FERC Approves in Part PJM’s Proposed Changes to the Minimum Offer Price Rule
May 22, 2013
by John D. McGrane, Mitchell D. Carroll, and Glen S. Bernstein
On May 2, 2013, FERC issued an order conditionally accepting in part, and rejecting in part, tariff revisions filed by PJM Interconnection, L.L.C. (PJM) regarding the Minimum Offer Price Rule (MOPR) for generating resources seeking to participate in PJM’s capacity market auctions. The MOPR attempts to limit the potential exercise of buyer-side market power in PJM’s forward capacity market. According to FERC, a concern arises when a large net buyer of capacity in PJM’s forward capacity auction owns generating capacity and offers that capacity into the auction at a reduced price. To address that concern, at the time of its filing, the PJM tariff included a minimum bid price for all new generating resources unless the relevant market participant could demonstrate, through a unit-specific review process, that a lower bid was justified based on the economics of the market participant’s unit.
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LawFlash: FERC Proposes to Approve Overhaul of NERC Cybersecurity Standards
April 23, 2013
by Stephen Spina and J. Daniel Skees
On April 18, the Federal Energy Regulatory Commission (FERC) issued a Notice of Proposed Rulemaking (NOPR) that would approve version 5 of the North American Electric Reliability Corporation’s (NERC’s) Critical Infrastructure Protection (CIP) Reliability Standards. The proposed rule aims to expand the scope of bulk electric system (BES) cyber systems protected by the CIP Reliability Standards. The proposal also includes 12 requirements with new cybersecurity controls as well as proposed modifications and clarifications to the CIP Reliability Standards. If approved, the revised CIP Reliability Standards will address a wider variety of utility computer systems and equipment, with the strictest protections applied to the most critical equipment.
LawFlash: FERC Lacks Authority Over Commodity Futures Contracts
March 19, 2013
by Mark R. Haskell, George D. Billinson, Brett A. Snyder, and Pamela C. Tsang
On March 15, the U.S. Court of Appeals for the District of Columbia Circuit ruled in Hunter v. FERC that the Federal Energy Regulatory Commission (FERC) lacks authority over commodity futures contracts and therefore cannot assess fines for manipulation of the natural gas futures market. This decision undercuts FERC’s interpretation of its enforcement jurisdiction under the Natural Gas Act (NGA) to regulate the natural gas markets.
FERC Extends Deadline for Order No. 1000 Interregional Compliance Filings
February 26, 2013
by Stephen Spina and Joseph Lowell
On February 26, FERC issued an order extending through July 10, 2013, the deadline for all public utility transmission providers to submit their Order No. 1000 compliance filings with respect to interregional transmission coordination procedures as well as an interregional cost allocation method or methods. FERC’s order was prompted by requests for an extension of time from Southwest Power Pool, Inc., Midwest Independent Transmission System Operator, Inc., and a number of individual public utilities. FERC stated that it would grant a 90-day extension of the Order No. 1000 interregional compliance filing deadline to enable public utility transmission providers in each transmission planning region to work with their stakeholders and develop interregional compliance filings with broad-based support.
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D.C. Circuit Upholds FERC Ruling to Apply Mobile-Sierra Doctrine to FCA Rates
February 19, 2013
by Glen S. Bernstein and Pamela C. Tsang
On February 15, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) upheld FERC’s determination that the Mobile-Sierra doctrine applies when deciding whether a Forward Capacity Auction (FCA) rate is just and reasonable.[1] The New England Power Generators Association (NEPGA) and another group composed of the Maine Public Utilities Commission and the Attorneys General of Massachusetts and Connecticut (collectively, the State Petitioners) challenged FERC’s ruling that, although the rates resulting from the FCA are not contract rates, they warrant the Mobile-Sierra presumption. NEPGA argued that the FCA rates are contract rates and therefore must receive the presumption. The State Petitioners argued that, because the FCA rates are not contract rates, FERC cannot presume they are just and reasonable.
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LawFlash: President Obama Signs Executive Order on Cybersecurity
February 14, 2013
by Stephen Spina and J. Daniel Skees
On February 12, President Barack Obama signed an executive order directing the Department of Homeland Security (DHS) to identify critical infrastructure and encourage the designated owners and operators of critical infrastructure to adopt a voluntary cybersecurity program that will be developed by the National Institute of Standards and Technology (NIST). As reflected in the president’s State of the Union address, DHS is certain to identify electric system infrastructure as critical, resulting in significant pressure on electric utilities to adopt the NIST standards.
LawFlash: FERC Proposes Changes for Small Generator Interconnection Requests
January 23, 2013
by Kenneth M. Kulak, Glen S. Bernstein, and Brooke E. McGlinn
On January 17, the Federal Energy Regulatory Commission (FERC or Commission) issued a Notice of Proposed Rulemaking (Proposed Rule) setting forth proposed revisions to the pro forma Small Generator Interconnection Procedures (SGIP) and the pro forma Small Generator Interconnection Agreement (SGIA). The revisions are intended to reduce the time and cost to process small generator interconnection requests for facilities of no more than 20 megawatts (MW).