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On October 31, 2012, FERC issued an order (“Show Cause Order”) proposing to fine Barclays Bank PLC (“Barclays”) $435 million for manipulating Western energy markets from November 2006 to December 2008.  FERC also proposed a disgorgement of $34.9 million, plus interest, in profits earned as part of Barclays’ alleged market manipulation scheme.  Additionally, FERC proposed individual civil penalties for four different Barclays’ traders: Daniel Brin, Scott Connelly, Karen Levine, and Ryan Smith.

On October 26, 2012, FERC accepted two related tariff amendments that give the California Independent System Operator Corporation’s (“CAISO”) more authority to reduce payments to generators that are subject to non-market “exceptional dispatch.”  The CAISO made the amendments over concerns that certain suppliers could exercise market power by bidding in a way that makes them more likely to be exceptionally dispatched, earning higher revenues than the market would have provided otherwise.

On October 29, 2012, the California Independent System Operator Corporation (“CAISO”) filed tariff changes at FERC to permit generators to include greenhouse gas compliance costs in certain bid cost calculations.  The CAISO currently calculates generating units’ start-up and minimum load costs in order to create default energy bids used for market power mitigation, calculate bid caps for minimum load and start-up costs, and create bids in the event the unit does not submit a required bid.

On September 20, 2012, FERC conditionally accepted Southwest Power Pool, Inc.’s (“SPP”) proposal to incorporate systematic and automated curtailments of new Non-Dispatchable Resources in SPP’s Energy Imbalance Service Market during periods of congestion.  In doing so, the Commission determined that SPP will afford “Non-Dispatchable Resources equal curtailment priority treatment and exposure to Uninstructed Deviation Charges commensurate with other resources that are similarly situated, on the basis of their transmission reservation rights and whether their output is scheduled or unscheduled.”

On October 18, 2012, FERC issued a Notice of Proposed Rulemaking (“NOPR”) proposing to approve the revised reliability standard FAC-003-002 regarding vegetation management submitted by the North American Electric Reliability Corporation (“NERC”).  Generally, the NOPR states that the revised reliability standard FAC-003-002 would, among other things: (1) expand the applicability of the current standard; (2) add a new minimum annual vegetation inspection requirement; and (3) include a minimum vegetation clearance distance (“MVCD”) into the standard.

On October 18, 2012, FERC conditionally approved Southwest Power Pool, Inc.’s (“SPP”) revised tariff to implement its “Integrated Marketplace,” making SPP the last RTO/ISO to adopt a day-ahead market. The Integrated Marketplace will include a market-based congestion management program and energy markets. The energy markets will consist of day-ahead and real-time energy and operating reserves that utilize locational marginal pricing.

On October 15, 2012, FERC Staff issued a report proposing to collect information to track performance and operation of utilities outside of Independent System Operators (“ISOs”) and Regional Transmission Organizations (“RTOs”) (“October 15 Report”). In its October 15 Report, Staff requests participating utilities submit reports by January 25, 2013 that respond to the final list of performance metrics.

On October 18, 2012, FERC issued a Notice of Proposed Rulemaking (“NOPR”) directing the North American Electric Reliability Corporation (“NERC”) to submit for FERC approval reliability standards that address and mitigate the effects of geomagnetic disturbances (“GMDs”) on the bulk-power system.  This NOPR is the first step in developing reliability standards to mitigate the effects of GMDs.