FERC Practice

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On June 15, 2023, FERC issued Order No. 895, adopting new regulations permitting regional transmission organizations (“RTO”) and independent system operators (“ISO”) to share, amongst each other, credit-related information of their market participants, and requiring RTOs/ISOs to adopt tariff or similar rules for providing credit-related information sharing in order to better assess market participants’ credit risks.

On June 13, 2023, the House of Representatives Subcommittee on Energy, Climate, and Grid Security held a hearing on the “Oversight of FERC: Adhering to a Mission of Affordable and Reliable Energy for America.” The hearing focused on reliability and the transition from fossil fuel generation to renewable resources.

In its May 26, 2023 opinion in Sierra Club v. Federal Energy Regulatory Commission (an article on the rest of the opinion regarding FERC’s environmental review of the Mountain Valley Pipeline can be found here), the United States Court of Appeals for the District of Columbia Circuit addressed challenges to its jurisdiction to hear appeals of Commission rehearing orders when they are denied by operation of law and the Commission subsequently modifies the underlying order after said denial.

On May 26, 2023, the United States Court of Appeals for the District of Columbia Circuit issued an opinion in Sierra Club v. Federal Energy Regulatory Commission largely denying challenges to several FERC orders authorizing the resumption of construction of Mountain Valley Pipeline (“MVP”) but remanded, without vacatur, all but one of the orders on review insofar as FERC failed to adequately explain its decision not to prepare a supplemental Environmental Impact Statement (“EIS”) for MVP. (See related article on the Court’s finding with regard to hearing appeals of FERC’s rehearing orders, here).

On June 2, 2023, FERC accepted in part and rejected in part Public Service Company of Colorado’s (“PSCo”) proposed revisions to its Large Generator Interconnection Procedures (“LGIP”) and Large Generator Interconnection Agreement (“LGIA”). In largely accepting PSCo’s proposed revisions, FERC found that the reforms would either strengthen the ability of PSCo to process generator interconnection requests or provide general improvements to existing processes.

On May 11, 2023, FERC notified Mankato Energy Center, LLC and Mankato Energy Center II, LLC (“Mankato Companies”) that it will release certain privileged information included in the initial brief that Mankato Companies submitted in an ongoing proceeding section 206 of the Federal Power Act (“FPA”) to determine whether Mankato companies and J.P. Morgan Investment Management, Inc. (“J.P. Morgan Investment”) are affiliated for purposes of the FPA.  FERC reasoned that disclosing certain privileged information is necessary to carry out the Commission’s jurisdictional responsibilities in evaluating whether the Mankato Companies’ upstream ownership raises market power concerns.  Commissioner Danly dissented in a separate statement, arguing that FERC could instead release a redacted order.

A group of 17 states, through their Attorneys General (“State AGs”), filed a motion (“Motion”) on May 10, 2023, requesting that the Commission audit and investigate whether BlackRock is acting as an “activist” investor, thereby violating Section 203 of the Federal Power Act (“FPA”) and the Commission’s latest reauthorizations for BlackRock to acquire public utility securities. The Motion comes shortly after Commissioners Danly and Christie issued a joint statement regarding a different investment company, Vanguard Group, Inc. (“Vanguard”), questioning whether Vanguard’s “enormous accumulation” of utility assets may enable it to exercise “profound control” over those utilities.

On May 16, 2023, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued an opinion in Center for Biological Diversity v. Alaska Gasline Development Corporation, affirming FERC’s authorization for Alaska Gasline Development Corporation (“AGDC”) to construct and operate liquified natural gas (“LNG”) facilities in Alaska’s North Slope region (“Project”).

On May 3, 2023, a divided FERC voted 3-1 to deny a widely-supported complaint by multiple utilities in the Southwest Power Pool (“SPP”) region arguing that the absence of the new 15% generation Planning Reserve Margin (“Reserve Margin”) from the SPP tariff rendered that tariff unjust and unreasonable.  The Reserve Margin dictates exactly how much electric generating capacity load-serving utilities must own or have under contract to serve customers.  The complaining utilities argued that customers in SPP could be harmed by the costs associated with the rapid increase in the Reserve Margin with little corresponding reliability benefit and asked FERC to keep closer tabs on the process.  The utilities’ request for additional FERC oversight was opposed only by SPP itself.  As a result of the decision, SPP is free to change the Reserve Margin without any oversight by FERC or approval by a single state commission.   FERC further held that a complaint alleging that a key rate is missing from a tariff in violation of section 205 of the Federal Power Act and the Commission’s Rule of Reason fails to state a claim upon which relief could be granted.