costs if the Project is cancelled or abandoned for reasons outside ComEd’s control (“Abandonment Incentive”).  FERC found that the Project is properly treated as transmission plant, and thus eligible for recovery in ComEd’s Formula Rate and that the Commission’s approval of ComEd’s requested Abandonment Incentive is appropriate for the Project, which reflects an innovative use of an advanced technology that will improve system reliability.
Continue Reading

On May 15, 2019, with the support of various Democratic co-sponsors, Senator Jeanne Shaheen (D-NH) reintroduced the “Public Engagement at FERC Act” (S. 1477) to amend the Federal Power Act to establish an Office of Public Participation and Consumer Advocacy (“Office of PPCA” or “Office”).  The bill was first introduced by Senator Shaheen in 2017 and was created to assist residential and small commercial energy consumers in participating in FERC proceedings.
Continue Reading

On May 14, 2019, FERC granted in part, and denied in part, United Illuminating Company’s (“United Illuminating”) request for approval of three transmission rate incentives for investments in the Pequonnock Substation Project (“Project”).  United Illuminating asked FERC to approve three transmission incentives: (i) a 50-basis point return on equity (“ROE”), (ii) an Abandoned Plant Incentive, and (iii) a Construction Work in Progress (“CWIP”) Incentive.  United Illuminating also requested waivers of several of FERC’s regulatory requirements, including the requirements related to anti-competitive impacts of CWIP recovery and the requirement to file Statement BM under section 35.13(h)(38) of the Commission’s regulations.   In the May 14 Order, FERC granted United Illuminating’s requested Abandoned Plant and CWIP Incentives and its waiver requests, but denied the requested ROE Incentive adder.

Continue Reading

On May 9, 2019, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) dismissed Otsego 2000 Inc.’s (“Otsego”) petition to set aside a FERC order granting a certificate to Dominion Energy Transmission Inc. (“Dominion”) to construct and operate its New Market Project (“Project”).  Specifically, the D.C. Circuit found that Otsego failed to demonstrate standing to petition the court and that Otsego’s expenditure of resources for litigation was insufficient to demonstrate standing.
Continue Reading