Ninth Circuit Affirms Dismissal of Class Action Suit Associated with NERC Reliability Violations

On March 2, 2016, in an unpublished opinion , the U.S. Court of Appeals for the Ninth Circuit (“Ninth Circuit”) affirmed the judgement of the district court dismissing a class action suit brought by individuals and business entities located within the State of California (the “Plaintiffs”) against the Arizona Public Service Company (“APS”). Waldon v. Ariz. Pub. Serv. Co. , No. 14-55076 (9th Cir. Mar. 2, 2016). The Plaintiffs alleged that APS violated North American Electric Reliability Corporation (“NERC”) reliability standards adopted by the Federal Energy Regulatory Commission (“FERC”)...

Selling Power to a Texas Muni Just Got Easier (or at least more enforceable)

Electric utilities operated by Texas municipalities (Munis) are attractive wholesale customers for power generators, as Munis are willing to enter into the coveted long-term power purchase agreements (PPAs) that enable the financing of new generation capacity. Because Munis are governmental entities, however, there has been a longstanding question regarding the extent to which “governmental immunity” may restrict a generator’s ability to recover damages when its counterparty to the PPA is a Muni. Until last month the answer to this question was uncertain, with different districts of the Texas...

CFTC Proposal Creates Jurisdictional Controversy and Uncertainty in the RTO and ISO Markets

On May 10, 2016, the Commodity Futures Trading Commission (“CFTC” or “Commission”) issued a proposed amendment (“May 10 Proposed Amendment”) [1] to a final order issued on March 28, 2013 (the “RTO-ISO Order”) that exempted certain specified transactions of six Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”) from certain provisions of the Commodity Exchange Act (“CEA”) and other CFTC regulations. [2] The May 10 Proposed Amendment would modify the RTO-ISO Order to state that the exemption provided therein does not prohibit private causes of action pursuant...

EPA Issues a Mixed Bag of Methane Regulations for the Oil and Gas Sector

On May 12, EPA issued regulations to control methane emissions from new oil and gas sources, along with a proposed information collection request seeking information regarding methane emissions from existing oil and gas sources to support future existing source regulations. EPA also provided clarity regarding how and whether emissions from the oil and gas sector should be aggregated – a welcome relief after more than 30 years of inconsistent and confusing application of a subjective test. These actions are part of the Obama Administration’s Climate Action Plan to address climate change and...

FERC Finds Problems in Enbridge Audit

On May 9, 2016, the Director of the Office of Enforcement, under delegated authority from the Federal Energy Regulatory Commission (FERC), issued a final audit report of Enbridge Energy Partners, L.P. (EEP) and its crude oil pipeline, the North Dakota Pipeline Company (NDPL). This is the third oil pipeline audit that FERC has issued over the past year. See Colonial Pipeline Company, Docket No. FA14-4, and Enterprise Products Partners L.P., Docket No FA-14. The NDPL audit was conducted by the Division of Audits and it covered the period from January 1, 2012 through December 31, 2015. The...

Wilkins Publishes Critique of Expansive TCEQ Water Code Jurisdiction

In a recent article for the Texas Environmental Law Journal, I explore TCEQ’s view that the management of wastewaters or other industrial wastes “adjacent to water in the state” – construed expansively as (a) any location anywhere above groundwater or (b) anywhere waste may be “disposed of” via evaporation – requires a “Texas Land Application Permit” under the Water Code, above and beyond obtaining a Registration under TCEQ’s waste program. Under TCEQ’s interpretation, surface impoundments, evaporation ponds, on-site waste storage and disposal units, enclosed cleaning operations, sumps, and...

U.S. Futures Exchanges Disciplinary Actions Report - April 2016

ICE FUTURES U.S. 2015-025 Spoofing Violation of Rule 4.02(I) – Trade Practice Violations. Allegedly, an individual engaged in a pattern of trading activity in the Coffee “C” (“KC”) Futures market between March 2015 and May 2015 where numerous order book imbalances were created wherein he entered a small order relative to market conditions to buy or sell at the best price on one side and a large order to sell or buy on the opposite side of the market. Once the small order transacted, often the individual would cancel the larger order on the other side of the market. The individual engaged in...

FERC Denies Request for Discovery by Respondent in FERC Enforcement Case

On May 6, 2016, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) issued an order denying ETRACOM LLC (“ETRACOM”) and Michael Rosenberg’s Motion to Require Disclosure of Certain Materials and Information or, in the Alternative, for Issuance of Subpoena. The motion sought certain data from the California Independent System Operator Corp. (“CAISO”) to support ETRACOM’s defense that CAISO “market flaws” are at the bottom of the matter, not market manipulation as alleged by FERC staff. The Commission denied the motion on three grounds: (1) the data is unnecessary; (2) the...

DOT Site Security Plans – Potential Application to Pipelines as Offerors

The Department of Transportation (“DOT”) requires “offerors” of hazardous materials to develop and adhere to a site-specific security plan that evaluates transportation security risks and appropriate measures to address those risks. For the midstream sector, questions often arise as to whether or not the activities of a pipeline owner or operator trigger DOT’s site security plan requirements. Below, we briefly address the relevant regulations as well as some of the actions that may trigger these planning requirements. Background Under the Hazardous Material Regulations (“HMRs”), 49 C.F.R...

FERC Notice of Alleged Violation Foreshadowed by Market Monitor Report in Southwest Power Pool

On May 6, 2016, the Office of Enforcement of the Federal Energy Regulatory Commission (“FERC”) issued a Staff Notice of Alleged Violations (“NAV”), disclosing a nonpublic investigation in which FERC staff has preliminarily determined that Saracen Energy Midwest, LP (“Saracen”) violated Southwest Power Pool, Inc.’s (“SPP”) Open Access Transmission Tariff (“Tariff”), Attachment AE, § 7.4.1(4) between August 2014 and March 2015. According to FERC staff, Saracen submitted bids for transmission congestion rights (“TCRs”) at electronically equivalent settlement points, which is prohibited by § 7.4...

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