On December 21, 2017, FERC issued an order accepting a proposal from the Midcontinent Independent System Operator, Inc. (“MISO”) to revise its Open Access Transmission, Energy, and Operating Reserve Markets Tariff (“Tariff”) and establish Dynamic Narrow Constrained Areas (“Dynamic NCAs”).  FERC found that MISO’s proposal would strengthen existing market power mitigation measures in MISO and help ensure that the potential exercise of market power during such transitory conditions would be properly mitigated.

On December 11, 2017, Eversource Energy (“Eversource”) sent a cease and desist letter to Fred Krupp, President of the Environmental Defense Fund (“EDF”) and N. Jonathan Peress, EDF’s Senior Director of Energy Market Policy.  Specifically, Eversource directed both EDF executives to immediately stop the publication of all statements insinuating that Eversource has withheld gas pipeline capacity from the wholesale electricity market in order to earn profits from higher prices.

On December 11, 2017, BP America Inc., BP Corporation North America Inc., BP America Production Company, and BP Energy Company (collectively, “BP”) requested FERC to dismiss its July 11, 2016 order (“July 11 Order”) assessing civil penalties against BP and requiring BP to disgorge profits for violating FERC’s anti-market manipulation rule.  In doing so, BP argued that, due to recent federal court cases, the law had changed regarding the statute of limitations for actions imposing civil penalties and disgorgement.  Therefore, according to BP, FERC’s August 5, 2013 order to show cause issued to BP failed to commence a “proceeding” within the meaning of the statute of limitations for enforcing civil fines and penalties, and thus FERC’s assessment of civil penalties and disgorgement was time-barred.  Rather, BP argued that the statute of limitations began to run on November 25, 2008 at the latest, and thus FERC was required to commence a “proceeding” by November 25, 2013, but FERC did not commence a “proceeding” until May 15, 2014 at the earliest when it set the matter for hearing.

On December 8, 2017, FERC issued an order on remand, rejecting PJM Interconnection, L.L.C.’s (“PJM”) proposed revisions to the minimum offer price rule (“MOPR”) in its entirety, reinstating PJM’s prior FERC-approved market design.  FERC further determined that it would not require PJM to rerun the markets for the period in which the now defunct MOPR rules were in operation, as doing so would be burdensome and significantly disrupt the market. 

On December 7, 2017, the U.S. Government Accountability Office (“GAO”) issued a report summarizing its review of FERC’s oversight of the nation’s four regional capacity markets.  The GAO found generally that “FERC has not fully assessed the overall performance of capacity markets,” and the agency recommends that FERC improve data quality, use consistent metrics reported through standardized definitions, and establish goals, performance metrics, and risk tolerance levels for capacity markets.  The report comes at a time when FERC is considering significant capacity market-related issues, including the Department of Energy-initiated “Grid Reliability and Resilience Pricing” docket (see October 2, 2017 Edition of the WER), and reliability-focused pricing reforms from the PJM Interconnection, L.L.C. (see November 21, 2017 edition of the WER).

On November 16, 2017, twelve New England electricity consumers (“Plaintiffs”) filed a class action lawsuit in in the U.S. District Court of Massachusetts against two large New England energy companies, Eversource Energy (“Eversource”) and Avangrid, Inc. (“Avangrid”), arguing that they raised power prices by artificially constraining capacity on the Algonquin Gas Transmission Pipeline (“Algonquin”).  Specifically, the Plaintiffs argue that for the past three years, Eversource and Avangrid have increased power prices by 20% by reserving more capacity than was needed on Algonquin with the intent to cancel the reservation when it was too late for the pipeline capacity to be resold to other market participants.  Plaintiffs allege that this behavior was a misuse of Eversource’s and Avangrid’s market power, in violation of state and federal unjust enrichment, consumer protection and antitrust laws.

On December 7, 2017, Kevin McIntyre was sworn in as FERC Chairman.  The addition of Chairman McIntyre now completes a full, five-member Commission.  On the same day, Chairman McIntyre requested a 30-day extension of the deadline for FERC to act on Department of Energy (“DOE”) Secretary Rick Perry’s proposed rulemaking concerning grid resiliency pricing.

On December 6, 2017, FERC denied requests for rehearing of its prior order (“February Order”) authorizing Transcontinental Gas Pipe Line Company (“Transco”) to build and operate its Atlantic Sunrise Project.  A variety of protestors raised several claims in their requests for rehearing, including that the assessment of the public purpose and need of the project was incorrect and that the analysis regarding the project’s effect on climate change was inadequate.  FERC rejected all challenges to its February Order for several reasons, concluding that the claims were meritless.

On December 5, 2017, FERC approved a trio of proposed revisions to the Open Access Transmission, Energy, and Operating Reserve Markets Tariff (“Tariff”) of the Midcontinent Independent System Operator, Inc. (“MISO”).  These revisions all pertained to MISO’s Competitive Developer Selection Process, memorialized in Tariff Attachment FF, which sets out the process for identifying certain transmission facilities within a regional transmission project as well as qualified developers to construct the facilities.  FERC approved the proposed revisions after finding that they would improve MISO’s Competitive Developer Selection Process and make it more efficient.

On November 17, 2017, FERC conditionally accepted a proposal filed by the PJM Interconnection, LLC (“PJM”) to establish pseudo-tie requirements for new external resources desiring to participate in PJM’s forward capacity auction, as well as a transition period to allow existing “pseudo-tie” resources to comply with the new requirements.  PJM’s proposal was given a May 9, 2017 effective date, provided that it submits further compliance filings addressing FERC’s concerns in its order.