On March 6, 2020, FERC rejected ISO New England Inc.’s (“ISO-NE”) and the New England Power Pool Participants Committee’s proposed revisions to the ISO-NE Tariff intended to eliminate ISO-NE’s ability to retain a resource for local transmission reliability needs if that resource has been previously retained for fuel security purposes (“Proposed Tariff Revisions”). FERC found that the Tariff Revisions were not just and reasonable because they would limit ISO-NE’s ability to address potential future transmission reliability issues without alternative transmission solutions yet being in place.
This order is the latest action involving the retiring Mystic generating units 8 and 9 (“Mystic Units”) (see July 11, 2018 edition of the WER, January 23, 2020 edition of the WER, and February 26, 2020 edition of the WER). On May 1, 2018, ISO-NE filed a petition for waiver of certain Tariff provisions that would allow ISO-NE to retain the Mystic Units through May 31, 2024. FERC denied this petition for waiver, finding that ISO-NE’s tariff may be unjust and unreasonable, and instituted a Federal Power Act section 206 proceeding. FERC directed ISO-NE to submit both interim and long-term Tariff revisions that would address fuel security concerns or, alternatively, show cause that the Tariff was just and reasonable without such filings.
On December 3, 2018, FERC accepted ISO-NE’s interim solution to the potential fuel security issues. This solution allows ISO-NE to retain resources for fuel security that seek to retire in Forward Capacity Auctions (“FCA”) 13, 14, or 15, and would thereby allow ISO-NE to retain the retiring Mystic Units through FCA 15.
On October 11, 2019, ISO-NE submitted the Proposed Tariff Revisions that would eliminate ISO-NE’s ability to further retain resources previously retained for fuel security if those resources are subsequently needed to meet local transmission reliability needs. ISO-NE stated that the revisions would limit the scope and length of out-of-market retention of resources and would ensure that ISO-NE prioritizes the use of alternative, competitive solutions to address any identified transmission reliability issues.
FERC rejected ISO-NE’s Proposed Tariff Revisions because they would eliminate ISO-NE’s ability to retain fuel security resources that may be needed to handle future transmission reliability issues solely due to those resources having already been retained for fuel security. FERC explained that ISO-NE’s alternative, competitive solutions have not yet been implemented and that ISO-NE must still complete a review process before implementing any such solutions. FERC, however, remained open to proposals revising the reliability review timeline so that resources are not needlessly retained when appropriate transmission solutions are put into place.
FERC’s order can be found here.