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On March 29, 2013, the Commission rejected a proposal by the California Independent System Operator Corporation (“CAISO”) that would provide financial assistance to resources that are either at risk for retirement or are uneconomic, but are still needed for flexible capacity and local reliability (“FLRR mechanism”).  Instead, the Commission encouraged CAISO and its stakeholders to develop a market-based mechanism that offers incentives for resources that address adequacy and operational needs in CAISO.   The Commission further ordered FERC staff to convene a technical conference with CAISO, the California Public Utilities Commission (“CPUC”), and industry participants within 120 days of its order to identify new solutions.

On March 29, 2013, the Environmental Protection Agency (“EPA”) issued updates to its emissions limits for new power plants under the mercury and air toxic standards (“MATS”).  The less stringent limits are a result of new information and analysis the EPA received during the reconsideration period of MATS.  The EPA stated that the revisions should not alter the control technologies that owners and operators must install to comply with MATS.

On March 29, 2013, several environmental advocacy groups (“Petitioners”) filed a Writ of Certiorari with the Supreme Court of the United States (“Supreme Court”), requesting review of the U.S. Court of Appeals for the District of Columbia Circuit’s (“D.C. Circuit”) vacatur of the Cross-State Air Pollution Rule (“CSAPR”).  Petitioners sought review on grounds that the D.C. Circuit exceeded its statutory authority in its decision, and its decision was inconsistent with court precedent.

On March 21, 2013, FERC issued an order disagreeing with the North American Electric Reliability Corporation’s (“NERC”) proposed interpretation of the Critical Infrastructure Protection (“CIP”) Reliability Standard dealing with identification of Critical Cyber Assets, CIP-002.  FERC found that NERC’s proposed interpretation and petition did not provide “adequate justification” for leaving unprotected certain cyber assets that are “essential to the operation of associated Critical Assets.”  The Commission’s order remands the interpretation to NERC for further consideration to address the Commission’s concern.

On March 25, 2013, FERC rejected a rate complaint brought by an individual, Gordon Gooch, against oil pipeline Colonial Pipeline Company (“Colonial”).  FERC dismissed the complaint because Mr. Gooch failed to show he was adversely affected by Colonial’s rates for pipeline service.  Notably, while the Commission unanimously dismissed the complaint, Commissioners Phillip Moeller and John Norris issued separate statements expressing concern with the lack of guidance in the order for future individual complainants.

On March 15, 2013, FERC granted a petition for enforcement by petitioners Grouse Creek Wind Park, LLC and Grouse Creek Wind Park II, LLC (together “Grouse Creek”) and announced FERC would again go to court to enforce the Public Utility Regulatory Policies Act of 1978 (“PURPA”) against the Idaho Public Utilities Commission (“Idaho PUC”).  FERC’s enforcement action concerning Grouse Creek will take place in conjunction with its enforcement action in a similar proceeding, Murphy Flat (see December 3, 2012 edition of the WER).

On March 22, 2013, FERC approved a Stipulation and Consent Agreement (“Agreement”) between the Office of Enforcement (“Enforcement”) and Rumford Paper Company (“Rumford”) regarding Rumford’s alleged fraudulent conduct in ISO-New England (“ISO-NE”).  Enforcement concluded that Rumford violated FERC’s Anti-Manipulation Rule by adopting and implementing a “scheme” proposed by energy consultant Dr. Richard Silkman of Competitive Energy Services, LLC (“CES”) that defrauded ISO-NE of demand response payments.

On March 21, 2013, FERC issued a final rule approving the North American Electric Reliability Corporation’s (“NERC”) modified reliability standard for vegetation management along transmission right-of-ways.  The modified reliability standard, FAC-003-2, makes several revisions to the current standard, FAC-003-1, by (1) expanding the applicability of the standard; (2) requiring a minimum vegetation clearance distance (“MVCD”) regardless of whether an outage occurs or not; and (3) implementing a new annual vegetation inspection and work requirement.

On March 15, 2013, the United States Court of Appeals for the District of Columbia (“D.C. Circuit”) determined that FERC did not have the authority to fine energy trader Brian Hunter – previously a natural gas trader for Amaranth Advisors LLC (“Amaranth”) – $30 million for manipulating natural gas futures markets.  Instead, the D.C. Circuit determined that the Commodity Futures Trading Commission (“CFTC”) has “exclusive jurisdiction over all transactions involving commodity futures contracts” and that nothing in the Energy Policy Act of 2005 (“EPAct 2005”) clearly and manifestly repeals CFTC’s exclusive jurisdiction.