FERC, CFTC, and State Energy Law Developments
FERC recently held a Staff-led technical conference to discuss whether, and if so, how, the Commission should require additional financial assurance mechanisms in the licenses and other authorizations it issues for hydroelectric projects, to ensure that licensees have the capability to carry out license requirements and, particularly, to maintain their projects in safe condition. The feedback received during the conference, as well as the comments to be filed, will likely shape the ultimate FERC rule on financial assurance requirements currently under consideration.

Cost allocation for regional transmission projects has long been one of the more challenging aspects of regional transmission development because it determines who should ultimately bear the costs of the regional transmission projects and in what proportion. Litigation over these issues is not uncommon.

FERC believes that barriers to transmission investment pose significant risks to the energy economy. Inadequate transmission can lead to transmission congestion, which in turn impedes capital investment in energy infrastructure and the facilities necessary to ensure reliable and efficient service. That problem is compounded by changing supply and demand conditions and an increasingly diverse generation mix, which can create ripple effects on competitive wholesale markets.
As an example of its renewed focus on dam safety, FERC recently issued an order assessing a $600,000 civil penalty to Ampersand Cranberry Lake Hydro LLC for a violation of Ampersand’s hydro license for the 500 kW Cranberry Lake Project No. 9658. The violation is related to Ampersand’s failure to complete known dam safety repairs over multiple years and its loss of property rights needed for the Cranberry Lake Project, located on the Oswegatchie River in St. Lawrence County, New York.
According to FERC, one of the biggest shortcomings of existing regional transmission planning is its focus on short-term needs. Long-term planning, while part of planning processes today, is not sufficient in FERC’s view and has led to “piecemeal” transmission development and an overreliance on meeting transmission needs through generator interconnection processes, which are not designed with larger regional facilities in mind.
To address changing system needs, FERC ordered each Regional Transmission Organization and Independent System Operator (collectively, RTO/ISO) to submit information to the Commission regarding changes to wholesale markets within 180 days.
FERC initiated show-cause proceedings on April 21, 2022, to investigate the justness and reasonableness of the formula rate protocols of five public utility transmission providers in the West.
At the March open meeting, FERC issued an order extending the existing deadline for power sellers making sales above the energy price cap in the Western Electricity Coordinating Council (WECC) region. As a result of the order, sellers will have 30 days after the month in which the sales occurred to submit cost justification filings to FERC.
On March 24, FERC granted a public utility’s petition for declaratory order regarding the treatment of a master license agreement for communications equipment under the public utility’s previously approved revenue sharing mechanism (Revenue Sharing Mechanism).
In an order denying a request to waive filing requirements triggered by changes in ownership of qualifying facility (QF) projects, the Federal Energy Regulatory Commission reiterated the importance of ensuring QF filings, specifically Form 556, are up to date.