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On May 20, 2015, the North American Electric Reliability Corporation (“NERC”) submitted to the Commission a compliance filing relating to the Reliability Assurance Initiative (“RAI”)—a multi-year effort among NERC and the Regional Entities designed to transition NERC’s Compliance Monitoring and Enforcement Program (“CMEP”) to a “risk-based” approach that focuses CMEP resources on certain activities based on the proportional risk that those activities pose to the reliability of the Bulk Electric System.

On May 15, 2015, the FERC commissioners sent a letter to the Environmental Protection Agency (“EPA”) addressing two areas where FERC could contribute to maintaining reliability under EPA’s Clean Power Plan (“CPP”).  FERC’s letter was in response to EPA’s Acting Assistant Administrator Janet McCabe’s May 6, 2015 letter to FERC regarding FERC’s role in the CPP and the steps the two agencies have already pursued thus far.

In an order issued May 21, 2015, FERC approved an amendment to PacifiCorp’s Network Operating Agreement (“NOA”) between PacifiCorp and its merchant function, PacifiCorp Energy, allowing for a new planning redispatch protocol.  The amendment prevents the need for PacifiCorp to build network upgrades that are driven solely by qualifying facility (“QF”) requests to site in a constrained area, and that are not otherwise needed for economic or reliability reasons.

On May 13, 2015, Commissioner Philip Moeller announced his intent to resign from FERC upon the confirmation of his successor by the U.S. Senate.  Commissioner Moeller joined FERC in 2006.  He is currently serving the final months of his second term, set to expire on June 30 of this year (see June 25, 2010 edition of the WER).

On May 14, 2015, the Commission issued a Notice of Proposed Rulemaking (“NOPR”) in which it proposed to approve Reliability Standard TPL-007-1 regarding Geomagnetic Disturbance (“GMD”) Events.  According to the Commission, the Reliability Standard requires applicable Bulk-Power System (“BPS”) owners and operators to conduct initial and on-going vulnerability assessments regarding the potential impact of a benchmark (i.e.,1-in-100 year) GMD event on the BPS as a whole, and on BPS components individually.  In addition, the Commission stated that the proposed Reliability Standard requires applicable entities to develop and implement corrective action plans to mitigate any vulnerabilities identified by such assessments.

On May 14, 2015, FERC issued a Notice of Proposed Rulemaking (“NOPR”) proposing to change the date on which FERC begins to assess annual charges for hydropower licenses and exemptions that authorize unconstructed projects and unconstructed new capacity.  The Federal Power Act and the Omnibus Budget Reconciliation Act of 1986 require that FERC collect annual charges from such licensees and exemptees in order to cover the costs of administering the hydropower portion of the Federal Power Act.

On April 29, 2015, the United States Court of Appeals for the Ninth Circuit (the “Ninth Circuit”) held that FERC failed to comply with the court’s remand order in a 2004 case involving the California Energy Crisis—California ex rel. Lockyer v. FERC (“Lockyer”)—by improperly structuring its administrative fact-finding proceeding to focus solely on the accumulation by wholesale power sellers of excessive market share, and not including an analysis of possible deficiencies in transaction reporting by those sellers.  The court remanded the case back to FERC for further proceedings.

On May 1, 2015, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) held that the Environmental Protection Agency (“EPA”) acted arbitrarily and capriciously when it modified its National Emissions Standards and New Source Performance Standards (“NSPS”) to allow backup generators to operate without emission controls for up to 100 hours per year in emergency demand-response programs.  As a result of the ruling, the D.C. Circuit reversed the 100-hour exemption and remanded the rules back to EPA for further action.

On May 1, 2015, FERC issued an order assessing civil penalties against Maxim Power Corporation, Maxim Power (USA), Inc., Maxim Power (USA) Holding Company Inc., Pawtucket Power Holding Co., LLC, Pittsfield Generating Company, LP (collectively “Maxim”) and an Energy Marketing Analyst at Maxim, Kyle Mitton (“Mitton”), finding that Maxim and Mitton violated section 222(a) of the Federal Power Act and FERC’s Anti-Manipulation Rule, 18 C.F.R. § 1c.2.  FERC assessed civil penalties of $5,000,000 against Maxim and $50,000 against Mitton. 

On April 24, 2015, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) denied Petitioners’ (Citizens of the town of Myersville) review challenging FERC’s orders approving Dominion Transmission, Inc.’s (“Dominion”) “Allegheny Storage Project,” and specifically FERC’s approval of the construction of a new natural gas compressor station in Myersville, Maryland (the “Myersville Compressor”).   In denying the petition, the D.C. Circuit concluded that each of the Petitioners’ challenges lacked merit.