Troutman Pepper Locke

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On October 15, 2015, FERC issued a final rule (Order No. 587-W) amending its regulations at 18 C.F.R. § 284.12 to incorporate by reference, with certain enumerated exceptions, the latest version (Version 3.0) of business practice standards applicable to interstate natural gas pipelines (and to the contents of intrastate pipeline Form No. 549D filings) adopted by the North American Energy Standards Boards’s (“NAESB”) Wholesale Gas Quadrant (“WGQ”).  Interstate pipelines must file tariff records to reflect the changed standards by February 1, 2016, with such records to take effect on April 1, 2016, and must comply with the revised standards beginning on April 1, 2016.  The final rule adopts policies on waiver requests set out in the related Notice of Public Rulemaking (“NOPR”).  Intrastate pipelines filing Form No. 549D should use, instead of common codes, their own location codes and names in their list of jurisdictional receipt and delivery points.  Upon incorporation by reference, the new Version 3.0 Standards will replace the standards incorporated by reference in 2012 in Order No. 587-V.

On October 15, 2015, FERC issued a certificate of public convenience and necessity under section 7(c) of the Natural Gas Act (“NGA”) and a blanket certificate under Part 157 of the FERC’s regulations to Regency Field Services LLC (“Regency”) to continue operating the existing Coyanosa Residue Line.  In issuing the certificates, FERC held that the Coyanosa Residue Line was jurisdictional under FERC’s current five-mile processing plant “stub line” test, even though the line was in operation well before FERC adopted the test in 1994.

On October 15, 2015, the FERC issued Order No. 816 in which it promulgates a final rule (“Final Rule”) to revise its requirements for market-based rate (“MBR”) authorizations for wholesale sales of electric energy, capacity, and ancillary services by public utilities.  The FERC expects that the changes implemented under the Final Rule will increase transparency in the MBR application process and relieve burdensome reporting requirements for MBR sellers, while continuing to ensure that MBRs are just and reasonable.

On October 15, 2015, the Commission accepted the North American Electric Reliability Corporation’s (“NERC”) compliance filing implementing NERC’s Risk-Based Registration (“RBR”) initiative, and, among other things, authorized NERC’s proposal to eliminate the Load-Serving Entity (“LSE”) registration function.  The Commission further directed NERC to submit an informational filing on the impact of the removal of the LSE function on the next-day studies of Transmission Operators and Balancing Authorities.

On October 15, 2015, FERC issued an order denying rehearing and granting clarification of Order No. 807, which contained regulations and policies regarding open access to and priority rights on Interconnection Customer’s Interconnection Facilities (“ICIF”). Two groups—one including the National Rural Electric Cooperative Association (“NRECA”) and the other including the American Public Power Association and the Transmission Access Policy Study Group (“APPA” and “TAPS,” respectively)—sought rehearing and clarification of Order No. 807. Order No. 807 amended FERC’s regulations to: (1) waive the Open Access Transmission Tariff, Open Access Same-Time Information System, and Standards of Conduct requirements for entities that are subject to such requirements solely because they own, control, or operate ICIF; (2) provide that a third party seeking service on ICIF may follow the procedures of sections 210, 211, and 212 of the Federal Power Act (“FPA”); and (3) establish that, for the first five years after the commercial operation date of the ICIF, FERC will apply the rebuttable presumption that the ICIF owner has definitive plans to use its facilities, and thus it is in the public interest to grant it priority rights to use the ICIF capacity.

On October 1, 2015, FERC issued an order approving the California Independent System Operator’s (“CAISO”) revisions to its capacity procurement mechanism (“CPM”) to, among other things, implement a competitive solicitation process to procure backstop capacity. In the order, FERC found that (1) compensating CPM capacity based on a competitive solicitation process will result in compensation driven by competitive factors and (2) the use of a soft cap and 20 percent adder to compensate resources will provide them with enough revenue for system upgrades and improvements.

On September 29, 2015, the Office of the Inspector General (“OIG”) of the Department of Energy issued a special report describing the results of its audit of FERC’s Office of Enforcement (“OE”). Based on its review, the OIG determined that “nothing came to our attention to indicate that OE had not performed enforcement activities in accordance with relevant policies and procedures.”

On October 8, 2015, Mayor Muriel Bowser announced that the District of Columbia (“DC”) government has reached a settlement (“Settlement”) in negotiations related to the proposed merger filed with the Public Service Commission of the District of Columbia (“DCPSC”) by Exelon Corporation (“Exelon”) and Pepco Holdings, Inc. (“Pepco” and together with Exelon, the “Joint Applicants”). While the merger application remains subject to DCPSC approval, the Settlement is a milestone for the Joint Applicants in a regulatory review process that has proven to be contentious in DC.

On October 6, 2015, FERC Commissioner Philip D. Moeller announced his intention to leave the Commission at the end of October.  Commissioner Moeller has been with the Commission since 2006, when he was appointed by former President George W. Bush.  In 2010, Commissioner Moeller was re-appointed by President Obama for a five-year term that expired on June 30, 2015; however, he was permitted to remain at the agency until Congress adjourns, unless a replacement was confirmed and sworn in.  At this time, no one has been nominated to replace Commissioner Moeller.

On September 28, 2015, the North American Electric Reliability Corporation (“NERC”) submitted to FERC its annual analysis on the use of Technical Feasibility Exceptions (“TFEs”).  TFEs are exceptions from strict compliance with NERC Critical Infrastructure Protection (“CIP”) Reliability Standards that Registered Entities may apply for, pursuant to a process established in the NERC Rules of Procedure.