FERC Rulemaking: A JD Supra Legal Reader

For your reference, a roundup of commentary and analysis on recent regulatory and other activity at the Federal Energy Regulatory Commission (FERC). We will also be publishing a related roundup, on FERC Order Nos. 1000 and 1000-A, in the near future:

FERC Votes to Issue Notice of Proposed Rulemaking to Adopt Revised Bulk Electric System Definition and Exception Process (Leonard, Street and Deinard):

“… FERC voted to issue a Notice of Proposed Rulemaking (NOPR) to approve NERC’s revised definition of the Bulk Electric System (BES) and procedural mechanisms within the NERC Rules of Procedure to create an exception process for adding or removing certain elements from the definition on a case-by-case basis… FERC staff noted that NERC’s filings responded to the directives issued in Order No. 743/743-A by making clear that the BES ‘core’ definition includes all transmission elements and real power and reactive power resources operated or connected at 100 kilovolts or higher and eliminated regional discretion that existed under the existing definition.” Read on>>

FERC Proposes to Revise Definition of “Bulk Electric System” for Determining Who Must Comply with Federal Reliability Standards (Davis Wright Tremaine LLP):

“In its Order No. 743 issued in 2011, FERC directed NERC to develop a revised definition of BES because the existing definition gives the Regional Entities discretion to define the term, and because it establishes a rather loose threshold that includes facilities ‘generally operated’ at voltages of 100kV or higher. FERC was concerned that the existing definition did not encompass all facilities that are necessary for operating the grid, and identified as problems the regional discretion to define BES, the absence of a ‘bright-line’ threshold, and the absence of a process to create exceptions for inclusion or exclusion of facilities.” Read on>>

FERC Issues Proposed Rulemaking to Revise the Avista Policy on Ancillary Services, and Adopt a New Policy on Waivers of Accounting and Reporting Requirements (King & Spalding):

“The Federal Energy Regulatory Commission (FERC) recently issued a Notice of Proposed Rulemaking (the NOPR) that contemplates revisions to its decade-old Avista policy, which restricts sales of ancillary services at marketbased rates outside organized markets. In order to narrow the applicability of the stringent Avista restrictions, the NOPR proposes a variety of ways for sellers to justify market-based rate sales of ancillary services outside organized markets, including allowing such sales when the seller passes the market power screens for sales of energy and capacity, and establishing new screens specifically for ancillary services.” Read on>>

FERC Issues New Rule to Facilitate Integration of Wind, Solar, and Other Variable Energy Resources into the Grid (King & Spalding):

“On June 22, 2012, the Federal Energy Regulatory Commission (‘FERC’) issued Order No. 764, which is intended to remove barriers to the integration of variable energy resources into the electric grid. Variable energy resources (such as wind and solar) are devices used for the production of electricity that use a renewable energy source that cannot be stored and have variability that is beyond the control of the facility owner or operator. Because variable energy resources represent an increasing percentage of generation capacity, FERC concluded that it must prevent public utility transmission providers from treating these customers in an unduly discriminatory manner.” Read on>>

FERC Finalizes Rule to Facilitate the Integration of Renewable Generation Resources Into the Electric Grid, Which May Have Broader Benefits (Davis Wright Tremaine LLP):

“The Federal Energy Regulatory Commission (FERC), on June 22, 2012, issued Order No. 764 that adopts provisions to facilitate the integration of Variable Energy Resources (VERs) into the U.S. electric system. The existing electric grid is governed by rules and procedures that assumed that the output from electric generation resources would be relatively constant and controllable. VERs, which include wind, solar, and other renewable generation resources, have output that is dependent on weather conditions, and thus is variable and not controllable. FERC’s Order 764 is an attempt to remove barriers so that VERs can be efficiently incorporated into grid operations.” Read on>>

FERC Proposes to Replace “Outmoded” EQR System (Davis Wright Tremaine LLP):

“On June 21, 2012, the Federal Energy Regulatory Commission (FERC) issued a Notice of Proposed Rulemaking that proposes to eliminate the current Electronic Quarterly Reports (EQR) system used by public utilities to report to FERC required electricity data on a quarterly basis. FERC proposes that the EQR system be replaced by two options for submitting data that are web-based and not dependent on special software.” Read on>>

Shots Across The Bow: How FERC’s Recent Actions Demonstrate A Change In Emphasis And Focus For FERC Enforcement (K&L Gates LLP):

“The Federal Energy Regulatory Commission (‘FERC’) recently sent several strong signals that it intends to ramp up anti-manipulation enforcement efforts in the energy trading markets, including potentially taking aim at trading practices that many in the energy industry may view as legitimate portfolio management strategy. As part of these increased enforcement efforts, Chairman Wellinghoff announced a reorganization of FERC’s Office of Enforcement aimed at the monitoring, detection, prevention, and prosecution of manipulation within the energy markets.” Read on>>

FERC Rules in Compliance Registry Issues: The Federal Energy Regulatory Commission (‘FERC’) Recently Issued Two Notable Reliability Orders Regarding The Compliance Registry (White & Case LLP):

“FERC issued two orders addressing appeals of registration determinations made by the North American Electric Reliability Corporation (‘NERC’). The first order denied the appeal of the City of Holland, Michigan Board of Public Works (‘Holland’) and the second granted the appeal of the US Department of Energy, Portsmouth/Paducah Project Office (‘DOE Portsmouth’). Although the orders are split, they provide useful guidance regarding FERC’s handling of challenges to NERC’s registration determinations.” Read on>>

FERC Authorizes Sabine Pass LNG Export Project; Vacates Authorization for Jordan Cove LNG Import Project (King & Spalding):

“On April 16, 2012, the Federal Energy Regulatory Commission (‘FERC’) granted authorizations under the Natural Gas Act (the ‘NGA’) for Sabine Pass Liquefaction, LLC and Sabine Pass LNG, L.P. to site, construct, and operate facilities to export liquefied natural gas (‘LNG’) at Sabine Pass LNG’s existing LNG import terminal in Cameron Parish, Louisiana. This represents the first time that FERC has authorized a project that would export LNG from domestic production. Concurrently, FERC issued an order vacating the authorization previously granted to Jordan Cove Energy Project, L.P. (‘Jordan Cove’) for an LNG import terminal in Coos County, Oregon based on its understanding that Jordan Cove no longer intends to construct and operate an import terminal and is instead planning to use the facilities to export natural gas.” Read on>>

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