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.

Late in the day on Friday, November 16, 2012, the Environmental Protection Agency (“EPA”) issued a proposal to reconsider maximum achievable control technology standards for hazardous air pollutant emissions from new electric generating units (referred to as “UMACT”). EPA’s previously-issued standards for new units, promulgated as a part of EPA’s Mercury and Air Toxics Standards rule, had been criticized by a coalition of new unit developers as unattainable. One of the new unit developers asked EPA to reconsider the standards, as did the trade association of pollution control equipment vendors, which also told EPA that its members could not issue guarantees that the standards could be met.

On November 14, 2012, FERC suspended J.P. Morgan Ventures Energy Corporation’s (“JP Morgan”) market-based rate authority for six months beginning April 1, 2013, for allegedly submitting false or misleading information to FERC and the California Independent System Operator Corporation (“CAISO”) in violation of Section 35.41 the Commission’s regulations.  Section 35.41 prohibits sellers from submitting “false or misleading information” or omitting material information in any communication with the Commission and certain other entities, including Regional Transmission Organizations and their market monitors.

On November 15, 2012, FERC issued a Policy Statement to provide new guidance to applicants seeking electric transmission incentives pursuant to section 219 of the Federal Power Act (“FPA”).  The Commission stated that the guidance is necessary to encourage investment in transmission infrastructure while maintaining just and reasonable rates.  Notably, the Commission “reframes” the nexus test applied to transmission projects and will no longer depend on its prior routine/non-routine analysis.

On Thursday, November 15, 2012, FERC announced it is considering whether or not it should require all market participants “engaged in sales of wholesale physical natural gas in interstate commerce to report quarterly to the Commission every natural gas transaction within the Commission’s jurisdiction that entails physical delivery for the next day (i.e., next day gas) or for the next month (i.e., next month gas).”  In doing so, FERC issued a Notice of Inquiry (“NOI”) seeking comments regarding the usefulness of such quarterly reports.  FERC also requested input regarding the type of information that should be included and the subsequent treatment of such information and data.

On November 15, 2012, FERC ordered additional technical conferences and measures to address issues related to the coordination between the natural gas and electric markets.  FERC’s order was in response to of a staff report summarizing discussions during five recent gas-electric technical conferences.

On October 31, 2012, FERC conditionally approved the New York Independent System Operator, Inc.’s (“NYISO”) August 31, 2012 proposed tariff revisions to address concerns with Black Start and System Restoration Services (“Restoration Services”), effective November 1, 2012.  The Commission found NYISO’s proposed tariff revisions were a “reasonable step” towards meeting concerns regarding black start service adequacy, and requested one area of modification by NYISO on compliance.

On November 5, 2012, FERC Chairman Jon Wellinghoff sent a letter to the House Energy and Commerce Committee’s (the “Energy Committee”) Chairman, Fred Upton (R-MI), responding to several questions from Republican members of the Energy Committee about the jurisdiction, scope, and general nature of the recently-created Office of Energy Infrastructure Security (“OEIS”).

On Tuesday, November 6, 2012, the Edison Electric Institute (“EEI”), on behalf of its member companies, filed a late motion to intervene in NorthWestern Corporation’s (“NorthWestern”) proceeding regarding NorthWestern’s proposed revisions to its rates for Regulation and Frequency Response (“Schedule 3”) Service. In its motion, EEI focused on the resulting policy implications if the FERC Administrative Law Judge’s (“ALJ”) Initial Decision is affirmed. Specifically, EEI stated that these policy implications could limit electric utilities’ ability to recover the cost of their investments – including costs used to ensure system reliability – that are needed to support the integration of variable resources. As such, EEI asked FERC to reverse findings in the Initial Decision.