On November 16, 2017, FERC issued a Notice of Proposed Rulemaking (“NOPR”) in which it proposed to approve two Reliability Standards—PRC-027-1 (Coordination of Protection Systems for Performance During Faults) and PER-006-1 (Specific Training for Personnel)—that the North American Electric Reliability Corporation (“NERC”) submitted in a petition on September 2, 2016, and which are intended to replace currently-effective Reliability Standard PRC-001-1.1(ii) (System Protection Coordination).  FERC also proposed to direct NERC to modify PRC-027-1 to require an initial protection system coordination study to ensure that applicable entities will perform (or have performed), as a baseline, a study demonstrating proper coordination of their protection systems.  Lastly, FERC proposed in the NOPR to approve new and revised definitions to the NERC Glossary of Terms, the associated violation risk factors, violation severity levels, implementation plans, and effective dates for PRC-027-1 and PER-006-1, and the retirement of currently-effective PRC-001-1.1(ii). Continue Reading FERC Proposes Approval of Two Reliability Standards

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 November 15, 2017, PJM Interconnection LLC (“PJM”) released two proposals to modify how Locational Marginal Prices (“LMPs”) are formed in its wholesale energy market and to enhance compensation for resources providing essential grid services during “shortage” periods.  The LMP proposal seeks to enhance system reliability by expanding the eligibility criteria for setting wholesale energy market prices in the PJM footprint.  Practically speaking, this proposal will allow a wider variety of energy resources, notably less economically flexible generating units such as coal and nuclear generators, to set LMPs and increase their revenue recovery prospects.  Along with the U.S. Department of Energy’s Notice of Proposed Rulemaking currently before FERC (see October 2, 2017 edition of the WER), PJM’s dual proposals represent the latest developments in an ongoing national discussion about whether, and how, organized electricity markets can play a role in ensuring fuel diversity and system reliability through pricing mechanisms. Continue Reading PJM Proposes Price Formation and Shortage Pricing Reforms to Increase Compensation to Generators Providing Reliability Services

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 7, 2017, FERC approved a settlement between FERC’s Office of Enforcement and Barclays Bank PLC (“Barclays”), Daniel Brin, Scott Connelly, and Karen Levine (collectively with Barclays, “Defendants”) that resolves FERC’s claims that Defendants manipulated physical electricity markets.  Under the settlement, Barclays is required to pay $105 million in civil penalties and disgorgement, a big reduction compared to the $488 million FERC originally ordered. Continue Reading FERC Approves $105 Million Settlement with Barclays for Market Manipulation

The California Independent System Operator Corp. (“CAISO”) is moving forward on a slate of proposals which are intended to enhance grid reliability.  These proposals include addressing issues related to generation retirement, entering into a specific reliability must-run contract, modifications to incentives related to the resource adequacy program, as well as adjusting the compensation given to its Board of Governors (the “Board”).  On November 2, 2017, the Board approved the four proposals, and CAISO will file any resulting tariff related changes with FERC at a later date.   Continue Reading CAISO Board Approves Proposals to Enhance Grid Reliability

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 31, 2017, FERC accepted proposed revisions to the ISO New England, Inc. (“ISO-NE”) Transmission, Markets and Services Tariff (“Tariff”) to incorporate a methodology for interconnection request cluster studies, which were filed by ISO-NE, the New England Power Pool Participants Committee, and the Participating Transmission Owners Administrative Committee on behalf of the Participating Transmission Owners (collectively, the “Filing Parties”).  Under the new revisions, which became effective on November 1, 2017, interconnection requests for resources located in the same electrical part of the ISO-NE system and that meet certain other criteria, will be studied together, as opposed to individually.  As part of the stakeholder discussions preceding the filing, ISO-NE developed a strategic infrastructure study to identify the transmission upgrades needed to interconnect remotely-located wind resources in Maine, which will serve as the first cluster study to proceed under the newly-accepted methodology. Continue Reading FERC Accepts ISO-NE Methodology for Interconnection Cluster Studies

On November 1, 2017, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) denied a petition from the Sierra Club challenging the Department of Energy’s (“DOE”) approval of liquified natural gas (“LNG”) exports from three facilities.  In doing so, the D.C. Circuit rejected arguments made by the Sierra Club that the DOE did not properly fulfill its obligations under the National Environmental Policy Act (“NEPA”) and the Natural Gas Act (“NGA”). Continue Reading D.C. Circuit Upholds DOE NEPA Reviews of LNG Export Applications