On November 18, 2021, FERC issued a Notice of Inquiry (“NOI”) inviting comments on reactive power capability compensation and market design.  The NOI highlights various issues with reactive power filings that have resulted from significant changes to electric markets and the generation resource mix, including the potential for overcompensation.  The NOI seeks comment on various aspects of reactive power compensation, as well as potential alternative approaches that could be used to develop reactive power capability revenue requirements.  
Continue Reading FERC Issues Notice of Inquiry on Reactive Power

On October 26, 2021, FERC issued an order accepting a California Independent System Operator Corporation (“CAISO”) tariff filing designed to improve CAISO’s markets by optimizing the performance of storage and demand response resources. CAISO proposed three distinct tariff revisions: (1) creating biddable state of charge parameters for energy storage; (2) applying market power mitigation to energy storage; and (3) enabling demand response resources to specify maximum daily run times.
Continue Reading FERC Accepts CAISO Proposal Regarding Storage and Demand Response Resources

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 23, 2021, FERC issued an order rejecting a unilateral offer of settlement regarding the compensation for reactive power by Panda Hummel Station LLC (“Panda”) under Schedule 2 of the PJM Interconnection LLC (“PJM”) OATT, remanding the proceeding to the Chief Administrative Law Judge (“Chief ALJ”) to resume hearing procedures.  FERC found Panda’s proposed methodology flawed and inconsistent with FERC policy. 
Continue Reading FERC Rejects Reactive Compensation Settlement, Finding Methodology Flawed

On September 7, 2021, FERC staff issued a whitepaper to frame discussions ahead of two technical conferences planning to discuss potential ancillary services reforms.  The whitepaper summarizes approaches that RTOs/ISOs are currently evaluating to reform energy and ancillary services markets to address the need for greater operational flexibility, including increasing shortage prices, procuring higher quantities of existing “traditional” ancillary services products (like an operating reserve demand curve), and creating new ancillary services products.
Continue Reading FERC Staff Issues Whitepaper on Energy and Ancillary Services Market Reforms Ahead of Technical Conferences

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 issued an order providing guidance on the means by which sellers in the Western Electricity Coordinating Council (“WECC”) market can demonstrate that sales made above the $1,000/MWh soft price cap were just and reasonable.  This guidance has been provided for sellers with pending justification filings, which have been granted 30 days to amend or supplement their filings accordingly, as well as any sellers making prospective justification filings.
Continue Reading FERC Provides Guidance on Justification Filings for Sales Above the WECC Soft Price Cap

On May 19, 2021, FERC issued an order dismissing requests for rehearing of an order directing briefing (“Briefing Order”) about the operation of Algonquin Gas Transmission, LLC’s  Atlantic Bridge project after finding that requesting parties were not “aggrieved” under court precedent interpreting Section 19(a) of the Natural Gas Act (“NGA”).  Commissioner James Danly wrote separately in dissent explaining his view that FERC’s request for briefing means that the determinations made in the Atlantic Bridge certificate order are no longer settled and that the certificate order is in fact no longer final.  
Continue Reading FERC Maintains Order Directing Briefing Long After Authorizing Gas Facilities to Begin Operations, Prompting Dissent from Commissioner Danly

On May 4, 2021, FERC issued Order No. 871-B, clarifying that the rule established in Order No. 871, which precludes FERC from authorizing natural gas pipeline companies to proceed with construction of approved pipeline projects, only applies until the earlier of either (a) the date that a qualifying rehearing request is no longer pending before FERC or (b) 90 days following the date that a qualifying request for rehearing may be deemed denied by operation of law. FERC also limited the application of this rule to requests for rehearing that raise issues reflecting opposition to project construction, operation, or need. Finally, FERC announced a general policy to stay Natural Gas Act (“NGA”) section 7 certificate orders during the rehearing period and pending resolution of any timely requests for rehearing. Commissioner James Danly dissented, arguing that the need for Order No. 871 is obviated by further developments on appeal of FERC’s practice of indefinite tolling orders before the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) and that presumptively staying pipeline project construction is contrary to the NGA and is “bad policy.” Commissioner Mark Christie concurred with Order No. 871-B.

Continue Reading FERC Revises Policy on Authorizing Pipelines to Commence Construction Pending Requests for Rehearing of Certificate Orders