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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 January 20, 2022, FERC granted Adelphia Gateway, LLC’s (“Adelphia”) request for an 18-month extension of time, until June 20, 2023, to construct and place into service the proposed Adelphia Gateway Project. The order also announces FERC’s new policy on interventions in extension of time proceedings for pipeline projects. The new policy allows interventions in extension of time proceedings regardless of intervenor status in the underlying certificate docket, but untimely motions to intervene in the extension of time proceedings will still be reviewed under the FERC’s criteria for late-filed interventions. Commissioners James Danly and Mark C. Christie issued separate partial dissents arguing against the change in policy for interventions in extension of time proceedings.
Continue Reading FERC Announces New Policy on Interventions in Extension of Time Proceedings for Gas Pipeline Certificates

On December 17, 2021, FERC affirmed a Public Utility Regulatory Policies Act of 1978 (“PURPA”) qualifying facility (“QF”) self-certification for the Shields Valley Solar Facility (“Shields Valley”), a hybrid solar and battery project relying on inverters to limit its net power production capacity.  In doing so, FERC reiterated its finding in its Broadview Solar rehearing order that a QF owner can use MW net output at the point of interconnection, taking into account inverter losses and other components to produce electricity, in determining whether a facility meets the 80 MW statutory maximum for QF status.  Commissioner James Danly wrote separately in dissent explaining his view that Shields Valley plainly exceeds the statutory capacity limit for a QF.
Continue Reading FERC Affirms QF Self-Certification for a Hybrid Solar and Battery Project, Prompting Dissent from Commissioner Danly

On November 26, 2021, FERC issued a notice stating that it would not review a Notice of Penalty filed by the North American Electric Reliability Corporation (“NERC”) against Ohio Valley Electric Corporation (“OVEC”). FERC’s November 26 notice effectively approves a $300,000 settlement between OVEC and the regional reliability entity, ReliabilityFirst Corporation (“RF”), for violations of NERC reliability standards FAC-003-4 R2 and FAC-003-4 R6, which address vegetation management. The settlement followed a 4.5-hour outage to one of OVEC’s 345 kV transmission lines in September 2018 that resulted when contact with a cedar tree growing in close proximity tripped the line out of service. OVEC neither admitted nor denied the violations, but agreed to the assessed $300,000 penalty.
Continue Reading FERC Approves $300,000 Settlement Between ReliabilityFirst and Ohio Valley Electric Corp. for Violations of NERC Reliability Standards

On November 16, 2021, staff from FERC, the North American Electric Reliability Corporation (“NERC”), and certain Regional Reliability Entities issued a final report on the 2021 winter storms that severely impacted the bulk electric systems in Texas and the South Central United States. The report recommended, among other things, strengthening regulations and the grid for cold weather preparedness and enhancing coordination between natural gas and electric systems to prevent winter blackouts.
Continue Reading FERC and NERC Issued Final Report on the 2021 Winter Freeze

On October 21, 2021, FERC denied multiple complaints against Panhandle Eastern Pipe Line Company, LP (“Panhandle”) regarding its refusal to waive all penalties associated with Operational Flow Orders (“OFO”) issued during the extreme Storm Uri weather event in February 2021. In doing so, FERC upheld penalties levied against Panhandle customers who argued they were forced to use the pipeline contrary to the OFO order to ensure reliable service for their own end-use customers.
Continue Reading FERC Rejects Attempts to Waive $75 Million in Pipeline Penalties During Storm Uri

On September 2, 2021, FERC accepted a new Market Seller Offer Cap (“MSOC”) in the PJM Interconnection, L.L.C. (“PJM”) capacity market that will require all capacity market sellers that fail PJM’s market structure test and offer above $0/MW-day to, at their election, obtain approval for their offer from PJM’s Market Monitor or utilize a default MSOC equal to the resource’s applicable net Avoidable Cost Rate (“ACR”)—i.e., its annual operating costs—less the resource’s net energy and ancillary services (“E&AS”) revenues (“ACR Proposal”). Commissioner James Danly issued a separate dissenting statement in which he argued that the ACR Proposal will lead to over-mitigation, in part because it will require the Market Monitor to review a higher number of capacity offers than under PJM’s previously-effective MSOC. In a compliance filing on FERC’s September 2 order, PJM asked for a 55-day delay of its upcoming capacity auction (currently scheduled to begin December 1, 2021) in order to allow time for the Market Monitor to perform the required unit-specific review under the new MSOC. As of this writing, FERC has not yet acted on PJM’s request.
Continue Reading FERC Accepts Replacement Offer Cap for PJM Capacity Markets; PJM Requests Capacity Auction Delay to Implement New Offer Cap

