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On September 12, 2024, FERC’s Chief Accountant issued a notice of proposed accounting release (“NOPAR”) to modify the transferability of income tax credits (“ITCs”) related to certain energy projects under the Inflation Reduction Act of 2022 (“IRA”), which allows entities to monetize such ITCs via transfers to independent third parties for cash.  The proposal seeks to treat the transfer of ITCs, including both the cash proceeds of the credit and necessary costs to complete the transfer, as “nonoperating activity” under FERC’s Uniform System of Accounts (“USofA”) accounting procedures.  The proposed modifications are applicable to public utilities, licensees, and natural gas companies.Continue Reading FERC Chief Accountant Proposes to Modify Transferability of Income Tax Credits

On September 10 and 11, 2024, FERC staff held a two-day workshop at its headquarters in Washington, DC on opportunities to further refine the generator interconnection queue process. Panelists and FERC staff discussed potential enhancements to transmission planning and processing interconnection requests over the course of six panels on discrete issues related to interconnection queue reform. Panelists included representatives from public utilities, independent power producers, transmission providers, RTOs/ISOs, research organizations, and technology firms. Key points from each panel are summarized below. On September 12, 2024, FERC issued a formal notice requesting written post-workshop comments, which are due October 15, 2024.Continue Reading FERC Holds Workshop on Innovations & Efficiencies in Generator Interconnection Process, Seeks Comments

On August 20, 2024, the Federal Energy Regulatory Commission (“FERC”) issued an order rejecting, without prejudice, a contested proposal from Basin Electric Power Cooperative (“Basin”) to establish special wholesale power sales rate schedules for cryptocurrency (“crypto”) operations and other new large loads.  While FERC expressed sympathy for Basin’s concerns regarding its ability to serve expected load growth reliably and economically, FERC found that Basin failed to justify its proposal to treat crypto currency mining loads differently from other large loads and therefore rejected the differential rate proposal.Continue Reading FERC Rejects Basin’s Special Rate for Crypto and Large Load Customers, Sparking Further Interest in “Large Load” Policy Discussions at FERC

On August 5, 2024, the United States Court of Appeals for the Eighth Circuit (“Eighth Circuit”) denied Associated Electric Cooperative, Inc.’s (“AECI”) petition for review of a Federal Energy Regulatory Commission (“FERC”) order upholding FERC’s decision to exercise primary jurisdiction over emergency energy sales between Southwest Power Pool, Inc. (“SPP”) and AECI during Winter Storm Uri and FERC’s decision that SPP properly compensated AECI pursuant to SPP’s Open Access Transmission Tariff (“Tariff”). The Eighth Circuit denied the AECI’s petition and upheld FERC’s determination that AECI was appropriately compensated according to the existing tariff rates filed with FERC and, accordingly, rejected AECI’s claims that SPP had breached an alleged oral contract with SPP personnel made during the storm.Continue Reading Eighth Circuit Applies FERC’s Filed Rate Doctrine to Reject Allegations that SPP Breached an Oral Contract Made During Winter Storm Uri

On July 25, 2024, FERC issued an order granting in part and denying in part a complaint raised by American Municipal Power, Inc., the People’s Counsel for the District of Columbia, and the PJM Industrial Customer Coalition (collectively, “Complainants”) against PJM Interconnection, L.L.C. (“PJM”) arguing, principally, that PJM violated Schedule 6 of the PJM Operating Agreement by failing to execute Designated Entity Agreements in all situations with each “Designated Entity,” or the entity designated to build transmission projects that PJM selects in the PJM Regional Transmission Expansion Plan (“RTEP”). FERC also granted in part and denied in part a separate request by PJM under section 206 of the Federal Power Act to revise Schedule 6 of the PJM Operating Agreement (the “PJM 206 Filing”) governing the RTEP process and associated requirements for Designated Entity Agreements. FERC established paper hearing procedures to develop a record to determine PJM’s responsibilities concerning Designated Entity Agreements for certain RTEP projects already in process and whether remedial actions are required to address the Operating Agreement violations.Continue Reading FERC Faults PJM for Failing to Execute Designated Entity Agreements, Establishes Hearing on Whether Remedial Actions Warranted

On July 9, 2024, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) vacated orders issued by the FERC that required six wholesale power sellers (the “Sellers”) to issue refunds to customers for power sales made above FERC’s “soft” price cap during the 2020 heatwave in California.  The court held that FERC “should have conducted [a] Mobile-Sierra analysis prior to ordering refunds,” and therefore remanded the orders so that FERC could “change its refund analysis for above-cap sales going forward.”Continue Reading Court Vacates FERC “Soft” Cap Refund Order Issued After 2020 California Heat Wave

On June 27, 2024, FERC accepted Midcontinent Independent System Operator Inc.’s (“MISO”) proposed tariff revisions that sought to implement a downward-sloping Reliability Based Demand Curve (“RBDC”) in the MISO Planning Resource Auction (“Auction”) beginning with the 2025/2026 Planning Year.  FERC determined that MISO’s proposal is not only consistent with its acceptance of similar sloped curves in other Regional Transmission Owners/Independent System Operators capacity markets but that MISO’s proposal to adopt a downward-sloping RBDC will reduce volatility in Auction Clearing Prices, increase the stability of the capacity revenue stream over time, and render capacity investments less risky, thereby encouraging greater investment and at a lower financing cost.Continue Reading FERC Approves MISO’s Use of Downward Sloping Demand Curve in 2025-2026 Planning Resource Auctions

David Rosner and Lindsay See have been sworn in as FERC’s newest Commissioners on June 13 and 28, 2024, respectively. The FERC Open Meeting on June 27 marked Commissioner Rosner’s first Open Meeting and Commissioner Allison Clements’ last Open Meeting before her term expired on June 30, 2024. The U.S. Senate previously confirmed now-current Commissioners Rosner and See on June 13, 2024, along with Judy Chang. It is likely that Judy Chang will be sworn in as Commissioner in the coming days. Judy Chang’s swearing in will bring the agency to its full complement of five commissioners.  Continue Reading David Rosner and Lindsay See Sworn in as FERC Commissioners; Allison Clements’ Term Expires

On June 14, 2024, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) denied Food & Water Watch’s environmental challenges to the FERC’s order granting a certificate of public convenience and necessity (“CPCN”) to Tennessee Gas Pipeline Company (“Tennessee Gas”) for its East 300 Upgrade Project (“Project”).Continue Reading D.C. Circuit Denies Food & Water Watch’s Challenges to FERC’s GHG Review in NGA Certificate Proceeding

On June 28, 2024, the United States Supreme Court (“Supreme Court”) overruled its prior decision in Chevron U.S.A. v. Natural Resources Defense Council (“Chevron”) in a 6-3 vote in Loper Bright Enterprises et al. v. Raimondo, Secretary of Commerce, et al. (“Loper Bright”). The Chevron doctrine has required federal courts to defer to administrative agencies’ interpretations of statutes the agency administers when the underlying statute is ambiguous. Under the Loper Bright ruling, federal courts will not defer to administrative agencies in interpreting ambiguous statutes and instead must exercise their judgment in determining whether the agency acted within its statutory authority. The decision will likely have a substantial impact on both regulated industries and federal agencies such as FERC.Continue Reading SCOTUS Overrules Chevron Deference in 6-3 Ruling