Executive Summary of FERC Order No. 872: Qualifying Facility Rates and Requirements Implementation Issues Under the Public Utility Regulatory Policies Act of 1978 [1]

I. Overview

On July 16, 2020, the Federal Energy Regulatory Commission (FERC or the Commission) issued Order No. 872, the Commission’s final order revising its regulations implementing Sections 201 and 210

On July 7, 2020, the PJM Interconnection, L.L.C. (“PJM”) Planning Committee held an informational session on its State Agreement Approach, a transmission planning process that allows one or more states to request the studying and funding of new transmission projects within the PJM footprint to address identified public policy needs. The State Agreement Approach could help accommodate the anticipated growth in offshore wind generation by allowing states to submit transmission expansion or extension projects in the Regional Transmission Expansion Plan (“RTEP”) so long as the states agree to assume responsibility for project costs.
Continue Reading PJM Planning Committee Holds Stakeholder Meeting About Process for States to Fund New Transmission Projects

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 1, 2020, FERC issued an order on remand from the United States Court of Appeals for the District of Columbia Circuit (the “D.C. Circuit”) directing the Bonneville Power Administration (“Bonneville”) to return to Chehalis Power Generating, L.P. (“Chehalis”) refunded payments for reactive power supplied to Bonneville from August 1, 2005 through September 30, 2005. While FERC declined to require Bonneville to return the entire refund amount requested by Chehalis, it did provide interest calculated according to FERC’s interest regulation.
Continue Reading FERC Directs Bonneville to Pay Partial Refunds to Chehalis in Drawn-Out Reactive Power Dispute

On May 21, 2020, FERC issued three orders denying, or denying in part, complaints against PJM Interconnection, L.L.C. (“PJM”), finding that the complainants failed to demonstrate that PJM’s pseudo-tie rules are unjust, unreasonable, or unduly discriminatory or that such rules had been applied in a manner inconsistent with the PJM Tariff. With respect to PJM’s market-to-market flowgate test and its electrical distance requirement, however, FERC granted the complaints in part, finding that PJM’s Tariff fails to provide an open and transparent process regarding PJM’s administration of those requirements.
Continue Reading FERC Finds PJM Tariff Lacks Transparency for Pseudo-Tied Resources

On May 1, 2020, the U.S. Department of Energy (“DOE”) issued a Notice of Proposed Rulemaking (“NOPR”) to update its National Environmental Policy Act (“NEPA”) implementing regulations concerning applications to import to, or export from, liquid natural gas (“LNG”) terminals. In particular, DOE has previously determined that the transportation of natural gas by marine vessels normally does not pose the potential for significant environmental impacts, and accordingly, exports of LNG should be considered a “categorical exclusion” from NEPA review.  Comments are due June 1, 2020. 
Continue Reading DOE Proposes to Limit NEPA Review for LNG Export Applications

On May 1, 2020, FERC accepted two agreements—an unexecuted Network Integration Transmission Service Agreement (“NITSA”) and a Network Operating Agreement (“NOA”) (together, “Agreements”)—filed by Southwest Power Pool Inc. (“SPP”) to be effective February 1, 2020, subject to the outcome of pending rehearing proceedings. Consistent with FERC’s prior notice policies, SPP had requested waiver of the 60-day prior notice requirement to permit the Agreements to become effective February 1, 2020. While Commissioner Danly concurred with the decision to grant an effective date prior to the filing date, he noted that this practice appears to run afoul of the rule against retroactive ratemaking and urged FERC to reexamine its practice.
Continue Reading Short Danly Concurrence May Signal Big Changes to FERC Waiver Policies

On April 24, 2020, FERC largely upheld an earlier-issued order imposing additional transparency obligations on Midcontinent Independent System Operator, Inc. (“MISO”), Southwest Power Pool, Inc. (“SPP”), and PJM Interconnection, L.L.C. (“PJM”) (collectively, “RTOs”) regarding the RTOs’ Affected Systems study processes. FERC declined to require holistic alignment of the RTOs’ interconnection study processes, but clarified that, in subsequent compliance filings, the Commission will scrutinize whether each RTO applies the Energy Resource Interconnection Service (“ERIS”) or Network Resource Interconnection Service (“NRIS”) modeling standards in a just and reasonable manner.
Continue Reading FERC Denies Rehearing, Partially Grants Clarification on MISO, SPP, and PJM Affected System Study Coordination Order

On April 22, 2020, FERC accepted tariff revisions from Southwest Power Pool, Inc. (“SPP”) to comply with a October 17, 2019 order accepting in part SPP’s Order No. 841 compliance proposal (the “October Order”). FERC also directed SPP to submit a further compliance filing to specifically exempt run-of-the-river hydroelectric, wind, and solar resources from the continuous minimum run-time requirement under SPP’s Resource Adequacy tariff provisions and Planning Criteria.
Continue Reading FERC Accepts SPP Resource Adequacy Compliance Filing, Subject to Further Compliance