On September 7, 2021, FERC staff issued a whitepaper to frame discussions ahead of two technical conferences planning to discuss potential ancillary services reforms.  The whitepaper summarizes approaches that RTOs/ISOs are currently evaluating to reform energy and ancillary services markets to address the need for greater operational flexibility, including increasing shortage prices, procuring higher quantities of existing “traditional” ancillary services products (like an operating reserve demand curve), and creating new ancillary services products.
Continue Reading FERC Staff Issues Whitepaper on Energy and Ancillary Services Market Reforms Ahead of Technical Conferences

On July 15, 2021, FERC issued an Advance Notice of Proposed Rulemaking (“ANOPR”) to solicit comments on potential reforms for electric regional transmission planning, cost allocation, and generator interconnection processes. Through public comment, the Commission seeks input on how transmission and interconnection planning and cost allocation procedures can be reformed to facilitate additional renewable energy integration and adjust for increasing demands on the grid. Comments on the ANOPR and replies to Comments are due 75 days and 105 days, respectively, after the ANOPR’s publication in the Federal Register. Following these filings, the Commission may consider whether to issue a formal Notice of Proposed Rulemaking, which would precede any final rule on these issues.
Continue Reading FERC Issues Advance Notice of Proposed Rulemaking on Potential Reforms for Electric Transmission Planning, Cost Allocation, and Generator Interconnection Processes

On June 17, 2021, FERC took two actions to encourage transmission development across the U.S.  Specifically, FERC issued an order establishing a joint state-federal task force to evaluate transmission development issues, and also issued a policy statement clarifying that states and public utilities remain free to coordinate and collaborate on transmission projects. As Chairman Glick stated in the Commission meeting announcing the order and policy statement, these actions are intended to enable FERC to be “fully engaged with [its] state partners,” ahead of “several transmission initiatives” that may be issued from the Commission in the coming months.
Continue Reading FERC Establishes Joint Federal-State Task Force with NARUC and Issues Policy Statement to Spur Transmission Development

On April 15, 2021, FERC issued a declaratory order confirming that under FERC Order No. 1000, incumbent New York Transmission Owners (“NYTOs”) have a federal right of first refusal (“ROFR”) for upgrades to their existing transmission facilities, including upgrades that are part of another Developer’s transmission project selected in the regional transmission plan for cost allocation. Specifically, FERC declared that the foundational agreements and Section 31.6.4 of the New York Independent System Operator, Inc. (“NYISO”) Open Access Transmission Tariff (“OATT”) established a ROFR of NYTOs to build, own and recover the cost of transmission upgrades to their existing facilities. In the same order, FERC denied requested clarification from the NYISO that such ROFR-exercising NYTOs could be considered “Developers” under the transmission planning process. FERC also provided additional clarity on the distinction between ROFR-eligible “upgrades” and new transmission facilities, indicating that different physical configurations resulting in power flow changes, increasing voltage/transfer capability, and performing different transmission functions, likely fall outside of traditional “upgrades.”

Continue Reading FERC Confirms NYTOs Federal Right of First Refusal to Build and Recover Cost of Upgrades to Existing Transmission Facilities

On March 19, 2021, FERC set aside a September 1, 2020 order (“September Order”) that had upended 40 years’ worth of FERC precedent regarding how to determine the 80MW threshold for small power production qualifying facilities (“QFs”) under the Public Utility Regulatory Policies Act of 1978 (“PURPA”). Specifically, FERC rejected the September Order’s denial of QF status to a hybrid photovoltaic solar and storage facility owned by Broadview Solar LLC (“Broadview”) as a result of the facility’s 160 MW gross capacity, as opposed to the facility’s 80 MW maximum net output or “send out.” After further consideration, FERC explained that it had erred by departing from and overturning its longstanding “send out” precedent. Commissioner Danly dissented, arguing that the September Order correctly applied PURPA in relying on gross power production capacity.
Continue Reading FERC Reverses September 2020 Order, Reinstating Long-Standing “Send Out” Test for Small Power Production QF 80MW Threshold

