Energy Law Alert: FERC Directs NERC To Deregister South Louisiana Electric Cooperative As Distribution Provider And Load Serving Entity

by Stinson Leonard Street

On Thursday, the Federal Energy Regulatory Commission resolved a two-year-old dispute concerning whether South Louisiana Electric Cooperative was appropriately listed on the NERC Compliance Registry and therefore subject to compliance with certain NERC Reliability Standards.

In an order highly qualified by the facts of the particular interconnection that South Louisiana had to higher voltage facilities owned by another entity, the Commission granted South Louisiana's appeal of the NERC determination, and directed NERC to remove South Louisiana as both a Distribution Provider and a Load Serving Entity registrant. The order provides guidance on how to apply NERC's Statement of Compliance Registry Criteria and could result in some entities with similar interconnection characteristics as South Louisiana having colorable claims to deregister as well.

While NERC jurisdiction vested though Section 215 of the Federal Power Act does permit registration of entities that simply use the bulk electric system (and do not own or operate any facilities of their own that qualify as bulk electric system assets), there are important limitations tested in this case. At the center of FERC's ruling was the fact that in the Statement of Compliance Registry Criteria, to be registered as a Distribution Provider or a Load Serving Entity, an entity must have greater than 25 MW of peak load AND be directly connected to the Bulk Power System (>100kV). South Louisiana prevailed with the use of detailed interconnection diagrams and explanation that showed no such direct interconnection existed.

Specifically, the Commission was persuaded by several facts that demonstrated a radial, unidirectional power flow. First, while two 230-115kV transformers existed at the point of interconnection, a normally open switch on the third parties' 115 kV bus prevents power from flowing over one transformer. Second, NERC failed to show that the interconnection configuration could deliver power from South Louisiana to the bulk electric system or experience network (looped) flow though the interconnection. And finally, FERC rejected NERC's contentions that the presence of protection schemes on South Louisiana's 115 kV circuit switches that are designed to protect their own radial facilities necessitates that the entity maintain a registration.

South Louisiana had to endure a long path of challenge, first through the SERC regional entity, then through unsuccessful appeal to the NERC Board of Trustees Compliance Committee, and finally to the FERC. Hopefully, this guidance by FERC will enable other similarly situated entities to present comparable evidence to the regional entity in support of a request to deregister, and that request will be accommodated moving forward. To date, only a few entities have successfully deregistered – in whole or in part – based on a technical demonstration of specific facts.

While South Louisiana raised the broader issue concerning whether an entity that owns only local distribution facilities can be required to comply with NERC Reliability Standards, the Commission declined to base its determination on that argument. It should be noted, however, that requests for rehearing of the Commission's order on the definition of the bulk electric system are pending in another docket, and a substantial record regarding the local distribution jurisdiction argument has been established in that case. It is unlikely that the Commission will reverse its prior determinations, but if not, the issue is squarely framed for an appeal.

Go here for a copy of the South Louisiana order.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Stinson Leonard Street | Attorney Advertising

Written by:

Stinson Leonard Street

Stinson Leonard Street on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.