On June 24, 2019, FERC issued an order rejecting, without prejudice, Midcontinent Independent System Operator’s (“MISO”) and the MISO Transmission Owners’ (“MISO TOs”) proposal to allocate MISO’s share of the costs of certain interregional economic transmission projects with PJM Interconnection, L.L.C. (“PJM”) and Southwest Power Pool, Inc. within the MISO footprint (“Interregional Cost Allocation Proposal”).  FERC explained that it rejected the Interregional Cost Allocation Proposal because it referenced and relied on certain provisions contained within a related, regional cost allocation proposal that FERC rejected as inconsistent with cost causation principles in a concurrently-issued order (see July 18, 2019 edition of the WER ).  The June 24 order also rejected MISO’s submission of the Interregional Cost Allocation Proposal in a compliance filing in a separate complaint proceeding.  FERC directed MISO to submit a new compliance filing either to confirm that an existing cost allocation method will apply to interregional projects, or to propose a new cost allocation method for these projects.

On June 24, 2019, FERC rejected the Midcontinent Independent System Operator, Inc.’s (“MISO”) and the MISO Transmission Owners’ (collectively, “Filing Parties”) tariff revisions regarding cost allocation for regional and local economic transmission projects, finding that the cost allocation methodology related to the Filing Parties’ newly proposed Local Economic Project category was inconsistent with the cost-causation principle.  FERC rejected the Filing Parties’ filing as a whole based on the above finding, however FERC did provide guidance on other portions of the filing, stating that it did not find such other aspects of the filing to be unjust and unreasonable.

On June 26, 2019, the U.S. District Court of Maine (“District Court”) denied a motion for leave to file an interlocutory appeal to the U.S. Court of Appeals for the First Circuit (“First Circuit”) ultimately concerning whether FERC’s enforcement action against Competitive Energy, LLC and its managing member Richard Silkman (collectively, “Respondents”) was time-barred.  The District Court previously denied two motions for summary judgment, relying on the First Circuit’s decision in United States v. Meyer (“Meyer”), which held that a FERC enforcement action accrues when FERC assesses a penalty, and therefore was not barred.  Respondents argued that the District Court should not have followed the First Circuit’s decision in Meyer because two subsequent United States Supreme Court (“Supreme Court”) decisions—Kokesh v. SEC (“Kokesh”) and Gabelli v. SEC (“Gabelli”)—have overruled Meyer.  In denying the motion for interlocutory appeal, the District Court held that whether Meyer continues to be good law does not present a “controlling question of law as to which there is a substantial ground for difference of opinion.” 

On June 27, 2019, FERC rejected PJM Interconnection, L.L.C.’s (“PJM”) proposed revisions to its Open Access Transmission Tariff and Reliability Assurance Agreement Among Load Serving Entities in the PJM Region that would have required demand resources to be available year-round.  PJM argued that the proposed revisions better aligned its Price Responsive Demand (“PRD”) program with the year-around availability obligation of other supply-side “Capacity Performance Resources” participating in PJM’s capacity market. On review, however, FERC agreed with concerns raised by PJM’s Independent Market Monitor (“IMM”) and other parties that, among other things, the price-responsive demand program must be more consistent with the annual peak-based billing framework for capacity procurement by Load Serving Entities (“LSEs”).  FERC also agreed that, as a result, PJM’s proposal failed to accurately reflect PRD participants’ load reduction capabilities.

On June 20, 2019, FERC Commissioner Cheryl LaFleur announced on Twitter that she will be leaving FERC at the end of August after serving on the Commission for nine years.  She first announced her intent to leave the Commission in January of this year.  In her recent announcement, Commissioner LaFleur noted that the July open meeting will be her last meeting as a commissioner.  FERC currently has four members—Commissioners Neil Chatterjee and Bernard McNamee, who are Republicans, and Commissioners LaFleur and Richard Glick, who are Democrats.  Assuming no nominee is confirmed by the end of August, Commissioner LaFleur’s departure would leave FERC with a two to one Republican majority, and a minimum number of commissioners for a quorum.

On June 20, 2019, FERC approved revisions to the Midcontinent Independent System Operator, Inc.’s (“MISO”) Tariff which permit MISO to share, without notice to its market participants, confidential information with federal cybersecurity authorities in response to detected cyber intrusions or weaknesses in electric utility infrastructure that have the potential to compromise reliability and call for immediate action.  FERC concluded that MISO’s proposal allows for greater information sharing with the appropriate federal agencies before a potential cybersecurity threat becomes an emergency, and appropriately maintains the confidentiality of the information at issue.

On June 20, 2019, FERC issued an Order on Voluntary Remand from the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) directing PJM Interconnection, L.L.C. (“PJM”) to refund certain line loss over-collection amounts to certain virtual traders.  Upon re-examining its refund authority in light of recent court precedent, FERC determined that it has greater discretion to order refunds in cost allocation and rate design proceedings than it previously had determined.

On June 11, 2019, FERC accepted Republic Transmission LLC’s (“Republic”) proposed transmission formula rate (“Formula Rate”) that will be incorporated into Midcontinent Independent Transmission System Operator, Inc.’s (“MISO”) tariff when Republic becomes a transmission owner in MISO.  Additionally, FERC granted Republic’s request for authorization to allow future affiliates or subsidiaries of Republic that undertake transmission projects in the MISO region to apply the Formula Rate, as well as the transmission rate incentives previously granted to Republic (“Incentives”).

On June 7, 2019, Judge Dennis Montali of the U.S. Bankruptcy Court of the Northern District of California San Francisco Division found that FERC’s finding that it had concurrent jurisdiction with the U.S. bankruptcy court over wholesale power agreements was “unenforceable in bankruptcy court and of no force on the parties before it.” Judge Montali further noted that if necessary, the U.S. bankruptcy court will “enjoin FERC from perpetuating its attempt to exercise power it wholly lacks.” At issue, on review by the bankruptcy court, was whether, pursuant to 28 U.S.C. 2201, the bankruptcy court has exclusive jurisdiction over Pacific Gas & Electric Company’s and Pacific Gas & Electric Corporation’s (collectively “Debtors”) right to reject a power purchase agreement (“PPA”) under Section 365 of the Bankruptcy Code, and whether FERC has concurrent jurisdiction to grant or deny PG&E’s rejection of any PPAs.