Category

FERC

22 February 2019

Trailblazer Pipeline Company LLC Reinforces FERC Income Tax Allowance Policy But Punts Final Determinations on Other Partnership Taxation Matters

On February 21, 2019, the Federal Energy Regulatory Commission (FERC) issued Trailblazer Pipeline Company LLC (“Trailblazer”), FERC’s first order addressing how FERC applies its Revised Income Tax Allowance Policy Statement, as further revised on rehearing (collectively “Revised Policy Statement”), to a pipeline organized as a pass-through partnership that is not a master limited partnership (“MLP”) in a Natural Gas Act (“NGA”) section 4 rate case proceeding.  FERC issued the Revised Policy Statement in response to the U.S. Court of Appeals for the D.C. Circuit’s (“D.C. Circuit”) decision in United Airlines, Inc. v. FERC (“United Airlines”), which found that FERC could not permit a specific MLP pipeline to recover an income tax allowance in its rates without further explaining why this did not result in the MLP’s investors “double recovering” their income tax costs, based on a concern that the investors’ pre-tax return on equity (“ROE”) also provided such compensation when calculated using the discounted cash flow (“DCF”) methodology.  United Airlines did not consider other types of pass-through entities, such as non-publicly traded partnerships, or alternative methodologies to calculate ROE and the Revised Policy Statement did not address them directly.  (more…)

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24 January 2019

Energy Enforcement Update

In our first enforcement update for 2019, we cover a range of issues (including some news from the end of 2018):

  • FERC opens investigations into rates charged by three interstate natural gas companies;
  • Powhatan and Chen file opening appellate brief;
  • Judge suspends CFTC case against Kraft because of the partial government shutdown;
  • FERC increases maximum civil penalties for violations;
  • FERC approves settlement between FERC Enforcement and Algonquin;
  • Judge rules that FERC action against Silkman/CES is not time-barred by statute of limitations; and
  • Judge finds CFTC fails to meet burden on manipulation claims against DRW and Wilson.

(more…)

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17 January 2019

2019: Top Five Things to Watch in the FERC-Regulated Pipeline Space

1 – Make-up of FERC Commissioners – FERC’s leadership already was uncertain heading into 2019 before the tragic passing of Commissioner and former Chairman Kevin McIntyre on January 3, 2019. Prior to his passing, the Commission achieved a full complement of five commissioners in December 2018, following the confirmation of Bernard McNamee who filled a spot made vacant by the August 2018 resignation of former Commissioner Robert Powelson. Commissioner McNamee is facing calls to recuse himself from certain FERC electric generation proceedings given positions he took on grid resiliency in his prior position at the Department of Energy, and he is certain to be scrutinized by environmental groups for positions he is anticipated to take on pipeline matters as a FERC commissioner.  (more…)

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16 January 2019

Implementation of Amended Section 203(a)(1)(B) of the Federal Power Act

On November 15, 2018, the Federal Energy Regulatory Commission (FERC) issued a rulemaking to revise its regulations relating to mergers or consolidations by a public utility.  See Implementation of Amended Section 203(a)(1)(B) of the Federal Power Act, 165 FERC ¶ 61,091 (2018).  These regulations would implement a law signed on September 28, 2018 establishing a $10 million threshold on transactions that will be subject to FERC’s review and authorization under section 203(a)(1)(B) of the Federal Power Act (FPA).  Previously, there was no dollar value threshold for FERC review of public utility “merge or consolidate” transactions under FPA section 203(a)(1)(B).  See 16 U.S.C. § 824b(a)(1)(B).  (more…)

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27 November 2018

Energy Enforcement Update

This week’s enforcement update covers:

  • FERC issues 2018 Report on Enforcement showing continued focus on fraud and market manipulation;
  • CFTC Enforcement Director discusses Enforcement trends and CFTC releases Annual Report on enforcement;
  • CFTC orders Commerzbank AG to pay $12 million for swap dealing violations and misleading statements to the CFTC;
  • Former commodities trading executive arrested for scheme to defraud employer by hiding trading losses; and
  • CFTC and Kraft file oppositions to motions for summary judgment.

(more…)

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18 October 2018

Energy Enforcement Update

This week’s enforcement update covers:

  • CFTC announces Insider Trading & Information Protection Task Force;
  • FERC approves settlement with Wheelabrator Technologies Inc. related to capacity payments;
  • Second Circuit upholds New York zero emission credits for nuclear facilities;
  • Petrobras pays over $1.7 billion to settle corruption charges with U.S. and Brazilian authorities;
  • Judge denies Powhatan and Chen motion to dismiss on statute of limitations grounds;
  • CFTC finds Mizuho Bank, Ltd. engaged in spoofing of Treasury futures and Eurodollar futures;
  • CFTC finds that proprietary trading firm Geneva Trading USA, LLC engaged in spoofing;
  • FERC Enforcement requests that Commission vacate Order to Show Cause to Footprint; and
  • CFTC orders futures trader and trading firm to pay $2.3 million in penalties for spoofing and manipulative scheme.

(more…)

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17 September 2018

Energy Enforcement Update

This week’s enforcement update covers:

  • Commodity Trading Adviser (CTA) violation settled with CFTC;
  • CFTC and Kraft file motions for summary judgment;
  • CFTC files 12 enforcement actions addressing registration, position limits, recordkeeping, supervision and reporting;
  • Seventh Circuit upholds Illinois zero emissions credits for nuclear facilities;
  • Judge denies class action lawsuit alleging antitrust violations in New England gas market;
  • CFTC Staff issues report on impact of U.S. tight oil on NYMEX WTI futures contract;
  • CFTC orders BNP Paribas to pay $90 million penalty for attempted manipulation and false reporting of U.S. Dollar ISDAFIX benchmark swap rates; and
  • FERC issues notice of intent to revoke MBR authority to five entities for failure to file EQRs.

(more…)

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30 July 2018

Energy Enforcement Update

This week’s enforcement update covers:

  • FERC issues Order Approving ENPM Stipulation and Consent Agreement;
  • Footprint Elects De Novo Review in FERC Show Cause Proceeding;
  • CFTC Announces Its Largest Ever Whistleblower Award of Approximately $30 Million, and First Award to a Foreign Whistleblower;
  • CFTC Staff Issues Research Report on Sharp Price Movements in the Commodity Futures Markets
  • SEC and CFTC Announce Approval of New MOU

(more…)

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28 June 2018

Lucia v. SEC: Implications for FERC ALJs

In Lucia v. Securities and Exchange Commission, the Supreme Court held 7-2 that Securities and Exchange Commission (“SEC”) administrative law judges (“ALJs”) are “officers of the United States” subject to the Constitution’s appointments clause, rather than employees.  The June 21, 2018 opinion for the Court was by Justice Kagan, and has implications for ALJs at the Federal Energy Regulatory Commission (“FERC”). (more…)

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25 June 2018

Energy Enforcement Update

This week’s enforcement update covers:

  • FERC issues Order to Show Cause to Footprint for alleged tariff violations and submission of false information;
  • The Supreme Court denies TOTAL petition for writ of certiorari;
  • FERC settles with Duke Energy regarding alleged violation of FERC market behavior rule on communications;
  • CFTC orders Société Générale S.A. to pay $475 million penalty to resolve charges of alleged LIBOR and Euribor manipulation; and
  • U.S. Department of Justice announces new policy on coordination of corporate penalties.

(more…)

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