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

On June 3, 2016, FERC accepted a compliance filing made by the New York Independent System Operator, Inc. (“NYISO”) providing for changes to the NYISO tariff in order to expand participation in NYISO’s Day-Ahead Demand Response Program (“DADRP”) to include demand response from behind-the-meter generation. The tariff changes will become effective 60 days after the issuance of the June 3, 2016 order.
Continue Reading FERC Accepts NYISO Compliance Filing Including Behind-the-Meter Generation in Day-Ahead Demand Response Program

On June 2, the California Assembly passed a proposal to amend the state constitution and reduce the California Public Utilities Commission’s (“CPUC”) regulatory authority. Assembly Constitutional Amendment 11 (“ACA”), also referred to as the Public Utility Reform Act of 2016, was passed by the California Assembly by a 61-to-9 vote, and may ultimately be placed on the November 2016 ballot for consideration by California’s voters. If passed, the ACA would restructure the CPUC and reallocate many of the CPUC’s functions to other state agencies, departments, or boards. 
Continue Reading California Assembly Passes Constitutional Amendment to Restructure the California Public Utilities Commission

On June 1, 2016, FERC granted the joint application of Elba Liquefaction Company, L.L.C. (“ELC”) and Southern LNG Company, L.L.C. (“Southern LNG”) requesting authorization to construct and operate new natural gas liquefaction and export facilities at Southern LNG’s existing liquefied natural gas (“LNG”) terminal located on Elba Island, Chatham County, Georgia (the “Elba Liquefaction Project”). FERC also granted Southern LNG’s request to abandon its LNG truck loading facilities at the terminal. In the same order, FERC granted the separate application of Elba Express Company, L.L.C. (“Elba Express”) to add north-to-south transportation capacity to the existing Elba Express pipeline system by constructing and operating additional compressors at the existing Hartwell Compressor Station in Hart County, Georgia, and constructing and operating two new compressor stations in Jefferson and Effingham Counties, Georgia (the “Elba Express Modification Project”). Elba Express proposed this expansion in part to enable Elba Express to transport domestic natural gas on a firm basis to the Elba Liquefaction Project.
Continue Reading FERC Authorizes the Elba Liquefaction Project for LNG Exports and the Elba Express Modification Project to Add North-To-South Natural Gas Transportation Capacity

On June 2, 2016, FERC issued a declaratory order finding Williams Field Services – Gulf Coast Company LP’s (“WGC”) proposed offshore facilities located on Transcontinental Gas Pipe Line Corporation’s (“Transco”) existing jurisdictional platform, including metering equipment on the platform and a 5.8-mile, 12-inch-diameter pipeline extending from that platform, to be gathering facilities exempt from FERC’s jurisdiction. Notably, FERC held that WGC’s proposed pipeline will primarily function as a gathering facility, despite being downstream from jurisdictional facilities, because WGC will not commingle gas that has moved through jurisdictional facilities.
Continue Reading FERC Holds Williams Field Services’ Offshore Pipeline to Be Exempt Gathering Facility

On June 1, 2016, FERC granted the request by MoGas Pipeline LLC (“MoGas”) for abandonment authority to transfer by sale its jurisdictional natural gas pipeline facilities to an affiliate, CorEnergy Pipeline Company, LLC (“CorEnergy”), and certificate authority to lease the facilities back for continued operation by MoGas. MoGas stated that if its parent, Corridor MoGas, Inc. (“Corridor MoGas”), sells a majority stake in MoGas to an unaffiliated third party, the income from MoGas’s lease payments will qualify as non-taxable Real Estate Investment Trust (“REIT”) rental income.
Continue Reading Over Objections, FERC Approves Sale-Leaseback Transaction to Transform Income Stream into Lease Payments for REIT Purposes

On May 31, 2016, FERC rejected PJM Interconnection, L.L.C.’s (“PJM”) proposal to excuse a Capacity Performance Resource from Non-Performance Charges during emergency conditions. PJM proposed to excuse such resources from Non-Performance Charges when the resource followed PJM’s dispatch instructions and operated at a ramp rate PJM had previously approved. In refusing to allow the proposed exemption, FERC emphasized that “[i]t is critical that the capacity market rules send the proper long-term investment signals to ensure capacity that can meet the reliability needs of the region.”
Continue Reading FERC Rejects PJM Proposal to Exempt Capacity Performance Resources from Non-Performance Charges During Emergencies

On June 1, 2016, former Troutman Sanders LLP attorney Lisa Hardie began her term as Chair of the Oregon Public Utility Commission. Ms. Hardie was appointed by Oregon Governor Kate Brown and confirmed by the Oregon Senate in May of 2016. Until her appointment, Ms. Hardie was a member of Troutman Sanders’ Energy Practice.
Continue Reading Troutman Sanders Attorney Named Chair of Oregon Public Utility Commission

On June 2, 2016, FERC conditionally accepted revisions to the California Independent System Operator Corporation’s (“CAISO”) tariff to facilitate the participation of aggregations of distribution-connected or distributed energy resources in CAISO’s energy and ancillary services markets. The proposed revisions are effective June 3, 2016, subject to CAISO submitting a compliance filing.
Continue Reading FERC Conditionally Allows Distributed Energy Resources to Participate in CAISO Markets