Adrienne Thompson

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On October 20, 2016, FERC issued an order that, among other things, rejected a refund report filed by the California Independent System Operator Corporation (“CAISO”). In so doing, FERC reiterated its discretionary authority to order refunds as well as its general policy to not exercise this discretion in situations involving cost allocation and rate design.

On October 11, 2016, FERC issued an order on the refund liability of Midwest Generation, LLC (“Midwest”) for violating FERC-approved settlement agreement terms regarding reactive supply and voltage control service. Of note, although FERC approved Midwest’s total refund obligation calculation of over $3.6 million, it declined to exercise its primary jurisdiction over whether Midwest should be responsible to pay the portion of this obligation that accrued before the utility’s debts were discharged in an April 2014 bankruptcy proceeding. Instead, FERC directed Midwest to pay the refund amounts that accrued following the bankruptcy proceeding, which totaled around $1.7 million.

On September 30, 2016, FERC accepted the change in status filing submitted by Puget Sound Energy, Inc. (“Puget”) and certain affiliated generators. The filing informed FERC that Puget intended to join the Energy Imbalance Market (“EIM”) administered by the California Independent System Operator Corporation (“CAISO”) beginning on October 1, 2016. FERC accepted the change in status filing and authorized Puget to transact at market-based rates (“MBR”) in the EIM, based on Puget’s market power analysis submitted (and supplemented) as part of the change in status filing.

On September 27, 2016, FERC issued an order denying a request for a limited tariff waiver filed by the Midcontinent Independent System Operator Inc. (“MISO”). MISO filed its request to waive certain eligibility requirements for participation in MISO’s price volatility make-whole payment program as part of an attempt to compensate Entergy Arkansas, Inc. (“Entergy Arkansas”) for insufficient revenue returns following several manual re-dispatches of two Entergy Arkansas nuclear units in 2014. In its order, FERC rejected MISO’s request, indicating that generators are ineligible for the program when their units do not meet the flexibility requirements, and that waiver of such requirements was not appropriate in this case.

On September 22, FERC denied a request to rehear an April 21, 2016 order involving a complaint from the Occidental Chemical Corporation (“Occidental”) against the Midwest Independent Transmission System Operator, Inc. (“MISO”). In so doing, FERC reaffirmed its April 21 Order (see April 27, 2016 edition of the WER) and further explained its previous finding that MISO’s treatment of qualifying facilities (“QFs”) within the Entergy service territory neither violates the Public Utility Regulatory Policies Act of 1978 (“PURPA”) nor the Federal Power Act (“FPA”).

On September 9, 2016, FERC conditionally accepted an unexecuted Generator Interconnection Agreement (“GIA”) filed by the Midcontinent Independent System Operator, Inc. (“MISO” or the “ISO”) involving Duke Energy Indiana, LLC (“Duke Indiana”) as the interconnection customer, Duke Energy Business Services, LLC, on behalf of Duke Indiana, as the transmission owner, and MISO as the transmission provider. In so doing, FERC declined a request from Duke Indiana to require MISO to amend its pro forma GIA to address potential future situations in which an integrated utility acts as both the transmission owner and interconnection customer.

On August 31, 2016, FERC conditionally approved Arizona Public Service Company’s (“APS”) request to amend its market-based rate tariff to facilitate APS’ participation in the western Energy Imbalance Market (“EIM”) administered by the California Independent System Operator Corporation (“CAISO”). Another western utility, Puget Sound Energy (“PSE”) is also expected to join the EIM. With respect to its market-based rate authorization to participate in the EIM, PSE filed a Non-Material Change in Status on March 9 in Docket ER10-2374-010. FERC has not yet acted on this submittal. On October 1, 2016, APS and PSE are expected to begin participating in the EIM alongside existing members—PacifiCorp, and NV Energy—to form a six-balancing authority area EIM footprint. 

On August 26, 2016, FERC established a proceeding to determine whether transmission owners in the footprint of the PJM Interconnection L.L.C. (“PJM”) are complying with the requirements of Order No. 890. This proceeding follows a November 2015 technical conference in which several PJM transmission customers and other parties suggested that PJM stakeholders are unable to meaningfully participate in the transmission planning process for certain PJM projects, in contravention of Order No. 890’s planning requirements.

On July 27, 2016, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) accepted a compliance filing from ISO New England (“ISO-NE”) that establishes a ten-percent materiality threshold before ISO-NE will mitigate a retirement bid in its annual Forward Capacity Auction (“FCA”). In an April 2016 order, FERC previously accepted a set of proposed revisions to ISO-NE’s Transmission, Markets, and Services Tariff (“Tariff”) regarding capacity market power and FCA prices on the condition that the ISO include a price mitigation threshold for retirement bids (see April 18, 2016, edition of the WER).

On July 21, 2016, FERC issued a final rule (“Order No. 828”) modifying the pro forma Small Generator Interconnection Agreement (“SGIA”) to require newly interconnecting small generators to “ride-through” voltage and frequency variations rather than having those generators disconnect from the larger transmission system. With this final rule, FERC obligates new small generators—those less than 20 MW—to have comparable ride-through capabilities as those currently imposed on their large-scale counterparts through the pro forma Large Generator Interconnection Agreement (“LGIA”).