More FERC Federalism: D.C. Circuit Affirms FERC’s Jurisdiction Again – New England Power Generators Ass’n v. FERC

By Kenneth Irvin, Gregory Lawrence, Natalie Mitchell, and Katrina Olsen

On July 8, 2014, the United States Court of Appeals for the District of Columbia Circuit denied the petition for review filed by New England Power Generators Association, Inc. and other market participants’ over four Federal Energy Regulatory Commission orders related to the Independent System Operator-New England Forward Capacity Market. The D.C. Circuit held that the orders on review fell within FERC’s statutory ratemaking authority conferred by the Federal Power Act because FERC’s ratemaking authority extends to parameters of capacity markets related to the price of capacity.  Additionally, the court deferred to the Commission to craft mitigation measures responsive to the needs of the ISO-NE FCM because the Commission properly balanced competing interests and based its decision on substantial evidence.  read more

Posted in FERC, Oil & Gas, Power, Regulation

FERC Versus State Authorities: Supreme Court Agrees to Review ONEOK v. Learjet

By Kenneth Irvin, Terence Healey, Natalie Mitchell, and Christopher Polito

On July 1, 2014, the U.S. Supreme Court granted a petition to hear an appeal by several companies contending that antitrust claims filed against them under state law over alleged manipulation of gas prices during the western energy crisis from 2000 to 2002 were precluded by the Natural Gas Act (“NGA”). The Court’s decision to hear this appeal marks an important development in the preemptive effect of the NGA, and may potentially affect the scope of the Federal Energy Regulatory Commission’s (“FERC”) enforcement authority versus state authorities.  read more

Posted in FERC, Oil & Gas, Power, Regulation

ACER 2014 REMIT Report Confirms Continued Inquiries into Market Conduct

By Doron Ezickson and Adam Topping

ACER calls for substantial funding increase to enable more aggressive monitoring and enforcement efforts in coordination with national regulators.

On Tuesday 10 June 2014, the Agency for the Cooperation of Energy Regulators (“ACER”) published its annual report (the “REMIT Report”) in connection with the Regulation on Wholesale Energy Markets Integrity and Transparency (“REMIT”).
The REMIT Report confirms that, for the remainder of 2014 and 2015, ACER will be focused on continuing and expanding its monitoring and investigation of market abuse, completing the implementation process for REMIT, launching the framework for trade reporting and increasing transparency in the gas market.  read more

Posted in Commodity Trading, Oil & Gas, Power, Regulation, REMIT

Update Regarding D.C. Circuit’s Demand Response Ruling

By Kenneth Irvin, Gregory Lawrence, Sohair Aguirre and Natalie Mitchell

There have been several notable developments in the Electric Power Supply Ass’n v. FERC proceeding, and in other, related proceedings since the firm’s last memo regarding the D.C. Circuit’s demand response ruling. On June 11, 2014, FERC announced that it will seek en banc review of the D.C. Circuit’s May 23, 2014 decision striking down Order No. 745, FERC’s Demand Response regulation.  In making this decision, Chairman LaFleur sought the input of other FERC Commissioners, including Commissioner Clark.  In conjunction with FERC’s announcement that it would seek en banc review, Commissioner Clark released a statement concurring with the D.C. Circuit’s decision with regards to both jurisdiction and the merits. In addition, on June 11, 2014, FERC issued a notice in the FirstEnergy Service Co. v. PJM Interconnection, L.L.C. matter, extending the time for answers, interventions, and protests “to, on, or before 30 days after the submission of an amended complaint” from FirstEnergy. Also, a federal district court judge in Massachusetts refused to stay two proceedings (FERC v. Lincoln Paper & Tissue, LLC and FERC v. Silkman) involving demand response providers.  read more

Posted in FERC, Oil & Gas, Power, Regulation

EPA Proposes First Carbon Emissions Limits for Power Plants

By Athena Eastwood, Kenneth Irvin, Gregory Lawrence, Douglas Fischer and Neal Kumar

On June 2, 2014, the U.S. Environmental Protection Agency announced its Clean Power Plan, which would impose the first federal limits on carbon-dioxide (CO2) emissions from power plants in the United States.  The proposed rules, which the EPA published pursuant to Section 111(d) of the Clean Air Act, aim to cut CO2 emissions from power plants by approximately 30% by 2030, using 2005 emissions levels as a baseline.  The Clean Power Plan is a central component of President Obama’s Climate Action Plan, which he announced in June 2013.  read more

Posted in Emissions, EPA, Power, Regulation, Renewables

D.C. Circuit Vacates FERC’s Wholesale Demand Response Compensation Rule Because It “Goes Too Far”

