On September 13, 2012, FERC’s Office of Enforcement (“Enforcement”) issued a Notice of Alleged Violations against the California Independent System Operator Corporation (“CAISO”), suggesting that CAISO violated two mandatory Reliability Standards in connection with a power outage in the San Diego area in 2010.  FERC will next determine if it agrees with Enforcement’s preliminary determinations, open a formal investigation, or accept a settlement between the parties.

On September 7, 2012, FERC conditionally authorized Plains and Eastern Clean Line LLC and Plains and Eastern Clean Line Oklahoma LLC, subsidiaries of Clean Line Energy Partners LLC, (collectively “Clean Line”) to charge negotiated rates for a proposed high voltage direct current merchant transmission project.  This negotiated rate authority will allow Clean Line to allocate up to 75 percent of the project’s capacity to anchor customers through negotiated rates, while the remaining 25 percent will be available through an open season auction.

On September 5, 2012, FERC issued an Order to Show Cause and Notice of Proposed Penalty to Deutsche Bank Energy Trading LLC (“Deutsche Bank”) concerning alleged manipulation and submission of false information in connection with trading in the California Independent System Operator Corporation (“CAISO”) market.

On September 5, 2012, FERC approved Duke Energy Ohio, Inc.’s (“Duke Ohio”) proposed internal reorganization within the Duke Energy Corporation (“Duke”).  The primary purpose of the reorganization is to transfer Duke Ohio’s generation assets to other subsidiaries of Duke.  The internal reorganization is part of a comprehensive retail rate settlement approved by the Ohio Public Utilities Commission (“Ohio PUC”) in November 2011.

In an opinion issued August 27, 2012, the Ninth Circuit concluded that FERC has the authority to retroactively determine just and reasonable prices in order to establish refund amounts for jurisdictional entities, but does not have retroactive rate-setting authority over non-jurisdictional sellers.   

On August 27, 2012, FERC Commissioners Tony Clark and Phillip Moeller issued separate concurring opinions in an order regarding the results of ISO-New England, Inc.’s (“ISO-NE”) sixth Forward Capacity Auction.  In those concurrences, the two Commissioners urged Congress to take action to rectify conflicts between environmental regulations and reliability standards.

On August 27, 2012, FERC announced that it will hold two technical conferences in September to discuss actions in response to the August 16, 2011 Report on Outages and Curtailments During the Southwest Cold Weather Event of February 1-5, 2011 (the “Report”).