Transmission

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On October 6, 2017, FERC rejected without prejudice Southwest Power Pool, Inc.’s (“SPP”) proposed tariff revisions and a cost sharing agreement related to two transmission projects with Associated Electric Cooperative (“AECI”), a rural electric cooperative that has member cooperatives in Missouri, Iowa, and Oklahoma, and City Utilities of Springfield, Missouri (“City Utilities”), a non-public utility that is a transmission-owning member of SPP.  AECI is not a member of SPP.  FERC found that SPP’s proposal did not allocate the costs of the proposed transmission projects to its beneficiaries in a “roughly commensurate” manner.  For this reason, FERC rejected SPP’s tariff revisions and cost sharing agreement without prejudice.  FERC’s action is notable in that cross-border projects have been few and far between in the post-Order No. 1000 world of transmission planning, and FERC might be expected to tout the success of its planning initiatives.  FERC nonetheless found the cost allocation proposals to have serious shortcomings. 

On September 27, 2017, FERC issued an order granting a request from the New York Independent System Operator, Inc. (“NYISO”) to waive certain sections of its Market Administration and Control Area Services Tariff (“Tariff”) as they pertain to particular transmission shortage cost provisions.  NYISO submitted the waiver request in January 2017 to allow time to correct certain discrepancies with its Tariff and software used to resolve transmission constraints. 

On September 28, 2017, FERC accepted the change in status filing submitted by Portland General Electric Company (“Portland General”) and granted Portland General authorization to transact at market-based rates in the Energy Imbalance Market (“EIM”) administered by California Independent System Operator Corporation (“CAISO”).  Portland General’s change in status filing included a market power analysis examining the entire EIM footprint, as well as an analysis that the Portland General balancing authority area (“BAA”) will not be a submarket within the EIM, once Portland General begins its participation in the EIM on October 1, 2017.

On September 20, 2017, FERC rejected the Midcontinent Independent System Operator, Inc.’s (“MISO”) proposed revisions to Attachment FF-6 of its Open Access Transmission, Energy and Operating Reserve Markets Tariff (“Tariff”).  Specifically, as part of its Order No. 1000 interregional planning and cost allocation efforts, MISO filed a proposed cost allocation plan for interregional projects that terminate wholly outside of MISO.  Ultimately, FERC found that MISO did not demonstrate how its proposed cost allocation plan was just and reasonable and therefore rejected MISO’s filing. 

On September 8, 2017, FERC rejected an unexecuted amendment to an interconnection service agreement (“Agreement”), which PJM Interconnection, LLC (“PJM”) filed on behalf of Hudson Transmission Partners, LLC (“HTP”). The amended Agreement sought to allow HTP to convert 320 MW of Firm Transmission Withdrawal Rights to Non-Firm Transmission Withdrawal Rights—a conversion opposed by another party to the Agreement, Public Service Electric and Gas Company (“PSEG”), due to its alleged potential impact on PJM’s pending Regional Transmission Expansion Plan (“RTEP”) cost allocation proceedings.  Along with its rejection of the amended Agreement, FERC initiated a Federal Power Act (“FPA”) section 206 proceeding into whether the Agreement, and PSEG’s withholding of consent for the conversion, unjustly and unreasonably restrict HTP’s ability to convert its Firm Transmission Withdrawal Rights.

On September 1, 2017, FERC rejected without prejudice the California Independent System Operator Corporation’s (“CAISO”) April 18, 2017 proposal to revise the CAISO Tariff to create a new class of participating transmission owner (“PTO”) called the “Certified Small PTO,” whose low-voltage, generator-interconnection-driven network upgrade costs would be allocated regionally, rather than locally.

On June 30, 2017, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) denied a petition by Seminole Electric Cooperative, Inc. (“Seminole”) seeking to increase the refund amount FERC ordered Florida Power & Light Company (“FP&L”) to pay Seminole for overcharges related to energy imbalance services.  Seminole raised two challenges to FERC’s refund order: (1) FERC improperly restricted the refund period to twenty-four months, as opposed to the full four and a half year period for which FP&L overcharged Seminole for energy imbalance services; and (2) FERC failed to require that energy imbalance charges be apportioned among the three tiers established in Schedule 4 of FP&L’s Tariff.

On June 1, 2017, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) denied petitions for review and upheld FERC’s interpretation of a transmission agreement (the “Operation Agreement”) between the Transmission Agency of Northern California (“TANC”) and Pacific Gas and Electric Company (“PG&E”).

On June 1, 2017, the United States Court of Appeals for the D.C. Circuit (“D.C. Circuit”) dismissed LSP Transmission Holdings, LLC’s and LS Power Transmission, LLC’s (collectively, “LS Power”) challenges to Southwest Power Pool, Inc.’s (“SPP”) tariff revisions regarding the criteria SPP considers in its Order No. 1000 planning process to select developers for transmission projects identified for cost allocation through the Order No. 1000 planning process.  In doing so, the D.C. Circuit held that LS Power lacked standing to challenge FERC’s orders approving SPP’s tariff revisions because LS Power has no active bids to build a transmission project, nor has LS Power had a bid rejected by SPP.

On May 9, 2017, the New Jersey Boroughs of Milltown, Park Ridge, and South River (collectively, “New Jersey Boroughs”) filed a Federal Power Act (“FPA”) Section 206 complaint against Public Service Electric & Gas Company (“PSE&G”) seeking to reduce PSE&G’s current base return on equity (“ROE”) of 11.18 percent to a base ROE of no higher than 8.3 percent.  Additionally, the New Jersey Boroughs requested that FERC order refunds and establish the date of the complaint as the refund effective date.