On November 27, 2018, the Senate Committee on Energy and Natural Resources (“ENR Committee”) advanced FERC nominee Bernard McNamee to a full vote on the Senate floor.  The ENR Committee furthered Mr. McNamee’s nomination with a bipartisan vote of 13-10, with one Democrat joining the entire Republican majority on the ENR Committee.  If confirmed by the full Senate, Mr. McNamee will join current FERC Commissioners Cheryl A. LaFleur, Richard Glick, Kevin McIntyre, and Chairman Neil Chatterjee.

On November 15, 2018, FERC issued a Notice of Proposed Rulemaking (“NOPR”) to implement Public Law No. 115-247, which amended section 203 of the Federal Power Act (“FPA”) to clarify that FERC authorization is only required for mergers or consolidations valued at more than $10 million.  In addition, in accordance with the new law’s requirements, FERC proposes that transactions that are valued at $10 million or less, but more than $1 million, would only be subject to a notification requirement.

On November 15, 2018, Bernard L. McNamee, who has been nominated to fill the vacancy left by former FERC Commissioner Robert Powelson, testified before the Senate Committee on Energy and Natural Resources (“Committee”).  Currently, Mr. McNamee heads the Department of Energy’s (“DOE”) Office of Policy.

On November 15, 2018, FERC issued a Notice of Proposed Rulemaking (“NOPR”) addressing the effect of the Tax Cuts and Jobs Act of 2017 (“TCJA”), which lowered the federal corporate tax rate from 35 percent to 21 percent, on accumulated deferred income tax (“ADIT”) balances. Specifically, FERC proposed to require transmission companies to remove excess ADIT or add deficient ADIT to their rate bases. In addition, FERC issued a policy statement providing accounting and ratemaking guidance related to the treatment of ADIT (“Policy Statement”).

On October 15, 2018, FERC issued two orders involving rate of return on equity (“ROE”): the first was an order directing parties in two proceedings involving the base ROE of the transmission owning members of the Midcontinent Independent System Operator, Inc. (“MISO”) to submit briefs concerning a proposed change in FERC’s approach to determining the base ROE of public utilities previously outlined in Martha Coakley v. Bangor Hydro-Elec. Co. (“Coakley Briefing Order”) (see October 25, 2018 edition of the WER); the second was an order providing guidance regarding the effect of the Coakley Briefing Order on pending proceedings involving base ROE issues that have been set for hearing and settlement judge procedures.

On October 31, 2018, FERC Chairman Neil Chatterjee submitted comments (“October 31 Comments”) on the U.S. Environmental Protection Agency’s (“EPA”) proposed rule, the Affordable Clean Energy rule (“ACE Rule”).  If approved, the ACE Rule would implement new regulations for states to develop plans to reduce Greenhouse Gas (“GHG”) emissions from certain existing Electric Utility Generating Units.  Chairman Chatterjee’s comments generally supported the ACE Rule.

On November 5, 2018, FERC granted in part and denied in part a rehearing request (“Rehearing Order”) filed by Ameren Services Company (“Ameren Services”), on behalf of its affiliate Ameren Transmission Company of Illinois (together with Ameren Services, “Ameren”) of a FERC order (“February 13 Order”) denying Ameren’s request pursuant to Order No. 679 for a 100 basis point incentive rate of return on equity (“ROE Incentive”) for the Illinois Rivers and Mark Twain components (“Components”) of the Grand Rivers Project (“Project”).  In the February 13 Order, FERC denied Ameren’s requested ROE Incentive for the Components, largely because of construction progress made to date on the Illinois Rivers component.  In the Rehearing Order, FERC granted rehearing in part with respect to the Mark Twain component because that component is not substantially complete and, because based on its own merits, the Mark Twain component continues to face risks and challenges that warrant an ROE Incentive.  FERC denied rehearing with respect to the Illinois River component, however, upon finding that given the substantial completion of the Illinois Rivers component and limited remaining risks and challenges Ameren faces with respect to that component, Ameren’s requested ROE Incentive for Illinois River failed to meet the nexus test.

On November 6, 2018, clean energy ballot initiatives failed in several states.  In particular, voters rejected Arizona’s 50 percent renewable energy mandate, Washington’s fee on carbon emissions, Colorado’s limits on oil and gas drilling and Nevada’s retail choice initiative.  However, voters passed Nevada’s 50 percent renewable energy portfolio.

On November 5, 2018, the American Wind Energy Association and the Wind Coalition (together, the “Wind Developers”) filed a complaint against Southwest Power Pool, Inc. (“SPP”) regarding SPP’s Bylaws and Membership Agreement.  Specifically, the Wind Developers object to the sections of the Bylaws and Membership Agreement which impose financial obligations (“exit fees”) on independent power producers (“IPPs”), other comparable non-transmission owners (“non-TOs”), and non-load-serving entities (“non-LSEs”).  The Wind Developers argue that the exit fee violates cost causation principles, may pose a barrier to entry into SPP to vote on critical issues, directly affects jurisdictional rates, and that therefore, the exit fee is unjust, unreasonable, and unduly discriminatory.