Energy Legal Blog

In December 16 orders approving changes in how the California and Midwest Independent System Operators (ISO) plan transmission, FERC seems to preview how it intends to resolve two critically important and controversial questions that it put in play in a pending September 2010 notice of proposed rulemaking on transmission planning and cost allocation (Transmission Planning NOPR).  Those questions ask whether transmission investments should be competitively sourced and who should pay for transmission investments. (more…)

By Jonathan Halpern and Thomas Kokalas

Under a rule proposed by the Securities and Exchange Commission, oil, gas and mining companies listed on U.S. stock exchanges would be required to disclose payments they made to foreign governments or the United States government in connection with a broad swath of activity, from exploration to oil processing. (more…)

In a November 18 annual report on FERC enforcement actions, the agency’s Enforcement Staff disclosed the outcomes of those actions, including those that the agency took in response to 93 self-reports of violations.  The clear message from this annual recap is that prompt self-reporting pays big dividends.

Fiscal year 2010 showed a 24 percent decrease in the number of self-reports compared to the preceding fiscal year, but of those self-reports a majority, 58 percent, were closed with no penalty assessed.  The remaining self-reports were still pending an initial review.  As to why so many self-reports are closed without penalty, Enforcement Staff explained that in most cases the offender took effective remedial action and promptly submitted a self-report.  Further, the Commission chose to impose no penalty in cases where the violation harmed neither the market or other parties or where the violation was inadvertent.  Other reasons for declining penalties included: (more…)

The Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) on December 8, 2010, jointly proposed rules to define “swap dealer,” “security-based swap dealer,” “major swap participant,” “major security-based swap participant,” and “eligible contract participant” as these terms are used in amendments to the Commodity Exchange Act (CEA) and Securities Exchange Act of 1934 (’34 Act) enacted in Title VII of Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank), which President Obama signed into law on July 21, 2010.  Title VII of Dodd-Frank directs the CFTC to regulate “swaps” and the SEC to regulate “security-based swaps.” To be considered, public comments on the proposed definitions and associated rules must be submitted to wither the CFTC or SEC within 60 days of the proposed rules publication in the Federal Register — likely in the second or third week of February 2011. (more…)

On December 1, 2010, the Electric Reliability Council of Texas (ERCOT) began operation of its long-planned nodal wholesale market.  This market has been in the works since September, 2003 when the Public Utility Commission of Texas directed ERCOT to replace its handful of congestion management zones, or CMZs, with what would develop into a congestion management system based on more than 4,000 nodes — points of potential energy price differentiation within the operating ERCOT grid.  In contrast to the blunt instrument of CMZs, Nodal ERCOT is expected to produce energy and ancillary service prices that are locationally granular, to lower the cost of what is dispatched, and to assign the cost of congestion directly to shippers. (more…)