On October 6, 2017, FERC accepted a tariff filing from ISO New England Inc. (“ISO-NE”) proposing updated calculations for various Forward Capacity Market input values, including Cost of New Entry (“CONE”), Net CONE, and Offer Review Trigger Price (“ORTP”).  As part of its order, FERC also approved ISO-NE’s choice of a simple cycle gas turbine as the reference technology for establishing CONE and Net CONE values—thereby replacing the combined cycle natural gas turbine that had been used as a reference technology by ISO-NE since 2014. Continue Reading FERC Accepts ISO-NE’s Updated CONE and Other Forward Capacity Market Values

On October 2, 2017, FERC issued notice of the September 29, 2017 Notice of Proposed Rulemaking (“NOPR”) from the United States Department of Energy (“DOE”) under section 403 of the Department of Energy Organization Act.  In the NOPR, DOE urges FERC to act quickly to enact rules requiring regional transmission organizations and independent system operators (“RTOs/ISOs”) to provide just and reasonable rates for “fuel-secure” generation units (see October 2, 2017 edition of the WER).  Shortly thereafter, on October 4, FERC staff issued a Request for Information, listing various questions for commenters to address in aiding the Commission to better understand the NOPR’s implications.  Commenting parties have until October 23, 2017 to file initial comments and until November 7, 2017 to file reply comments.  In recent testimony before the Senate’s Committee on Energy and Natural Resources, FERC General Counsel, James Danly, confirmed that FERC intends to review the comments and take final action within 60 days of the NOPR’s publication, as requested by the DOE. Continue Reading FERC Sets Comment Deadline and Poses Questions for Commenters on DOE Proposed Rule

On September 29, 2017, United States Department of Energy (“DOE”) Secretary Rick Perry took the unusual step of proposing a rule for final action by the Federal Energy Regulatory Commission (“FERC”).  Secretary Perry’s initiative, a DOE-issued Notice of Proposed Rulemaking (“NOPR”) under section 403 of the Department of Energy Organization Act (“DOE Act”) (42 U.S.C. § 7173), urges FERC to act extremely quickly to enact rules requiring regional transmission organizations and independent system operators (“RTOs/ISOs”) to provide just and reasonable rates for “fuel-secure” generation units (e.g., coal and nuclear units).  See Grid Resiliency Pricing Rule, Docket No. RM17-3-000, at 4–5 (Sept. 29, 2017) (“DOE NOPR”).  Continue Reading Department of Energy Proposes FERC-Authorized Full Cost Recovery for Certain Nuclear and Coal Power Generation

On September 7, 2017, FERC rejected, without prejudice, Midcontinent Independent System Operator, Inc.’s (“MISO”) proposed tariff revisions regarding its generator interconnection process.  FERC found that MISO did not provide sufficient support in its filing to demonstrate that the reductions for its study procedures timeline are just and reasonable. Continue Reading FERC Rejects Revisions to MISO’s Generator Interconnection Review Process Due to Lack of Justification

On July 25, 2017, two weeks after an Illinois federal judge issued a similar ruling, the U.S. District Court of the Southern District of New York (“District Court”) issued an order dismissing challenges to a New York state “zero emission credit” (“ZEC”) program established by the New York Public Service Commission (“NYPSC”).  As with the Illinois court’s decision regarding the Illinois ZEC program (see July 25, 2017 edition of the WER), the District Court found the New York ZEC program constitutional and determined that the challengers lacked a private right of action to challenge the New York ZEC program on preemption and dormant commerce clause grounds.  Nevertheless, the District Court reached, and rejected, the merits of those challenges. On August 24, 2017 the case was appealed to the U.S. Court of Appeals for the Second Circuit.  Continue Reading Federal District Court Dismisses Challenges to New York ZEC Program

On July 14, 2017, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) vacated in part the Federal Energy Regulatory Commission’s (“FERC”) orders approving a Joint Dispatch Agreement (“JDA”) between Duke Energy Carolinas, LLC (“Duke”) and Progress Energy Carolinas, Inc. (“Progress”).  Specifically, the D.C. Circuit found that FERC failed to articulate a satisfactory explanation for approving the provisions of the JDA that provide for disparate treatment of wholesale ratepayers.  As discussed below, the D.C. Circuit remanded the matter to FERC, directing it to reconsider the relevant JDA provisions and provide a reasoned explanation for its approval of the JDA.

Continue Reading D.C. Circuit Remands Duke-Progress Joint Dispatch Agreement for Disparate Treatment of Wholesale Ratepayers

On July 14, 2017, the United States District Court for the Northern District of Illinois, Eastern Division (“District Court”), issued a memorandum opinion and order dismissing various challenges to an Illinois “zero emission credit” (“ZEC”) program passed into law at the end of 2016 (“ZEC Program”).  After finding that the plaintiffs largely lacked standing to bring their claims, the District Court nonetheless reached the merits of, and rejected, the plaintiffs’ preemption, equal protection, and dormant commerce clause challenges to the ZEC Program.  Three days after its release, the ruling was appealed to the U.S. Court of Appeals for the Seventh Circuit (“Seventh Circuit”). Continue Reading Federal District Court’s Standing Analysis and Dismissal of Illinois ZEC Challenges Heads to Court of Appeals

On June 28, 2017, the United States Court of Appeals for the Second Circuit (“Second Circuit”) affirmed a district court’s dismissal of challenges to Connecticut’s renewable energy solicitation program and Renewable Portfolio Standard (“RPS”) law.  The Second Circuit rejected arguments from the plaintiff-appellant, Allco Finance Limited (“Allco”), that the solicitation program was preempted by the Federal Power Act (“FPA”) and the Public Utility Regulatory Policies Act of 1978 (“PURPA”) and that the RPS law unduly burdens interstate commerce, in violation of the “dormant commerce clause.” Continue Reading Second Circuit Upholds Connecticut’s Renewables Solicitation Program and RPS Against Preemption, Dormant Commerce Clause Challenges

On May 19, 2017, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued a decision in which it held in part that FERC erred by determining that it lacked authority under the Federal Power Act (“FPA”) to order a non-jurisdictional entity to repay refunds that it should not have received.  The D.C. Circuit made clear that although the FPA prohibits FERC from ordering a non-jurisdictional entity to provide a refund to another entity, FPA Section 309 vests FERC with broad remedial authority, including authority to grant recoupment when it is justified and FERC otherwise has jurisdiction over the disputed funds. Continue Reading D.C. Circuit Holds that FERC has Authority to Order BPA to Forfeit Inappropriate Refunds

On March 28, 2017, Dynegy Marketing and Trade, LLC and Illinois Power Marketing Company (collectively, the “Complainants”) filed a complaint against the Midcontinent Independent System Operator, Inc. (“MISO”) alleging that MISO has failed to comply with the terms of its Open Access Transmission, Energy and Operating Reserve Markets Tariff (“MISO Tariff”) with respect to resources “pseudo-tied” into PJM Interconnection, L.L.C. (“PJM”). According to the Complainants, MISO has been assessing congestion and losses charges to MISO resources pseudo-tied into PJM using “Financial Schedules” in a manner that “blatantly contravenes the MISO Tariff and that results in the unjust, unreasonable, and unduly discriminatory imposition of duplicative charges.” The Complainants request that the Commission order MISO to immediately cease and desist from imposing such charges and that MISO “refund duplicative congestion and losses charges unlawfully imposed.” Continue Reading Dynegy and IPM Allege MISO Failed to Comply with Own Tariff Regarding Resources Pseudo-Tied into PJM