Energy Legal Blog

After designating two bilateral Mid-Columbia (Mid-C) electricity contracts traded on the Intercontinental Exchange (ICE) as significant price discovery contracts (SPDC), the Commodity Futures Trading Commission (CFTC), in July 9th orders, designated four additional ICE electricity contracts used in organized Regional Transmission Organization (RTO) markets as SPDCs.  The four contracts are the SP-15 Financial Day-Ahead LMP Peak (SPM) and SP-15 Financial Day-Ahead LMP Off-Peak (OFP) contracts for the California ISO and the PJM Western Hub Real Time Peak (PJM) and PJM Western Hub Real Time Off-Peak (OPJ) contracts for the PJM Interconnection.  SPDC designation subjects these contracts to heightened regulatory oversight and reporting requirements.  At the same time, the CFTC issued two other orders finding that two daily SP-15 and two daily PJM contracts were not SPDCs.  (more…)

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…)

The Federal Energy Regulatory Commission (FERC) on June 17 proposed a rulemaking that, if implemented, has the potential to complete the opening of the transmission grid, an undertaking that began fourteen years ago. Earlier reforms, starting with FERC’s Order No. 888 in 1996, offered for the first time non-discriminatory open access to those who sought to interconnect with and use the grid.  In 2007 Order No. 890 expanded customer participation in the planning and operation of the grid. The new rule proposes to allow all power industry participants to contribute equally to the future design, configuration, and even ownership of the grid.  Public comments on the proposed rulemaking must be submitted to the agency by August, 30, 2010. (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…)

FERC last week launched an effort to raise the price cap in the Western Electricity Coordinating Council (WECC) spot power markets from $400/MWh to $750/MWh, which would align it with the bid cap in place in the California Independent System Operator Corporation (CAISO) spot markets.  Comments on FERC’s proposal are due by June 21, 2010. (more…)