On July 18, 2018, FERC affirmed its Revised Policy Statement on Treatment of Income Taxes (“Revised Policy Statement”), where FERC stated that it will generally not permit master-limited partnerships (“MLPs”) to recover income tax allowance in their cost of service.  In doing so, FERC dismissed requests for clarification and rehearing of its Revised Policy Statement, reiterating that tax pass-through entities (including MLPs) that recover an income tax allowance in addition to a return on equity (“ROE”) based on the discounted cash flow (“DCF”) methodology double recover investors’ tax costs.  FERC did however explain that while pass-through entities may eliminate previously-accumulated sums of accumulated deferred income tax (“ADIT”) from their cost of service, they did not need to refund those ADIT balances to ratepayers. 
Continue Reading FERC Affirms Policy on Income Tax Allowance for Gas Pipelines

On July 19, 2018, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) issued a Notice of Proposed Rulemaking (“NOPR”) that would update FERC’s regulations regarding interlocking positions.  According to the NOPR, the proposed revisions to parts 45 and 46 of the Commission’s regulations aim to “reflect statutory changes to the circumstances in which an applicant who would otherwise require Commission authorization to hold an interlocking position need not do so.”
Continue Reading FERC Proposes Reforms to Regulations Governing Interlocking Positions

On July 5, 2018, the Midcontinent Independent System Operator, Inc. (“MISO”) proposed to restore provisions in its Open Access Transmission, Energy and Operating Reserve Markets Tariff (“Tariff”) to allow Transmission Owners the discretion to elect to provide initial funding for network upgrades.  MISO filed its proposed Tariff changes after the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) vacated earlier FERC orders that required MISO interconnection customers’ consent before allowing Transmission Owner funding of interconnection-related network upgrades. 
Continue Reading MISO Proposes to Reinstate Prior Transmission Owner Network Upgrade Funding Mechanism

On July 2, 2018, FERC denied ISO New England Inc.’s (“ISO-NE”) request for waiver of its Transmission, Markets, and Services Tariff (“Tariff”) and instituted a Federal Power Act (“FPA”) section 206 proceeding because, according to FERC, the Tariff may be unjust and unreasonable.  Specifically, ISO-NE requested waiver of certain provisions in its Tariff in order to delay the retirement of two generating units owned by Exelon Generation Company, LLC (“Exelon”) for fuel security purposes.  FERC denied the waiver request and preliminarily found that the Tariff did not sufficiently address specific regional fuel security concerns. 
Continue Reading FERC Finds ISO-NE’s Tariff May Not Adequately Address Fuel Security Concerns

On June 21, 2018, FERC found that the Midcontinent Independent System Operator, Inc.’s (“MISO”) Open Access Transmission Tariff (“Tariff”) provisions governing the termination of generator interconnection agreements (“GIAs”) were unjust and unreasonable due to an inconsistency between the terms of the GIA contained in the Tariff and the MISO Generator Interconnection Procedures (“GIP”).  FERC also accepted, after a paper hearing, MISO’s proposed revisions to the GIA and GIP termination provisions, subject to further revisions.  MISO’s Tariff revisions clarified that an interconnection customer could extend its commercial operating date (“COD”) for up to three years without risking termination from MISO, which FERC found, subject to modification, just and reasonable. 
Continue Reading FERC Conditionally Approves MISO Tariff Revisions Regarding Termination of GIAs

On June 8, 2018, FERC approved a Stipulation and Consent Agreement (“Settlement”) between the Office of Enforcement (“OE”) and Duke Energy Corporation and its public utility operating subsidiaries (“Duke”).  OE claimed that Duke violated FERC regulations when it failed to accurately describe certain information in the transmission studies submitted in support of its merger with Progress Energy, Inc. (collectively, “Applicants”).  FERC determined that the Settlement was fair and reasonable and resolved all outstanding claims and proceedings between OE and Duke. 
Continue Reading FERC Approves Civil Penalty Against Duke for Submitting Inaccurate Data in Section 203 Proceeding

On June 5, 2018, FERC granted the PJM Interconnection, L.L.C. (“PJM”) independent market monitor’s (“IMM”) request to compel the American Electric Power Services Corporation (“AEP”) to provide certain information related to cost-based offers to the IMM.  The IMM stated in its petition that it needed the information to determine whether AEP’s total costs of variable operations and maintenance (“VOM”) included in its capacity offer raise any market power concerns in the PJM Energy Market.  FERC determined that because the IMM had broad authority under PJM’s Open Access Transmission Tariff (“Tariff”) to request such information, it would grant the IMM’s petition.
Continue Reading FERC Approves PJM IMM’s Request for Access to AEP Cost Data for Market Power Analysis

On May 31, 2018, CPV Power Holdings, L.P., Calpine Corporation, and Eastern Generation, LLC (together, “Complainants”) filed a complaint against PJM Interconnection, L.L.C. (“PJM”), contending that PJM’s Open Access Transmission Tariff (“Tariff”) does not prevent the suppression of prices in PJM’s Reliability Pricing Model (“RPM”) market by resources receiving state subsidies, and that the solutions that PJM had proposed to FERC—“Capacity Repricing” and “Minimum Offer Price Rule (“MOPR”)-Ex”—are “inadequate and unjust and unreasonable.”  The Complainants argued that FERC should instead require PJM to adopt a “Clean MOPR”—meaning a MOPR “applicable to all subsidized resources and without categorical exemptions like those in PJM’s MOPR-Ex proposal.”
Continue Reading Complaint Proposes “Clean MOPR” as an Alternative to PJM’s Proposals to Address State Subsidies in Capacity Markets

On May 22, 2018, GlidePath Power Solutions LLC (“GlidePath”) filed a complaint with FERC under sections 206 and 306 of the Federal Power Act alleging that PJM Interconnection, L.L.C. (“PJM”) improperly rejected GlidePath’s interconnection request for a proposed battery storage facility (the “Project”).  GlidePath alleged that PJM relied on an impermissible interpretation of its generator interconnection rules, which require demonstration of site control, to unjustly deny interconnection service for the Project, resulting in cancellation of the Project’s interconnection request.  In its complaint, GlidePath requested that FERC find that PJM unjustly, unreasonably, and incorrectly applied its rules regarding site control, and that PJM must restore the queue position held by the Project. 
Continue Reading Complaint Asserts PJM Impermissibly Revised Generation Site Control Requirements

On May 17, 2018, FERC issued Order No. 833-A wherein it denied rehearing of Order No. 833 and granted, in part, Edison Electric Institute’s (“EEI”) request for clarification of Order No. 833.  Order No. 833 amended FERC’s regulations regarding Critical Energy Infrastructure Information (“CEII”), as directed by the FAST Act.  The FAST Act, signed into law on December 4, 2015, added section 215A to the Federal Power Act (“FPA”) to improve the security and resilience of energy infrastructure in the face of emergencies.  The FAST Act also directed FERC to issue regulations on the procedures for designating certain material as CEII, provided for the imposition of sanctions on any party who knowingly discloses CEII, and authorized the voluntary sharing of CEII material.
Continue Reading FERC Clarifies CEII Rules