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On November 29, 2012, U.S. Magistrate Judge Deborah A. Robinson issued a memorandum order denying FERC’s request to compel production of certain portions of 25 email documents by J.P. Morgan Ventures Energy Corporation (“JP Morgan”).  In its petition before the court, FERC argued that JP Morgan was “overbroad” in claiming attorney-client privilege for this information.  Upon in camera review of the JP Morgan emails at issue, Magistrate Judge Robinson found that the redacted information was in fact “shielded” by attorney-client privilege.

On December 5, 2012, the Department of Energy (“DOE”) released the results of a long-awaited study that it commissioned regarding the macroeconomic impacts of liquefied natural gas (“LNG”) exports from the U.S.  Notably, the study, conducted by NERA Economic Consulting (“NERA”), concluded that “LNG exports have net economic benefits in spite of higher domestic natural gas prices.”  The study also determined that LNG exports from the U.S. would have a relatively small impact on domestic prices, and that LNG exports from the U.S. are “not likely to affect the overall level of employment in the U.S.”

On November 30, 2012, FERC approved a stipulation and consent agreement (“Settlement Agreement”) between its Office of Enforcement (“Enforcement”) and Alliance Pipeline L.P. (“Alliance”) for an unsubscribed capacity scheme that FERC determined violated its Standards of Conduct for Transmission Providers as well as Alliance’s own Open Access Transmission Tariff (“OATT”).  While Alliance neither admitted nor denied the allegations in the Settlement Agreement, it consented to a $500,000 fine and to filing semi-annual compliance reports with Enforcement for one year.

On November 20, 2012, FERC granted a petition for enforcement and announced that it will take the Idaho Public Utilities Commission (“Idaho PUC”) to court for failure to adhere to the Public Utility Regulatory Policies Act of 1978 (“PURPA”) and FERC’s PURPA regulations and precedent.  In what appears to be the culmination of FERC’s frustration with the Idaho PUC’s apparent refusal to give effect to FERC’s prior interpretations of PURPA, this most recent order suggests FERC will now actively enforce its interpretation of the law through the courts.  It is not known when and in what venue FERC will file the enforcement lawsuit.

On November 19, 2012, the Commission approved a Stipulation and Consent Agreement (“Settlement”) between Gila River Power, LLC (“Gila River”) and the Commission’s Office of Enforcement (“OE”) under which Gila River agreed to pay a $2.5 million fine and disgorge $911,553 in profits plus interest.  The Settlement states that Gila River: (1) violated FERC’s Anti-Manipulation Rule, and (2) violated the California Independent System Operator Corporation (“CAISO”) Tariff and FERC’s Regulations by submitting inaccurate information in booking invalid wheeling transactions.

On November 14, 2012, FERC suspended J.P. Morgan Ventures Energy Corporation’s (“JP Morgan”) market-based rate authority for six months beginning April 1, 2013, for allegedly submitting false or misleading information to FERC and the California Independent System Operator Corporation (“CAISO”) in violation of Section 35.41 the Commission’s regulations.  Section 35.41 prohibits sellers from submitting “false or misleading information” or omitting material information in any communication with the Commission and certain other entities, including Regional Transmission Organizations and their market monitors.

On November 15, 2012, FERC issued a Policy Statement to provide new guidance to applicants seeking electric transmission incentives pursuant to section 219 of the Federal Power Act (“FPA”).  The Commission stated that the guidance is necessary to encourage investment in transmission infrastructure while maintaining just and reasonable rates.  Notably, the Commission “reframes” the nexus test applied to transmission projects and will no longer depend on its prior routine/non-routine analysis.

On Thursday, November 15, 2012, FERC announced it is considering whether or not it should require all market participants “engaged in sales of wholesale physical natural gas in interstate commerce to report quarterly to the Commission every natural gas transaction within the Commission’s jurisdiction that entails physical delivery for the next day (i.e., next day gas) or for the next month (i.e., next month gas).”  In doing so, FERC issued a Notice of Inquiry (“NOI”) seeking comments regarding the usefulness of such quarterly reports.  FERC also requested input regarding the type of information that should be included and the subsequent treatment of such information and data.

On October 31, 2012, FERC conditionally approved the New York Independent System Operator, Inc.’s (“NYISO”) August 31, 2012 proposed tariff revisions to address concerns with Black Start and System Restoration Services (“Restoration Services”), effective November 1, 2012.  The Commission found NYISO’s proposed tariff revisions were a “reasonable step” towards meeting concerns regarding black start service adequacy, and requested one area of modification by NYISO on compliance.