On November 12, 2020, FERC accepted two compliance filings submitted by PJM Interconnection, L.LC. (“PJM”) in which PJM proposed updates to its reserve market and forward-looking energy and ancillary services offset (“E&AS Offset”) used in PJM’s capacity market. Commissioner Glick filed a partial dissent, stating that, while he agreed with the implementation of the E&AS Offset, the order was otherwise implementing an unjust and unreasonable rate.
Continue Reading FERC Largely Accepts PJM Reserve Market Compliance Filings

On October 30, 2020, FERC rejected ISO New England Inc.’s (“ISO-NE”) proposed revisions to the ISO-NE tariff to resolve long-term fuel security concerns in the New England region. FERC found that ISO-NE’s proposed solutions would substantially increase consumer costs without meaningfully improving fuel security in the region, and offered guidance on how ISO-NE might develop a just and reasonable approach to address its fuel security concerns.
Continue Reading FERC Rejects ISO-NE’s Long-Term Fuel Security Proposal

On October 26, 2020, FERC issued an order on rehearing sustaining its previous order in which it accepted PJM Interconnection, L.L.C.’s (“PJM”) proposed revisions to the PJM Operating Agreement related to the Regional Transmission Expansion Plan (“RTEP”) that allow project developers to submit voluntary binding cost commitment proposals and that specify PJM’s methodology for considering the cost-effectiveness of such proposals. FERC disagreed with arguments raised by certain PJM transmission owners that the revisions would usurp FERC’s authority, that they lacked specificity, and that the revisions were not submitted in compliance with the procedural requirements of PJM’s Operating Agreement.
Continue Reading FERC Affirms PJM’s Voluntary Binding Cost Commitment Requirements Related to RTEP

On October 15, 2020, FERC issued a notice of proposed policy statement (“Proposed Policy Statement”) with proposed guidance for oil pipeline carriers to demonstrate through tariff filings or declaratory order petitions that the rates and terms in long-term contracts with affiliate shippers (“Affiliate Contracts”) are just, reasonable, and not unduly discriminatory under the Interstate Commerce Act (“ICA”).
Continue Reading FERC Proposes Guidance on Oil Pipeline Carrier Contracts with Affiliates

On October 15, 2020, FERC issued an order sustaining, with modifications, its previous denial of a complaint that claimed New York Independent System Operator, Inc.’s (“NYISO”) buyer-side market (“BSM”) power mitigation rules were unjust, unreasonable and unduly discriminatory. FERC upheld its previous determination that the application of BSM rules to electric storage resources (“ESRs”) does not inappropriately interfere with state policies and that the complainants failed to show that NYISO’s existing rate was unjust and unreasonable because it over-mitigates electric storage resources. FERC’s order sparked a dissent from Commissioner Glick who argued that the majority’s order was arbitrary and capricious, and that BSM power mitigation should only apply to buyers with market power.
Continue Reading FERC Upholds Prior Decision Applying NYISO Buyer-Side Market Power Mitigation Rules to Electric Storage Resources

On October 7, 2020, the United States Court of Appeals for the Ninth Circuit (“Ninth Circuit”) vacated, as moot, two FERC orders asserting concurrent jurisdiction to review the disposition of certain Pacific Gas & Electric Corporation (“PG&E”) power purchase agreements (“PPAs”) that PG&E sought to reject through bankruptcy. In a brief memorandum decision, a three-judge Ninth Circuit panel explained that the orders had become moot when the bankruptcy court confirmed a reorganization plan that had PG&E assume, rather than reject, the PPAs. In the same decision, the Ninth Circuit vacated a related bankruptcy court order in which the bankruptcy court determined that FERC does not have concurrent jurisdiction with the bankruptcy courts over the rejection of such PPAs. In vacating the three orders, the Ninth Circuit expressed no opinion on the merits of the consolidated appeal, and left open the question of whether FERC and the bankruptcy courts have concurrent jurisdiction over wholesale power contracts in Chapter 11 bankruptcy proceedings.
Continue Reading Ninth Circuit Vacates FERC and Bankruptcy Court Orders, Avoiding Jurisdictional Dispute Over PPAs in Bankruptcy

On September 29, 2020, in response to a request for rehearing, FERC issued an order modifying the discussion in, while sustaining the result of, a prior order finding that PJM Interconnection, L.L.C. (“PJM”) was not in compliance with three of the five criteria of Order No. 1000’s immediate need reliability project exemption (“Immediate Need Exemption”). Concurrently, in a separate order, FERC modified, while sustaining the result of, an order where it found that ISO New England Inc.’s (“ISO-NE”) implementation of the Immediate Need Exemption was not unjust, unreasonable, or unduly discriminatory or preferential.
Continue Reading FERC Sustains PJM and ISO-NE Immediate Need Reliability Project Exemption Orders

On September 17, 2020, FERC issued a final rule (“Order No. 2222”) amending its regulations to require Regional Transmission Organizations and Independent System Operators (“RTO/ISO”) to revise their tariffs to facilitate the participation of distributed energy resource (“DER”) aggregations in organized wholesale electric markets. In the order, FERC found current RTO/ISO DER aggregation market rules to be unjust and unreasonable, established new definitions for DERs and DER aggregations, and detailed RTO/ISO tariff revisions that will allow DER aggregations to participate in RTO/ISO markets. Commissioner Danly dissented from the order, contending that FERC was overextending its jurisdictional authority and that, through the order, FERC was imprudently encouraging “resource development by fiat.” RTO/ISOs are required to file the tariff changes needed to comply with Order No. 2222 within two hundred seventy (270) days of publication of the order in the Federal Register.
Continue Reading FERC Opens Door for Participation of Distributed Energy Resource Aggregations in Wholesale Electric Markets

On September 9, 2020, FERC issued a Notice of Proposed Rulemaking (“NOPR”) proposing updated regulations that will establish a one-year period for state agencies or other certifying authorities (“Certifying Agencies”) to act on requests for water quality certifications related to sections 3 and 7 of the Natural Gas Act (“NGA”). Under the Clean Water Act (“CWA”), should a Certifying Agency fail to act on such a request within one year, they are deemed to have waived the certification requirements.
Continue Reading FERC Proposes to Modify Water Quality Certification Waiver Period for Natural Gas Projects

On July 17, 2020, FERC issued three orders relating to the executed cost-of-service agreement (“Mystic Agreement”) among Constellation Mystic Power, LLC (“Mystic”), Exelon Generation Company, LLC (“Exelon”), and ISO New England Inc. (“ISO-NE”).  The Mystic Agreement provides for cost-of-service compensation to Mystic for the continued operation of two gas-fired generating units.  In the first two orders, FERC addressed requests for rehearing of its 2018 orders accepting the Mystic Agreement (the “July 2018 Order” and the “December 2018 Order”), including its conclusion that Mystic should recover from ratepayers 91% of the operating costs of the Everett Marine Terminal (“Everett”), a non-jurisdictional liquified natural gas import terminal.  In its third order, FERC accepted in part a Mystic compliance filing submitted in response to the December 2018 Order.  Commissioner Glick issued dissents to each of the July 17 orders.  Commissioner Glick concluded that FERC was forcing consumers to pay the full cost of service for Mystic in order to “bail out” Everett, and that each of the orders exceeded FERC’s jurisdiction under the Federal Power Act (“FPA”).

Continue Reading Divided FERC Permits Mystic to Recover Operating Costs of Non-Jurisdictional LNG Terminal