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On August 24, 2009, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) ruled that claims of market manipulation should be brought under section 306 of the Federal Power Act (“FPA”) and not section 206 of the FPA, where the Attorney General of Connecticut, the Connecticut Department of Public Utility Control (“DPUC”), and the Connecticut Office of Consumer Counsel (“OCC”) filed their complaints against power plant operators earlier this year. 

On July 23, 2009, the Commission’s Enforcement Litigation Staff (“Staff”), Amaranth Advisors LLC (“Amaranth”), and one of Amaranth’s two former gas traders filed a new settlement in its high-profile enforcement case. The Commission previously rejected a settlement submitted by the parties earlier this year (See February 20, 2009 edition of the WER).

On July 20, 2009, a split panel from the United States Court of Appeals for the Ninth Circuit (“Ninth Circuit”) voted 2-1 to uphold the Commission’s decision to deny two environmental groups’ untimely attempt to intervene in proceedings to amend the flow requirements at Pyramid Dam in Los Angeles County. The Ninth Circuit concluded that the Commission reasonably determined that California Trout and Friends of the River (collectively, the “petitioners”) lacked good cause in their untimely attempt to intervene.

On July 20, 2009, Entergy Services, Inc. (“Entergy”) submitted comments indicating that it will consider becoming a member of the Southwest Power Pool (“SPP”). Entergy’s filing addressed issues raised during the Joint FERC and State Regulator Conference held on June 24, 2009, in Charleston, South Carolina.

On July 16, 2009, FERC granted a complaint filed by Pepco Energy Services, Inc. (“Pepco”) challenging provisions of PJM’s Open Access Transmission Tariff regarding peak-hour-period availability penalties for infrequently-run generation units. The Commission determined that the market rules governing the peak-hour-period availability penalties for infrequently-run generators were unjust and unreasonable, and established new rates to be applied as of the date of the complaint (April 22, 2008).

On July 16, 2009, the Commission adopted staff’s conclusion that there were no deceptive or fraudulent actions taken by market participants when they placed circuitous power delivery schedules around the Lake Erie region in 2008. While the Commission did not find any market manipulation that directly led to the Lake Erie “loop flow” issues, it did order market operators in New York and surrounding regions to find long-term, comprehensive solutions to the problem and submit those solutions to the Commission within six months.

On July 16, 2009, the Federal Energy Regulatory Commission (“FERC” or “Commission”) issued Order No. 719-A affirming its decision in Order No. 719 that removing barriers to demand response is consistent with FERC’s duty to ensure the sound operation of organized wholesale electric markets. However, FERC exempted small utilities that distributed up to 4 million megawatt-hours (“MWh”) during the previous year.

On July 10, 2009, the North American Electric Reliability Corporation (“NERC”) filed with the Federal Energy Regulatory Commission (“FERC” or “Commission”) four notices of penalties with a proposed total of $75,000 in fines for violations of mandatory reliability standards. A fifth notice of violation did not include a financial penalty. All of the companies are also implementing mitigation plans.