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As 2011 rapidly approaches, electric utilities face significant legal and regulatory uncertainty on a variety of fronts.  First, with respect to transmission, the Federal Energy Regulatory Commission’s (“FERC”) Notice of Proposed Rulemaking on transmission planning and cost allocation and the Midwest Independent Transmission System Operator, Inc.’s (“MISO”) so-called “MVP” filing, which socializes the costs of new transmission projects across the entire MISO region, both remain pending. 

On November 18, 2010, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) released a Notice of Proposed Rulemaking (“NOPR”) on Integrating Variable Energy Resources (“VERs”) into the electric grid (the “Proposed Rule”). 

On November 18, 2010, FERC directed the North American Electric Reliability Corporation (“NERC”) to revise the definition of the bulk electric system to include all facilities necessary for operating an interconnected transmission network.  FERC said this is best achieved by eliminating the ability of regions to have discretion over the definition, and the definition should include all facilities at or above 100 kV except defined radial facilities. 

On November 5, 2010, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued its remand opinion in Maine Public Utilities Commission v. FERC.  The D.C. Circuit remanded the case back to the Federal Energy Regulatory Commission (“FERC” or the “Commission”) for further consideration of the Commission’s position that, while auction rates may not be contract rates, the Mobile-Sierra doctrine nevertheless applies.

On October 27, 2010, Cedar Creek Wind LLC (“Cedar Creek”) and Milford Wind Corridor Phase I, LLC (“Milford”) filed two separate appeals with FERC to challenge a decision by the North American Electric Reliability Corporation (“NERC”) that would force the wind generators to register as a transmission owner and operator.

On October 28, 2010, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) issued an order approving a stipulation and consent agreement (the “Agreement”) between the Office of Enforcement (“Enforcement”) at FERC and North America Power Partners (“NAPP”).  Under the Agreement, NAPP will pay a civil penalty of $500,000 and disgorge $2,258,157, plus interest, in unjust profits.  Additionally, NAPP will begin compliance monitoring.

On October 29, 2010, FERC granted Southern California Edison Company (“SoCal Edison”) incentive rate treatment for their Lugo-Pisgah Transmission Project (“Lugo-Pisgah”) and Red Bluff Substation Project (“Red Bluff”) (collectively, the “Projects”).  Though the Commission determined in their October 29, 2010 order (the “Order”) that SoCal Edison did not meet the requirements of Federal Power Act (“FPA”) section 219 and Order No. 679 as projects which would improve reliability or reduce the cost of delivered power by reducing transmission congestion, the Commission exercised its authority under section 205 of the FPA to grant requested rate incentives on policy grounds.