Tag: Independent System Operators

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CFTC Proposes to Permit Private Rights of Action Against RTOs and ISOs and Persons Transacting Thereon
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FERC Issues Staff White Paper on Guidance Principles for Clean Power Plan Modeling; Suggests Stakeholder Engagement to Consider Reliability Issues

CFTC Proposes to Permit Private Rights of Action Against RTOs and ISOs and Persons Transacting Thereon

By Lawrence Patent

The Commodity Futures Trading Commission (CFTC) has proposed to amend its previous Order exempting specified electric energy transactions from certain provisions of the Commodity Exchange Act (CEA) and CFTC regulations and to permit a private right of action against regional transmission organizations (RTOs) and independent system operators (ISOs) and persons transacting thereon for alleged fraud and manipulation.  81 Fed. Reg. 30245 (May 16, 2016).  The CFTC stated that it did not intend in the original RTO/ISO Order, issued in 2013 (78 Fed. Reg. 19880 (April 2, 2013)), to grant exemption from the private right of action provided in CEA Section 22, but the Fifth Circuit held that this was the effect of the RTO/ISO Order in Aspire Commodities, L.P. v. GDF Suez Energy N.Am., Inc., No. 15-20125, 2016 WL 758689 (5th Cir. Feb. 25, 2016).  Therefore, were the CFTC to adopt the amendment to the RTO/ISO Order, it would in effect be overruling Aspire.  The types of transactions covered by the RTO/ISO Order include financial transmission rights, energy transactions, forward capacity transactions, and reserve or regulation transactions, and the RTO/ISO Order applies to any person or class of persons offering, entering into, rendering advice, or rendering other services with respect to these transactions.

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FERC Issues Staff White Paper on Guidance Principles for Clean Power Plan Modeling; Suggests Stakeholder Engagement to Consider Reliability Issues

On January 19, 2016, the Federal Energy Regulatory Commission (“FERC”) issued a Staff White Paper[1] outlining four guiding principles to assist transmission planning entities – including regional transmission organizations (“RTOs”), independent system operators (“ISOs”) and electric utilities – in analyzing the Clean Power Plan (“CPP”) promulgated by the U.S. Environmental Protection Agency (“EPA”).[2]  The CPP requires each state to demonstrate that it has considered electric system reliability issues in developing its state emissions reduction plan.  The EPA explained that one particularly effective way for states to make such a demonstration is by consulting with the relevant RTO, ISO, or other transmission planning entities and documenting this consultation process in their state plans.

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