On June 21, 2016, the U.S. District Court of Wyoming (“District Court”) rejected the Bureau of Land Management’s (“BLM”) regulations for hydraulic fracturing on federal and Indian lands. In doing so, the District Court held that (1) BLM’s originating land use, management, and planning statutes did not grant BLM authority to regulate hydraulic fracturing and (2) Congress’s exclusion of non-diesel hydraulic fracturing from the Environmental Protection Agency’s (“EPA”) underground injection control (“UIC”) programs means that no federal agency can regulate hydraulic fracturing.
Continue Reading U.S. District Court of Wyoming Rejects BLM’s Hydraulic Fracturing Rules

On June 16, 2016, FERC amended its regulations to require that the North American Electric Reliability Corporation (“NERC”) provide FERC Commissioners and staff with access, on a non-public and ongoing basis, to NERC’s Transmission Availability Data System (“TADS”), the Generating Availability Data System (“GADS”), and the protection system misoperations database. While FERC explained that such access would “provide the Commission with information necessary to determine the need for new or modified Reliability Standards and to better understand NERC’s periodic reliability and adequacy assessments,” it also added that “the Commission is not precluded from using the accessed data for other statutory purposes.”
Continue Reading FERC Grants Itself Access to NERC Transmission and Generation Databases

On June 16, 2016, FERC granted Southwest Gas Corporation’s (“Southwest Gas’s”) request for rehearing and approved Paiute Pipeline Company’s (“Paiute’s”) proposal to impose a fuel retention charge of zero, and a separate, stand-alone lost and unaccounted for (“L&U”) gas charge, for transportation service that only utilizes Paiute’s Adobe Lateral.
Continue Reading FERC Grants Rehearing as to Pipeline’s Charging Zero Fuel Retention Charge and Separate, Stand-Alone Lost and Unaccounted for Gas Charge for Lateral Pipeline Service

On June 16, 2016, FERC affirmed its process outlined in Opinion No. 538 for analyzing whether natural gas storage companies lack significant market power for the purposes of determining whether to grant market-based rate (“MBR”) authority for natural gas storage service. However, FERC clarified that the burden to show lack of control over an affiliate rests with the applicant.
Continue Reading FERC Largely Upholds Market Power Analysis for Market-Based Rate Authority for Natural Gas Storage Service

On June 16, 2016, FERC denied as inconsistent with section 210 of the Public Utility Regulatory Policies Act of 1978 (“PURPA”) a proposal that would require members of a generation and transmission cooperative to compensate the cooperative when the members purchase power from qualifying facilities (“QFs”) instead of from the cooperative. Specifically, Tri-State Generation and Transmission Association, Inc. (“Tri-State”) had petitioned FERC for a declaratory order finding that Tri-State’s policy of requiring compensation from Tri-State’s members when they purchase power from QFs in excess of five percent of their requirements is consistent with PURPA. FERC denied the request.
Continue Reading FERC Denies Cooperative’s Proposal to Charge Members for Losses Associated with QF Power Purchases

On June 16, 2016, FERC directed the Midcontinent Independent System Operator, Inc. (“MISO”) to either: (1) revise its Tariff to ensure that a generation or non-generation resource owner will no longer receive compensation for Reactive Supply and Voltage Control Service (“Reactive Service”) after it has deactivated or transferred its unit(s), and to clarify the treatment of Reactive Service revenue requirements for such unit(s); or (2) show cause why it should not be required to do so. FERC also directed MISO to post and maintain a chart listing all resource owners receiving compensation for Reactive Service, along with their current Reactive Service revenue requirements.
Continue Reading FERC Issues Show Cause Order to MISO Over Reactive Power Compensation

On June 16, 2016, FERC revised the pro forma Large Generator Interconnection Agreement (“LGIA”) and the pro forma Small Generator Interconnection Agreement (“SGIA”) to require wind generators to design their facilities to be capable of providing reactive power at their points of interconnection as a condition of interconnection. As a result, going forward all newly interconnecting non-synchronous generators, including wind generators, must be able to provide reactive power as a condition of interconnection.
Continue Reading FERC Issues Rule Eliminating Exemptions for Wind Generators from Reactive Power Requirements

On June 16, 2016, FERC clarified some of its Electric Quarterly Report (“EQR”) reporting requirements, including EQR Data Dictionary modifications that (1) clarify certain EQR fields, (2) require all EQR users to report transactions that occur on a sub-hourly basis, and (3) emphasize the requirement for transmission providers to report transmission service information. FERC’s order also indicates that, in the future, it will post certain non-material changes to the EQR reporting requirements and EQR Data Dictionary to its website and notify EQR users via e-mail of any such changes. 
Continue Reading FERC Clarifies Electric Quarterly Report Reporting Requirements

On June 1, 2016, FERC issued First ECA Midstream LLC (“FECAM”) a certificate of public convenience and necessity to operate an existing 16-mile, 4- to 16-inch-diameter pipeline as a jurisdictional interstate pipeline. Notably, FERC denied FECAM’s request to file two negotiated rate agreements in lieu of an open access tariff, stating that an exception to FERC’s policies favoring open access was not warranted where FECAM was operating a pipeline to transport gas for third parties and where shippers did not have contractual rights and long-standing arrangements already in place.
Continue Reading FERC Approves Request to Operate Existing, 16-Mile Gathering Line as an Interstate Pipeline, but Requires Filing of Open Access Tariff

On June 1, 2016, FERC granted in part and denied in part National Fuel Gas Supply Corporation’s (“National Fuel’s”) request for rehearing regarding its request to expand the reservoir and buffer boundaries of its Beech Hill Complex natural gas storage facility. In its initial order, issued December 17, 2015, the Commission stated that it “grants jurisdictional storage field operators additional certificate authority to revise the boundaries of storage fields when the applicant can demonstrate, with engineering and geological data, that such authorization is required . . . to improve the operation of a storage field or to maintain its integrity.” In its June 1 rehearing order, the Commission found geochemical data and evidence of hydraulic connections to be persuasive evidence that gas was migrating, discounted theories based on seismic evidence, and observed that “[w]hile geochemical data is not always required to support expansion of certificated boundaries, it is highly persuasive.”
Continue Reading FERC Notes “Highly Persuasive” Nature of Geochemical Data, Discounts Seismic Data, in Considering Request to Expand Natural Gas Storage Reservoir and Claims of Gas Migration