On February 11, 2020, the U.S. Court of Appeals for the Fourth Circuit (“Fourth Circuit”) held that FERC’s claim for civil penalties under the Federal Power Act (“FPA”) against Powhatan Energy Fund, LLC and certain of its traders and affiliates (“Powhatan”) was not barred by the statute of limitations. In doing so, the Fourth Circuit held that FERC’s claim in federal district court did not accrue for statute of limitation purposes until all of the legal prerequisites for filing the suit had been met, including failure by Powhatan to pay its assessed penalties.  
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On February 3, 2020, FERC denied a waiver request filed by Genbright LLC (“Genbright”) seeking a one-time limited waiver of Market Rule 1 in the ISO New England Inc. (“ISO-NE”) Transmission, Markets and Services Tariff (“Tariff”) to allow fourteen distributed energy resource projects (the “DER Projects”) to participate in the fourteenth ISO-NE Forward Capacity Auction (“FCA 14”).  According to Genbright, the DER Projects did not qualify to participate in this year’s capacity auction because Genbright sought interconnection under a state-administered interconnection process rather than the FERC jurisdictional interconnection options specified in the ISO-NE Tariff, and Genbright argued that the interconnected utility should have alerted Genbright of the FERC-jurisdictional status of its interconnections.  In denying the request, FERC found that granting waiver would inappropriately allow Genbright to avoid ISO-NE’s complex interconnection study process.
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On January 30, 2020, FERC accepted revisions to the Midcontinent Independent System Operator, Inc. (“MISO”) planning resource auction participation rules for resources expecting extended outages during the planning year.  FERC simultaneously dismissed as moot an earlier-filed complaint by Wolverine Power Supply Cooperative (“Wolverine”) that alleged MISO’s Open Access Transmission, Energy and Operating Reserves Markets Tariff (“Tariff”) was unjust and unreasonable because it allowed resources with MISO-approved outages for the entire planning year to participate in the resource auction.
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On January 23, 2020, FERC concluded that a “pricing and dispatch mismatch problem” needs to be resolved before PJM Interconnection, L.L.C. (“PJM”) can revise the fast-start provisions in its Tariff, as previously directed by FERC on April 18, 2019.  Because PJM currently has a stakeholder process addressing the pricing and dispatch mismatch, FERC placed PJM’s fast-start pricing filing in abeyance until July 31, 2020 to allow PJM and its stakeholders the opportunity to fully consider any necessary changes. 
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On January 14, 2020, FERC accepted revisions to ISO New England, Inc.’s (“ISO-NE”) Transmission, Markets and Services Tariff (“Tariff”), which update ISO-NE’s Financial Assurance Policy, which aims to ensure that resources achieve commercial operation by the time their relevant Capacity Commitment Period begins.  The revisions alter the methodology used to calculate the financial assurances requirements for resources that have cleared the Forward Capacity Auction (“FCA”) but have not yet achieved commercial operation (“Non-Commercial Resources”), basing it on the Net Cost of New Entry (“Net CONE”) value associated with the FCA, rather than the starting and clearing prices of the FCA.
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On December 20, 2019, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) denied petitions for review of a series of FERC orders that exempted certain North Carolina transmission customers of Virginia Electric and Power Company (“Dominion”) from the incremental costs to underground certain transmission lines in the Virginia portion of the Dominion’s service territory.  The challenges were brought by certain Virginia transmission customers of Dominion Energy, which sought to overturn FERC’s determination that only Dominion’s Virginia wholesale customers, not its North Carolina customers, should bear the costs of undergrounding three transmission line upgrade projects.
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On December 6, 2019, a bipartisan group of ten U.S. Senators wrote to FERC Chairman Neil Chatterjee asking for assurances that FERC fully appreciates the threat posed to the nation’s energy infrastructure by the use of equipment manufactured by Huawei Technologies Co., Ltd. (“Huawei”).  The letter praised FERC’s creation of a new cybersecurity division and expressed hope that the new division’s first objective would be defending the nation’s infrastructure against threats posed by the use of Huawei’s equipment.
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On December 5, 2019, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) granted a petition for rehearing en banc of an opinion it issued on August 2, 2019 (“August 2019 Opinion”) upholding FERC’s decision to conditionally approve the application of Transcontinental Gas Pipeline Company (“Transco”) to construct and operate the Atlantic Sunrise Project.  Petitioners challenge FERC’s use of tolling orders, which allow FERC to delay rehearing after granting a pipeline certificate, as impermissible under the Natural Gas Act and the Due Process Clause of the Fifth Amendment.  Specifically, Petitioners argue that FERC’s use of tolling orders in pipeline certificate proceedings unlawfully require challengers to wait for the rehearing order to issue before obtaining judicial review, while the pipeline can proceed with eminent domain proceedings and pipeline construction following the issuance of FERC’s certificate order.     
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On November 21, 2019, FERC announced that public utilities with transmission formula rates must revise those rates to account for changes in accumulated deferred income taxes (“ADIT”) resulting from the Tax Cuts and Jobs Act of 2017 (“TCJA”). Utilities with transmission formula rates under an Open Access Transmission Tariff, a transmission owner tariff, or a rate schedule must:

  • include a mechanism to deduct any excess ADIT from, or add any deficient ADIT to, their rate base in order to ensure rate base neutrality (the “Rate Base Adjustment Mechanism”);
  • return to, or recover from, customers any excess or deficient ADIT through an adjustment to the formula rate’s income tax allowance (“Income Tax Allowance Adjustment Mechanism”); and
  • incorporate a new permanent worksheet into the formula rate to annually track ADIT amounts.

FERC declined to adopt any compliance requirements for transmission stated rates, finding that the utility’s next rate case would be the most appropriate place to address excess or deficient ADIT resulting from the TCJA. Compliance filings are due the later of: (1) 30 days from the effective date of the final rule; or (2) the utility’s next informational filing following the final rule. 
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On November 5 and 6, 2019, FERC staff held a two-day workshop at its headquarters in Washington, DC on technologies that increase the capacity, efficiency, or reliability of transmission facilities.  Panelists and FERC staff discussed technologies that are currently used in transmission planning and operations, challenges associated with the deployment of grid-enhancing technologies, and regulatory actions that might promote increased adoption of these technologies going forward. A formal notice requesting written comments will soon be issued. 
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