FERC recently approved a stipulation and consent agreement between the Los Angeles Department of Water and Power (LADWP) and Office of Enforcement and Regulatory Accounting to resolve an investigation into potential violations of the North American Electric Reliability Corporation (NERC) Rules of Procedure (ROP) and FERC regulations during a 2020 audit by the Western Electricity Coordinating Council. The settlement, and with it the large monetary penalty and additional compliance obligations, underscores the critical importance of transparency, accuracy, and truthfulness in reliability compliance monitoring and enforcement.
Power & Pipes
FERC, CFTC, and State Energy Law Developments
On September 12, 2025, the Federal Energy Regulatory Commission (FERC) terminated the proceeding in which it issued an updated policy statement that explained how FERC’s approach to considering applications to construct new interstate natural gas transportation facilities under Section 7 of the Natural Gas Act (Updated Certificate Policy Statement) would differ from the approach described in a policy statement issued in 1999 (1999 Certificate Policy Statement).
On August 29, 2025, the US secretary of energy proposed a significant regulatory shift regarding the certification process for new interstate natural gas facilities. In a letter submitted to FERC, the secretary recommended terminating the ongoing policy proceeding in Docket Nos. PL18-1-000 and PL18-1-001 and therefore rescind the 2022 draft Updated Certificate Policy Statement. Instead, the secretary advocates for continued reliance on the longstanding 1999 Certificate Policy Statement, which remains in effect.
Earlier this year, the Federal Energy Regulatory Commission (FERC or the Commission) issued Order 1977 to address its limited backstop siting authority for electric transmission lines. On October 17, 2024, FERC issued Order 1977-A, adding a new requirement mandating that siting applicants seeking rights of way on Tribal lands must include their Tribal Engagement Plans within their project proposals.
The Federal Energy Regulatory Commission (FERC or the Commission) issued a notice of proposed rulemaking on September 19, 2024 to tighten its existing mandatory controls for certain electric assets. The proposal reflects FERC’s increasing concern that current controls are not up to the task of preventing bad actors from infiltrating the supply chain of critical electric infrastructure, thereby creating significant risk to electric system reliability.
The DC Circuit has affirmed FERC’s application of the “cost causation” principle to prevent a public utility (the Utility) from allocating costs for facilities to customers that did not benefit from the facilities. The Utility had asked the court to overturn FERC’s order preventing the Utility from recovering transmission costs from customers located near the facilities because those facilities were built and intended to serve solely a separate group of customers located 300 miles away.
The US Federal Energy Regulatory Commission (FERC) issued a notice of inquiry (NOI) in December 2023 seeking comments on whether and, if so, how FERC should revise its policy on providing blanket authorizations for investment companies under Section 203(a)(2) of the Federal Power Act (FPA). This policy has permitted certain nonactive investors (such as mutual funds) to purchase and sell equity interests in utilities and holding companies without the typical FERC review of such investments.
FERC recently issued an order approving revisions to the North American Electric Reliability Corporation (NERC) Rules of Procedures to modify the rules for developing mandatory reliability standards. These changes, reflected in Section 300 and Appendix 3A to the NERC Rules, will allow NERC to curtail the use of its traditional stakeholder-driven reliability standards development process where NERC leadership concludes that the process would be too cumbersome in addressing the reliability risk.
In 2022, FERC began issuing directives aimed at ensuring that the reliability of the bulk-power system is protected from potential risks posed by the growing number of inverter-based resources (IBRs) connected to the electric grid. As we previously reported, FERC issued three orders in December 2022 focused on increasing regulations for IBRs through the North American Electric Reliability Corporation (NERC), an independent electric reliability organization that develops and enforces mandatory reliability standards. In continuance of this goal, this fall, FERC took the step of directing NERC to develop or modify reliability standards specifically to address reliability concerns attributable to IBRs (Order No. 901).
The US Federal Energy Regulatory Commission (FERC or Commission) has released its annual report on enforcement for fiscal year 2023. As in fiscal year 2022, FERC’s Office of Enforcement (OE) focused on matters involving fraud and market manipulation, serious violations of the Reliability Standards, anticompetitive conduct, threats to the nation’s energy infrastructure and associated impacts on the environment and surrounding communities, and conduct that threatens the transparency of regulated markets.