On March 29, 2019, FERC issued an order accepting revisions to the Midcontinent Independent System Operator Inc.’s (“MISO”) Open Access Transmission, Energy, and Operating Reserve Markets Tariff (“Tariff”) to enhance the scheduling of Generator Planned Outages—i.e., the scheduled removal of a generator from service for inspection, maintenance, or repair.  While MISO previously managed planned outages through voluntary rescheduling, the Tariff revisions at issue: 1) impose penalties for outages scheduled during low capacity margin, high risk periods, and 2) assist generators in scheduling outages by improving the transparency and quality of generator outage information through MISO’s maintenance margin tool. In accepting MISO’s proposal, FERC concluded that these measures would address recent increases in emergency events by incenting generators to schedule planned outages in advance, and by improving MISO’s ability to coordinate these outages to avoid emergency events.

On April 1, 2019, FERC issued deficiency letters to the six FERC-jurisdictional ISOs and RTOs, asking for additional information about how they intend to comply with the directives of FERC Order No. 841.  The specific ISOs and RTOs are: ISO New England Inc. (“ISO-NE”); Midcontinent Independent System Operator, Inc. (“MISO”); California Independent System Operator Corporation (“CAISO”); New York Independent System Operator, Inc. (“NYISO”); PJM Interconnection, L.L.C. (“PJM”); and Southwest Power Pool, Inc. (“SPP”).  Each grid operator has thirty days to respond to the deficiency letters.

On March 19, 2019, the U.S. Court of Appeals for the First Circuit (“First Circuit”) found that FERC’s issuance of a certificate of public convenience and necessity (“CPCN”) authorizing Algonquin Gas Transmission, LLC’s (“Algonquin”) compressor station construction in the Town of Weymouth, Massachusetts (“Weymouth”) preempted Weymouth’s later denial of a Wetland Protection Ordinance (“WPO” or “Ordinance”) permit that ultimately prohibited Algonquin from constructing a compressor station in Weymouth.  Notably, the First Circuit found that Weymouth’s WPO permit denial was preempted, in part, because FERC considered essentially the same environmental factors Weymouth relied on to deny the WPO permit.

On Monday, March 25, 2019, ISO New England, Inc. (“ISO-NE”) filed a proposal with FERC for an interim inventoried energy program that would provide incremental compensation to generation resources that store fuel onsite during winter months. ISO-NE’s filing explains that a key contributor to the region’s winter energy security concerns is its reliance on gas deliveries from the interstate pipeline network, which can become constrained during winter cold spells, and that lack of on-site fuel sources during these cold spells can lead to loss of load events.  ISO-NE seeks to reduce this concern by directly compensating generation resources for maintaining “inventoried energy,” defined as “fuel or potential energy that a resource can convert to electric energy at the ISO’s direction.”  The proposal is intended as an interim measure to complement the ISO’s ongoing efforts to develop a long-term, market-based solution to the region’s fuel security challenges.  The ISO believes that the program will contribute to the region’s winter energy security by providing incremental revenue to generation resources that store fuel on-site, reducing the amount of revenue those resources must recover through the capacity market, and decreasing the likelihood that such resources will seek to retire.  However, ISO-NE also clarified that it cannot guarantee that the program will “incent specific resources to take precise actions that improve winter energy security or deter any particular resource that would otherwise be economic from retiring.”

On March 21, 2019, the Commission issued a proposed order directing two wind energy generators, Cedar Creek Wind Energy, LLC (“Cedar Creek”) and Cedar Creek II, LLC (“Cedar Creek II”) (collectively the “Cedar Creek Entities”) to provide interconnection and transmission service to a proposed wind project, Mountain Breeze Wind, LLC (“Mountain Breeze”) across jointly-owned interconnection customer facilities (“ICIF”) to the Public Service Company of Colorado (“PSCo”) transmission system.  Although Cedar Creek II sought to dismiss the matter as an impermissible attempt by Mountain Breeze to acquire an ownership interest in the ICIF outside of a Federal Power Act (“FPA”) Section 203 or Section 205 proceeding, FERC rejected this characterization and instead found narrowly that Mountain Breeze had properly filed an application for Commission-ordered service under FPA Sections 210 and 211.  FERC directed the parties to attempt to reach an agreement on the terms and conditions for interconnection and transmission service, or a separate order prescribing such terms and conditions would be issued.

On March 26, 2019, FERC accepted, subject to condition, AMP Transmission, LLC’s (“AMP”) proposed formula rate template and implementation protocols (collectively, “Formula Rate”) to recover a revenue requirement based on a cash-flow method for AMP’s integrated transmission facilities located in the PJM Interconnection, L.L.C. (“PJM”) region.  As a minor condition of acceptance, FERC directed AMP to revise on compliance its Formula Rate to enable AMP to use it in PJM transmission zones that require different rate years, as opposed to only in zones whose rate year is based on the calendar year.

On March 21, 2019, the same day FERC issued an inquiry into Return on Equity (“ROE”) policies (see here), FERC also published another Notice of Inquiry (“NOI”) seeking comments on the scope and implementation of its electric transmission incentives policy and regulations.  The NOI covers a broad range of topics from using incentives to encourage new technology integration to unlocking location constrained resources and addressing resiliency concerns.  Initial comments are due 90 days after the NOI is published in the Federal Register, with reply comments due 30 days thereafter.

On March 20, 2019 the Missouri Public Service Commission (“MPSC”) granted a certificate of convenience and necessity (“CCN”) to Grain Belt Express Clean Line LLC (“Grain Belt”) for a $2.35 billion, 780-mile, 600 kV transmission line that is planned to deliver wind-generated electricity from western Kansas to customers in both MISO and PJM. While the MPSC previously denied Grain Belt’s application for a CCN in a 2015 decision that cited burdens to affected landowners, its March 20 order concludes that “the broad economic, environmental, and other benefits of the Project to the entire state of Missouri outweigh the interests of the individual landowners,” whose concerns would be “addressed through carefully considered conditions placed on the CCN.”

On March 21, 2019, FERC issued a Notice of Inquiry (“NOI”) seeking information regarding whether and how to revise its policy for determining the rate of return on equity (“ROE”) used in setting rates charged by jurisdictional public utilities.  The NOI also seeks comment on whether any changes to the Commission’s ROE policies for public utilities should be applied to interstate natural gas and oil pipelines.  Specifically, the NOI requests information in eight areas:  (1) the role of FERC’s base ROE in investment decision-making and what objectives should guide the Commission’s approach; (2) whether uniform application of FERC’s base ROE policy across the electric, interstate natural gas pipeline and oil pipeline industries is appropriate and advisable; (3) performance of the discounted cash flow (“DCF”) model; (4) proxy groups; (5) the choice of financial model(s) used; (6) the mismatch between market-based ROE determinations and book-value rate base; (7) how FERC determines whether an existing ROE is unjust and unreasonable under the first prong of Federal Power Act section 206; and (8) model mechanics and implementation.

On March 19, 2019, FERC conditionally accepted the Midcontinent Independent System Operator, Inc.’s (“MISO”) proposed tariff revisions to: (1) clarify how market participants with pseudo-ties outside of MISO can use virtual transactions to align Financial Transmission Rights (“FTRs”) and transmission usage charges; and (2) reduce the administrative charges assessed to market participants with a pseudo-tie of generation or load out of MISO.