On October 25, the North American Electric Reliability Corporation (NERC) released a report regarding the lessons learned from the electric industry’s response to the novel coronavirus (COVID-19) pandemic. NERC’s report described the industry’s response and provided possible solutions and paths for the industry’s future based on its findings.

Continue Reading NERC Issues Report on Lessons Learned from Utilities Response to the COVID-19 Pandemic

On October 21, 2021, FERC denied multiple complaints against Panhandle Eastern Pipe Line Company, LP (“Panhandle”) regarding its refusal to waive all penalties associated with Operational Flow Orders (“OFO”) issued during the extreme Storm Uri weather event in February 2021. In doing so, FERC upheld penalties levied against Panhandle customers who argued they were forced to use the pipeline contrary to the OFO order to ensure reliable service for their own end-use customers.
Continue Reading FERC Rejects Attempts to Waive $75 Million in Pipeline Penalties During Storm Uri

On October 21, 2021, during the Federal Energy Regulatory Commission’s monthly open meeting, each Commissioner released an explanatory statement regarding their views of the Southeast Energy Market Exchange (“SEEM”) proposal. Ultimately, the proposal took effect by operation of law on October 12 after the Commission was divided two-two on the lawfulness of the proposal. Under such circumstances, the Federal Power Act requires each Commissioner to issue a written statement explaining their views with respect to the changes. The Commissioners were split on multiple issues, including whether the proposal provided enough protection for competition and whether the Mobile-Sierra presumption should apply to SEEM transactions.
Continue Reading FERC Commissioners Each Explain Southeast Energy Market Exchange Impasse

On August 27, 2021, in Oklahoma Gas and Electric Company v. FERC, Case No. 20-1062, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) denied petitions for review of FERC’s orders involving the Southwest Power Pool, Inc. (“SPP”) process for reimbursing certain of its customers for transmission system upgrades that those customers paid for pursuant to Attachment Z2 of SPP’s Open Access Transmission Tariff (“Tariff”). The D.C. Circuit’s order upheld FERC’s decision to deny retroactive waiver of Section I.7.1 of SPP’s Tariff—which provides that any billing adjustments must be made within one year after the charges were incurred—thus preventing SPP from implementing the Attachment Z2 revenue crediting process retroactively from 2008-2016. The court also upheld FERC’s orders requiring SPP to refund any charges it previously collected for the 2008-2016 period. Basing its decision on the filed rate doctrine, the court concluded that “the filed rate requirements are a formidable obstacle for entities regulated by FERC that wish to obtain retroactive relief from the terms of their tariff.”
Continue Reading D.C. Circuit Denies Petitions for Review; Holds that the Filed Rate Doctrine Prevents SPP from Reimbursing Customers for Historical Transmission Upgrade Costs

On September 7, 2021, FERC staff issued a whitepaper to frame discussions ahead of two technical conferences planning to discuss potential ancillary services reforms.  The whitepaper summarizes approaches that RTOs/ISOs are currently evaluating to reform energy and ancillary services markets to address the need for greater operational flexibility, including increasing shortage prices, procuring higher quantities of existing “traditional” ancillary services products (like an operating reserve demand curve), and creating new ancillary services products.
Continue Reading FERC Staff Issues Whitepaper on Energy and Ancillary Services Market Reforms Ahead of Technical Conferences

On July 15, 2021, FERC issued an Advance Notice of Proposed Rulemaking (“ANOPR”) to solicit comments on potential reforms for electric regional transmission planning, cost allocation, and generator interconnection processes. Through public comment, the Commission seeks input on how transmission and interconnection planning and cost allocation procedures can be reformed to facilitate additional renewable energy integration and adjust for increasing demands on the grid. Comments on the ANOPR and replies to Comments are due 75 days and 105 days, respectively, after the ANOPR’s publication in the Federal Register. Following these filings, the Commission may consider whether to issue a formal Notice of Proposed Rulemaking, which would precede any final rule on these issues.
Continue Reading FERC Issues Advance Notice of Proposed Rulemaking on Potential Reforms for Electric Transmission Planning, Cost Allocation, and Generator Interconnection Processes

On June 17, 2021, FERC took two actions to encourage transmission development across the U.S.  Specifically, FERC issued an order establishing a joint state-federal task force to evaluate transmission development issues, and also issued a policy statement clarifying that states and public utilities remain free to coordinate and collaborate on transmission projects. As Chairman Glick stated in the Commission meeting announcing the order and policy statement, these actions are intended to enable FERC to be “fully engaged with [its] state partners,” ahead of “several transmission initiatives” that may be issued from the Commission in the coming months.
Continue Reading FERC Establishes Joint Federal-State Task Force with NARUC and Issues Policy Statement to Spur Transmission Development

On April 15, 2021, FERC issued a long-awaited policy statement providing guidance on incorporating state-determined carbon pricing into organized markets operated by Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”). The non-binding policy statement explains how FERC will review and consider rate filings submitted under section 205 of the Federal Power Act (“FPA”) to establish market rules for incorporating state-determined carbon pricing into RTOs and ISOs.
Continue Reading FERC Issues Policy Statement on Carbon Pricing in Organized Wholesale Electric Markets

On April 15, 2021, FERC issued a declaratory order confirming that under FERC Order No. 1000, incumbent New York Transmission Owners (“NYTOs”) have a federal right of first refusal (“ROFR”) for upgrades to their existing transmission facilities, including upgrades that are part of another Developer’s transmission project selected in the regional transmission plan for cost allocation. Specifically, FERC declared that the foundational agreements and Section 31.6.4 of the New York Independent System Operator, Inc. (“NYISO”) Open Access Transmission Tariff (“OATT”) established a ROFR of NYTOs to build, own and recover the cost of transmission upgrades to their existing facilities. In the same order, FERC denied requested clarification from the NYISO that such ROFR-exercising NYTOs could be considered “Developers” under the transmission planning process. FERC also provided additional clarity on the distinction between ROFR-eligible “upgrades” and new transmission facilities, indicating that different physical configurations resulting in power flow changes, increasing voltage/transfer capability, and performing different transmission functions, likely fall outside of traditional “upgrades.”

Continue Reading FERC Confirms NYTOs Federal Right of First Refusal to Build and Recover Cost of Upgrades to Existing Transmission Facilities