On June 27, 2019, FERC rejected PJM Interconnection, L.L.C.’s (“PJM”) proposed revisions to its Open Access Transmission Tariff and Reliability Assurance Agreement Among Load Serving Entities in the PJM Region that would have required demand resources to be available year-round.  PJM argued that the proposed revisions better aligned its Price Responsive Demand (“PRD”) program with the year-around availability obligation of other supply-side “Capacity Performance Resources” participating in PJM’s capacity market. On review, however, FERC agreed with concerns raised by PJM’s Independent Market Monitor (“IMM”) and other parties that, among other things, the price-responsive demand program must be more consistent with the annual peak-based billing framework for capacity procurement by Load Serving Entities (“LSEs”).  FERC also agreed that, as a result, PJM’s proposal failed to accurately reflect PRD participants’ load reduction capabilities.
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On June 12, 2019, FERC issued an order on paper hearing (“June 12 Order”) finding that Southwest Power Pool, Inc.’s (“SPP”) quick-start pricing practices are unjust and unreasonable and directing SPP to revise its Open Access Transmission Tariff (“Tariff”) to: implement quick-start pricing provisions in order to more accurately reflect the marginal cost of serving load; provide clear and transparent price signals that better reflect investment decisions; minimize production costs; and reduce uplift. Quick-start resources (also referred to as “fast-start resources”) are able to start within ten minutes or less to meet transient or unforeseen system needs. Previously, energy supply from quick-start resources had not necessarily been included in SPP’s unified pricing and dispatch run, but after the June 12 Order, quick-start resources in SPP may participate in setting market-clearing energy prices under certain circumstances.
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On June 5, 2019, FERC revoked the self-certification for qualifying facility (“QF”) status of Eco Green Generation LLC’s (“Eco Green”) hybrid power generation facility (the “Facility”) located in and around Fairbanks, Alaska.  In doing so, FERC found that the Facility—which consists of a wind farm and twenty duel-fueled renewable diesel and propane engines intended to firm the energy generated by the wind farm—does not meet the criteria for a small power production QF or a cogeneration QF.
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On May 16, 2019, FERC’s Offices of Electric Reliability and Enforcement issued the Summer 2019 Reliability and Energy Market Assessment (“2019 Summer Assessment”), a high-level summary of anticipated reliability challenges for the upcoming operating season and prospective assessment of electric and natural gas markets.  While higher than average temperatures are predicted for the West, South, and Eastern regions of the country this summer, the report concludes that reserve margins—a measure of the projected capability of anticipated resources to serve forecasted peak load—will be adequate in all regions except the Electric Reliability Council of Texas (“ERCOT”).  The 2019 Summer Assessment also predicts high hydroelectric power production in California, continued rapid growth in battery storage, wind, and solar capacity, as well as growth in demand for natural gas driven by new LNG export capacity.
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On May 21, 2019, FERC announced that it will convene a staff-led public meeting on July 15, 2019 to discuss ISO New England Inc.’s (“ISO-NE”) development of tariff revisions addressing the regional fuel security concerns discussed by FERC in a July 2, 2018 order.  Commissioners from FERC are invited to attend and participate in the meeting, along with their staffs.
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On May 16, 2019, FERC denied several rehearing requests and partially granted clarification of its Order No. 841 regarding the participation of electric storage resources (“ESRs”) in regional markets operated by Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”) (“Order No. 841-A”).  Most notably, FERC upheld its decision not to adopt a state opt-out of ESR participation in wholesale markets.  Commissioner McNamee issued a partial dissent discussing the need to recognize states’ interests in the impacts of Order Nos. 841 and 841-A.
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On May 16, 2019, FERC issued four orders on related complaints against the Midcontinent Independent System Operator, Inc. (“MISO”) by Tilton Energy LLC (“Tilton”), American Municipal Power, Inc. (“AMP”), and Dynegy Marketing and Trade, LLC/Illinois Power Marketing Company (“Dynegy Companies” or “Dynegy”), as well as a complaint against PJM Interconnection, L.L.C. (“PJM”) by AMP and the Northern Illinois Municipal Power Agency (“NIMPA”).  The complaints alleged that MISO’s and PJM’s assessment of congestion and other costs for resources physically located in MISO but pseudo-tied into PJM violated MISO’s and PJM’s Tariffs by imposing duplicative charges.  The complaints also alleged that MISO and PJM subjected the complainants to unjust and unreasonable duplicative congestion charges.  FERC’s orders denied arguments that MISO’s and PJM’s assessment of congestion and other charges violated their respective Tariffs, but found that MISO and PJM may have assessed duplicative congestion charges prior to FERC’s acceptance of revisions to the MISO-PJM Joint Operating Agreement (“JOA”) to address such charges beginning in July 2018.  After consolidating the proceedings, FERC’s orders established hearing and settlement procedures to determine appropriate refunds.
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On May 3, 2018, FERC accepted revisions proposed by PJM Interconnection, L.L.C. (“PJM”) to its Open Access Transmission Tariff, Amended and Restated Operating Agreement, and Reliability Assurance Agreement Among Load Serving Entities in the PJM Region, to reflect load reductions from Summer-period Demand Response resources in load forecasts for PJM’s capacity market (“Peak Shaving Adjustment”).
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On April 23, 2019 FERC granted in part and denied in part a rehearing request (“Rehearing Order”) filed by American Municipal Power Inc. (“AMP”) of FERC’s February 5, 2018 order (“February 5 Order”) accepting PJM Interconnection, L.L.C.’s (“PJM”) revisions to amend its Open Access Transmission Tariff (“Tariff”) and Amended and Restated Operating Agreement (“Operating Agreement”) to improve the process for adding a pseudo-tied resource into the PJM region.  As part of this process, PJM proposed to incorporate two pro forma pseudo-tie agreements and a pro forma system modification reimbursement agreement (“Reimbursement Agreement”).  In the Rehearing Order, FERC granted AMP’s request on rehearing that the indemnification provisions of the Reimbursement Agreement should be consistent with related provisions in the pro forma pseudo-tie agreements.  FERC denied rehearing with respect to the compensation provision and the suspension and termination provisions in the pro forma pseudo-tie agreements.
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On April 18, 2019, FERC found that the fast-start pricing practices of New York Independent System Operator, Inc. (“NYISO”) and PJM Interconnection, L.L.C. (“PJM”) were unjust and unreasonable and directed NYISO and PJM to revise their tariffs to implement certain changes discussed in the orders (“2019 Orders”).  In doing so, FERC found that NYISO’s and PJM’s current fast-start tariff provisions do not allow prices to reflect the marginal cost of serving load.
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