By Kenneth Irvin, Gregory Lawrence, Sohair Aguirre and Natalie Mitchell

On May 23, 2014, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”), in a 2-1 decision, vacated in its entirety and remanded Order No. 745 of the Federal Energy Regulatory Commission (“FERC” or the “Commission”).  FERC Order No. 745 requires independent system operators and regional transmission organizations (“ISOs/RTOs”) to compensate, in certain circumstances, demand response providers at market prices, i.e., locational marginal price (“LMP”).  read more

Posted in FERC, Oil & Gas, Power, Regulation

FERC Orders Evidentiary Hearing for Alleged Market Manipulation by BP

By Christopher Polito and Paul Pantano

On May 15, 2014, the Federal Energy Regulatory Commission (FERC) issued an order setting an evidentiary hearing before an administrative law judge (ALJ) to determine whether BP America Inc., BP Corporation North America Inc., BP America Production Company, and BP Energy Company (collectively, BP) violated FERC’s prohibition on market manipulation in section 1c.1 of FERC’s regulations and section 4A of the Natural Gas Act.  In an August 2013 report, FERC’s Office of Enforcement (OE) alleged that BP manipulated the next-day, fixed-price natural gas market at the Houston Ship Channel (HSC) between September and November 2008.  BP denied these allegations and requested that FERC dismiss the proceeding.  In the May 15, 2014 order, FERC rejected BP’s threshold legal objections regarding the FERC’s authority to proceed and set the matter for an evidentiary hearing.  read more

Posted in Commodity Trading, Enforcement and Investigations, FERC, Oil & Gas, Regulation

SAVE THE DATE: 2014 Energy & Commodities Regulation, Compliance and Enforcement Conference

Cadwalader, Wickersham & Taft LLP will be hosting its annual Energy & Commodities Conference in Houston, Texas. The program will feature informative presentations and panel discussions on the evolving regulatory and enforcement issues affecting the U.S. and international energy and commodities markets.

As the industry continues to face sweeping changes, Cadwalader attorneys, distinguished government and self-regulatory organization officials, and notable industry leaders will offer timely insights on pressing regulatory, compliance and enforcement issues and trends.

Wednesday, October 8, 2014

The Houstonian Hotel, Club & Spa
111 North Post Oak Lane
Houston, Texas

New York CLE credit will be offered. Additional accreditation is pending.
Please note this event is closed to members of the press. Additional information to follow.
If you have any questions, please contact Christine Judge at

Posted in CFTC, Commodity Trading, CSAPR, Dodd-Frank, DOJ, EMIR, Emissions, Enforcement and Investigations, EPA, ERCOT, Events, FERC, FTC, MiFID, MiFIR, Mining/Metals, Oil & Gas, Power, PUCT, Regulation, Renewables, SEC

Significant Upwind Impact: The Supreme Court Upholds Cross-State Air Pollution Rule

By Athena Eastwood, Kenneth Irvin, Gregory Lawrence, David Williams, Sohair Aguirre, and Sarah Tucker.

On Tuesday, April 29, 2014, the U.S. Supreme Court upheld the U.S. Environmental Protection Agency’s (“EPA”) Cross-State Air Pollution Rule (“CSAPR”).  EPA v. EME Homer City Generation, L.P., No. 12-1182.  In a 6-2 decision, the majority held that: (1) the Clean Air Act (“CAA”) does not require that states be given a second opportunity to file a state implementation plan (“SIP”) after EPA has quantified the state’s interstate pollution obligations under the Good Neighbor Provision of the CAA, and (2) that EPA’s cost-effective allocation of emissions reductions among upwind states is a permissible, workable, and equitable interpretation of the Good Neighbor Provision.i The decision will have a significant impact on utilities, electrical generators, coal companies, and other industries in upwind states, who will be subject to the emissions limitations imposed by the EPA.  And there is more to come.  read more

Posted in Cases, CSAPR, Emissions, Energy Infrastructure, EPA, Power, Regulation, Renewables

EMIR Clearing and Margin Consultation Paper Proposes Rules Which Will Impose Substantial Trading Costs on Market Participants

By Doron Ezickson, Nick Shiren, Assia Damianova, and Adam Topping

The European Market Infrastructure Regulation (“EMIR”) imposes a number of risk mitigation techniques on counterparties to uncleared swaps.  Some of those involve much tighter operational procedures (such as the rules for timely confirmations, portfolio reconciliation and dispute resolution).  However, the most significant increase in the costs of trading over-the-counter (“OTC”) derivatives will arise as a result of the rules on margin and eligible collateral for such trades.  New legal and risk issues will need to be addressed in the running of what will become multiple collateral posting flows: for initial margin (“IM”), for variation margin (“VM”), possibly with silos for different currencies and different jurisdictions and separately, for legacy trades pre-dating the new rules (each separate from cleared trades).  read more

Posted in Commodity Trading, EMIR, Oil & Gas, Power, Regulation