Energy Legal Blog

A central issue in the proceeding will be whether demand response providers are “electricity suppliers,” which the Maryland Code defines as someone “(i) who sells: 1. electricity; 2. electricity supply services; 3. competitive billing services; or 4 competitive metering services; or (ii) who purchase, broker, arrange, or market electricity or electricity supply services for sale to a retail electric customer.” If determined to be electricity suppliers, then demand response providers may be subjected to a host of new licensing and compliance responsibilities, including creditworthiness, registration, marketing, reporting, and record retention, depending on the outcome of the proceeding. (more…)

The Commodity Futures Trading Commission issued an order August 16 approving a settlement resolving allegations that ConAgra Trade Group, Inc. caused a non-bona fide price to be reported for a NYMEX spot month crude oil futures contract in violation of the Commodity Exchange Act (CEA).  The settlement is noteworthy in that (1) it required ConAgra to pay a $12 million civil monetary penalty (significantly after the event occurred) even though no fraudulent intent or specific injury was alleged, and (2) two of five commissioners dissented vigorously from the majority’s decision to accept the settlement. (more…)

The U.S. Court of Appeals for the D.C. Circuit has upheld FERC’s decision to remove price ceilings on short term (one year or less) capacity releases by shippers on natural gas pipelines, while maintaining price ceilings on capacity sales by the pipelines themselves.  The court’s decision, issued on August 13 in Interstate Natural Gas Assoc. of America v. FERC, rejected arguments from an association of pipelines that FERC had impermissibly subjected pipelines and shippers to different regulatory standards in the same short-term capacity sales market. (more…)

Baltimore Gas & Electric (BG&E) won Maryland PSC approval late Friday for an $833 million smart grid plan pursuant to which it will install 3,000 smart meter devices per day through 2014. Without timely PSC approval, BG&E risked losing approximately $200 million in Department of Energy subsidies to implement the plan.

The PSC rejected BG&E’s original plan, which included the large-scale build-out of advanced meters and mandatory time-of-use (TOU) billing because the PSC opposed (1) granting BG&E a rate tracker to recover smart grid costs as they are incurred as opposed to following a prudence determination, and (2) imposing TOU rates on all retail customers. The PSC also faulted the original BG&E proposal as doing too little to educate customers on how smart grid programs would work. The PSC nevertheless invited BG&E to resubmit its proposal to address these concerns. (more…)

Recently, the Federal Energy Regulatory Commission announced a decision under which it will have broader regulatory power over buy-sell transactions on small pipelines. The unexpected decision, stemming from a case involving Arizona Public Service Co. and Sequent Energy Management LP, expands FERC’s prohibition of transactions involving transportation through open access interstate pipelines to apply to intrastate pipelines as well. SNL Financial interviewed Bracewell & Giuliani Partner Mark Lewis about the decision and its potential effects on these common pipeline transactions. Click here to read the article.

The Federal Energy Regulatory Commission (“FERC”) recently determined in a case of first impression that states have limited authority to implement feed-in tariff programs, which generally seek to encourage “green” energy. For energy service companies and energy sellers seeking to take advantage of these programs, the order potentially dampens the prospects for feed-in tariffs to take off in the US, and, at a minimum presents additional FERC compliance considerations, discussed below.

Feed-in tariffs generally consist of three elements: (1) a state-fixed incentive rate designed to attract new sources; (2) a mandated offer to purchase power for a prescribed duration through long-term contract; and (3) a guaranteed access to the grid. (more…)