On March 26, 2019, FERC accepted, subject to condition, AMP Transmission, LLC’s (“AMP”) proposed formula rate template and implementation protocols (collectively, “Formula Rate”) to recover a revenue requirement based on a cash-flow method for AMP’s integrated transmission facilities located in the PJM Interconnection, L.L.C. (“PJM”) region.  As a minor condition of acceptance, FERC directed AMP to revise on compliance its Formula Rate to enable AMP to use it in PJM transmission zones that require different rate years, as opposed to only in zones whose rate year is based on the calendar year.
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On March 21, 2019, the same day FERC issued an inquiry into Return on Equity (“ROE”) policies (see here), FERC also published another Notice of Inquiry (“NOI”) seeking comments on the scope and implementation of its electric transmission incentives policy and regulations.  The NOI covers a broad range of topics from using incentives to encourage new technology integration to unlocking location constrained resources and addressing resiliency concerns.  Initial comments are due 90 days after the NOI is published in the Federal Register, with reply comments due 30 days thereafter.

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On March 20, 2019 the Missouri Public Service Commission (“MPSC”) granted a certificate of convenience and necessity (“CCN”) to Grain Belt Express Clean Line LLC (“Grain Belt”) for a $2.35 billion, 780-mile, 600 kV transmission line that is planned to deliver wind-generated electricity from western Kansas to customers in both MISO and PJM. While the MPSC previously denied Grain Belt’s application for a CCN in a 2015 decision that cited burdens to affected landowners, its March 20 order concludes that “the broad economic, environmental, and other benefits of the Project to the entire state of Missouri outweigh the interests of the individual landowners,” whose concerns would be “addressed through carefully considered conditions placed on the CCN.”
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On March 21, 2019, FERC issued a Notice of Inquiry (“NOI”) seeking information regarding whether and how to revise its policy for determining the rate of return on equity (“ROE”) used in setting rates charged by jurisdictional public utilities.  The NOI also seeks comment on whether any changes to the Commission’s ROE policies for public utilities should be applied to interstate natural gas and oil pipelines.  Specifically, the NOI requests information in eight areas:  (1) the role of FERC’s base ROE in investment decision-making and what objectives should guide the Commission’s approach; (2) whether uniform application of FERC’s base ROE policy across the electric, interstate natural gas pipeline and oil pipeline industries is appropriate and advisable; (3) performance of the discounted cash flow (“DCF”) model; (4) proxy groups; (5) the choice of financial model(s) used; (6) the mismatch between market-based ROE determinations and book-value rate base; (7) how FERC determines whether an existing ROE is unjust and unreasonable under the first prong of Federal Power Act section 206; and (8) model mechanics and implementation.
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At a time of significant industry transformation driven by technological change and spurred on by environmental policy concerns, the Federal Energy Regulatory Commission (“FERC” or “Commission”) has now added a significant layer to the stack of policy debates – the future of transmission investment.  Many states have seized the initiative in terms of establishing preferable resource mixes for in-state customers, and are spearheading significant pushes for greater renewable and storage resource deployment.  FERC has now joined the fray by opening up the policy debate anew regarding how to spur (or whether to spur) additional transmission sector investment.  The FERC order described below focuses on regulatory and market rules impacting transmission investment (Docket No. PL19-3-000).  The agency also opened a companion docket requesting comments on the details of its policies regarding establishment of a public utility transmission owner’s stated return on equity (“ROE”) (Docket No. PL19-4-000).  The Washington Energy Report will provide detailed summaries of these orders via our blog.  FERC’s mention here of “an increased emphasis on the reliability of transmission infrastructure” (emphasis added) could signal an attempt to re-focus the U.S. Department of Energy’s resiliency concerns to an arena that gives FERC home-field advantage.  Lest the states forget, FERC controls the price of admission for a ticket to the interstate transmission network, and this open-ended fact-finding effort bears a high likelihood of impacting the price of such tickets (for a large portion of the continental United States).
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On March 6, 2019, FERC denied GridLiance GP, LLC’s (“GridLiance”) proposal (“Proposed Transaction”) to acquire from People’s Electric Cooperative certain transmission lines and related facilities (“Assets”).  In its order, FERC concluded that GridLiance failed to demonstrate that the benefits of its ownership of the facilities would offset the rate increases that GridLiance acknowledged would result from the Proposed Transaction.  However, because FERC denied the proposal without prejudice, GridLiance can make a new filing that, according to FERC “proposes adequate ratepayer protection and demonstrates specific additional benefits to offset a rate increase.”

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On February 28, 2019, following a July 2018 voluntary remand order from the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”), FERC reversed tariff waivers it previously granted to the Southwest Power Pool, Inc. (“SPP”) regarding customer crediting payments for certain network upgrades.  FERC had granted a waiver of the one-year time bar for billing adjustments in SPP’s tariff so that SPP could retroactively reimburse transmission customers for qualifying network upgrade payments.  In its order on voluntary remand (“Remand Order”) however, FERC concluded that granting such a waiver would violate the filed rate doctrine.  As such, FERC directed the SPP to provide refunds and interest to affected transmission customers.
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On February 21, 2019, FERC issued an order (“Order No. 845-A”) granting in part and denying in part various requests for rehearing and clarification of its determinations in Order No. 845.  In Order No. 845, FERC revised its interconnection rules for large generators, i.e., generators with capacities greater than 20 MW.  Although the requests for rehearing asked FERC to reconsider all but one of the Order No. 845 reforms, Order No. 845-A effectively leaves the major reforms intact, and focuses in large part on explaining FERC’s intentions as to how the new rules should work.  Compliance filings in response to both Order Nos. 845 and 845-A are due May 22, 2019.
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On February 8, 2019, FERC approved nine revisions to the New York Independent System Operator, Inc. (“NYISO”) Tariff addressing its Public Policy Transmission Planning Process.  While the changes mainly provide additional process and transparency to NYISO’s existing procedures, NYISO also removed the requirement that the New York Public Service Commission (“New York Commission”) issue an order confirming the transmission need before NYISO can move forward with its planning process.
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