On February 18, 2021, FERC denied a rehearing request for an order it issued in October of 2020 that stated that payments received under the Commercial System Distribution Load Relief Programs (“CSRPs”) may not be excluded from the offer floors for Special Case Resources’ (“SCR”) calculation under the New York Independent System Operator, Inc.’s (“NYISO”) buyer-side market power mitigation (“BSM”) rules. Although FERC denied the request for rehearing, FERC modified and set aside the October 2020 Order in part, finding that the identified CSRPs should be excluded from the calculation of SCR offer floors in NYISO. Commissioners Clements and Christie issued concurring opinions.

Continue Reading FERC Exempts Certain Demand Response Programs from NYISO’s Buyer-Side Market Power Mitigation Rules

On January 22, 2021, two Washington state irrigation districts, Quincy-Columbia Basin Irrigation District and East Columbia Basin Irrigation District (the “Districts”), filed a Petition for Declaratory Order (“Petition”) requesting that FERC find that Federal Power Act (“FPA”) section 211A does not grant FERC jurisdiction over an unregulated transmitting utility solely as a result of the utility establishing different transmission rates by customer class or by contract.
Continue Reading Two Northwest Irrigation Districts Request Declaratory Order on FERC’s Jurisdiction Under FPA Section 211A

On January 19, 2021, FERC directed Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”) to submit informational reports regarding four hybrid resources issues: (1) terminology; (2) interconnection; (3) market participation; and (4) capacity valuation. Specifically, FERC directed that each RTO or ISO file a report within 180 days from the order providing:  (1) a description of its current practices related to these four issues; (2) an update on the status of any ongoing efforts to develop reforms related to the four issues; and (3) responses to the specific requests for information contained in the January 19, 2021 order. FERC’s request for reports follows a technical conference focusing on technical and market issues raised by hybrid resources (see April 14, 2020 edition of the WER) and a Notice Inviting Post-Technical Conference Comments.
Continue Reading FERC Directs Informational Reports on Hybrid Resources from RTOs and ISOs Following Technical Conference

On December 17, 2020, FERC issued an order concluding its review of the index level used to determine annual changes to oil pipeline rate ceilings, establishing an index level of Producer Price Index for Finished Goods plus 0.78% (PPI-FG+0.78%), and also issued a Withdrawal of Proposed Policy Statement on Oil Pipeline Affiliate Contracts, the latter of which drew a dissenting opinion from Commissioner Richard Glick.
Continue Reading FERC Establishes New Oil Index Level and Withdraws Proposed Affiliate Contract Guidance for Oil Pipelines

On December 7, 2020, FERC issued an order on rehearing sustaining its previous order in which it: found that PJM Interconnection, L.L.C.’s (“PJM”) uplift allocation rules were unjust, unreasonable, and unduly preferential as they did not allocate uplift to Up-to-Congestion (“UTC”) transactions; and directed PJM to update its rate. FERC disagreed with comments provided by XO Energy MA, LP (“XO Energy”) that FERC’s previous order was inconsistent with cost causation principles, since the record in the proceedings did not support a finding that UTCs are the cause of capacity-related costs that would be passed through as uplift.
Continue Reading FERC Affirms Previous Order Requiring PJM to Bill UTC Transactions for Uplift

On November 19, 2020, FERC issued Order No. 872-A, an order denying rehearing and clarifying portions of Order No. 872, which revised the regulations implementing the Public Utility Regulatory Policies Act of 1978 (“PURPA”). In Order No. 872-A, FERC affirmed its previous PURPA regulation amendments in Order No. 872, but provided further explanation regarding six key reforms: (1) states’ use of tiered avoided cost pricing; (2) states’ use of variable energy rates in qualifying facility (“QF”) contracts and availability of utility avoided cost data; (3) the role of independent entities overseeing competitive solicitations that set avoided cost rates; (4) the circumstances under which a small power production QF needs to recertify; (5) the application of the rebuttable presumption of separate sites for the purpose of determining the power production capacity of small power production facilities; and (6) the PURPA section 210(m) rebuttable presumption of nondiscriminatory access to markets and accompanying regulatory text.
Continue Reading FERC Denies Rehearing, But Clarifies Various Aspects of the New PURPA Rules

On November 5, 2020, FERC approved Southern California Edison Company’s (“SoCal Edison”) request to utilize a May 2020 formula rate sales forecast rather than its April 2020 sales forecast, as required by Appendix IX of SoCal Edison’s Transmission Owner Tariff (“Tariff”). The updated sales forecast, which informs SoCal Edison’s wholesale and retail transmission rate-recovery and true-up calculations, reflects a decrease in sales revenues due to the COVID-19 pandemic. In a dissenting opinion, then-Commissioner James Danly opposed the waiver, citing previous criticisms that such FERC action violates the filed rate doctrine and the rule against retroactive ratemaking (see October 28, 2020 edition of the WER).
Continue Reading FERC Grants Formula Rate Tariff Waiver; Then-Commissioner Danly Reiterates Criticisms of Retroactivity

On October 15, 2020, FERC issued a notice of proposed policy statement (“Proposed Policy Statement”) with proposed guidance for oil pipeline carriers to demonstrate through tariff filings or declaratory order petitions that the rates and terms in long-term contracts with affiliate shippers (“Affiliate Contracts”) are just, reasonable, and not unduly discriminatory under the Interstate Commerce Act (“ICA”).
Continue Reading FERC Proposes Guidance on Oil Pipeline Carrier Contracts with Affiliates

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