On July 17, 2012, FERC’s Director of the Office of Electric Reliability, Joseph McClelland, testified before the Senate Committee on Energy and Natural Resources regarding grid and cyber security matters.  McClelland discussed what he believes are the general limitations of FERC’s current authority over cyber security, as well as his recommendations for new legislation to enhance the Commission’s ability to prepare for and respond to cyber attacks and other grid vulnerabilities.

On July 11, 2012, FERC issued an order granting the complaint of FirstEnergy Solutions Corp. (“FirstEnergy”) regarding the allocation of Auction Revenue Rights (“ARRs”) under the PJM Interconnection, L.L.C.’s (“PJM”) Open Access Transmission Tariff (“Tariff”).  FirstEnergy’s complaint focused on the allocation of monthly ARRs for transmission capacity that becomes available over the course of the year, but was limited in the annual allocation due to modeled outages. 

On July 12, 2012, FERC denied NorthWestern Corporation’s (“NorthWestern”) request for rehearing of a December 30, 2011 order (“December 30 Order”) which rejected, in part, NorthWestern’s proposal to modify Schedule 3, Regulation and Frequency Response Service (“Schedule 3”) of its Montana Open Access Transmission Tariff (“July 12 Rehearing Order”).  The requested modifications rejected by the Commission included, among other things, creation of an explicit right for NorthWestern to apply certain Schedule 3 charges to customers who elect to self-supply regulating reserves. 

On July 5, 2012, FERC announced the details for its upcoming technical conferences on better coordination between natural gas and electricity markets.  The conferences follow public comments filed earlier this year in Docket No. AD12-12-000 and focus on a variety of issues, including: (1) communications, coordination and information sharing; (2) scheduling; (3) market structures and rules; and (4) reliability concerns. 

On July 2, 2012, FERC’s Office of Enforcement petitioned the U.S. District Court for the District of Columbia to order J.P. Morgan Ventures Energy Corp. (“JP Morgan”) to show cause why the court should not enforce a subpoena against JP Morgan.  At issue are 25 emails that JP Morgan has refused to produce in an ongoing FERC investigation into potential manipulation of the California and Midwest energy markets.

On July 2, 2012, Duke Energy Corp. (“Duke”) and Progress Energy, Inc. (“Progress”) finalized their merger after receiving regulatory approval from the South Carolina Public Service Commission (“SCPSC”).  The SCPSC’s approval was the final regulatory step needed to complete the merger. 

On June 21, 2012, FERC denied rehearing of its previous order affirming an $80,000 penalty assessed against Turlock Irrigation District (“Turlock”).  Additionally, FERC took the opportunity to clarify that: (1) the North American Electric Reliability Corporation (“NERC”) must consider loss of load and harm to consumers when assessing penalties for violating a mandatory reliability standard; and (2) all self-reports will not automatically warrant a penalty “credit,” particularly when there is another existing obligation to report the violation in question.

On June 28, 2012, FERC granted in part Seminole Electric Cooperative, Inc.’s (“Seminole”) complaint against Florida Power & Light Company (“FPL”), which accused FPL of misapplying the language of Schedule 4 (Energy Imbalance Service) of its Open Access Transmission Tariff (“OATT”).  Specifically, FERC granted Seminole’s claim that FPL violated its OATT by misconstruing Schedule 4’s tier thresholds, but rejected Seminole’s claim that FPL incorrectly apportioned penalties within the highest possible tier.