On March 9, 2018, a divided FERC approved the Competitive Auctions with Sponsored Policy Resources (“CASPR”) proposal submitted by the ISO New England Inc. (“ISO-NE”). Developed through an extensive stakeholder process that began in 2016, CASPR was promoted by ISO-NE as a mechanism to integrate out-of-market state resource policies that might otherwise suppress capacity market prices in ISO-NE’s capacity market. A divided FERC approved the proposal as a just and reasonable accommodation of state policies, with Commissioner Powelson dissenting, arguing that the proposal dilutes market signals and “threatens the viability” of ISO-NE’s capacity market. Commissioners LaFleur and Glick concurred with the outcome, but criticized the order’s guidance on adapting markets to state energy policies, and reliance on minimum offer pricing rules (“MOPRs”) as the “standard solution” to achieve that end. Continue Reading A Divided FERC Approves ISO-NE’s Capacity Market Changes to Accommodate State Subsidized Resources
In a decision issued on March 6, 2018, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit” or the court) upheld a series of FERC orders declining to direct Entergy Services Inc. (“Entergy”) to pay refunds for previously misallocated capacity costs. The D.C. Circuit found that FERC adequately explained its reasoning and clarified that—contrary to previous assertions—the Commission has no general policy of ordering refunds in cases involving flawed rate design, and that it had adequately explained that such a refund order would be inequitable in this instance. Continue Reading D.C. Circuit Affirms FERC Refund Denial in Louisiana PSC Cost Allocation Challenge
In dual orders issued on February 28, 2018, FERC affirmed that the current resource adequacy requirements of the Midcontinent Independent System Operator, Inc. (“MISO”) remain just and reasonable, and simultaneously rejected an earlier MISO filing that would have imposed additional resource adequacy program changes. The rejection of MISO’s earlier filing came after the United States Court of Appeals for the D.C. Circuit (“D.C. Circuit”) granted FERC a voluntary remand to reconsider its previous conditional acceptance in light of NRG Power Marketing, LLC. v. FERC (“NRG”). Continue Reading FERC Reaffirms Current MISO Resource Adequacy Program, Cites Recent D.C. Circuit Decision in Separate Rejection of Other Resource Adequacy Proposals on Remand
On February 14, 2018, FERC accepted a suite of system functionality enhancements to the Energy Imbalance Market (“EIM”) proposed by the California Independent System Operator Corporation (“CAISO”). The enhancements, which became effective the following day, included automated matching of import/export schedule changes between resources inside and outside the EIM, as well as allowing EIM entities to use CAISO’s settlement process to address base energy transfer differences. As CAISO explained in its proposal, the requested enhancements will improve the EIM overall, as well as facilitate the entrance of Powerex Corp. and Idaho Power Company into the market on April 4, 2018. Continue Reading FERC Accepts CAISO EIM System Functionality Enhancement Proposal
On February 15, 2018, FERC issued a notice that staff will hold a technical conference on April 10-11, 2018 to discuss the participation of distributed energy resources (“DER”) in markets operated by Regional Transmission Organizations and Independent System Operators. As FERC stated in the notice, the two-day conference will host several panels on two broad DER-related agendas: first, to continue considering the DER-related reforms initially proposed in the rulemaking culminating in the concurrently-issued Order No. 841 on electric storage participation in organized markets; and second, to broadly explore issues related to the potential effects of DERs on the bulk power system.
Additional details will be provided in a supplemental notice to be issued closer to the conference date. The deadline to submit a nomination form to participate in the conference as a panelist is March 15, 2018. Those interested in attending in person are encouraged to register online by April 3, 2018.
A copy of FERC’s notice, and a description of the panels to be convened during the conference, can be found here.
In an order issued February 15, 2018 (“February 15 Order”), FERC found that several transmission owners participating in the PJM Interconnection, L.L.C. (“PJM”) market have been acting inconsistently with FERC Order No. 890, and that certain terms and conditions in PJM’s Open Access Transmission Tariff (“OATT”) are unjust and unreasonable. In particular, FERC concluded that the PJM transmission owners’ planning processes ran afoul of the coordination and transparency principles in Order No. 890 by allowing the incumbent transmission owners to bypass input and, effectively, competition, from other transmission planning stakeholders. FERC ordered the transmission owners to revise the OATT and Operating Agreement in compliance with Order No. 890. Continue Reading FERC Finds PJM Transmission Owner Supplemental Project Planning Process Violates Order No. 890 and PJM Operating Agreement
On February 5, 2018, FERC conditionally accepted a proposal by the PJM Interconnection, L.L.C. (“PJM”) to amend its Open Access Transmission Tariff (“OATT”) and Amended and Restated Operating Agreement (“Operating Agreement”) to accommodate additional pseudo-tied and dynamically scheduled resources into the PJM region. FERC accepted the proposal and provided an effective date of November 9, 2017, provided that PJM submits a compliance filing addressing FERC’s limited concerns in the order. Continue Reading FERC Conditionally Accepts PJM Tariff Amendments Related to Pseudo-Ties and Dynamic Schedules
On January 31, 2018, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) denied requests for an en banc rehearing of an August 2017 decision (Sierra Club v. FERC) vacating FERC’s approval of the Southeast Market Pipelines Project (“SMP Project”), a natural gas pipeline currently under construction in the southeastern United States. In its August decision, the D.C. Circuit held that FERC failed to analyze the greenhouse gas emissions that would result from the SMP Project, as required by the National Environmental Policy Act (“NEPA”). On February 2, 2018, the developers for the SMP Project filed a request at FERC for expedited reissued construction approval certificates, or in the alternative, temporary emergency certificates, arguing that halting work on the SMP Project will cause “irreparable harm.” Continue Reading D.C. Circuit Denies Rehearing after Vacating Pipeline Certificate; Developers Seek Emergency Relief from FERC
On January 26, 2018, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) rejected a challenge to FERC’s approval of tariff revisions from the PJM Interconnection, L.L.C. (“PJM”) regarding the so-called cost-of-new-entry (“CONE”), or the anticipated revenues required to recover costs in PJM’s wholesale capacity market. A coalition of generators challenged PJM’s CONE as too low, which they argued undercut their own recovery in the capacity market. In a brief opinion, the D.C. Circuit held that petitioners’ claims failed to overcome the deferential standard of review applied to factual challenges to agency orders. Continue Reading D.C. Circuit Upholds PJM Capacity Market CONE
On January 22, 2018, a New York state trial court largely rejected motions to dismiss various challenges to the state’s zero emission credit (“ZEC”) program established in 2016 by the New York Public Service Commission (“NYPSC”). The ZEC program, which is also being challenged in federal court, provides subsidies to financially struggling in-state nuclear energy generators. Although the court allowed five of the six claims against the program to proceed to trial, the court dismissed 56 of the 61 petitioners for failing to timely raise their challenges. Continue Reading New York ZEC Challenges Move Forward at the State Level