On October 22, 2018, FERC Commissioner Kevin McIntyre announced in a letter to President Donald Trump that he would step down from his role as Chairman and would continue his work as Commissioner.  In addition, President Trump announced on October 24, 2018 that current FERC Commissioner and former Chairman Neil Chatterjee would replace Commissioner McIntyre as FERC Chairman.

On October 16, 2018, FERC proposed a new method to determine whether a utility’s return on equity (“ROE”) remains just and reasonable under section 206 of the Federal Power Act (“FPA”).  Specifically, FERC discussed three additional methods, along with the well-known and traditionally used Discounted Cash Flow (“DCF”) analysis, and proposed to average the results to come to an equitable ROE.  This new method will apply to successive complaints filed against the New England Transmission Owners (“NETOs”), regarding the justness and reasonableness of their existing ROE.  Briefs related to this proposal are due on December 17, 2018. 

On October 18, 2018, in Order No. 850, the Commission approved new Critical Infrastructure Protection (“CIP”) Reliability Standards submitted by the North American Electric Reliability Corporation (“NERC”) in response to the Commission’s directive in Order No. 829.  The new CIP Reliability Standards require responsible entities to take additional actions to address cybersecurity risks associated with the supply chain for Bulk Electric System (“BES”) Cyber Systems.  FERC directed NERC to submit modifications to the new CIP Reliability Standards within 24 months of the effective date of its order, which is 60 days after the order’s publication in the Federal Register.

On October 12, 2018, FERC rejected without prejudice a proposal submitted by Midcontinent Independent System Operator, Inc. (“MISO”) and a group of MISO Transmission Owners (“MISO TOs”) (together, “Filing Parties”) to add a new Schedule 50 to MISO’s Open Access Transmission, Energy and Operating Reserve Markets Tariff (“Tariff”) that would enable MISO TOs to recover reasonable expenses, including overhead costs, associated with operation, maintenance, and repair of a transmission owner’s interconnection facilities (“TOIF”).  FERC rejected the proposal without prejudice because it relied on estimated construction costs of the TOIF without the requirement to support the reasonableness of such estimated costs.

On October 18, 2018, FERC accepted Southwest Power Pool’s (“SPP”) tariff revisions to implement a major maintenance cost component for mitigated start-up offers and mitigated no-load offers.  FERC found SPP’s proposal to be a just and reasonable means of addressing concerns over the recovery of costs resulting from the gradual deterioration of resources’ operating equipment in the SPP Integrated Marketplace.

On October 5, 2018, FERC accepted revisions to the New York Independent System Operator, Inc.’s (“NYISO”) methodology used to determine Locational Installed Capacity Requirements (“LCRs”) in NYISO’s Installed Capacity (“ICAP”) market. In doing so, FERC found that the proposed Alternative LCR Methodology was just and reasonable because, among other things, the Alternative LCR Methodology results in LCRs, and thus capacity costs, that are reasonably aligned with the associated reliability benefits.

On October 10, 2018, the U.S. Senate passed S. 3021, the America’s Water Infrastructure Act of 2018 (“AWIA”), which contains several hydropower provisions that seek to amend the Federal Power Act (“FPA”) to promote hydropower development.  The Senate passed the AWIA by a 99-1 vote.  The AWIA was previously passed by the U.S. House of Representatives on September 14, 2018 and will now go to the President for his signature.

On October 11, 2018, twenty-six pipelines submitted filings in compliance with Order No. 849 in response to a directive from FERC concerning the effect of reduced corporate income taxes on pipelines. Order No. 849 established a staggered filing schedule, so pipelines have between 28 and 84 days to submit “FERC Form No. 501-G,” depending on how FERC assigned the pipelines. The pipelines in the first category were required to file Form No. 501-G along with other information to inform FERC and the public of the impact of the recent reduction in federal income tax rates, as well as the effect of the Commission’s policy on the collection of federal income taxes by tax pass-through entities, on their revenue requirements. 

Troutman Sanders LLP has authored the 2019 Alternative Energy & Power Guide for Chambers and Partners. The firm’s Energy and Capital Projects & Infrastructure practices were asked by Chambers to be the exclusive contributor for the section. Associates Jamond Perry and Meghan Mandel and partners Christopher Jones, Amie Colby…

On September 28, 2018, President Donald Trump signed into law Public Law No: 115-247, amending Federal Power Act (“FPA”) section 203 to add a $10 million threshold for public utility mergers and acquisitions requiring FERC approval.  The new law will also require FERC to (i) issue a rule to require any public utility to notify FERC, after 30 days of the close of the transaction, if the value of the merger is more than $1 million but less than $10 million and (ii) submit a report to Congress assessing the impacts of the new law.  The amendments to FPA section 203 will become effective on March 27, 2019.