On October 17, 2019, FERC issued its 2019-2020 Winter Energy Market Assessment (“Assessment”), which is a summary of staff’s expectations about market preparedness, including a high‐level assessment of the risks and challenges anticipated in the coming winter operating season. In its 2019-2020 Assessment, FERC highlighted that: 1) the National Oceanic and Atmospheric Administration (“NOAA”) forecasts a warmer than average winter; 2) natural gas storage levels are expected to be average going into the winter; 3) natural gas futures prices are lower than last winter; 4) a diverse and changing generation resource mix will maintain electric reliability this winter; and 5) expected winter reserve margins exceed reference levels in all regions.

Continue Reading FERC Issues 2019-2020 Winter Energy Market Assessment

On October 17, 2019, FERC denied Public Citizen, Inc.’s (“Public Citizen”) complaint alleging that PJM Interconnection, L.L.C. (“PJM”) recovered improper campaign contributions and lobbying expenses through its filed rate and failed to disclose its spending on political activity. In doing so, FERC concluded that PJM could recover the expenses in question through its rates because they represent an educational, outreach, or informational function essential to PJM’s core operations and because PJM determined that such expenditures are in the collective best interest of PJM’s stakeholders. Continue Reading FERC Denies Complaint Alleging that PJM Improperly Recovered Campaign Contributions Through Its Rate

On October 23, 2019, FERC issued twin orders denying rehearing of the PJM Interconnection, L.L.C. (“PJM”) Phase 1 and Phase 2 Revisions, which sought to resolve overlapping congestion charges on pseudo-tied generation in Midcontinent Independent System Operator, Inc. (“MISO”) and PJM. American Municipal Power (“AMP”) requested rehearing, arguing that FERC engaged in impermissible piecemeal ratemaking, failed to evaluate the ultimate end result of the revisions, and did not fully address overlapping congestion charges. FERC rejected AMP’s arguments, confirming that it fully considered the proposed revisions and found them just and reasonable. Continue Reading FERC Denies Rehearing on PJM Revisions Addressing Overlapping Congestion Charges from Certain Pseudo-Tied Generation

On October 17, 2019, FERC issued two separate orders accepting in part PJM Interconnection L.L.C.’s (“PJM”), and Southwest Power Pool, Inc.’s (“SPP”) proposals to comply with FERC’s orders addressing energy storage resources’ (“ESR”) participation in Regional Transmission Organization (“RTO”)-operated markets, subject to further compliance (see February 20, 2018 edition of the WER; April 10, 2019 edition of the WER; and May 22, 2019 edition of the WER for more background and context on Order No. 841). SPP’s and PJM’s ESR participation proposals are the first to be accepted by FERC, which found that the RTOs generally complied with Order No. 841 by enabling ESRs to provide all services they are technically capable of providing, to be compensated for those services in the same manner as other resources, and by recognizing ESRs’ unique physical and operational characteristics. However, FERC initiated further proceedings to require both RTOs to include the minimum run-time requirements applicable to ESRs and other generation resources in their Tariffs, and initiated an investigation into whether PJM’s application of minimum run-time requirements to ESRs participating in its capacity markets is just and reasonable. FERC also directed SPP and PJM to take further action, requiring both RTOs to submit compliance filings within 60 days that, as one example, address the basic metering and accounting practices applicable to ESRs. Commissioner McNamee issued separate opinions concurring with both orders. Continue Reading FERC Accepts SPP and PJM Storage Participation Proposals; Initiates Proceedings to Address Minimum Run-Time Rules

On October 17, 2019, FERC denied rehearing of its order denying a complaint filed by CXA La Paloma, LLC (“La Paloma”), which argued that the California Independent System Operator Corporation’s (“CAISO”) resource adequacy regime had become unjust and unreasonable. Stakeholders asserted, among other things, that FERC ignored certain evidence suggesting inadequate capacity prices would lead to near-term reliability problems; FERC disagreed, restating the evidence and arguments initially presented in the complaint, and explaining that based on the evidence presented it did not find CAISO’s resource adequacy regime unjust and unreasonable. In its order denying rehearing, FERC weighed in (again) on low capacity prices and reliability concerns in California, as well as the scope of its section 206 authority.      Continue Reading According to FERC, CAISO’s Resource Adequacy Program is (Still) Alright

