On November 21, 2024, the Federal Energy Regulatory Commission (“FERC”) issued a final rule establishing a categorical one-year “reasonable period of time” for certifying authorities to act on requests for water quality certification under section 401 of the Clean Water Act (“CWA”). The final rule also clarifies that all FERC authorizations “that have the potential to discharge into waters of the United States,” including hydropower exemptions, amendments, and surrenders, require either a section 401 water quality certification or waiver thereof.
FERC Partially Accepts NorthWestern’s Order Nos. 2023 and 2023-A Compliance Filing
On November 21, 2024, FERC issued an Order partially accepting NorthWestern Energy Corporation’s (“NorthWestern”) compliance filing, effective July 10, 2024. FERC found that NorthWestern’s filing partially complies with the requirements of Order Nos. 2023 and 2023-A and directed NorthWestern to submit a further compliance filing within 60 days.
FERC Holds Technical Conference on Large Loads Co-Locating at Generating Facilities
On November 1, 2024, FERC Commissioners led a technical conference at their headquarters in Washington, DC, on issues pertaining to co-locating large loads at generating facilities. FERC Commissioners asked questions of individuals across the energy industry into how large loads, and data centers in particular, are impacting the grid and
FERC Dismisses Challenges Related to Market-to-Market Coordination over Data Center-Constrained Flowgate
On September 10, 2024, FERC issued an Order denying two complaints. The first complaint was filed on January 23, 2023 by Montana-Dakota Utilities Company (“MDU”) against Midcontinent Independent System Operator, Inc. (“MISO”) and Southwest Power Pool, Inc. (“SPP”). The second complaint was filed on March 8, 2024 by MISO against
Eighth Circuit Applies FERC’s Filed Rate Doctrine to Reject Allegations that SPP Breached an Oral Contract Made During Winter Storm Uri
On August 5, 2024, the United States Court of Appeals for the Eighth Circuit (“Eighth Circuit”) denied Associated Electric Cooperative, Inc.’s (“AECI”) petition for review of a Federal Energy Regulatory Commission (“FERC”) order upholding FERC’s decision to exercise primary jurisdiction over emergency energy sales between Southwest Power Pool, Inc. (“SPP”) and AECI during Winter Storm Uri and FERC’s decision that SPP properly compensated AECI pursuant to SPP’s Open Access Transmission Tariff (“Tariff”). The Eighth Circuit denied the AECI’s petition and upheld FERC’s determination that AECI was appropriately compensated according to the existing tariff rates filed with FERC and, accordingly, rejected AECI’s claims that SPP had breached an alleged oral contract with SPP personnel made during the storm.
D.C. Circuit Finds That Interconnection Customers are Responsible for Network Upgrade Costs
On July 19, 2024, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued an Order denying Tenaska Clear Creek Wind, LLC’s (“Clear Creek”) challenges to FERC’s orders allowing the allocation of costs for network upgrades. Southwest Power Pool, Inc. (“SPP”) assigned costs of more than $100 million to Clear Creek to pay for upgrades required on SPP’s system to accommodate the interconnection of Clear Creek’s wind turbine-powered electrical generation project (the “Project”).
FERC Approves MISO’s Use of Downward Sloping Demand Curve in 2025-2026 Planning Resource Auctions
On June 27, 2024, FERC accepted Midcontinent Independent System Operator Inc.’s (“MISO”) proposed tariff revisions that sought to implement a downward-sloping Reliability Based Demand Curve (“RBDC”) in the MISO Planning Resource Auction (“Auction”) beginning with the 2025/2026 Planning Year. FERC determined that MISO’s proposal is not only consistent with its acceptance of similar sloped curves in other Regional Transmission Owners/Independent System Operators capacity markets but that MISO’s proposal to adopt a downward-sloping RBDC will reduce volatility in Auction Clearing Prices, increase the stability of the capacity revenue stream over time, and render capacity investments less risky, thereby encouraging greater investment and at a lower financing cost.
FERC Issues ANOPR on Dynamic Line Ratings
On June 27, 2024, FERC issued an advance notice of proposed rulemaking (“ANOPR”) regarding potential reforms to require transmission providers to use dynamic line ratings (“DLRs”) to encourage more accurate and transparent line ratings. The Commission seeks comment on a proposed DLR framework and whether other transmission line rating reforms are needed to ensure just and reasonable and not unduly discriminatory or preferential FERC-jurisdictional rates. Initial and reply comments are due 90 and 120 days after the ANOPR’s publication in the Federal Register, respectively. After the comment period in this proceeding ends, FERC may consider issuing a formal Notice of Proposed Rulemaking, which would be a prerequisite to issuing any final rule.
FERC Issues Notice of Proposed Rulemaking to Conform to EPA’s Recent CWA § 401 Rule
At its May 23, 2024 open meeting, the Federal Energy Regulatory Commission (“FERC”) issued a Notice of Proposed Rulemaking (“NOPR”) proposing to establish a one-year “reasonable period of time” for certifying authorities to act on requests for water quality certification under section 401 of the Clean Water Act (“CWA”). The proposed rule also clarifies that all FERC authorizations “that have the potential to discharge into waters of the United States,” including exemptions from licensing, require either a section 401 water quality certification or waiver thereof.
FERC Accepts CAISO’s Request to Raise Soft Cap Offer
On April 25, 2024, FERC approved the California Independent System Operator Corporation’s (“CAISO”) request to increase its capacity procurement mechanism (“CPM”) soft cap offer from $6.31/kW-month to $7.32, which will become effective in June 2024.