Bracewell & Giuliani

Powered by the attorneys of Bracewell & Giuliani, Energy Legal Blog® is your resource for updates and analysis on national and global energy issues.
  1. D.C. Circuit Affirms FERC on Order No. 1000

    Monday, August 18, 2014 5:15 pm by

    On August 15, 2014, the U.S. Court of Appeals for the D.C. Circuit (D.C. Circuit) issued an opinion in South Carolina Public Service Authority v. FERC, Case Nos. 12-1232, et al. (consolidated), upholding the Federal Energy Regulatory Commission’s (FERC) Order No. 1000 in its entirety, giving FERC a major win in a case involving 45 petitioners and 16 intervenors.

    Authority to Require Participation:  In Order No. 888 in 1996, FERC required public utility transmission providers to functionally unbundle their wholesale generation and transmission services and file open-access transmission tariffs to provide non-discriminatory transmission service and to provide the benefits of competitively priced generation.  Previously, the D.C. Circuit upheld Order No. 888 in nearly all respects.  In this opinion, the D.C. Circuit affirmed FERC’s conclusion that transmission planning affects transmission rates and that FERC has authority under Section 206 of the Federal Power Act (FPA) to require transmission providers to participate in a regional planning process.  The Court expressed its view that such a requirement is simply the next step in reforms that began with Order No. 888.  The Court also concluded that the statutory directive for “voluntary interconnection and coordination” found in Section 202(a) of the FPA does not bar FERC from requiring regional planning and that Order No. 1000 does not interfere with traditional state authority. (more…)

  2. Environmental Regulations Impacting the Energy Industry – Summer 2014

    Friday, June 20, 2014 11:06 am by

  3. FERC Confirms the Long Reach of Open Access Requirements

    Monday, March 3, 2014 10:45 am by and

    This week the Federal Energy Regulatory Commission (FERC) put to rest any doubt that transmission rights pursuant to a pre-Order No. 888 transmission service agreement are subject to the FERC’s open access regime when the agreement is modified or becomes obsolete. In the same order, FERC found that a so-called “resale tariff” is only permissible where a jurisdictional transmission provider seeks to resell transmission rights on a non-jurisdictional transmission provider’s facilities—where the resale could not be facilitated under a FERC-approved Open Access Transmission Tariff (OATT).

    FERC’s February 27, 2014 order rejected a December 30, 2013 filing by SoCal Edison Company (SCE). SCE’s filing attempted to modify transmission rights it has held since 1966 under a transmission services agreement with Arizona Public Service Company (APS). The 1966 agreement arose in connection with SCE and APS’s joint ownership interests in two generating units at Four Corners in New Mexico. Pursuant to the agreement, APS constructed and operated a 500 kV transmission line from Four Corners to the Arizona-Nevada border, and SCE paid APS cost-based transmission service charges for rights to all of that line’s transmission capacity, for purposes of transmitting SCE’s portion of the units’ output to California. In 2013, SCE transferred to APS its ownership interests in the Four Corners units, so SCE no longer needed the transmission capacity it had held for more than four decades for purposes of transmitting its Four Corners capacity. (more…)

  4. Barclays Motion to Dismiss Raises Significant Issues About FERC Jurisdiction

    Monday, January 6, 2014 8:00 am by , and

    After an investigation of actions in the western electricity markets by Barclays Bank PLC (“Barclays”), Daniel Brin, Scott Connelly, Karen Levine, and Ryan Smith (collectively, the “Traders” and together with Barclays, “Defendants”), the Federal Energy Regulatory Commission (“FERC”) issued an order finding the Defendants in violation of FERC’s anti-manipulation regulations and assessing Barclays a $435 million civil penalty, assessing each Trader an individual civil penalty, and requiring disgorgement of $34.9 million plus interest in unjust profits.[i] In accordance with the Defendants’ election of a trial de novo in federal district court, on October 9, 2013 FERC filed a petition in the United States District Court for the Eastern District of California requesting an order affirming its assessment of penalties.

    In response to FERC’s petition, on December 16, 2013, the Defendants filed a motion to dismiss the complaint.[ii]  The Defendants moved to dismiss the complaint, as a matter of law, on the grounds that venue is not proper and that FERC has failed to state a claim upon which relief can be granted. (more…)

  5. Electricity Consumers Seek to Lower Returns for MISO Transmission Owners and also Challenge Capital Structure and Incentive Adders

    Thursday, November 14, 2013 5:50 pm by

    Adding to a recent spate of complaints filed at FERC seeking to reduce the return on equity (“ROE”) of various transmission owners, on November 12, 2013, several groups composed of large industrial and commercial electricity consumers together filed a complaint against Midcontinent Independent System Operator (“MISO”) transmission owners asking for a reduction in the MISO transmission owners’ ROE.  With one exception, all MISO transmission owners currently have a base ROE of 12.38%.[1]  The complaint seeks to lower the transmission owners’ base ROE over 300 basis points below the current base ROE, to 9.15%. 

    The law is well settled that in regulated industries, ROEs must be set at levels sufficient to attract capital investment.  Transmission owners have responded to the recent complaints seeking ROE reductions  by expressing concerns that lower ROEs will result in lower levels of investment in transmission, contrary to FERC’s policy initiatives intended to encourage and sustain transmission investment.  (more…)

  6. FERC Takes Steps to Eliminate Barriers to Transmission Provider and Pipeline Communications

    Wednesday, August 7, 2013 8:38 am by

    On July 18, 2013, the Federal Energy Regulatory Commission (“Commission”) issued a Notice of Proposed Rulemaking (“NOPR”) proposing to revise its regulations to permit expressly interstate natural gas pipelines and public utilities that own, operate, or control transmission facilities (i.e., transmission operators) to share non-public, operational information for the purpose of promoting reliable service or operational planning. The Commission issued the NOPR in response to statements by natural gas pipelines and transmission operators at recent conferences concerning electric-gas coordination that they are reluctant to share non-public operational information with each other due to a concern that such sharing may be viewed as a violation of Commission laws and regulations, including the prohibitions against undue discrimination and preference contained in the Federal Power Act (“FPA”) and Natural Gas Act (“NGA”). 

    Noting that the protections against undue discrimination and preference do not prohibit differences in treatment when the difference is justified, the Commission clarified that the sharing of non-public, operational information between transmission operators and natural gas pipelines for the purpose of promoting reliable service or operational planning is reasonable and does not violate the FPA or NGA. In addition, responding to concerns that the Standards of Conduct (“SOC”) contained in Part 358 of the Commission’s regulations could prevent the effective participation of such entities in regional reliability or system planning exercises, the Commission clarified that the SOC do not limit communications between pipelines and transmission operators that are not affiliated with each other; the Commission emphasized, however, that communicating non-public transmission information during private exercises involving only the transmission provider and its marketing function employees is prohibited by the SOC, as it would give marketing function employees preferential access to non-public transmission information. (more…)

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