On November 15, 2018, FERC issued a Notice of Proposed Rulemaking (“NOPR”) to implement Public Law No. 115-247, which amended section 203 of the Federal Power Act (“FPA”) to clarify that FERC authorization is only required for mergers or consolidations valued at more than $10 million. In addition, in accordance with the new law’s requirements, FERC proposes that transactions that are valued at $10 million or less, but more than $1 million, would only be subject to a notification requirement.
On November 13, 2018, FERC issued a notice providing a schedule for implementing S. 3021, the America’s Water Infrastructure Act of 2018 (“AWIA”). Continue Reading FERC Establishes Schedule for Implementing AWIA Requirements
On November 15, 2018, Bernard L. McNamee, who has been nominated to fill the vacancy left by former FERC Commissioner Robert Powelson, testified before the Senate Committee on Energy and Natural Resources (“Committee”). Currently, Mr. McNamee heads the Department of Energy’s (“DOE”) Office of Policy. Continue Reading FERC Nominee Bernard McNamee Testifies Before Senate Committee on Energy & Natural Resources
On November 15, 2018, FERC issued a Notice of Proposed Rulemaking (“NOPR”) addressing the effect of the Tax Cuts and Jobs Act of 2017 (“TCJA”), which lowered the federal corporate tax rate from 35 percent to 21 percent, on accumulated deferred income tax (“ADIT”) balances. Specifically, FERC proposed to require transmission companies to remove excess ADIT or add deficient ADIT to their rate bases. In addition, FERC issued a policy statement providing accounting and ratemaking guidance related to the treatment of ADIT (“Policy Statement”). Continue Reading FERC Proposes Rule, Provides Guidance on Treatment of Impact of Tax Reductions on ADIT
On October 15, 2018, FERC issued two orders involving rate of return on equity (“ROE”): the first was an order directing parties in two proceedings involving the base ROE of the transmission owning members of the Midcontinent Independent System Operator, Inc. (“MISO”) to submit briefs concerning a proposed change in FERC’s approach to determining the base ROE of public utilities previously outlined in Martha Coakley v. Bangor Hydro-Elec. Co. (“Coakley Briefing Order”) (see October 25, 2018 edition of the WER); the second was an order providing guidance regarding the effect of the Coakley Briefing Order on pending proceedings involving base ROE issues that have been set for hearing and settlement judge procedures.
On October 31, 2018, FERC Chairman Neil Chatterjee submitted comments (“October 31 Comments”) on the U.S. Environmental Protection Agency’s (“EPA”) proposed rule, the Affordable Clean Energy rule (“ACE Rule”). If approved, the ACE Rule would implement new regulations for states to develop plans to reduce Greenhouse Gas (“GHG”) emissions from certain existing Electric Utility Generating Units. Chairman Chatterjee’s comments generally supported the ACE Rule. Continue Reading FERC Chairman Files Comments with EPA on Affordable Clean Energy Rule
On November 5, 2018, FERC granted in part and denied in part a rehearing request (“Rehearing Order”) filed by Ameren Services Company (“Ameren Services”), on behalf of its affiliate Ameren Transmission Company of Illinois (together with Ameren Services, “Ameren”) of a FERC order (“February 13 Order”) denying Ameren’s request pursuant to Order No. 679 for a 100 basis point incentive rate of return on equity (“ROE Incentive”) for the Illinois Rivers and Mark Twain components (“Components”) of the Grand Rivers Project (“Project”). In the February 13 Order, FERC denied Ameren’s requested ROE Incentive for the Components, largely because of construction progress made to date on the Illinois Rivers component. In the Rehearing Order, FERC granted rehearing in part with respect to the Mark Twain component because that component is not substantially complete and, because based on its own merits, the Mark Twain component continues to face risks and challenges that warrant an ROE Incentive. FERC denied rehearing with respect to the Illinois River component, however, upon finding that given the substantial completion of the Illinois Rivers component and limited remaining risks and challenges Ameren faces with respect to that component, Ameren’s requested ROE Incentive for Illinois River failed to meet the nexus test. Continue Reading FERC Grants Rehearing in Part, Grants Transmission ROE Incentive Adder
On November 6, 2018, clean energy ballot initiatives failed in several states. In particular, voters rejected Arizona’s 50 percent renewable energy mandate, Washington’s fee on carbon emissions, Colorado’s limits on oil and gas drilling and Nevada’s retail choice initiative. However, voters passed Nevada’s 50 percent renewable energy portfolio. Continue Reading Voters Reject Some State Ballot Initiatives on Clean Power and Deregulation
On November 5, 2018, the American Wind Energy Association and the Wind Coalition (together, the “Wind Developers”) filed a complaint against Southwest Power Pool, Inc. (“SPP”) regarding SPP’s Bylaws and Membership Agreement. Specifically, the Wind Developers object to the sections of the Bylaws and Membership Agreement which impose financial obligations (“exit fees”) on independent power producers (“IPPs”), other comparable non-transmission owners (“non-TOs”), and non-load-serving entities (“non-LSEs”). The Wind Developers argue that the exit fee violates cost causation principles, may pose a barrier to entry into SPP to vote on critical issues, directly affects jurisdictional rates, and that therefore, the exit fee is unjust, unreasonable, and unduly discriminatory. Continue Reading Wind Developers File Complaint Against SPP Exit Fee for IPPs, non-TOs, and non-LSEs
On October 31, 2018, FERC accepted revisions to the Midcontinent Independent System Operator, Inc.’s (“MISO”) Open Access Transmission, Energy and Operating Reserve Markets Tariff (“Tariff”) to enhance the locational aspects of its resource adequacy construct (“Filing”). In March of 2018 (“March 2018 Filing”), MISO had proposed a similar filing, which FERC rejected, without prejudice, on August 2, 2018. There, FERC found two elements of the March 2018 Filing to be unjust and unreasonable, but FERC provided MISO with guidance with respect to any future filing. With the exception of those two elements, MISO stated that its Filing contains the same proposal and justification for the proposal as in its March 2018 Filing. Continue Reading FERC Accepts Revisions to the Locational Aspects of MISO’s Resource Adequacy Construct