On March 2, 2021, the United States Court of Appeals of the District of Columbia Circuit (“D.C. Circuit”) denied petitions for review of three FERC orders addressing cost allocation by PJM Interconnection, L.L.C. (“PJM”) for a high-voltage transmission line connecting three nuclear power plants on Artificial Island in New Jersey to the Delmarva transmission zone (“Artificial Island Project”). In a 2016 order, FERC upheld PJM’s use of a hybrid cost allocation method including the “Solution Based DFAX” method to assign 90 percent of the costs of the Artificial Island Project to PJM’s Delmarva transmission zone; FERC reversed its position in a 2018 rehearing order. In dismissing the petitions for review filed by certain PJM transmission owners including Public Service Electric and Gas Company (“PSE&G”), the New Jersey Board of Public Utilities, and the New Jersey Division of Rate Counsel, the D.C. Circuit’s March 2 opinion held that FERC reasonably concluded that assigning nearly 90 percent of the Artificial Island Project costs to the Delmarva transmission zone would not be commensurate with the benefits that zone received, and that FERC’s change in position was adequately explained and supported by substantial evidence.
Continue Reading D.C. Circuit Upholds FERC Cost Allocation Orders for PJM Artificial Island Transmission Project

On March 2, 2021, members of the United States House of Representatives introduced H.R.1512, the Climate Leadership and Environmental Action for our Nation’s Future Act (“CLEAN Future Act”). The CLEAN Future Act, aims to achieve net zero greenhouse gas (“GHG”) emissions by 2050 in concert with the target identified by the United Nations Intergovernmental Panel on Climate Change to limit temperature increases to 1.5°C in order to avoid the most catastrophic consequences of climate change. H.R.1512 is a revision of draft legislation released in January 2020.
Continue Reading House Introduces CLEAN Future Act – A Comprehensive Bill to Achieve A Net Zero Greenhouse Gas Economy by 2050

On February 18, 2021, FERC denied a rehearing request for an order it issued in October of 2020 that stated that payments received under the Commercial System Distribution Load Relief Programs (“CSRPs”) may not be excluded from the offer floors for Special Case Resources’ (“SCR”) calculation under the New York Independent System Operator, Inc.’s (“NYISO”) buyer-side market power mitigation (“BSM”) rules. Although FERC denied the request for rehearing, FERC modified and set aside the October 2020 Order in part, finding that the identified CSRPs should be excluded from the calculation of SCR offer floors in NYISO. Commissioners Clements and Christie issued concurring opinions.

Continue Reading FERC Exempts Certain Demand Response Programs from NYISO’s Buyer-Side Market Power Mitigation Rules

On January 22, 2021, two Washington state irrigation districts, Quincy-Columbia Basin Irrigation District and East Columbia Basin Irrigation District (the “Districts”), filed a Petition for Declaratory Order (“Petition”) requesting that FERC find that Federal Power Act (“FPA”) section 211A does not grant FERC jurisdiction over an unregulated transmitting utility solely as a result of the utility establishing different transmission rates by customer class or by contract.
Continue Reading Two Northwest Irrigation Districts Request Declaratory Order on FERC’s Jurisdiction Under FPA Section 211A

On January 19, 2021, FERC directed Regional Transmission Organizations (“RTOs”) and Independent System Operators (“ISOs”) to submit informational reports regarding four hybrid resources issues: (1) terminology; (2) interconnection; (3) market participation; and (4) capacity valuation. Specifically, FERC directed that each RTO or ISO file a report within 180 days from the order providing:  (1) a description of its current practices related to these four issues; (2) an update on the status of any ongoing efforts to develop reforms related to the four issues; and (3) responses to the specific requests for information contained in the January 19, 2021 order. FERC’s request for reports follows a technical conference focusing on technical and market issues raised by hybrid resources (see April 14, 2020 edition of the WER) and a Notice Inviting Post-Technical Conference Comments.
Continue Reading FERC Directs Informational Reports on Hybrid Resources from RTOs and ISOs Following Technical Conference