19 May 2017

Energy Enforcement Update

This week’s Enforcement Update covers:

  • Senate Energy & Natural Resources Committee to consider FERC nominees;
  • Ninth Circuit affirms dismissal of RICO class action against JPMVEC;
  • FERC to host technical conference on developments in natural gas index liquidity and transparency; and
  • Plaintiffs appeal dismissal of class action against TOTAL.

Senate Committee to Consider FERC nominees.  On May 25, the Senate Committee on Energy & Natural Resources will consider FERC nominees Neil Chatterjee of Kentucky and Robert Powelson of Pennsylvania.  The Committee will also consider the nomination of Dan Brouillette of Texas to be Deputy Secretary of Energy.  The hearing will be webcast live on the Committee’s website: https://www.energy.senate.gov/public/index.cfm/hearings-and-business-meetings?ID=268CDE11-103F-44FF-BCA2-322F34B68EB3

Ninth Circuit affirms dismissal of RICO class action against JPMVEC.  On May 12, the Ninth Circuit issued an unpublished per curiam opinion affirming the dismissal of a class action against J.P. Morgan Ventures Energy Corporation (JPMVEC) for alleged manipulation of the rates in California’s wholesale electricity market.  The Ninth Circuit affirmed the district court’s October 2015 decision, ruling that the filed rate doctrine bars RICO claims arising from alleged manipulation involving rates set by FERC.  According to the Ninth Circuit, “Try as they might to distinguish their claim for relief from actions we have barred in the past, Plaintiffs cannot escape the fact that they—like those who have come before them—fundamentally allege that the FERC-approved electricity rates in California’s wholesale market were, for a time, too high.”  The Ninth Circuit concluded that its precedents make clear that the only avenue for such a complaint is with FERC.

FERC to host June 29 technical conference on developments in natural gas index liquidity and transparency.  On June 29, FERC will host a technical conference to explore the state of liquidity in the physical natural gas markets, current trends in physical natural gas trading and price reporting, and how the use of natural gas indices have evolved over time.  FERC is seeking to understand the industry’s views on the current level of confidence in natural gas indices and price formation, and whether/how to improve natural gas market liquidity and price reporting.  During the technical conference, FERC Staff plans to discuss these issues with buyers and sellers of physical natural gas, natural gas pipelines, ISO/RTOs or public utilities that use natural gas indices in their tariffs, market monitors, index developers, energy exchanges, academics and market experts.  A detailed agenda will be issued prior to the conference.

Plaintiffs appeal dismissal of class action against TOTAL.  On April 24, class action plaintiffs Alan Harry, Levante Capital, LLC, and Public Utility District No. 1 of Clark County, Washington (d/b/a Clark Public Utilities) filed an appeal to the U.S. Court of Appeals for the Second Circuit of the district court’s ruling dismissing the class action plaintiffs’ case against TOTAL.  As we previously reported, on March 27, Judge Koeltl of the U.S. District Court for the Southern District of New York issued an order dismissing the class action plaintiffs’ case against TOTAL for alleged natural gas market manipulation.  Judge Koeltl ruled that the class action complaint did not plead facts sufficient to allow the court to draw a reasonable inference that the plaintiffs suffered any economic injury as a result of TOTAL’s alleged manipulation of physical natural gas monthly index prices at certain regional hubs.  The appeal has been docketed in the Second Circuit as Case No. 17-01199.