On May 5, 2020, FERC issued a Notice shortening the period from 21 days to 5 business days for interventions and protests to filings submitted under Federal Power Act (“FPA”) Section 204.  With some exceptions, FPA Section 204 grants FERC the authority to regulate the issuance of securities and assumption of certain liabilities by public utilities.  In shortening the commenting period, FERC expressly cited the desire to expedite review of FPA 204 filings as may be necessary to ensure public utility liquidity in the face of the ongoing COVID-19 pandemic.  A copy of the Notice, issued in Docket No. AD20-16-000, can be found here.

 

On May 7, 2020, FERC’s Division of Audits and Accounting issued a guidance letter on how regulated entities may account for expected credit losses on accounts receivable.  The letter, issued to ease regulatory burdens on the energy industry in the midst of the ongoing COVID-19 pandemic, clarifies that Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) No. 2016-13 is an acceptable methodology for purposes of financial accounting and reporting obligations on jurisdictional public utilities and licensees, natural gas companies, oil pipeline companies, and centralized service companies. Continue Reading FERC Issues Guidance on Accounting for Credit and Accounts Receivable Losses

On April 30, 2020, FERC accepted the New York Independent System Operator, Inc.’s (“NYISO”) proposed revisions to its Open Access Transmission Tariff (“OATT”) and its Market Administration and Control Area Services Tariff intended to enhance the integration of its Generator Deactivation Process with its Reliability Planning Process. NYISO proposed to establish a Short-Term Reliability Process using quarterly Short-Term Assessment of Reliability (“STAR”) studies that simultaneously evaluate the reliability impact of both generator deactivations and other changes that may impact transmission facilities (“Proposal”). FERC found that the Proposal will enhance NYISO’s current Generator Deactivation Process into a more efficient and comprehensive Short-Term Reliability Process. Continue Reading FERC Accepts NYISO’s Proposed Tariff Revisions Regarding Its Short-Term Reliability Process

On April 24, 2020, FERC largely upheld an earlier-issued order imposing additional transparency obligations on Midcontinent Independent System Operator, Inc. (“MISO”), Southwest Power Pool, Inc. (“SPP”), and PJM Interconnection, L.L.C. (“PJM”) (collectively, “RTOs”) regarding the RTOs’ Affected Systems study processes. FERC declined to require holistic alignment of the RTOs’ interconnection study processes, but clarified that, in subsequent compliance filings, the Commission will scrutinize whether each RTO applies the Energy Resource Interconnection Service (“ERIS”) or Network Resource Interconnection Service (“NRIS”) modeling standards in a just and reasonable manner. Continue Reading FERC Denies Rehearing, Partially Grants Clarification on MISO, SPP, and PJM Affected System Study Coordination Order

On April 27, 2020, FERC granted renewable energy company Goldman Sachs Renewable Power Marketing, LLC (“GSRPM”) authority to make wholesale sales of energy, capacity, and ancillary services at market-based rates. However, FERC also found GSRPM to be affiliated with the investment bank Goldman Sachs Group, Inc. (“Goldman Sachs”). On the basis of that finding, FERC concluded that GSRPM would be subject to enhanced reporting requirements as a Category 2 Seller in the northwest region of the United States. The order reflects FERC’s increasing interest in the disclosure of corporate structure for purposes of affiliation determinations in market-based rate applications. Continue Reading FERC Finds Renewable Project Company to be Affiliated with Goldman Sachs Investment Bank for Purposes of Market-Based Rate Analysis

On May 1, 2020, President Trump issued Executive Order No. 13920 (“Executive Order”) prohibiting Federal agencies and U.S. persons from engaging in certain “transactions” defined thereunder—specifically, acquiring, importing, transferring, or installing certain items defined in the Executive Order as “bulk-power system electric equipment”—with “foreign adversaries.” Such equipment classifications and types are specified in the order and include “items used in bulk-power substations, control rooms, or power generating stations.” The prohibitions apply to transactions involving such equipment if such items are (i) designed, developed, manufactured, or supplied by a foreign adversary, or by persons under the control, direction, or jurisdiction of such adversaries and where (ii) such equipment pose an unacceptable risk to national security and America’s safety. Continue Reading Executive Summary of Executive Order 13920 — Securing the U.S. Bulk-Power System

On April 17, 2020, FERC denied Potomac Economics, Ltd.’s (“Potomac Economics”) complaint against PJM Interconnection, L.L.C. (”PJM”), which alleged that PJM’s rule requiring external generation resources to obtain a pseudo-tie in order to participate in PJM’s capacity market was unjust and unreasonable (“Complaint”). FERC found that Potomac Economics failed to show that PJM’s pseudo-tie requirement had caused market inefficiencies or harmed reliability and that any arguments regarding potential future harms to the New York System Operator, Inc. (“NYISO”) by the pseudo-tie requirement were speculative. FERC also denied PJM’s motion to dismiss the Complaint, finding that market monitors may file complaints under Federal Power Act (“FPA”) section 206, provided that such market monitors satisfy the requirements of FERC’s relevant regulations. Continue Reading FERC Denies Complaint Alleging PJM’s External Resource Pseudo-Tie Requirements Are Unjust and Unreasonable

On April 22, 2020, FERC accepted tariff revisions from Southwest Power Pool, Inc. (“SPP”) to comply with a October 17, 2019 order accepting in part SPP’s Order No. 841 compliance proposal (the “October Order”). FERC also directed SPP to submit a further compliance filing to specifically exempt run-of-the-river hydroelectric, wind, and solar resources from the continuous minimum run-time requirement under SPP’s Resource Adequacy tariff provisions and Planning Criteria. Continue Reading FERC Accepts SPP Resource Adequacy Compliance Filing, Subject to Further Compliance

On April 23, 2020 the Federal Communications Commission (“FCC”) issued a Report and Order adopting rules to make 1,200 megahertz of spectrum in the 6 GHz band—a band of airwaves used for communications in the operation of electric, oil, natural gas, and water companies—also available for unlicensed use by Wi-Fi and Bluetooth-connected consumer products. The FCC stated that expanding unlicensed broadband operations would provide opportunity for innovation and improve broadband speed and connectivity. The FCC also adopted an Automated Frequency Coordination (“AFC”) system to prevent unlicensed use from interfering with incumbent users including utilities. The Report and Order follows a December 2019 letter from FERC Chairman Neil Chatterjee and Commissioners Richard Glick and Bernard McNamee to FCC Chairman Ajit Pai, urging the FCC to consider additional testing of the AFC system to guarantee that unlicensed devices do not interfere with incumbent users. Continue Reading FCC Approves Unlicensed Use of Airwaves Used in Utility Operations

On April 21, 2020, the National Rural Electric Cooperative Association (“NRECA”), an organization that represents the interests of over 900 electric cooperatives nationally, issued a fact sheet projecting that COVID-19’s economic impact on electric cooperatives will total an estimated $10 billion through 2022. This fact sheet follows an April 6, 2020 letter from the CEO of NRECA to congressional leaders requesting legislative remedies to help address the challenges currently facing electric cooperatives as a result of COVID-19. Among other things, NRECA explains that, absent federal assistance in the form of federal funding and repricing of the United States Department of Agriculture (“USDA”) Rural Utilities Services (“RUS”) debt, co-ops may face severe financial distress due to prohibitions against utility disconnections, increasing electric bill nonpayment, and loss of load.

Continue Reading COVID-19 Projected to Cause a Multi-Billion Dollar Hit to Electric Cooperatives