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On September 9, 2014, the Energy and Power Subcommittee held a hearing on the Environmental Protection Agency’s (“EPA”) proposed Clean Power Plan (“CPP”) – a proposed rule designed to limit carbon dioxide emissions through state-developed plans.  The hearing’s focus was to obtain state officials’ perspectives on the challenges associated with implementing the CPP.  The hearing also marked the third time the Subcommittee has heard testimony on the CPP, which includes testimony from FERC commissioners earlier in the year (see July 29, 2014 edition of the WER).

On August 26, 2014, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) vacated and remanded a FERC decision that required a generator to pay network upgrade costs related to its interconnection in the PJM Interconnection, L.L.C. (“PJM”).  The D.C. Circuit held that FERC did not justify its reasoning when it departed from its own precedent and required West Deptford Energy, L.L.C. (“West Deptford”) to pay upgrade charges pursuant to cost-allocation provisions of a superseded PJM tariff, rather than pursuant to provisions of the currently-effective tariff.

On August 22, 2014, FERC authorized construction, operation and abandonment under a blanket certificate for Columbia Gas Transmission, LLC’s (“Columbia Gas”) proposed Line 1655 North Project in Cumberland County, Pennsylvania.  FERC rejected arguments that its Environmental Assessment (“EA”) of the project improperly segmented the project and failed to consider the cumulative impacts of projects regarding Columbia Gas’ Modernization Program.  In doing so, FERC distinguished the facts and circumstances surrounding the Line 1655 North Project from a recent U.S. Court of Appeals for the District of Columbia decision that held that FERC had violated the National Environmental Policy Act for segmenting Tennessee Gas Pipeline Company, L.L.C. projects in its respective EA and failed to provide a meaningful analysis of the cumulative impacts of four interconnected upgrade projects on one mainline (see June 10, 2014 edition of the WER).

On August 22, 2014, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) vacated an order by FERC which had upheld the North American Electric Reliability Corporation’s (“NERC”) assessment of reliability based penalties on the Southwestern Power Administration (“SWPA”), an entity within the United States Department of Energy (“DOE”).  The D.C. Circuit explained that in order to authorize a monetary penalty against the federal government, the statute must unequivocally subject the government to monetary liability, something that the provisions of the Federal Power Act (“FPA”) which address enforcement of reliability do not do.

On September 4, 2014, FERC issued two concurrent declaratory orders – one involving Shell U.S. Gas & Power, LLC (“Shell”), and the other involving Pivotal LNG, Inc. (“Pivotal”) – that addressed FERC’s jurisdiction over Liquid Natural Gas (“LNG”) facilities, and the transportation and sale of LNG in general, under the Natural Gas Act (“NGA”).  FERC generally stated in its declaratory orders that (1) the transportation of LNG via non-pipeline modes of transportation to end users would not be subject to FERC’s jurisdiction under section 7 of the NGA, (2) facilities that receive LNG by waterborne vessels in interstate commerce that will be delivered to end users without entering a pipeline system will not be considered LNG Terminals under section 3 of the NGA, and (3) sales for resale will only be subject to FERC jurisdiction under section 7 of the NGA if the gas is transported at some point by interstate pipeline.

Today, FERC Commissioners and Norman Bay, who has been confirmed by the Senate to serve as a FERC Commissioner, will testify before the House Subcommittee on Energy and Power regarding the potential impact of the Environmental Protection Agency’s (“EPA”) proposed rulemaking establishing carbon emissions guidelines for stationary generation sources.  EPA’s proposed rule is specifically designed to reduce greenhouse gas emissions from existing fossil fuel-fired electric generating units.

On July 18, 2014, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued a decision denying petitions for review of FERC’s orders related to Regional Transmission Organization (“RTO”) transmission expansion cost allocation for FirstEnergy Service Company (“FirstEnergy”) after it transitioned between two RTOs.  Specifically, the D.C. Circuit affirmed FERC’s rejection of FirstEnergy’s request for relief from the PJM Interconnection L.L.C.’s (“PJM”) annual allocation of transmission expansion plan costs for any project approved before FirstEnergy transitioned to that RTO. 

On July 18, 2014, United States Senator Robert Casey (D-PA) sent a letter to the Department of Energy’s Inspector General requesting a review of FERC’s Office of Enforcement’s practices with regard to investigations of alleged manipulation in energy markets.  Senator Casey requested that such a review take place in order to ensure that FERC’s Office of Enforcement was fairly conducting its investigations and that all enforcement actions were transparent.