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Power & Pipes

FERC, CFTC, and State Energy Law Developments

On September 12, 2017, FERC and NERC released a joint statement and guidance encouraging ongoing interutility cooperation among all utilities in response to Hurricane Irma, which ravaged areas in Florida and Georgia, neighboring states, Puerto Rico, and US territories in the Caribbean. The statement emphasized that the utility response to Hurricane Irma will likely be among the largest industry restoration efforts in US history. In it, FERC and NERC encourage utilities to lend personnel skilled in vegetation management to those utilities in need as a result of the hurricane.

In addition to calling on the longstanding practice of mutual assistance following natural disasters, the joint statement also reassures utilities that to the extent this effort to provide assistance makes it difficult to meet their existing transmission vegetation management plans, FERC and NERC are willing to exercise their enforcement discretion and may not penalize utilities for noncompliance with the FAC-003 Reliability Standard, which can otherwise result in penalties of up to about $1 million per violation per day. As noted in the announcement, FAC-003 itself also provides a degree of flexibility to modify the vegetation management plan in response to unanticipated events during the year. Such modifications should only occur following a thorough analysis of a utility's unique circumstances.