Thursday, November 14, 2013 5:50 pm by Kaleb Lockwood
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 Midcontinent Independent System Operator (“MISO”) transmission customers together filed a complaint against 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%. 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…)
Category: Electric, FERC, Organized Markets, Power, Transmission
Wednesday, August 7, 2013 8:38 am by Stephen Hug
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…)
Category: FERC, National Energy Law, Natural Gas/LNG, Power, Transmission
Monday, July 1, 2013 11:21 am by Kaleb Lockwood
In a recent order on the ColumbiaGrid Order No. 1000 compliance filing, FERC dug in on its position that Order No. 1000 requires that cost allocation for transmission projects selected in the regional transmission planning process must be binding. FERC rejected the filing parties’ proposed non-binding cost allocation provisions, stating that non-binding cost allocation is inconsistent with Order No. 1000’s goals of minimizing free ridership and increasing the likelihood that planned transmission facilities move forward to construction.
FERC’s decision to require binding cost allocation could pose particular challenges to the transmission planning process in the ColumbiaGrid region, which is located in the Pacific Northwest. That region includes an unusually large number of transmission owners not subject to FERC’s jurisdiction or the requirements of Order No. 1000. About 75% of the transmission in the region is owned by the Bonneville Power Administration (“BPA”). BPA’s transmission is not generally subject to FERC’s jurisdiction. Without the participation of non-jurisdictional entities in the Order No. 1000 regional transmission planning process, FERC’s Order No. 1000 policy goals could be at risk. (more…)
Category: FERC, Regional Energy Law, Transmission
Monday, June 17, 2013 8:49 am by Jessica Miller and Sandy Rizzo
On May 17, 2013, the Federal Energy Regulatory Commission found that its generic findings in its regional transmission planning order, Order No. 1000, were sufficient to overcome the Mobile-Sierra prohibition against the alteration of contract terms unless they seriously harm the public interest. ISO New England Inc., 143 FERC ¶ 61,150 (2013). This conclusion may signal a weakening, under certain circumstances, of the previously high standard for overcoming the Mobile-Sierra presumption of justness and reasonableness. The apparent departure from Commission precedent was significant enough to prompt two Commissioners—Moeller and Clark—to submit separate dissents on that sole issue. (more…)
Category: Courts, FERC, Organized Markets, Regional Energy Law, Transmission
Friday, February 22, 2013 4:44 pm by Tracy Davis
On February 12, 2013, the California Independent System Operator Corporation (CAISO) and neighboring utility, PacifiCorp, entered a Memorandum of Understanding (MOU) to cooperate on the development of an energy imbalance market (EIM) in each entity’s respective balancing authority areas, in the hopes of laying groundwork for a broader effort across the western region. Hailed by the CAISO as the “first step in bringing PacifiCorp and ultimately other Western balancing authorities into an automated real-time [five]-minute dispatch system” the CAISO and PacifiCorp agreed in the MOU to work towards implementing the EIM by October 2014. In statements issued with the release of the MOU, the parties noted their hope that the EIM will integrate resources efficiently and reliably, including, in particular, the significant renewable resources that have come online in the West in recent years. (more…)
Category: FERC, Organized Markets, Regional Energy Law, Transmission
Monday, February 4, 2013 2:28 pm by Stephen Hug
On February 1, 2013, the Department of Justice (DOJ) filed comments in response to the Federal Energy Regulatory Commission’s (FERC) Notice of Inquiry in which FERC is considering amending its regulations to require jurisdictional sellers of natural gas to report on a quarterly basis detailed, transaction-specific information regarding every sale of natural gas that entails physical delivery the next day or the next month. FERC already requires sellers of electricity and transmission service to file such information on a quarterly basis. FERC has taken the position that existing natural gas reporting requirements may not be sufficient to ensure that market prices are transparent such that FERC can detect and prevent market manipulation. FERC also is considering whether and how publicly to disseminate any transactional data that is collected. (more…)
Category: FERC, National Energy Law, Natural Gas/LNG, Transmission