Rulemakings

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On July 18, 2018, FERC issued Order No. 849, finalizing its procedures and regulations regarding the effect of reduced corporate income taxes on certain natural gas pipelines and their rates at FERC.  Notably, Order No. 849 requires interstate natural gas pipelines to submit “FERC Form No. 501-G,” an abbreviated cost and revenue study designed to illustrate the effect of reduced corporate tax rates, which FERC might then use to determine whether the pipeline’s rates may be unjust and unreasonable under the Natural Gas Act (“NGA”). 

On July 19, 2018, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) issued a Notice of Proposed Rulemaking (“NOPR”) that would update FERC’s regulations regarding interlocking positions.  According to the NOPR, the proposed revisions to parts 45 and 46 of the Commission’s regulations aim to “reflect statutory changes to the circumstances in which an applicant who would otherwise require Commission authorization to hold an interlocking position need not do so.”

On May 17, 2018, FERC issued Order No. 833-A wherein it denied rehearing of Order No. 833 and granted, in part, Edison Electric Institute’s (“EEI”) request for clarification of Order No. 833.  Order No. 833 amended FERC’s regulations regarding Critical Energy Infrastructure Information (“CEII”), as directed by the FAST Act.  The FAST Act, signed into law on December 4, 2015, added section 215A to the Federal Power Act (“FPA”) to improve the security and resilience of energy infrastructure in the face of emergencies.  The FAST Act also directed FERC to issue regulations on the procedures for designating certain material as CEII, provided for the imposition of sanctions on any party who knowingly discloses CEII, and authorized the voluntary sharing of CEII material.

On March 17, 2018, FERC issued a Notice of Proposed Rulemaking (“NOPR”) proposing to eliminate the Licensed Hydropower Development Recreation Report, designated as FERC Form No. 80 (“Form 80”), which collects information on the use and development of recreational facilities at licensed hydropower projects.  In addition, FERC proposed in the NOPR to revise related regulations in order “to modernize public notice practices, clarify recreational signage requirements, and provide flexibility to assist licensees’ compliance efforts.” 

On April 19, 2018, FERC issued a final rule (“Order No. 844”) addressing transparency in markets operated by Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”).  FERC required that each RTO/ISO establish in its tariff: requirements to report information about uplift payments for each resource and transmission zone; requirements to report information on each operator-initiated commitment; and the transmission constraint penalty factors used in its market software.  Order No. 844 will become effective 75 days after publication in the Federal Register.

On April 19, 2018, FERC issued a final rule (“Order No. 845”) revising its pro forma Large Generator Interconnection Procedures (“LGIP”) and the pro forma Large Generator Interconnection Agreement (“LGIA”) to address reforms of generator interconnection procedures and agreements for generators of more than 20 megawatts.  FERC adopted a majority of the reforms proposed in FERC’s December 15, 2016 Notice of Proposed Rulemaking (“NOPR”).

On April 19, 2018, FERC issued a Notice of Inquiry (“NOI”) seeking information regarding whether—and if so, how—to revise its policy for determining if a proposed natural gas pipeline is in the public convenience and necessity.  Specifically, the NOI requests information in four areas related to FERC’s policy for reviewing such certificate applications: (1) determining need for a pipeline project; (2) eminent domain issues; (3) evaluating environmental impacts, including greenhouse gas (“GHG”) emissions and climate change; and (4) changes that would improve the efficiency and effectiveness of FERC’s review.

On March 28, 2018, FERC partially accepted the Midcontinent Independent System Operator, Inc.’s (“MISO”) Order No. 831 compliance filing (“March 28 Order”).  In Order Nos. 831 and 831-A, FERC required Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”) to amend their respective tariff provisions governing existing offer caps on incremental energy offers, which FERC determined was necessary to: (1) avoid suppressing Locational Marginal Prices (“LMPs”) below the marginal cost of production; and (2) fully compensate generation resources for the costs incurred to serve load (see November 21, 2016 edition of the WER). 

On March 20, 2018, FERC extended the time for entities to submit reply comments to the filings submitted by the Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”) in the new grid resiliency proceeding.  Several trade associations requested additional time to respond to the “significant” comments that the RTOs/ISOs submitted to FERC, pertaining to the resilience of the bulk power system in their regions.

In response to concerns regarding the changing nature of the nation’s energy supply portfolio and the emergence of promising energy storage technologies, the Commission in recent years issued several notices of inquiry, notices of proposed rulemaking, and policy statements regarding various energy storage and ancillary service supply issues.  Additionally, the Commission considered but ultimately declined to pursue the Department of Energy-initiated rulemaking on grid resiliency and reliability.  On February 15, 2018, however, the Commission took concrete action by issuing a pair of Final Rules, addressing (i) storage participation in regional markets; and (ii) the provision of primary frequency response, a critical grid support service.