On May 29, 2020, FERC accepted the California Independent System Operator Corporation’s (“CAISO”) proposed update to its capacity procurement mechanism (“CPM”) compensation for offers above the soft offer cap, where a participating resource will be compensated at the resource’s going-forward fixed costs plus a 20 percent adder. The new CPM compensation formula will go into effect June 1, 2020. Commissioner Richard Glick dissented, stating that while he agreed that CPM compensation should be determined by a resource’s going-forward fixed costs, CAISO had failed to show that the 20 percent adder was just and reasonable.

On June 1, 2020, FERC issued an order on remand from the United States Court of Appeals for the District of Columbia Circuit (the “D.C. Circuit”) directing the Bonneville Power Administration (“Bonneville”) to return to Chehalis Power Generating, L.P. (“Chehalis”) refunded payments for reactive power supplied to Bonneville from August 1, 2005 through September 30, 2005. While FERC declined to require Bonneville to return the entire refund amount requested by Chehalis, it did provide interest calculated according to FERC’s interest regulation.

On May 21, 2020, FERC denied two 2017 complaints alleging that PJM Interconnection, L.L.C.’s (“PJM’s”) capacity procurement rules are unjust and unreasonable as applied to seasonal resources. FERC concluded complainants failed to show that PJM’s single annual capacity product is unjust and unreasonable, and rejected arguments that the rules discriminate against seasonal resources. Commissioner Richard Glick filed a separate concurring statement.

On May 20, 2020, FERC issued a notice that it will convene a Commissioner-led technical conference on Wednesday and Thursday, July 8–9, 2020 from approximately 9:00 a.m. to 5:00 p.m. Eastern time each day “to consider the ongoing, serious impacts that the emergency conditions caused by COVID-19 are having on various segments of the United States’ energy industry.” The notice stated that the technical conference will explore potential long-term impacts on FERC-regulated entities to ensure the continued efficient functioning of energy markets, electric transmission, transportation of natural gas and oil, and reliable operation of energy infrastructure, while also protecting consumers.

On May 21, 2020, FERC issued three orders denying, or denying in part, complaints against PJM Interconnection, L.L.C. (“PJM”), finding that the complainants failed to demonstrate that PJM’s pseudo-tie rules are unjust, unreasonable, or unduly discriminatory or that such rules had been applied in a manner inconsistent with the PJM Tariff. With respect to PJM’s market-to-market flowgate test and its electrical distance requirement, however, FERC granted the complaints in part, finding that PJM’s Tariff fails to provide an open and transparent process regarding PJM’s administration of those requirements.

On May 21, 2020, FERC reversed, on rehearing, an earlier determination from October 2017 that the Commission has the authority to require the Midcontinent Independent System Operator, Inc. (“MISO”) to revise its Transmission, Energy and Operating Reserve Markets Tariff (“Tariff”) to include refund commitments by non-public utility transmission owning members. FERC found that although it has authority to review non-public utility rates included in jurisdictional rates (such as MISO’s), it was neither necessary nor appropriate to impose the refund commitment contemplated on non-public transmission owners in MISO. FERC also dismissed, as moot, MISO’s compliance filing submitted in response to the October 2017 Order, and terminated various related proceedings.

On May 19, 2020, the Edenville dam on the Tittabawassee and Tobacco Rivers in central Michigan was breached during historic flooding.  The downstream FERC-licensed Sanford Dam (Project No. 2785) was later overtopped by the increased flows from the Edenville breach.  Evacuation orders were issued for around 10,000 residents in the area and floodwaters from the dam failures encroached on downtown Midland, Michigan, and a nearby Dow Chemical complex.

On May 19, 2020 President Trump issued an Executive Order directing federal agencies to “combat the economic consequences of COVID-19” by “rescinding, modifying, waiving, or providing exemptions from regulations and other requirements that may inhibit economic recovery.”

As the California Legislature prepares its 2021 budget and continues to address the impacts of COVID-19, the Subcommittee 2 on Resources, Environmental Protection, Energy and Transportation (Subcommittee) proposed language in a trailer bill related to the State Water Resources Control Board’s (Water Board) authority to issue water quality certifications under section 401 of the Clean Water Act (CWA) for federally licensed and permitted activities.  If enacted, the bill purportedly would authorize the Water Board to meet the one-year action requirement under CWA section 401 by issuing a water quality certification—even if California Environmental Quality Act (CEQA) requirements are not met.  Further, the bill seeks to authorize the Water Board to make any changes to conditions in the water quality certification at a later date after CEQA requirements are met.