On March 28, 2018, FERC partially accepted the Midcontinent Independent System Operator, Inc.’s (“MISO”) Order No. 831 compliance filing (“March 28 Order”).  In Order Nos. 831 and 831-A, FERC required Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”) to amend their respective tariff provisions governing existing offer caps on incremental energy offers, which FERC determined was necessary to: (1) avoid suppressing Locational Marginal Prices (“LMPs”) below the marginal cost of production; and (2) fully compensate generation resources for the costs incurred to serve load (see November 21, 2016 edition of the WER).  Continue Reading FERC Partially Accepts MISO Order No. 831 Compliance Filing, Orders Further Modifications to MISO Tariff

On March 20, 2018, FERC extended the time for entities to submit reply comments to the filings submitted by the Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”) in the new grid resiliency proceeding.  Several trade associations requested additional time to respond to the “significant” comments that the RTOs/ISOs submitted to FERC, pertaining to the resilience of the bulk power system in their regions. Continue Reading FERC Extends Deadline for Comments on Resiliency Proceeding

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 January 8, 2018, FERC terminated the Department of Energy’s (“DOE”) Proposed Rule on Grid Reliability and Resilience Pricing (“Proposed Rule”) proceeding, and, instead, initiated a new proceeding whereby FERC plans to collect information on resilience from regional transmission organizations (“RTO”) and independent system operators (“ISO”).  Once that information is collected, FERC will determine whether further action is necessary to address grid resilience.  While FERC’s decision was unanimous, three of FERC’s Commissioners issued separate concurring opinions.  Of note, Commissioner Neil Chatterjee stated that while he would have preferred an order that took an interim step to address the issues raised in the Proposed Rule, he looked forward to addressing those critical issues in the new proceeding established by FERC. Continue Reading FERC Terminates DOE NOPR Proceeding, Requests Information from RTOs/ISOs on Resilience

On October 25, 2017, FERC released a final report regarding whether its policies materially burden the development and use of domestic energy resources (“Final Report”).  While FERC concluded that most agency actions are not materially burdensome or are necessary to administer its statutory mandates, FERC recommended certain changes to licensing processes, exemption processes, and determinations on deficient applications for hydropower resources.  Continue Reading FERC Releases Final Report on Review of Agency Actions

In a policy statement issued October 19, 2017, FERC revised its longstanding approach to setting the license terms for hydroelectric projects.  The new policy establishes a default term of 40 years for non-federal projects.  The default term can be shortened or extended in certain identified circumstances. Continue Reading FERC Issues Policy Statement Extending License Terms for Hydro Projects

On October 19, 2017, FERC issued a Notice of Proposed Rulemaking (“NOPR”) proposing to direct the North American Electric Reliability Corporation (“NERC”) to modify the Critical Infrastructure Protection (“CIP”) Reliability Standard, CIP-003-7 (Cyber Security – Security Management Controls), which is intended to mitigate cyber security risks posed by malware from ‘transient electronic devices’ (such as laptops and thumb drives) used at low-impact cyber systems.  FERC stated in the NOPR that, once those modifications have been made, it plans to make the new reliability standard effective approximately 18 months after FERC approval. Continue Reading FERC Proposes to Direct NERC to Revise Cyber Proposal on Malware Risks

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

On September 29, 2017, United States Department of Energy (“DOE”) Secretary Rick Perry took the unusual step of proposing a rule for final action by the Federal Energy Regulatory Commission (“FERC”).  Secretary Perry’s initiative, a DOE-issued Notice of Proposed Rulemaking (“NOPR”) under section 403 of the Department of Energy Organization Act (“DOE Act”) (42 U.S.C. § 7173), urges FERC to act extremely 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 (e.g., coal and nuclear units).  See Grid Resiliency Pricing Rule, Docket No. RM17-3-000, at 4–5 (Sept. 29, 2017) (“DOE NOPR”).  Continue Reading Department of Energy Proposes FERC-Authorized Full Cost Recovery for Certain Nuclear and Coal Power Generation

On September 20, 2017, FERC issued two final rules and a notice of proposed rulemaking (“NOPR”) on reliability standards for the bulk power system. The final rules—Order Nos. 836 and 837—will become effective sixty days after their publication in the Federal Register.  Parties interested in filing comments on matters discussed in the NOPR must do so within sixty days of when that notice is published in the Federal Register. Continue Reading FERC Issues Final Rules and NOPR to Enhance Bulk Electric System Resilience, Reliability