On July 27, 2015, FERC released its 2015 version of the Energy Primer: A Handbook of Energy Market Basics (“Energy Primer”). The Energy Primer was developed by staff from the Division of Energy Market Oversight within FERC’s Office of Enforcement. First released in 2012, the Energy Primer is a manual that provides a broad overview of the physical wholesale markets for natural gas and electricity and energy-related financial markets. The 2015 release of the Energy Primer provides an update of the changes in the energy industry since its 2012 release.
FERC News
FERC Office of Energy Projects Issues Best Practices Manual
On July 28, 2012, FERC’s Office of Energy Projects (“OEP”) released a 32-page manual titled “Suggested Best Practices for Industry Outreach Programs to Stakeholders” (“Manual”). In doing so, OEP states that the purpose of the Manual is to identify best practices for natural gas project developers to “effectively engage stakeholders in the application process for siting, construction and operation of interstate natural gas facilities and LNG terminals.”
FERC Enforcement Alleges that Pipeline Posting of Notices of Available Firm Capacity Auctions on the Password-Protected Portion of its EBB Violated the Pipeline’s Tariff
On July 16, 2015, FERC’s Office of Enforcement (“Enforcement”) released a “Staff Notice of Alleged Violations” (“Notice”) stating that it had preliminarily determined that Columbia Gas Transmission LLC (“Columbia Gas”) violated Part 4 of the General Terms and Conditions of the pipeline’s FERC Gas Tariff by posting notices of auctions of available firm capacity on the password-protected side of its Electronic Bulletin Board (“EBB”), rather than the public side of the EBB, between January 1, 2010 to May 1, 2013.
NERC Renews Request to Eliminate the Load-Serving Entity Registration Function
On July 17, 2015, the North American Electric Reliability Corporation (“NERC”) submitted a compliance filing with the Commission regarding NERC’s Risk-Based Registration (“RBR”) initiative, including renewed requests for the elimination of the Load-Serving Entity (“LSE”) registration function. The Commission previously rejected, without prejudice, NERC’s proposal to eliminate the LSE registration function in its March 19, 2015 order (the “March 19 Order”) on NERC’s RBR initiative.
CAISO Board of Governors Adopts Framework to Permit Market Participation by Aggregated Distributed Resources
On July 16, 2015, the California Independent System Operator Corporation’s (“CAISO”) Board of Governors approved a new proposal (the “Proposal”) that will allow aggregated distributed energy resources to participate in the California wholesale energy market. Under the approved framework, distributed energy resources, such as rooftop solar, energy storage, and plug-in electric vehicles, will be allowed to aggregate together to meet CAISO’s 500 kW minimum participation requirement. CAISO stated that it will continue to develop supporting tariff language for the framework; it intends to submit such language to FERC for approval later this year.
FERC Issues NOPR Proposing Development of NERC Reliability Standard for Industrial Supply Chain Management
On July 16, 2015, the Commission issued a Notice of Proposed Rulemaking (“NOPR”) in which it proposed, among other things, to direct the North American Electric Reliability Corporation (“NERC”) to develop a new or modified Reliability Standard to provide security controls for supply chain management of industrial control system hardware, software, and computing and networking services associated with bulk electric system operations. Comments are due 60 days after publication of the NOPR in the Federal Register.
FERC Eliminates Form 566 Filling Requirements for RTOs, ISOs, EWGs, and Certain Public Utilities
On July 16, 2015, the Commission issued a final rule in which it eliminated the obligation to file Form 566 (Annual Report of a Utility’s 20 Largest Customers) for regional transmission organizations (“RTOs”), independent system operators (“ISOs”), and exempt wholesale generators (“EWGs”). The final rule also eliminates the requirement to submit a Form 566 for public utilities that have not made any Form 566-reportable sales (i.e., sales to customers who purchase the energy for purposes other than for resale) in any of the three preceding years. Lastly, the final rule eliminates the requirement for public utilities submitting Form 566 to identify individual residential customers by name and address, and eliminates the requirement to notify customers listed on the Form 566 of their designation.
AWEA Petitions FERC to Significantly Reform Pro Forma Generator Interconnection Procedures and Agreement
On July 7, 2015, the Commission issued a notice calling for comments on a Petition for Rulemaking filed by the American Wind Energy Association (“AWEA”) on June 19, 2015 in Docket No. RM15-21-000. In its petition, AWEA requested that the Commission initiate a rulemaking to significantly amend the pro forma Large Generator Interconnection Procedures (“GIP”) and Large Generation Interconnection Agreement (“GIA”), in order to alleviate what it described as “unduly discriminatory and unreasonable barriers to generator market access.” Comments on the petition are due August 6, 2015.
FERC Approves New Market Monitor Provisions for ISO-NE
On June 30, 2015, FERC approved most of the proposed tariff revisions in a joint proposal from the ISO New England, Inc. (“ISO-NE”) and the New England Power Pool (“NEPOOL”) Participants Committee addressing the ISO-NE’s market monitor rules. Specifically, the proposed revisions are designed to mitigate the potential to exercise market power in the ISO-NE Forward Capacity Auction (“FCA”), which is used to secure capacity in ISO-NE three years in advance of the relevant delivery year. Going forward, the new rules approved by FERC will be implemented in ISO-NE’s next FCA in February 2016.
FERC Denies PSEG Complaint, Upholds PJM’s Solicitation Process for the “Artificial Island”
On June 16, 2015, the Commission denied a complaint filed by Public Service Electric and Gas Company (“PSEG”) against PJM Interconnection, L.L.C. (“PJM”) in which PSEG contended that PJM did not comply with certain rules of its Open Access Transmission Tariff (“OATT”) in conducting a competitive solicitation for transmission solutions to the “Artificial Island”— a term that refers to the transmission and generation infrastructure associated with a nuclear complex that includes the Salem 1, Salem 2, and Hope Creek nuclear generating units. In denying PSEG’s complaint, the Commission found that: (i) PJM was not required to follow its Order No. 1000 procedures in its Artificial Island solicitation; and (ii) PJM complied with its pre-Order No. 1000 OATT rules in conducting the solicitation.