Energy Legal Blog

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…)

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.

In June 25th Orders, the Commodity Futures Trading Commission (CFTC) for the first time designated two monthly electricity contracts traded at the Mid-Columbia (Mid-C) hub on the Intercontinental Exchange (ICE) - the Mid-C Financial Peak (MDC) and Mid-C Financial Off-Peak (OMC) - as significant price discovery contracts (SPDC) under §2(h)(7) of the Commodity Exchange Act (CEA).  (Two other daily ICE contracts traded at Mid-C - Mid-C Financial Peak Daily and Mid-C Financial Off-Peak Daily - were not so designated.)  SPDC designation subjects the contracts to heightened regulatory oversight and reporting requirements. (more…)

In connection with the completion of the 2010-2011 budget for the Commonwealth of Pennsylvania, the General Assembly has expressed its intention to pass legislation imposing a severance tax on the extraction of natural gas. The structure and rate of the tax remains uncertain, but it is expected that Pennsylvania law makers will negotiate the scope and magnitude of the tax in the coming months. (more…)

FERC’s Office of Energy Policy and Innovation (OEPI) last week requested comments regarding rate policies, as well as accounting and financial reporting requirements, for new electric-storage technologies such as flywheels and chemical batteries.  OEPI’s goal is to “better understand the various ways electric storage can be used, where each of those uses would fall within established jurisdictional boundaries, and the appropriate rate treatment, accounting classification, and reporting requirements for those uses.”  Comments are due 45 days after the Notice is published in the Federal Register. (more…)

The Commodity Futures Trading Commission (CFTC) voted unanimously April 27 to designate seven natural gas contracts traded on the Intercontinental Exchange Inc. (ICE) as “significant price discovery contracts,” or SPDCs.  These actions represent the U.S. Government’s first significant foray into the regulation of over-the-counter (OTC) derivatives transactions, which are currently the subject of Congress’s attention in Washington.  In addition, these actions may evidence the CFTC’s interest in pursuing increased enforcement efforts and a greater presence in the energy sector. The CFTC has yet to act on 16 electricity contracts and one refined petroleum contract that have been identified in the Federal Register as potential SPDCs. (more…)