On June 29, 2018, FERC approved the California Independent System Operator, Inc.’s (“CAISO”) revisions to its congestion revenue rights (“CRR”) auction intended to address the shortfall between CRR auction revenues and amounts owed by CAISO to holders of auctioned CRRs.  Specifically, CAISO proposed to (1) require CAISO transmission owners to submit all known transmission maintenance outages for the next year by July 1, rather than October 15; and (2) limit the allowable source and sink pairs eligible for the CRR auction to pairs associated with supply delivery and to exclude non-delivery CRR pairs. Continue Reading FERC Approves Changes to CAISO’s Congestion Revenue Rights Auction

On June 15, 2018, in separate opinions, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) affirmed two FERC rulings that denied utilities’ requests to be made whole for purchasing natural gas at inflated prices to comply with their PJM Interconnection, L.L.C. (“PJM”) capacity resource obligations during the 2014 Polar Vortex.  Specifically, the D.C. Circuit upheld FERC’s holdings that (1) permitting the utility in one case to recover costs retroactively would violate the filed rate doctrine and the rule prohibiting retroactive ratemaking and (2) the utility in the second case was not entitled to indemnification for its losses resulting from PJM requesting the utility to comply with its capacity resource obligations. Continue Reading D.C. Circuit Affirms Denial of Recovery of Gas Purchase Costs During 2014 Polar Vortex

On June 12, 2018, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) rejected challenges to FERC orders modifying PJM’s financial transmission right (“FTR”) and auction revenue right (“ARR”) designs.  FERC had ordered changes to PJM’s FTR/ARR designs to address PJM’s inability to make all of the payments owed to FTR owners. Continue Reading D.C. Circuit Upholds FERC’s Changes to PJM’s FTR and ARR Designs

On May 18, 2018, FERC denied rehearing of its April 28, 2016 order (the “April 28 Order”) approving Dominion Transmission, Inc.’s (“Dominion”) New Market Project.  Notably, FERC held that it is not required to analyze the upstream and downstream impacts of a proposed pipeline project unless those impacts are considered cumulative or indirect effects within the meaning of the National Environmental Policy Act (“NEPA”).  Commissioners Cheryl LaFleur and Richard Glick dissented in part, instead finding that FERC is required to provide the public with information relating to the upstream and downstream impacts of a proposed project and stating that FERC should ask applicants to provide such information. Continue Reading FERC Limits Analysis of Upstream/Downstream Impacts of Proposed Gas Pipeline Projects

On May 4, 2018, the U.S. Court of Appeals for the Second Circuit (“Second Circuit”) dismissed a private suit filed by a group of investors (“Plaintiffs”) seeking damages for Total Gas & Power North America, Inc., Total S.A., and Total Gas & Power Limited (collectively, “Total”) for allegedly manipulating natural gas markets at four western trading hubs.  In doing so, the Second Circuit held that Plaintiffs – who did not trade at the four western trading hubs at which Total traded, but argued that Total’s trading impacted Plaintiffs’ trading at the Henry Hub – established constitutional standing but failed to plead sufficient facts to establish a plausible substantive cause of action. Continue Reading Second Circuit Dismisses Private Suit Against Total for Alleged Gas Market Manipulation

On April 24, 2018, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) held that FERC lacks jurisdiction over certain of the City of Clarksville, Tennessee’s (“Clarksville”) interstate sales of natural gas for resale, because the plain language of the Natural Gas Act (“NGA”) excludes sales by municipalities from FERC’s jurisdiction, which extends to interstate sales of natural gas for resale under NGA section 7. Continue Reading D.C. Circuit Holds that FERC Lacks Jurisdiction over Certain Interstate Gas Sales by Municipalities

On April 19, 2018, FERC issued a Notice of Inquiry (“NOI”) seeking information regarding whether—and if so, how—to revise its policy for determining if a proposed natural gas pipeline is in the public convenience and necessity.  Specifically, the NOI requests information in four areas related to FERC’s policy for reviewing such certificate applications: (1) determining need for a pipeline project; (2) eminent domain issues; (3) evaluating environmental impacts, including greenhouse gas (“GHG”) emissions and climate change; and (4) changes that would improve the efficiency and effectiveness of FERC’s review. Continue Reading FERC Issues Notice of Inquiry into Pipeline Certificate Policy

On April 2, 2018, FERC denied a complaint alleging that the interconnection process under Midcontinent Independent System Operator, Inc.’s (“MISO”) tariff was unjust and unreasonable because certain wind generators were experiencing delays in the process, such that those customers would not receive a Generator Interconnection Agreement (“GIA”) in time to receive Federal Production Tax Credit (“PTC”) benefits.  In doing so, FERC found that there was no evidence that MISO was not making reasonable efforts to meet interconnection deadlines, as required by its tariff.  FERC added that prior precedent does not require MISO to ensure wind generators receive their GIA in time to receive full PTC benefits. Continue Reading FERC Holds that MISO Interconnection Process Need Not Ensure that Interconnection Customers Receive PTC Benefits

On March 16, 2018, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) affirmed FERC’s (1) reduction in NorthWestern Corporation’s (“NorthWestern”) Schedule 3 regulation service rate by removing “regulation-down” capacity from the rate’s numerator and increasing the denominator to the full nameplate capacity of NorthWestern’s generating facility and (2) decision to order NorthWestern to refund customers the difference between NorthWestern’s proposed rate and FERC’s approved rate. Continue Reading D.C. Circuit Affirms FERC’s Modifications to NorthWestern’s Regulation Service Rate

On March 14, 2018 and March 15, 2018, FERC issued separate orders (1) reinstating the certificate for the Southeast Market Pipelines Project (“SMP Project”) and (2) authorizing DTE Midstream Appalachia, LLC’s (“DTE”) Birdsboro Pipeline Project.  In approving the projects, FERC held that determining the significance of the indirect effect of a pipeline on downstream greenhouse gas (“GHG”) emissions is not possible for purposes of FERC’s National Environmental Policy Act (“NEPA”) analysis, and that the Social Cost of Carbon tool is not appropriate for estimating a project’s downstream impacts in FERC’s NEPA analysis.  In partial dissents, Commissioners Cheryl LaFleur and Richard Glick asserted that GHG emissions estimates and the Social Cost of Carbon tool can inform FERC’s Natural Gas Act (“NGA”) section 7 evaluation. Continue Reading FERC Certificate Orders Address Estimates of Pipeline Impacts on Downstream GHG Emissions