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Jeffrey Jakubiak, a partner in Troutman’s New York office, has authored an article in Fortnightly Spark regarding FERC enforcement risk.  The article, titled “Don’t Fear The FERC” includes four steps for companies engaging in energy trading to follow and discuss with counsel in order to help minimize the likelihood of an investigation and lower the risk of any adverse outcome in the event of an investigation.

On October 29, 2013, Jeff Wright, Director of FERC’s Office of Energy Projects, testified before the House of Representatives Subcommittee on Energy and Power regarding H.R. 3301, the proposed North American Energy Infrastructure Act (“H.R. 3301”).  In part, H.R. 3301 requires that FERC approve new pipeline projects at the Canadian and Mexican borders within 120 days of receiving requests for approval, unless the project is not in the interest of national security, and that approval of such projects are not major federal actions under the National Environmental Policy Act (“NEPA”).

On October 23, 2013, the Inspector General of the Department of Energy (“DOE IG”) released an audit report evaluating FERC’s Unclassified Cyber Security Program.  In the audit, the DOE IG concluded that despite FERC’s progress in improving its internal processes related to cyber security, FERC needs to take additional actions to improve its cyber security systems.

On October 17, 2013, FERC issued an order denying PPL Electric Utilities Corporation’s (“PPL Electric”) request to be relieved of its mandatory obligation under the Public Utility Regulatory Policies Act of 1978 (“PURPA”) to purchase the output of Sounderton LLC’s (“Sounderton”) cogeneration facility, which is a small Qualifying Facility (“QF”) with an output of less than 20 MW. 

On October 17, 2013, FERC issued an order clarifying its policy regarding the filing of reactive power rate schedules where there is no rate charged (“Clarification Order”).  Specifically, FERC clarified that, going forward, all entities must file reactive power rate schedules containing the rates, terms, and conditions for reactive power service, even if there is no charge for such service.  Furthermore, FERC directed FERC Staff to conduct a workshop to explore the mechanics of such filings.

On October 9, 2013, FERC filed a petition (“Petition”) in the United States District Court for the Eastern District of California for an order affirming FERC’s assessment of civil penalties totaling $435 million against Barclays Bank PLC (“Barclays”) and four of its traders for manipulating electricity markets in and around California, along with disgorgement of profits in the amount of $34.9 million.

On October 1, 2013, FERC accepted and suspended PJM Interconnection, LLC’s (“PJM”) demand resource offer revisions to its Open Access Transmission Tariff (“OATT”) and Reliability Assurance Agreement, and set the matter for a technical conference.  FERC stated that the technical conference will explore issues raised in the proceeding that warrant further discussion.

On September 19, 2013, FERC issued a final rule approving the North American Electric Reliability Corporation’s (“NERC”) modifications to four requirements for electricity reliability.  The modifications were proposed to close perceived reliability gaps associated with generator interconnection facilities without the need for most generator owners or operators to register as transmission owners or operators.