On October 25, 2022, FERC declined to act on a petition for enforcement against California’s rules for solar installations implemented pursuant to the Public Utility Regulatory Policies Act (“PURPA”). As a result, ongoing federal litigation against the California rules will continue.
FERC Sustains Prior Order Approving Revisions to SPP’s Tariff Establishing Uniform Zonal Planning Criteria
On October 20, 2022, the Federal Energy Regulatory Commission (the “Commission”) issued an order addressing Oklahoma Gas and Electric Company, GridLiance High Plans LLC, and the Indicated SPP Transmission Owners’ (consisting of Evergy Kansas Central, Inc., Evergy Metro, Inc., Evergy Missouri West, Inc., and ITC Great Plains, LLC) (together, the “Petitioners”) requests for rehearing and alternatively request for clarification of the Commission’s June 2022 Order accepting revisions to Southwest Power Pool, Inc.’s (“SPP”) Open Access Transmission Tariff (“Tariff”) (“Rehearing Order”). The Commission denied the Petitioners’ request for rehearing and sustained its June 2022 Order establishing SPP’s uniform Zonal Planning Criteria.
Senator Manchin’s Permitting Reform Bill Pulled From the Continuing Resolution
On September 21, Senator Joe Manchin (D-WV), Chairman of the Senate Energy and Natural Resources Committee, released the text of the Energy Independence and Security Act of 2022 (Act). This comprehensive Act was set to be included in the upcoming Continuing Resolution; however, on September 27, Manchin pulled the Act from the Continuing Resolution given bipartisan opposition. The Act sought to improve energy production in the United States by accelerating agency review of certain energy projects and modernizing permitting laws.
D.C. Circuit Court of Appeals Denies Transmission Developer Challenge to MISO Baseline Reliability Project Cost Allocation
On August 19, 2022, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) denied a Petition for Review from LS Power and two other organizations (“Petitioners”) challenging FERC’s rejection of an earlier-submitted complaint against the Midcontinent Independent System Operator, Inc.’s (“MISO”) method of allocating costs for certain transmission construction projects identified as Baseline Reliability Projects in MISO’s transmission planning process. As the D.C. Circuit determined, FERC’s rejection of the Petitioners’ complaint was not arbitrary and capricious, as the Petitioners had failed to demonstrate that MISO’s cost-allocation method was unjust and unreasonable.
FERC Proposes a New, Broader Duty of Candor Rule
On July 28, 2022, FERC proposed a new “duty of candor” rule that would broadly apply to “all entities communicating with the Commission or other specified organizations related to a matter subject to the jurisdiction of the Commission.” According to the Commission, the Notice of Proposed Rulemaking (“NOPR”) is intended to capture the types of communications that may not have been included in the Commission’s existing communication rules and policies, some of which have an existing duty of candor standard.
Generation Project Developers Agree to Pay Civil Penalties, Disgorge Profits, after FERC Enforcement Investigations
On June 24th and 27th, 2022 FERC approved two stipulations and consent agreements between FERC’s Office of Enforcement (“Enforcement”) and two separate project developers. First, sPower Development Company, LLC (“sPower Devco”) agreed to a civil penalty of $24,000 after Enforcement determined that sPower Devco violated PJM Interconnection, L.L.C.’s (“PJM’s”) Tariff by submitting inaccurate information in PJM’s interconnection process. Second, Salem Harbor Power Development LP (“Harbor Power Devco”) agreed to a civil penalty of $17 million, to disgorge $26.7 million in profits, and to submit to compliance monitoring after Enforcement found that it collected capacity revenues on a project that had not yet been built nor was in commercial operation.
Summary of FERC Interconnection NOPR
On June 16, FERC issued a Notice of Proposed Rulemaking (NOPR) focused on updating procedures for interconnecting large generating facilities (20MW and above) and small generating facilities (under 20MW). The NOPR proposes significant updates to FERC’s pro forma interconnection procedures, which were first established in the early 2000s. In the intervening years, however, the nation’s generation fleet has evolved, new technologies have emerged, and interconnection wait-times have steadily increased. The NOPR proposes various reforms to help address growing interconnection queue backlogs and process delays. Comments are due 100 days after the NOPR’s publication in the Federal Register. Reply comments are due 130 days after publication in the Federal Register.
Below is a summary of the primary reforms outlined in the NOPR, which fall into three broad categories: (1) implement a first-ready, first-served cluster study process; (2) increase the speed of interconnection queue processing; and (3) incorporate technological advancements into the interconnection process. FERC’s proposed reforms are discussed further in the full summary, linked below.
FERC Proposes Changes to Filing and Reporting Requirements for NGA Section 4 Rate Cases
On May 19, 2022, FERC issued a Notice of Proposed Rulemaking (“NOPR”) to establish a rule that would require natural gas pipelines to submit all supporting statements, schedules, and workpapers in native format, with all links and formulas intact, when filing a Natural Gas Act (“NGA”) section 4 rate case. FERC issued the NOPR in response to a petition from several national gas trade associations, which argued that FERC’s current policy of permitting certain supporting documents to be filed in non-native format does not ensure that FERC staff and stakeholders have access to all information required to perform routine rate analyses. Comments on the NOPR are due June 17, 2022.
FERC Reverses Approval of CAISO Capacity Market Adder
On April 22, 2022, the Commission on remand from the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”), reversed its approval of the California Independent System Operator Corporation’s (“CAISO”) proposed Capacity Market Adder (“20% adder”). The Commission ordered CAISO to submit a compliance filing that removes the 20% adder from its Open Access Transmission Tariff (“OATT”) and replace it with an alternative methodology that excludes the 20% adder.
Summary of FERC’s April 2022 NOPR on Transmission Planning, Cost Allocation, and Generator Interconnection
On April 21, the Federal Energy Regulatory Commission (FERC or Commission) released its Notice of Proposed Rulemaking (NOPR) to reform its policies regarding Regional Transmission Planning and Cost Allocation. The NOPR follows from an Advanced Notice of Proposed Rulemaking (ANOPR) on these reforms, which FERC issued in July 2021. Representing FERC’s most significant action on transmission planning and cost allocation in more than a decade, the NOPR outlines six major proposals: