Troutman Pepper Locke

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On July 2, 2012, FERC’s Office of Enforcement petitioned the U.S. District Court for the District of Columbia to order J.P. Morgan Ventures Energy Corp. (“JP Morgan”) to show cause why the court should not enforce a subpoena against JP Morgan.  At issue are 25 emails that JP Morgan has refused to produce in an ongoing FERC investigation into potential manipulation of the California and Midwest energy markets.

On July 2, 2012, the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (“PHMSA”) proposed a record $3.7 million penalty in its Notice of Probable Violation and Proposed Civil Penalty (“NOP”) against Enbridge Energy, Limited Partnership (“Enbridge”).  The NOP stems from an oil spill on one of Enbridge’s pipelines in Marshall, Michigan. 

On July 2, 2012, Duke Energy Corp. (“Duke”) and Progress Energy, Inc. (“Progress”) finalized their merger after receiving regulatory approval from the South Carolina Public Service Commission (“SCPSC”).  The SCPSC’s approval was the final regulatory step needed to complete the merger. 

Constellation Energy Commodities Group (“CECG”) recently requested Western Electricity Coordinating Council (“WECC”) certification for two new Balancing Authorities (“BAs”).  One BA would be located at the Mid-Columbia trading hub (“Mid-C”) and focus on providing ancillary services to wind generators in the Northwest region, while the other BA would be set up for NaturEner USA’s 189 MW Rim Rock wind power project in Montana.

On June 25, 2012, the Supreme Court of the United States (“Supreme Court”) denied a petition for certiorari challenging a decision by the Court of Appeals for the Ninth Circuit (“9th Circuit”) that FERC’s Order No. 697, “Market-Based Rates For Wholesale Sales Of Electric Energy, Capacity And Ancillary Services By Public Utilities” does not violate the Federal Power Act (“FPA”).  The Supreme Court did not discuss its reasons for denying the petition.

On June 21, 2012, FERC denied rehearing of its previous order affirming an $80,000 penalty assessed against Turlock Irrigation District (“Turlock”).  Additionally, FERC took the opportunity to clarify that: (1) the North American Electric Reliability Corporation (“NERC”) must consider loss of load and harm to consumers when assessing penalties for violating a mandatory reliability standard; and (2) all self-reports will not automatically warrant a penalty “credit,” particularly when there is another existing obligation to report the violation in question.

On June 28, 2012, FERC granted in part Seminole Electric Cooperative, Inc.’s (“Seminole”) complaint against Florida Power & Light Company (“FPL”), which accused FPL of misapplying the language of Schedule 4 (Energy Imbalance Service) of its Open Access Transmission Tariff (“OATT”).  Specifically, FERC granted Seminole’s claim that FPL violated its OATT by misconstruing Schedule 4’s tier thresholds, but rejected Seminole’s claim that FPL incorrectly apportioned penalties within the highest possible tier.

On June 15, 2012, Idaho Wind Partners 1, LLC (“Idaho Wind”) filed at FERC a petition for declaratory order, stating that a Qualifying Facility (“QF”) curtailment policy proposed by Idaho Power Company (“Idaho Power”) at the Idaho Public Utilities Commission (“Idaho PUC”) would violate the Public Utility Regulatory Policies Act (“PURPA”). 

On June 15, 2012 and June 18, 2012, various parties submitted Requests for Rehearing and/or Clarification of FERC’s May 17, 2012 Order on Rehearing and Clarification of Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities (“Order No. 1000-A”).  The Requests focused on a variety of issues, including: 1) the definition of transmission facilities “selected in the regional transmission plan for purposes of cost allocation,” 2) whether FERC must first prove that existing rates are unjust and unreasonable before “forcing” public utilities to file particular rates, and 3) related Mobile-Sierra contract issues.