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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.

On October 9, 2012, the Commission denied PPL Electric Utilities Corporation’s (“PPL”) request for an incentive Return on Equity (“ROE”) adder for its Northeast/Pocono Reliability (“NPR”) project, marking the first time since the Energy Policy Act of 2005 that FERC denied a request for an ROE adder for a transmission project it determined to  be “non-routine.”

On October 2, 2012, FERC approved Entergy Services, Inc.’s (“Entergy”) proposal to transfer its Independent Coordinator of Transmission (“ICT”) services from Southwest Power Pool, Inc. (“SPP”) to the Midwest Independent Transmission System Operator, Inc. (“MISO”).  Additionally, FERC granted an extension of Entergy’s current ICT agreement with SPP, which expires on November 17, 2012, to November 30, 2012.  This will allow transfer of ICT functions to MISO on December 1, 2012.