FERC News

Subscribe to FERC News via RSS

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.

Today, FERC Commissioners and Norman Bay, who has been confirmed by the Senate to serve as a FERC Commissioner, will testify before the House Subcommittee on Energy and Power regarding the potential impact of the Environmental Protection Agency’s (“EPA”) proposed rulemaking establishing carbon emissions guidelines for stationary generation sources.  EPA’s proposed rule is specifically designed to reduce greenhouse gas emissions from existing fossil fuel-fired electric generating units.

On July 18, 2014, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued a decision denying petitions for review of FERC’s orders related to Regional Transmission Organization (“RTO”) transmission expansion cost allocation for FirstEnergy Service Company (“FirstEnergy”) after it transitioned between two RTOs.  Specifically, the D.C. Circuit affirmed FERC’s rejection of FirstEnergy’s request for relief from the PJM Interconnection L.L.C.’s (“PJM”) annual allocation of transmission expansion plan costs for any project approved before FirstEnergy transitioned to that RTO. 

On July 18, 2014, United States Senator Robert Casey (D-PA) sent a letter to the Department of Energy’s Inspector General requesting a review of FERC’s Office of Enforcement’s practices with regard to investigations of alleged manipulation in energy markets.  Senator Casey requested that such a review take place in order to ensure that FERC’s Office of Enforcement was fairly conducting its investigations and that all enforcement actions were transparent.

On July 17, 2014, FERC issued a notice of proposed rulemaking (“NOPR”) proposing to approve the North American Electric Reliability Corporation (“NERC”) Reliability Standard CIP-014-1.  The goal of the Reliability Standard is to enhance physical security measures for the most critical Bulk-Power System facilities and thereby lessen the overall vulnerability of the Bulk-Power System facilities against physical attacks.  FERC also proposed to direct NERC to develop two modifications to the standard.

On July 8, 2014, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued an order denying petitions for review of FERC’s January 19, 2012 order requiring certain market mitigation measures in ISO New England Inc.’s (“ISO-NE”) Forward Capacity Market (“FCM”).  The D.C. Circuit instead deferred to FERC’s reasoning, holding that FERC based its buyer-side and supplier-side mitigation measures on substantial evidence and undertook its balancing responsibilities with appropriate consideration.  Notably, the D.C. Circuit upheld FERC’s prior decision that the FCM must have an offer-floor mechanism to keep “out of market” capacity from bidding as a price-taker and depressing market-clearing prices.

On July 7, 2014, FERC petitioned the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) for an en banc rehearing of the D.C. Circuit’s opinion that vacated FERC’s Order No. 745, which required organized wholesale energy markets to compensate demand response resources at the market price for energy (see June 13, 2014 edition of the WER).