On July 16, 2020, FERC dismissed a petition for declaratory order by the New England Ratepayers Association (“NERA”) that asked FERC to assert jurisdiction over net metering, finding that the petition failed to identify a specific controversy or harm that warranted a generic response from FERC. NERA’s petition had requested that FERC declare: (1) that all flows of electricity from behind-the-meter generators under state net metering programs back to the interconnected utility are wholesale sales subject to FERC’s exclusive jurisdiction, and (2) such sales should be priced in accordance with the requirements of the Federal Power Act (“FPA”) or the Public Utility Regulatory Policies Act (“PURPA”). Commissioners Bernard L. McNamee and James Danly issued separate concurring opinions, noting that though NERA’s petition was procedurally unsound, the issues raised could be addressed on the merits in a different proceeding.

Continue Reading FERC Declines Request to Assert Jurisdiction over Net Metering

On June 18, 2020, FERC denied rehearing, but granted partial clarification, of a 2019 order addressing certain market power mitigation reforms proposed by the California Independent System Operator Corporation (“CAISO”). In particular, FERC again rejected CAISO’s “Net Export Limit” proposal to enhance local market power mitigation in the western energy imbalance market (“EIM”). As FERC reiterated in its order, the Net Export Limit proposal could allow EIM resource owners to limit dispatch during periods of market power mitigation, resulting in unjust and unreasonable market outcomes.
Continue Reading FERC Denies CAISO’s Rehearing Request, and Grants Limited Clarification, Regarding CAISO’s EIM Net Export Limit Proposal

On June 18, 2020, FERC issued an order directing New Fortress Energy LLC (“New Fortress Energy”) to show cause, within 30 days, why the liquified natural gas (“LNG”) handling facilities it constructed adjacent to the San Juan Combined Cycle Power Plant in San Juan, Puerto Rico, are not subject to FERC’s jurisdiction under section 3 of the Natural Gas Act (“NGA”).

Continue Reading New Fortress Energy Directed to Show Cause Why Its LNG Facility is Not Subject to FERC Jurisdiction

On May 29, 2020, FERC accepted PJM Interconnection, L.L.C.’s (“PJM”) and PJM Settlement, Inc.’s (“PJM Settlement”) proposed revisions to its Open Access Transmission Tariff (“Tariff”) and the Amended and Restated Operating Agreement establishing updated credit risk evaluation criteria and processes for market participants in PJM. These revisions, which enhance PJM’s rules for evaluating and managing the posed credit risk of current and potential PJM market participants, were developed in response to GreenHat Energy LLC’s (“GreenHat”) 2018 default on a large portfolio of Financial Transmission Rights (“FTRs”). The proposed revisions went into effect on June 1, 2020, as requested. Commissioners James Danly and Richard Glick issued concurring opinions.

Continue Reading FERC Accepts PJM’s Credit Risk Evaluation Proposal After GreenHat’s 2018 Default

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