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On December 10, 2012, FERC granted a complaint that alleged that the New York Independent System Operator, Inc. (“NYISO”) violated the Federal Power Act (“FPA”) and its Market Administration and Central Area Services Tariff (“Services Tariff”) by issuing a technical bulletin that excluded certain behind-the-meter generators from participating in the NYISO’s Special Case Resources (“SCR”) program.  FERC held that the technical bulletin, NYISO’s Service Tariff, and its Installed Capacity (“ICAP”) manual were ambiguous as to which generators are able to participate in the NYISO SCR program.

On December 10, 2012, FERC approved amendments to the California Independent System Operator Corporation (“CAISO”) tariff that are designed to improve overall market efficiency by allowing for the dissemination of certain market data to market participants  This release of information by CAISO is intended to enhance participation in CAISO’s energy, ancillary services, and congestion rights markets.

On December 11, 2012, the Commonwealth of Massachusetts Department of Public Utilities (“MDPU”) assessed fines totaling $24.8 million to three utilities for their responses after Tropical Storm Irene and an October 2011 snowstorm.  In assessing the fines, the MDPU determined that National Grid USA Service Company, Inc. (“National Grid”), NSTAR Electric Co. (“NSTAR”), and the Western Massachusetts Electric Co. (“WMECo”) were all deficient in their post-storm response operations, including their response to downed wires.  The MDPU announced that all of the money collected from the penalties will be returned to the utilities’ respective customers.

On December 7, 2012, FERC announced the details for its upcoming technical conference on information sharing and communications issues between natural gas and electricity industry entities.  The technical conference follows FERC’s November 15, 2012 order directing further conferences and reports to address common issues raised in regional conferences held on gas-electric coordination in August 2012 (see November 16, 2012 edition of the WER).

On November 29, 2012, U.S. Magistrate Judge Deborah A. Robinson issued a memorandum order denying FERC’s request to compel production of certain portions of 25 email documents by J.P. Morgan Ventures Energy Corporation (“JP Morgan”).  In its petition before the court, FERC argued that JP Morgan was “overbroad” in claiming attorney-client privilege for this information.  Upon in camera review of the JP Morgan emails at issue, Magistrate Judge Robinson found that the redacted information was in fact “shielded” by attorney-client privilege.

On December 5, 2012, the Department of Energy (“DOE”) released the results of a long-awaited study that it commissioned regarding the macroeconomic impacts of liquefied natural gas (“LNG”) exports from the U.S.  Notably, the study, conducted by NERA Economic Consulting (“NERA”), concluded that “LNG exports have net economic benefits in spite of higher domestic natural gas prices.”  The study also determined that LNG exports from the U.S. would have a relatively small impact on domestic prices, and that LNG exports from the U.S. are “not likely to affect the overall level of employment in the U.S.”

On November 30, 2012, FERC approved a stipulation and consent agreement (“Settlement Agreement”) between its Office of Enforcement (“Enforcement”) and Alliance Pipeline L.P. (“Alliance”) for an unsubscribed capacity scheme that FERC determined violated its Standards of Conduct for Transmission Providers as well as Alliance’s own Open Access Transmission Tariff (“OATT”).  While Alliance neither admitted nor denied the allegations in the Settlement Agreement, it consented to a $500,000 fine and to filing semi-annual compliance reports with Enforcement for one year.

On November 30, 2012, Secretary of the Interior Ken Salazar, Deputy Secretary David J. Hayes, and Bureau of Ocean Energy Management Director Tommy P. Beaudreau announced the first ever competitive lease sales for renewable energy development for offshore wind projects in federal waters.  Described as part of the Obama Administration’s strategy to continue to expand domestic energy production, the proposed energy lease sales are for two separate Outer Continental Shelf offshore locations, described as “Wind Energy Areas.” 

On November 20, 2012, FERC granted a petition for enforcement and announced that it will take the Idaho Public Utilities Commission (“Idaho PUC”) to court for failure to adhere to the Public Utility Regulatory Policies Act of 1978 (“PURPA”) and FERC’s PURPA regulations and precedent.  In what appears to be the culmination of FERC’s frustration with the Idaho PUC’s apparent refusal to give effect to FERC’s prior interpretations of PURPA, this most recent order suggests FERC will now actively enforce its interpretation of the law through the courts.  It is not known when and in what venue FERC will file the enforcement lawsuit.

On November 19, 2012, the Commission approved a Stipulation and Consent Agreement (“Settlement”) between Gila River Power, LLC (“Gila River”) and the Commission’s Office of Enforcement (“OE”) under which Gila River agreed to pay a $2.5 million fine and disgorge $911,553 in profits plus interest.  The Settlement states that Gila River: (1) violated FERC’s Anti-Manipulation Rule, and (2) violated the California Independent System Operator Corporation (“CAISO”) Tariff and FERC’s Regulations by submitting inaccurate information in booking invalid wheeling transactions.