On April 24, 2018, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) held that FERC lacks jurisdiction over certain of the City of Clarksville, Tennessee’s (“Clarksville”) interstate sales of natural gas for resale, because the plain language of the Natural Gas Act (“NGA”) excludes sales by municipalities from FERC’s jurisdiction, which extends to interstate sales of natural gas for resale under NGA section 7.

On April 20, 2018, the New York State Department of Environmental Conservation (“NYSDEC”) denied the Transcontinental Gas Pipe Line Company, LLC’s (“Transco”) application (“Application”) for a Water Quality Certification (“WQC”) for the Northeast Supply Enhancement Project (“Project”).  The NYSDEC denied the Application without prejudice, asserting that the Application provided incomplete information upon which to make a determination.  

On April 19, 2018, FERC issued a final rule (“Order No. 844”) addressing transparency in markets operated by Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”).  FERC required that each RTO/ISO establish in its tariff: requirements to report information about uplift payments for each resource and transmission zone; requirements to report information on each operator-initiated commitment; and the transmission constraint penalty factors used in its market software.  Order No. 844 will become effective 75 days after publication in the Federal Register.

In two orders concurrently issued on April 17, 2018, FERC reaffirmed its jurisdiction over the participation of energy efficiency resources (“EERs”) in wholesale electricity markets and accepted an EER-related tariff filing from PJM Interconnection, L.L.C. (“PJM”).  In one order, FERC denied rehearing and granted clarification of a December 1, 2017 order (“Declaratory Order”) asserting jurisdiction over EERs, rejecting claims that FERC had overstepped its “directly affects” jurisdiction under the Federal Power Act (“FPA”), and in the second order, FERC applied that understanding to find PJM’s proposal to integrate EERs into PJM’s wholesale markets just and reasonable.

On April 19, 2018, FERC issued a final rule (“Order No. 845”) revising its pro forma Large Generator Interconnection Procedures (“LGIP”) and the pro forma Large Generator Interconnection Agreement (“LGIA”) to address reforms of generator interconnection procedures and agreements for generators of more than 20 megawatts.  FERC adopted a majority of the reforms proposed in FERC’s December 15, 2016 Notice of Proposed Rulemaking (“NOPR”).

On April 19, 2018, FERC issued a Notice of Inquiry (“NOI”) seeking information regarding whether—and if so, how—to revise its policy for determining if a proposed natural gas pipeline is in the public convenience and necessity.  Specifically, the NOI requests information in four areas related to FERC’s policy for reviewing such certificate applications: (1) determining need for a pipeline project; (2) eminent domain issues; (3) evaluating environmental impacts, including greenhouse gas (“GHG”) emissions and climate change; and (4) changes that would improve the efficiency and effectiveness of FERC’s review.

On April 9, 2018, PJM Interconnection, L.L.C. (“PJM”) filed two alternative proposals to address supply-side state subsidies that, as PJM argues, could otherwise depress prices in PJM’s capacity market, the Reliability Pricing Model (“RPM”).  As presented by PJM, its “Capacity Repricing” proposal would establish a two-stage capacity market to accommodate subsidized resources, while the other proposal, the “MOPR-Ex proposal,” would expand PJM’s use of the Minimum Offer Price Rule (“MOPR”) to address subsidized resource entry.  With PJM’s filing, the issue of how to address out-of-market capacity market subsidies returns again to FERC exactly one month after a divided Commission approved a similar filing from the ISO New England Inc. (“ISO-NE”) (see March 20, 2018 edition of the WER).

On April 10, 2018, FERC approved a Stipulation and Consent Agreement (“Settlement”) among the Office of Enforcement (“OE”), ETRACOM LLC (“ETRACOM”), and Michael Rosenberg (together, with ETRACOM, “Respondents”) as in the public interest.  OE claimed that Respondents violated federal law and FERC’s rules against anti-manipulation in the California Independent System Operator Corp. (“CAISO”) wholesale electric market.  FERC determined that the Settlement was fair and reasonable and resolved all outstanding claims and proceedings between OE and the Respondents.

On April 10, 2018, FERC approved the Midcontinent Independent System Operator, Inc.’s (“MISO”) proposed revisions to Attachment X of its Open Access Transmission, Energy and Operating Reserve Markets Tariff (“Tariff”).  Specifically, MISO proposed to require interconnection customers seeking to modify their elected level of Network Resource Interconnection Service (“NRIS”), to do so earlier on in the generator interconnection process.

On March 30, 2018, FERC rejected PJM Interconnection, L.L.C.’s (“PJM”) October 17, 2017 proposed tariff revisions to improve the performance of the PJM frequency regulation (“Regulation”) market (the “Regulation Proposal”).  According to PJM, the revisions were needed in light of a number of ongoing operational and market issues that had developed in the Regulation market.  FERC rejected the Regulation Proposal because it did not comply with the requirements of Order No. 755 and FERC’s regulations to compensate all Regulation resources based on the actual quantity of Regulation service provided.