On April 30, 2020, FERC granted Tennessee Gas Pipeline Company, L.L.C.’s (“Tennessee Gas”) petition for declaratory order that requested authorization to charge market-based rates for its proposed firm flexible storage (“FS Flex”) service. In reaching its decision, FERC reviewed whether Tennessee Gas held significant market power in the relevant product and geographic markets where the FS Flex service was to be offered, with the geographic market including east Texas, Louisiana, Mississippi, and Alabama (“Gulf Coast Production Area”). FERC found that Tennessee Gas’s small market share and market concentration in the relevant markets adequately demonstrated that Tennessee Gas lacked market power and that there were no other factors indicating that Tennessee Gas would be able to exercise market power when providing the FS Flex service.
Continue Reading FERC Grants Tennessee Gas Market-Based Rate Authority for Proposed FS Flex Service

On April 17, 2020, FERC denied Potomac Economics, Ltd.’s (“Potomac Economics”) complaint against PJM Interconnection, L.L.C. (”PJM”), which alleged that PJM’s rule requiring external generation resources to obtain a pseudo-tie in order to participate in PJM’s capacity market was unjust and unreasonable (“Complaint”). FERC found that Potomac Economics failed to show that PJM’s pseudo-tie requirement had caused market inefficiencies or harmed reliability and that any arguments regarding potential future harms to the New York System Operator, Inc. (“NYISO”) by the pseudo-tie requirement were speculative. FERC also denied PJM’s motion to dismiss the Complaint, finding that market monitors may file complaints under Federal Power Act (“FPA”) section 206, provided that such market monitors satisfy the requirements of FERC’s relevant regulations.
Continue Reading FERC Denies Complaint Alleging PJM’s External Resource Pseudo-Tie Requirements Are Unjust and Unreasonable

On April 13, 2020, numerous industry groups and business associations (“Industry Stakeholders”) submitted a joint request asking FERC to organize a technical conference or workshop to discuss potential issues with the implementation of state, regional, and national carbon pricing in regions with organized wholesale electric energy markets. The Industry Stakeholders proposed that the workshop examine both the mechanics needed to account for the implementation of carbon pricing as well as the mechanics that are already in place. Industry Stakeholders stated that such a conference could open a dialogue among stakeholders and interested parties regarding the opportunities and potential difficulties presented by carbon pricing.
Continue Reading Stakeholders Request FERC Technical Conference on Carbon Pricing

On April 10, 2020, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) granted Gulf South Pipeline Company, LP’s (“Gulf South”) petition for review in part, finding that FERC’s rejection of Gulf South’s proposed “incremental plus rates” for the Westlake Expansion Project, an expansion within the Lake Charles Zone, was arbitrary and capricious. In doing so, the D.C. Circuit found that FERC could easily distinguish between which customers are using the new facilities and which customers were using the gas pipeline’s existing facilities. The D.C. Circuit denied Gulf South’s petition for review on issues related to FERC’s denial of Gulf South’s proposed initial rate of return and depreciation rate for the Project, upholding FERC’s use of Gulf South’s last approved rate of return and depreciation rate.
Continue Reading D.C. Circuit Reverses FERC’s Rejection of “Incremental Plus” Rates for Gas Pipeline Expansion Project

On March 30, 2020, FERC issued an order establishing a paper hearing to evaluate Energy Harbor LLC’s (formerly known as FirstEnergy Solutions Corp.) proposed rejection in bankruptcy of a variety of FERC-jurisdictional contracts (“Jurisdictional Contracts”). FERC’s order follows a recent decision of the United States Court of Appeals for the Sixth Circuit ordering the bankruptcy court to take public interest factors into account when reviewing the proposed rejection of the Jurisdictional Contracts, and to invite FERC to provide its opinion on the issue (see December 19, 2019 edition of the WER).  FERC initiated the paper hearing to consider these public interest factors.
Continue Reading FERC Establishes Paper Hearing on Proposed Rejection of FERC-Jurisdictional Contracts in Bankruptcy

On March 19, 2020, FERC authorized Jordan Cove Energy Project L.P.’s (“Jordan Cove”) Natural Gas Act (“NGA”) section 3 proposal to site, construct, and operate a liquefied natural gas (“LNG”) export terminal in Coos County, Oregon (“Terminal”) and Pacific Connector Gas Pipeline, LP’s (“Pacific Connector”) application under section 7(c) of the NGA and Parts 157 and 284 of FERC’s regulations that would allow it to construct and operate an interstate natural gas pipeline system connected to the Terminal (“Pacific Connector Pipeline”). The decision prompted a dissent from Commissioner Richard Glick, who argued that the majority’s decision did not adequately consider the impacts that the Terminal and Pacific Connector Pipeline will have on climate change and other environmental concerns.
Continue Reading FERC Approves Jordan Cove LNG Export Project, Prompting Dissent From Commissioner Glick

On March 6, 2020, FERC rejected ISO New England Inc.’s (“ISO-NE”) and the New England Power Pool Participants Committee’s proposed revisions to the ISO-NE Tariff intended to eliminate ISO-NE’s ability to retain a resource for local transmission reliability needs if that resource has been previously retained for fuel security purposes (“Proposed Tariff Revisions”). FERC found that the Tariff Revisions were not just and reasonable because they would limit ISO-NE’s ability to address potential future transmission reliability issues without alternative transmission solutions yet being in place.
Continue Reading FERC Rejects ISO-NE Tariff Revisions Preventing Further Retention of Retained Fuel Security Resources

On March 4, 2020, FERC denied rehearing of its prior order rejecting the New Jersey Board of Public Utilities’ (“NJBPU”) complaint alleging unjust and unreasonable cost allocations for the Bergen-Linden Corridor transmission project (“BLC Project”). FERC found that it had already fully addressed the issues raised in the original complaint and that there was no need for an evidentiary hearing to evaluate disputed facts related to the BLC Project.
Continue Reading FERC Denies Rehearing of Order Dismissing Cost Allocation Complaint for Bergen-Linden Corridor Project

On February 12, 2020, the U.S. International Trade Commission (“ITC”) issued a notice stating that it will investigate and report on the potential economic effects of renewable energy commitments, including the role of renewable energy imports, in Massachusetts and the broader New England region as requested by the Committee on Ways and Means of the U.S. House of Representatives (“Committee”). The ITC intends to send the report to the Committee by January 25, 2021.
Continue Reading U.S. International Trade Commission to Investigate Impacts of Renewable Energy Imports in New England

On February 14, 2020, FERC rejected ISO New England Inc.’s (“ISO-NE”) and the New England Power Pool Participants Committee’s (together with ISO-NE, the “Filing Parties”) proposed revisions to the ISO-NE tariff intended to allow for the termination of ISO-NE’s Fuel Security Reliability Retention Mechanism (“Fuel Security Mechanism”) at the end of Forward Capacity Auction (“FCA”) 14 – one year earlier than currently provided in the tariff. The Fuel Security Mechanism allows ISO-NE to retain resources for fuel security that seek to retire in FCAs 13, 14, or 15 and was initially implemented following ISO-NE’s 2018 petition for waiver seeking to retain two retiring Mystic Units through FCA 15 (“Mystic Units”). FERC rejected the filing because ISO-NE had not yet submitted its proposed long-term solutions to address fuel security concerns and because it found that that ISO-NE’s proposed interim solutions were inadequate. FERC Commissioner Richard Glick dissented from the order, arguing the majority lacked a reasoned basis to find that ISO-NE’s filing was not just and reasonable.
Continue Reading FERC Rejects ISO-NE’s Proposed Early Sunsetting Revisions to Fuel Security Mechanism