The Federal Energy Regulatory Commission (FERC) will hold a Commissioner-lead technical conference on Tuesday, July 9, 2013 from 8:45 a.m. to 5:00 p.m. to discuss policy issues related to the reliability of the Bulk-Power System. According to the agenda released on June 19, the conference will be comprised of four panels:

  1. State of Reliability and Emerging Issues;
  2. Continuing Evolution of NERC Enforcement and Compliance Activities;
  3. NERC Standards Development Process and Priorities; and
  4. Other Issues.

On January 25, 2013, the Federal Energy Regulatory Commission (Commission) approved the January 14, 2013 settlement between its Office of Enforcement (Enforcement) and Westar Energy, Inc. (Westar) to resolve an investigation under Part 1b of the Commission’s regulations, 18 C.F.R. Part 1b (2012) concerning possible violations of the Southwest Power Pool open access transmission tariff (SPP OATT) in connection with purchases of secondary network integrated transmission service to facilitate off-system sales. Section 28.6 of the SPP OATT prohibits the use of network transmission service for any other purpose but to serve network load.
Continue Reading FERC fines Westar $420,000, plus $1.15 million in Disgorgement of Unjust Profits, For Improper Use of Network Service Under the SPP OATT

On January 22, 2013, the Federal Energy Regulatory Commission (Commission) approved the January 14, 2013 settlement between its Office of Enforcement (Enforcement) and Deutsche Bank Energy Trading LLC (Deutsche Bank) to resolve an Order to Show Cause proceeding and Enforcement’s investigation under Part 1b of the Commission’s regulations, 18 C.F.R. Part 1b (2012), into Deutsche Bank’s conduct in the markets of the California Independent System Operator Corporation (CAISO). Under the settlement, Deutsche Bank stipulates to the facts; neither admits nor denies the violations; agrees to pay a civil penalty of $1.5 million; agrees to disgorge unjust profits of $172,645, plus interest; and agrees to implement improved compliance training and procedures.
Continue Reading FERC News: FERC Approves $1.5 million Deutsche Bank Market Manipulation Settlement

On December 20, 2012, the Federal Energy Regulatory Commission approved numerous revisions proposed by the North American Electric Reliability Corporation to its Rules of Procedure (ROP). North Amer. Elec. Reliability Cor., 141 FERC ¶ 61,241. The approved revisions include numerous changes to §400, Compliance Enforcement, of the ROP, to Appendix 4B, Sanction Guidelines, and to Appendix 4C, Compliance Monitoring and Enforcement Program.
Continue Reading FERC Approves NERC’s Proposed Changes to its Sanction Guidelines

On September 28, 2012, Judge Robert L. Wilkins of the United States District Court for the District of Columbia issued an opinion vacating the Commodity Futures Trading Commission’s (“CFTC”) attempted imposition of position limits pursuant to the Dodd-Frank Act (“Dodd-Frank”). International Swaps & Derivatives Ass’n v. CFTC, Civil Action 11-cv-2146 (Memorandum Opinion). Specifically, the Memorandum Opinion grants a motion for summary judgment filed by the International Swaps and Derivatives Association (“ISDA”) and finds that the CFTC misinterpreted its authority under Dodd-Frank.
Continue Reading Court Overturns Position Limits

On June 18, 2012, multiple parties filed requests for rehearing of FERC’s Order No. 1000-A [PDF], which is the order on rehearing of FERC’s landmark Order No. 1000 [PDF] order on transmission planning and cost allocation. Transmission dependent utilities (“TDUs”) argued that in Order No. 1000-A the Commission erred by determining that unless public utility transmission providers elect to make provision in their Order No. 1000 compliance filings for Federal Power Act Section 205 filing of specific applications of the region’s cost allocation methodology, the only means to challenge the project-specific application of an Order No. 1000 cost allocation methodology would be by filing a Section 206 complaint. Instead, TDUs argue that the Commission should require the Section 205 filing of project-specific applications of the regional cost allocation methodology, or leave to the compliance filing process the determination (in response to requests of transmission providers or other stakeholders) as to whether such filing is required. TDUs further argue that Order 1000-A erred by altering or limiting Order No. 681’s [PDF] preference for load serving entities’ (“LSE”) long-term rights. According to TDUs, Order No. 681 extended the preference to be afforded LSEs to long-term rights from existing capacity to new transmission capacity, with one limited exception – where a transmission upgrade is funded by “direct cost assignment,” i.e., participant-funded. They argue that the exception is inapplicable to the new transmission facilities at issue in the transmission planning and cost allocation proceeding, as Order No. 1000 specifically ruled that participant funding will not comply with the regional or interregional cost allocation principles adopted by Order No. 1000.
Continue Reading Parties Seek Rehearing/Clarification and Review of Order Nos. 1000 and 1000-A

FERC has recently imposed severe monetary penalties on entities it claims engaged in market manipulation in violation of the Federal Power and Natural Gas Acts. In particular, FERC has focused on entities that it asserts have engaged in gas or power transactions for the purpose of obtaining financial benefits with respect to related transactions.
Continue Reading FERC’s Recent Focus on Market Manipulation: Is It Time to Review Your Compliance Plan?

Originally published as a Schiff Hardin Environmental Update newsletter

On December 30, 2011, the United States Court of Appeals for the District of Columbia issued an order staying the Cross-State Air Pollution Rule (CSAPR) pending the resolution of an appeal of the rule. Several companies, industry groups and states appealed CSAPR after it was promulgated in July 2011. The petitioners in the appeals, which have been consolidated, filed motions asking the court to stay the rule pending review. In their motions, petitioners listed unrealistic compliance deadlines, reliability concerns and federalism concerns as among the reasons warranting a stay. The court issued a two page per curiam order granting the petitioners’ stay motions, noting that petitioners “satisfied the standards required for a stay pending court review,” but adding no further reasoning for its decision. Absent the stay, the rule would have become effective on January 1, 2012.
Continue Reading Court Stays Cross-State Air Pollution Rule

This post is the first in a series of practical pointers on dealing with enforcement actions and investigations by the Federal Energy Regulatory Commission’s (“FERC” or the “Commission”) Office of Enforcement, the National Energy Reliability Corporation (“NERC”), or other regional electric reliability organizations (“ERO”s).  Despite the overall focus of this series on investigations and enforcement actions, this particular piece deals with situations in which it makes sense for a regulated entity to take corrective action on its own before the Commission, NERC or a regional ERO issues a notice of penalty or otherwise instigates some sort of investigation – the self-report.
Continue Reading To Self-Report or Not: The Upside to FERC’s Self-Reporting Process.