On July 24, 2018, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) affirmed FERC’s 2015 and 2016 orders denying challenges to ISO New England’s (“ISO-NE”) ninth and tenth Forward Capacity Auctions (“FCA 9” and “FCA 10”) and approving the results of those auctions.  The D.C. Circuit found that petitioners, Utility Workers Union of America Local 464 and its President, Robert Clark, failed to establish standing to challenge the FERC orders approving the results of FCA 9 and FCA 10. Continue Reading D.C. Circuit Affirms FERC Finding of No Manipulation in ISO-NE Capacity Market Auction

On July 13, 2018, pursuant to section 205 of the Federal Power Act (“FPA”), FERC accepted and set for hearing a cost-of-service agreement between Constellation Mystic Power, LLC (“Mystic”), Exelon Generation Company, LLC (“Exelon”), and ISO New England Inc. (“ISO-NE”) providing cost-of-service compensation to Mystic for continued operation of two gas-fired generating units (“Mystic 8 and 9”) to ensure fuel security in New England.  Commissioners Powelson and Glick dissented. Continue Reading FERC Accepts and Sets for Hearing Cost-of-Service Compensation Agreement

On July 5, 2018, the Midcontinent Independent System Operator, Inc. (“MISO”) proposed to restore provisions in its Open Access Transmission, Energy and Operating Reserve Markets Tariff (“Tariff”) to allow Transmission Owners the discretion to elect to provide initial funding for network upgrades.  MISO filed its proposed Tariff changes after the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) vacated earlier FERC orders that required MISO interconnection customers’ consent before allowing Transmission Owner funding of interconnection-related network upgrades.  Continue Reading MISO Proposes to Reinstate Prior Transmission Owner Network Upgrade Funding Mechanism

On July 9, 2018, FERC denied Cloverland Electric Cooperative’s (“Cloverland”) application to terminate its mandatory obligation under the Public Utilities Regulatory Policies Act of 1978 (“PURPA”) to purchase electric energy and capacity from qualifying cogeneration or small power production facilities (“QF”) with a net capacity in excess of 20 megawatts.  In denying the request, FERC emphasized that direct membership in regional transmission organizations or independent system operators is necessary to meet the exemption Cloverland requested under PURPA. Continue Reading FERC Denies Application to Terminate PURPA Mandatory Purchase Obligation

On June 29, 2018, FERC rejected proposals by Calpine Corporation (“Calpine”) and PJM Interconnection, L.L.C. (“PJM”) to address what they view as shortcomings in PJM’s capacity markets resulting from what they characterize as state subsidy programs that suppress capacity prices (the “June 29 Order”).  Continue Reading FERC Rejects PJM’s Proposed Tariff Revisions and Initiates Section 206 Proceeding

On July 2, 2018, FERC denied ISO New England Inc.’s (“ISO-NE”) request for waiver of its Transmission, Markets, and Services Tariff (“Tariff”) and instituted a Federal Power Act (“FPA”) section 206 proceeding because, according to FERC, the Tariff may be unjust and unreasonable.  Specifically, ISO-NE requested waiver of certain provisions in its Tariff in order to delay the retirement of two generating units owned by Exelon Generation Company, LLC (“Exelon”) for fuel security purposes.  FERC denied the waiver request and preliminarily found that the Tariff did not sufficiently address specific regional fuel security concerns.  Continue Reading FERC Finds ISO-NE’s Tariff May Not Adequately Address Fuel Security Concerns

On June 15, 2018, in separate opinions, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) affirmed two FERC rulings that denied utilities’ requests to be made whole for purchasing natural gas at inflated prices to comply with their PJM Interconnection, L.L.C. (“PJM”) capacity resource obligations during the 2014 Polar Vortex.  Specifically, the D.C. Circuit upheld FERC’s holdings that (1) permitting the utility in one case to recover costs retroactively would violate the filed rate doctrine and the rule prohibiting retroactive ratemaking and (2) the utility in the second case was not entitled to indemnification for its losses resulting from PJM requesting the utility to comply with its capacity resource obligations. Continue Reading D.C. Circuit Affirms Denial of Recovery of Gas Purchase Costs During 2014 Polar Vortex

On June 21, 2018, FERC found that the Midcontinent Independent System Operator, Inc.’s (“MISO”) Open Access Transmission Tariff (“Tariff”) provisions governing the termination of generator interconnection agreements (“GIAs”) were unjust and unreasonable due to an inconsistency between the terms of the GIA contained in the Tariff and the MISO Generator Interconnection Procedures (“GIP”).  FERC also accepted, after a paper hearing, MISO’s proposed revisions to the GIA and GIP termination provisions, subject to further revisions.  MISO’s Tariff revisions clarified that an interconnection customer could extend its commercial operating date (“COD”) for up to three years without risking termination from MISO, which FERC found, subject to modification, just and reasonable.  Continue Reading FERC Conditionally Approves MISO Tariff Revisions Regarding Termination of GIAs

On June 8, 2018, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) upheld FERC’s re-examination of an order regarding the effective rate for network upgrades in an Interconnection Agreement (“IA”) with the PJM Interconnection, L.L.C. (“PJM”).  A power developer, West Deptford Energy, LLC (“West Deptford”), requested interconnection with PJM.  After the negotiations for the IA commenced, PJM’s effective rate changed, triggering a dispute between the parties as to the appropriate effective rate for the IA: the rate in effect at the start of negotiations or the rate in effect at the time the IA was completed. The D.C. Circuit agreed with FERC’s finding that the governing rate is the rate in effect at the time the IA was completed. Continue Reading D.C. Circuit Upholds FERC’s Decision Regarding the Timing of the Application of an Effective Rate

On June 5, 2018, FERC granted the PJM Interconnection, L.L.C. (“PJM”) independent market monitor’s (“IMM”) request to compel the American Electric Power Services Corporation (“AEP”) to provide certain information related to cost-based offers to the IMM.  The IMM stated in its petition that it needed the information to determine whether AEP’s total costs of variable operations and maintenance (“VOM”) included in its capacity offer raise any market power concerns in the PJM Energy Market.  FERC determined that because the IMM had broad authority under PJM’s Open Access Transmission Tariff (“Tariff”) to request such information, it would grant the IMM’s petition. Continue Reading FERC Approves PJM IMM’s Request for Access to AEP Cost Data for Market Power Analysis