On January 31, 2020, FERC filed its brief in the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) responding to consolidated petitions challenging Order No. 841. Order No. 841—the agency’s 2018 rulemaking that established a regulatory framework for Electric Storage Resources (“ESRs”) including grid-level batteries—is widely hailed as the legal lynchpin for the very recent, significant penetration by ESRs into the U.S. electricity resource mix. Accordingly, the D.C. Circuit proceeding has been closely watched by industry stakeholders as the petitioners seek to vacate important parts of the rule facilitating ESR participation in wholesale markets.

Petitions for review were filed in July 2019 by: (1) the National Association of Regulatory Utility Commissioners (“NARUC” or “State Commissions”); and (2) jointly by the American Public Power Association, National Rural Electric Cooperative Association, Edison Electric Institute, and American Municipal Power, Inc. (“Utility Petitioners”). The Transmission Access Policy Study Group also filed a brief as intervenor in support of petitioners.
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At a time of significant industry transformation driven by technological change and spurred on by environmental policy concerns, the Federal Energy Regulatory Commission (“FERC” or “Commission”) has now added a significant layer to the stack of policy debates – the future of transmission investment.  Many states have seized the initiative in terms of establishing preferable resource mixes for in-state customers, and are spearheading significant pushes for greater renewable and storage resource deployment.  FERC has now joined the fray by opening up the policy debate anew regarding how to spur (or whether to spur) additional transmission sector investment.  The FERC order described below focuses on regulatory and market rules impacting transmission investment (Docket No. PL19-3-000).  The agency also opened a companion docket requesting comments on the details of its policies regarding establishment of a public utility transmission owner’s stated return on equity (“ROE”) (Docket No. PL19-4-000).  The Washington Energy Report will provide detailed summaries of these orders via our blog.  FERC’s mention here of “an increased emphasis on the reliability of transmission infrastructure” (emphasis added) could signal an attempt to re-focus the U.S. Department of Energy’s resiliency concerns to an arena that gives FERC home-field advantage.  Lest the states forget, FERC controls the price of admission for a ticket to the interstate transmission network, and this open-ended fact-finding effort bears a high likelihood of impacting the price of such tickets (for a large portion of the continental United States).
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