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On May 16, 2013, FERC’s Office of Enforcement and Office of Electric Reliability jointly presented their annual assessment of the condition and reliability of the energy market to FERC.  The presentation, titled Summer 2013 Energy Market and Reliability Assessment, predicted an increase in natural gas prices due to higher-than-normal summer temperatures, as well as an increase in coal usage due to the increased natural gas prices.

On May 16, 2013, FERC issued an order on an investigation (“Investigation Order”) that will require revisions to the formula rate protocols of the Midcontinent (previously Midwest) Independent System Operator, Inc. (“MISO”) and its Transmission Owners (“TOs”).  The formula rate protocols are used by the TOs when calculating annual charges pursuant to their formula transmission rates.  As a result of FERC’s Investigation Order, MISO and the TOs must revise their formula rate protocols to: (1) allow for increased participation in the annual update of the TOs formula rates; (2) provide interested parties with additional and more specific information regarding the annual update process; and (3) allow interested the opportunity to challenge those updates.

On May 16, 2013, the Commission issued Order No. 779, “Reliability Standards for Geomagnetic Disturbances,” directing the North American Electric Reliability Corporation (“NERC”) to submit for approval reliability standards that address the impact of Geomagnetic Disturbances (“GMD”) on the “reliable operation of the Bulk Power System.”  Order No. 779 follows an October 12, 2012 Notice of Proposed Rulemaking (“NOPR”), and reflects comments on the NOPR received by the Commission (see October 21, 2012 edition of the WER).

On May 16, 2013, the U.S. Senate confirmed Dr. Ernest Moniz as the next Secretary for the Department of Energy (“DOE”).  With a unanimous vote of 97-0, Dr. Moniz succeeds Secretary Steven Chu.  Dr. Moniz was previously the Under Secretary for DOE from 1997 until 2001, and served as a professor of Physics and Engineering at the Massachusetts Institute of Technology prior to his nomination (see March 11, 2013 edition of the WER).

On May 8, 2013, FERC denied Linden VFT, LLC’s (“Linden”) complaint against two power marketers, Brookfield Energy Marketing, L.P. (“Brookfield”) and Cargill Power Markets, LLC (“Cargill”), for failure to pay pass-through charges related to PJM Interconnection, LLC (“PJM”) transmission upgrades.  In denying the complaint, FERC determined that Linden lacked the contractual authority to charge for the additional costs.

On May 9, 2013, FERC issued a notice that it will hold a special Commission meeting on May 16, 2013 to hear presentations from representatives of Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”) on natural gas and electric coordination.  The meeting follows a November 15, 2012 order requiring RTOs and ISOs to brief FERC on their experiences during the winter and spring seasons, share any advances made in increased coordination between the two industries, and voice any concerns that have emerged.

On May 7, 2013, FERC announced that it will hold a Commissioner-led Technical Conference on reliability on Tuesday, July 9, 2013 from 9:00 AM to 5:00 PM.  While the conference will discuss policy issues related to reliability of the Bulk-Power System, the Commission will issue a more formal agenda for the conference at a later date.

On April 29, 2013, FERC accepted PJM Interconnection, L.L.C.’s (“PJM”) proposed Open Access Transmission Tariff revisions aimed at incentivizing the participation of an efficient mix of demand resource (“DR”) products in the PJM capacity auction.  PJM’s tariff revisions set up an additional test to establish the Limited DR Reliability Target for certain types of DR capacity products.

On April 29, 2013, three U.S. Senators sent a letter to FERC and the Commodity Futures Trading Commission (“CFTC”) urging greater cooperation between the two agencies.  Senators Dianne Feinstein (D-CA), Lisa Murkowski (R-AK), and Ron Wyden (D-OR) penned the open-letter requesting that FERC and the CFTC “execute more robust Memorandums of Understandings” (“MOUs”) to prevent market manipulation.