On August 27, 2021, in Oklahoma Gas and Electric Company v. FERC, Case No. 20-1062, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) denied petitions for review of FERC’s orders involving the Southwest Power Pool, Inc. (“SPP”) process for reimbursing certain of its customers for transmission system upgrades that those customers paid for pursuant to Attachment Z2 of SPP’s Open Access Transmission Tariff (“Tariff”). The D.C. Circuit’s order upheld FERC’s decision to deny retroactive waiver of Section I.7.1 of SPP’s Tariff—which provides that any billing adjustments must be made within one year after the charges were incurred—thus preventing SPP from implementing the Attachment Z2 revenue crediting process retroactively from 2008-2016. The court also upheld FERC’s orders requiring SPP to refund any charges it previously collected for the 2008-2016 period. Basing its decision on the filed rate doctrine, the court concluded that “the filed rate requirements are a formidable obstacle for entities regulated by FERC that wish to obtain retroactive relief from the terms of their tariff.”
Continue Reading D.C. Circuit Denies Petitions for Review; Holds that the Filed Rate Doctrine Prevents SPP from Reimbursing Customers for Historical Transmission Upgrade Costs

On June 29, 2021, the Supreme Court of the United States ruled that a certificate of public convenience and necessity issued by FERC under section 7 of the Natural Gas Act (“NGA”) authorizes a private company to exercise eminent domain to condemn state-owned property.  In particular, the opinion holds that states cannot claim sovereign immunity from condemnation lawsuits filed by certificated pipelines against the state in order to take public land to construct, own, and operate an interstate gas pipeline project.    
Continue Reading Supreme Court Rules that PennEast, Gas Pipelines May Condemn State-Owned Land

On June 17, 2021, FERC set aside its previous decision in Order No. 2222-A that allowed state regulatory authorities to prohibit demand response resources from participating in distributed energy resource (“DER”) aggregations in wholesale energy markets when the DER aggregation contains only demand response resources. As a result, upon the effective date of Order No. 2222-B, state regulatory authorities will be able to prohibit demand response resources from participating in all wholesale DER aggregations. However, FERC also stated that it will further consider the issue in the Notice of Inquiry (“NOI”) proceeding established in Order No. 2222-A to consider whether to revise its regulations to remove the demand response opt-out established in Order Nos. 719 and 719-A. FERC also extended the comment period in the NOI proceeding to ensure an adequate opportunity for interested parties to comment on these issues. Finally, Order No. 2222-B clarified the appropriate restrictions to avoid double counting of services and the compensation of demand response resources that participate in DER aggregations. Commissioners Neil Chatterjee and James Danly wrote separate concurring opinions; Commissioner Mark Christie concurred in part and dissented in part.
Continue Reading FERC Issues Order No. 2222-B, Setting Demand Response Opt-Out for Further Consideration

On May 20, 2021, FERC issued a Show Cause Order directing GreenHat Energy, LLC (“GreenHat”) and its owners to show why they did not violate the Federal Power Act, FERC’s regulations, the PJM Interconnection, L.L.C. (“PJM”) Tariff, and the PJM Operating Agreement by manipulating PJM’s Financial Transmission Rights (“FTR”) market, generating $13 million in unjust profits and imposing $179 million in losses on PJM members. FERC also directed GreenHat and its owners to file an answer with FERC within 30 days showing why they should not be required to disgorge $13 million in unjust profits, plus interest, and to pay civil penalties totaling $229 million. FERC’s order is accompanied by a report from FERC’s Office of Enforcement (“OE Report”). Commissioner James Danly issued a separate concurring statement.
Continue Reading FERC Issues Show Cause Order Directing GreenHat Energy to Respond to Market Manipulation Claims