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On December 11, 2015, FERC issued an order accepting PJM’s proposed tariff and operating agreement revisions that would (1) double PJM’s energy market offer cap from $1,000/MWh to $2,000/MWh for cost-justified offers, (2) cap market-based offers at $2,000/MWh only when the corresponding cost-based offer is above $1,000/MWh, and (3) allow market sellers of generation resources with demonstrated costs above $2,000/MWh to recover those costs through make-whole payments. Although PJM’s proposal was made in advance of potential natural gas price spikes in the 2015–2016 winter, PJM’s proposal would apply year-round.

On December 17, 2015, FERC issued a Notice of Proposed Rulemaking (NOPR) containing proposed revisions to its market-based rate (MBR) regulations regarding the ownership information that sellers seeking to obtain or retain MBR authority must provide. In the NOPR, FERC proposes to amend its MBR regulations to narrow the ownership information required for an assessment of horizontal or vertical market power under the MBR regulations. Additionally, FERC proposes amendments to its MBR regulations to clarify the types of ownership changes that must be reported via a notice of change in status. The NOPR indicated that these proposed revisions are intended to complement the amendments to the MBR regulations recently made in Order No. 816 (see October 19, 2015 edition of the WER). 

On December 18, 2015, FERC staff of the Office of Energy Projects (“OEP”) issued a notice of availability of the Draft Guidance Manual for Environmental Report Preparation (“Guidance Manual”) for natural gas projects seeking comments on the Guidance Manual on or before January 19, 2016. OEP staff is asking for public input and suggestions for modifications to the Guidance Manual from interested parties in regards to preparation of resource reports associated with natural gas projects.

On December 17, 2015, the Commission denied a request for rehearing filed by Potomac-Appalachian Transmission Highline, L.L.C. and its operating companies, PATH West Virginia Transmission Company, LLC and PATH Allegheny Transmission Company, LLC (collectively, “PATH”) of a November 30, 2012 order in which the Commission determined, among other things, that PATH could not include a 50 basis points adder in its Return on Equity (“ROE”) for participation in a Regional Transmission Organization (“RTO”) when recovering costs for a transmission project that had been abandoned.

On November 30, 2015, the Commission rejected proposed revisions to Southwest Power Pool, Inc’s (“SPP”) Open Access Transmission Tariff (“OATT”) that would have created a new category of transmission facility—called a “Seams Transmission Project”—eligible for approval under SPP’s transmission planning and cost allocation processes.

On December 4, 2015, FERC granted a petition for declaratory order filed by Central New York Oil and Gas Company, L.L.C. (“CNYOG”) to provide interruptible park and loan storage service at market-based rates. CNYOG previously obtained Commission authorization to charge market-based rates for the storage and interruptible wheeling services it currently provides. 

On November 20, 2015, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) rejected the Federal Energy Regulatory Commission’s (“FERC”) holding that Federal Power Act (“FPA”) Section 7(a) limits the municipal preference in original licensing for hydroelectric projects to municipalities located in the vicinity of the water resource to be developed. The D.C. Circuit case, Western Municipal Power Agency v. FERC, No. 14-1153 (issued Nov. 20, 2015), was filed on appeal of FERC orders refusing to grant a municipal preference to Western Minnesota. The D.C. Circuit granted Western Minnesota Municipal Power Agency’s (“Western Minnesota”) petition for review, vacated the Commission’s underlying orders, and remanded the proceeding to FERC.

On November 24, 2015, FERC issued an order accepting proposed CAISO tariff revisions, closing what has been described by CAISO as a loophole in CAISO’s generator interconnection process. CAISO proposed the corrective tariff revisions to prevent interconnection customers from taking advantage of CAISO’s annual opportunity to decrease the size of queued projects. CAISO expressed concern that queued projects were using this “downsizing” process for the sole purpose of reducing the amount of financial security that an interconnection customer could be required to forfeit upon withdrawal from CAISO’s interconnection queue.

On November 19, 2015, FERC issued an order on remand from the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) finding that, when considered with the other projects involving construction on the 300 Line pipeline, Tennessee Gas Pipeline, L.L.C.’s (“Tennessee”) Northeast Upgrade Project does not result in significant additive or cumulative impacts. FERC originally held that it did not segment its environmental review of the Northeast Upgrade Project from that of the 300 Line Project and that its cumulative impacts analysis was not deficient. However, the D.C. Circuit remanded the additive and cumulative impacts analysis to FERC for further consideration.

On November 19, 2015, FERC granted Dominion Transmission, Inc.’s (“Dominion”) request for a certificate to construct and operate pipeline, compression, regulation equipment, valves, and other facilities in Ohio and Pennsylvania (the “Lebanon West II Project”) pursuant to section 7(c) of the Natural Gas Act. Dominion stated that the proposed Lebanon West II Project will enable it to provide an additional 130,000 dekatherms per day of firm transportation service from Dominion’s Mark West Liberty Bluestone Interconnection in Butler County, Pennsylvania, to the Lebanon-Texas Interconnection with Texas Gas Transmission Corporation in Warrant County, Ohio.