On October 17, 2019, FERC issued an order establishing an investigation under Federal Power Act Section 206 into whether ISO New England Inc. (“ISO-NE”), PJM Interconnection, L.L.C. (“PJM”), and Southwest Power Pool, Inc. (“SPP”) (collectively, “Responding RTOs”) may be inconsistently or more expansively implementing Order No. 1000’s immediate need reliability project exemption, which allows Responding RTOs to establish immediate need reliability projects exempt from Order No. 1000’s regional transmission planning competition requirements. In the order, FERC established proceedings related to its concern, and directed the Responding RTOs to provide responses to certain questions regarding the implementation of the exemption. Continue Reading FERC Initiates Investigation of ISO-NE’s, PJM’s, and SPP’s Use of Order No. 1000 Exemption for Immediate Need Reliability Projects

On October 17, 2019, FERC denied a complaint filed in June 2019 by Nevada Hydro Company, Inc. (“Nevada Hydro”) alleging that the California Independent System Operator Corporation (“CAISO”) failed to follow its Tariff requirements in studying the Lake Elsinore Advanced Pumped Storage Project (“LEAPS”) as a transmission facility in CAISO’s 2018-2019 transmission planning process. FERC concluded that Nevada Hydro failed to demonstrate that CAISO violated its Tariff in studying LEAPS as a proposed reliability-driven transmission solution and as a proposed economic transmission project. Rather, FERC accepted CAISO’s conclusion that it could identify no reliability need for LEAPS, and that the project’s economic benefits are far outweighed by its costs. FERC’s October 17 order also explained that it found no evidence that CAISO’s treatment of LEAPS was biased by a predetermined conclusion that LEAPS is a generation asset or that storage cannot qualify as transmission. FERC went on to note that a project’s ability to provide transmission benefits does not equate to a transmission need, nor does it guarantee eligibility to recover costs through transmission rates. Continue Reading FERC Denies Pumped Storage Facility’s Complaint Requesting Treatment as a Transmission Facility

On October 4, 2019, FERC rejected without prejudice a stated rate tariff and Open Access Transmission Tariff (“OATT”), among other filings, by Tri-State Generation and Transmission Association, Inc. (“Tri-State”) and its subsidiary Thermal Cogen Partnership, L.P. (“Thermal Cogen”). Tri-State, an electric cooperative previously exempt from FERC’s jurisdiction, submitted the filings in an attempt to submit to FERC regulation after Tri-State admitted Mieco, Inc., a jurisdictional public utility, to its Board of Directors. FERC concluded that Tri-State’s stated rate tariff and OATT filings were patently deficient because they failed to provide the supporting data required for FERC to assess whether the proposed rates were just and reasonable, and for potentially interested parties to determine how the rates might affect them. Continue Reading FERC Rejects Tri-State Proposal to Become FERC-Jurisdictional

On October 4, 2019, FERC staff issued a report for users, operators, and owners of the bulk-power system to increase compliance with mandatory Critical Infrastructure Protection (“CIP”) standards and improve cybersecurity for the nation’s electric grid. In the report, FERC staff recommended, among other things, that entities:

  1. verify employees’ recurring authorizations for using removable media;
  2. ensure all employees and third-party contractors complete required trainings and properly maintain training records;
  3. consider all generation assets when categorizing bulk electric system cyber systems associated with transmission facilities; and
  4. review all firewalls to ensure there are no obsolete or overly permissive firewall access control rules in use.

Continue Reading FERC Staff Offer Recommendations for CIP Reliability Audits and Cybersecurity

On October 8, 2019, FERC accepted ISO New England Inc.’s (“ISO-NE”) public and private versions of a filing containing the de-list bids (“De-List Bids”) and substation auction test prices (“Test Prices”) for the fourteenth Forward Capacity Auction (“FCA 14”), to be held in February 2020 and to become effective August 27, 2019. In the process, FERC also granted ISO-NE’s requested waiver of FERC’s regulations requiring parties requesting privileged treatment of their filings to provide a copy of such non-public documents to intervenors who execute a protective agreement. Continue Reading FERC Grants ISO-NE’s Request to Prevent Disclosure of Confidential Retirement Bid