On November 9, 2017, FERC issued an order conditionally accepting proposed revisions to Attachment AE of the Southwest Power Pool, Inc. (“SPP”) Open Access Transmission Tariff (“Tariff”).  SPP’s proposed Tariff revisions modify SPP’s so-called “scarcity pricing” methodology in response to FERC Order No. 825.  Under this newly-approved methodology, SPP will institute variable demand curves that will more accurately reflect the value of resources during times of shortages, thereby reducing price signal distortions that can reduce incentives for resources to respond to dispatch signals.  In its order conditionally accepting the Tariff revisions, FERC directed SPP to make a compliance filing to show that certain provisions be placed in SPP’s Tariff as opposed to its Marketplace Protocols. Continue Reading FERC Conditionally Accepts SPP Tariff Revisions to Implement Contingency and Regulation Reserve Demand Curves

On November 3, 2017, FERC largely denied rehearing requests from a group of generation developers (“Generation Developers”) regarding the Midcontinent Independent System Operator, Inc.’s (“MISO”) revisions to its Generator Interconnection Procedures (“GIP”) and its pro forma Generator Interconnection Agreement (“GIA”).  With the exception of one issue, FERC otherwise rejected the Generation Developers requests that FERC reconsider prior MISO revisions regarding the efficiency and timeliness of MISO’s generator interconnection queue process contained in Attachment X of its Open Access Transmission, Energy and Operating Reserve Markets Tariff (“Tariff”). Continue Reading FERC Largely Denies Rehearing Request to Change Existing MISO Generator Interconnection Procedures

On October 20, 2017, FERC approved the California Independent System Operator Corporation’s (“CAISO”) proposal to revise tariff language as it relates to the procurement and cost allocation of black start capability.  Under the proposed changes, black start capability will be redefined as a reliability service instead of an ancillary service, with costs for black start services to be allocated to the participating transmission owner in the service area the resource is located.  The revisions will go into effect on November 1, 2017. Continue Reading FERC Approves CAISO Proposal on Generating Unit Black Start Capabilities

On October 25, 2017, FERC issued an order explaining the market consequences when a resource loses certain participation rights in the New York Intendent System Operator, Inc. (“NYISO”) Installed Capacity (“ICAP”) market.  The order on clarification, which was requested by NRG Power Marketing LLC and GenON Energy Management, LLC (collectively, “NRG”), followed a January 27, 2017 decision in which FERC largely accepted NYISO’s proposed revisions to its Market Administration and Control Area Services Tariff (“Tariff”) to correct a pricing inefficiency in its ICAP market design.  As FERC clarified in this most recent order, when a capacity resource loses its ability to participate in NYISO’s ICAP market, certain benefits or discounts tied to that participation ability—here, a so-called “Locality Exchange Factor”—fall away. Continue Reading FERC Clarifies Impacts from Lost Capacity Market Rights in NYISO

On October 19, 2017, FERC ordered Southwest Power Pool, Inc. (“SPP”) to revise its Open Access Transmission Tariff (“OATT”) to provide that network customers with service subject to redispatch can only obtain Auction Revenue Rights (“ARRs”) and Long-Term Congestion Rights (“LTCRs”) for those times and in the amounts that service can be provided without redispatch. Continue Reading FERC Directs SPP to Change Eligibility for Certain Transmission Rights

On October 13, 2017, a group of transmission owners in the Southwest Power Pool, Inc. (“SPP”) filed a complaint with FERC under Section 206 of the Federal Power Act alleging that SPP’s Open Access Transmission Tariff (“Tariff”) is unjust and unreasonable because it lacks cost-shifting protections when new transmission owners join existing SPP transmission pricing zones.  To correct this alleged “loophole,” the complainants propose a new rate schedule for new transmission owners that are placed into existing zones. Continue Reading SPP Transmission Owners File FERC Complaint Over Alleged Cost Shifting

On October 6, 2017, FERC accepted a tariff filing from ISO New England Inc. (“ISO-NE”) proposing updated calculations for various Forward Capacity Market input values, including Cost of New Entry (“CONE”), Net CONE, and Offer Review Trigger Price (“ORTP”).  As part of its order, FERC also approved ISO-NE’s choice of a simple cycle gas turbine as the reference technology for establishing CONE and Net CONE values—thereby replacing the combined cycle natural gas turbine that had been used as a reference technology by ISO-NE since 2014. Continue Reading FERC Accepts ISO-NE’s Updated CONE and Other Forward Capacity Market Values

On October 4, 2017, FERC issued two separate orders clarifying its jurisdiction under sections 203 and 205 of the Federal Power Act (“FPA”) related to certain project development activities.  In Ad Hoc Renewable Energy Financing Group, FERC granted a petition for declaratory order and confirmed that certain tax equity interests in public utilities do not constitute “voting securities” for purposes of FPA section 203 and therefore do not require prior FERC approval.  Separately, in ALLETE, Inc., FERC disclaimed jurisdiction under FPA section 205 over certain pre-construction activities and thereby found that ALLETE, Inc. did not need to file three pre-construction agreements with the agency.  Continue Reading FERC Issues Orders Clarifying Jurisdiction Over Specific Project Development Activities

On October 3, 2017, FERC conditionally approved proposed revisions to the Midcontinent Independent System Operator, Inc. (“MISO”) and PJM Interconnection, L.L.C. (“PJM”) Joint Operating Agreement (“JOA”) to create a new category of small interregional transmission projects, termed target market efficiency projects (“TMEPs”), intended to address congestion along both regional transmission organizations’ (“RTOs”) seams.  FERC approved the RTOs’ proposal, but required further revisions to ensure that the RTOs’ stakeholders receive adequate information regarding how each RTO evaluates proposed TMEP projects and determines their value as a solution to identified congestion points.  In a concurrent order released the same day, FERC approved MISO’s proposed plan for the assignment of TMEP costs within its region. Continue Reading FERC Conditionally Approves New Category of Interregional Transmission Projects Between MISO and PJM

On October 2, 2017, FERC issued notice of the September 29, 2017 Notice of Proposed Rulemaking (“NOPR”) from the United States Department of Energy (“DOE”) under section 403 of the Department of Energy Organization Act.  In the NOPR, DOE urges FERC to act quickly to enact rules requiring regional transmission organizations and independent system operators (“RTOs/ISOs”) to provide just and reasonable rates for “fuel-secure” generation units (see October 2, 2017 edition of the WER).  Shortly thereafter, on October 4, FERC staff issued a Request for Information, listing various questions for commenters to address in aiding the Commission to better understand the NOPR’s implications.  Commenting parties have until October 23, 2017 to file initial comments and until November 7, 2017 to file reply comments.  In recent testimony before the Senate’s Committee on Energy and Natural Resources, FERC General Counsel, James Danly, confirmed that FERC intends to review the comments and take final action within 60 days of the NOPR’s publication, as requested by the DOE. Continue Reading FERC Sets Comment Deadline and Poses Questions for Commenters on DOE Proposed Rule