On May 13, 2024, the Commission announced two major transmission reform final rules: Building for the Future Through Electric Regional Transmission Planning and Cost Allocation (“Order No. 1920”) and Applications for Permits to Site Interstate Electric Transmission Facilities (“Order No. 1977”). Order No. 1920, which adopts specific requirements for how transmission providers must conduct long-term planning and allocate costs for regional transmission facilities, was the subject of significant debate at today’s meeting and only mustered two votes in support from the three sitting commissioners. The Commission unanimously approved Order No. 1977, which updates the process FERC will use in the limited circumstances in which it must exercise its authority over siting electric transmission lines, as directed by Congress in the Infrastructure Investment and Jobs Act of 2021 (“IIJA”).

Continue Reading Divided FERC Announces Much-Anticipated Transmission Rules

On April 18, 2024, Senators Richard Blumenthal (D-CT) and Cindy Hyde-Smith (R-MS) introduced the Making Pipelines Accountable to Consumers and Taxpayers Act (“MPACT Act”) (S. 4171) that, if adopted, would grant FERC authority to order refunds under section 5 of the Natural Gas Act (“NGA”). Specifically, the MPACT Act amends section 5 of the NGA to give FERC authority to order a pipeline to issue retroactive refunds for charges FERC determines are unjust and unreasonable. The MPACT is intended to align FERC’s authority over the gas and electric industries and protect customers from unjust and unreasonable rates. At this time, a companion bill has not been introduced in the House of Representatives.

Continue Reading Senate Introduces Bipartisan Legislation to Give FERC Retroactive Refund Authority Under Section 5 of the Natural Gas Act

On March 12, 2024, the U.S. Court of Appeals for the Third Circuit upheld a prospective rule change to PJM Interconnection, L.L.C.’s (“PJM”) annual capacity auction but struck down attempts by PJM and FERC to apply the rule change to the ongoing auction held in December 2022.  Although the rule change permits PJM to adjust the Locational Deliverability Area (“LDA”) Reliability Requirement downward to reflect the lack of participation in the December 2022 auction by certain resources to correct for distortions to the auction results, the Third Circuit held that FERC could not permit the change to go into effect in the middle of an ongoing auction.

Continue Reading Third Circuit Upholds PJM Capacity Market Change but Prevents Retroactive Application

The United States Court of Appeals for the District of Columbia (“D.C. Circuit”) recently upheld two FERC orders granting natural gas pipeline developers’ requests to extend their construction deadlines. The D.C. Circuit denied the Sierra Club’s petitions for review of the extension orders because the court determined that FERC’s decisions were reasonable and adequately supported by the record. The D.C. Circuit further provided that FERC has broad discretion in determining whether a developer has demonstrated good cause for an extension and whether circumstances have changed enough to warrant revisiting FERC’s original findings.

Continue Reading D.C. Circuit Upholds FERC Orders Granting Natural Gas Pipeline Companies’ Requests to Extend Project Deadlines

On March 28, 2024, the Midcontinent Independent System Operator, Inc. (“MISO”) submitted a filing to the Federal Energy Regulatory Commission (“FERC”) proposing revisions to its Open Access Transmission, Energy and Operating Reserve Markets Tariff (“Tariff”) to implement a direct loss of load (“DLOL”) based accreditation methodology.  The DLOL methodology will be used to accredit resources for MISO’s annual Planning Resource Auction and to determine a load serving entity’s resource adequacy for each season during the applicable year.  According to MISO, the proposal will better account for how different resources bolster grid reliability during stress periods.  MISO requests that the tariff revisions take effect on September 1, 2024.

Continue Reading MISO Seeks to Reform Resource Accreditation Requirements

We are pleased to publish our latest white paper, entitled “Driving Change: Scaling Up EVs in the U.S.” The report highlights the challenges of expanding electric vehicles (EVs) and EV battery manufacturing in the U.S. Outdated infrastructure and divergent state and federal environmental regulatory structures are identified as key hurdles.

Continue Reading Driving Change: Scaling Up EVs in the U.S.

On March 21, 2024, FERC issued a Notice of Inquiry (“NOI”) seeking additional information on whether the Commission should continue to allow interstate pipelines to package “high value” capacity with non-contiguous and operationally unrelated parcels of capacity in a single auction or open season, thus requiring interested bidders to bid on both segments of capacity.  Initial comments on the NOI are due by June 20, 2024.

Continue Reading FERC Initiates Inquiry into Capacity Allocation on Non-Contiguous Pipeline Segments

On March 21, 2024, FERC proposed to prohibit transmission providers from being compensated through their transmission rates charges for reactive power that is within the standard power factor range from generating facilities.  Similarly, FERC proposed to revise both the large generator interconnection agreement (“LGIA”) and small generator interconnection agreement (“SGIA”) to remove the requirement that a transmission provider pay an interconnection customer for reactive power within the standard power factor range if the transmission provider pays its own or affiliated generators for the same service.  If the Notice of Proposed Rulemaking (“NOPR”) becomes final as proposed, transmission providers would only be required to pay an interconnection customer for reactive power when the transmission provider asks the interconnection customer to operate its facility outside the standard power factor range set forth in its interconnection agreement.

Continue Reading FERC Proposes to Largely Eliminate Compensation for Reactive Power

On March 21, 2024, the Senate Committee on Energy and Natural Resources held a hearing to consider President Biden’s three recent nominations to the Federal Energy Regulatory Commission (“FERC” or “Commission”): (1) David Rosner for the term expiring June 30, 2027; (2)Lindsay S. See for the term expiring June 30, 2028; and (3)Judy W. Chang for the term expiring June 30, 2029.Rosner is an energy industry analyst at FERC and led efforts related to the Commission’s rulemaking on energy storage resources, electric transmission, offshore wind integration, fuel security, and natural gas-electric coordination. See is the Solicitor General of West Virginia, and manages West Virginia’s civil and criminal appellate dockets, with a focus on regulatory and administrative law matters. Chang is an energy economics and policy analyst and was the former Undersecretary of Energy and Climate Solutions for Massachusetts, where she set policies for the Commonwealth’s energy sector.

Continue Reading Senate Committee Considers Three New FERC Nominees

Executive Summary

On March 21, the Federal Energy Regulatory Commission (FERC or the Commission) issued Order No. 2023-A (Final Rule), which reaffirmed aspects of Order No. 2023 — the Commission’s landmark order updating its generator interconnection procedures. As detailed further in this summary, the Commission largely upheld Order No. 2023, including some of the more controversial aspects of the order, such as penalties and the transmission capacity “heat map,” and provided further clarity on other aspects.

Continue Reading Troutman Pepper Summary of FERC Order No. 2023-A on Generator Interconnections