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On September 19, 2014, FERC, in response to a petition for declaratory order, disclaimed jurisdiction under both section 3 and section 7 of the Natural Gas Act (“NGA”) over Emera CNG, LLC’s (“Emera”) construction and operation of compressed natural gas (“CNG”) facilities that will be used to send CNG to the Bahamas via ocean-going tankers.  In reaching its decision, FERC noted that Emera’s proposed facilities would not directly load the CNG onto ships, but would rather compress natural gas at a location where the CNG would first be loaded onto trucks, and then be transported a quarter mile by those trucks to ocean-going tankers.

On September 18, 2014, the Commission issued Order No. 676-H, which revises its regulations to incorporate by reference, with several exceptions, Version 003 of the Standards for Business Practices and Communication Protocols for Public Utilities, as mandatory and enforceable requirements.  The purpose of the Version 003 standards is to promote a more seamless marketplace for wholesale electricity.

On September 18, 2014, FERC issued an order addressing Order No. 1000 compliance filings, and requests for rehearing regarding prior compliance filings, for the parties within the ColumbiaGrid Transmission Planning region in the Pacific Northwest.  In doing so, FERC clarified the role of public power entities in the regional transmission planning process, explaining that if a public power entity chooses to enroll in a regional transmission planning process, it is bound to the resulting cost allocation determinations.  However, FERC also approved a mechanism whereby a public power entity could refrain from enrolling in the process while still being included in its respective planning process.  Under this framework, if a public power entity is subsequently allocated costs under the regional cost allocation method, it could separately determine whether it would accept those costs based on its statutory authorities.

On September 8, 2014, FERC held a technical conference on the subject of “uplift payments” in Regional Transmission Organization (“RTO”)/Independent System Operator (“ISO”) markets.  The conference was held several weeks after the release of Commission Staff’s preliminary analysis on the topic, and is the first of several technical conferences aimed at addressing the broader issue of improving price formation in energy and ancillary services markets.  The next conference will convene on October 28, 2014, and address the issues of offer price mitigation and offer price caps.

On September 9, 2014, the Energy and Power Subcommittee held a hearing on the Environmental Protection Agency’s (“EPA”) proposed Clean Power Plan (“CPP”) – a proposed rule designed to limit carbon dioxide emissions through state-developed plans.  The hearing’s focus was to obtain state officials’ perspectives on the challenges associated with implementing the CPP.  The hearing also marked the third time the Subcommittee has heard testimony on the CPP, which includes testimony from FERC commissioners earlier in the year (see July 29, 2014 edition of the WER).

On August 26, 2014, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) vacated and remanded a FERC decision that required a generator to pay network upgrade costs related to its interconnection in the PJM Interconnection, L.L.C. (“PJM”).  The D.C. Circuit held that FERC did not justify its reasoning when it departed from its own precedent and required West Deptford Energy, L.L.C. (“West Deptford”) to pay upgrade charges pursuant to cost-allocation provisions of a superseded PJM tariff, rather than pursuant to provisions of the currently-effective tariff.

On August 22, 2014, FERC authorized construction, operation and abandonment under a blanket certificate for Columbia Gas Transmission, LLC’s (“Columbia Gas”) proposed Line 1655 North Project in Cumberland County, Pennsylvania.  FERC rejected arguments that its Environmental Assessment (“EA”) of the project improperly segmented the project and failed to consider the cumulative impacts of projects regarding Columbia Gas’ Modernization Program.  In doing so, FERC distinguished the facts and circumstances surrounding the Line 1655 North Project from a recent U.S. Court of Appeals for the District of Columbia decision that held that FERC had violated the National Environmental Policy Act for segmenting Tennessee Gas Pipeline Company, L.L.C. projects in its respective EA and failed to provide a meaningful analysis of the cumulative impacts of four interconnected upgrade projects on one mainline (see June 10, 2014 edition of the WER).

On August 22, 2014, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) vacated an order by FERC which had upheld the North American Electric Reliability Corporation’s (“NERC”) assessment of reliability based penalties on the Southwestern Power Administration (“SWPA”), an entity within the United States Department of Energy (“DOE”).  The D.C. Circuit explained that in order to authorize a monetary penalty against the federal government, the statute must unequivocally subject the government to monetary liability, something that the provisions of the Federal Power Act (“FPA”) which address enforcement of reliability do not do.

On September 4, 2014, FERC issued two concurrent declaratory orders – one involving Shell U.S. Gas & Power, LLC (“Shell”), and the other involving Pivotal LNG, Inc. (“Pivotal”) – that addressed FERC’s jurisdiction over Liquid Natural Gas (“LNG”) facilities, and the transportation and sale of LNG in general, under the Natural Gas Act (“NGA”).  FERC generally stated in its declaratory orders that (1) the transportation of LNG via non-pipeline modes of transportation to end users would not be subject to FERC’s jurisdiction under section 7 of the NGA, (2) facilities that receive LNG by waterborne vessels in interstate commerce that will be delivered to end users without entering a pipeline system will not be considered LNG Terminals under section 3 of the NGA, and (3) sales for resale will only be subject to FERC jurisdiction under section 7 of the NGA if the gas is transported at some point by interstate pipeline.