On May 18, 2017, ISO New England Inc. (“ISO-NE”) and the New England Power Pool Participants Committee (together with ISO-NE, the “Filing Parties”) proposed revisions to the ISO-NE/New York Independent System Operator, Inc. (“NYISO”) Coordination Agreement (the “NE/NY Coordination Agreement”) and the term sheet indicating the price of emergency energy sold to Hydro-Quebec Transenergie (“HQTE”) by ISO-NE (the “HQTE EE Pricing Schedule”) to reflect changes that were implemented to ISO-NE’s Market Rule regarding emergency energy purchases and sales. The NE/NY Coordination Agreement specifies, among other things, the terms and conditions under which a control area will provide energy to the neighboring control area during emergency conditions. These terms and conditions include the price one control area will charge the other for providing emergency energy.
FERC to Convene Technical Conference on Natural Gas Index Liquidity and Transparency
On May 10, 2017, FERC issued notice that FERC staff will convene a technical conference on June 29, 2017 on natural gas index liquidity and transparency. Specifically, the purpose of the technical conference is to (1) understand the state of liquidity in physical natural gas markets; (2) explore trends in physical gas trading and price reporting and how the use of natural gas indices have evolved over time; (3) obtain industry views on the confidence in natural gas indices and price formation; and (4) consider whether there is a need to improve natural gas market liquidity and price reporting and, if so, how.
Commissioner Honorable Announces She Will Not Pursue Another Term
On April 28, 2017, Commissioner Colette Honorable announced that she will not pursue another term as a Commissioner at FERC after her current term expires June 30, 2017. Commissioner Honorable is serving her first term with the Commission. After she was appointed by President Obama, she was confirmed by the U.S. Senate on December 16, 2014 (see December 19, 2014 edition of the WER). Prior to joining FERC, Commissioner Honorable was the Chairman of the Arkansas Public Service Commission and also was president of the National Association of Regulatory Utility Commissioners.
D.C. Circuit Dismisses PGE Petition for Review over PURPA Purchase Obligation, Denies PáTu Petition on the Merits
On April 25, 2017, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) dismissed Portland General Electric Company’s (“PGE”) and PáTu Wind Farm LLC’s (“PáTu”) petitions for review of FERC’s orders finding that PGE must purchase all of the power delivered by PáTu pursuant to their power purchase agreement (“PPA”) under the Public Utility Regulatory Policies Act (“PURPA”), but that PGE was not required to use dynamic scheduling. In doing so, the D.C. Circuit held, among other things, that: (1) it lacked jurisdiction to review FERC’s resolution of PGE and PáTu’s PURPA dispute because the orders were merely declaratory; (2) circuit court review of PURPA section 210(h) enforcement actions occurs on appeal from district courts; and (3) FERC’s Federal Power Act (“FPA”)-based regulations cited to by PáTu in support of its claim that FERC should require PGE to use dynamic scheduling only apply to the transmission customer-transmission provider relationship, which was unlike PáTu and PGE’s relationship.
D.C. Circuit Backs FERC Removal of ISO-NE Right of First Refusal and Consideration of State Policies in Transmission Planning
On April 18, 2017, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) upheld FERC orders that (1) required ISO New England (“ISO-NE”) and its participating transmission owners (“TOs”) to remove right of first refusal (“ROFR”) provisions from their Transmission Operating Agreement (“TOA”) that granted incumbent transmission facilities the option to construct any new transmission facilities within their footprint; and (2) permitted ISO-NE to consider state policy goals in evaluating transmission needs during the Order No. 1000 transmission process. Of note, the D.C. Circuit affirmed FERC’s finding that the Mobile-Sierra presumption against abrogating negotiated contract provisions was overcome because the TOA’s existing ROFR provisions “severely harm the public interest.”
Potomac Economics Requests That FERC Eliminate PJM’s Pseudo-Tie Requirement for External Capacity Performance Resources
On April 6, 2017, Potomac Economics, Ltd. (“Potomac Economics”), the market monitor for the Midcontinent Independent System Operator, Inc. (“MISO”), New York Independent System Operator, Inc. (“NYISO”), and ISO New England Inc., requested that FERC eliminate PJM Interconnection, L.L.C.’s (“PJM”) requirement that external Capacity Performance Resources must be pseudo-tied to PJM. In doing so, Potomac Economics argued that, among other issues, the requirement has caused congestion management issues for MISO and could impose similar and more significant costs on NYISO.
Trump Executive Order to Rescind CEQ GHG Guidance, Withdraw Social Cost of Carbon Analysis, and Review Clean Power Plan
On March 28, 2017, President Donald Trump signed an Executive Order that, among other things, (1) directed the Council on Environmental Quality (“CEQ”) to rescind its guidance for federal departments and agencies on the consideration of greenhouse gas (“GHG”) emissions in National Environmental Policy Act (“NEPA”) reviews; (2) withdrew documents implementing the Social Cost of Carbon tool for regulatory impact analysis; and (3) directed the Administrator of the Environmental Protection Agency (“EPA”) to review and determine whether to withdraw or revise the Clean Power Plan, which several agencies were in the process of implementing (see January 29, 2016 edition of the WER).
Federal District Court Dismisses Suit Accusing FERC of Pro-Industry Bias
On March 22, 2017, the U.S. District Court for the District of Columbia (“District Court”) dismissed a complaint by the Delaware Riverkeeper Network (“DRN”) alleging that its members had been deprived of constitutional due process because FERC is unable to make unbiased determinations on the issuance of natural gas pipeline certificates of public convenience and necessity (“CPCNs”). Specifically, DRN argued that because FERC’s funding mechanism requires FERC to recover its budget through a charge to regulated natural gas companies, it has a pro-industry bias.
EKPC’s Application Requesting FERC Terminate PURPA PPA Requirement Deemed Denied Due to Lack of Quorum
On March 10, 2017, FERC Secretary Kimberly D. Bose (“Secretary Bose”) issued a notice that East Kentucky Power Cooperative, Inc.’s (“EKPC”) application to terminate its requirement pursuant to the Public Utility Regulatory Policies Act of 1978 (“PURPA”) to purchase electricity from qualifying facilities was deemed denied without prejudice due to FERC’s lack of quorum (see February 21, 2017 edition of the WER).
Reports Suggest President Trump Plans to Appoint McIntyre as FERC Chairman, Chatterjee and Powelson as FERC Commissioners
According to various reports, President Donald Trump plans to appoint Kevin McIntyre as FERC Chairman, and Neil Chatterjee and Rob Powelson as FERC Commissioners, to fill the three vacant Commissioner seats at FERC. All three potential appointees are Republicans, whereas the current Commissioners—Acting Chairman Cheryl LaFleur and Commissioner Collette Honorable—are Democrats.