On Monday, FERC hosted a technical conference entitled, Integrating Renewable Resources Into the Wholesale Electric Grid. Attention at the conference centered on the challenges that intermittent resources pose to the transmission system, as well as which entities should be responsible for regional planning.

On February 27, 2009, FERC approved a settlement agreement with Energy Transfer Partners LP (“ETP”) under which it will pay no civil penalty and neither admit nor deny any wrongdoing to any third party by Oasis Pipeline, LP (“Oasis”), an affiliate. The decision follows a ruling by FERC Administrative Law Judge Bruce Birchman that FERC was unable to prove Oasis had unduly discriminated against non-affiliated shippers (see November 21, 2008 edition of the WER).

On February 20, 2009, FERC accepted the California Independent System Operator Corporation’s (“CAISO”) Exceptional Dispatch provisions in its Market Redesign and Technology Upgrade Tariff (“MRTU Tariff”). While FERC believes that CAISO will rely on the Exceptional Dispatch mechanism much less frequently in the future as it gains experience with MRTU, the mechanism will maintain grid reliability in circumstances where resources issued exceptional dispatch instructions could exercise local market power.

Today, the U.S. Court of Appeals for the District of Columbia Circuit overturned a decision by the Federal Energy Regulatory Commission (“FERC” or “Commission”) regarding a rate increase mandated by the Commission that resulted from the California energy crisis.

On February 20, 2009, the American Public Power Association (“APPA”) issued a report entitled APPA’s Competitive Market Plan: A Roadmap for Reforming Wholesale Electricity Markets (“Market Plan”). The Market Plan proposes reforms for RTO markets that it says would provide better competition and consumer protection within Regional Transmission Organizations (“RTOs”) while maintaining reliability.

On February 19, 2009, the Commission ruled that PJM’s three-pivotal-supplier test, used to identify sellers that can exercise market power, was not unjust and unreasonable and rejected complaints to have the test terminated. However, the Commission did require PJM to reform the test’s mitigation measures applied to suppliers who fail the test.

On Thursday, FERC approved new flexible rate mechanisms for two merchant transmission projects. Chinook Power Transmission, LLC (“Chinook”) and Zephyr Power Transmission, LLC (“Zephyr”) plan to build 2,100 miles of transmission to deliver wind power from Montana and Wyoming to customers in Nevada and other Southwestern states.

On February 12, 2009, in an unusual move, FERC rejected a settlement between the Commission’s Office of Enforcement Litigation Staff (“Staff”), the defunct hedge fund Amaranth Advisors LLC (“Amaranth”) and two of Amaranth’s traders, Brian Hunter and Matthew Donohoe. The parties submitted the settlement, which was not made public, to the Commission for approval on November 24, 2008.