On May 21, 2020, FERC reversed, on rehearing, an earlier determination from October 2017 that the Commission has the authority to require the Midcontinent Independent System Operator, Inc. (“MISO”) to revise its Transmission, Energy and Operating Reserve Markets Tariff (“Tariff”) to include refund commitments by non-public utility transmission owning members. FERC found that although it has authority to review non-public utility rates included in jurisdictional rates (such as MISO’s), it was neither necessary nor appropriate to impose the refund commitment contemplated on non-public transmission owners in MISO. FERC also dismissed, as moot, MISO’s compliance filing submitted in response to the October 2017 Order, and terminated various related proceedings.

Continue Reading On Rehearing, FERC Decides Not to Require Prospective Refund Commitment from Non-Public Utility Transmission Owners

On May 21, 2020, FERC issued a proposed policy statement setting forth a revised approach to addressing requests for waiver, including: waiver of rates; non-rate terms and conditions; market rules; and procedural deadlines that are set forth in tariffs, rate schedules, service agreements, and contracts on file with FERC (“Proposed Policy Statement”). FERC specifically proposes to:

  1. discontinue granting retroactive waivers of tariff provisions, with a few specified exceptions; and
  2. grant requests for “remedial relief” only when applicants demonstrate that (a) such a request does not violate the filed rate doctrine or rule against retroactive ratemaking, or (b) the requested relief is within FERC’s remedial authority under section 309 of the Federal Power Act (“FPA”) or section 16 of the Natural Gas Act (“NGA”).


Continue Reading FERC Proposes and Seeks Comment on Changes to its Policies on Retroactive Waivers

On April 30, 2020, the United States Court of Appeals for the Eighth Circuit (“Eighth Circuit”) denied Nebraska Public Power District’s (“NPPD”) petition for review of FERC’s approval of the Southwest Power Pool, Inc.’s (“SPP”) placement of Tri-State Generation & Transmission Association’s (“Tri-State”) transmission facilities in SPP Zone 17. NPPD challenged FERC’s approval on cost causation grounds, arguing that FERC’s ruling was arbitrary and capricious because it failed to find that the benefits accruing to NPPD are roughly commensurate with the costs. The Eighth Circuit denied NPPD’s petition, concluding that FERC provided plausible and articulable reasons for why the costs and benefits of placing Tri-State’s transmission facilities in Zone 17 were comparable, and that FERC’s cost-causation analysis was not arbitrary and capricious.

Continue Reading Eighth Circuit Denies Petition for Review of Tri-State’s Placement in SPP Zone 17

On April 30, 2020, FERC accepted the New York Independent System Operator, Inc.’s (“NYISO”) proposed revisions to its Open Access Transmission Tariff (“OATT”) and its Market Administration and Control Area Services Tariff intended to enhance the integration of its Generator Deactivation Process with its Reliability Planning Process. NYISO proposed to establish a Short-Term Reliability Process using quarterly Short-Term Assessment of Reliability (“STAR”) studies that simultaneously evaluate the reliability impact of both generator deactivations and other changes that may impact transmission facilities (“Proposal”). FERC found that the Proposal will enhance NYISO’s current Generator Deactivation Process into a more efficient and comprehensive Short-Term Reliability Process.
Continue Reading FERC Accepts NYISO’s Proposed Tariff Revisions Regarding Its Short-Term Reliability Process

On April 21, 2020, the National Rural Electric Cooperative Association (“NRECA”), an organization that represents the interests of over 900 electric cooperatives nationally, issued a fact sheet projecting that COVID-19’s economic impact on electric cooperatives will total an estimated $10 billion through 2022. This fact sheet follows an April 6, 2020 letter from the CEO of NRECA to congressional leaders requesting legislative remedies to help address the challenges currently facing electric cooperatives as a result of COVID-19. Among other things, NRECA explains that, absent federal assistance in the form of federal funding and repricing of the United States Department of Agriculture (“USDA”) Rural Utilities Services (“RUS”) debt, co-ops may face severe financial distress due to prohibitions against utility disconnections, increasing electric bill nonpayment, and loss of load.

