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Russell Kooistra counsels an array of energy companies on various issues related to natural gas and electricity markets. Russell uses his in-depth knowledge of Federal Energy Regulatory Commission (FERC) policy and regulations to advise clients on complex regulatory matters.

On July 27, 2020, President Trump announced his intent to nominate Mark Christie (Republican) and Allison Clements (Democrat) to fill the vacant Commissioner seats at FERC. Mr. Christie would replace the departing Commissioner Bernard McNamee—whose term expired on June 30, 2020 but who stayed at FERC past the expiration of his term to maintain a quorum (see January 28, 2020 edition of the WER)—while Ms. Clements would fill the remaining vacant seat. If both nominees are sworn in, the Commission would consist of three Republicans (Chairman Neil Chatterjee, Commissioner James Danly, and Mr. Christie) and two Democrats (Commission Richard Glick and Ms. Clements).
Continue Reading President Trump Nominates Mark Christie and Allison Clements as FERC Commissioners

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 July 6, 2020, FERC moved for a ninety-day stay of the United States Court of Appeals for the District of Columbia Circuit’s (“D.C. Circuit’s”) mandate in Allegheny Defense Project v. FERC. That decision upset FERC’s long-used practice of granting itself more time to consider requests for rehearing of its orders by issuing tolling orders (see July 1, 2020 issue of the WER). Although the decision was issued in the context of a pipeline proceeding under the Natural Gas Act (“NGA”), FERC’s motion noted that the impact of the D.C. Circuit’s decision extends to all requests for rehearing under the NGA, and presumably to those under the Federal Power Act as well. In support of its motion, FERC explained that over the past fifty years, tolling orders have been a critical tool to help manage its large case load and bring its expertise to bear on complex technical matters before they are presented to the courts of appeals. FERC stated that a stay of the court’s mandate would afford it time to consider how to revise its processes and allocate its resources in the absence of tolling orders. FERC also argued that a stay would give it and the Solicitor General additional time to consider whether to petition the Supreme Court for a writ of certiorari, though it noted that the ultimate decision of whether to petition the Supreme Court lies with the Solicitor General and the Department of Justice.
Continue Reading FERC Moves to Stay DC Circuit’s Tolling Order Decision

On June 22, 2020, FERC issued a declaratory order confirming its view that it shares jurisdiction with the United States Bankruptcy Court (“Bankruptcy Court”) over transportation agreements between ETC Tiger Pipeline, LLC (“ETC Tiger”) and Chesapeake Energy Marketing L.L.C. (“Chesapeake”). As a result, aside from obtaining approval from the Bankruptcy Court to reject its contracts with ETC Tiger, Chesapeake must seek a determination from FERC as to whether a filed rate may be modified or abrogated under the Natural Gas Act (“NGA”).
Continue Reading FERC Asserts Concurrent Jurisdiction with Bankruptcy Court over Natural Gas Transportation Service Agreements

On June 4, 2020, President Trump issued an Executive Order directing federal agencies to take all reasonable measures to speed infrastructure investments and requiring the heads of all federal agencies to identify projects that can be exempted from the requirements of the National Environmental Policy Act (“NEPA”), Endangered Species Act (“ESA”), or the Clean Water Act (“CWA”), pursuant to the emergency procedures within each act, among other requirements.
Continue Reading President Trump Issues Executive Order Directing the Expedition of NEPA Reviews

On June 9, 2020, FERC ordered amendments to its regulations to prohibit natural gas projects authorized under Sections 3 and 7 of the Natural Gas Act (“NGA”) from commencing construction activities until after (i) the deadline for filing a request for rehearing has lapsed without a request being filed, or (ii) FERC has acted upon the merits of any timely-filed request for rehearing (“Order No. 871”). The new regulation will become effective, without any opportunity to file comments, 30 days after the Final Rule is published in the Federal Register. Because FERC’s orders on rehearing sometimes take several months, and in some cases more than a year to be issued, both liquefied natural gas (“LNG”) and natural gas pipeline projects approved by FERC could be significantly delayed from commencing construction as a result of Order No. 871.
Continue Reading FERC to Block LNG, Pipeline Project Construction Until After Rehearing Process is Complete

On May 20, 2020, FERC issued a notice that it will convene a Commissioner-led technical conference on Wednesday and Thursday, July 8–9, 2020 from approximately 9:00 a.m. to 5:00 p.m. Eastern time each day “to consider the ongoing, serious impacts that the emergency conditions caused by COVID-19 are having on various segments of the United States’ energy industry.” The notice stated that the technical conference will explore potential long-term impacts on FERC-regulated entities to ensure the continued efficient functioning of energy markets, electric transmission, transportation of natural gas and oil, and reliable operation of energy infrastructure, while also protecting consumers.
Continue Reading FERC to Convene Technical Conference on Impacts of COVID-19 on the Energy Industry

On May 21, 2020, FERC found PJM Interconnection, L.LC.’s (“PJM”) existing reserve market design to be unjust and unreasonable and established a replacement market design that includes, among other elements, a downward-sloping Operating Reserve Demand Curve (“ORCD”) and a $2,000/MWh price ceiling. In addition, FERC found that the changes to PJM’s reserve market would render PJM’s existing methodology for calculating its energy and ancillary services offset (“E&AS Offset”) unjust and unreasonable, and directed PJM to implement a forward-looking E&AS Offset on compliance. In a separate dissenting statement, Commissioner Richard Glick stated that PJM’s proposal would result in over procurement of reserves and impose billions of dollars of additional costs on consumers. Pointing to FERC’s recent orders accepting PJM’s Variable Resource Requirement Curve (see April 23, 2020 edition of the WER) and Minimum Offer Price Rule (see April 22, 2020 edition of the WER), Commissioner Glick characterized the May 21 order as the latest installment in a series of decisions prioritizing high prices over efficient markets.
Continue Reading FERC Orders Changes to PJM Reserve Market Design and E&AS Offset Calculation

On April 30, 2020, FERC granted Tennessee Gas Pipeline Company, L.L.C.’s (“Tennessee Gas”) petition for declaratory order that requested authorization to charge market-based rates for its proposed firm flexible storage (“FS Flex”) service. In reaching its decision, FERC reviewed whether Tennessee Gas held significant market power in the relevant product and geographic markets where the FS Flex service was to be offered, with the geographic market including east Texas, Louisiana, Mississippi, and Alabama (“Gulf Coast Production Area”). FERC found that Tennessee Gas’s small market share and market concentration in the relevant markets adequately demonstrated that Tennessee Gas lacked market power and that there were no other factors indicating that Tennessee Gas would be able to exercise market power when providing the FS Flex service.
Continue Reading FERC Grants Tennessee Gas Market-Based Rate Authority for Proposed FS Flex Service

On April 27, 2020, FERC granted renewable energy company Goldman Sachs Renewable Power Marketing, LLC (“GSRPM”) authority to make wholesale sales of energy, capacity, and ancillary services at market-based rates. However, FERC also found GSRPM to be affiliated with the investment bank Goldman Sachs Group, Inc. (“Goldman Sachs”). On the basis of that finding, FERC concluded that GSRPM would be subject to enhanced reporting requirements as a Category 2 Seller in the northwest region of the United States. The order reflects FERC’s increasing interest in the disclosure of corporate structure for purposes of affiliation determinations in market-based rate applications.
Continue Reading FERC Finds Renewable Project Company to be Affiliated with Goldman Sachs Investment Bank for Purposes of Market-Based Rate Analysis