On January 29, FERC issued an order accepting revisions to ISO New England Inc.’s (“ISO-NE”) Competitive Auctions with Sponsored Policy Resources (“CASPR”) program, the ISO-NE’s mechanism to integrate state-sponsored generation resources (“Sponsored Policy Resources”) that might otherwise suppress prices in its Forward Capacity Market.  The order addressed the contested test price mechanism in detail, ultimately accepting it as a just and reasonable modification to ISO-NE’s Forward Capacity Auction (“FCA”) design.  In so doing, FERC’s order permits ISO-NE to bar capacity resources from participating in the FCA secondary auction if those resources bid capacity into the FCA primary action at a price below the ISO-NE’s assessment of their going-forward costs.  FERC’s order drew a dissent from Commissioner Glick, who argued that the test price mechanism had not been shown to be just and reasonable. Continue Reading FERC Accepts Revisions to ISO-NE’s CASPR Program, Including Disputed Test Price Proposal

On January 15, 2019, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) in San Diego Gas & Electric Co. v. FERC, No. 16-1433, denied San Diego Gas & Electric’s (“SDG&E”) petition for review of FERC orders declining retroactive application of its cancelled or abandoned electric transmission facilities incentive (“Abandonment Incentive”).  The D.C. Circuit’s decision denies SDG&E the eligibility to recover, in the case of abandonment, approximately $15 million in development costs associated with its South Orange County Reliability Enhancement Project (“SOCRE Project”).  The decision also prompted a dissent from Senior Circuit Judge A. Raymond Randolph, who argued that the underlying FERC orders were contrary to the plain language of the regulation at issue, as well as the Commission’s own precedent. Continue Reading D.C. Circuit Denies SDG&E Petition for Review of FERC Orders Denying Retroactive Abandonment Incentive

On January 7, 2019, FERC Commissioner Bernard McNamee signaled in a letter to members of the United States Senate (“January 7 Letter”) that he would not recuse himself from FERC’s pending grid resiliency proceeding in Docket No. AD18-7 unless the FERC proceeding began to “closely resemble” a Notice of Proposed Rulemaking (“NOPR”) issued in September 2018 by the Department of Energy (“DOE”).  Commissioner McNamee helped draft the DOE NOPR, which also addressed grid resiliency issues and was rejected by FERC in Docket No. RM18-1 in January 2018 (see January 17, 2018 edition of the WER), when he was an attorney at the DOE.  The January 7 Letter responded to a December 12, 2018 request from a group of Senators, led by Catherine Cortez Masto (D-NV), that Commissioner McNamee provide an update on the guidance he received from FERC ethics officials regarding his recusal from specific proceedings.  According to that guidance, notwithstanding the similarities between Docket No. AD18-7 and the now-terminated Docket No. RM18-1 on the DOE NOPR, previous statements by Commissioner McNamee did not meet the legal standard for recusal, although the guidance urged “continued oversight to ensure that Docket No. AD18-7 does not develop in such a way as to replicate or closely resemble Docket No. RM18-1.” Continue Reading Commissioner McNamee Unlikely to Recuse Himself from FERC Grid Resiliency Proceeding Unless it “Closely Resembles” DOE Resiliency NOPR