On April 29, 2015, the United States Court of Appeals for the Ninth Circuit (the “Ninth Circuit”) held that FERC failed to comply with the court’s remand order in a 2004 case involving the California Energy Crisis—California ex rel. Lockyer v. FERC (“Lockyer”)—by improperly structuring its administrative fact-finding proceeding to focus solely on the accumulation by wholesale power sellers of excessive market share, and not including an analysis of possible deficiencies in transaction reporting by those sellers.  The court remanded the case back to FERC for further proceedings.

On May 1, 2015, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) held that the Environmental Protection Agency (“EPA”) acted arbitrarily and capriciously when it modified its National Emissions Standards and New Source Performance Standards (“NSPS”) to allow backup generators to operate without emission controls for up to 100 hours per year in emergency demand-response programs.  As a result of the ruling, the D.C. Circuit reversed the 100-hour exemption and remanded the rules back to EPA for further action.

On May 1, 2015, FERC issued an order assessing civil penalties against Maxim Power Corporation, Maxim Power (USA), Inc., Maxim Power (USA) Holding Company Inc., Pawtucket Power Holding Co., LLC, Pittsfield Generating Company, LP (collectively “Maxim”) and an Energy Marketing Analyst at Maxim, Kyle Mitton (“Mitton”), finding that Maxim and Mitton violated section 222(a) of the Federal Power Act and FERC’s Anti-Manipulation Rule, 18 C.F.R. § 1c.2.  FERC assessed civil penalties of $5,000,000 against Maxim and $50,000 against Mitton. 

On April 24, 2015, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) denied Petitioners’ (Citizens of the town of Myersville) review challenging FERC’s orders approving Dominion Transmission, Inc.’s (“Dominion”) “Allegheny Storage Project,” and specifically FERC’s approval of the construction of a new natural gas compressor station in Myersville, Maryland (the “Myersville Compressor”).   In denying the petition, the D.C. Circuit concluded that each of the Petitioners’ challenges lacked merit.

On April 22, 2015, the United States Court of Appeals for the Second Circuit (the “Second Circuit”) upheld the Commission’s approval of NERC’s Bulk Electric System (“BES”) definition—a regulatory mechanism that plays a key role in determining which facilities are subject to NERC mandatory Reliability Standards.

On April 24, 2015, FERC approved PJM Interconnection LLC’s (“PJM”) request for waiver of its tariff to delay its 2015 Base Residual Auction (“BRA”) for the 2018-2019 delivery year.  As a result of the waiver, PJM’s BRA will not take place as originally scheduled, but rather during a week that is 30 to 75 days after FERC rules on the merits of PJM’s pending capacity performance proposal, but no later than the week of August 10-14, 2015.

On April 16, 2015, FERC approved a new policy statement that will allow interstate natural gas pipelines to recover certain capital costs used to modernize or replace the pipeline’s existing facilities through the use of a surcharge mechanism.  FERC explained that the new policy statement was created in anticipation of new, future requirements from the Pipeline and Hazardous Materials Safety Administration that will likely require interstate pipelines to upgrade their pipeline systems for improved safety and reliability.

On April 16, 2015, FERC issued Order No. 809, “Coordination of the Scheduling Processes of Interstate Natural Gas Pipelines and Public Utilities,” in furtherance of its goal to improve the coordination of wholesale natural gas and electricity market scheduling in order to ensure the reliable and efficient operation of the nation’s natural gas pipeline and electric systems.  In issuing Order No. 809, FERC explained that as the nation increasingly relies on natural gas for electric generation, FERC has identified a mounting concern related to this growing gas-electric interdependence and a misalignment between the gas and electric operating days.

On April 9, 2015, the California Public Utilities Commission (“CPUC”) voted unanimously to assess Pacific Gas & Electric Company (“PG&E”) a $1.6 billion penalty for its role in the San Bruno pipeline explosion.  The explosion, which occurred on September 9, 2010, resulted in the deaths of eight people and injuries to 58 people, as well as the destruction and/or damage to many homes and city infrastructure.  The transmission pipeline was owned and operated by PG&E.