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Powered by the attorneys of Bracewell & Giuliani, Energy Legal Blog® is your resource for updates and analysis on national and global energy issues.
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  1. PJM Sets Out Framework For Continued Participation Of Demand Response In Wholesale Markets Following EPSA

    Friday, October 10, 2014 2:35 pm by

    On October 7, 2014, PJM Interconnection, L.L.C. (“PJM”) filed with the Federal Energy Regulatory Commission (“FERC”) a blueprint for the continued participation of demand response resources in its markets in the wake of the United States Court of Appeals for the D.C. Circuit’s decision in Electric Power Supply Ass’n v. Fed. Energy Reg. Comm’n, 753 F.3d 216 (D.C. Cir. 2014) (“EPSA”).  In that case, the D.C. Circuit vacated Order No. 745, FERC’s rule governing the compensation of demand response resources in wholesale energy markets on the basis that the rule encroached upon state jurisdiction over retail sales.  The court’s opinion casts significant doubt on FERC’s authority to require transmission providers to allow demand response to participate in their markets, with some wondering whether there is any room left for demand response in wholesale markets at all.  (more…)


  2. FERC Issues Another Notice of Alleged Violations Concerning Up To Congestion Trades

    Wednesday, August 27, 2014 2:29 pm by

    On August 25, 2014, staff at the Federal Energy Regulatory Commission (FERC Enforcement)  issued a Notice of Alleged Violations (NAV) against City Power Marketing, LLC, and its principal owner, K. Stephen Tsingas.  The Notice said that FERC Enforcement has preliminarily determined that City Power and Tsingas violated the Commission’s Anti-manipulation rule through Up To Congestion (UTC) trading in the PJM market.  FERC Enforcement has defined UTC as “a virtual product that earns or loses money on the change between the Day ahead market and the Real time market of the spread in prices between two price nodes in PJM’s system.”  See Preliminary Findings of Enforcement Staff’s Investigation in Powhatan Energy Fund, LLC, http://ferclitigation.com/wp-content/uploads/0005-FERC-Preliminary-Findings-August-9-2013-2002899_1.pdf.  FERC Enforcement also alleged that City Power made false statements and omitted material information during the investigation.  (more…)


  3. FERC Alleges PJM Manipulation by Powhatan

    Wednesday, August 6, 2014 9:26 am by

    On August 5, 2014, the Federal Energy Regulatory Commission’s (FERC) Secretary, at the direction of the Division of Enforcement, issued a Notice of Alleged Violations against Powhatan Energy Fund, LLC, a hedge fund owned by brothers Kevin and Richard Gates.  In the Notice, FERC Enforcement alleged that Powhatan’s trader, Dr. Houlian Chen, engaged in Up to Congestion trades in the PJM market that allegedly were the equivalent of wash trades in violation of FERC’s anti-manipulation rule.  FERC’s Notices generally reveal little about the matter under investigation.  However, in this case we know a great deal about Enforcement’s case because Powhatan itself publically disclosed much of the investigative record.  See http://ferclitigation.com/legal-back-and-forth/.  It has been Powhatan’s contention that their actions have been transparent and fully consistent with the PJM tariff and FERC’s rules.  Nevertheless, in staff’s preliminary findings, dated August 9, 2013, Enforcement alleged that Chen made the wash trades in order to capture millions of dollars from the Margin Loss Surplus Allocation (MLSA).  FERC alleged that Powhatan entered the riskless trades in order to boost the volume of its trading thus increasing the MLSA payments.  (more…)


  4. FERC Approves $3.25 Million Civil Penalty in Southwest Blackout Case

    Tuesday, July 8, 2014 2:00 pm by and

    On July 7, the Federal Energy Regulatory Commission (FERC) approved a stipulation and consent agreement between FERC’s Office of Enforcement, the North American Electric Reliability Corporation (NERC) and Arizona Public Service Company (APS) resolving FERC and NERC’s joint investigation into APS’s involvement in the September 8, 2011 Southwest Blackout.  The Southwest Blackout was a system disturbance in the Pacific Southwest that affected transmission in Arizona, California and Mexico, and ultimately caused a complete blackout of San Diego.  FERC and NERC found that APS violated certain of the Transmission Operations (TOP) group of NERC Reliability Standards, and that these violations resulted in cascading outages in which 2.7 million customers, or approximately 5 million people, lost power for several hours.  FERC and NERC concluded that APS failed to prepare for this type of event by not performing a unique day-ahead study for September 8 and by not coordinating its day-ahead studies with neighboring transmission operators, including the Imperial Irrigation District and the California Independent System Operator.  APS has neither admitted nor denied the violations in the stipulation and consent agreement.  (more…)


  5. FERC Proposes to Revamp its Market-Based Rate Policies and Procedures

    Monday, June 23, 2014 12:47 pm by and

    On June 19, 2014, the Federal Energy Regulatory Commission (“FERC” or “Commission”) issued a Notice of Proposed Rulemaking (“NOPR”) proposing to revise its standards for evaluating applications to sell energy, capacity, and ancillary services at market-based rates, as set forth in Order No. 697 and subsequent orders. FERC’s revisions have two primary goals: (1) to streamline the horizontal and vertical market power analyses that public utilities are required to submit when filing an application for market-based rate authority or a triennial market power update; and (2) increase the transparency of information that sellers report to FERC as part of the market-based rate process, including the seller’s affiliates and corporate structure and its interest in generation and transmission assets. (more…)


  6. Intervenors Urge Caution from FERC on CAISO-PacifiCorp Energy Imbalance Market

    Wednesday, May 7, 2014 11:03 am by

    On Friday, April 25, approximately two dozen intervenors filed comments regarding PacifiCorp’s proposed amendments to its Open Access Transmission Tariff (“OATT”) to permit its participation in the California Independent System Operator Corp.’s proposed Energy Imbalance Market (“EIM”).

    The CAISO EIM is the first proposed organized market structure across a multi-state footprint in the West, which is otherwise largely OATT-defined.  PacifiCorp has contracted with the CAISO to be the first EIM participating balancing authority.  The design and implementation of the new market requires substantial amendments to both the CAISO and PacifiCorp tariffs, and all proposals must be approved by the Federal Energy Regulatory Commission (“FERC” or “Commission”) as just, reasonable, non-discriminatory and non-preferential under the Federal Power Act.  CAISO filed its proposed tariff amendments on February 28, and PacifiCorp filed its proposed OATT amendments on March 25.  (more…)


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