Continue Reading COVID-19 Projected to Cause a Multi-Billion Dollar Hit to Electric Cooperatives

On April 17, 2020, FERC granted the North American Electric Reliability Corporation’s (“NERC”) request to defer implementing several Commission-approved Reliability Standards that have effective dates or phased-in implementation dates in the second half of 2020. NERC argued the deferred implementation would not hamper grid reliability but would instead allow NERC-registered entities additional flexibility to continue prioritizing worker safety and reliability during the COVID-19 pandemic.
Continue Reading FERC Defers Implementation of Certain NERC Reliability Standards, Citing COVID-19

On April 16, 2020, FERC addressed the American Public Power Association (“APPA”) and Exelon Corporation and its public utility subsidiaries (collectively, “Exelon Companies”) requests for rehearing and clarification of Order No. 864.  Specifically, FERC:

  • granted in part APPA’s request, clarifying that public utilities with stated transmission rates are required to use some ratemaking method to appropriately account for excess or deficient accumulated deferred income taxes (“ADIT”) resulting from the Tax Cuts and Jobs Act (“TCJA”), which will be subject to review in the utility’s next rate case;
  • confirmed that, consistent with prior precedent, any excess or deficient ADIT will not result in a windfall to either shareholders or ratepayers of public utilities with stated transmission rates; and
  • denied Exelon Companies’ request for rehearing, reaffirming Order No. 864’s requirement that public utilities with transmission formula rates return to customers the full amount of excess ADIT resulting from TCJA.


Continue Reading FERC Reaffirms Obligations Requiring Public Utilities to Address Excess and Deficient Income Taxes Resulting from Tax Act Changes

On March 27, 2020, FERC denied NorthWestern Corporation’s (“NorthWestern” or the Company) petition for a declaratory order regarding Qualifying Facility (“QF”) avoided cost pricing during times of excess generation. In its petition, NorthWestern asked the Commission to determine that (1) when excess generation occurs, QF pricing should be set to zero, and (2) nothing in the Public Utilities Regulatory Policies Act (“PURPA”), including the rule against non-discrimination in avoided cost pricing, permits establishing a rate in excess of the utility’s avoided cost. In exercising its discretion to deny the petition, FERC did not reject NorthWestern’s request on the merits, but rather, stated that whether avoided energy costs can be zero depends on the facts of the case, and that NorthWestern had failed to provide sufficient information to support its request.

Continue Reading FERC Declines Opportunity to Weigh in on Zero Avoided Cost Pricing under PURPA

On March 25, 2020, the United States Court of Appeals for the Eighth Circuit (“Eighth Circuit”) upheld a Minnesota law granting a right of first refusal (“ROFR”) to incumbent electric transmission owners to construct, own, and maintain electric transmission lines connecting to their existing facilities. In its complaint brought before the United States District Court for the District of Minnesota (“District Court”), LSP Transmission Holdings, LLC (“LSP”) argued that Minnesota’s ROFR statute discriminates against out-of-state transmission developers and places an undue burden on interstate commerce in violation of the dormant Commerce Clause. The Eight Circuit affirmed the District Court’s dismissal of LSP’s complaint finding, de novo, that Minnesota’s ROFR provision does not violate the dormant Commerce Clause.
Continue Reading Eighth Circuit Upholds Minnesota’s Right of First Refusal Law

On March 17, 2020, FERC accepted revisions to the PJM Interconnection LLC (“PJM”) Open Access Transmission Tariff (“Tariff”) to establish enhanced procedures for compliance with the North American Electric Reliability Corporation (“NERC”) reliability standard CIP-024-2.  A majority of FERC Commissioners found that the Tariff revisions, captured in a new proposed Tariff Attachment M-4, appropriately balanced transparency obligations in transmission planning with the need to maintain strict confidentiality regarding the names, locations, and vulnerabilities of CIP-014-2 facilities.  In a separate opinion, Commissioner Glick dissented, in part, arguing that the proposal inappropriately categorized Attachment M-4 projects as a subset of “Supplemental Projects” under the Tariff and PJM Operating Agreement. Commissioner Glick argued that the proposal improperly subjected such projects to non-regional cost allocation, contrary to cost-causation and other transmission planning principles expressed in Commission Order Nos. 890 and 1000.

Continue Reading FERC Accepts Separate Planning Process for CIP-014 Mitigation Projects in PJM