On Thursday, June 28, 2018, the Senate approved ten individual hydropower bills by unanimous consent.  Seven of the ten were previously passed by the House and will now go to the President for his signature.  The remaining three bills have not yet been passed by the House, but in all three cases, the House has passed either a companion bill or bills with language similar to the Senate bills.

Three recent FERC staff decisions (“Decisions”) confirm that, for purposes of establishing the mandatory licensing requirements under the Federal Power Act (“FPA”), groundwater is not a “non-navigable Commerce Clause stream.”  Thus, a hydropower project—and particularly a closed-loop pumped storage project—that uses only groundwater as its water source will not require FERC licensing if the project does not trigger other jurisdictional tests under the FPA.

On June 21, 2018, the Supreme Court of the United States (“Supreme Court”) held that the U.S. Securities Exchange Commission’s (“SEC”) Administrative Law Judges (“ALJs”) are “Officers of the United States” whose appointment must meet the requirements of the Constitution’s Appointments Clause.  Accordingly, pursuant to the Appointments Clause, the SEC ALJs must be appointed by the SEC itself, as the “Head of the Department.”  It is unclear whether this impacts any of the current ALJs at FERC. 

On June 21, 2018, FERC issued an order instituting several proceedings, pursuant to section 206 of the Federal Power Act, to examine the methodology utilized by certain public utilities for calculating Accumulated Deferred Income Tax (“ADIT”) balances in their projected test year and annual true-up calculations for their formula transmission rates.

On June 15, 2018, in separate opinions, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) affirmed two FERC rulings that denied utilities’ requests to be made whole for purchasing natural gas at inflated prices to comply with their PJM Interconnection, L.L.C. (“PJM”) capacity resource obligations during the 2014 Polar Vortex.  Specifically, the D.C. Circuit upheld FERC’s holdings that (1) permitting the utility in one case to recover costs retroactively would violate the filed rate doctrine and the rule prohibiting retroactive ratemaking and (2) the utility in the second case was not entitled to indemnification for its losses resulting from PJM requesting the utility to comply with its capacity resource obligations.

On June 21, 2018, FERC approved tariff provisions proposed by the California Independent System Operator (“CAISO”).  Specifically, the Commission’s order approved, subject to compliance filing, CAISO’s proposals to revise the definition of which resources qualify as use-limited and to allow those resources to include opportunity cost adders in their bids, while rejecting CAISO’s proposed revisions relating to the Master File, an electronic database of generator-provided data on resources participating in CAISO markets, as well as its proposal to remove ramp rates as components of daily bids.

On June 21, 2018, FERC found that the Midcontinent Independent System Operator, Inc.’s (“MISO”) Open Access Transmission Tariff (“Tariff”) provisions governing the termination of generator interconnection agreements (“GIAs”) were unjust and unreasonable due to an inconsistency between the terms of the GIA contained in the Tariff and the MISO Generator Interconnection Procedures (“GIP”).  FERC also accepted, after a paper hearing, MISO’s proposed revisions to the GIA and GIP termination provisions, subject to further revisions.  MISO’s Tariff revisions clarified that an interconnection customer could extend its commercial operating date (“COD”) for up to three years without risking termination from MISO, which FERC found, subject to modification, just and reasonable. 

On June 12, 2018, FERC Commissioner Cheryl LaFleur, through a concurrence in an order denying rehearing (“Rehearing Order”), announced that going forward she will try to consider and disclose the upstream and downstream greenhouse gas (“GHG”) impacts of proposed pipeline projects, even if such information is generic and ignored, as part of FERC’s public interest determination.  In the Rehearing Order, Commissioner LaFleur calculated her own estimation of the total downstream GHG emissions as part of her environmental review in the proceeding, even though the majority did not.

On June 12, 2018, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) rejected challenges to FERC orders modifying PJM’s financial transmission right (“FTR”) and auction revenue right (“ARR”) designs.  FERC had ordered changes to PJM’s FTR/ARR designs to address PJM’s inability to make all of the payments owed to FTR owners.