The Nickel Report

On July 19, 2018, the Federal Energy Regulatory Commission (FERC or Commission) held its July 2018 open meeting. This meeting was Commissioner Powelson’s last, following his announcement on June 28, 2018, that he would be leaving the agency.

Highlights of the meeting include the following:

• In his opening comments, Chairman McIntyre encouraged stakeholders to provide detailed and candid comments on the Notice of Inquiry regarding the certification of interstate natural gas pipeline facilities. Those comments were due on July 25, 2018. Commissioner LaFleur acknowledged the strong disagreements at FERC on certification matters and expressed her hope that the docket would lead to wide-ranging discussion and an effort to find consensus on a way forward. Similarly, Commissioner Glick noted that this was an opportunity for all to get on board with an approach going forward. He noted recent EPA staff comments that outlined possible approaches to assessing the significance of greenhouse gas emissions.
• Chairman McIntyre also highlighted the Commission’s annual reliability conference, which was to be held on July 31. He noted that there would be a new panel focused on the resilience of the bulk power system.
• In addition, Chairman McIntyre announced that Commission staff is developing a Memorandum of Understanding with the US Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) to leverage each agency’s expertise to significantly reduce the time to review applications for liquefied natural gas (LNG) facilities. Commissioner Chatterjee spoke briefly on the importance of the Commission to act expeditiously on the LNG facilities and his support for improved inter-agency coordination.
  The Commission issued four natural gas pipeline certificates, with Commissioner LaFleur concurring and/or dissenting and Commissioner Glick dissenting in part. In her opening comments, Commissioner LaFleur noted that she took issue with the majority’s approach to downstream impacts of greenhouse gas emissions but was still willing to vote for certifications that she believed were in the public interest. Commissioner Glick noted that he would partially dissent in the orders consistent with his previous dissents regarding greenhouse gas emissions associated with downstream and upstream emissions associated with new pipelines.
• The Commission voted to adopt Order No. 848 in Docket No. RM18-2-000. The order directs NERC to develop and submit modifications to its Reliability Standards to augment the mandatory reporting of cyber security incidents, including incidents that might facilitate subsequent efforts to harm the reliable operation of the bulk electric system.
• The Commission also issued a Notice of Proposed Rulemaking in Docket No. RM18-15-000 concerning revisions to the interlocking officer and director requirements in Parts 45 and 46 of its regulations. In particular, the Commission proposes to revise its regulations: (i) to reflect statutory changes to the circumstances in which an applicant who would otherwise require Commission authorization to hold an interlocking position need not do so; (ii) to clarify its position on late-filed applications and informational reports; (iii) to clarify that an interlock holder is not required to file a notice of change when merely changing positions within a holding company; (iv) to state that applicants do not need to list in their applications public utilities that do not have officers or directors; (v) with regard to public utilities owned by a natural person; and (vi) to remove a section containing definitions and phrases now rendered obsolete. Comments are due within 60 days after the publication of the NOPR in the Federal Register.
• The Commission granted the rehearing requested by, among others, the Delaware and Maryland state commissions in Docket No. EL15-95-000 concerning the allocation of costs associated with the Artificial Island transmission project in PJM. The Commission determined that it is unjust and unreasonable to apply PJM’s solution-based distribution factor (DFAX) cost allocation methodology for certain transmission facilities that address stability-related reliability issues, including the Artificial Island project. The Commission, therefore, established a paper hearing to develop additional information to help determine a just and reasonable ex ante cost allocation methodology for certain transmission facilities in PJM that address stability-related reliability issues.
• Finally, Commission staff provided a presentation concerning the Commission’s July 18, 2018, orders that: (i) established procedures in Order No. 849 in Docket No. RM18-11-000 to address the impact of income tax reductions resulting from the Tax Cuts and Jobs Act on natural gas pipeline rates, and (ii) dismissed requests for rehearing and clarification in Docket No. PL17-1-001 and provided guidance concerning its Revised Policy Statement on Treatment of Income Taxes.