On February 2, 2018, FERC directed Commission Staff to convene a technical conference to explore issues concerning interconnection issues that affect neighboring utilities or regions.  In particular, the technical conference is to address issues raised in a complaint by EDF Renewable Energy, Inc. (“EDF”) against the Midcontinent Independent System Operator, Inc. (“MISO”), Southwest Power Pool, Inc. (“SPP”), and PJM Interconnection, L.L.C. (“PJM) related to the Affected Systems coordination procedures contained in the MISO, SPP, and PJM tariffs, the MISO-PJM Joint Operating Agreement (“JOA”), and the MISO-SPP JOA, as well as the Affected Systems coordination issues raised in FERC’s Interconnection Reform Rulemaking proceeding in Docket No. RM17-8-000 (see December 20, 2016 edition of the WER).

On January 26, 2018, a divided panel of the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) vacated a series of FERC orders that removed from transmission owners in the Midcontinent Independent System Operator, Inc. (“MISO”) the ability to elect to fund the construction of network upgrades on their transmission systems to accommodate the interconnection of new generation.  The D.C. Circuit vacated FERC’s orders and remanded the case back to FERC for further proceedings.

On January 25, 2018, as amended on January 31, 2018, FERC Office of Enforcement Staff (“OE Staff”) answered BP America Inc., BP Corporation North America Inc., BP America Production Company, and BP Energy Company’s (collectively, “BP”) arguments that FERC must dismiss its order assessing civil penalties and disgorgement against BP for violating FERC’s anti-market manipulation rule due to the five-year statute of limitations for civil penalties.  Among other things, OE Staff argued that (1) enforcement actions under the Natural Gas Act (“NGA”) are distinct from the enforcement process under the Federal Power Act (“FPA”), and thus similar federal district court precedent in the FPA context is inapplicable to BP; and (2) FERC’s issuance of disgorgement is more remedial than punitive and thus not subject to the statute of limitations.

On January 31, 2018, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) denied requests for an en banc rehearing of an August 2017 decision (Sierra Club v. FERC) vacating FERC’s approval of the Southeast Market Pipelines Project (“SMP Project”), a natural gas pipeline currently under construction in the southeastern United States.  In its August decision, the D.C. Circuit held that FERC failed to analyze the greenhouse gas emissions that would result from the SMP Project, as required by the National Environmental Policy Act (“NEPA”).  On February 2, 2018, the developers for the SMP Project filed a request at FERC for expedited reissued construction approval certificates, or in the alternative, temporary emergency certificates, arguing that halting work on the SMP Project will cause “irreparable harm.”

On January 26, 2018, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) rejected a challenge to FERC’s approval of tariff revisions from the PJM Interconnection, L.L.C. (“PJM”) regarding the so-called cost-of-new-entry (“CONE”), or the anticipated revenues required to recover costs in PJM’s wholesale capacity market.  A coalition of generators challenged PJM’s CONE as too low, which they argued undercut their own recovery in the capacity market.  In a brief opinion, the D.C. Circuit held that petitioners’ claims failed to overcome the deferential standard of review applied to factual challenges to agency orders.

On January 24, 2018, FERC staff directed Rover Pipeline LLC (“Rover”) to stop horizontal directional drilling (“HDD”) activity—which involves using a drill to bore horizontally underground and drilling mud to remove drill cuttings and maintain the bore for a newly constructed pipeline to “cross” beneath rivers and other areas—at the Tuscarawas River site due to inadvertent losses of drilling mud.  Although FERC staff found that Rover had complied with its HDD contingency plans and that drilling mud had not impacted sensitive resources, FERC staff requested Rover to provide information to assess alternate methods of crossing the Tuscarawas River.

On January 19, 2018, FERC approved PennEast Pipeline Company, LLC’s (“PennEast”) proposal to construct its 116-mile pipeline project from Pennsylvania to New Jersey (“Project”).  FERC approved the Project despite protesters challenging the Project’s need given that affiliated shippers subscribed to most of the Project’s capacity, as well as FERC’s limited environmental impact analysis after PennEast could not complete certain surveys along the Project’s route due to landowners denying PennEast access to their property.  Commissioners Cheryl A. LaFleur and Neil Chatterjee issued separate concurrences, while Commissioner Richard Glick issued a separate dissent.

On January 19, 2018, the United States Court of Appeals for the District of Columbia (the “D.C. Circuit”) rejected the New England Power Generators Association’s (the “Association”) challenge to two FERC orders on ISO New England Inc.’s (“ISO-NE”) scarcity pricing mechanisms in ISO-NE’s real-time and capacity markets.  The D.C. Circuit rejected the challenge both on procedural grounds and on the merits.

On January 22, 2018, a New York state trial court largely rejected motions to dismiss various challenges to the state’s zero emission credit (“ZEC”) program established in 2016 by the New York Public Service Commission (“NYPSC”).  The ZEC program, which is also being challenged in federal court, provides subsidies to financially struggling in-state nuclear energy generators.  Although the court allowed five of the six claims against the program to proceed to trial, the court dismissed 56 of the 61 petitioners for failing to timely raise their challenges.

On January 18, 2018, FERC took steps to develop supply chain risk management Reliability Standards and to approve several new Emergency Preparedness and Operations (“EOP”) Reliability Standards.  First, FERC issued a Notice of Proposed Rulemaking (“NOPR”) proposing to direct the North American Electric Reliability Corporation (“NERC”) to develop supply chain risk management requirements under the Critical Infrastructure Protection (“CIP”) Reliability Standards.  Second, in a separate order, FERC approved several new EOP Reliability Standards aimed at addressing emergency event reporting, roles and responsibilities during system restoration via blackstart resources, system restoration plans and coordination, and the loss of control center functionality.