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.  

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”).

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.

On June 27, 2024, FERC issued an advance notice of proposed rulemaking (“ANOPR”) regarding potential reforms to require transmission providers to use dynamic line ratings (“DLRs”) to encourage more accurate and transparent line ratings. The Commission seeks comment on a proposed DLR framework and whether other transmission line rating reforms are needed to ensure just and reasonable and not unduly discriminatory or preferential FERC-jurisdictional rates. Initial and reply comments are due 90 and 120 days after the ANOPR’s publication in the Federal Register, respectively. After the comment period in this proceeding ends, FERC may consider issuing a formal Notice of Proposed Rulemaking, which would be a prerequisite to issuing any final rule.

On May 23, 2024, FERC issued an Order denying Lackawanna Energy Center LLC’s (“Lackawanna”) complaint against PJM Interconnection, L.L.C. (“PJM”) alleging that PJM failed to reimburse Lackawanna for lost opportunity costs (“LOC”) incurred following allegedly improper curtailment orders from PJM during a 2023 transmission line outage.  Lackawanna argued that PJM’s curtailment of its generation output violated the Federal Power Act and the PJM Tariff, which typically allow for LOC payments when generator output is reduced due to transmission constraints or reliability issues.  FERC dismissed all claims raised in the complaint.

On May 23, 2024, FERC approved the North American Electric Reliability Corporation’s (“NERC”) proposed Critical Infrastructure Protection (“CIP”) Reliability Standard, CIP-012-2 (Cyber Security – Communications between Control Centers), which is intended to improve upon and expand existing reliability standards to mitigate risks posed by loss of availability of communication links and certain data transmitted between bulk electric system (“BES”) Control Centers. FERC also approved NERC’s associated implementation plan, violation risk factors and violation severity levels, and the retirement of Reliability Standard CIP-012-1.

On May 13, 2024, the Commission announced two major transmission reform final rules: Building for the Future Through Electric Regional Transmission Planning and Cost Allocation (“Order No. 1920”) and Applications for Permits to Site Interstate Electric Transmission Facilities (“Order No. 1977”). Order No. 1920, which adopts specific requirements for how transmission providers must conduct long-term planning and allocate costs for regional transmission facilities, was the subject of significant debate at today’s meeting and only mustered two votes in support from the three sitting commissioners. The Commission unanimously approved Order No. 1977, which updates the process FERC will use in the limited circumstances in which it must exercise its authority over siting electric transmission lines, as directed by Congress in the Infrastructure Investment and Jobs Act of 2021 (“IIJA”).

On March 12, 2024, the U.S. Court of Appeals for the Third Circuit upheld a prospective rule change to PJM Interconnection, L.L.C.’s (“PJM”) annual capacity auction but struck down attempts by PJM and FERC to apply the rule change to the ongoing auction held in December 2022.  Although the rule change permits PJM to adjust the Locational Deliverability Area (“LDA”) Reliability Requirement downward to reflect the lack of participation in the December 2022 auction by certain resources to correct for distortions to the auction results, the Third Circuit held that FERC could not permit the change to go into effect in the middle of an ongoing auction.

The United States Court of Appeals for the District of Columbia (“D.C. Circuit”) recently upheld two FERC orders granting natural gas pipeline developers’ requests to extend their construction deadlines. The D.C. Circuit denied the Sierra Club’s petitions for review of the extension orders because the court determined that FERC’s decisions were reasonable and adequately supported by the record. The D.C. Circuit further provided that FERC has broad discretion in determining whether a developer has demonstrated good cause for an extension and whether circumstances have changed enough to warrant revisiting FERC’s original findings.