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On September 26, 2016, FERC issued an order denying the Louisiana Public Service Commission’s (“LPSC”) request for rehearing (“Order Denying Rehearing”) of an April 29, 2016 order on remand from the United States Court of Appeals for the District of Columbia Circuit (“DC Circuit”), in which FERC clarified and distinguished its approach to refunds in cost allocation and rate design cases from its approach to refunds in cases of utility over-recovery (“April 29 Order”). As a result of the Order Denying Rehearing, Entergy Services, Inc. and its subsidiary operating companies (collectively, “Entergy”) will not be required to pay refunds for certain cost allocations that FERC has previously determined to be unjust and unreasonable.

On September 22, 2016, FERC issued a notice seeking comments on proposed revisions and clarifications of Electric Quarterly Report (“EQR”) reporting requirements and corresponding updates to the EQR Data Dictionary. Notably, FERC proposes to significantly expand the instances in which transmission providers must report ancillary services transaction data. FERC also proposes to require filers to submit certain tariff-related information that they submit in the e-Tariff system, require filers to submit time zone information in connection with transmission capacity reassignment transactions, and clarify how filers should report booked out transactions.

On September 22, 2016, the Commission approved Reliability Standard TPL-007-1 (Transmission System Planned Performance for Geomagnetic Disturbance Events), which establishes for the first time mandatory requirements for Transmission Owners and other entities to assess the vulnerability of transmission systems to geomagnetic disturbance events (“GMDs”), which occur when the sun ejects charged particles that cause changes in the earth’s magnetic fields. The Standard requires that entities who do not meet certain performance requirements, based on the results of their vulnerability assessments, develop a plan to achieve those performance requirements. The Commission also affirmed that recovery for prudent costs to comply with TPL-007-1, including for the purchase and installation of monitoring devices, will be available to registered entities.

On September 22, FERC denied a request to rehear an April 21, 2016 order involving a complaint from the Occidental Chemical Corporation (“Occidental”) against the Midwest Independent Transmission System Operator, Inc. (“MISO”). In so doing, FERC reaffirmed its April 21 Order (see April 27, 2016 edition of the WER) and further explained its previous finding that MISO’s treatment of qualifying facilities (“QFs”) within the Entergy service territory neither violates the Public Utility Regulatory Policies Act of 1978 (“PURPA”) nor the Federal Power Act (“FPA”).

On September 22, 2016, FERC issued a Notice of Inquiry (“NOI”) to examine whether to revise its market power analysis for transactions under section 203 of the Federal Power Act (“FPA”) and market-based rate (“MBR”) applications under section 205 of the FPA to provide greater alignment between the two. Specifically, in the NOI, FERC requests comment on whether it should: (1) simplify its analysis for certain FPA section 203 transactions that are unlikely to raise market power issues because they are likely to have a de minimis effect on competition; (2) add a supply curve analysis to its FPA section 203 analysis; (3) retain its current pivotal supplier analysis in the MBR context and also add this test to its FPA section 203 analysis; (4) expand its FPA section 203 analysis to require the filing of a market share analysis; (5) revise how it accounts for capacity associated with long-term firm power purchase agreements (“PPAs”) in its FPA section 203 review; and (6) require the submission of additional merger-related documents for FPA section 203 transactions that require a full Competitive Analysis Screen. FERC also requests comments on its scope of review, including blanket authorizations under FPA section 203.

On September 8, 2016, the Commission denied a complaint filed by Boundless Energy NE, LLC, CityGreen Transmission, Inc. and Miller Bros. (collectively, “Competitive Transmission Developers” or “CTD”) against the New York Independent System Operator, Inc. (“NYISO”), alleging that NYISO violated its Open Access Transmission Tariff (“OATT”) in its most-recent solicitation for projects to address public policy transmission needs identified by the New York State Public Service Commission (“NYPSC”). The Commission determined that CTD had failed to demonstrate that NYISO had violated its OATT, or that NYISO had improperly abdicated its responsibilities to the NYPSC in the implementation of its public policy transmission planning process.

On September 9, 2016, FERC conditionally accepted an unexecuted Generator Interconnection Agreement (“GIA”) filed by the Midcontinent Independent System Operator, Inc. (“MISO” or the “ISO”) involving Duke Energy Indiana, LLC (“Duke Indiana”) as the interconnection customer, Duke Energy Business Services, LLC, on behalf of Duke Indiana, as the transmission owner, and MISO as the transmission provider. In so doing, FERC declined a request from Duke Indiana to require MISO to amend its pro forma GIA to address potential future situations in which an integrated utility acts as both the transmission owner and interconnection customer.

On September 14, 2016, FERC denied a Federal Power Act (“FPA”) Section 206 complaint filed by Vineland Municipal Electric Utility (“Vineland”) alleging that Atlantic City Electric Company (“ACE”) applied unauthorized weather normalization adjustments to Vineland’s capacity peak load contribution, which increased the capacity charge PJM Interconnection, LLC (“PJM”) assessed to Vineland during the 2015-2016 delivery year by 18.6 percent, or $1.6 million. In denying the complaint, FERC validated ACE’s application of the weather normalization adjustment and precluded Vineland from receiving refunds requested for past adjustments.  

On September 8, 2016, the U.S. Court of Appeals for the Ninth Circuit (“Ninth Circuit”) upheld FERC’s determination that various marketers and generators of electricity (“Petitioners”) violated the California Independent System Operator Corporation (“CAISO”) tariff by scheduling electricity in advance for export and in real-time for import, overscheduling load by submitting exaggerated day-ahead demand schedules to CAISO, and submitting bids at prices that did not reflect marginal costs and/or market prices.

On August 31, 2016, FERC conditionally approved Arizona Public Service Company’s (“APS”) request to amend its market-based rate tariff to facilitate APS’ participation in the western Energy Imbalance Market (“EIM”) administered by the California Independent System Operator Corporation (“CAISO”). Another western utility, Puget Sound Energy (“PSE”) is also expected to join the EIM. With respect to its market-based rate authorization to participate in the EIM, PSE filed a Non-Material Change in Status on March 9 in Docket ER10-2374-010. FERC has not yet acted on this submittal. On October 1, 2016, APS and PSE are expected to begin participating in the EIM alongside existing members—PacifiCorp, and NV Energy—to form a six-balancing authority area EIM footprint.