On February 3, 2020, FERC denied a waiver request filed by Genbright LLC (“Genbright”) seeking a one-time limited waiver of Market Rule 1 in the ISO New England Inc. (“ISO-NE”) Transmission, Markets and Services Tariff (“Tariff”) to allow fourteen distributed energy resource projects (the “DER Projects”) to participate in the fourteenth ISO-NE Forward Capacity Auction (“FCA 14”).  According to Genbright, the DER Projects did not qualify to participate in this year’s capacity auction because Genbright sought interconnection under a state-administered interconnection process rather than the FERC jurisdictional interconnection options specified in the ISO-NE Tariff, and Genbright argued that the interconnected utility should have alerted Genbright of the FERC-jurisdictional status of its interconnections.  In denying the request, FERC found that granting waiver would inappropriately allow Genbright to avoid ISO-NE’s complex interconnection study process.

Market Rule 1 of the ISO-NE Tariff governs the operation and eligibility requirements for the ISO-NE FCAs and expressly requires a valid interconnection request under Schedules 22, 23 or 25 of the Tariff.  Due to other information published by ISO-NE, Genbright interpreted this requirement to include either FERC- or state-jurisdictional interconnection requests.  Genbright argued that the DER Projects consist of Public Utility Regulatory Policies Act (“PURPA”) qualifying facilities (“QFs”) and energy storage facilities that will interconnect to distribution facilities that are not subject to FERC jurisdiction, and therefore do not need to apply for interconnection under the ISO-NE Tariff.  Moreover, Genbright contended that Eversource Energy Service Company (“Eversource”), the DER Projects’ interconnecting electric distribution company and ISO-NE transmission owner, failed to timely notify the DER Project developers of the jurisdictional status of their interconnections.  Thus, Genbright argued that waiver was consistent with FERC precedent granting waiver of tariff requirements because: (1) the underlying error was made in good faith; (2) the waiver is of limited scope; (3) the waiver would remedy a concrete problem; and (4) the waiver does not have undesirable consequences.

In arguing against waiver, Eversource asserted that Genbright’s request would require a substantive ruling related to a disagreement over the law as to what causes a distribution-level interconnection to fall under FERC jurisdiction that would be more appropriate in a declaratory order or rulemaking proceeding.  Eversource argued the waiver request was not limited in scope because it invoked issues such as: (1) the impact of wholesale capacity sales to third parties on QF interconnection jurisdiction; and (2) whether utilities in Massachusetts must use their distribution systems to move electricity purchased pursuant to PURPA to the ISO-NE market, which affects which distribution facilities are subject to wholesale use and interconnection jurisdiction.  Eversource warned that Genbright’s views would have far-reaching impacts on auction eligibility, jurisdiction over interconnection agreements, and the appropriate queue for yet-to-be interconnected generators.

FERC denied waiver, finding that Genbright failed to demonstrate its request was limited in scope.  FERC also explained that the request would allow Genbright to avoid the ISO-NE interconnection study process, including the system impact study, which is ISO-NE’s comprehensive reliability evaluation.  In addition, FERC distinguished between Genbright’s requested waiver and other discrete, one-time waivers of a tariff-imposed deadline.

A copy of the order is available here.