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 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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As part of its overall proposal to implement carbon pricing to incorporate the social cost of carbon emissions in the wholesale power market, New York Independent System Operator, Inc. (“NYISO”) staff made a presentation at the Market Issues Working Group (“MIWG”) meeting on April 30, 2019 (“MIWG Presentation”).  The MIWG Presentation set forth NYISO’s proposed methodology to calculate the estimated impact of carbon pricing on locational-based marginal prices (“LBMP”).  Specifically, the MIWG Presentation provides additional details about how NYISO proposes to calculate the location-based marginal price-carbon (“LBMPc”), which would consider the impact of carbon pricing on LBMPs for purposes of subtracting from an energy supplier’s ultimate bid during the market settlement phase.

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On May 1, 2019, FERC denied Pacific Gas and Electric Company’s (“PG&E”) requests for rehearing of two prior orders in which FERC held that it and the bankruptcy courts have concurrent jurisdiction to review and address the disposition of wholesale power contracts sought to be rejected through bankruptcy.  FERC’s order comes as the PG&E bankruptcy proceedings in the United States Bankruptcy Court for the Northern District of California (“Bankruptcy Court”) remain ongoing.  The May 1 order affirmed FERC’s earlier conclusions in response to petitions from NextEra Energy, Inc./NextEra Energy Partners and Exelon Corporation that a party to a FERC-jurisdictional wholesale power contract must obtain approval from both the bankruptcy court and FERC to reject a contract and to modify the filed rate, respectively (see January 30, 2019 edition of the WER).  FERC clarified that rendering a determination on rejection motions was solely within the bankruptcy court’s province, but also made clear that rejection would not relieve PG&E of its separate regulatory obligations under the Federal Power Act.  The order may provide comfort to the Bankruptcy Court, which expressed concern over its exclusive authority to approve a rejection at an April 10 hearing.
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On April 29, 2019, FERC accepted revisions proposed by PJM Interconnection, L.L.C. (“PJM”) to its Open Access Transmission Tariff (“Tariff”) and Amended and Restated Operating Agreement (“Operating Agreement”) to allow market participants to submit day-ahead offers that vary by hour and to update such offers in real time (“April Order”).  FERC also denied PJM’s motion for clarification as to whether PJM’s Independent Market Monitor (“IMM”) may file certain complaints against PJM.
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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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