On September 16, 2010, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) issued two orders denying rehearing requests for Tres Amigas LLC’s (“Tres Amigas”) transmission project.  FERC denied the request for rehearing of the order where the Commission refused to disclaim jurisdiction over Electric Reliability Council of Texas (“ERCOT”) if it connected with the Tres Amigas Project.  Also, FERC denied the rehearing request of the order that conditionally approved the negotiated rate authority for transmission service at the Tres Amigas Superstation facility.

On September 16, 2010, FERC unanimously approved the Revised Policy Statement on penalty guidelines for enforcement cases at their monthly meeting.  FERC released their initial penalty guidelines on March 18, 2010, but on April 15, 2010, the Commission suspended the use of the guidelines and opened up the forum for comments. (See April 16, 2010 issue of the WER)  The revised guidelines incorporate many changes based on the comments FERC received.

On August 20, 2010, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) approved an audit report on the Western Electricity Coordinating Council (“WECC”), and in that order, FERC directed WECC to make organizational changes that will separate certain operational functions from the functions of overseeing regional reliability standards. 

On August 27, 2010, the Commission issued a Notice of No Further Review and Guidance Order (the “Order”) regarding one Notice of Penalty against Commonwealth Edison Company (“ComEd”).  The Commission addressed the question “whether repetitive infractions of the same or a closely-related Reliability Standard requirement are treated as an aggravating factor in penalty determinations.”

On August 30, 2010, FERC issued an order clarifying the state netting policies for station power.  The order was on remand from two orders from the United States Court of Appeals for the DC Circuit (“DC Circuit”).   In the FERC order on remand, the Commission said it will not encroach upon a state’s right to establish netting periods for station power; thus, for retail calculations, states do not have to adopt the same methodology that FERC uses for calculating station power sold in interstate commerce.

Beginning in July of this year, PJM noticed that some of its market participants appeared to be taking unfair advantage of certain of its power market settlement rules.  These rules permit non-firm transmission customers to receive an allocation of the PJM marginal losses surplus which exceeds such participants’ cost of transmission service.  FERC has announced that it will conduct a non-public, formal investigation – with subpoena power – to determine whether this behavior constitutes unlawful market manipulation.  This investigation will have an obvious and direct impact on PJM market participants because FERC’s Office of Enforcement will move swiftly to collect information and undertake its investigation in earnest. 

On July 15, 2010, the Midwest Independent Transmission System Operator, Inc. (“Midwest ISO”) submitted to the Federal Energy Regulatory Commission (“FERC” or the “Commission”) a new proposal to allocate the costs of new transmission projects.  Notably, the proposal asks for the creation of a new category of projects, the Multi Value Projects (“MVPs”) category, and widely socialized costs for such projects across the entire Midwest ISO footprint.