Energy Legal Blog

The Public Utility Commission of Texas (PUCT) on June 10, 2009, issued its final order denying Kelson Transmission Company, LLC’s (Kelson) application for a certificate of convenience and necessity to construct and operate a 95-mile 345 Kilovolt open-access transmission line, for which Kelson initially sought certification in August of 2007.  The transmission line was planned to connect the 1,160 Megawatt Cottonwood electric generation facility located in the Southeast Reliability Council (SERC) to a substation in the Electric Reliability Council of Texas (ERCOT) located on the CenterPoint Houston Electric Company, LLC transmission grid. (more…)

The Department of Energy announced June 12 the resumption of work on “FutureGen,” a public-private initiative directed at reducing the environmental impact of coal-powered electricity generation.  The concept of FutureGen is attractive to coal-dependent economies domestically and internationally.  It contemplates construction of a coal-fired power plant that produces hydrogen in addition to electricity, utilizing carbon capture & storage (CCS) technology to eliminate atmospheric emission of greenhouse gases.

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FERC last week announced the appointment of Norman C. Bay to head its Office of Enforcement.  Professor Bay is a former U.S. Attorney who focused on criminal matters and is currently an associate professor at the University of New Mexico School of Law. The message sent by the appointment of former criminal prosecutor Bay as head of the Office of Enforcement is clear: FERC’s new Chairman Wellinghoff intends to continue the vigorous pursuit of violations of the laws that FERC administers.

The Attorney General of the State of Connecticut (CT AG), Richard Blumenthal, filed a Complaint requesting Investigation, Hearing, Disgorgement and other penalties against ISO-New England, Inc. (ISO-NE) and Certain Unidentified Market Participant Importer(s) of Installed Capacity on April 20, 2009 based in part on ISO-NE’s statements that such sellers with contracts over the Northern New York AC Interface (the NNY Capacity Resources) did not deliver energy when called upon to do so.  The ISO-NE statements that precipitated the CT AG Complaint were made in a filing with the Federal Energy Regulatory Commission in Docket No. ER09-873-000 that sought to change the market rules to provide that capacity resources must submit competitive energy bids and to set forth a means to determine that a bid is competitive.   (more…)

The US Senate Committee on Finance entertained divergent views on the Federal income tax implications of proposed cap-and-trade legislation to reduce carbon and other greenhouse gas emissions during a June 15 hearing.  Among the issue aired was whether emission allowances under the program should be treated as ordinary for tax purposes and, if so, then how should they be valued.  In addition, when should valuation occur - when the allowances are first awarded or when they are used (i.e. when they can be surrendered to account for emissions produced)?  The cap-and-trade bill currently making its way through the US House of Representatives would cause the government to allocate at no cost to the recipient 85% of allowances and auction the remaining 15%.

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California Attorney General Jerry Brown filed a complaint on May 22 against 18 named sellers who made sales to the California Energy Resources Scheduling (CERS) Division of the California Department of Water Resources eight years ago from January 18 to June 20, 2001.   The complaint alleges, among other things, that the named respondent sellers:  (1) possessed and exercised undue market power in markets in which CERS was forced to purchase; (2) manipulated these markets by use of gaming practices and physical and economic withholding; and (3) violated their market-based rate tariffs by failing to properly report these sales.  The Attorney General also asserts that FERC’s quarterly transaction reporting requirements in place prior to Order 2001 and market-based rate program in effect during 2000-2001 were insufficient to provide the Commission or other interested parties with the information they needed to evaluate whether sellers had acquired or were exercising market power.   (more…)