On December 5, 2016, the United States Court of Appeals for the Eighth Circuit (“Eighth Circuit”) ruled that the United States District Court for the District of Minnesota (“District Court”) did not have federal question jurisdiction over the breach of contract suit filed in Great Lakes Transmission Limited Partnership v. Essar Steel Minnesota., LLC. The Eighth Circuit vacated the lower court’s $32.9 million judgment in favor of the pipeline and remanded for dismissal. 
Continue Reading Eighth Circuit Rules No Federal Question Jurisdiction Over Breach of Contract Claim Involving Pipeline Transportation Agreement

On November 4, 2016, the U.S. Court of Appeals for the D.C. Circuit (the “D.C. Circuit”) rejected Sierra Club’s arguments that FERC’s environmental review under the National Environmental Policy Act of 1969 (“NEPA”) of Cheniere Energy Inc.’s (“Cheniere”) Corpus Christi, Texas liquefied natural gas (“LNG”) export project (the “Corpus Christi Project”) was inadequate. Notably, the D.C. Circuit held that FERC does not have to address the indirect environmental effects of anticipated exports of LNG in its NEPA review because the U.S. Department of Energy (the “DOE”) has sole authority to approve the export of natural gas.
Continue Reading D.C. Circuit Denies Review, Upholds FERC Approval of Corpus Christi LNG Facility

On October 25, 2016, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) ruled that two Notices issued by the FERC Secretary as the result of a deadlock between the then-four sitting FERC Commissioners over whether to approve or set for hearing the rates established by ISO-New England, Inc.’s (“ISO-NE”) eighth Forward-Capacity Auction (“FCA 8”) were unreviewable. Specifically, the court concluded that: (i) the Notices did not constitute reviewable “agency action” as contemplated by the Federal Power Act (“FPA”), because, according to the court, the FPA requires a “majority” vote of the Commissioners in order for FERC to act institutionally; and (ii) the Notices were not reviewable under the Administrative Procedure Act (“APA”) by virtue of an unlawful “failure to act,” because the FPA does not mandatorily obligate FERC to either set disputed rates for hearing, or to affirmatively prevent any unjust and unreasonable rates from going into effect.
Continue Reading D.C. Circuit Holds That FERC Deadlock is Unreviewable Under FPA, APA

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.
Continue Reading Ninth Circuit Upholds FERC’s Finding of CAISO Tariff Violations During the California Energy Crisis

On July 21, 2016, the U.S. District Court for the District of Massachusetts (“District Court”) determined that review of a FERC-issued penalty for alleged market manipulation must be treated as an “ordinary civil action” requiring de novo review and finding against FERC’s arguments to the contrary. The District Court further ordered in its decision, FERC v. Maxim Power Corp., et al., that in the corresponding civil action—to determine whether to affirm FERC’s prior penalty assessment against the owners and operators of a power plant in Pittsfield, Massachusetts (“Maxim”) and one of their employees (together, “Respondents”)—the Respondents will be entitled to the full discovery of an ordinary civil case, and the proceeding can be decided by a jury, if necessary. 
Continue Reading FERC Ordered to Participate in Full Civil Trial to Affirm Prior Market Manipulation Penalty

On July 1, 2016, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) rendered an opinion affecting the return-on-equity and cost-of-service components of oil pipeline ratemaking. Specifically, the D.C. Circuit ordered FERC to either justify or amend its practice of granting income tax allowances for limited partnership pipelines, questioned FERC’s rationale in deciding what financial data should be used to calculate real rate of return on equity, and upheld FERC’s determination that a pipeline’s cost-of-service rates can already account for changes in costs associated with rate indexes. The D.C. Circuit remanded the case back to FERC on the income tax allowance and real rate of return on equity issues.
Continue Reading D.C. Circuit Issues Opinion Affecting Oil Pipeline Ratemaking

On July 1, 2016, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) denied a petition to review FERC’s determination that the “Mobile-Sierra” presumption does not preserve “right of first refusal” provisions that are otherwise required to be removed from tariffs and agreements following Order No. 1000.
Continue Reading D.C. Circuit Affirms FERC Order Finding that Mobile-Sierra Does Not Prevent Order No. 1000’s Elimination of Rights of First Refusal

On June 21, 2016, the U.S. District Court of Wyoming (“District Court”) rejected the Bureau of Land Management’s (“BLM”) regulations for hydraulic fracturing on federal and Indian lands. In doing so, the District Court held that (1) BLM’s originating land use, management, and planning statutes did not grant BLM authority to regulate hydraulic fracturing and (2) Congress’s exclusion of non-diesel hydraulic fracturing from the Environmental Protection Agency’s (“EPA”) underground injection control (“UIC”) programs means that no federal agency can regulate hydraulic fracturing.
Continue Reading U.S. District Court of Wyoming Rejects BLM’s Hydraulic Fracturing Rules

On April 19, 2016, the U.S. Supreme Court issued an opinion in Hughes v. Talen Energy Marketing, LLC affirming the decisions of the courts below that the Federal Power Act (“FPA”) vests in FERC exclusive jurisdiction over wholesale sales of electricity. As a result, the Supreme Court upheld the determination that Maryland’s state program to grant power plant subsidies was preempted by the FPA.
Continue Reading U.S. Supreme Court Affirms FERC’s Jurisdiction in Face of Maryland Power Plant Subsidy

On April 11, 2016, the U.S. District Court for the District of Massachusetts issued an opinion denying motions filed by Lincoln Paper and Tissue Company (“Lincoln”), Competitive Energy Services, LLC (“CES”) and Richard Silkman (“Mr. Silkman”) seeking dismissal of two federal proceedings commenced by FERC to affirm civil penalties. FERC imposed the penalties on the three respondents for allegedly manipulating ISO-New England Inc.’s (“ISO-NE”) Day-Ahead Load Response Program (“DALRP”). The court held that: (1) FERC’s enforcement actions were not barred by the applicable statute of limitations; (2) FERC clearly had jurisdiction over demand-response programs such as DALRP given the Supreme Court’s recent opinion so holding; (3) respondents received fair notice that their conduct was proscribed by Federal Power Act (“FPA”) Section 222 and FERC’s Anti-Manipulation Rule; (4) FERC plead its claims alleging fraud with the sufficient particularity required by F.R.C.P. 9(b); (5) respondents would not be liable were they mere “aiders and abbetters,” but FERC alleges they were primary violators themselves, who directly gave fraudulent information to ISO-NE; and (6) a natural person, such as Mr. Silkman, may be an “entity” subject to FPA Section 222 and FERC’s Anti-Manipulation Rule and the penalties imposed thereunder. With respect to this last holding, the court becomes the second federal court to hold that a natural person can be an “entity” under FERC’s Anti-Manipulation Rule and be personally liable for penalties imposed by FERC.
Continue Reading U.S. District Court for Massachusetts Denies Motions to Dismiss FERC Penalty Enforcement Actions and Affirms Individual’s Potential Personal Liability for Penalty Under FERC’s Anti-Manipulation Rule