On October 15, 2018, FERC issued two orders involving rate of return on equity (“ROE”): the first was an order directing parties in two proceedings involving the base ROE of the transmission owning members of the Midcontinent Independent System Operator, Inc. (“MISO”) to submit briefs concerning a proposed change in FERC’s approach to determining the base ROE of public utilities previously outlined in Martha Coakley v. Bangor Hydro-Elec. Co. (“Coakley Briefing Order”) (see October 25, 2018 edition of the WER); the second was an order providing guidance regarding the effect of the Coakley Briefing Order on pending proceedings involving base ROE issues that have been set for hearing and settlement judge procedures.
On November 5, 2018, FERC granted in part and denied in part a rehearing request (“Rehearing Order”) filed by Ameren Services Company (“Ameren Services”), on behalf of its affiliate Ameren Transmission Company of Illinois (together with Ameren Services, “Ameren”) of a FERC order (“February 13 Order”) denying Ameren’s request pursuant to Order No. 679 for a 100 basis point incentive rate of return on equity (“ROE Incentive”) for the Illinois Rivers and Mark Twain components (“Components”) of the Grand Rivers Project (“Project”). In the February 13 Order, FERC denied Ameren’s requested ROE Incentive for the Components, largely because of construction progress made to date on the Illinois Rivers component. In the Rehearing Order, FERC granted rehearing in part with respect to the Mark Twain component because that component is not substantially complete and, because based on its own merits, the Mark Twain component continues to face risks and challenges that warrant an ROE Incentive. FERC denied rehearing with respect to the Illinois River component, however, upon finding that given the substantial completion of the Illinois Rivers component and limited remaining risks and challenges Ameren faces with respect to that component, Ameren’s requested ROE Incentive for Illinois River failed to meet the nexus test. Continue Reading FERC Grants Rehearing in Part, Grants Transmission ROE Incentive Adder
On November 6, 2018, clean energy ballot initiatives failed in several states. In particular, voters rejected Arizona’s 50 percent renewable energy mandate, Washington’s fee on carbon emissions, Colorado’s limits on oil and gas drilling and Nevada’s retail choice initiative. However, voters passed Nevada’s 50 percent renewable energy portfolio. Continue Reading Voters Reject Some State Ballot Initiatives on Clean Power and Deregulation
On October 31, 2018, FERC denied a request from a group of wind generation developers (“Wind Generation Developers”) for rehearing of FERC’s order denying a complaint which alleged that the interconnection process under the Midcontinent Independent System Operator, Inc.’s (“MISO”) Open Access Transmission, Energy, and Operating Reserve Markets Tariff (“Tariff”) is unjust and unreasonable because certain wind generators would not receive a Generator Interconnection Agreement (“GIA”) in time to receive Federal Production Tax Credit (“PTC”) benefits. Notably, FERC found that interconnection customers are not guaranteed that MISO will meet its projected deadlines and that most interconnection customers in the study cluster that was the subject of the complaint will be eligible for GIAs in time to receive PTC benefits. Continue Reading FERC Affirms Denial of Complaint Alleging MISO Interconnection Process Delays
On October 29, 2018, FERC approved the California Independent System Operator Corp.’s (“CAISO”) tariff revisions related to its Energy Imbalance Market (“EIM”) bid adders, which reflect EIM participating resources’ costs to comply with the California Air Resources Board’s (“CARB”) greenhouse gas (“GHG”) regulations. Specifically, FERC accepted CAISO’s proposal to limit the hourly megawatt quantity included in an EIM bid adder to the range between the EIM resource’s base schedule and its effective upper economic bid for that hour. Continue Reading FERC Approves Limit to Hourly MW Quantity Included in CAISO EIM GHG Bid Adders
On October 22, 2018, FERC Commissioner Kevin McIntyre announced in a letter to President Donald Trump that he would step down from his role as Chairman and would continue his work as Commissioner. In addition, President Trump announced on October 24, 2018 that current FERC Commissioner and former Chairman Neil Chatterjee would replace Commissioner McIntyre as FERC Chairman. Continue Reading McIntyre Steps Down as FERC Chairman; President Trump Designates Chatterjee as His Replacement
On October 12, 2018, FERC rejected without prejudice a proposal submitted by Midcontinent Independent System Operator, Inc. (“MISO”) and a group of MISO Transmission Owners (“MISO TOs”) (together, “Filing Parties”) to add a new Schedule 50 to MISO’s Open Access Transmission, Energy and Operating Reserve Markets Tariff (“Tariff”) that would enable MISO TOs to recover reasonable expenses, including overhead costs, associated with operation, maintenance, and repair of a transmission owner’s interconnection facilities (“TOIF”). FERC rejected the proposal without prejudice because it relied on estimated construction costs of the TOIF without the requirement to support the reasonableness of such estimated costs.
On October 18, 2018, FERC accepted Southwest Power Pool’s (“SPP”) tariff revisions to implement a major maintenance cost component for mitigated start-up offers and mitigated no-load offers. FERC found SPP’s proposal to be a just and reasonable means of addressing concerns over the recovery of costs resulting from the gradual deterioration of resources’ operating equipment in the SPP Integrated Marketplace.
On October 5, 2018, FERC accepted revisions to the New York Independent System Operator, Inc.’s (“NYISO”) methodology used to determine Locational Installed Capacity Requirements (“LCRs”) in NYISO’s Installed Capacity (“ICAP”) market. In doing so, FERC found that the proposed Alternative LCR Methodology was just and reasonable because, among other things, the Alternative LCR Methodology results in LCRs, and thus capacity costs, that are reasonably aligned with the associated reliability benefits.
On September 28, 2018, President Donald Trump signed into law Public Law No: 115-247, amending Federal Power Act (“FPA”) section 203 to add a $10 million threshold for public utility mergers and acquisitions requiring FERC approval. The new law will also require FERC to (i) issue a rule to require any public utility to notify FERC, after 30 days of the close of the transaction, if the value of the merger is more than $1 million but less than $10 million and (ii) submit a report to Congress assessing the impacts of the new law. The amendments to FPA section 203 will become effective on March 27, 2019. Continue Reading New Law Amends FPA Section 203 to Add Monetary Threshold to Public Utility Mergers and Acquisitions