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Daniel Archuleta

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Daniel Archuleta helps energy clients handle critical matters, especially those pertaining to the FERC in both the gas pipeline and electric utility industries.

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On November 4, 2016, the U.S. Court of Appeals for the D.C. Circuit (the “D.C. Circuit”) rejected Sierra Club’s arguments that FERC’s environmental review under the National Environmental Policy Act of 1969 (“NEPA”) of Cheniere Energy Inc.’s (“Cheniere”) Corpus Christi, Texas liquefied natural gas (“LNG”) export project (the “Corpus Christi Project”) was inadequate. Notably, the D.C. Circuit held that FERC does not have to address the indirect environmental effects of anticipated exports of LNG in its NEPA review because the U.S. Department of Energy (the “DOE”) has sole authority to approve the export of natural gas.

On November 4, 2016, FERC conditionally accepted revisions to the Southwest Power Pool, Inc.’s (“SPP”) Open Access Transmission Tariff (“Tariff”) designed to clarify and consolidate SPP’s processes regarding “out-of-merit” energy, which refers to energy that is specifically dispatched to address operational situations that cannot be resolved by market systems. The Tariff revisions are effective August 10, 2016.

On October 31, 2016, FERC approved PJM Interconnection, L.L.C.’s (“PJM”) proposed revisions to Schedule 1 of the PJM Amended and Restated Operating Agreement (“Operating Agreement”) and the parallel provisions of Attachment K-Appendix of the PJM Open Access Transmission Tariff (“Tariff”). The approved revisions modify PJM’s compensation procedures for load reductions during emergency conditions.

On October 25, 2016, FERC held that a pipeline providing interstate service pursuant to Natural Gas Policy Act (“NGPA”) Section 311 may not give preferential curtailment priority to preexisting, intrastate customers unless their intrastate transportation service agreements expressly provide for a higher curtailment priority above the pipeline’s other firm services. In doing so, FERC clarified that it is not enough that a preexisting intrastate service agreement has “different” curtailment provisions than the pipeline’s Statement of Operating Conditions (“SOC”) used to provide interstate service pursuant to NGPA Section 311.

On October 17, 2016, the U.S. Commodity Futures Trading Commission (the “CFTC”) clarified that certain transactions in Regional Transmission Organization (“RTO”) and Independent System Operator (“ISO”) markets are exempted from the Commodity Exchange Act (the “CEA”) provisions governing private rights of action, marking a reversal of the CFTC’s proposal in May 2016 which sought to subject the transactions to private rights of action. In addition, the CFTC granted Southwest Power Pool, Inc.’s (“SPP”) request to exempt certain transactions in its markets from most CEA provisions and CFTC regulations, excluding those relating to the CFTC’s anti-fraud and anti-manipulation authority.

On October 18, 2016, FERC accepted proposed changes to ISO New England Inc’s (“ISO-NE”) Transmission, Markets and Services Tariff (“Tariff”) intended to enhance liquidity in ISO-NE’s Forward Capacity Market (“FCM”). According to ISO-NE’s proposal, the changes – proposed jointly by ISO-NE and the New England Power Pool Participants Committee – will give qualified resources additional opportunities to provide capacity to the New England region.

On October 11, 2016, FERC issued an order on the refund liability of Midwest Generation, LLC (“Midwest”) for violating FERC-approved settlement agreement terms regarding reactive supply and voltage control service. Of note, although FERC approved Midwest’s total refund obligation calculation of over $3.6 million, it declined to exercise its primary jurisdiction over whether Midwest should be responsible to pay the portion of this obligation that accrued before the utility’s debts were discharged in an April 2014 bankruptcy proceeding. Instead, FERC directed Midwest to pay the refund amounts that accrued following the bankruptcy proceeding, which totaled around $1.7 million.

On October 3, 2016, FERC denied La Paloma Generating Company, LLC’s (“La Paloma”) complaint (“Complaint”) requesting that FERC order the California Independent System Operator Corporation (“CAISO”) to designate the portion of La Paloma’s generating capacity that is not currently designated as resource adequacy capacity as reliability must-run (“RMR”) units.

On September 26, 2016, the Commission approved revisions to the California Independent System Operator Corporation (“CAISO”) Open Access Transmission Tariff (“Tariff”) that create a new product in the CAISO real-time market for “flexible ramping”—meaning a generation resource’s ability to rapidly change its output, upward or downward, to respond to a change in forecasted net load. While the Commission approved the new product, which will replace CAISO’s existing “flexible ramping constraint,” effective October 1, 2016, the CAISO subsequently requested on September 28, 2016 that the Commission suspend the effectiveness of the Tariff revisions for one month, until November 1, 2016. That request remains pending before the Commission.

On September 22, 2016, FERC issued a notice seeking comments on proposed revisions and clarifications of Electric Quarterly Report (“EQR”) reporting requirements and corresponding updates to the EQR Data Dictionary. Notably, FERC proposes to significantly expand the instances in which transmission providers must report ancillary services transaction data. FERC also proposes to require filers to submit certain tariff-related information that they submit in the e-Tariff system, require filers to submit time zone information in connection with transmission capacity reassignment transactions, and clarify how filers should report booked out transactions.