Energy Legal Blog

FERC proposes to revisit credit practices and risk management for organized wholesale market in a January 21 rulemaking proposal.  The seven proposed revisions across the board would reign in credit and reduce the default exposure of market operators beginning before the 2010-2011 winter-heating season.  Public comment on the proposed revisions must be filed with the FERC by March 29, 2010. (more…)

PR News announced that Bracewell & Giuliani’s Energy Legal Blog will be recognized as the best “Legal PR Blog” at its annual Corporate Social Responsibility & Legal Awards Luncheon on February 24, 2010 at the National Press Club in Washington, D.C. This award recognizes an outstanding and influential law-related weblog or online journal written by a representative of the organization with the goal of espousing the brand or a certain message and written with flair and personality.

“Managing a crisis and working with legal counsel are two areas of communication that will always be a part of a PR professional’s responsibilities,” notes Diane Schwartz, vice president of PR News. “The Legal PR Awards shines a light both on how law firms are communicating to their stakeholders and to how the PR industry is in the driver’s seat when a crisis hits.”

More information on the award program and this year’s winners is available at http://www.prnewsonline.com/awards/csr2009_event-finalists.html.

The Supreme Court (8-1) in a January 13 decision confirmed that the “Mobile-Sierra presumption” that rates and terms of a wholesale power or natural gas contract are presumed to be just and reasonable applies as against all challenges and challengers, including non-parties to the contract, so long as the contract was freely negotiated at arm’s length.  In NRG Power Marketing, LLC v. Maine Pub. Utils. Comm’n (NRG), Justice Ginsburg writing for the majority reversed a 2008 DC Circuit ruling in Maine Pub. Utils. Comm’n v. FERC (Maine PUC) that the Mobile-Sierra presumption of lawfulness applied only to challenges from one of the parties to the contract and not to all other non-party challengers who, the lower court ruled, were entitled to a less-exacting standard of review.  Rejecting the DC Circuit’s holding as undermining the stability of contracts in energy markets, the Supreme Court’s NRG decision makes clear that the applicability of the Mobile-Sierra presumption to contract rates “does not depend on the identity of the complainant who seeks FERC investigation.”  NRG, slip op. at 10. (more…)

The United States Court of Appeals for the Second Circuit upheld a U.S. Commodity Futures Trading Commission (CFTC) civil enforcement action against a New York Mercantile Exchange broker for “knowingly” manipulating settlement prices for electricity future contracts on behalf of Avista Energy, Inc. in 1998.  In DiPlacido the court lowered the CFTC’s penalty by one third, and affirmed the CFTC’s cease-and-desist order, registration revocation, and 20-year trading prohibition. (more…)

The U.S. District Court for the Southern District of Texas dismissed a twenty-six-count indictment that the Commodity Futures Trading Commission (CFTC) and Justice Department had brought against four former BP traders for allegedly attempting to manipulate the TET propane market in 2004 in violation of the Commodities Exchange Act (CEA). In doing so, the court appears to have narrowed significantly the CFTC’s (and possibly other regulators’) authority to prosecute allegations of price manipulation. (more…)

Maryland and New Jersey’s state utility boards August 24 petitioned the US Court of Appeals for the Fourth Circuit to review FERC’s approval of PJM’s initial Reliability Pricing Model (RPM) capacity auctions. The state regulators, joined by more than a dozen other petitioners, argued before FERC that “[t]he absence of price discipline provided by new capacity resources and the ability of existing resources to withhold some capacity within the RPM rules combined to produce capacity prices in the transition period that are not comparable to those that would be produced in a competitive market or determined under cost-based regulation.” As a consequence, the state parties asked FERC to re-compute four RPM auctions (for delivery years 2007-8, 2008-9, 2009-10, and 2010-11), which were allegedly over-inflated. FERC roundly rejected these arguments, finding that the state parties’ requested relief was “not exactly clear” and that no violation of the RPM Settlement Agreement or the PJM tariff was evident, and therefore dismissed the complaint. (more…)