On April 29, 2022, the FERC rejected Midcontinent Independent System Operator Inc.’s (“MISO”) proposed tariff revisions that sought to “extend” MISO Transmission Owners’ option to self-fund transmission upgrades so as to apply to Necessary Upgrades to support the connection of Merchant High Voltage Direct Current (“MHVDC”) transmission into MISO. FERC found that MISO failed to show its proposal was just and reasonable because MISO argued that Network Upgrades and Necessary Upgrades were functionally identical yet only proposed to extend the self-funding option traditionally applied to Network Upgrades without also extending other funding options and protections for customers.
Continue Reading FERC Rejects MISO Proposal for Transmission Owners to Self-fund Necessary Upgrades to Connect Merchant HVDC Lines

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:
Continue Reading Summary of FERC’s April 2022 NOPR on Transmission Planning, Cost Allocation, and Generator Interconnection

On April 5, 2022, FERC approved PJM Interconnection, L.L.C.’s (“PJM”) proposed revisions to the Consolidated Transmission Owners Agreement (“CTOA”) aimed at improving effectiveness and efficiency in decision-making among the 18 transmission owners currently eligible to vote on PJM business. Despite a protest arguing that the proposal would disenfranchise non-traditional transmission owners, FERC found that the proposed revisions “rebalance the CTOA voting rules to better align with individual PJM Transmission Owners’ economic stakes in the transmission system.”
Continue Reading FERC Approves New Voting Rules for PJM Transmission Owners

On December 28, 2021, the Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) vacated and remanded a series of FERC orders that allowed for the formula rate pass-through of “indirect” public relations and advocacy expenditures incurred by Potomac-Appalachian Transmission Highline, LLC (“PATH”) related to its pursuit of certificates of public convenience and necessity to build a proposed electric transmission line (“December 28 Opinion”). The D.C. Circuit held that PATH had improperly booked the expenditures to incorrect accounts under FERC’s Uniform System of Accounts (“USofA”), and that Account 426.4–Expenditures for Certain Civic, Political and Related Activities, should have been used instead because it contemplated the inclusion of indirect, as well as direct, public relations and advocacy expenses.

Continue Reading D.C. Circuit Vacates and Remands FERC Orders Permitting Formula Rate Pass-Through of “Indirect” Public Relations and Advocacy Expenditures

On January 5, 2022, FERC denied a motion of the Andrew Kittell Estate (“Kittell Estate”) to drop FERC’s enforcement action against GreenHat Energy, LLC (“GreenHat”) because of an October 1, 2021 revelation that FERC’s decisional staff had improperly communicated with FERC enforcement litigation staff (“Email Exchange”) regarding the GreenHat enforcement proceeding, potentially violating FERC’s Separation of Functions regulations (“January 5 Order”). In the January 5 Order, however, FERC abstained from deciding whether the Email Exchange violated Commission regulations, finding that “the conduct at issue here would not warrant the extraordinary remedy of dismissal,” which sparked a dissent from Commissioner Danly, who “would have explicitly found that the email exchange . . . was inappropriate, ordered the two attorneys barred from all future involvement in this matter, and directed Commission staff to conduct a robust, public investigation with findings to be set forth in a later Commission order.”
Continue Reading FERC Denies Motion to Drop Enforcement Action in GreenHat Proceeding, Sparking Dissent from Commissioner Danly

On December 1, 2021, Jordan Cove Energy Project and Pacific Connector Gas Pipeline (the “Jordan Cove Developers” or “Developers”) notified the Federal Energy Regulatory Commission (the “Commission”) of their decision not to proceed with the Jordan Cove LNG project (“Jordan Cove Project” or “Project”) and requested that the Commission vacate the authorizations issued for the Project. The Jordan Cove Developers decided not to move forward because of concerns regarding their ability to obtain required state permits.
Continue Reading Applicants for Jordan Cove LNG Project Request FERC to Vacate Authorizations

On November 18, 2021, FERC issued a Notice of Inquiry (“NOI”) inviting comments on reactive power capability compensation and market design.  The NOI highlights various issues with reactive power filings that have resulted from significant changes to electric markets and the generation resource mix, including the potential for overcompensation.  The NOI seeks comment on various aspects of reactive power compensation, as well as potential alternative approaches that could be used to develop reactive power capability revenue requirements.  
Continue Reading FERC Issues Notice of Inquiry on Reactive Power

On September 29, 2021, FERC recognized that PJM’s Minimum Offer Price Rule (“MOPR”) replacement proposal, previously filed with FERC on July 30, 2021, went into effect by operation of law after the Commission failed to act on PJM’s filing within the 60-day statutory deadline. FERC’s notice stated that FERC did not act on PJM’s filing because the Commissioners are divided two-to-two as to the filing’s lawfulness. Consistent with the Federal Power Act (“FPA”), the Commissioners each issued a statement explaining his or her view on PJM’s MOPR replacement proposal. Going forward, PJM’s MOPR replacement proposal has already been appealed based on an emergency request for rehearing of FERC’s September 29 notice. Additional requests for rehearing continue to be filed prior to the October 29 deadline.
Continue Reading PJM MOPR Replacement Takes Effect by Operation of Law; Commissioners Issue Separate Statements

On September 23, 2021, FERC issued an order rejecting a unilateral offer of settlement regarding the compensation for reactive power by Panda Hummel Station LLC (“Panda”) under Schedule 2 of the PJM Interconnection LLC (“PJM”) OATT, remanding the proceeding to the Chief Administrative Law Judge (“Chief ALJ”) to resume hearing procedures.  FERC found Panda’s proposed methodology flawed and inconsistent with FERC policy. 
Continue Reading FERC Rejects Reactive Compensation Settlement, Finding Methodology Flawed

On August 31, 2021, FERC denied Cross-Sound Cable Company, LLC’s (“Cross-Sound Cable”) application for incentive rate treatment to create a regulatory asset to recover costs incurred between 2016 and 2021 to comply with Interconnection Reliability Operating Limits (“IROL”) Critical Infrastructure Protection (“IROL-CIP”) costs under Schedule 17 of the ISO-New England (“ISO-NE”) Tariff.
Continue Reading FERC Denies Cross-Sound Cable Company’s Application for Incentive Rate Treatment to Comply with IROL-CIP Costs