On May 7, 2020, FERC’s Division of Audits and Accounting issued a guidance letter on how regulated entities may account for expected credit losses on accounts receivable.  The letter, issued to ease regulatory burdens on the energy industry in the midst of the ongoing COVID-19 pandemic, clarifies that Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) No. 2016-13 is an acceptable methodology for purposes of financial accounting and reporting obligations on jurisdictional public utilities and licensees, natural gas companies, oil pipeline companies, and centralized service companies.
Continue Reading FERC Issues Guidance on Accounting for Credit and Accounts Receivable Losses

On April 2, 2020, FERC issued several orders aimed at helping regulated entities manage compliance deadlines and related issues in the wake of COVID-19 response.  Chairman Neil Chatterjee also issued a press release confirming the pandemic qualifies as an emergency under the Commission’s rules and detailing additional steps in FERC’s plan to help regulated entities manage potential enforcement and compliance-related burdens during the pandemic, including two new task forces to expedite standards of conduct waiver requests and no-action letters.
Continue Reading FERC Relieves Regulatory Burdens and Creates New Task Forces Due to COVID-19 Pandemic

On February 11, 2020, the U.S. Court of Appeals for the Fourth Circuit (“Fourth Circuit”) held that FERC’s claim for civil penalties under the Federal Power Act (“FPA”) against Powhatan Energy Fund, LLC and certain of its traders and affiliates (“Powhatan”) was not barred by the statute of limitations. In doing so, the Fourth Circuit held that FERC’s claim in federal district court did not accrue for statute of limitation purposes until all of the legal prerequisites for filing the suit had been met, including failure by Powhatan to pay its assessed penalties.  
Continue Reading Fourth Circuit Rules FERC Acted Within Statute of Limitations in Enforcement Action Against Powhatan Energy

On January 10, 2020, FERC issued two separate orders approving Stipulation and Consent Agreements (“Agreements”) between the Office of Enforcement (“Enforcement”) and Emera Energy Incorporated (“Emera Energy”) and Exelon Generation Company, LLC (“Exelon”), respectively. Both Agreements relate to alleged violations of ISO New England Inc.’s (“ISO-NE”) Tariff. Specifically, with respect to Emera Energy, FERC alleged that Emera Energy violated the Tariff’s requirement that evidence supporting Fuel Price Adjustment Requests (“FPA Requests”) must reflect an arm’s length transaction. With respect to Exelon, FERC alleged that Exelon misreported the type and quantity of start-up fuel used by its Mystic 7 generating unit (“Mystic 7”). In both cases, FERC found that the Agreements were in the public interest and the Enforcement investigations were resolved on fair and equitable terms.

Continue Reading FERC Issues Two Orders Approving Civil Penalties and Disgorgement of Profits for Violations of ISO New England Inc.’s Tariff

On December 6, 2019, a bipartisan group of ten U.S. Senators wrote to FERC Chairman Neil Chatterjee asking for assurances that FERC fully appreciates the threat posed to the nation’s energy infrastructure by the use of equipment manufactured by Huawei Technologies Co., Ltd. (“Huawei”).  The letter praised FERC’s creation of a new cybersecurity division and expressed hope that the new division’s first objective would be defending the nation’s infrastructure against threats posed by the use of Huawei’s equipment.
Continue Reading Bipartisan Group of Senators Seek FERC Assurances Regarding Huawei Equipment Threat

On November 21, 2019, FERC’s Office of Enforcement (“OE”) released its thirteenth annual Report on Enforcement (“Report”) to provide an update about its activities during the last fiscal year (i.e., 12-months ending September 30, 2019; hereinafter “FY2019”). The Report provides an overview of, and statistics reflecting, the activities of OE’s Divisions of Investigations (“DOI”), Division of Audits and Accounting (“DAA”), Division of Analytics and Surveillance (“DAS”), and Division of Energy Market Oversight (“DEMO”).
Continue Reading FERC Issues 2019 Report on Enforcement

On September 19, 2019, one Independent and four Democratic Senators wrote a letter to FERC which expressed concerns over recent actions taken by FERC and which directed a series of questions to FERC regarding the “apparent erosion” of FERC’s role in preventing fraud and manipulation in U.S. energy and financial markets (see October 3, 2019 edition of the WER). The concerns expressed by the senators related to (i) the decline in the number of civil penalty actions initiated by FERC; (ii) the closing of FERC’s Division of Energy Market Oversight (“DEMO”), and (iii) FERC’s ending its policy on issuing Notices of Alleged Violations (“NAVs”) regarding investigations.
Continue Reading FERC Commissioners Respond to Senate Inquiries on FERC’s Enforcement Role

On November 1, 2019 FERC approved a Stipulation and Consent Agreement between its Office of Enforcement (“OE”), the regional reliability entity Texas Reliability Entity, Inc. (“Texas RE”), the North American Electric Reliability Corporation (“NERC”), and Calpine Corporation (“Calpine”), related to Calpine’s alleged violations of NERC reliability standards governing maintenance and testing of batteries and other protection systems, as well as provisions of the California Independent System Operator Corporation (“CAISO”) Tariff requiring entities to report planned and unplanned generator outages. As part of the settlement, Calpine neither admitted nor denied the alleged violations, but agreed to pay civil penalties of $375,000 to Texas RE and $25,000 to the United States Treasury, and to undergo compliance monitoring.
Continue Reading Calpine Corp. Settles FERC Investigation of Battery Testing and Outage Issues