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On July 11, 2016, FERC imposed fines on BP America Inc., BP Corporation North America Inc., BP America Production Company, and BP Energy Company (collectively, “BP”) of over $20 million in civil monetary penalties, and disgorgement of over $200,000 in profits, for manipulating natural gas prices by, FERC found, uneconomically trading physical natural gas at the Houston Ship Channel to benefit BP’s financial spread positions based on the price differential between the Houston Ship Channel and the Henry Hub.

On July 13, 2016, FERC issued an order partially lifting a long-standing pricing limitation for energy exports from the Midcontinent Independent System Operator, Inc. (“MISO”) to the PJM Interconnection, L.L.C. (“PJM”) in relation to Multi-Value Projects (“MVPs”). The order—released in response to a remand from the U.S. Court of Appeals for the Seventh Circuit (“Seventh Circuit Court of Appeals”)—resolves a multi-year-long process and debate over how to allocate costs to PJM for MISO’s MVP transmission projects that benefit customers inside of the PJM region. The central issue decided by FERC was, in light of current system, market, and technological conditions impacting these two Regional Transmission Organizations (“RTOs”), whether it was still necessary to maintain a restriction on export charges for MVP-enabled energy deliveries that originate in MISO and sink in PJM.

On July 1, 2016, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) rendered an opinion affecting the return-on-equity and cost-of-service components of oil pipeline ratemaking. Specifically, the D.C. Circuit ordered FERC to either justify or amend its practice of granting income tax allowances for limited partnership pipelines, questioned FERC’s rationale in deciding what financial data should be used to calculate real rate of return on equity, and upheld FERC’s determination that a pipeline’s cost-of-service rates can already account for changes in costs associated with rate indexes. The D.C. Circuit remanded the case back to FERC on the income tax allowance and real rate of return on equity issues.

On July 7, 2016, FERC granted waiver of certain provisions of the Southwest Power Pool, Inc. (“SPP”) Open Access Transmission Tariff in order to permit SPP to implement the revenue crediting process for certain transmission upgrades. In its order, FERC noted that SPP’s implementation of the revenue crediting process had been delayed for eight years, and that “[u]pgrade sponsors who have been negatively affected by SPP’s delay will finally, through this order, get the appropriate relief.”

On July 1, 2016, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) denied a petition to review FERC’s determination that the “Mobile-Sierra” presumption does not preserve “right of first refusal” provisions that are otherwise required to be removed from tariffs and agreements following Order No. 1000.

On June 17, 2016, FERC declined to exercise primary jurisdiction over an interconnection dispute between Cottonwood Wind Project, LLC (“Cottonwood”) and Nebraska Public Power District (“NPPD”) because FERC determined that the controversy centered on the parties’ actions and that resolution of the case would only affect the parties to the specific agreement at issue. Specifically, FERC explained that the dispute over the interconnection agreement, which was based on FERC’s pro forma Large Generator Interconnection Agreement (“LGIA”), was a contractual dispute that failed to satisfy the factors set out in FERC’s “Arkla” test. As a result, FERC’s order dismissed the complaint brought by Cottonwood against the NPPD, which alleged that certain pre-construction authorizations were required under the parties’ LGIA. FERC’s refusal to assume jurisdiction over the dispute likely means a court will have to resolve the case.

On June 16, 2016, FERC amended its regulations to require that the North American Electric Reliability Corporation (“NERC”) provide FERC Commissioners and staff with access, on a non-public and ongoing basis, to NERC’s Transmission Availability Data System (“TADS”), the Generating Availability Data System (“GADS”), and the protection system misoperations database. While FERC explained that such access would “provide the Commission with information necessary to determine the need for new or modified Reliability Standards and to better understand NERC’s periodic reliability and adequacy assessments,” it also added that “the Commission is not precluded from using the accessed data for other statutory purposes.”

On June 16, 2016, FERC granted Southwest Gas Corporation’s (“Southwest Gas’s”) request for rehearing and approved Paiute Pipeline Company’s (“Paiute’s”) proposal to impose a fuel retention charge of zero, and a separate, stand-alone lost and unaccounted for (“L&U”) gas charge, for transportation service that only utilizes Paiute’s Adobe Lateral.

On June 16, 2016, FERC affirmed its process outlined in Opinion No. 538 for analyzing whether natural gas storage companies lack significant market power for the purposes of determining whether to grant market-based rate (“MBR”) authority for natural gas storage service. However, FERC clarified that the burden to show lack of control over an affiliate rests with the applicant.

On June 16, 2016, FERC denied as inconsistent with section 210 of the Public Utility Regulatory Policies Act of 1978 (“PURPA”) a proposal that would require members of a generation and transmission cooperative to compensate the cooperative when the members purchase power from qualifying facilities (“QFs”) instead of from the cooperative. Specifically, Tri-State Generation and Transmission Association, Inc. (“Tri-State”) had petitioned FERC for a declaratory order finding that Tri-State’s policy of requiring compensation from Tri-State’s members when they purchase power from QFs in excess of five percent of their requirements is consistent with PURPA. FERC denied the request.