On March 30, 2021, FERC accepted the New York Independent System Operator’s (“NYISO”) proposed Co-located Storage Resource (“CSR”) Participation Model to enable energy storage resources (“ESRs”) paired with wind or solar resources to share a common point of injection and participate in the NYISO-administered markets. FERC’s order accepted revisions to NYISO’s Energy and Ancillary Services (“E&AS”) market rules, its metering rules, its Interconnection Process, its Installed Capacity Market participation rules, and its market power mitigation measures to accommodate the interconnection and participation of an ESR that is co-located with a wind or solar resource. Chairman Glick issued a concurring statement addressing NYISO’s application of existing buyer-side market power rules to co-located ESR and intermittent resources, urging NYISO “to move expeditiously to replace those rules with a model that moves beyond the minimum offer price rule as a means for mediating the interaction between state policies and wholesale markets.”
Continue Reading FERC Accepts NYISO Co-Located Storage Resource Participation Model

On March 18, 2021, FERC granted two consolidated complaints alleging that the default offer cap in PJM Interconnection, L.L.C.’s (“PJM”) capacity market is unjust and unreasonable because the Expected Performance Assessment Intervals input, set at a value of 360 12-minute intervals (30 hours), is too high. Ultimately, FERC found that the default offer cap is “incorrectly calibrated,” rendering PJM and its Market Monitor unable to ensure competitive market outcomes. FERC ordered additional briefing on a replacement rate, but concluded that PJM’s capacity auction for the 2022-2023 delivery year, scheduled for May 2021, should go forward under the current rules.
Continue Reading FERC Grants Complaints, Directs Further Briefing on PJM Capacity Market Default Offer Cap

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 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 21, 2021, President Biden named Richard Glick as the new FERC Chairman. Chairman Glick joined FERC as a Commissioner in 2017. He previously served as general counsel to the Democrats on the Senate Energy and Natural Resources Committee and as Vice President of Government Affairs for Iberdrola’s renewable energy, electric and gas utility,

On December 23, 2020, FERC accepted Southwest Power Pool, Inc.’s (“SPP”) proposal to implement the Western Energy Imbalance Service Market (“WEIS Market”), a voluntary market providing for security-constrained economic dispatch to balance supply and demand every five minutes. SPP’s proposal consisted of a Tariff to implement the WEIS Market, a joint dispatch agreement executed by eight participating entities, and the Western Markets Executive Committee Charter to establish the WEIS Market’s governance structure and procedures. The December 23rd order follows FERC’s rejection of SPP’s WEIS Market proposal in July 2020.
Continue Reading FERC Accepts SPP Energy Imbalance Market Proposal

On December 17, 2020, FERC issued a Notice of Proposed Rulemaking proposing to revise its regulations to establish incentives for public utilities to make certain cybersecurity investments that go beyond the current requirements of the Critical Infrastructure Protection (“CIP”) Reliability Standards established by the North American Electric Reliability Corporation (“NERC”) (“Cybersecurity NOPR”). Specifically, FERC proposed rules to allow regulated entities to:

  1. receive incentive-based rate treatment for the voluntary implementation of: (i) certain NERC CIP Reliability Standards to facilities that are not currently subject to those requirements (“NERC CIP Incentives Approach”), and/or (ii) certain security controls included in the National Institute of Standards and Technology Framework (“NIST Framework Approach”);
  2. request a return-on-equity adder of two hundred (200) basis points for making eligible cybersecurity capital investments; and
  3. defer cost recovery of certain cybersecurity costs that are generally expensed as incurred, and treat such costs as regulatory assets that may be included in transmission rate base.


Continue Reading FERC Issues Notice of Proposed Rulemaking on Cybersecurity Investment Incentives

On December 2, 2020, FERC clarified that when an entity with passive equity holdings in a company later wants to assume operational responsibilities over the company, the entity must obtain authorization under Federal Power Act (“FPA”) section 203 prior to the assumption of operational management responsibilities. FERC’s December 2 order on rehearing modified the discussion in a May 29, 2020 order in the proceedings approving Tenaska Lotus Holdings, LLC’s (“Tenaska Lotus”) assumption of rights as operations manager of 41MB 8me, LLC (“Project Company”) (together, “Applicants”), a 51 MW solar facility in California.
Continue Reading FERC Clarifies FPA Section 203 Authorization Requirements Prior to Acquisition of a Utility’s Operational Management Responsibilities

On December 2, 2020, FERC ordered ISO New England, Inc. (“ISO-NE”) to remove the price-lock mechanism and zero-price offer rule (together, the “New Entrant Rules”) from Tariff provisions relating to its Forward Capacity Market (“FCM”), finding that the price certainty benefit afforded by these rules no longer outweighs their price suppressive effects. FERC also clarified that its termination of these rules would not impact price-lock agreements in effect prior to the issuance of its order. FERC thus ordered ISO-NE to eliminate the New Entrant rules starting in its sixteenth Forward Capacity Auction (“FCA”).
Continue Reading FERC Orders ISO-NE to Remove FCM New Entrant Rules From its Tariff