Power Marketing Industry A Target of FERC Enforcement Investigations in 2014

On November 20, FERC Enforcement announced the issuance of its annual report for fiscal year 2014. All market participants in the energy industry need to ensure that their ducks are in a row as FERC Enforcement is continuing its focus on fraud and market manipulation. Just over the last few months, FERC enforcement has been active in the power marketing industry. For example, on August 5, FERC’s issued a public notice of violations against Powhatan Energy Fund for allegedly manipulating PJM’s up-to congestion market. On August 25, FERC issued a notice of violation against City Power Marketing for allegedly manipulating PJM’s up-to congestion market. On September 29, FERC approved a settlement between DC Energy, LLC, Scylla Energy LLC and PJM regarding a dispute over the deviation charges applied to internal bilateral transactions. In addition, at the end of October FERC announced that it has opened three probes, one into the natural gas market and two generators that took advantage of uplift payments last winter.

Below are some highlights from FERC Enforcement’s annual report: Continue reading

This Week At FERC

Here Are Your 6 Top Stories This Week at FERC:

  1. FERC Revokes Market-Based Rate Authority for 26 Utilities
  2. PJM Updates Capacity Performance Proposal
  3. Proposal For Centralized Bilateral Natural Gas Market Exchange Gets Pushback
  4. NYPSC Takes FERC to Court Over New Capacity Zone
  5. FERC Launches Investigation into Market Manipulation
  6. ISO-NE Responds to NEPGA’s Winter Reliability Program Concerns

Continue reading

DC Circuit Issues A Stay On Vacating of Order 745 & The Market Reacts

On October 20, the Court of Appeals for the DC Circuit issued a stay on its ruling to vacate Order 745. The stay will be in effect until December 16, which will give the Solicitor General and FERC time to issue a writ of certiorari to the Supreme Court. If the case goes to the Supreme Court, then Order 745 will remain in effect until a final ruling is issued on the matter. For a refresher on Order 745, which lays out FERC’s demand response program to compensate end-users for reducing their consumption in wholesale organized markets, see our previous blog post here.

In FERC’s request to the DC Circuit for a stay of its decision on Order 745, FERC indicated that it may petition the Supreme Court for review. There is currently a great deal of uncertainty on the scope of FERC’s jurisdiction between wholesale and retail markets. While policy professionals are working to resolve this jurisdictional conundrum, stakeholders are wading in a bath of market uncertainty. Continue reading

FERC Publishes EQR Blacklist: 43 Companies Risk Losing Market-Based Rate Authority

On October 9, FERC issued an order stating its intent to revoke market based rate authority from 43 companies that have failed to file their Electronic Quarterly Reports (EQRs). Unless all outstanding EQRs are filed for each of these companies, FERC will, within 15 days of the order, “revoke that public utility’s market-based rate authorization and will terminate its electric market-based rate tariff.” The bottom line is that FERC is ramping up its enforcement efforts across the board, and the entities listed below have until October 24 to get their EQRs up to date and save themselves from FERC’s blacklist. All retail electric providers (“REP”) and electric generation suppliers must be aware of what EQRs are. Losing market based rate authority can put an electric company, whether a REP or a supplier, out of business. Continue reading

Industry Expresses Concern That NY’s Reforming the Energy Vision (REV) Proposal Will Institutionalize Monopoly Power & Unfair Markets

On August 22, the New York Public Service Commission (NY PSC) issued a proposed rule on the Reforming the Energy Vision (REV) initiative and comments were submitted throughout September. In short, the PSC intends to transform NY’s utilities into Distributed System Platform Providers (DSPPs), which will create, operate, plan, and police new markets for distributed energy resources (DER) and demand response (DR), in addition to acting as a local balancing authority (like a distribution level RTO). Retail Energy Providers (REPs aka ESCOs in NY) are asking, who will police the DSPPs and what will stop utility-affiliated generation from getting preferential treatment?

In our last post on this matter, we highlighted that REV may serve as one of the main driver’s of NY’s compliance efforts under the EPA’s Clean Power Plan. Now that REV’s form is taking shape, it’s being asked whether New York is sacrificing its freedom from monopoly control over the energy industry for the sake of expedience.  The question is whether utilities, rather than a third party, should take on this role, as the argument follows that utilities have the resources and ability to more easily expand into becoming DSPPs. Continue reading

Industry Leaders Discuss Retail Energy Operations, M&A, and Compliance

On September 8, Feller Energy Law Group attended the NYC Energy Marketing Conference. Although many of the concerns and needs of retail energy providers (“REPs”) remain the same, there was a shift at this conference towards bundling innovative products with commodity service. Speakers highlighted that offering distributed generation, demand response, and energy efficiency products is not just a good idea, but essential for any REP to remain competitive. REPs that offer these products by creating strategic partnerships with energy management firms and by offering financing products, like on-bill financing will remain competitive as the market evolves. Offering innovative products is not just about having the lowest bottom line, but also about being able to cultivate deep relationships with customers through numerous touch points that are not necessarily available when a REP is only offering commodity service. Continue reading

Rate Shock Across The Lower Hudson Valley (Part II)

As we left off in Part I, the fight over the Hudson Valley’s energy future has gone to federal court. NYISO’s new capacity zone is going to raise prices for ratepayers by $70 million this summer just as the sting from this past winter’s polar vortex price spikes are beginning to wear off. When this sort of danger strikes who are you going to call? The NYPSC and the CHG&E (expecting someone else?) each filed separate, now consolidated, petitions at the Federal Court of Appeals for the Second Circuit seeking immediate reprieve for New Yorkers who face immediate and sudden “rate shock”. CHG&E petitioned for judicial review of the FERC August and January Orders that seem to have triggered this impending doom, arguing that FERC’s orders are arbitrary, capricious, and contrary to law and FERC’s prior orders, regulations, and policies. CHGE v. FERC, (2d Cir.), Petition for Review (May 30, 2014). Continue reading

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