In an order dated May 20, 2021, the Federal Energy Regulatory Commission (FERC, or the Commission) terminated the hydropower licenses for three projects located on the Tittabawasee River in Michigan—the Secord (P-10809), Smallwood (P-10810) and Sanford (P-2785) dams.  The termination by implied surrender follows a May 2020 breach at the Sanford dam and the breach

On May 20, 2021, FERC issued a Show Cause Order directing GreenHat Energy, LLC (“GreenHat”) and its owners to show why they did not violate the Federal Power Act, FERC’s regulations, the PJM Interconnection, L.L.C. (“PJM”) Tariff, and the PJM Operating Agreement by manipulating PJM’s Financial Transmission Rights (“FTR”) market, generating $13 million in unjust profits and imposing $179 million in losses on PJM members. FERC also directed GreenHat and its owners to file an answer with FERC within 30 days showing why they should not be required to disgorge $13 million in unjust profits, plus interest, and to pay civil penalties totaling $229 million. FERC’s order is accompanied by a report from FERC’s Office of Enforcement (“OE Report”). Commissioner James Danly issued a separate concurring statement.
Continue Reading FERC Issues Show Cause Order Directing GreenHat Energy to Respond to Market Manipulation Claims

On December 17, 2020, FERC issued a Notice of Proposed Rulemaking proposing to revise its regulations to establish incentives for public utilities to make certain cybersecurity investments that go beyond the current requirements of the Critical Infrastructure Protection (“CIP”) Reliability Standards established by the North American Electric Reliability Corporation (“NERC”) (“Cybersecurity NOPR”). Specifically, FERC proposed rules to allow regulated entities to:

  1. receive incentive-based rate treatment for the voluntary implementation of: (i) certain NERC CIP Reliability Standards to facilities that are not currently subject to those requirements (“NERC CIP Incentives Approach”), and/or (ii) certain security controls included in the National Institute of Standards and Technology Framework (“NIST Framework Approach”);
  2. request a return-on-equity adder of two hundred (200) basis points for making eligible cybersecurity capital investments; and
  3. defer cost recovery of certain cybersecurity costs that are generally expensed as incurred, and treat such costs as regulatory assets that may be included in transmission rate base.


Continue Reading FERC Issues Notice of Proposed Rulemaking on Cybersecurity Investment Incentives

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