On July 18, 2019, FERC issued a final rule (“Order No. 860”) revising its data collection and reporting requirements for market-based rate (“MBR”) sellers (“MBR Sellers”).  FERC will require MBR Sellers to provide certain information about corporate relationships and affiliations through a “relational database” that FERC will implement over the next year and a half.  Among other things, FERC adopted reforms to (1) revise the scope of ownership information provided by MBR Sellers in their market-based rate filings; (2) change the information to be included in an asset appendix; (3) require MBR Sellers to submit monthly updates to their relational database; (4) require MBR Sellers to file quarterly notices of change in status, instead of 30 days after the change in status; and (5) remove the existing requirement that MBR Sellers submit corporate organization charts.  Notably, FERC declined to adopt its proposal requiring MBR Sellers to submit “Connected Entity” information.
Continue Reading FERC Revises Data Submission Requirements for Market-Based Rate Sellers

On July 18, 2019, FERC issued Order No. 861, modifying its regulations regarding the horizontal market power analysis required to obtain authorization to sell energy, capacity, or ancillary services at market-based rates.  FERC adopted its proposal (see December 20, 2018 edition of the WER) to relieve electric power sellers of the obligation to submit indicative screens to obtain or retain market-based rate authority in any Regional Transmission Organization (“RTO”)/Independent System Operator (“ISO”) market with FERC-approved RTO/ISO monitoring and mitigation.  Market-based rate sellers (“MBR Sellers”) must continue to submit indicative screens for authorization to make capacity sales in any RTO/ISO that lacks an RTO/ISO-administered capacity market subject to FERC-approved monitoring and mitigation—currently, the California Independent System Operator (“CAISO”) and Southwest Power Pool (“SPP”).  FERC stated its intent for the rule is to ease regulatory burdens on MBR Sellers while simultaneously preserving its authority to prevent the exercise of market power.
Continue Reading FERC Eliminates Obligation to Submit Indicative Screens to Obtain Market-Based Rate Authority in Certain Wholesale Markets

On July 18, 2019, FERC issued an order denying in part and granting in part a request for clarification or rehearing of Order No. 856, which revised its regulations relating to interlocking officers and directors.  FERC provided additional clarification and explanation, but declined to make any further revisions or to allow rehearing.
Continue Reading FERC Grants Partial Clarification of Final Rule on Interlocking Directorates

On April 1, 2019, FERC issued deficiency letters to the six FERC-jurisdictional ISOs and RTOs, asking for additional information about how they intend to comply with the directives of FERC Order No. 841.  The specific ISOs and RTOs are: ISO New England Inc. (“ISO-NE”); Midcontinent Independent System Operator, Inc. (“MISO”); California Independent System Operator Corporation (“CAISO”); New York Independent System Operator, Inc. (“NYISO”); PJM Interconnection, L.L.C. (“PJM”); and Southwest Power Pool, Inc. (“SPP”).  Each grid operator has thirty days to respond to the deficiency letters.
Continue Reading FERC Directs RTOs and ISOs to Provide Additional Details on Storage Participation to Ensure Compliance with Order No. 841

On March 21, 2019, the same day FERC issued an inquiry into Return on Equity (“ROE”) policies (see here), FERC also published another Notice of Inquiry (“NOI”) seeking comments on the scope and implementation of its electric transmission incentives policy and regulations.  The NOI covers a broad range of topics from using incentives to encourage new technology integration to unlocking location constrained resources and addressing resiliency concerns.  Initial comments are due 90 days after the NOI is published in the Federal Register, with reply comments due 30 days thereafter.

Continue Reading FERC Issues Notice of Inquiry on Transmission Incentives

On March 21, 2019, FERC issued a Notice of Inquiry (“NOI”) seeking information regarding whether and how to revise its policy for determining the rate of return on equity (“ROE”) used in setting rates charged by jurisdictional public utilities.  The NOI also seeks comment on whether any changes to the Commission’s ROE policies for public utilities should be applied to interstate natural gas and oil pipelines.  Specifically, the NOI requests information in eight areas:  (1) the role of FERC’s base ROE in investment decision-making and what objectives should guide the Commission’s approach; (2) whether uniform application of FERC’s base ROE policy across the electric, interstate natural gas pipeline and oil pipeline industries is appropriate and advisable; (3) performance of the discounted cash flow (“DCF”) model; (4) proxy groups; (5) the choice of financial model(s) used; (6) the mismatch between market-based ROE determinations and book-value rate base; (7) how FERC determines whether an existing ROE is unjust and unreasonable under the first prong of Federal Power Act section 206; and (8) model mechanics and implementation.
Continue Reading FERC Issues Notice of Inquiry on ROE Policy

At a time of significant industry transformation driven by technological change and spurred on by environmental policy concerns, the Federal Energy Regulatory Commission (“FERC” or “Commission”) has now added a significant layer to the stack of policy debates – the future of transmission investment.  Many states have seized the initiative in terms of establishing preferable resource mixes for in-state customers, and are spearheading significant pushes for greater renewable and storage resource deployment.  FERC has now joined the fray by opening up the policy debate anew regarding how to spur (or whether to spur) additional transmission sector investment.  The FERC order described below focuses on regulatory and market rules impacting transmission investment (Docket No. PL19-3-000).  The agency also opened a companion docket requesting comments on the details of its policies regarding establishment of a public utility transmission owner’s stated return on equity (“ROE”) (Docket No. PL19-4-000).  The Washington Energy Report will provide detailed summaries of these orders via our blog.  FERC’s mention here of “an increased emphasis on the reliability of transmission infrastructure” (emphasis added) could signal an attempt to re-focus the U.S. Department of Energy’s resiliency concerns to an arena that gives FERC home-field advantage.  Lest the states forget, FERC controls the price of admission for a ticket to the interstate transmission network, and this open-ended fact-finding effort bears a high likelihood of impacting the price of such tickets (for a large portion of the continental United States).
Continue Reading Summary & Insight: Federal Policy Inquiry on Electric Transmission Incentives

On February 21, 2019, FERC issued a final rule (“Order No. 855”) amending Part 33 of its regulations to establish that FERC authorization for mergers or consolidations of a public utility’s jurisdictional facilities is only required when such transactions exceed a $10 million threshold.  Order No. 855 also establishes that public utilities are not required to secure FERC authorization for mergers and acquisitions that are valued between $1 million and $10 million – instead they are only required to submit a notification filing.  Order No. 855 will become effective 30 days after publication in the Federal Register.
Continue Reading FERC Issues Final Rule Regarding Amended Mergers and Consolidations Requirements

On February 21, 2019, FERC issued an order (“Order No. 845-A”) granting in part and denying in part various requests for rehearing and clarification of its determinations in Order No. 845.  In Order No. 845, FERC revised its interconnection rules for large generators, i.e., generators with capacities greater than 20 MW.  Although the requests for rehearing asked FERC to reconsider all but one of the Order No. 845 reforms, Order No. 845-A effectively leaves the major reforms intact, and focuses in large part on explaining FERC’s intentions as to how the new rules should work.  Compliance filings in response to both Order Nos. 845 and 845-A are due May 22, 2019.
Continue Reading FERC Revises and Clarifies Order No. 845 Large Generator Interconnection Reforms

On February 21, 2019, FERC issued a Final Rule, Order No. 856, amending its regulations related to interlocking officers and directors in response to a Notice of Proposed Rulemaking (“NOPR”) issued on July 18, 2018 to revise Parts 45 and 46 of its regulations (see July 24, 2018 edition of the WER).

Continue Reading FERC Amends Its Interlocking Officers and Directors Regulations