On March 15, 2018, FERC issued three interrelated orders regarding the creation of a new Transco within the Southwest Power Pool, Inc. (“SPP”), the integration of a new Transmission Owner within SPP, and the allocation of existing transmission costs for new transmission owners within the region.  The package of orders stems from South Central MCN LLC’s (“South Central”) acquisition of transmission facilities from a public power entity, the City of Nixa, Missouri.
Continue Reading FERC Issues Orders Regarding SPP’s Allocation of Existing Facility Transmission Costs for New Transmission Owners

On March 14, 2018 and March 15, 2018, FERC issued separate orders (1) reinstating the certificate for the Southeast Market Pipelines Project (“SMP Project”) and (2) authorizing DTE Midstream Appalachia, LLC’s (“DTE”) Birdsboro Pipeline Project.  In approving the projects, FERC held that determining the significance of the indirect effect of a pipeline on downstream greenhouse gas (“GHG”) emissions is not possible for purposes of FERC’s National Environmental Policy Act (“NEPA”) analysis, and that the Social Cost of Carbon tool is not appropriate for estimating a project’s downstream impacts in FERC’s NEPA analysis.  In partial dissents, Commissioners Cheryl LaFleur and Richard Glick asserted that GHG emissions estimates and the Social Cost of Carbon tool can inform FERC’s Natural Gas Act (“NGA”) section 7 evaluation.
Continue Reading FERC Certificate Orders Address Estimates of Pipeline Impacts on Downstream GHG Emissions

On March 5, 2018, FERC accepted PJM Interconnection, L.LC.’s (“PJM”) revisions to the appendices to Schedule 12 of its Open Access Transmission Tariff (“Tariff”).  Under Schedule 12, PJM annually files updates to the cost responsibility assignments for transmission enhancement and expansion projects selected in PJM’s Regional Transmission Plan (“RTEP”).  Through the Tariff revisions, PJM sought to update load-ratio share and solution-based distribution factor (“DFAX”) cost allocations in the appendices to Schedule 12 for Regional Facilities, Necessary Lower Voltage Facilities, and Lower Voltage Facilities.  Additionally, pursuant to prior FERC orders issued in late-2017, PJM’s Tariff revisions sought to reduce the cost responsibility assignments under the appendices of Schedule 12 of PJM’s Tariff to certain merchant facilities—including, Hudson Transmission Partners and Linden VFT, LLC (together, the “Merchant Facilities”)—to zero. 
Continue Reading FERC Accepts PJM’s Load-Ratio Share and Solution-Based DFAX Proposal

On February 23, 2018, FERC approved PJM Interconnection, L.L.C.’s (“PJM”) changes to its tariff and Reliability Assurance Agreement (“RAA”) to revise Reliability Pricing Model (“RPM”) capacity market rules in order to accommodate greater participation from seasonal resources.  Specifically, FERC approved changes related to: (1) resource aggregation for submitting combined capacity market sell offers; (2) granting winter-period interconnection rights; and (3) demand response resource measurement and verification for seasonal resources.  However, FERC separately responded to complaints that the RPM does not adequately accommodate seasonal resources by directing FERC staff to establish a technical conference to explore whether further changes are needed to permit seasonal resource participation.
Continue Reading FERC Orders Technical Conference on Seasonal Resources Participating in PJM’s RPM Capacity Market

On February 28, 2018, FERC accepted ISO New England Inc.’s (“ISO-NE”) and the New England Power Pool Participants Committee’s (“NEPOOL”) tariff revisions to replace the capacity market’s existing bilateral contracting mechanism with a new mechanism, the Annual Reconfiguration Transaction (“ART”).  According to ISO-NE, the ART provides an alternative method to achieve the equivalent of a Capacity Supply Obligation (“CSO”) Bilateral while also accounting for a resource’s impact on reliability. 
Continue Reading ISO-NE Creates New Annual Reconfiguration Transaction in its Forward Capacity Market

On February 2, 2018, FERC conditionally granted FirstEnergy Service Company (“FirstEnergy”) a limited waiver of certain market-based rate affiliate restrictions to allow for the establishment of a centralized regional transmission organization (“RTO”) interface group.  The affiliate restrictions protect captive customers from potential harm if a franchised public utility interacts with its affiliates in ways that would transfer benefits to the affiliate to the detriment of the captive customer.  FERC granted the waiver to FirstEnergy, with the condition that it must keep sufficient records to permit the Commission to audit whether FirstEnergy’s representations that it would not harm captive customers are true.
Continue Reading FERC Conditionally Allows FirstEnergy Holding Company System to Establish a Centralized RTO Interface Group

On January 31, 2018, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) denied requests for an en banc rehearing of an August 2017 decision (Sierra Club v. FERC) vacating FERC’s approval of the Southeast Market Pipelines Project (“SMP Project”), a natural gas pipeline currently under construction in the southeastern United States.  In its August decision, the D.C. Circuit held that FERC failed to analyze the greenhouse gas emissions that would result from the SMP Project, as required by the National Environmental Policy Act (“NEPA”).  On February 2, 2018, the developers for the SMP Project filed a request at FERC for expedited reissued construction approval certificates, or in the alternative, temporary emergency certificates, arguing that halting work on the SMP Project will cause “irreparable harm.”
Continue Reading D.C. Circuit Denies Rehearing after Vacating Pipeline Certificate; Developers Seek Emergency Relief from FERC

On January 22, 2018, a New York state trial court largely rejected motions to dismiss various challenges to the state’s zero emission credit (“ZEC”) program established in 2016 by the New York Public Service Commission (“NYPSC”).  The ZEC program, which is also being challenged in federal court, provides subsidies to financially struggling in-state nuclear energy generators.  Although the court allowed five of the six claims against the program to proceed to trial, the court dismissed 56 of the 61 petitioners for failing to timely raise their challenges.
Continue Reading New York ZEC Challenges Move Forward at the State Level

On January 18, 2018, FERC took steps to develop supply chain risk management Reliability Standards and to approve several new Emergency Preparedness and Operations (“EOP”) Reliability Standards.  First, FERC issued a Notice of Proposed Rulemaking (“NOPR”) proposing to direct the North American Electric Reliability Corporation (“NERC”) to develop supply chain risk management requirements under the Critical Infrastructure Protection (“CIP”) Reliability Standards.  Second, in a separate order, FERC approved several new EOP Reliability Standards aimed at addressing emergency event reporting, roles and responsibilities during system restoration via blackstart resources, system restoration plans and coordination, and the loss of control center functionality. 
Continue Reading FERC Proposes to Approve Supply Chain Risk Management Reliability Standards and Approves New EOP Reliability Standards

On January 8, 2018, FERC terminated the Department of Energy’s (“DOE”) Proposed Rule on Grid Reliability and Resilience Pricing (“Proposed Rule”) proceeding, and, instead, initiated a new proceeding whereby FERC plans to collect information on resilience from regional transmission organizations (“RTO”) and independent system operators (“ISO”).  Once that information is collected, FERC will determine whether further action is necessary to address grid resilience.  While FERC’s decision was unanimous, three of FERC’s Commissioners issued separate concurring opinions.  Of note, Commissioner Neil Chatterjee stated that while he would have preferred an order that took an interim step to address the issues raised in the Proposed Rule, he looked forward to addressing those critical issues in the new proceeding established by FERC.
Continue Reading FERC Terminates DOE NOPR Proceeding, Requests Information from RTOs/ISOs on Resilience