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On September 30, 2014, the North American Electric Reliability Corporation (“NERC”) published an analysis of the impacts of the 2013-2014 Polar Vortex on generator performance in the Eastern and Texas Interconnections, and made recommendations as to how to improve performance during future extreme cold weather events.

On September 30, 2014, the Department of Energy (“DOE”) released a draft solicitation that would provide up to $12.6 billion in loan guarantees for innovative nuclear energy and “front end” nuclear projects.  In its announcement, DOE stated that the loan guarantees are to assist with the financial burdens of deploying next generation technology to diversify the United States’ clean energy portfolio.

On September 17, 2014, the Commodities Futures Trading Commission (“CFTC”) issued a final rule, amending its regulations to permit a person to exclude utility operations-related swaps entered into with “utility special entities” when calculating the aggregate gross notional amount of that person’s swap positions.  This exclusion is solely for purposes of the de minimis exception applicable to swaps with “special entities.”

On September 19, 2014, FERC, in response to a petition for declaratory order, disclaimed jurisdiction under both section 3 and section 7 of the Natural Gas Act (“NGA”) over Emera CNG, LLC’s (“Emera”) construction and operation of compressed natural gas (“CNG”) facilities that will be used to send CNG to the Bahamas via ocean-going tankers.  In reaching its decision, FERC noted that Emera’s proposed facilities would not directly load the CNG onto ships, but would rather compress natural gas at a location where the CNG would first be loaded onto trucks, and then be transported a quarter mile by those trucks to ocean-going tankers.

On September 15, 2014, the Commodity Futures Trading Commission (“CFTC”) filed a consent order signed by Brian Hunter, previously a natural gas trader for trading firm Amaranth Advisors LLC (“Amaranth”), pursuant to which Hunter will pay a civil penalty of $750,000, plus post-judgment interest, to resolve allegations that he manipulated the natural gas futures market in 2006.  Additionally, Hunter agreed to be “permanently restrained, enjoined and prohibited from directly or indirectly trading any futures contracts, options on futures contracts, or any other product or financial instrument regulated by the [CFTC].” 

On September 18, 2014, the Commission issued Order No. 676-H, which revises its regulations to incorporate by reference, with several exceptions, Version 003 of the Standards for Business Practices and Communication Protocols for Public Utilities, as mandatory and enforceable requirements.  The purpose of the Version 003 standards is to promote a more seamless marketplace for wholesale electricity.

On September 16, 2014, ISO New England Inc.’s (“ISO-NE”) eighth annual Forward Capacity Auction (“FCA 8”) results took effect by operation of law due to a deadlocked FERC that could not agree to approve or reject the results amid allegations that market power within the auction was not properly mitigated.  As a result, FERC on the same day issued a Show Cause Order requiring ISO-NE to either revise its tariff to allow for independent oversight of import offers prior to each FCA or show cause why it is not required to do so.

On September 18, 2014, FERC issued an order addressing Order No. 1000 compliance filings, and requests for rehearing regarding prior compliance filings, for the parties within the ColumbiaGrid Transmission Planning region in the Pacific Northwest.  In doing so, FERC clarified the role of public power entities in the regional transmission planning process, explaining that if a public power entity chooses to enroll in a regional transmission planning process, it is bound to the resulting cost allocation determinations.  However, FERC also approved a mechanism whereby a public power entity could refrain from enrolling in the process while still being included in its respective planning process.  Under this framework, if a public power entity is subsequently allocated costs under the regional cost allocation method, it could separately determine whether it would accept those costs based on its statutory authorities.

On September 8, 2014, the United States Court of Appeals for the Fifth Circuit (“Fifth Circuit”) upheld a rule issued by the Public Utility Commission of Texas (“PUCT”) which restricts Qualifying Facilities (“QFs”) that generate non-firm power from entering into Legally Enforceable Obligations (“LEOs”).  The PUCT had promulgated the rule as part of Texas’ implementation of FERC’s Public Utilities Regulatory Policies Act of 1978 (“PURPA”) regulations. The Fifth Circuit reversed the lower court’s finding that such requirements were inconsistent with PURPA, remanding for a further determination.  The Fifth Circuit also vacated the portion of the lower court’s order related to a specific PUCT order as lacking subject matter jurisdiction.   

On September 8, 2014, FERC held a technical conference on the subject of “uplift payments” in Regional Transmission Organization (“RTO”)/Independent System Operator (“ISO”) markets.  The conference was held several weeks after the release of Commission Staff’s preliminary analysis on the topic, and is the first of several technical conferences aimed at addressing the broader issue of improving price formation in energy and ancillary services markets.  The next conference will convene on October 28, 2014, and address the issues of offer price mitigation and offer price caps.