FERC Practice

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On June 30, 2022, in a 6-3 decision, with Chief Justice John G. Roberts Jr. writing for the majority, the United States Supreme Court issued a decision in West Virginia v. EPA limiting the EPA’s ability to regulate carbon emissions from existing power plants. The Court’s decision could have significant implications for other executive branch agencies attempting to issue regulations that implicate “major questions.”

On April 15, 2022, the Federal Energy Regulatory Commission (FERC) issued an Equity Action Plan (EAP) that introduces a two-year overhaul to review its policies to better promote equity and remove barriers to environmental justice communities.  In particular, for hydropower projects, the EAP will focus on:  (1) building and staffing its new Office of Public Participation, (2) strengthening Tribal government consultation and engagement policies and processes, (3) reviewing key regulations within the hydropower project licensing process, and (4) implementing equity readiness for staff to understand the EAP mission.

On May 31, 2022, FERC accepted and set for hearing Southwest Power Pool, Inc.’s (“SPP”) proposal to revise its Open Access Transmission Tariff (“OATT”) to establish a formula rate template (“Formula Rate”) on behalf of People’s Electric Cooperative (“People’s Electric”) when People’s Electric transfers functional control of its transmission facilities to SPP on June 1, 2022. The Commission granted People’s Electric’s request to include a 50-basis point adder for participating as a member of SPP, a regional transmission organization (“RTO”). Commissioner Christie wrote separately in concurrence to express his continued support for limiting the RTO participation adder to three years.

On May 19, 2022, FERC staff released its 2022 Summer Energy Market and Reliability Assessment (“Summer Assessment”). The Summer Assessment forecasts “higher than average” temperatures for the summer, which are expected to have a significant impact on demand for electricity, amid a continuation of extreme drought conditions in the West, and coming on the heels of the retirement of thousands of megawatts of baseload conventional resources.

On April 29, 2022, the FERC rejected Midcontinent Independent System Operator Inc.’s (“MISO”) proposed tariff revisions that sought to “extend” MISO Transmission Owners’ option to self-fund transmission upgrades so as to apply to Necessary Upgrades to support the connection of Merchant High Voltage Direct Current (“MHVDC”) transmission into MISO. FERC found that MISO failed to show its proposal was just and reasonable because MISO argued that Network Upgrades and Necessary Upgrades were functionally identical yet only proposed to extend the self-funding option traditionally applied to Network Upgrades without also extending other funding options and protections for customers.

On April 22, 2022, the Commission on remand from the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”), reversed its approval of the California Independent System Operator Corporation’s (“CAISO”) proposed Capacity Market Adder (“20% adder”). The Commission ordered CAISO to submit a compliance filing that removes the 20% adder from its Open Access Transmission Tariff (“OATT”) and replace it with an alternative methodology that excludes the 20% adder.

On April 5, 2022, FERC approved PJM Interconnection, L.L.C.’s (“PJM”) proposed revisions to the Consolidated Transmission Owners Agreement (“CTOA”) aimed at improving effectiveness and efficiency in decision-making among the 18 transmission owners currently eligible to vote on PJM business. Despite a protest arguing that the proposal would disenfranchise non-traditional transmission owners, FERC found that the proposed revisions “rebalance the CTOA voting rules to better align with individual PJM Transmission Owners’ economic stakes in the transmission system.”

On February 22, 2022, FERC issued a Supplemental Notice regarding its planned Technical Conference on its Notice of Inquiry on Financial Assurance Measures for licenses, scheduled to take place on Tuesday, April 26 at 11:30am.

The Supplemental Notice provides a schedule for the program and proposed panel topics.  The first…