On February 5, 2020, FERC denied a request from demand-side energy management company Enerwise Global Technologies, Inc. d/b/a CPower (“CPower”) for a one-time waiver of ISO New England, Inc’s (“ISO-NE”) Market Rule 1 in order to permit CPower’s summer-only demand capacity distributed generation resources, for which it elected Renewable Technology Resource (“RTR”) treatment, to participate in ISO-NE’s fourteenth Forward Capacity Auction (“FCA 14”) and the substitution auction. CPower presented two alternative options for waiver, arguing that an unintended interaction between ISO-NE’s RTR and “composite offer” Tariff provisions caused its resources to be excluded from FCA 14 and the substitution auction. FERC denied CPower’s request, even though ISO-NE supported one of the alternatives that CPower presented. Commissioner Richard Glick dissented in part, explaining that he also would have granted one of CPower’s proffered waiver options.

ISO-NE assigns summer-only distributed generation resources a 0 MW winter capacity value, and defines the capacity value for distributed generation as the lesser of a resource’s summer and winter capacity values. In order to participate in the FCA, ISO-NE requires summer-only distributed generation to submit “composite offers,” i.e., to combine their offers with other resources that have winter-only qualified capacity. CPower bid into ISO-NE’s FCA 14 and requested Renewable Technology Resource (“RTR”) treatment in order to exempt its resources from ISO-NE’s minimum offer price floor requirement. Because the total amount of all RTRs offered into FCA 14 exceeded the cap permitted, ISO-NE prorated each RTR’s offered capacity. CPower explained that when RTR proration occurs, ISO-NE’s Tariff prohibits RTRs from using composite offers—and without the ability to composite its summer-only capacity resources with others’ winter-only capacity, CPower’s resources were assigned the “lesser of” qualified capacity value of 0 MW and could not participate in either FCA 14 or the substitution auction.

CPower argued that FERC should either: 1) grant waiver to permit CPower to submit its summer-only qualified capacity at the auction’s offer floor price (“Primary Waiver Request”); or 2) allow CPower to withdraw its election of RTR treatment and to submit composite offers (“Alternate Waiver Request”). Although ISO-NE supported CPower’s Alternate Waiver Request, FERC denied both of CPower’s requests. FERC reasoned that CPower’s Primary Waiver Request would permit it to qualify for FCA 14 based on summer-only qualified capacity, contrary to ISO-NE’s Tariff. FERC denied CPower’s Alternate Waiver Request on the basis that the request was not limited in scope, and that CPower failed to demonstrate why its resources should be offered the opportunity to opt out of RTR treatment once proration results are known, when no other resource has that choice.

In a separate dissenting statement, Commissioner Glick explained that he would have granted CPower’s Alternate Waiver Request, which be believed to be in the public interest. Commissioner Glick disagreed with FERC’s assessment that the Alternate Waiver Request was not limited in scope, arguing that waiver requests by definition produce different treatment for the applicable resources. Commissioner Glick concluded that “CPower chose one of two seemingly viable paths for participating in the FCA” and that “without a waiver, the FCA will categorically ignore the capacity those resources provide.”

The order is available here.