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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

On April 8, 2016, the U.S. Court of Appeals for the Seventh Circuit (“Seventh Circuit”) denied petitions for review from the Midcontinent Independent System Operator, Inc. (“MISO”) and the MISO transmission owners (“TOs”) regarding FERC’s Order No. 1000 requirement that transmission providers remove from their tariffs and agreements provisions granting incumbent transmission owners a right of first refusal (“ROFR”) to construct transmission facilities selected in a regional transmission plan. In addition, the Seventh Circuit also upheld FERC’s classification of baseline reliability projects as local projects. 
Continue Reading Seventh Circuit Upholds Order No. 1000 ROFR Removal

On March 8, 2016, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) granted Xcel Energy Services Inc.’s (“Xcel”) petition for review of FERC orders related to tariff revisions filed by Southwest Power Pool, Inc. (“SPP”) to implement a formula rate for transmission service on behalf of Tri-County Electric Cooperative, Inc. (“Tri-County”), a non-jurisdictional transmission owner. 
Continue Reading D.C. Circuit Finds FERC at Fault for Refusing to Consider Refunds for SPP Rates after Admitting Such Rates Were Unlawful

On January 25, 2016, the Supreme Court of the United States ruled that FERC had not exceeded its legal authority under the Federal Power Act (“FPA”) in promulgating a rule—Order No. 745—that regulates the compensation paid to demand response resources in organized wholesale markets administered by Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”).
Continue Reading U.S. Supreme Court Upholds FERC Order No. 745

On January 4, 2016, the United States Court of Appeals for the Fifth Circuit (the “Fifth Circuit”) vacated a federal district court’s indefinite stay of proceedings before it involving disputed Public Utility Regulatory Policies Act (“PURPA”) issues while awaiting administrative action from FERC, and instead ordered a definite period of 180 days for FERC to act.

The district court had supported its indefinite stay by applying the doctrine of primary jurisdiction—a doctrine that permits a federal court with non-exclusive jurisdiction over a proceeding to, under appropriate circumstances, defer to another forum (such as an administrative agency like FERC) that also has non-exclusive jurisdiction over the issue, based on the court’s determination that the benefits of obtaining aid from the other forum outweigh the need for expeditious litigation. While the Fifth Circuit found the doctrine applicable in the circumstances presented, it determined that the indefinite nature of the stay would unfairly harm the interests of one of the litigants.
Continue Reading Fifth Circuit Overturns Lower Court’s Use of Primary Jurisdiction Doctrine to Order Indefinite Stay While Awaiting FERC PURPA Decision; Orders 180-Day Stay Instead

On December 22, 2015, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) largely upheld FERC’s approval of ISO New England Inc.’s (“ISO-NE”) Winter 2013-2014 Reliability Program (the “Program”). The Program was designed to compensate selected oil-fired and dual-fuel generators to maintain sufficient supplies of fuel oil when system conditions were stressed. The court upheld FERC’s decision to allocate the Program’s costs to Load-Serving Entities (“LSEs”), as opposed to ISO-NE Transmission Owners. Lastly, the court remanded to FERC the issue of whether the Program’s rates were just and reasonable.
Continue Reading D.C. Circuit Largely Upholds FERC’s Approval of ISO-NE Winter Reliability Program, Cost-Allocation to Load-Serving Entities

On November 20, 2015, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) rejected the Federal Energy Regulatory Commission’s (“FERC”) holding that Federal Power Act (“FPA”) Section 7(a) limits the municipal preference in original licensing for hydroelectric projects to municipalities located in the vicinity of the water resource to be developed. The D.C. Circuit case, Western Municipal Power Agency v. FERC, No. 14-1153 (issued Nov. 20, 2015), was filed on appeal of FERC orders refusing to grant a municipal preference to Western Minnesota. The D.C. Circuit granted Western Minnesota Municipal Power Agency’s (“Western Minnesota”) petition for review, vacated the Commission’s underlying orders, and remanded the proceeding to FERC.
Continue Reading D.C. Circuit Rejects FERC’s Interpretation of Municipal Preference in Permitting of Hydroelectric Projects

On September 30, 2015, the U.S. District Court for the District of Wyoming (“District Court”) granted motions for preliminary injunction filed by various states, tribes, and industry members (“Petitioners”) seeking to enjoin the Bureau of Land Management (“BLM”) from regulating hydraulic fracturing under its final hydraulic fracturing rule (“Final Rule”).  In granting the preliminary injunction, the District Court held that (1) the petitioners were likely to succeed on the merits because the BLM acted without Congressional authority, the Final Rule was arbitrary and capricious, and the BLM failed to adequately consult with certain Indian tribes; (2) affected states, tribes, and industry members would suffer irreparable harm without the preliminary injunction; and (3) balancing interests between the Petitioners and the BLM and intervening environmental groups favored the Petitioners.
Continue Reading Wyoming District Court Grants Preliminary Injunction Enjoining BLM from Regulating Hydraulic Fracturing

On September 4, 2015, the U.S. Court of Appeals for the Ninth Circuit (“Ninth Circuit”) remanded a pair of FERC decisions that partially approved two settlement agreements between Idaho Power, its holding company IDACORP (together, “IDACORP”), and the Cities of Tacoma and Seattle, respectively. These settlement agreements arose out of one of the many FERC proceedings stemming from the California Energy Crisis. When FERC partially rejected the settlement agreements, IDACORP petitioned the Ninth Circuit for review, arguing that FERC failed to follow its own precedent and regulations in partially rejecting the agreements. The Ninth Circuit agreed, remanded the proceeding to FERC, and mandated that it issue a decision within sixty days.
Continue Reading 9th Circuit Remands FERC Decisions on Idaho Power Settlements from California Crisis