On March 16, 2023, FERC found that Commonwealth Edison Company’s (“ComEd”) formula rate protocols under the PJM Interconnection, L.L.C. (“PJM”) Open Access Transmission Tariff (“OATT”) appear to be unjust and unreasonable and therefore directed ComEd to show cause as to why its formula rate protocols are just and reasonable or explain what changes to its formula rate protocols would remedy FERC’s concerns relating to the scope of participation, transparency, and challenge procedures.Continue Reading FERC Institutes Show Cause Proceeding on ComEd’s Formula Rate Protocols

On February 16, 2023, FERC approved two new extreme cold weather Reliability Standards—EOP-011-3 (Emergency Operations) and EOP-012-1 (Extreme Cold Weather Preparedness and Operations)—filed by the North American Electric Reliability Corporation (“NERC”) and aimed at implementing the recommendations resulting from a joint inquiry into the circumstances surrounding Winter Storm Uri. However, FERC also directed modifications to EOP-012-1 to address what FERC characterized as concerns over the Standard’s applicability, ambiguity, lack of objective measures and deadlines, and prolonged, indefinite compliance periods. The new Reliability Standards constitute the first phase of NERC’s effort to implement the recommendations resulting from the joint inquiry into the 2021 winter storm. NERC stated that it will address the remaining recommendations in the second phase of the project.Continue Reading FERC Approves Extreme Cold Weather Reliability Standards in Response to Winter Storm Uri

On January 23, 2023, FERC set New York Power Authority’s (“NYPA”) proposed revisions to its Formula Rate Template for hearing, including changing NYPA’s allocation methodology for administrative and general (“A&G”) costs to a multi-factor, modified Massachusetts method (“Massachusetts Method”). In doing so, FERC found that NYPA had not supported its claim that the Massachusetts Method is appropriate for its specific circumstances and organizational structure or how the change would affect rates. FERC also conditionally accepted proposed changes to NYPA’s Formula Rate Protocols implementing transmission rate incentives and cost containment mechanisms for the Smart Path Connect Project.Continue Reading FERC Sets NYPA Formula Rate Changes for Hearing, Including Proposed Template Utilizing “Massachusetts Method” for A&G Cost Allocation.

On December 16, 2022, FERC again rejected the Midcontinent Independent System Operator Inc. (“MISO”) proposal for Transmission Owners to self-fund Necessary Upgrades to connect Merchant High Voltage Direct Current (“HVDC”) transmission lines into MISO and addressed arguments on rehearing. Commissioner Danly dissented and Commissioner Christie concurred in separate statements. Chairman Glick did not participate.Continue Reading On Rehearing FERC Again Rejects MISO Proposal for Transmission Owners to Self-Fund Necessary Upgrades to Connect Merchant HVDC Lines

On November 28, 2022, various State Attorneys General intervened to protest (the “Protest”) a filing made by The Vanguard Group, Inc., along with its affiliated entities (collectively, “Vanguard”) requesting to extend the blanket waiver authorization granted by the Commission for acquisitions of voting securities of publicly traded utilities. Utah, Indiana, Alabama, Arkansas, Kentucky, Louisiana, Mississippi, Montana, Nebraska, Ohio, South Carolina, South Dakota, and Texas, by and through their Attorneys General (collectively, “the States”), requested that the Commission deny Vanguard’s application for blanket reauthorization and set the proceeding for hearing.Continue Reading Various State Attorneys General Urge FERC to Revoke Vanguard’s Blank Waiver to Acquire Utility Securities

On November 17, 2022, FERC issued three orders intended to address the reliability impacts of the rapid integration of inverter-based resources (“IBRs”), including solar, wind, fuel cell, and battery storage resources, on the Bulk-Power System (“BPS”). Specifically, in the first proceeding, FERC directed the North American Electric Reliability Corporation (“NERC”) to develop a plan to register the entities that own and operate IBRs so that NERC may monitor their compliance with NERC’s Reliability Standards. In the second proceeding, FERC issued a Notice of Proposed Rulemaking (“NOPR”) to direct NERC to develop new or modified Reliability Standards that address reliability gaps related to IBRs. Lastly, in the final proceeding, FERC approved revisions to two of NERC’s Reliability Standards.Continue Reading FERC Issues Proposals Regarding Inverter-Based Resources to Improve Grid Reliability

On November 2, 2022, FERC denied a complaint brought by the Iowa Coalition for Affordable Transmission (“ICAT”) alleging that ITC Midwest, LLC’s (“ITC Midwest”) capital structure, with a targeted 60%-40% equity-to-debt ratio, is unjust and unreasonable. FERC found that ICAT failed to demonstrate that ITC Midwest’s use of its actual capital structure to determine its equity ratio is unjust and unreasonable and that ICAT’s reliance on prior FERC precedent was misplaced. Given these findings, FERC declined to address ICAT’s arguments for a 53% equity ratio.Continue Reading FERC Denies Complaint Against ITC Midwest’s Capital Structure

On October 20, 2022, FERC issued orders in two separate proceedings that clarified how investor company appointments to public utility boards of directors can trigger additional FERC regulatory scrutiny. Specifically, in the first proceeding, FERC determined that such appointments established an “affiliate” relationship under FERC’s rules, while in the second proceeding, FERC determined that the appointments effectuated a “change in control” over the public utility that required prior FERC approval under Section 203 of the Federal Power Act (“FPA”).Continue Reading FERC Elaborates on How Board Membership Impacts “Affiliation” Determination Under FERC’s Rules

On September 16, 2022, a panel of three judges on the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued a decision in United Power, Inc. v. FERC affirming FERC’s exclusive jurisdiction over exit fees charged by Tri-State Generation and Transmission Association, Inc. (“Tri-State”), a Colorado generation and transmission cooperative.Continue Reading D.C. Circuit Holds that FERC Has Exclusive Jurisdiction Over Exit Fees Charged by a Colorado Electric Cooperative