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On September 13, 2012, FERC’s Office of Enforcement (“Enforcement”) issued a Notice of Alleged Violations against the California Independent System Operator Corporation (“CAISO”), suggesting that CAISO violated two mandatory Reliability Standards in connection with a power outage in the San Diego area in 2010.  FERC will next determine if it agrees with Enforcement’s preliminary determinations, open a formal investigation, or accept a settlement between the parties.

On September 7, 2012, FERC conditionally authorized Plains and Eastern Clean Line LLC and Plains and Eastern Clean Line Oklahoma LLC, subsidiaries of Clean Line Energy Partners LLC, (collectively “Clean Line”) to charge negotiated rates for a proposed high voltage direct current merchant transmission project.  This negotiated rate authority will allow Clean Line to allocate up to 75 percent of the project’s capacity to anchor customers through negotiated rates, while the remaining 25 percent will be available through an open season auction.

At the annual Western Electricity Coordinating Council (“WECC”) Strategic Planning Session, held on September 6-7, 2012, the WECC Board of Directors took a first step towards separating WECC into two companies.  The proposed bifurcation would likely separate WECC’s North American Electric Reliability Corporation (“NERC”)-delegated governance functions from its functions on behalf of member entities, such as reliability coordination efforts and system planning.  The move is intended to address criticisms levied at WECC by both the Federal Energy Regulatory Commission (“FERC”) and NERC.

On September 5, 2012, FERC approved Duke Energy Ohio, Inc.’s (“Duke Ohio”) proposed internal reorganization within the Duke Energy Corporation (“Duke”).  The primary purpose of the reorganization is to transfer Duke Ohio’s generation assets to other subsidiaries of Duke.  The internal reorganization is part of a comprehensive retail rate settlement approved by the Ohio Public Utilities Commission (“Ohio PUC”) in November 2011.

On September 5, 2012, Royal Dutch Shell plc (“Shell”) announced it would be moving forward with the Quest carbon capture and storage (“CCS”) project in the oil sands near northern Alberta, Canada (“Quest Project”).  The Quest Project will be the world’s first commercial-scale CCS project in the Canadian oil sands.  Shell will hold majority ownership in the Quest Project and will serve as the designer, builder, and operator of the CCS facility.

In an opinion issued August 27, 2012, the Ninth Circuit concluded that FERC has the authority to retroactively determine just and reasonable prices in order to establish refund amounts for jurisdictional entities, but does not have retroactive rate-setting authority over non-jurisdictional sellers.   

On August 27, 2012, FERC Commissioners Tony Clark and Phillip Moeller issued separate concurring opinions in an order regarding the results of ISO-New England, Inc.’s (“ISO-NE”) sixth Forward Capacity Auction.  In those concurrences, the two Commissioners urged Congress to take action to rectify conflicts between environmental regulations and reliability standards.

On July 27, 2012, the Department of the Interior (“DOI”) Bureau of Land Management (“BLM”) and the Department of Energy (“DOE”) announced the availability of the Final Programmatic Environmental Impact Statement (“PEIS”) for solar energy development in Arizona, California, Colorado, Nevada, New Mexico and Utah in the Federal Register.