Adrienne Thompson

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On December 6 and December 18, 2018, various environmental groups filed a motion and comments with FERC requesting that Commissioner Bernard McNamee recuse himself from FERC’s two ongoing grid resiliency proceedings.  The groups argued that because Commissioner McNamee represented the Department of Energy (“DOE”) when the agency proposed compensating “fuel-secure” units for their contribution to the resilience of the electrical grid, recusal is appropriate because he is already a party to the proceedings, and in any event, may have already “prejudged” central matters of law and fact relevant to those dockets.

On December 20, 2018, FERC issued a series of nine orders addressing how certain public utilities calculate accumulated deferred income tax (“ADIT”) balances in their transmission formula rates.  The orders were the result of separate proceedings under Section 206 of the Federal Power Act (“FPA”), which FERC initiated after concluding in a June 21, 2018 order (“June Order”) that the use of its former “two-step” ADIT averaging methodology may be unjust and unreasonable.

On December 7, 2018, the United States Court of Appeals for the Sixth Circuit (“Sixth Circuit”) affirmed the United States District Court for the Northern District of Ohio’s (“District Court”) granting of a preliminary injunction to Nexus Gas Transmission, LLC (“Nexus”).  The preliminary injunction will allow Nexus to exercise the right of eminent domain under the Natural Gas Act (“NGA”) to build an interstate natural gas pipeline through parts of Ohio and Michigan.  The Sixth Circuit held that the District Court did not abuse its discretion in balancing the preliminary injunction factors and in refusing to allow an evidentiary hearing on the issue.

On December 3, 2018, FERC accepted ISO New England Inc.’s (“ISO-NE”) proposed temporary revisions to its Transmission, Markets and Services Tariff (“Tariff”) designed to address fuel security by a 2-1 vote.  Among other things, the order enables ISO-NE to enter into cost-of service agreements with certain retiring generators that are deemed necessary for regional fuel security and reliability.  Commissioner McIntyre did not participate and Commissioner Glick issued a separate concurring opinion.  Of particular note was the dissenting opinion filed by Chairman Neil Chatterjee.

On May 24, 2018, FERC denied a complaint filed by the New Jersey Board of Public Utilities (“NJBPU”) alleging unjust and unreasonable cost allocations for the Bergen-Linden Corridor transmission project (the “Project”) within the PJM Interconnection, L.L.C. (“PJM”) footprint.  FERC rejected NJBPU’s claims that, among other alleged problems, PJM’s implementation of certain provisions in its tariff and the Joint Operating Agreement (the “JOA”) with the New York Independent System Operator, Inc. (“NYISO”) unfairly insulated New York ratepayers from costs associated with the Project, at the expense of New Jersey ratepayers and in violation of FERC’s Order No. 1000.  

On May 17, 2018, FERC issued two orders denying requests for rehearing of two orders rejecting certain Southwest Power Pool, Inc. (“SPP”) Open Access Transmission Tariff (“OATT”) proposals that, as FERC found, provided Auction Revenue Rights (“ARRs”) and Long-term Congestion Rights (“LTCRs”) on an unjust and unreasonable basis (“May 2018 Orders”).  FERC’s previous orders, both issued on October 19, 2017 (“October 2017 Orders”), found that SPP was impermissibly providing ARRs and LTCRs for network service subject to “redispatch” (or, curtailment), on the same basis as network service not subject to redispatch (see October 25, 2017 edition of the WER).  In these latest orders, FERC rejected claims that, among other things, the October 2017 Orders had violated the contract rights of eligible network customers and that they constituted unlawful retroactive agency action.

On May 4, 2018, FERC issued an order approving a proposal by the Southwest Power Pool, Inc. (“SPP”) to eliminate transmission revenue credits for certain non-capacity network upgrades and to exempt non-firm and short-term firm point-to-point transmission service requests from incurring payment obligations for otherwise creditable system upgrades.  Recognizing the flexibility afforded to Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”) in the assignment of network upgrade costs, FERC rejected protests that SPP was not sufficiently recognizing the benefits of non-capacity upgrades.

On May 1, 2018, FERC staff held a technical conference on local transmission planning within the California Independent System Operator Corporation (“CAISO”) footprint.  The conference comes at a time when two California utilities, Pacific Gas and Electric Company (“PG&E”) and Southern California Edison Company (“SCE”), have transmission planning issues before the Commission, and also following FERC’s recent order addressing compliance with Order No. 890 in the PJM Interconnection, L.L.C. (“PJM”) region (see February 20, 2018 edition of the WER).

In two orders concurrently issued on April 17, 2018, FERC reaffirmed its jurisdiction over the participation of energy efficiency resources (“EERs”) in wholesale electricity markets and accepted an EER-related tariff filing from PJM Interconnection, L.L.C. (“PJM”).  In one order, FERC denied rehearing and granted clarification of a December 1, 2017 order (“Declaratory Order”) asserting jurisdiction over EERs, rejecting claims that FERC had overstepped its “directly affects” jurisdiction under the Federal Power Act (“FPA”), and in the second order, FERC applied that understanding to find PJM’s proposal to integrate EERs into PJM’s wholesale markets just and reasonable.

On April 9, 2018, PJM Interconnection, L.L.C. (“PJM”) filed two alternative proposals to address supply-side state subsidies that, as PJM argues, could otherwise depress prices in PJM’s capacity market, the Reliability Pricing Model (“RPM”).  As presented by PJM, its “Capacity Repricing” proposal would establish a two-stage capacity market to accommodate subsidized resources, while the other proposal, the “MOPR-Ex proposal,” would expand PJM’s use of the Minimum Offer Price Rule (“MOPR”) to address subsidized resource entry.  With PJM’s filing, the issue of how to address out-of-market capacity market subsidies returns again to FERC exactly one month after a divided Commission approved a similar filing from the ISO New England Inc. (“ISO-NE”) (see March 20, 2018 edition of the WER).