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On May 15, 2015, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) denied a petition for review of FERC’s order determining that the La Grange Hydroelectric Project (“Project”) fell within the mandatory licensing provisions of the Federal Power Act (“FPA”).  In doing so, the D.C. Circuit rejected arguments made by the owners of the Project – the Turlock Irrigation District and the Modesto Irrigation District (collectively, the “Districts”) – that FERC’s decision was arbitrary and capricious for asserting jurisdiction over a historical hydro facility that owners contend does not qualify for FPA’s mandatory licensing triggers.

On May 20, 2015, the U.S. District Court of the Eastern District of California (“District Court”) upheld FERC’s decision that it had jurisdiction over Barclays Bank PLC and four traders (collectively, “Barclays”) for allegedly manipulating electricity markets in the West.  In doing so, the District Court held that FERC maintained jurisdiction, and not the Commodity and Futures Trading Commission (“CFTC”).  The District Court also ruled that FERC’s jurisdiction under Federal Power Act (“FPA”) sections 201 and 222 – FERC’s authority to regulate transmission and sale of wholesale electric energy in interstate commerce and FERC’s anti-manipulation rule, respectively – was appropriate.

On May 20, 2015, the North American Electric Reliability Corporation (“NERC”) submitted to the Commission a compliance filing relating to the Reliability Assurance Initiative (“RAI”)—a multi-year effort among NERC and the Regional Entities designed to transition NERC’s Compliance Monitoring and Enforcement Program (“CMEP”) to a “risk-based” approach that focuses CMEP resources on certain activities based on the proportional risk that those activities pose to the reliability of the Bulk Electric System.

On May 15, 2015, the FERC commissioners sent a letter to the Environmental Protection Agency (“EPA”) addressing two areas where FERC could contribute to maintaining reliability under EPA’s Clean Power Plan (“CPP”).  FERC’s letter was in response to EPA’s Acting Assistant Administrator Janet McCabe’s May 6, 2015 letter to FERC regarding FERC’s role in the CPP and the steps the two agencies have already pursued thus far.

In an order issued May 21, 2015, FERC approved an amendment to PacifiCorp’s Network Operating Agreement (“NOA”) between PacifiCorp and its merchant function, PacifiCorp Energy, allowing for a new planning redispatch protocol.  The amendment prevents the need for PacifiCorp to build network upgrades that are driven solely by qualifying facility (“QF”) requests to site in a constrained area, and that are not otherwise needed for economic or reliability reasons.

On May 13, 2015, Commissioner Philip Moeller announced his intent to resign from FERC upon the confirmation of his successor by the U.S. Senate.  Commissioner Moeller joined FERC in 2006.  He is currently serving the final months of his second term, set to expire on June 30 of this year (see June 25, 2010 edition of the WER).

On May 14, 2015, the Commission issued a Notice of Proposed Rulemaking (“NOPR”) in which it proposed to approve Reliability Standard TPL-007-1 regarding Geomagnetic Disturbance (“GMD”) Events.  According to the Commission, the Reliability Standard requires applicable Bulk-Power System (“BPS”) owners and operators to conduct initial and on-going vulnerability assessments regarding the potential impact of a benchmark (i.e.,1-in-100 year) GMD event on the BPS as a whole, and on BPS components individually.  In addition, the Commission stated that the proposed Reliability Standard requires applicable entities to develop and implement corrective action plans to mitigate any vulnerabilities identified by such assessments.

On May 14, 2015, FERC issued a Notice of Proposed Rulemaking (“NOPR”) proposing to change the date on which FERC begins to assess annual charges for hydropower licenses and exemptions that authorize unconstructed projects and unconstructed new capacity.  The Federal Power Act and the Omnibus Budget Reconciliation Act of 1986 require that FERC collect annual charges from such licensees and exemptees in order to cover the costs of administering the hydropower portion of the Federal Power Act.

On April 29, 2015, the United States Court of Appeals for the Ninth Circuit (the “Ninth Circuit”) held that FERC failed to comply with the court’s remand order in a 2004 case involving the California Energy Crisis—California ex rel. Lockyer v. FERC (“Lockyer”)—by improperly structuring its administrative fact-finding proceeding to focus solely on the accumulation by wholesale power sellers of excessive market share, and not including an analysis of possible deficiencies in transaction reporting by those sellers.  The court remanded the case back to FERC for further proceedings.

On May 1, 2015, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) held that the Environmental Protection Agency (“EPA”) acted arbitrarily and capriciously when it modified its National Emissions Standards and New Source Performance Standards (“NSPS”) to allow backup generators to operate without emission controls for up to 100 hours per year in emergency demand-response programs.  As a result of the ruling, the D.C. Circuit reversed the 100-hour exemption and remanded the rules back to EPA for further action.