On December 5, 2017, FERC approved a trio of proposed revisions to the Open Access Transmission, Energy, and Operating Reserve Markets Tariff (“Tariff”) of the Midcontinent Independent System Operator, Inc. (“MISO”).  These revisions all pertained to MISO’s Competitive Developer Selection Process, memorialized in Tariff Attachment FF, which sets out the process for identifying certain transmission facilities within a regional transmission project as well as qualified developers to construct the facilities.  FERC approved the proposed revisions after finding that they would improve MISO’s Competitive Developer Selection Process and make it more efficient. Continue Reading FERC Approves MISO Tariff Revisions Related to its Competitive Developer Selection Process

On November 17, 2017, FERC conditionally accepted a proposal filed by the PJM Interconnection, LLC (“PJM”) to establish pseudo-tie requirements for new external resources desiring to participate in PJM’s forward capacity auction, as well as a transition period to allow existing “pseudo-tie” resources to comply with the new requirements.  PJM’s proposal was given a May 9, 2017 effective date, provided that it submits further compliance filings addressing FERC’s concerns in its order. Continue Reading FERC Conditionally Accepts PJM’s Pseudo-Tie Requirements for External Resources Participating in Forward Capacity Auctions

On November 15, 2017, PJM Interconnection LLC (“PJM”) released two proposals to modify how Locational Marginal Prices (“LMPs”) are formed in its wholesale energy market and to enhance compensation for resources providing essential grid services during “shortage” periods.  The LMP proposal seeks to enhance system reliability by expanding the eligibility criteria for setting wholesale energy market prices in the PJM footprint.  Practically speaking, this proposal will allow a wider variety of energy resources, notably less economically flexible generating units such as coal and nuclear generators, to set LMPs and increase their revenue recovery prospects.  Along with the U.S. Department of Energy’s Notice of Proposed Rulemaking currently before FERC (see October 2, 2017 edition of the WER), PJM’s dual proposals represent the latest developments in an ongoing national discussion about whether, and how, organized electricity markets can play a role in ensuring fuel diversity and system reliability through pricing mechanisms. Continue Reading PJM Proposes Price Formation and Shortage Pricing Reforms to Increase Compensation to Generators Providing Reliability Services

On November 9, 2017, FERC issued an order conditionally accepting proposed revisions to Attachment AE of the Southwest Power Pool, Inc. (“SPP”) Open Access Transmission Tariff (“Tariff”).  SPP’s proposed Tariff revisions modify SPP’s so-called “scarcity pricing” methodology in response to FERC Order No. 825.  Under this newly-approved methodology, SPP will institute variable demand curves that will more accurately reflect the value of resources during times of shortages, thereby reducing price signal distortions that can reduce incentives for resources to respond to dispatch signals.  In its order conditionally accepting the Tariff revisions, FERC directed SPP to make a compliance filing to show that certain provisions be placed in SPP’s Tariff as opposed to its Marketplace Protocols. Continue Reading FERC Conditionally Accepts SPP Tariff Revisions to Implement Contingency and Regulation Reserve Demand Curves

On October 31, 2017, FERC accepted proposed revisions to the ISO New England, Inc. (“ISO-NE”) Transmission, Markets and Services Tariff (“Tariff”) to incorporate a methodology for interconnection request cluster studies, which were filed by ISO-NE, the New England Power Pool Participants Committee, and the Participating Transmission Owners Administrative Committee on behalf of the Participating Transmission Owners (collectively, the “Filing Parties”).  Under the new revisions, which became effective on November 1, 2017, interconnection requests for resources located in the same electrical part of the ISO-NE system and that meet certain other criteria, will be studied together, as opposed to individually.  As part of the stakeholder discussions preceding the filing, ISO-NE developed a strategic infrastructure study to identify the transmission upgrades needed to interconnect remotely-located wind resources in Maine, which will serve as the first cluster study to proceed under the newly-accepted methodology. Continue Reading FERC Accepts ISO-NE Methodology for Interconnection Cluster Studies

On October 25, 2017, FERC issued an order explaining the market consequences when a resource loses certain participation rights in the New York Intendent System Operator, Inc. (“NYISO”) Installed Capacity (“ICAP”) market.  The order on clarification, which was requested by NRG Power Marketing LLC and GenON Energy Management, LLC (collectively, “NRG”), followed a January 27, 2017 decision in which FERC largely accepted NYISO’s proposed revisions to its Market Administration and Control Area Services Tariff (“Tariff”) to correct a pricing inefficiency in its ICAP market design.  As FERC clarified in this most recent order, when a capacity resource loses its ability to participate in NYISO’s ICAP market, certain benefits or discounts tied to that participation ability—here, a so-called “Locality Exchange Factor”—fall away. Continue Reading FERC Clarifies Impacts from Lost Capacity Market Rights in NYISO

On October 13, 2017, a group of transmission owners in the Southwest Power Pool, Inc. (“SPP”) filed a complaint with FERC under Section 206 of the Federal Power Act alleging that SPP’s Open Access Transmission Tariff (“Tariff”) is unjust and unreasonable because it lacks cost-shifting protections when new transmission owners join existing SPP transmission pricing zones.  To correct this alleged “loophole,” the complainants propose a new rate schedule for new transmission owners that are placed into existing zones. Continue Reading SPP Transmission Owners File FERC Complaint Over Alleged Cost Shifting

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 27, 2017, FERC issued an order granting a request from the New York Independent System Operator, Inc. (“NYISO”) to waive certain sections of its Market Administration and Control Area Services Tariff (“Tariff”) as they pertain to particular transmission shortage cost provisions.  NYISO submitted the waiver request in January 2017 to allow time to correct certain discrepancies with its Tariff and software used to resolve transmission constraints.  Continue Reading FERC Grants NYISO Waiver Request on Transmission Shortage Cost Provisions While NYISO Resolves Inconsistencies