FERC Enforcement

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On October 16, 2014, the Commission accepted in part Southwest Power Pool’s (“SPP”) proposed revisions to its Open Access Transmission Tariff (“OATT”) in compliance with Order No. 1000, and determined that SPP could consider certain state and local laws and regulations in the early stages of its competitive solicitation process for transmission planning.

On October 16, 2014, FERC issued two separate orders addressing the base return on equity (“ROE”) for (1) the New England transmission owners (“NETOs”) operating in ISO-New England Inc., and (2) certain transmission-owning members of the Midcontinent Independent System Operator, Inc. (“MISO TOs”).  In the NETO order, FERC determined that the base ROE should be set at 10.57 percent.  In the MISO TO order, FERC found that the complaint raises material issues of fact regarding whether the current base ROE of 12.38 percent remains just and reasonable, and therefore set the matter for hearing.

On September 18, 2014, FERC issued an order addressing Order No. 1000 compliance filings, and requests for rehearing regarding prior compliance filings, for the parties within the ColumbiaGrid Transmission Planning region in the Pacific Northwest.  In doing so, FERC clarified the role of public power entities in the regional transmission planning process, explaining that if a public power entity chooses to enroll in a regional transmission planning process, it is bound to the resulting cost allocation determinations.  However, FERC also approved a mechanism whereby a public power entity could refrain from enrolling in the process while still being included in its respective planning process.  Under this framework, if a public power entity is subsequently allocated costs under the regional cost allocation method, it could separately determine whether it would accept those costs based on its statutory authorities.

On July 18, 2014, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued a decision denying petitions for review of FERC’s orders related to Regional Transmission Organization (“RTO”) transmission expansion cost allocation for FirstEnergy Service Company (“FirstEnergy”) after it transitioned between two RTOs.  Specifically, the D.C. Circuit affirmed FERC’s rejection of FirstEnergy’s request for relief from the PJM Interconnection L.L.C.’s (“PJM”) annual allocation of transmission expansion plan costs for any project approved before FirstEnergy transitioned to that RTO. 

On September 12, 2013, FERC issued an order (“September 12 Order”) granting in part and denying in part requests for clarification filed by Puget Sound Energy, Inc. (“Puget”) and Powerex Corporation (“Powerex”) of a May 20, 2013 order (“May 20 Order”) accepting for filing certain non-conforming service agreements for conditional firm point-to-point transmission service executed between Puget and Morgan Stanley Capital Group, Inc. (“Morgan Stanley”).

On June 22, 2012, FERC released a final rule in the Integration of Variable Energy Resources (“VER”) rulemaking proceeding.  With the stated goal of removing barriers to VER integration, the final rule provides transmission customers the option of adjusting their transmission schedules at 15-minute intervals, and it requires VER generators to provide transmission owners with certain data on meteorological and forced outages in order to support power production forecasting.

On May 22, 2012, FERC issued an order allowing Rock Island Clean Line LLC (“Rock Island”), a subsidiary of Clean Line Energy LLC, to allocate up to 75 percent of its planned capacity on a proposed transmission line to anchor customers before conducting an open season for the remaining capacity.  However, in the same order, the Commission denied Rock Island’s request to favor renewable energy projects for the remaining quarter of transmission capacity on the proposed line.