D.C. Circuit Denies Rehearing after Vacating Pipeline Certificate; Developers Seek Emergency Relief from FERC

On January 31, 2018, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) denied requests for an en banc rehearing of an August 2017 decision (Sierra Club v. FERC) vacating FERC’s approval of the Southeast Market Pipelines Project (“SMP Project”), a natural gas pipeline currently under construction in the southeastern United States. In its August decision, the D.C. Circuit held that FERC failed to analyze the greenhouse gas emissions that would result from the SMP Project, as required by the National Environmental Policy Act (“NEPA”). On February 2, 2018, the developers for the SMP Project filed a request at FERC for expedited reissued construction approval certificates, or in the alternative, temporary emergency certificates, arguing that halting work on the SMP Project will cause “irreparable harm.” Continue reading

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D.C. Circuit Upholds PJM Capacity Market CONE

On January 26, 2018 the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) rejected a challenge to FERC’s approval of tariff revisions from the PJM Interconnection, L.L.C. (“PJM”) regarding the so-called cost-of-new-entry (“CONE”), or the anticipated revenues required to recover costs in PJM’s wholesale capacity market. A coalition of generators challenged PJM’s CONE as too low, which they argued undercut their own recovery in the capacity market. In a brief opinion, the D.C. Circuit held that petitioners’ claims failed to overcome the deferential standard of review applied to factual challenges to agency orders. Continue reading

New York ZEC Challenges Move Forward at the State Level

On January 22, 2018, a New York state trial court largely rejected motions to dismiss various challenges to the state’s zero emission credit (“ZEC”) program established in 2016 by the New York Public Service Commission (“NYPSC”). The ZEC program, which is also being challenged in federal court, provides subsidies to financially struggling in-state nuclear energy generators. Although the court allowed five of the six claims against the program to proceed to trial, the court dismissed 56 of the 61 petitioners for failing to timely raise their challenges. Continue reading

FERC Rejects Allegheny’s Proposal to Transfer Power Plant to Regulated Affiliate

On January 12, 2018, FERC denied authorization to transfer a 1,159 MW coal-fired generation facility (“Pleasants Facility”) owned by Allegheny Energy Supply Company, LLC (“AE Supply”) to its affiliate, Monongahela Power Company (“Mon Power”).  After considering the applicable tests for affiliate transfers under the Federal Power Act (“FPA”), FERC determined that the parties’ proposed transaction was not in the public interest because it presented potential concerns of captive ratepayers cross-subsidizing non-regulated entities and because certain solicitation criteria were not met. The denial is without prejudice, so Mon Power and AE Supply may resubmit an application that corrects the shortcomings identified by FERC. Continue reading

FERC Clarifies Impacts from Lost Capacity Market Rights in NYISO

On October 25, 2017, FERC issued an order explaining the market consequences when a resource loses certain participation rights in the New York Intendent System Operator, Inc. (“NYISO”) Installed Capacity (“ICAP”) market.  The order on clarification, which was requested by NRG Power Marketing LLC and GenON Energy Management, LLC (collectively, “NRG”), followed a January 27, 2017 decision in which FERC largely accepted NYISO’s proposed revisions to its Market Administration and Control Area Services Tariff (“Tariff”) to correct a pricing inefficiency in its ICAP market design.  As FERC clarified in this most recent order, when a capacity resource loses its ability to participate in NYISO’s ICAP market, certain benefits or discounts tied to that participation ability—here, a so-called “Locality Exchange Factor”—fall away. Continue reading

SPP Transmission Owners File FERC Complaint Over Alleged Cost Shifting

On October 13, 2017, a group of transmission owners in the Southwest Power Pool, Inc. (“SPP”) filed a complaint with FERC under Section 206 of the Federal Power Act (“FPA”) alleging that SPP’s Open Access Transmission Tariff (“Tariff”) is unjust and unreasonable because it lacks cost-shifting protections when new transmission owners join existing SPP transmission pricing zones. To correct this alleged “loophole,” the complainants propose a new rate schedule for new transmission owners that are placed into existing zones. Continue reading

FERC Sets Comment Deadline and Poses Questions for Commenters on DOE Proposed Rule

On October 2, 2017, FERC issued notice of the September 29, 2017 Notice of Proposed Rulemaking (“NOPR”) from the United States Department of Energy (“DOE”) under section 403 of the Department of Energy Organization Act.  In the NOPR, DOE urges FERC to act quickly to enact rules requiring regional transmission organizations and independent system operators (“RTOs/ISOs”) to provide just and reasonable rates for “fuel-secure” generation units (seeOctober 2, 2017 edition of the WER).  Shortly thereafter, on October 4, FERC staff issued a Request for Information, listing various questions for commenters to address in aiding the Commission to better understand the NOPR’s implications.  Commenting parties have until October 23, 2017 to file initial comments and until November 7, 2017 to file reply comments.  In recent testimony before the Senate’s Committee on Energy and Natural Resources, FERC General Counsel, James Danly, confirmed that FERC intends to review the comments and take final action within 60 days of the NOPR’s publication, as requested by the DOE. Continue reading

Senate Committee on Energy and Natural Resources Holds Hearing to consider FERC Nominees

On September 7, 2017, the Senate Committee on Energy and Natural Resources (“Committee”) held a hearing to consider the nominations of Kevin McIntyre and Richard Glick—President Trump’s final nominees for FERC. Mr. McIntyre and Mr. Glick, who were joined by two nominees also being considered for Department of Interior positions, fielded questions from Committee members but largely avoided opining on matters currently pending at FERC. Knowing that FERC only just recently reestablished the required quorum to resume regular business (see August 11, 2017 edition of the WER), Committee Chairman Sen. Lisa Murkowski (R-AK) stated that she was eager to advance the FERC nominees to the full Senate for confirmation. Continue reading

Federal District Court Dismisses Challenges to New York ZEC Program

On July 25, 2017, two weeks after an Illinois federal judge issued a similar ruling, the U.S. District Court of the Southern District of New York (“District Court”) issued an order dismissing challenges to a New York state “zero emission credit” (“ZEC”) program established by the New York Public Service Commission (“NYPSC”).  As with the Illinois court’s decision regarding the Illinois ZEC program (see July 25, 2017 edition of the WER), the District Court found the New York ZEC program constitutional and determined that the challengers lacked a private right of action to challenge the New York ZEC program on preemption and dormant commerce clause grounds.  Nevertheless, the District Court reached, and rejected, the merits of those challenges.  Continue reading

Federal District Court Dismisses Illinois ZEC Challenges; Appeal Heads to Seventh Circuit

On July 14, 2017, the United States District Court for the Northern District of Illinois, Eastern Division (“District Court”), issued a memorandum opinion and order dismissing various challenges to an Illinois “zero emission credit” (“ZEC”) program passed into law at the end of 2016 (“ZEC Program”).  After finding that the plaintiffs largely lacked standing to bring their claims, the District Court nonetheless reached the merits of, and rejected, the plaintiffs’ preemption, equal protection, and dormant commerce clause challenges to the ZEC Program.  Three days after its release, the ruling was appealed to the U.S. Court of Appeals for the Seventh Circuit (“Seventh Circuit”). Continue reading