On July 30, 2015, the Federal Energy Regulatory Commission (FERC) approved a stipulation and consent agreement between the FERC Office of Enforcement and Columbia Gas Transmission LLC (Columbia Gas) for violations of Section 4 of Columbia Gas’s tariff governing auctions for firm capacity. Columbia Gas admitted the violations and agreed to a $350,000 civil penalty along with compliance improvements. (more…)
WE KNOW ENERGY®
Robert E. Pease and Mark Lewis
Jason Hutt, Heather Palmer and Michael Weller
The Bureau of Land Management’s (“BLM’s”) Hydraulic Fracturing Rule has been stayed until at least September 2015. BLM finalized the rule on March 20, 2015 for application on federal and Indian lands, three years after its initial proposal. However, on June 23, 2015 (the eve of the rule’s effective date), a federal judge in Wyoming stayed implementation of the rule siding with several industry group and state petitioners that had filed lawsuits and sought an injunction. As deadlines have now slipped, based on the current schedule, Judge Scott W. Skavdahl of the U.S. District Court for the District of Wyoming is not expected to make a final decision on the BLM Rule until September 2015. (more…)
Robert E. Pease, David Perlman and Michael Brooks
After almost eight years since the Federal Energy Regulatory Commission (FERC) commenced its investigation against Barclays Bank PLC (Barclays) and four of its traders, Scott Connelly, Daniel Brin, Karen Levine and Ryan Smith, for allegedly manipulating the California electricity markets, Barclays filed its answer in federal district court. As expected, Barclays denied all of FERC’s substantive allegations and asserted that the District Court should give no merit to FERC’s findings of fact or legal conclusions. FERC, according to Barclays and the individual traders, must prove its case before an independent arbiter and cannot rely on anything that happened at the agency level. FERC is seeking a $435 million civil penalty against Barclays; $15 million against Connelly; and $1 million each from Brin and Levine. (more…)
David Perlman, Stephen Hug and Caitlin Tweed
On June 9, 2015, FERC issued an order accepting PJM’s proposal to modify its forward capacity market, the Reliability Pricing Model (“RPM”), to establish a new capacity product, the Capacity Performance Resource. PJM’s proposal is designed to tighten the performance standards applicable to resources that receive a capacity obligation through the RPM and is intended to address poor resource performance that has been experienced since implementation of the RPM, especially during the 2014 polar vortex.
Once implemented, PJM’s proposal will impose more stringent performance standards on resources that receive a capacity obligation through the RPM, including imposing non-performance charges when resources fail to perform and bonus payments for over-performance. All capacity resources will be eligible to offer as Capacity Performance Resources, and demand resources, energy efficiency resources, capacity storage resources, and intermittent resources will be allowed to aggregate their capabilities in order to reliably perform during emergency conditions. A Non-Performance Charge will be assessed on resources who fail to perform during system emergencies. (more…)
A permit system may finally arrive for the Migratory Bird Treaty Act – New Opportunities and ResponsibilitiesWednesday, May 27, 2015 5:06 pm by Lowell Rothschild
For years, Federal Courts have held that individuals can be held criminally liable under the Migratory Bird Treaty Act (MBTA) for the death of birds regardless of whether they intended to harm them. While several courts have recently called into question this precedent, yesterday, the Fish and Wildlife Service (FWS) started a process that could help clarify liability under the Act. However, with this clarity will come additional regulatory obligations and the creation of a bright line between compliance and noncompliance.
Like the Endangered Species Act (ESA), the MBTA imposes criminal liability for harming specifically-identified birds. Unlike the ESA, however, the MBTA does not currently have an extensive permitting system. As a result, most companies are unable to proactively ensure compliance with the MBTA unless they can avoid harming any migratory birds during their operations – and complete avoidance is extremely difficult when engaging in many industrial activities of any scale. Thus, entities operating wind energy, communication towers, oil and gas production, and electrical transmission facilities, for example, have generally adopted best management practices and hoped that their proactive efforts would result in lenient treatment by FWS if and when their operations accidentally harm migratory birds. (more…)
Federal District Court Denies Barclays Motion to Dismiss FERC Petition Which Alleges Manipulation and Assesses Significant PenaltiesThursday, May 21, 2015 2:02 pm by Jennifer Lias, Robert E. Pease, David Perlman and Michael Brooks
For the past two years we have been tracking and reporting on an enforcement proceeding brought by the Federal Energy Regulatory Commission (“FERC”) against Barclays Bank PLC (“Barclays”), Daniel Brin, Scott Connelly, Karen Levine, and Ryan Smith (collectively, the “Traders” and together with Barclays, “Defendants”) for alleged manipulative trading in the western electricity markets from November 2006 to December 2008. Yesterday, the United States District Court for the Eastern District of California denied a motion by the Defendants to dismiss the manipulation action. Although the court’s order did not address the merits of the manipulation charge, the court’s order is significant because it is the first judicial ruling on the scope of FERC’s enforcement authority over the physical electricity markets and the court found that FERC can pursue civil penalty actions against individuals as well as companies. (more…)