On July 17, 2020, FERC issued three orders relating to the executed cost-of-service agreement (“Mystic Agreement”) among Constellation Mystic Power, LLC (“Mystic”), Exelon Generation Company, LLC (“Exelon”), and ISO New England Inc. (“ISO-NE”).  The Mystic Agreement provides for cost-of-service compensation to Mystic for the continued operation of two gas-fired generating units.  In the first two orders, FERC addressed requests for rehearing of its 2018 orders accepting the Mystic Agreement (the “July 2018 Order” and the “December 2018 Order”), including its conclusion that Mystic should recover from ratepayers 91% of the operating costs of the Everett Marine Terminal (“Everett”), a non-jurisdictional liquified natural gas import terminal.  In its third order, FERC accepted in part a Mystic compliance filing submitted in response to the December 2018 Order.  Commissioner Glick issued dissents to each of the July 17 orders.  Commissioner Glick concluded that FERC was forcing consumers to pay the full cost of service for Mystic in order to “bail out” Everett, and that each of the orders exceeded FERC’s jurisdiction under the Federal Power Act (“FPA”).
Continue Reading Divided FERC Permits Mystic to Recover Operating Costs of Non-Jurisdictional LNG Terminal

On July 23, 2020, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) granted FERC’s motion for a ninety-day stay of the court’s mandate in Allegheny Defense Project v. FERC. In Allegheny, the D.C. Circuit rejected FERC’s long-used practice of issuing “tolling orders” to grant itself more time to consider requests for rehearing (see July 1, 2020 issue of the WER). On July 6, 2020, FERC moved to stay for ninety days the D.C. Circuit’s mandate for the decision (which would have otherwise issued July 7, 2020), contending that a stay would give FERC time to assesses the D.C. Circuit’s opinion and would allow FERC and the Solicitor General to consider whether to petition the Supreme Court for a writ of certiorari (see July 14, 2020 issue of the WER). Per the D.C. Circuit’s July 23 order, the mandate will be stayed through October 5, 2020, or, should FERC provide notice that a petition for writ of certiorari has been filed, until the Supreme Court issues its final disposition.

The D.C. Circuit’s order is available here.

On July 22, 2020, FERC approved a mitigation proposal that Sun Jupiter Holdings, LLC (“Sun Jupiter”) and El Paso Electric Company (“El Paso”) (together, “Applicants”) submitted in response to FERC’s March 30, 2020 order (“March 2020 Order”) conditioning approval of Sun Jupiter’s merger with and into El Paso and requiring the Applicants to address the transaction’s adverse impact on competition in certain circumstances. FERC also dismissed, on procedural grounds, United States Senators Jeffrey A. Merkley (D-OR), Edward J. Markey (D-MA), and Bernard Sanders (D-VT) (collectively, “Senators”) request for rehearing, and denied Public Citizen, Inc.’s  (“Public Citizen”) request for rehearing of FERC’s March 2020 Order.

Continue Reading FERC Approves Sun Jupiter’s and El Paso’s Mitigation Proposal, Dismisses U.S. Senators’ and Public Citizen’s Requests for Rehearing

On July 27, 2020, President Trump announced his intent to nominate Mark Christie (Republican) and Allison Clements (Democrat) to fill the vacant Commissioner seats at FERC. Mr. Christie would replace the departing Commissioner Bernard McNamee—whose term expired on June 30, 2020 but who stayed at FERC past the expiration of his term to maintain a quorum (see January 28, 2020 edition of the WER)—while Ms. Clements would fill the remaining vacant seat. If both nominees are sworn in, the Commission would consist of three Republicans (Chairman Neil Chatterjee, Commissioner James Danly, and Mr. Christie) and two Democrats (Commission Richard Glick and Ms. Clements). Continue Reading President Trump Nominates Mark Christie and Allison Clements as FERC Commissioners

On July 16, 2020, FERC dismissed a petition for declaratory order by the New England Ratepayers Association (“NERA”) that asked FERC to assert jurisdiction over net metering, finding that the petition failed to identify a specific controversy or harm that warranted a generic response from FERC. NERA’s petition had requested that FERC declare: (1) that all flows of electricity from behind-the-meter generators under state net metering programs back to the interconnected utility are wholesale sales subject to FERC’s exclusive jurisdiction, and (2) such sales should be priced in accordance with the requirements of the Federal Power Act (“FPA”) or the Public Utility Regulatory Policies Act (“PURPA”). Commissioners Bernard L. McNamee and James Danly issued separate concurring opinions, noting that though NERA’s petition was procedurally unsound, the issues raised could be addressed on the merits in a different proceeding.

Continue Reading FERC Declines Request to Assert Jurisdiction over Net Metering

On July 16, 2020, FERC responded to a petition for declaratory order filed by a group of merchant generators (“Petitioners”) requesting that the Commission provide guidance and clarification on six areas of its cost-based reactive power ratemaking policy. While FERC declined to address five of Petitioners’ specific requests, explaining that it would address them in another ongoing reactive rate proceeding, FERC established paper hearing procedures on a single question: “what proxies, if any, may be used by merchant generators for reactive power service ratemaking purposes other than the use of the capital structure and the cost of capital of the interconnected utility.” Continue Reading FERC to Consider Merchant Cost of Capital for Reactive Power Rates

At the June 18, 2020 and July 16, 2020 Commissioner meetings, FERC issued a combined five orders continuing its trend of finding that a state has waived its Clean Water Act (“CWA”) section 401 authority for failing to issue a water quality certification within one year from receiving the request for certification.  Since the D.C. Circuit’s 2019 ruling in Hoopa Valley Tribe v. FERC (see December 11, 2019 edition of the WER), which held that the plain language of section 401 limited a state’s review to one year, the Commission has consistently found state waiver when the time period has been exceeded under a variety of circumstances.  Below is a summary of FERC’s recent orders finding that a state certifying authority waived its section 401 authority. Continue Reading FERC Continues Trend Finding State Water Quality Certification Waiver

In the two months since the failures of the Edenville Dam and the downstream FERC-licensed Sanford Dam (Project No. 2785) in central Michigan, there has been a flurry of correspondence between the Federal Energy Regulatory Commission (Commission or FERC) and the licensee, including a series of directives and the warning of potential enforcement actions from the Commission, as well as discussion of possible harm to protected species following the dam breaches. Continue Reading Aftermath of the Michigan Dam Failures: Licensee Delays and Possible ESA Concerns

The Federal Energy Regulatory Commission (Commission or FERC) has proposed to revise its Part 12 dam safety regulations through a Notice of Proposed Rulemaking (NOPR) released at its monthly public meeting on July 14, 2020.  There will be a 60-day public comment period once the proposed regulations are published in the Federal Register.  The proposed revisions contain three major changes to the existing FERC dam safety regulations: Continue Reading FERC Proposes Overhaul of Dam Safety Regulations

On July 2, 2020, FERC staff issued an order granting an exemption from licensing to the City and County of Denver, Colorado, through its Board of Water Commissioners (“Denver Water”) for its Strontia Springs Hydroelectric Project (“Project”).  Prior to FERC issuing the exemption order, Denver Water held an original minor license for the Project, which is located on the South Platte River in Douglas and Jefferson counties, Colorado. Continue Reading FERC Issues Federal Power Act “Exemption” in Lieu of Relicensing to Colorado Hydropower Project