MPUC Investigates Transmission Planning Standards Criteria

The Maine Public Utilities Commission (“MPUC”) has opened an investigation to review the transmission planning standards and reliability/needs assessment methodologies and assumptions used by Maine’s investor-owned transmission and distribution utilities to identify local transmission needs and the cost impacts of those methodologies.  The investigation will also explore the potential impact of newly proposed bulk electric system definitions on local transmission system planning and associated costs. 

In its December 20, 2011 Notice of Investigation, the MPUC explained that it has not reassessed the transmission and distribution components of rate base since a 1999 investigation that followed the adoption of Maine’s Electric Restructuring Act.  Since that time, policy changes have contributed “significant increases to the amount of transmission investment made in Maine and the greater New England region.”  Moreover, NERC recently drafted a revised definition of bulk electric system at FERC’s direction.  If that definition is adopted by NERC and FERC, the MPUC explained that the definition will create the need for additional upgrades to the local transmission network in Maine and will increase costs to Maine’s electricity consumers.  Further, because transmission lines below 69 kV and substation facilities do not require a Certificate of Public Convenience and Necessity, the MPUC is concerned about the possibility of a substantial build out of the transmission system that could increase customer costs without the MPUC first determining whether those facilities are in the public interest.

 As part of the investigation, Maine’s three investor-owned utilities have been directed to file preliminary reports by January 16, 2012, covering transmission planning and the identification of system needs.

Annual FERC Report on Enforcement Is Issued

Any FERC-regulated entity will benefit by perusing the FERC’s latest annual report on enforcement of its regulations.  The FERC 2011 Report on Enforcement (clicking link will download a PDF) is organized functionally by such categories as “significant audit matters,” “significant accounting matters,” “self-reports,” and more.  Specific FERC-regulated entities are named in the report, along with actions (if any) that FERC took in response to non-compliance by the entity.  FERC staff also prepared a presentation (PDF) to accompany the report.

Katie Gray Recognized by Maine Women Magazine

Katie Gray, an associate in Verrill Dana’s Energy Group, was the subject of a recent article in Maine Women that recognizes her emerging energy expertise in regulatory issues, including FERC issues.  The article, in an issue dedicated to emerging women leaders, is titled “Katie M. Gray: She’s the Lone Woman in Regulatory Hearings.”

New Life Breathed into Woodland Mill

In September 2010, International Grand Investment Corporation (IGIC) purchased the Woodland pulp mill in Washington County from Domtar Maine LLC.  Prior to the sale, the mill, now owned by IGIC subsidiary Woodland Pulp LLC, was not part of Domtar’s core business, and its future was uncertain.  Under IGIC’s ownership, the mill has a much more optimistic future.  Governor Baldacci recently visited the mill and met with the mill’s Director, Bert Martin.   

The mill currently employs approximately 300 people and expects to hire 10 more in early 2011. The mill is currently producing 1,200 metric tons of pulp a day, but Martin would like to ramp-up production to 1,400 metric tons per day.  The mill is looking at alternative products and investing in energy efficiency with state and federal funding.  According to Baldacci, the mill is the largest employer north of Bangor and the “lifeblood” Washington County.  In addition to the pulp production, there are significant hydroelectric generating assets associated with the mill, which supply power for the mill.  Surplus power is sold to New Brunswick Power.

Verrill Dana served as local counsel to IGIC in the purchase of the mill, with a team spearheaded by Mark Googins and Jim Palmer.  Verrill Dana attorneys Scott Anderson, Johanna Babb, Charlie Bacall, Kelly Boden, Molly Callaghan, Doug Currier, Katie Gray, Bill Harwood, Nora Healy, John Krampf, Christopher McLoon, Suzanne Meeker, and Al Raymond assisted Mark and Jim. Verrill Dana will continue to serve as counsel to IGIC with respect to the mill, including representation of the mill in ongoing FERC matters.

FERC Announces Modifications to Penalty Guidelines

The Federal Energy Regulatory Commission announced today that it has modified its Penalty Guidelines.  The Penalty Guidelines apply to civil penalties that FERC assesses for violations of the Federal Power Act or FERC’s regulations or requirements. 

The modifications include, among other things:

• False or misleading statements are violations only if the acts were intentional or in reckless disregard for the truth. 
• Organizations that have effective, but not completely compliant, compliance programs may be given partial compliance credit. 
• Mitigation credits for self-reports, cooperation, avoidance of evidentiary hearings, and acceptance of responsibility have been unbundled.

Read the FERC’s press release here.  FERC Chairman Wellinghoff and Commissioner Spitzer weighed in on the changes.

ISO New England Executive Compensation Upheld

The U.S. Court of Appeals’ D.C. Circuit recently upheld ISO New England’s 2009 executive compensation in the face of a challenge by the State of Connecticut.  In Blumenthal v. FERC, — F.3d —, 2010 WL 2794293, Connecticut challenged ISO New England’s executive compensation as too high, arguing that the process by which FERC approved the compensation levels was flawed.  In 2009, ISO New England executive compensation ranged from $984,000 for ISO New England’s President to $319,000 for the Vice President of Information Services.  The Court expressed sympathy for Connecticut, noting that Connecticut’s “concerns are not without some basis,” but it ultimately concluded that, based on the Court’s limited standard of review of FERC decisions, “we cannot say that FERC’s decision jumped the rails of reasonableness.”

Energy News Roundup: June 19-June 25

This week in the regional news roundup …

• FERC has approved the Penobscot River Restoration Trust’s plans (click to download a PDF image of the project) to remove the Veazie and Great Works dams and bypass the Howland dam, reopening hundreds of miles of waterways for migratory fish.  Verrill Dana’s Scott Anderson represents the Trust on this project.
• The city of Boston has plans to create an “Innovation District,” which would be home to clean-tech and green energy businesses along the South Boston Waterfront.
• E2Tech hosted a well-attended and educational ocean energy forum at the Portland Country Club, with presentations by Beth Nagusky (click to download Beth’s PowerPoint presentation) of the Governor’s Ocean Energy Task Force, John Ferland of Ocean Renewable Power Co., Bill Staby of Resolute Marine Energy, and Des Fitzgerald of Principle Power.  Verrill Dana’s Nora Healy and Katie Gray attended the forum. 
• Meanwhile, Irving Oil has discarded its exclusive right to conduct tidal power research in the Bay of Fundy, off of New Brunswick, but NB says there’s still a future for tidal power there.
• FERC has issued a Notice of Proposed Rulemaking that would address regional transmission planning and cost allocation in light of FERC’s Order 890 open access reforms.  The public may submit comments to FERC over the next two months.