On October 7, 2020, the United States Court of Appeals for the Ninth Circuit (“Ninth Circuit”) vacated, as moot, two FERC orders asserting concurrent jurisdiction to review the disposition of certain Pacific Gas & Electric Corporation (“PG&E”) power purchase agreements (“PPAs”) that PG&E sought to reject through bankruptcy. In a brief memorandum decision, a three-judge Ninth Circuit panel explained that the orders had become moot when the bankruptcy court confirmed a reorganization plan that had PG&E assume, rather than reject, the PPAs. In the same decision, the Ninth Circuit vacated a related bankruptcy court order in which the bankruptcy court determined that FERC does not have concurrent jurisdiction with the bankruptcy courts over the rejection of such PPAs. In vacating the three orders, the Ninth Circuit expressed no opinion on the merits of the consolidated appeal, and left open the question of whether FERC and the bankruptcy courts have concurrent jurisdiction over wholesale power contracts in Chapter 11 bankruptcy proceedings.
Continue Reading Ninth Circuit Vacates FERC and Bankruptcy Court Orders, Avoiding Jurisdictional Dispute Over PPAs in Bankruptcy

On September 23, 2020, staff from the North American Electric Reliability Corporation (“NERC”) and FERC (collectively, “Joint Staff”) issued a second joint white paper that reversed previous recommendations regarding publicly disclosing the identities of entities accused of Critical Infrastructure Protection (“CIP”) violations. As stated in the Second Joint Whitepaper, the previous recommendation to publicly disclose CIP violator names and other information raised “substantial risks to the security of the Bulk-Power System.” Accordingly, the Second Joint Whitepaper stated that from now on, NERC will request that CIP noncompliance filings be treated as Critical Energy/Electric Infrastructure Information (“CEII”). FERC Staff will also designate such filings as CEII in their entirety.  Additionally, because of the risk associated with the disclosure of CIP noncompliance information, NERC will no longer publicly post redacted versions of CIP noncompliance filings and submittals.
Continue Reading FERC and NERC Staff Reverse Course, Opt for Confidentiality on CIP Violations

On September 17, 2020, FERC issued a Notice of Inquiry (“NOI”) seeking comments on strategies to mitigate any potential risks to the bulk electric system posed by telecommunications equipment and services produced or provided by entities identified as risks to national security. Huawei Technologies Company (“Huawei”) and ZTE Corporation (“ZTE”) have been identified as examples of such entities because they provide communication systems and other equipment and services that are critical to bulk electric system reliability.
Continue Reading FERC Opens Inquiry into Foreign Adversary-Provided Bulk Power System Telecommunications Equipment, Focusing on Huawei and ZTE Equipment Threat

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

Executive Summary of FERC Order No. 872: Qualifying Facility Rates and Requirements Implementation Issues Under the Public Utility Regulatory Policies Act of 1978 [1]

I. Overview

On July 16, 2020, the Federal Energy Regulatory Commission (FERC or the Commission) issued Order No. 872, the Commission’s final order revising its regulations implementing Sections 201 and 210 of the Public Utility Regulatory Policies Act of 1978 (PURPA) [2]. This order, which follows a 2016 technical conference on PURPA issues and a September 2019 Notice of Proposed Rulemaking (NOPR) [3], is the first major set of revisions to FERC’s regulations implementing PURPA since they were established through Order No. 69 in 1980.

As FERC explained in the NOPR, the energy landscape has evolved in significant ways since the initial PURPA regulations were established, which includes increased supplies of natural gas, a more matured renewables industry, and the growing presence of non-Qualifying Facility (QF) independent power producers. These and other changes prompted FERC to revise its PURPA regulations, many of which are implemented by the states. These new changes provide additional guidance to state commissions regarding PURPA implementation and rests additional authority in state commissions regarding QF rates and contract terms.
Continue Reading Analyzing FERC’s Order Updating PURPA Regulations for First Time in Almost 40 Years

On July 7, 2020, the PJM Interconnection, L.L.C. (“PJM”) Planning Committee held an informational session on its State Agreement Approach, a transmission planning process that allows one or more states to request the studying and funding of new transmission projects within the PJM footprint to address identified public policy needs. The State Agreement Approach could help accommodate the anticipated growth in offshore wind generation by allowing states to submit transmission expansion or extension projects in the Regional Transmission Expansion Plan (“RTEP”) so long as the states agree to assume responsibility for project costs.
Continue Reading PJM Planning Committee Holds Stakeholder Meeting About Process for States to Fund New Transmission Projects

On June 18, 2020, FERC denied rehearing, but granted partial clarification, of a 2019 order addressing certain market power mitigation reforms proposed by the California Independent System Operator Corporation (“CAISO”). In particular, FERC again rejected CAISO’s “Net Export Limit” proposal to enhance local market power mitigation in the western energy imbalance market (“EIM”). As FERC reiterated in its order, the Net Export Limit proposal could allow EIM resource owners to limit dispatch during periods of market power mitigation, resulting in unjust and unreasonable market outcomes.
Continue Reading FERC Denies CAISO’s Rehearing Request, and Grants Limited Clarification, Regarding CAISO’s EIM Net Export Limit Proposal

In an order issued June 9, 2020, FERC accepted a proposal from the Midcontinent Independent System Operator, Inc. (“MISO”) to require certain solar generating facilities to respond to real-time dispatch signals by registering as Dispatchable Intermittent Resources (“DIRs”). Through MISO’s proposal, all solar resources entering commercial operation on or after March 15, 2020 must register as DIRs and become dispatchable by March 15, 2022, whereas solar resources in operation before March 15, 2020 have the option, but are not required, to obtain DIR registration. In accepting the proposal, FERC rejected arguments from one protestor that the proposal unduly burdened solar projects in late-stage development, finding that MISO’s proposed two-year transition period for such resources was reasonable.
Continue Reading FERC Accepts MISO Proposal to Require Dispatchable Intermittent Resource Registration for Solar Projects

On June 1, 2020, FERC issued an order on remand from the United States Court of Appeals for the District of Columbia Circuit (the “D.C. Circuit”) directing the Bonneville Power Administration (“Bonneville”) to return to Chehalis Power Generating, L.P. (“Chehalis”) refunded payments for reactive power supplied to Bonneville from August 1, 2005 through September 30, 2005. While FERC declined to require Bonneville to return the entire refund amount requested by Chehalis, it did provide interest calculated according to FERC’s interest regulation.
Continue Reading FERC Directs Bonneville to Pay Partial Refunds to Chehalis in Drawn-Out Reactive Power Dispute

On May 21, 2020, FERC reversed, on rehearing, an earlier determination from October 2017 that the Commission has the authority to require the Midcontinent Independent System Operator, Inc. (“MISO”) to revise its Transmission, Energy and Operating Reserve Markets Tariff (“Tariff”) to include refund commitments by non-public utility transmission owning members. FERC found that although it has authority to review non-public utility rates included in jurisdictional rates (such as MISO’s), it was neither necessary nor appropriate to impose the refund commitment contemplated on non-public transmission owners in MISO. FERC also dismissed, as moot, MISO’s compliance filing submitted in response to the October 2017 Order, and terminated various related proceedings.

Continue Reading On Rehearing, FERC Decides Not to Require Prospective Refund Commitment from Non-Public Utility Transmission Owners