On April 10, 2018, FERC approved a Stipulation and Consent Agreement (“Settlement”) among the Office of Enforcement (“OE”), ETRACOM LLC (“ETRACOM”), and Michael Rosenberg (together, with ETRACOM, “Respondents”) as in the public interest.  OE claimed that Respondents violated federal law and FERC’s rules against anti-manipulation in the California Independent System Operator Corp. (“CAISO”) wholesale electric market.  FERC determined that the Settlement was fair and reasonable and resolved all outstanding claims and proceedings between OE and the Respondents. Continue Reading FERC Approves Settlement with ETRACOM for Market Manipulation Allegations

On March 30, 2018, FERC issued an order establishing a technical conference and partially granting one of two complaints against various changes to the PJM Interconnection, L.L.C. (“PJM”) frequency regulation market.  In partially granting one complaint, FERC found that PJM’s tariff is unjust and unreasonable in so far as it omits the methodology for calculating certain regulation-related cost curves, as well as the parameters governing certain regulation market signals.  In the forthcoming technical conference, FERC intends to consider both: (1) whether PJM’s recent frequency regulation market changes hamper the full participation of storage resources, for example, to provide regulation services, and (2) whether PJM’s regulation market design as a whole is consistent with prior FERC precedent. Continue Reading FERC Establishes Technical Conference Regarding PJM Frequency Regulation Complaints

On April 3, 2018, FERC pre-approved numerous utilities’ request to enter into certain future transmission system related transactions in the event of a catastrophic grid reliability event (“Triggering Event”).  As a result, participant-utilities in the Regional Equipment Sharing for Transmission Outage Restoration Agreement (“RESTORE Agreement”) are eligible to purchase certain replacement transmission system equipment (the “Proposed Transactions”) from other participant-utilities if there is a Triggering Event that impacts transmission service capabilities.  In addition, FERC also granted the utility-applicants’ (“Applicants’”) request for waiver of certain affiliate purchase restrictions in the event that qualifying transactions between affiliates becomes necessary. Continue Reading FERC Approves Regional Equipment Sharing Program

On March 28, 2018, FERC partially accepted the Midcontinent Independent System Operator, Inc.’s (“MISO”) Order No. 831 compliance filing (“March 28 Order”).  In Order Nos. 831 and 831-A, FERC required Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”) to amend their respective tariff provisions governing existing offer caps on incremental energy offers, which FERC determined was necessary to: (1) avoid suppressing Locational Marginal Prices (“LMPs”) below the marginal cost of production; and (2) fully compensate generation resources for the costs incurred to serve load (see November 21, 2016 edition of the WER).  Continue Reading FERC Partially Accepts MISO Order No. 831 Compliance Filing, Orders Further Modifications to MISO Tariff

On March 19, 2018, FERC issued an order terminating its proceeding under section 206 of the Federal Power Act (“FPA”), accepting Idaho Power Company’s (“Idaho Power”) updated market power analysis, and concluding that Idaho Power successfully rebutted the presumption of market power.  In doing so, FERC concluded that Idaho Power satisfied the Commission’s standards for market-based rate authority in its own Balancing Authority Area (“BAA”).  In finding that Idaho Power had rebutted the presumption of market power, FERC relied on Idaho Power’s delivered price test (“DPT”) analysis and various sensitivity analyses using transaction data from both the Idaho Power BAA and an adjacent trading hub. Continue Reading FERC Finds Idaho Power Lacks Market Power in Its Own BAA and Terminates FPA Section 206 Proceeding

On March 15, 2018, FERC issued three interrelated orders regarding the creation of a new Transco within the Southwest Power Pool, Inc. (“SPP”), the integration of a new Transmission Owner within SPP, and the allocation of existing transmission costs for new transmission owners within the region.  The package of orders stems from South Central MCN LLC’s (“South Central”) acquisition of transmission facilities from a public power entity, the City of Nixa, Missouri. Continue Reading FERC Issues Orders Regarding SPP’s Allocation of Existing Facility Transmission Costs for New Transmission Owners

On March 14, 2018 and March 15, 2018, FERC issued separate orders (1) reinstating the certificate for the Southeast Market Pipelines Project (“SMP Project”) and (2) authorizing DTE Midstream Appalachia, LLC’s (“DTE”) Birdsboro Pipeline Project.  In approving the projects, FERC held that determining the significance of the indirect effect of a pipeline on downstream greenhouse gas (“GHG”) emissions is not possible for purposes of FERC’s National Environmental Policy Act (“NEPA”) analysis, and that the Social Cost of Carbon tool is not appropriate for estimating a project’s downstream impacts in FERC’s NEPA analysis.  In partial dissents, Commissioners Cheryl LaFleur and Richard Glick asserted that GHG emissions estimates and the Social Cost of Carbon tool can inform FERC’s Natural Gas Act (“NGA”) section 7 evaluation. Continue Reading FERC Certificate Orders Address Estimates of Pipeline Impacts on Downstream GHG Emissions

On March 5, 2018, FERC accepted PJM Interconnection, L.LC.’s (“PJM”) revisions to the appendices to Schedule 12 of its Open Access Transmission Tariff (“Tariff”).  Under Schedule 12, PJM annually files updates to the cost responsibility assignments for transmission enhancement and expansion projects selected in PJM’s Regional Transmission Plan (“RTEP”).  Through the Tariff revisions, PJM sought to update load-ratio share and solution-based distribution factor (“DFAX”) cost allocations in the appendices to Schedule 12 for Regional Facilities, Necessary Lower Voltage Facilities, and Lower Voltage Facilities.  Additionally, pursuant to prior FERC orders issued in late-2017, PJM’s Tariff revisions sought to reduce the cost responsibility assignments under the appendices of Schedule 12 of PJM’s Tariff to certain merchant facilities—including, Hudson Transmission Partners and Linden VFT, LLC (together, the “Merchant Facilities”)—to zero.  Continue Reading FERC Accepts PJM’s Load-Ratio Share and Solution-Based DFAX Proposal

On February 23, 2018, FERC approved PJM Interconnection, L.L.C.’s (“PJM”) changes to its tariff and Reliability Assurance Agreement (“RAA”) to revise Reliability Pricing Model (“RPM”) capacity market rules in order to accommodate greater participation from seasonal resources.  Specifically, FERC approved changes related to: (1) resource aggregation for submitting combined capacity market sell offers; (2) granting winter-period interconnection rights; and (3) demand response resource measurement and verification for seasonal resources.  However, FERC separately responded to complaints that the RPM does not adequately accommodate seasonal resources by directing FERC staff to establish a technical conference to explore whether further changes are needed to permit seasonal resource participation. Continue Reading FERC Orders Technical Conference on Seasonal Resources Participating in PJM’s RPM Capacity Market

On February 28, 2018, FERC accepted ISO New England Inc.’s (“ISO-NE”) and the New England Power Pool Participants Committee’s (“NEPOOL”) tariff revisions to replace the capacity market’s existing bilateral contracting mechanism with a new mechanism, the Annual Reconfiguration Transaction (“ART”).  According to ISO-NE, the ART provides an alternative method to achieve the equivalent of a Capacity Supply Obligation (“CSO”) Bilateral while also accounting for a resource’s impact on reliability.  Continue Reading ISO-NE Creates New Annual Reconfiguration Transaction in its Forward Capacity Market