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 21, 2018, FERC accepted PJM Interconnection, L.L.C.’s (“PJM”) Order No. 825 compliance filing, subject to condition.  In Order No. 825, FERC directed each regional transmission organization (“RTO”) and independent system operator (“ISO”) to align settlement and dispatch intervals, and modify certain rules regarding when shortage pricing is triggered. Continue Reading FERC Conditionally Accepts PJM’s Order No. 825 Compliance Filing on Shortage Pricing and Settlement and Dispatch Alignment

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

In response to concerns regarding the changing nature of the nation’s energy supply portfolio and the emergence of promising energy storage technologies, the Commission in recent years issued several notices of inquiry, notices of proposed rulemaking, and policy statements regarding various energy storage and ancillary service supply issues.  Additionally, the Commission considered but ultimately declined to pursue the Department of Energy-initiated rulemaking on grid resiliency and reliability.  On February 15, 2018, however, the Commission took concrete action by issuing a pair of Final Rules, addressing (i) storage participation in regional markets; and (ii) the provision of primary frequency response, a critical grid support service. Continue Reading FERC Issues Final Rules on Electric Storage Participation in RTOs/ISOs and Primary Frequency Response for New Generators

On February 2, 2018, FERC directed Commission Staff to convene a technical conference to explore issues concerning interconnection issues that affect neighboring utilities or regions.  In particular, the technical conference is to address issues raised in a complaint by EDF Renewable Energy, Inc. (“EDF”) against the Midcontinent Independent System Operator, Inc. (“MISO”), Southwest Power Pool, Inc. (“SPP”), and PJM Interconnection, L.L.C. (“PJM) related to the Affected Systems coordination procedures contained in the MISO, SPP, and PJM tariffs, the MISO-PJM Joint Operating Agreement (“JOA”), and the MISO-SPP JOA, as well as the Affected Systems coordination issues raised in FERC’s Interconnection Reform Rulemaking proceeding in Docket No. RM17-8-000 (see December 20, 2016 edition of the WER). Continue Reading FERC Establishes Technical Conference on Inter-RTO Affected Systems Interconnection Issues

On January 26, 2018, a divided panel of the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) vacated a series of FERC orders that removed from transmission owners in the Midcontinent Independent System Operator, Inc. (“MISO”) the ability to elect to fund the construction of network upgrades on their transmission systems to accommodate the interconnection of new generation.  The D.C. Circuit vacated FERC’s orders and remanded the case back to FERC for further proceedings. Continue Reading D.C. Circuit Vacates FERC Orders on Transmission Owner Funding for Network Upgrades in MISO

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